<PAGE> 1
As filed with the Securities and Exchange Commission on April 18, 1997
Registration Nos. 2-95973 and 811-4236
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-lA
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 41 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT /X/
OF 1940
AMENDMENT NO. 42 /X/
THE ONE GROUP(R)
(Exact Name of Registrant as Specified in Charter)
1111 POLARIS PARKWAY
P.O. BOX 710211
COLUMBUS, OHIO 43271-0211
(Address of Principal Executive Offices)
(800) 480-4111
(Registrant's Telephone Number)
GEORGE MARTINEZ
3435 STELZER ROAD
COLUMBUS, OHIO 43219
(Name and Address of Agent for Service)
Copies To:
Alan G. Priest, Esquire Michael V. Wible, Esquire
Ropes & Gray Banc One Corporation
One Franklin Square 100 East Broad Street, 18th Fl.
1301 K Street, N.W., Suite 800E Columbus, Ohio 43271
Washington, D.C. 20005
It is proposed that this filing will become effective (check appropriate box)
Immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
X 60 days after filing pursuant to paragraph (a)(1)
----
on (DATE) pursuant to paragraph (a)(1)
----
<PAGE> 2
75 days after filing pursuant to paragraph (a)(2)
----
on (DATE) pursuant to paragraph (a)(2)
---- of Rule 485.
The Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933 pursuant to Section (a) (1) of Rule 24f-2. Rule 24f-2
Notice for the Registrant's fiscal year ending June 30, 1996 was filed on August
28, 1996.
<PAGE> 3
THE ONE GROUP(R)
CROSS REFERENCE SHEET FOR EACH OFFERED PROSPECTUS
- -------------------------------------------------
Form N-1A Part A Item Prospectus Caption
- --------------------- ------------------
1. Cover Page .................. Cover Page
2. Synopsis .................... Expense Summary
3. Financial Highlights ........ Financial Highlights
4. General Description Investment Objectives and
of Registrant ............ Permissible Investments; Additional
Investment Information; Other
Information; How To Do Business with
The One Group(R); Other Investment
Policies; Description of Permitted
Investments
5. Management of the Fund ...... Management of the Funds; The
Advisor; The Fund Managers, The
Administrator; The Distributor;
Other Information
6. Capital Stock and Other Investment Objectives and Permissible
Securities ............... Investments; How to Do Business
with The One Group(R); Other
Information
7. Purchase of Securities How To Do Business with
Being Offered ............ The One Group(R)
8. Redemption or Repurchase .... How To Do Business with
The One Group(R)
9. Pending Legal Proceedings ... Inapplicable
<PAGE> 4
PART A
The One Group(R) U.S. Treasury Securities Money Market Fund
The One Group(R) Prime Money Market Fund
The One Group(R) Municipal Money Market Fund
The One Group(R) Ohio Municipal Money Market Fund
The One Group(R) Income Equity Fund
The One Group(R) Disciplined Value Fund
The One Group(R) Growth Opportunities Fund
The One Group(R) Equity Index Fund
The One Group(R) International Equity Index Fund
The One Group(R) Large Company Value Fund
The One Group(R) Large Company Growth Fund
The One Group(R) Asset Allocation Fund
The One Group(R) Gulf South Growth Fund
The One Group(R) Value Growth Fund
The One Group(R) Louisiana Municipal Bond Fund
The One Group(R) Income Fund
The One Group(R) Intermediate Tax-Free Bond Fund
The One Group(R) Municipal Income Fund
The One Group(R) Ohio Municipal Bond Fund
The One Group(R) Texas Tax-Free Bond Fund
The One Group(R) West Virginia Municipal Bond Fund
The One Group(R) Kentucky Municipal Bond Fund
The One Group(R) Arizona Municipal Bond Fund
The One Group(R) Treasury Money Market Fund
The One Group(R) Treasury Only Money Market Fund
The One Group(R) Government Money Market Fund
The One Group(R) Tax-Exempt Money Market Fund
The One Group(R) Institutional Prime Money Market Fund
The information required by Items 1 through 9 for the above-referenced Funds of
The One Group(R) (the "Registrant") is hereby incorporated by reference to the
Prospectuses for these Funds filed with the Securities and Exchange Commission
under Rule 497(c) on November 5, 1996.
<PAGE> 5
THE ONE GROUP(R)
FAMILY OF MUTUAL FUNDS
BOND FUNDS COMBINED PROSPECTUS
June , 1997
THE ONE GROUP(R) INTERMEDIATE BOND FUND
THE ONE GROUP(R) INCOME BOND FUND
THE ONE GROUP(R) GOVERNMENT BOND FUND
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
This Prospectus describes five bond mutual funds (the "Funds"). Each Fund is a
series of The One Group(R) (the "Trust"). Banc One Investment Advisors
Corporation ("Banc One Advisors") serves as investment advisor to each Fund.
Banc One Advisors currently manages more than $41 billion in assets.
The following three classes of shares are available to investors:
Class A and Class B shares are offered to the general public.
Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodial or similar capacities (each an
"Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT OR
ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. BANC ONE
INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUNDS FOR INVESTMENT
ADVISORY AND OTHER SERVICES.
The Trust is registered with the Securities and Exchange Commission (the "SEC")
as an open-end management investment company. This Prospectus contains
information about the Trust and the Funds that a prospective investor should
know before investing. Please read this Prospectus carefully and retain it for
future reference. A Statement of Additional Information dated November 1, 1996,
as amended June , 1997, has been filed with the SEC and is available without
charge by calling (800) 480-4111 or writing to the Distributor, The One Group(R)
Services Company at 3435 Stelzer Road, Columbus, Ohio 43219. The Statement of
Additional Information is incorporated into this Prospectus by reference. The
Securities and Exchange Commission maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding The One Group(R).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY................................................................................ 3
ABOUT THE FUNDS........................................................................ 4
Expense Summary...................................................................... 4
Financial Highlights................................................................. 10
The Funds............................................................................ 20
Investment Objectives and Permissible Investments.................................... 20
Additional Investment Information.................................................... 21
Risk Factors......................................................................... 23
HOW TO DO BUSINESS WITH THE ONE GROUP(R)............................................... 24
How to Invest in The One Group....................................................... 24
Alternative Sales Arrangements....................................................... 28
Exchanges............................................................................ 30
Redemptions.......................................................................... 31
MANAGEMENT OF THE FUNDS................................................................ 32
The Trustees......................................................................... 32
The Advisor.......................................................................... 32
The Fund Managers.................................................................... 33
The Distributor...................................................................... 33
The Administrator.................................................................... 34
The Transfer Agent and Custodian..................................................... 34
Counsel and Independent Accountants.................................................. 35
OTHER INFORMATION...................................................................... 35
The Trust............................................................................ 35
Other Investment Policies............................................................ 36
Description of Permitted Investments................................................. 37
Description of Ratings............................................................... 44
Miscellaneous........................................................................ 48
Performance.......................................................................... 48
Taxes................................................................................ 49
</TABLE>
PROSPECTUS
2
<PAGE> 7
SUMMARY
The Trust is an open-end management investment company that provides a
convenient way to invest in professionally managed portfolios of securities. The
following provides basic information about various classes of shares of the
Funds.
WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES? Below is a brief overview of the
Funds and their investment objectives. A more detailed discussion of the Funds'
investment objectives and policies can be found in the Prospectus under the
heading "Investment Objectives and Permissible Investments."
THE ONE GROUP(R) INTERMEDIATE BOND FUND ("Intermediate Bond Fund") is a
diversified mutual fund that seeks current income consistent with the
preservation of capital through investments in high and medium-grade
fixed-income securities with intermediate maturities.
THE ONE GROUP(R) INCOME BOND FUND ("Income Bond Fund") is a diversified
mutual fund that seeks a high level of current income by investing primarily
in a diversified portfolio of high, medium, and low grade debt securities.
The Income Bond Fund may invest up to 30% of its total assets in high yield
bonds and similar securities in the lower rating categories. High yield
securities are commonly known as "junk bonds."
THE ONE GROUP(R) GOVERNMENT BOND FUND ("Government Bond Fund") is a
diversified mutual fund that seeks a high level of current income with
liquidity and safety of principal.
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND ("Ultra Short-Term Income
Fund") is a diversified mutual fund that seeks a high level of current
income consistent with low volatility of principal by investing in a
diversified portfolio of short-term investment grade securities. The Ultra
Short-Term Fund was formerly called The One Group(R) Government ARM Fund.
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND ("Limited Volatility Bond
Fund") is a diversified mutual fund that seeks current income consistent
with preservation of capital through investment in high and medium-grade
fixed-income securities.
WHAT ARE THE PERMITTED INVESTMENTS? The Intermediate Bond Fund, the Limited
Volatility Bond Fund, the Income Bond Fund, and the Ultra Short-Term Income Fund
invest in high and medium grade debt securities of all types with average
maturities ranging from one to fifteen years. The Income Bond Fund also may
invest in low grade debt securities. The Government Bond Fund invests in
obligations issued or guaranteed by the U.S. government or its agencies and
instrumentalities. Several of the Funds may invest in preferred stock. The
securities in which the Funds may invest are described in more detail in
"Description of Permitted Investments."
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation ("Banc One
Advisors"), an indirect subsidiary of BANC ONE CORPORATION, serves as the
advisor of the Trust. Banc One Advisors is entitled to a fee for advisory
services provided to the Trust. Banc One Advisors may voluntarily agree to waive
a part of its fees. A more detailed discussion regarding Banc One Advisors, its
services and compensation can be found in the Prospectus under the headings "The
Advisor" and "Expense Summary."
WHO IS THE ADMINISTRATOR? The One Group(R) Services Company, serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Advisors serves as the Sub-Administrator of the
Trust, pursuant to an agreement with the Administrator for which Banc One
Advisors receives a fee paid by the Administrator. Additional information
regarding the Administrator can be found in the Prospectus under the heading
"The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
WHO IS THE DISTRIBUTOR? The One Group(R) Services Company acts as Distributor
of the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A and Class B shares of the Funds. No compensation is
paid to the Distributor for distribution services for the Fiduciary Class shares
of the Funds. The activities of the Distributor are discussed under the heading
"The Distributor."
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions of shares of the
Funds may be made through the Distributor on any day that the New York Stock
Exchange is open for trading ("Business Days"). Purchase and redemption
procedures are explained in greater detail in "How to Invest in The One Group(R)
" and "Redemptions."
HOW ARE DIVIDENDS PAID? For each Fund net investment income (exclusive of
capital gains) is determined and declared daily and is distributed in the form
of daily dividends to Shareholders of record as of the first Business Day of
each month. Any capital gains are distributed at least annually. Distributions
are paid in additional shares of the same class unless the Shareholder elects to
take the payment in cash. For a more detailed discussion of dividends, see
"Dividends."
PROSPECTUS
3
<PAGE> 8
ABOUT THE FUNDS
EXPENSE SUMMARY -- THE ONE GROUP(R) CLASS A SHARES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
GOVERNMENT BOND FUND
INCOME BOND FUND LIMITED VOLATILITY BOND FUND
INTERMEDIATE BOND FUND ULTRA SHORT-TERM INCOME FUND
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases(2)
(as a percentage of offering price)............... 4.50% 3.00%
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable)............... none none
Redemption Fees..................................... none none
Exchange Fees....................................... none none
</TABLE>
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily net assets)
<TABLE>
<CAPTION>
INVESTMENT TOTAL
ADVISORY OPERATING
FEE 12B-1 FEE EXPENSES
(AFTER FEE (AFTER FEE OTHER (AFTER FEE
WAIVERS)(4) WAIVERS)(5) EXPENSES WAIVERS)(6)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............. .40% .25% .27% .92%
The One Group(R) Income Bond Fund................... .40% .25% .21% .86%
The One Group(R) Government Bond Fund............... .45% .25% .24% .94%
The One Group(R) Ultra Short-Term Income Fund....... .30% .25% .30% .85%
The One Group(R) Limited Volatility Bond Fund....... .40% .25% .22% .87%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more of Class A shares and is not
assessed a sales charge at the time of purchase, will be assessed a sales
charge equivalent to 1% of the purchase price if such purchaser redeems any
or all of the Class A shares prior to the first anniversary of purchase.
(3) The expense information in the table has been restated to reflect current
fees that would have been applicable had they been in effect during the
previous fiscal year.
(4) Investment Advisory Fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Banc One Advisors may voluntarily agree
to waive a part of its fees. Absent this voluntary reduction, Investment
Advisory Fees would be .60% for all classes of shares of the Intermediate
Bond Fund, the Income Bond Fund and the Limited Volatility Bond Fund, and
.55% for all classes of shares of the Ultra Short-Term Income Fund.
(5) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plans, 12b-1 fees (as a percentage of average daily net
assets) would be .35% for Class A shares. For a discussion of 12b-1 fees,
see "The Distributor."
(6) Total Operating Expenses have been revised to reflect fee waivers effective
as of the date of this Prospectus. Other Expenses are based on the Fund's
expenses during the most recent fiscal year. Absent the voluntary reduction
of Investment Advisory and 12b-1 fees, Total Operating Expenses would be
1.22% for Class A Shares of the Intermediate Bond Fund, 1.16% for the Class
A shares of the Income Bond Fund, 1.04% for the Class A shares of the
Government Bond Fund, 1.20% for the Class A shares of the Ultra Short-Term
Income Fund, and 1.17% for the Class A shares of the Limited Volatility Bond
Fund.
PROSPECTUS
4
<PAGE> 9
EXAMPLE: An investor would pay the following expenses on a $1,000 investment in
Class A shares of the Fund, assuming: (1) imposition of the maximum sales
charge; (2) 5% annual return; and (3) redemption at the end of each time period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............ $ 54 $ 73 $ 94 $ 153
The One Group(R) Income Bond Fund.................. $ 53 $ 71 $ 91 $ 146
The One Group(R) Government Bond Fund.............. $ 54 $ 74 $ 95 $ 155
The One Group(R) Ultra Short-Term Income Fund...... $ 38 $ 56 $ 76 $ 132
The One Group(R) Limited Volatility Bond Fund...... $ 39 $ 57 $ 77 $ 134
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Absent the voluntary reduction of fees, the dollar amounts in the above example
would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............ $ 57 $ 82 $109 $ 186
The One Group(R) Income Bond Fund.................. $ 56 $ 80 $106 $ 180
The One Group(R) Government Bond Fund.............. $ 55 $ 77 $100 $ 166
The One Group(R) Ultra Short-Term Income Fund...... $ 42 $ 67 $ 94 $ 171
The One Group(R) Limited Volatility Bond Fund...... $ 42 $ 66 $ 92 $ 168
- -------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS
5
<PAGE> 10
EXPENSE SUMMARY -- THE ONE GROUP(R) CLASS B SHARES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
GOVERNMENT BOND FUND
INCOME BOND FUND LIMITED VOLATILITY BOND FUND
INTERMEDIATE BOND FUND ULTRA SHORT-TERM INCOME FUND
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............... none none
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase
price or redemption proceeds, as applicable)...... 5.00% 3.00%
Redemption Fees..................................... none none
Exchange Fees....................................... none none
</TABLE>
ANNUAL OPERATING EXPENSES(2)
(as a percentage of average daily net assets)
<TABLE>
<CAPTION>
INVESTMENT TOTAL
ADVISORY OPERATING
FEES 12B-1 FEES EXPENSES
(AFTER FEE (AFTER FEE OTHER (AFTER FEE
WAIVERS)(3) WAIVERS)(4) EXPENSES WAIVERS)(5)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............. .40% .90% .27% 1.57%
The One Group(R) Income Bond Fund................... .40% .90% .21% 1.51%
The One Group(R) Government Bond Fund............... .45% .90% .24% 1.59%
The One Group(R) Ultra Short-Term Income Fund....... .30% .75% .30% 1.35%
The One Group(R) Limited Volatility Bond Fund....... .40% .75% .22% 1.37%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) The expense information in the table has been restated to reflect current
fees that would have been applicable had they been in effect during the
previous fiscal year.
(3) Investment Advisory Fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Banc One Advisors may voluntarily agree
to waive a part of its fees. Absent this voluntary reduction, Investment
Advisory Fees would be .60% for all classes of shares of the Intermediate
Bond Fund, the Income Bond Fund and the Limited Volatility Bond Fund, and
.55% for all classes of shares of the Ultra Short-Term Income Fund.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plans, 12b-1 fees (as a percentage of average daily net
assets) would be 1.00% for Class B shares. For a discussion of 12b-1 fees,
see "The Distributor."
(5) Total Operating Expenses have been revised to reflect fee waivers effective
as of the date of this Prospectus. Other Expenses are based on the Fund's
expenses during the most recent fiscal year. Absent the voluntary reduction
of Investment Advisory and 12b-1 fees, Total Operating Expenses would be
1.87% for Class B Shares of the Intermediate Bond Fund, 1.81% for the Class
B shares of the Income Bond Fund, 1.69% for the Class B shares of Government
Bond Fund, 1.85% for the Class B shares of Ultra Short-Term Income Fund, and
1.82% for the Class B shares of Limited Volatility Bond Fund.
EXAMPLE: An investor would pay the following expenses on a $1,000 investment in
Class B shares, assuming: (1) deduction of the applicable maximum Contingent
Deferred Sales Charge; and (2) 5% annual return.
Assuming a Complete Redemption at the End of the Period
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............ $ 66 $ 80 $106 $ 169
The One Group(R) Income Bond Fund.................. $ 65 $ 78 $102 $ 163
The One Group(R) Government Bond Fund.............. $ 66 $ 80 $107 $ 172
The One Group(R) Ultra Short-Term Income Fund...... $ 44 $ 63 $ 74 $ 136
The One Group(R) Limited Volatility Bond Fund...... $ 44 $ 63 $ 75 $ 138
- -------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS
6
<PAGE> 11
Assuming No Redemption
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............ $ 16 $ 50 $ 86 $ 169
The One Group(R) Income Bond Fund.................. $ 15 $ 48 $ 82 $ 163
The One Group(R) Government Bond Fund.............. $ 16 $ 50 $ 87 $ 172
The One Group(R) Ultra Short-Term Income Fund...... $ 14 $ 43 $ 74 $ 136
The One Group(R) Limited Volatility Bond Fund...... $ 14 $ 43 $ 75 $ 138
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Absent the voluntary reduction of fees, the dollar amounts in the above example
would be as follows:
Assuming a Complete Redemption at the End of the Period
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............ $ 69 $ 89 $121 $ 202
The One Group(R) Income Bond Fund.................. $ 68 $ 87 $118 $ 196
The One Group(R) Government Bond Fund.............. $ 67 $ 83 $112 $ 183
The One Group(R) Ultra Short-Term Income Fund...... $ 49 $ 78 $100 $ 184
The One Group(R) Limited Volatility Bond Fund...... $ 48 $ 77 $ 99 $ 181
</TABLE>
Assuming No Redemption
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............ $ 19 $ 59 $101 $ 202
The One Group(R) Income Bond Fund.................. $ 18 $ 57 $ 98 $ 196
The One Group(R) Government Bond Fund.............. $ 17 $ 53 $ 92 $ 183
The One Group(R) Ultra Short-Term Income Fund...... $ 19 $ 58 $100 $ 184
The One Group(R) Limited Volatility Bond Fund...... $ 18 $ 57 $ 99 $ 181
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 Years" examples above reflect the effect of such conversion.
PROSPECTUS
7
<PAGE> 12
EXPENSE SUMMARY -- THE ONE GROUP(R) FIDUCIARY CLASS SHARES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
GOVERNMENT BOND FUND
INCOME BOND FUND LIMITED VOLATILITY BOND FUND
INTERMEDIATE BOND FUND ULTRA SHORT-TERM INCOME FUND
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price)..................... none none
Maximum Contingent Deferred Sales Charge (as a
percentage of original purchase price or
redemption proceeds, as applicable)............... none none
Redemption Fees..................................... none none
Exchange Fees....................................... none none
- ----------------------------------------------------------------------------------------------------------
</TABLE>
ANNUAL OPERATING EXPENSES(2)
(as a percentage of average daily net assets)
<TABLE>
<CAPTION>
INVESTMENT TOTAL
ADVISORY OPERATING
FEES EXPENSES
(AFTER FEE OTHER (AFTER FEE
WAIVERS)(3) 12B-1 FEES EXPENSES WAIVERS)(4)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund.............. .40% none .27% .67%
The One Group(R) Income Bond Fund.................... .40% none .21% .61%
The One Group(R) Government Bond Fund................ .45% none .24% .69%
The One Group(R) Ultra Short-Term Income Fund........ .30% none .30% .60%
The One Group(R) Limited Volatility Bond Fund........ .40% none .22% .62%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) The expense information in the table has been restated to reflect current
fees that would have been applicable had they been in effect during the
previous fiscal year.
(3) Investment Advisory Fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Banc One Advisors may voluntarily agree
to waive a part of its fees. Absent this voluntary reduction, Investment
Advisory Fees would be .60% for all classes of shares of the Intermediate
Bond Fund, the Income Bond Fund and the Limited Volatility Bond Fund, and
.55% for all classes of shares of the Ultra Short-Term Income Fund.
(4) Total Operating Expenses have been revised to reflect fee waivers effective
as of the date of this Prospectus. Other Expenses are based on the Fund's
expenses during the most recent fiscal year. Absent the voluntary reduction
of Investment Advisory Fees, Total Operating Expenses would be .87% for
Fiduciary Class shares of the Intermediate Bond Fund, .81% for the Fiduciary
Class shares of the Income Bond Fund, .85% for the Fiduciary Class shares of
Ultra Short-Term Income Fund, and .82% for the Fiduciary Class shares of
Limited Volatility Bond Fund.
EXAMPLE: An investor would pay the following expenses on a $1,000 investment in
Fiduciary class shares of the Fund, assuming: (1) imposition of the maximum
sales charge; (2) 5% annual return; and (3) redemption at the end of each time
period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............ $ 7 $ 21 $ 37 $ 83
The One Group(R) Income Bond Fund.................. $ 6 $ 20 $ 34 $ 76
The One Group(R) Government Bond Fund.............. $ 7 $ 22 $ 38 $ 86
The One Group(R) Ultra Short-Term Income Fund...... $ 6 $ 19 $ 33 $ 75
The One Group(R) Limited Volatility Bond Fund...... $ 6 $ 20 $ 35 $ 77
</TABLE>
PROSPECTUS
8
<PAGE> 13
Absent the voluntary reduction of fees, the dollar amounts in the above example
would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The One Group(R) Intermediate Bond Fund............ $ 9 $ 28 $ 48 $ 107
The One Group(R) Income Bond Fund.................. $ 8 $ 26 $ 45 $ 100
The One Group(R) Ultra Short-Term Income Fund...... $ 9 $ 27 $ 47 $ 105
The One Group(R) Limited Volatility Bond Fund...... $ 8 $ 26 $ 46 $ 101
</TABLE>
The tables on pages 5-9 are designed to assist the investor in understanding the
various costs and expenses that may be directly or indirectly borne by investors
in the Trust. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The tables on pages 5-9 are designed to assist the investor in understanding the
various costs and expenses that may be directly or indirectly borne by investors
in the Trust. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The rules of the SEC require that the maximum sales charge be reflected in the
above tables. However, investors in the Funds ("Shareholders") may, under
certain circumstances, qualify for reduced sales charges. See "How to Invest in
The One Group(R)." Long-term Shareholders of Class A shares and Class B shares
may pay more than the equivalent of the maximum front-end sales charges
otherwise permitted by the National Association of Securities Dealers' Rules.
The rules of the SEC require that the maximum sales charge be reflected in the
above tables. However, investors in the Funds ("Shareholders") may, under
certain circumstances, qualify for reduced sales charges. See "How to Invest in
The One Group(R)." Long-term Shareholders of Class A shares and Class B shares
may pay more than the equivalent of the maximum front-end sales charges
otherwise permitted by the National Association of Securities Dealers' Rules.
FINANCIAL HIGHLIGHTS
The Trust was organized as a Massachusetts Business Trust on May 23, 1985. The
Trust currently consists of 40 separate investment portfolios (the "funds").
Currently, shares in the Funds are offered in three separate classes: Class A
shares, Class B shares and Fiduciary Class shares.
The following tables set forth certain financial information with respect to the
Financial Highlights for Class A, Class B and Fiduciary Class shares of the
Funds for the period from commencement of operations of each class of each Fund
to December 31, 1996. The information from the commencement of operations to
June 30, 1996 is a part of the financial statements audited by Coopers & Lybrand
L.L.P., independent accountants for the Trust, whose report on the Trust's
financial statements for the year ended June 30, 1996 appears in the Statement
of Additional Information. The information for the period ended December 31,
1996 is unaudited. Further information about the Funds' performance is contained
in the Annual Report to Shareholders, which may be obtained without charge from
the Distributor by calling 1-800-480-4111 during business hours.
PROSPECTUS
9
<PAGE> 14
THE ONE GROUP(R) INTERMEDIATE BOND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
----------------------------------------------------------------------
FIDUCIARY
----------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------
1996 1996 1995 1994 1993 1992(A)
------------ -------- -------- ------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $ 9.84 $ 10.01 $ 9.72 $ 10.51 $ 10.09 $ 10.00
-------- -------- -------- ------- ------- -------
Investment Activities
Net investment income..................... 0.33 0.66 0.66 0.60 0.63 0.22
Net realized and unrealized gains (losses)
from investments and futures............ 0.12 (0.17) 0.29 (0.67) 0.42 0.08
-------- -------- -------- ------- ------- -------
Total from Investment Activities............ 0.45 0.49 0.95 (0.07) 1.05 0.30
-------- -------- -------- ------- ------- -------
Distributions
Net investment income..................... (0.33) (0.66) (0.66) (0.60) (0.63) (0.21)
In excess of net investment income........ -- -- -- (0.02) -- --
Net realized gains........................ -- -- -- (0.10) -- --
-------- -------- -------- ------- ------- -------
Total Distributions......................... (0.33) (0.66) (0.66) (0.72) (0.63) (0.21)
-------- -------- -------- ------- ------- -------
Net Asset Value, End of Period.............. $ 9.96 $ 9.84 $ 10.01 $ 9.72 $ 10.51 $ 10.09
======== ======== ======== ======= ======= =======
Total Return (Excludes Sales Charge)........ 4.60%(c) 4.95% 10.15% (0.74)% 10.67% 3.00% (c)
Ratios/Supplementary Data:
Net Assets at end of period (000)......... $278,201 $230,812 $191,216 $98,483 $44,252 $23,457
Ratio of expenses to average net assets... 0.52%(b) 0.54% 0.56% 0.32% 0.39% 0.36% (b)
Ratio of net investment income to average
net assets.............................. 6.53%(b) 6.56% 6.88% 6.04% 6.14% 6.99% (b)
Ratio of expenses to average net
assets*................................. 0.81%(b) 0.87% 0.99% 0.87% 1.17% 1.33% (b)
Ratio of net investment income to average
net assets*............................. 6.24%(b) 6.23% 6.45% 5.49% 5.36% 6.02% (b)
Portfolio Turnover (d).................... 26.00% 101.06% 99.71% 85.62% 21.51% 11.74%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations February 28, 1992
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
-------------------------------------
CLASS A
-------------------------------------
SIX MONTHS YEARS ENDED
ENDED JUNE 30,
DECEMBER 31, ---------------------
1996 1996 1995(A)
------------ ------- -------
(UNAUDITED)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................................... $ 9.87 $ 10.04 $ 9.45
------- ------- ------
Investment Activities
Net investment income................................................ 0.31 0.64 0.37
Net realized and unrealized gains (losses) from investments and
futures............................................................ 0.12 (0.17) 0.59
------- ------- ------
Total from Investment Activities....................................... 0.43 0.47 0.96
------- ------- ------
Distributions
Net investment income................................................ (0.31) (0.64) (0.37)
------- ------- ------
Total Distributions.................................................... (0.31) (0.64) (0.37)
------- ------- ------
Net Asset Value, End of Period......................................... $ 9.99 $ 9.87 $10.04
======= ======= ======
Total Return (Excludes Sales Charge)................................... 4.46%(c) 4.77% 10.29% (c)
Ratios/Supplementary Data:
Net Assets at end of period (000).................................... $ 14,468 $13,706 $4,941
Ratio of expenses to average net assets.............................. 0.77%(b) 0.79% 0.83% (b)
Ratio of net investment income to average net assets................. 6.28%(b) 6.31% 6.64% (b)
Ratio of expenses to average net assets*............................. 1.15%(b) 1.22% 1.66% (b)
Ratio of net investment income to average net assets*................ 5.90%(b) 5.88% 5.81% (b)
Portfolio Turnover (d)............................................... 26.00% 101.06% 99.71%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced operations November 30, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
10
<PAGE> 15
THE ONE GROUP(R) INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
------------------------------------
CLASS B
------------------------------------
YEARS ENDED
JUNE 30,
--------------------
1996 1995(A)
SIX MONTHS ------ -------
ENDED
DECEMBER 31,
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.................................... $ 9.83 $10.01 $ 9.45
------ ------ -------
Investment Activities
Net investment income................................................. 0.28 0.58 0.23
Net realized and unrealized gains (losses) from investments and
futures............................................................. 0.13 (0.18) 0.56
------ ------ -------
Total from Investment Activities........................................ 0.41 0.40 0.79
------ ------ -------
Distributions
Net investment income................................................. (0.28) (0.58) (0.23)
------ ------ -------
Total Distributions..................................................... (0.28) (0.58) (0.23)
------ ------ -------
Net Asset Value, End of Period.......................................... $ 9.96 $ 9.83 $10.01
====== ====== =======
Total Return (Excludes Sales Charge).................................... 4.23%(c) 4.10% 8.22% (c)
Ratios/Supplementary Data:
Net Assets at end of period (000)..................................... $7,716 $6,077 $ 266
Ratio of expenses to average net assets............................... 1.42%(b) 1.44% 1.51% (b)
Ratio of net investment income to average net assets.................. 5.63%(b) 5.66% 6.15% (b)
Ratio of expenses to average net assets*.............................. 1.82%(b) 1.87% 2.34% (b)
Ratio of net investment income to average net assets*................. 5.23%(b) 5.23% 5.31% (b)
Portfolio Turnover (d)................................................ 26.00% 101.06% 99.71%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations on November 30, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
11
<PAGE> 16
THE ONE GROUP(R) INCOME BOND FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
INCOME BOND FUND
--------------------------------------------------------------------------
FIDUCIARY
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ---------------------------------------------------------
1996 1996 1995 1994 1993 1992
------------ -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $ 9.33 $ 9.54 $ 9.23 $ 10.43 $ 10.18 $ 9.59
-------- -------- -------- -------- -------- --------
Investment Activities
Net investment income...................... 0.32 0.65 0.64 0.54 0.66 0.71
Net realized and unrealized gains (losses)
from investments and futures............. 0.13 (0.21) 0.35 (0.74) 0.38 0.59
-------- -------- -------- -------- -------- --------
Total from Investment Activities............. 0.45 0.44 0.99 (0.20) 1.04 1.30
-------- -------- -------- -------- -------- --------
Distributions
Net investment income...................... (0.32) (0.65) (0.64) (0.57) (0.66) (0.71)
Net realized gains......................... -- -- (0.04) (0.43) (0.13) --
-------- -------- -------- -------- -------- --------
Total Distributions.......................... (0.32) (0.65) (0.68) (1.00) (0.79) (0.71)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period............... $ 9.46 $ 9.33 $ 9.54 $ 9.23 $ 10.43 $ 10.18
======== ======== ======== ======== ======== ========
Total Return (Excludes Sales Charge)......... 4.92%(b) 4.62% 11.29% (2.54)% 10.62% 13.85%
Ratios/Supplementary Data:
Net Assets at end of period (000).......... $584,762 $520,239 $474,124 $560,071 $483,291 $376,898
Ratio of expenses to average net assets.... 0.59%(a) 0.59% 0.59% 0.53% 0.56% 0.49%
Ratio of net investment income to average
net assets............................... 6.78%(a) 6.76% 6.94% 5.35% 6.44% 7.18%
Ratio of expenses to average net assets*... 0.79%(a) 0.81% 0.86% 0.85% 0.90% 1.04%
Ratio of net investment income to average
net assets*.............................. 6.58%(a) 6.54% 6.67% 5.03% 6.10% 6.63%
Portfolio Turnover (c)..................... 21.77% 95.52% 262.25% 131.04% 143.52% 32.50%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
<TABLE>
<CAPTION>
INCOME BOND FUND
---------------------------------------------------------------------
CLASS A
---------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------
1996 1996 1995 1994 1993 1992(A)
------------ ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 9.32 $ 9.54 $ 9.22 $ 10.43 $ 10.16 $10.06
-------- ------- ------- ------- ------- ------
Investment Activities
Net investment income........................... 0.31 0.63 0.61 0.52 0.63 0.26
Net realized and unrealized gains (losses) from
investments and futures....................... 0.13 (0.23) 0.36 (0.75) 0.41 0.11
-------- ------- ------- ------- ------- ------
Total from Investment Activities.................. 0.44 0.40 0.97 (0.23) 1.04 0.37
-------- ------- ------- ------- ------- ------
Distributions
Net investment income........................... (0.31) (0.62) (0.60) (0.55) (0.64) (0.27)
In excess of net investment income.............. -- -- (0.01) -- -- --
Net realized gains.............................. -- -- (0.04) (0.43) (0.13) --
-------- ------- ------- ------- ------- ------
Total Distributions............................... (0.31) (0.62) (0.65) (0.98) (0.77) (0.27)
-------- ------- ------- ------- ------- ------
Net Asset Value, End of Period.................... $ 9.45 $ 9.32 $ 9.54 $ 9.22 $ 10.43 $10.16
======== ======= ======= ======= ======= ======
Total Return (Excludes Sales Charge).............. 4.79%(c) 4.26% 10.90% (2.33)% 10.58% 10.16% (b)
Ratios/Supplementary Data:
Net Assets at end of period (000)............... $ 12,527 $10,127 $ 6,796 $ 5,347 $ 7,064 $ 188
Ratio of expenses to average net assets......... 0.84%(b) 0.84% 1.01% 0.78% 0.77% 0.97% (b)
Ratio of net investment income to average net
assets........................................ 6.53%(b) 6.51% 6.57% 5.25% 6.12% 6.58% (b)
Ratio of expenses to average net assets*........ 1.14%(b) 1.16% 1.38% 1.20% 1.26% 1.27% (b)
Ratio of net investment income to average net
assets*....................................... 6.23%(b) 6.19% 6.20% 4.83% 5.63% 6.28% (b)
Portfolio Turnover (d).......................... 21.77% 95.52% 262.25% 131.04% 143.52% 32.50%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A commenced offering on February 18, 1992.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
12
<PAGE> 17
THE ONE GROUP(R) INCOME BOND FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
INCOME BOND FUND
---------------------------------------------
CLASS B
---------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------
1996 1996 1995 1994(A)
------------ ------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................... $ 9.40 $ 9.62 $ 9.29 $ 9.97
------ ------ ------- -------
Investment Activities
Net investment income............................................ 0.28 0.56 0.56 0.17
Net realized and unrealized gains (losses) from investments and
futures........................................................ 0.14 (0.21) 0.38 (0.70)
------ ------ ------- -------
Total from Investment Activities................................... 0.42 0.35 0.94 (0.53)
------ ------ ------- -------
Distributions
Net investment income............................................ (0.28) (0.57) (0.57) (0.15)
Net realized gains............................................... -- -- (0.04) --
------ ------ ------- -------
Total Distributions................................................ (0.28) (0.57) (0.61) (0.15)
------ ------ ------- -------
Net Asset Value, End of Period..................................... $ 9.54 $ 9.40 $ 9.62 $ 9.29
====== ====== ======= =======
Total Return (Excludes Sales Charge)............................... 4.56%(c) 3.65% 10.63% (5.29)%(c)
Ratios/Supplementary Data:
Net Assets at end of period (000)................................ $9,075 $6,110 $ 1,887 $ 723
Ratio of expenses to average net assets.......................... 1.49%(b) 1.49% 1.49% 1.45%(b)
Ratio of net investment income to average net assets............. 5.88%(b) 5.86% 6.16% 5.20%(b)
Ratio of expenses to average net assets*......................... 1.81%(b) 1.81% 1.86% 1.84%(b)
Ratio of net investment income to average net assets*............ 5.56%(b) 5.54% 5.80% 4.81%(b)
Portfolio Turnover (c)........................................... 21.77% 95.52% 262.25% 131.04%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 17, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
<TABLE>
<CAPTION>
INCOME BOND FUND
------------------------
SERVICE/RETIREMENT(A)
------------------------
YEARS ENDED JUNE 30,
------------------------
1995 1994
------- -------
<S> <C> <C>
Net Asset Value, Beginning of Period................................................ $ 9.05 $ 9.97
-------- --------
Investment Activities
Net investment income............................................................. 0.49 0.12
Net realized and unrealized gains (losses) from investments and futures........... 0.40 (0.94)
-------- --------
Total from Investment Activities.................................................... 0.89 (0.82)
-------- --------
Distributions
Net investment income............................................................. (0.51) (0.10)
Net realized gains................................................................ (0.04) --
-------- --------
Total Distributions................................................................. (0.55) (0.10)
-------- --------
Net Asset Value, End of Period...................................................... $ 9.39 $ 9.05
======== ========
Total Return (Excludes Sales Charge)................................................ (a) (8.24)%(c)
Ratios/Supplementary Data:
Net Assets at end of period (000)................................................. $ -- $ 57
Ratio of expenses to average net assets........................................... 1.24%(b) 1.30%(b)
Ratio of net investment income to average net assets.............................. 5.85%(b) 5.28%(b)
Ratio of expenses to average net assets*.......................................... 1.53%(b) 1.59%(b)
Ratio of net investment income to average net assets*............................. 5.57%(b) 4.99%(b)
Portfolio Turnover (d)............................................................ 262.25% 131.04%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designed as "Retirement Shares". On April 4, 1995, the name of the
Retirement Shares was changed to "Service" Shares. As of June 1, 1995,
Service shares transferred to Class A Shares, and as of June 30, 1995 and
1996, there were no shareholders in the Service Class. The return for the
period from July 1, 1994 to June 1, 1995 for the Service Shares was 9.93%.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
13
<PAGE> 18
THE ONE GROUP(R) GOVERNMENT BOND FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
-------------------------------------------------------------------
FIDUCIARY
-------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------
1996 1996 1995 1994 1993(A)
------------ -------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $ 9.56 $ 9.81 $ 9.35 $ 10.15 $10.00
-------- -------- -------- -------- -------
Investment Activities
Net investment income..................... 0.31 0.62 0.62 0.51 0.20
Net realized and unrealized gains (losses)
from investments and futures............ 0.15 (0.25) 0.46 (0.77) (0.15)
-------- -------- -------- -------- -------
Total from Investment Activities............ 0.46 0.37 1.08 (0.26) 0.35
-------- -------- -------- -------- -------
Distributions
Net investment income..................... (0.31) (0.62) (0.61) (0.50) (0.20)
In excess of net investment income........ -- -- (0.01) (0.02) --
In excess of net realized gains........... -- -- -- (0.02) --
-------- -------- -------- -------- -------
Total Distributions......................... (0.31) (0.62) (0.62) (0.54) (0.20)
-------- -------- -------- -------- -------
Net Asset Value, End Of Period.............. $ 9.71 $ 9.56 $ 9.81 $ 9.35 $10.15
======== ======== ======== ======== =======
Total Return (Excludes Sales Charge)........ 4.90%(c) 3.81% 12.04% (2.73)% 9.03% (b)
Ratios/Supplementary Data:
Net Assets at end of period (000)......... $668,024 $677,326 $379,826 $209,692 $52,152
Ratio of expenses to average net assets... 0.63%(b) 0.68% 0.71% 0.68% 0.69% (b)
Ratio of net investment income to average
net assets.............................. 6.42%(b) 6.34% 6.65% 5.13% 5.43% (b)
Ratio of expenses to average net
assets*................................. 0.66%(b) 0.69% 0.73% 0.71% 1.05% (b)
Ratio of net investment income to average
net assets*............................. 6.39%(b) 6.33% 6.63% 5.10% 5.07% (b)
Portfolio Turnover (c).................... 22.24% 62.70% 106.14% 377.78% 139.24%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced offering on February 8, 1993.
(b) Annualized.
(c) Not Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
---------------------------------------------------------------
CLASS A
---------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ---------------------------------------------
1996 1996 1995 1994 1993(A)
------------ ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $ 9.56 $ 9.81 $ 9.35 $ 10.17 $10.22
------- ------- ------- ------- -------
Investment Activities
Net investment income......................... 0.30 0.60 0.61 0.48 0.17
Net realized and unrealized gains (losses)
from investments and futures................ 0.15 (0.25) 0.45 (0.79) (0.05)
------- ------- ------- ------- -------
Total from Investment Activities................ 0.45 0.35 1.06 (0.31) 0.12
------- ------- ------- ------- -------
Distributions
Net investment income......................... (0.30) (0.60) (0.59) (0.47) (0.17)
In excess of net investment income............ -- -- (0.01) (0.02) --
In excess of net realized gains............... -- -- -- (0.02) --
------- ------- ------- ------- -------
Total Distributions............................. (0.30) (0.60) (0.60) (0.51) (0.17)
------- ------- ------- ------- -------
Net Asset Value, End of Period.................. $ 9.71 $ 9.56 $ 9.81 $ 9.35 $10.17
======= ======= ======= ======= =======
Total Return (Excludes Sales Charge)............ 4.77%(c) 3.58% 11.84% (3.16)% 5.35% (b)
Ratios/Supplementary Data:
Net Assets at end of period (000)............. $ 37,606 $38,800 $ 8,130 $ 1,690 $ 840
Ratio of expenses to average net assets....... 0.88%(b) 0.93% 0.97% 0.92% 0.95% (b)
Ratio of net investment income to average net
assets...................................... 6.17%(b) 6.09% 6.46% 4.84% 5.56% (b)
Ratio of expenses to average net assets*...... 1.01%(b) 1.04% 1.09% 1.05% 1.44% (b)
Ratio of net investment income to average net
assets*..................................... 6.04%(b) 5.98% 6.34% 4.71% 5.07% (b)
Portfolio Turnover (c)........................ 22.24% 62.70% 106.14% 377.78% 139.24%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on March 5, 1993.
(b) Annualized.
(c) Not Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
14
<PAGE> 19
THE ONE GROUP(R) GOVERNMENT BOND FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
----------------------------------------------------
CLASS B
----------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------
1996 1996 1995 1994(A)
------------ ------- ------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................... $ 9.56 $ 9.81 $ 9.35 $ 10.04
------- ------- ------- -------
Investment Activities
Net investment income................................... 0.27 0.54 0.55 0.18
Net realized and unrealized gains (losses) from
investments and futures............................... 0.15 (0.25) 0.46 (0.69)
------- ------- ------- -------
Total from Investment Activities.......................... 0.42 0.29 1.01 (0.51)
------- ------- ------- -------
Distributions
Net investment income................................... (0.27) (0.54) (0.55) (0.16)
In excess of net investment income...................... -- -- -- (0.02)
In excess of net realized gains......................... -- -- -- --
------- ------- ------- -------
Total Distributions....................................... (0.27) (0.54) (0.55) (0.18)
------- ------- ------- -------
Net Asset Value, End of Period............................ $ 9.71 $ 9.56 $ 9.81 $ 9.35
======= ======= ======= =======
Total Return (Excludes Sales Charge)...................... 4.43%(c) 2.95% 11.20% (4.99)% (c)
Ratios/Supplementary Data:
Net Assets at end of period (000)....................... $ 11,316 $10,782 $ 2,513 $ 656
Ratio of expenses to average net assets................. 1.53%(b) 1.58% 1.62% 1.52% (b)
Ratio of net investment income to average net assets.... 5.52%(b) 5.44% 5.76% 4.60% (b)
Ratio of expenses to average net assets*................ 1.66%(b) 1.69% 1.74% 1.63% (b)
Ratio of net investment income to average net assets*... 5.39%(b) 5.33% 5.64% 4.49% (b)
Portfolio Turnover (d).................................. 22.24% 62.70% 106.14% 377.78%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
--------------------
SERVICE/RETIREMENT(A)
--------------------
YEAR ENDED
JUNE 30, 1995
--------------------
<S> <C>
Net Asset Value, Beginning of Period..................................................... $ 9.32
-------
Investment Activities
Net investment income.................................................................. 0.44
Net realized and unrealized gains (losses) from investments and futures................ 0.46
-------
Total from Investment Activities......................................................... 0.90
-------
Distributions
Net investment income.................................................................. (0.44)
-------
Total Distributions...................................................................... (0.44)
-------
Net Asset Value, End of Period........................................................... $ 9.78
=======
Total Return (Excludes Sales Charge)..................................................... --(a)
Ratios/Supplementary Data:
Net Assets at end of period (000)...................................................... $ --
Ratio of expenses to average net assets................................................ 1.64%(b)
Ratio of net investment income to average net assets................................... 6.65%(b)
Ratio of expenses to average net assets*............................................... 1.66%(b)
Ratio of net investment income to average net assets*.................................. 6.62%(b)
Portfolio Turnover (c)................................................................. 106.14%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on July 15, 1994 when they were
designated as "Retirement Shares". On April 4, 1995, the name of the
Retirement Shares was changed to "Service" Shares. As of June 1, 1995,
Service shares transferred to Class A Shares, and as of June 30, 1996 and
1995, there were no shareholders in the Service Class. The return for the
period from July 15, 1994 to June 1, 1995 for the Service Shares was 9.59%.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
15
<PAGE> 20
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
ULTRA SHORT-TERM INCOME FUND
--------------------------------------------------------------
FIDUCIARY
--------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, --------------------------------------------
1996 1996 1995 1994 1993(A)
------------ -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $ 9.79 $ 9.84 $ 9.85 $ 10.03 $ 10.00
------- ------- ------- -------- --------
Investment Activities
Net investment income.............................. 0.31 0.62 0.55 0.36 0.17
Net realized and unrealized gains (losses) from
investments and futures.......................... 0.04 (0.07) (0.05) (0.15) 0.03
------- ------- ------- -------- --------
Total from Investment Activities..................... 0.35 0.55 0.50 0.21 0.20
------- ------- ------- -------- --------
Distributions
Net investment income.............................. (0.30) (0.60) (0.48) (0.37) (0.17)
In excess of net investment income................. -- -- (0.03) (0.02) --
------- ------- ------- -------- --------
Total Distributions.................................. (0.30) (0.60) (0.51) (0.39) (0.17)
------- ------- ------- -------- --------
Net Asset Value, End of Period....................... $ 9.84 $ 9.79 $ 9.84 $ 9.85 $ 10.03
======= ======= ======= ======== ========
Total Return (Excludes Sales Charge)................. 3.70%(c) 5.71% 5.14% 2.16% 4.93%(b)
Ratios/Supplementary Data:
Net Assets at end of period (000).................. $ 72,650 $ 57,276 $ 51,050 $139,593 $154,413
Ratio of expenses to average net assets............ 0.32%(b) 0.45% 0.61% 0.65% 0.58%(b)
Ratio of net investment income to average net
assets........................................... 6.05%(b) 6.20% 5.18% 3.70% 4.71%(b)
Ratio of expenses to average net assets*........... 0.82%(b) 1.06% 1.01% 0.81% 1.03%(b)
Ratio of net investment income to average net
assets*.......................................... 5.55%(b) 5.59% 4.78% 3.54% 4.26%(b)
Portfolio Turnover (d)............................. 19.81% 67.65% 2.91% 242.20% 109.96%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations on February 2, 1993.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
<TABLE>
<CAPTION>
ULTRA SHORT-TERM INCOME FUND
---------------------------------------------------------
CLASS A
---------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, --------------------------------------
1996 1996 1995 1994 1993(A)
------------ ------ ------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..................... $ 9.78 $ 9.83 $ 9.84 $ 10.03 $10.00
------ ------ ------ ------- -------
Investment Activities
Net investment income.................................. 0.29 0.58 0.52 0.36 0.14
Net realized and unrealized gains (losses) from
investments and futures.............................. 0.05 (0.06) (0.06) (0.17) 0.03
------ ------ ------ ------- -------
Total from Investment Activities......................... 0.34 0.52 0.46 0.19 0.17
------ ------ ------ ------- -------
Distributions
Net investment income.................................. (0.29) (0.57) (0.46) (0.34) (0.14)
In excess of net investment income..................... -- -- (0.01) (0.04) --
------ ------ ------ ------- -------
Total Distributions...................................... (0.29) (0.57) (0.47) (0.38) (0.14)
------ ------ ------ ------- -------
Net Asset Value, End of Period........................... $ 9.83 $ 9.78 $ 9.83 $ 9.84 $10.03
====== ====== ====== ======= =======
Total Return (Excludes Sales Charge)..................... 3.48%(c) 5.42% 4.84% 1.95% 4.78%(b)
Ratios/Supplementary Data:
Net Assets at end of period (000)...................... $5,277 $3,969 $4,631 $19,053 $3,106
Ratio of expenses to average net assets................ 0.57%(b) 0.70% 0.86% 0.89% 0.81%(b)
Ratio of net investment income to average net assets... 5.79%(b) 5.95% 4.88% 3.54% 4.47%(b)
Ratio of expenses to average net assets*............... 1.21%(b) 1.41% 1.36% 1.14% 1.34%(b)
Ratio of net investment income to average net
assets*.............................................. 5.15%(b) 5.24% 4.38% 3.29% 3.95%(b)
Portfolio Turnover (d)................................. 19.81% 67.65% 2.91% 242.20% 109.96%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced offering on March 10, 1993.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
16
<PAGE> 21
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
ULTRA SHORT-TERM INCOME FUND
-------------------------------------------------
CLASS B
-------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------
1996 1996 1995 1994(A)
------------ ------ ------ -------
(UNAUDITED)
------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......................... $ 9.76 $ 9.84 $ 9.86 $ 9.98
------ ------ ------ -------
Investment Activities
Net investment income...................................... 0.26 0.52 0.47 0.12
Net realized and unrealized gains (losses) from investments
and futures.............................................. 0.04 (0.07) (0.04) (0.11)
------ ------ ------ -------
Total from Investment Activities............................. 0.30 0.45 0.43 0.01
------ ------ ------ -------
Distributions
Net investment income...................................... (0.27) (0.53) (0.45) (0.12)
In excess of net investment income......................... -- -- -- (0.01)
------ ------ ------ -------
Total Distributions.......................................... (0.27) (0.53) (0.45) (0.13)
------ ------ ------ -------
Net Asset Value, End of Period............................... $ 9.79 $ 9.76 $ 9.84 $ 9.86
====== ====== ====== =======
Total Return (Excludes Sales Charge)......................... 3.13%(c) 4.63% 4.77% (0.09)% (c)
Ratios/Supplementary Data:
Net Assets at end of period (000).......................... $1,675 $1,144 $ 160 $ 15
Ratio of expenses to average net assets.................... 1.22%(b) 1.20% 1.31% 1.41% (b)
Ratio of net investment income to average net assets....... 5.15%(b) 5.45% 4.91% 3.49% (b)
Ratio of expenses to average net assets*................... 1.81%(b) 2.06% 1.96% 1.83% (b)
Ratio of net investment income to average net assets*...... 4.56%(b) 4.59% 4.26% 3.07% (b)
Portfolio Turnover (d)..................................... 19.81% 67.65% 2.91% 242.20%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced offering on January 14, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
17
<PAGE> 22
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
LIMITED VOLATILITY BOND FUND
-------------------------------------------------------------------------
FIDUCIARY
-------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, --------------------------------------------------------
1996 1996 1995 1994 1993 1992
------------ -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $ 10.42 $ 10.53 $ 10.33 $ 10.87 $ 10.72 $ 10.26
-------- -------- -------- -------- -------- --------
Investment Activities
Net investment income....................... 0.32 0.64 0.60 0.54 0.61 0.70
Net realized and unrealized gains (losses)
from investments and futures.............. 0.06 (0.11) 0.19 (0.45) 0.25 0.47
-------- -------- -------- -------- -------- --------
Total from Investment Activities.............. 0.38 0.53 0.79 0.09 0.86 1.17
-------- -------- -------- -------- -------- --------
Distributions
Net investment income....................... (0.32) (0.64) (0.59) (0.55) (0.62) (0.70)
In excess of net investment income.......... -- -- -- (0.02) -- --
Net realized gains.......................... -- -- -- (0.06) (0.09) (0.01)
-------- -------- -------- -------- -------- --------
Total Distributions........................... (0.32) (0.64) (0.59) (0.63) (0.71) (0.71)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period................ $ 10.48 $ 10.42 $ 10.53 $ 10.33 $ 10.87 $ 10.72
======== ======== ======== ======== ======== ========
Total Return (Excludes Sales Charge).......... 3.65%(b) 5.13% 7.96% 0.79% 8.27% 11.75%
Ratios/Supplementary Data:
Net Assets at end of period (000)........... $589,229 $604,916 $410,746 $447,394 $397,820 $301,907
Ratio of expenses to average net assets..... 0.51%(a) 0.51% 0.52% 0.50% 0.56% 0.52%
Ratio of net investment income to average
net assets................................ 5.98%(a) 6.06% 5.82% 5.10% 5.70% 6.63%
Ratio of expenses to average net assets*.... 0.81%(a) 0.82% 0.85% 0.85% 0.90% 1.04%
Ratio of net investment income to average
net assets*............................... 5.68%(a) 5.75% 5.49% 4.75% 5.36% 6.11%
Portfolio Turnover (c)...................... 21.27% 75.20% 76.43% 30.61% 40.28% 43.87%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
<TABLE>
<CAPTION>
LIMITED VOLATILITY BOND FUND
--------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ---------------------------------------------------
1996 1996 1995 1994 1993 1992(A)
------------ ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $ 10.41 $ 10.52 $ 10.32 $ 10.87 $ 10.72 $10.61
------- ------- ------- ------- ------- -----
Investment Activities
Net investment income.......................... 0.30 0.63 0.56 0.52 0.59 0.24
Net realized and unrealized gains (losses) from
investments and futures...................... 0.07 (0.13) 0.21 (0.46) 0.24 0.13
------- ------- ------- ------- ------- -----
Total from Investment Activities................. 0.37 0.50 0.77 0.06 0.83 0.37
------- ------- ------- ------- ------- -----
Distributions
Net investment income.......................... 0.30 (0.61) (0.56) (0.51) (0.59) (0.26)
In excess of net investment income............. -- -- (0.01) (0.04) -- --
Net realized gains............................. -- -- -- (0.06) (0.09) --
------- ------- ------- ------- ------- -----
Total Distributions.............................. (0.30) (0.61) (0.57) (0.61) (0.68) (0.26)
------- ------- ------- ------- ------- -----
Net Asset Value, End of Period................... $ 10.48 $ 10.41 $ 10.52 $ 10.32 $ 10.87 $10.72
======= ======= ======= ======= ======= =====
Total Return (Excludes Sales Charge)............. 3.60%(c) 4.86% 7.67% 0.49% 8.04% 9.84% (b)
Ratios/Supplementary Data:
Net Assets at end of period (000).............. $ 20,953 $21,343 $12,516 $15,216 $15,719 $ 161
Ratio of expenses to average net assets........ 0.76%(b) 0.76% 0.77% 0.75% 0.76% 0.99% (b)
Ratio of net investment income to average net
assets....................................... 5.73%(b) 5.81% 5.57% 4.92% 5.35% 5.95% (b)
Ratio of expenses to average net assets*....... 1.15%(b) 1.17% 1.20% 1.20% 1.27% 1.29% (b)
Ratio of net investment income to average net
assets*...................................... 5.34%(b) 5.40% 5.14% 4.47% 4.84% 5.65% (b)
Portfolio Turnover (d)......................... 21.27% 75.20% 76.43% 30.61% 40.28% 43.87%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on February 18, 1992.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
18
<PAGE> 23
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
FINANCIAL HIGHLIGHTS
For a share of each class outstanding throughout each period.
<TABLE>
<CAPTION>
LIMITED VOLATILITY BOND FUND
-----------------------------------------------
CLASS B
-----------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------
1996 1996 1995 1994(A)
------------ ------ ------ --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......................... $10.49 $10.60 $10.40 $10.78
------- ------- ------- -------
Investment Activities
Net investment income....................................... 0.27 0.55 0.53 0.17
Net realized and unrealized gains (losses) from investments
and futures............................................... 0.06 (0.10) 0.19 (0.37)
------- ------- ------- -------
Total from Investment Activities.............................. 0.33 0.45 0.72 (0.20)
------- ------- ------- -------
Distributions
Net investment income....................................... (0.27) (0.56) (0.52) (0.15)
In excess of net realized gains............................. -- -- -- (0.03)
------- ------- ------- -------
Total Distributions........................................... (0.27) (0.56) (0.52) (0.18)
------- ------- ------- -------
Net Asset Value, End of Period................................ $10.55 $10.49 $10.60 $10.40
======= ======= ======= =======
Total Return (Excludes Sales Charge).......................... 3.18%(c) 4.28% 7.18% (1.81)%(c)
Ratios/Supplementary Data:
Net Assets at end of period (000)........................... $5,073 $4,923 $2,906 $1,974
Ratio of expenses to average net assets..................... 1.41%(b) 1.26% 1.28% 1.26%(b)
Ratio of net investment income to average net assets........ 5.08%(b) 5.31% 5.10% 4.39%(b)
Ratio of expenses to average net assets*.................... 1.81%(b) 1.82% 1.86% 1.86%(b)
Ratio of net investment income to average net assets*....... 4.68%(b) 4.75% 4.52% 3.79%(b)
Portfolio Turnover (d)...................................... 21.27% 75.20% 76.43% 30.61%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
<TABLE>
<CAPTION>
LIMITED VOLATILITY
BOND FUND
------------------------
SERVICE/RETIREMENT(A)
------------------------
YEARS ENDED JUNE 30,
------------------------
1995 1994
------ ------
<S> <C> <C>
Net Asset Value, Beginning of Period................................................ $10.38 $10.78
------- -------
Investment Activities
Net investment income............................................................. 0.51 0.10
Net realized and unrealized gains (losses) from investments and futures........... 0.19 (0.38)
------- -------
Total from Investment Activities.................................................... 0.70 (0.28)
------- -------
Distributions
Net investment income............................................................. (0.49) (0.08)
In excess of net investment income................................................ -- (0.04)
------- -------
Total Distributions................................................................. (0.49) (0.12)
------- -------
Net Asset Value, End of Period...................................................... $10.59 $10.38
======= =======
Total Return (Excludes Sales Charge)................................................ -- (a) (2.59)% (c)
Ratios/Supplementary Data:
Net Assets at end of period (000)................................................. $ -- $ 16
Ratio of expenses to average net assets........................................... 1.32% (b) 1.26% (b)
Ratio of net investment income to average net assets.............................. 5.55% (b) 4.37% (b)
Ratio of expenses to average net assets*.......................................... 1.68% (b) 1.60% (b)
Ratio of net investment income to average net assets*............................. 5.20% (b) 4.03% (b)
Portfolio Turnover (d)............................................................ 76.43% 30.61%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designated as "Retirement shares." On April 4, 1995, the name of the
Retirement Shares was changed to "Service" shares. As of June 1, 1995,
Service shares transferred to Class A Shares, and as of June 30, 1996 and
1995, there were no shareholders in the Service Class. The return for the
period from July 1, 1994 to June 1, 1995 for the Service Shares was 6.90%.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
PROSPECTUS
19
<PAGE> 24
THE FUNDS
The Funds are part of the Trust, which is an open-end management investment
company that offers shares in 40 separate funds, most of which offer three
classes of shares. This Prospectus relates to the Class A, Class B and Fiduciary
Class shares of the five taxable bond Funds of the Trust. Each class of shares
provides for variations in distribution costs, voting rights, dividends and per
share net asset value. Except for these differences among classes, each share of
a Fund represents an undivided, proportionate interest in the Fund. Information
regarding the Trust's 35 other funds and their classes is contained in separate
prospectuses which may be obtained from the Trust's Distributor, The One
Group(R) Services Company, 3435 Stelzer Road, Columbus, OH 43219 or by calling
1-800-480-4111.
INVESTMENT OBJECTIVES AND PERMISSIBLE INVESTMENTS
The investment objectives of the Funds are "fundamental" and may not be changed
without a Shareholder vote. For additional information on Shareholder voting,
see the sections of this Prospectus entitled "Other Information -- Voting
Rights" and "Investment Limitations." Unless expressly deemed to be fundamental,
the investment policies of the Funds are non-fundamental and may be changed
without a shareholder vote. You will be notified if a material change is made in
a non-fundamental policy. There is no assurance that the Funds will meet their
investment objectives.
Each of the Funds invest in bonds. For purposes of each Fund's investment
policy, "bonds" include debt instruments issued by the U.S. Treasury, U.S.
government agencies, corporations, municipalities and foreign entities,
mortgage-related securities, asset-backed securities, stripped government
securities and zero coupon obligations.
Below is a description of each Fund's investment objective and policies, as well
a summary of the types of securities in which each Fund may invest. For
additional information concerning the Funds' investments, see "Description of
Permitted Investments." The risks associated with investment in the Funds and
with certain investment techniques used by the Funds can be found in the
sections entitled "Risk Factors" and "Description of Permitted Investments."
THE ONE GROUP(R) INTERMEDIATE BOND FUND
The One Group(R) Intermediate Bond Fund seeks current income consistent with the
preservation of capital through investments in high and medium-grade
fixed-income securities with intermediate maturities. The Fund will normally
invest at least 80% of total assets in debt securities of all types. In
addition, up to 20% of the fund's total assets may be invested in preferred
stocks.
As a matter of fundamental policy at least 65% of the fund's total assets will
consist of bonds and at least 50% of total assets will consist of obligations
issued by the U.S. government or its agencies and instrumentalities, some of
which may be subject to repurchase agreements. However, the Fund intends to hold
at least 65% of its total assets in such government obligations in order to
qualify as a "government fund". The fund also may purchase taxable or tax-exempt
municipal securities.
Under normal market conditions, it is anticipated that the fund's average
weighted maturity will range between three and ten years, taking into
consideration expected prepayment of principal on select investments. The Fund
may shorten its effective weighted average maturity to as little as one year if
deemed appropriate for temporary defensive purposes.
THE ONE GROUP(R) INCOME BOND FUND
The One Group(R) Income Bond Fund seeks a high level of current income by
investing primarily in a diversified portfolio of high, medium and low grade
debt securities. The Fund normally will invest at least 70% of its total assets
in debt securities of all types rated as investment grade at the time of
investment or, if unrated, determined by Banc One Advisors to be of comparable
quality. In addition, up to 30% of the Fund's total assets may be invested in
convertible securities, preferred stock, loan participations and debt securities
rated below investment grade or, if unrated, determined by Banc One Advisors to
be of comparable quality. Securities rated below investment grade are called
"high yield bonds," "non-investment grade bonds" and "junk bonds." These
securities are rated in the fifth or lower rating categories, for example, BB or
lower by Standard & Poor's Corporation ("S&P") and Ba or lower by Moody's
Investors Service, Inc. ("Moody's"), and are considered to have speculative
characteristics. Even though it may invest in debt securities in all rating
categories, the Fund will not invest more than 20% of its total assets in
securities rated below the fifth rating category. As a matter of fundamental
policy, at least 65% of the fund's total assets will consist of bonds. The Fund
also may purchase taxable or tax-exempt municipal securities.
Under normal market conditions, it is anticipated that the Fund's average
weighted maturity will range between five and twenty years. The Fund may shorten
its effective weighted average maturity to as little as two years if deemed
appropriate for temporary defensive purposes.
PROSPECTUS
20
<PAGE> 25
THE ONE GROUP(R) GOVERNMENT BOND FUND
The One Group(R) Government Bond Fund seeks a high level of current income with
liquidity and safety of principal. The Fund seeks to achieve its objective
principally through investment in securities issued by the U.S. government and
its agencies and instrumentalities. At least 65% of the total assets of the Fund
will be invested in obligations guaranteed as to principal and interest by the
U.S. government or its agencies and instrumentalities, some of which may be
subject to repurchase agreements, and other securities representing an interest
in or collateralized by mortgages that are issued or guaranteed primarily by the
Government National Mortgage Association ("Ginnie Mae"), the Federal National
Mortgage Association ("Fannie Mae"), and the Federal Home Loan Mortgage
Corporation ("Freddie Mac"), although the Fund may in the future invest in
securities issued or guaranteed by other agencies or instrumentalities. The
Fund's ability to achieve higher income is not as great as that of funds that
invest in lower-quality instruments. The Fund will limit its investments to
securities issued by the U.S. Government and its agencies and instrumentalities
or related to securities issued by the U.S. Government and its agencies and
instrumentalities.
The average weighted remaining maturity of the fund is expected to be between
three and fifteen years, taking into consideration expected prepayment of
principal on selected investments. However, the Fund's average weighted
remaining maturity may be outside this range if warranted by market conditions.
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
(FORMERLY THE ONE GROUP(R) GOVERNMENT ARM FUND)
The One Group(R) Ultra-Short Term Income Fund seeks a high level of current
income consistent with low volatility of principal by investing in a diversified
portfolio of short-term investment grade securities. The Fund will normally
invest at least 80% of its total assets in debt securities of all types,
including money market instruments. In addition, up to 20% of the Fund's total
assets may be invested in other securities, including preferred stock. The Fund
will invest in adjustable rate mortgage pass-through securities and other
securities representing an interest in or collateralized by mortgages with
periodic interest rate resets, some of which may be subject to repurchase
agreements. These securities often are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. However, the Fund also may
purchase mortgage-backed securities that are issued by non-governmental
entities. Such securities may or may not have private insurer guarantees as to
timely payments.
The Fund will maintain a maximum duration approximately equal to that of a
two-year U.S. Treasury security. Under normal interest rate conditions, the
Fund's actual duration is expected to be in a range approximately equal to that
of a one year U.S. Treasury security. The Fund's duration is a measure of price
sensitivity, including expected cash flow and mortgage prepayments under a wide
range of interest rate scenarios. Maturity measures only the time until final
payment is due on a bond or other debt security; it takes no account of the
pattern of a security's cash flows over time, including how cash flow is
affected by prepayments and by changes in interest rates. In computing duration,
the Fund will have to estimate the duration of obligations that are subject to
prepayment or redemption by the issuer taking into account the influence of
interest rates on prepayments and coupon flows. This method of computing
duration is known as option-adjusted duration. The Fund may use various
techniques to shorten or lengthen the option-adjusted duration of its portfolio,
including the acquisition of debt obligations at a premium or discount, mortgage
and interest rate swaps, and interest rate caps and floors, futures contracts
and options on futures contracts. The Fund's average weighted life will range
between one and five years, taking into consideration expected prepayment of
principal on selected investments. The Fund also may purchase taxable and
tax-exempt municipal securities.
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
The One Group(R) Limited Volatility Bond Fund seeks current income consistent
with preservation of capital through investment in high and medium-grade
fixed-income securities. The Fund will normally invest at least 80% of total
assets in debt securities of all types with short to intermediate maturities. Up
to 20% of the Fund's total assets may be invested in preferred stocks. At least
65% of the Fund's total assets will consist of bonds and at least 65% of total
assets will consist of obligations issued by the U.S. government or its agencies
and instrumentalities, some of which may be subject to repurchase agreements.
The Fund also may purchase taxable or tax-exempt municipal securities.
Under normal market conditions, it is anticipated that the fund's average
weighted maturity will range between one and five years, taking into
consideration expected prepayment of principal on selected investments. The Fund
may shorten its average weighted maturity to as little as 90 days if deemed
appropriate for temporary defensive purposes.
ADDITIONAL INVESTMENT INFORMATION
ADDITIONAL PERMISSIBLE INVESTMENTS
In addition to the permissible investments listed above, each of the Funds may
invest in receipts, which may include Treasury Receipts ("TRS"), Treasury
Investment Growth Receipts ("TIGRS") and Certificates of Accrual on
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<PAGE> 26
Treasury Securities ("CATS"), U.S. Treasury obligations, which may include
Separately Traded Registered Interest and Principal Securities ("STRIPS") and
Coupon Under Book Entry Safekeeping ("CUBES"); repurchase agreements, reverse
repurchase agreements, securities of other investment companies, securities
purchased on a when-issued basis and forward commitments, variable and floating
rate notes, mortgage-backed securities, including collateralized mortgage
obligations ("CMOs") and real estate mortgage investment conduits ("REMICs"),
mortgage dollar rolls, adjustable rate mortgage loans ("ARMs"), fixed rate
mortgage loans, commercial paper, time deposits, certificates of deposit,
bankers' acceptances, securities subject to demand features, asset-backed
securities, corporate securities, restricted securities, and municipal
securities and leases. Each of the Funds, other than the Ultra Short-Term Income
Fund, also may invest in short-term funding agreements. The Government Bond Fund
may invest in the above listed securities only if they are issued or guaranteed
by a U.S. governmental entity. The Funds also may engage in securities lending
transactions.
Each of the Funds, other than the Limited Volatility Bond Fund, also may invest
in stripped mortgage-backed securities, inverse floating rate instruments,
swaps, caps and floors, structured instruments, futures and related options,
options and new financial products. The Government Bond Fund may invest the
above listed securities only if they are issued or guaranteed by a U.S.
governmental entity or are related to U.S. government securities (e.g., futures
on U.S. government securities).
In addition, each of the Funds, other than the Government Bond Fund, may also
invest in zero coupon obligations, loan participations and assignments, and
securities of foreign issuers. The Intermediate Bond Fund, the Ultra Short-Term
Income Fund, and the Income Bond Fund may invest in convertible securities.
ILLIQUID INVESTMENTS
Each Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities and private placements that are not deemed to be
liquid by Banc One Advisors. An illiquid instrument is a security that cannot be
disposed of promptly in seven (7) days at its current carrying value. Banc One
Advisors may determine that securities that cannot be sold to the general public
but may be sold to institutional investors (for example, Rule 144A Securities
and privately placed commercial paper) are liquid. In making liquidity
determinations, Banc One Advisors will follow guidelines established by the
Board of Trustees.
DEBT RATINGS
Debt securities purchased by the Funds, other than the Ultra Short-Term Income
Fund and the Income Bond Fund, must be rated in one of the three highest rating
categories described below in "Description of Ratings" at the time of investment
or, if unrated, determined by Banc One Advisors to be of comparable quality.
However, with respect to the Intermediate Bond Fund, Banc One Advisors reserves
the right to invest in more speculative debt securities if they present
attractive opportunities and are rated in the fourth highest rating category
described below in "Description of Ratings" at the time of investment or, if
unrated, determined by Banc One Advisors to be of comparable quality. The Ultra
Short-Term Income Fund may invest in debt securities rated in one of the four
highest rating categories or, if unrated, determined by Banc One Advisors to be
of comparable quality. The Income Bond Fund may purchase securities in any
rating category at the time of investment or, if unrated, determined by Banc One
Advisors to be of comparable quality. In addition, preferred stock purchased by
the Funds, other than the Intermediate Bond Fund, the Income Bond Fund and the
Limited Volatility Bond Fund, generally will be rated in one the four highest
rating categories or, if unrated, determined by Banc One Advisors to be of
comparable quality. Preferred stock purchased by the Intermediate Bond Fund, and
the Limited Volatility Bond Fund must be rated in one of the three highest
rating categories described below in "Description of Ratings" at the time of
investment or, if unrated, determined by Banc One Advisors to be of comparable
quality. The Income Bond Fund may invest in preferred stock in any rating
category or, if unrated, determined by Banc One Advisors to be of comparable
quality.
Municipal Securities purchased by Funds, other than the Limited Volatility Bond
Fund and the Income Bond Fund, if bonds, must be rated in one of the four
highest rating categories described below under "Description of Ratings" at the
time of investment or, if unrated, determined by Banc One Advisors to be of
comparable quality. Municipal bonds purchased by the Limited Volatility Bond
Fund must be rated in the of the three highest rating categories or, if unrated,
determined by Banc One Advisors to be of comparable quality. The Income Bond
Fund may invest in municipal securities in any rating category or, if unrated,
determined by Banc One Advisors to be of comparable quality. Other municipal
securities, such as tax-exempt commercial paper, notes and variable rate demand
obligations, purchased by the Funds, other than the Limited Volatility Bond Fund
and the Income Bond Fund, must be rated in the highest or second highest rating
categories described below under "Description of Ratings" at the time of
investment or, if unrated, determined by Banc One Advisors to be of comparable
quality. The Income Bond Fund may invest in such securities rated in any
category, or, if unrated, determined by Banc One Advisors to be of comparable
quality. The Limited Volatility Bond Fund may invest in such securities only if
they are rated in the highest rating category or, if unrated, determined by Banc
One Advisors to be of comparable quality. The Government Bond Fund will not
purchase municipal securities.
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RISK FACTORS
RISKS OF INVESTING IN FIXED-INCOME SECURITIES
The market value of a Fund's fixed-income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed-income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these investments. Except under conditions of default, changes in
the value of fixed-income securities will not affect cash income derived from
these securities but will affect the Funds' net asset value.
Because the Funds' investments are interest rate sensitive, each Fund's
performance will depend in varying degrees on fluctuations in market interest
rates. Banc One Advisors will utilize appropriate strategies to maximize returns
to the Fund, while attempting to minimize the associated risks to its invested
capital. Operating results also will depend upon the availability of
opportunities for the investment of the Fund's assets, including purchases and
sales of suitable securities.
RISKS OF INVESTING IN FOREIGN SECURITIES
Investments in securities of foreign issuers involve risks that are different
from investments in securities of U.S. issuers. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls and exchange rates, interest
limitations or other government restrictions which might effect payments of
principal or interest, higher transaction costs, and delayed settlements of
transactions. Securities of some foreign companies are less liquid, and their
prices more volatile, than securities of comparable U.S. companies.
Additionally, there may be less public information available about foreign
issuers. Finally, since the Funds may invest in securities denominated in
foreign currencies, changes in exchange rates may affect the value of
investments in the Funds.
RISKS OF INVESTING IN MORTGAGE-RELATED SECURITIES
Each of the Funds may invest in mortgage-related securities. Mortgage related
securities include, among other things, mortgage backed securities, adjustable
rate mortgage loans, and mortgage dollar rolls. The investment characteristics
of mortgage-related securities differ from traditional debt securities. These
differences can result in significantly greater price and yield volatility than
is the case with traditional fixed-income securities. The major differences
typically include more frequent interest and principal payments, usually
monthly, the adjustability of interest rates, and the possibility that
prepayments of principal may be made at any time. Prepayment rates are
influenced by changes in current interest rates and a variety of economic,
geographic, social, and other factors. During periods of declining interest
rates, prepayment rates can be expected to accelerate. Under certain interest
rate and prepayment rate scenarios, the Funds may fail to recoup any premium
paid on mortgage-related securities notwithstanding a direct or indirect
governmental or agency guarantee. The Funds will attempt to control this risk by
using various analytical and hedging techniques. In general, changes in the rate
of prepayments on a mortgage-related security will change that security's market
value and its yield to maturity. When interest rates fall, high prepayments
could force the Funds to reinvest principal at a time when investment
opportunities are not attractive. Thus, mortgage-related securities may not be
an effective means for the Funds to lock in long-term interest rates.
Conversely, during periods when interest rates rise, slow prepayments could
cause the average life of the security to lengthen and the value to decline more
than anticipated.
RISKS OF INVESTING IN CERTAIN DEBT SECURITIES
The Intermediate Bond Fund, the Ultra Short-Term Income Fund and the Income Bond
Fund may invest in debt securities rated in the fourth highest rating category
by a nationally recognized statistical rating organization. Securities in the
fourth highest rating category are deemed by rating organizations to have
speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of the issuer to
make principal and interest payments than is the case with higher grade
securities.
The Income Bond Fund may invest in debt securities rated in the fifth or lower
rating categories. Debt securities rated in these categories are regarded as
predominately speculative. These securities generally provide a higher yield
than higher rated debt securities of similar maturity, but are subject to a
greater degree of risk with respect to the ability of the issuer to meet its
principal and interest obligations. Issuers of high yield securities may not be
as strong financially as those issuing higher rated securities. Such high yield
issuers may include smaller, less creditworthy companies or highly indebted
firms.
The market value of high yield securities may fluctuate more than the market
value of higher rated securities, since high yield securities tend to reflect
short-term corporate and market developments to a greater extent than higher
rated
PROSPECTUS
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<PAGE> 28
securities. Thus, periods of economic uncertainty and changes can be expected to
result in the increased volatility of market prices of high yield bonds and of
the investment company's net asset value. Additional risks of high yield
securities include limited liquidity and secondary market support. As a result,
the prices of high yield securities may decline rapidly in the event that a
significant number of holders decide to sell. Issuers of high yield securities
also are more vulnerable to real or perceived economic changes, political
changes or adverse developments specific to the issuer. A projection of an
economic downturn, for example, could cause a decline in high yield prices
because the advent of a recession could lessen the ability of a highly leveraged
company to make principal and interest payments on its debt securities. In the
event of a default, the Income Bond Fund would experience a reduction of its
income and could expect a decline in the market value of the defaulted
securities. In addition, a long-term track record on bond default rates, such as
that for investment grade corporate bonds, does not exist for the high yield
market. It may be that future default rates on high-yield bonds will be more
widespread and higher than in the past, especially during periods of
deteriorating economic conditions. Finally, the market prices of debt securities
generally fluctuate with changes in interest rates so that the Income Bond
Fund's net asset value can be expected to decrease as long-term interest rates
rise and to increase as long-term rates fall. The market prices of high yield
securities structured as zero coupon or pay-in-kind securities are generally
affected to a greater extent by interest rate changes and tend to be more
volatile than securities which pay interest periodically.
Credit quality in the high yield bond market can change suddenly and
unexpectedly, and even recently-issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it is
not the Income Bond Fund's policy to rely solely on ratings issued by
established credit rating agencies, but to utilize such ratings in conjunction
with the adviser's independent and ongoing review of credit quality.
Because investments in lower rated securities involve greater investment risk,
achievement of the Income Bond Fund's investment objectives may be more
dependent on Banc One Advisor's credit analysis than would be the case if the
Income Bond Fund were investing in higher rated securities. The Income Bond Fund
may seek to hedge investments through transactions in options, futures contracts
and related options. The Income Bond Fund also may use swap agreements to
further manage exposure to lower rated securities.
For more information regarding rating categories, see "Description of Ratings."
RISKS RELATING TO CERTAIN INVESTMENT TECHNIQUES
Certain investment management techniques that the Funds may use may expose the
Funds to special risks. These include, but are not limited to, engaging in
hedging transactions (including mortgage and interest rate swaps and interest
rate floors and caps), purchasing and selling futures and options, making
forward commitments, purchasing structured instruments, lending portfolio
securities and entering into mortgage dollar rolls. These practices could expose
the Funds to potentially greater risk of loss than more traditional fixed-income
investments.
In addition, the permissible investments listed above include select securities
that may be considered to be derivatives, including: structured notes, swaps,
caps, floors, stripped mortgage-backed securities, collaterized mortgage
obligations (CMOs and REMICs), asset-backed securities, new financial products,
options, futures contracts, options on futures, and inverse floaters.
For additional information on each of the Fund's permitted investments and
associated risks, see "Description of Permitted Investments."
HOW TO DO BUSINESS WITH THE ONE GROUP(R)
HOW TO INVEST IN THE ONE GROUP(R)
Shares of the Funds are sold on a continuous basis and may be purchased directly
from the Trust's Distributor, The One Group(R) Services Company, by mail, by
telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor or through a broker-dealer that has
established a dealer agreement with the Distributor.
Purchases and redemptions of shares of the Funds may be made on any day that the
New York Stock Exchange is open for trading ("Business Days"). The minimum
initial and subsequent investments in the Funds are $1,000 and $100,
respectively ($100 and $25, respectively, for employees of BANC ONE CORPORATION
and its affiliates). Initial and subsequent minimum investments may be waived at
the Distributor's discretion. Investors may purchase up to a maximum of $250,000
of Class B shares per individual purchase order.
Class A and Class B shares are offered to the general public. Fiduciary Class
shares are offered to institutional investors, including affiliates of BANC ONE
CORPORATION and any bank, depository institution, insurance company, pension
plan
PROSPECTUS
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<PAGE> 29
or other organization authorized to act in fiduciary, advisory, agency,
custodial or similar capacities (each an "Authorized Financial Organization").
For additional details regarding eligibility, call the Distributor at
1-800-480-4111.
BY MAIL
Investors may purchase Class A and Class B shares of a Fund by completing and
signing an Account Application Form and mailing it, along with a personal check
(or other negotiable bank instrument or money order), to State Street Bank and
Trust Company (the Trust's Transfer Agent and Custodian), P.O. Box 8500, Boston,
MA 02266-8500. All checks must be made payable to The One Group, the appropriate
fund, State Street Bank and Trust Company, or The One Group Services Company. If
the purchase order is to be credited to a Fund Direct IRA, the check should be
payable to State Street Bank and Trust Company for the benefit of the
Shareholder. Subsequent purchases of shares may be made at any time by mailing a
personal check to the Transfer Agent. Account Application Forms are available
through the Distributor by calling 1-800-480-4111. All purchases made by check
should be in U.S. dollars. Third party checks will not be accepted. When
purchases are made by personal check or under the Systematic Investment Plan
(see below), redemptions will not be allowed until the investment being redeemed
has been in a Fund for 10 calendar days.
Purchases of Fiduciary Class shares and Class A shares that are being offered to
investors in certain retirement plans such as 401(k) and similar plans, other
than Individual Retirement Accounts, are made by an institutional investor
and/or other intermediary on behalf of an investor (each also a "Shareholder
Servicing Agent"). The Shareholder Servicing Agent may require an investor to
complete forms in addition to the Account Application Form and to follow
procedures established by the Shareholder Servicing Agent. Such Shareholders
should contact their Shareholder Servicing Agents regarding purchases, exchanges
and redemptions of shares. See "Additional Information Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible to
make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agent, if applicable.
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
SYSTEMATIC INVESTMENT PLAN
Class A and Class B investors may make automatic monthly investments in the
Funds from their bank, savings and loan or other depository institution
accounts. The minimum initial investment must be $1,000 and subsequent
investments must be $25 under the Systematic Investment Plan, which minimum may
be reduced at the discretion of the Distributor. The Trust pays the costs
associated with these transfers, but reserves the right, upon thirty days'
written notice, to impose reasonable charges for this service. A depository
institution may impose a charge for debiting an investor's account which would
reduce the investor's return from an investment in the Funds.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which shares of the Funds
may be an appropriate investment. The Trust's retirement plan allows
participants to defer taxes while helping them build their retirement savings.
The One Group(R)'s Fund-Direct IRA is a retirement plan with a wide choice of
investments offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A and Class
B shares, and the investor could be liable for any fees or expenses incurred by
the Trust. Federal funds are monies credited to a bank's account with a Federal
Reserve Bank. The purchase price of shares of the Funds is the net asset value
next determined after a purchase order is effected plus any applicable sales
charge (the "offering price"). The net asset value per share of each Fund is
determined by dividing the total market value of the Fund's investments and
other assets allocable to a class, less any liabilities allocable to that class,
by the total number of outstanding shares of such class. Net asset value per
share is determined daily as of 4:00 p.m., eastern time, on each Business Day.
For a further discussion of the calculation of net asset value, see the
Statement of Additional Information.
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<PAGE> 30
Shares also may be issued in transactions involving the acquisition by the Funds
of securities held by collective investment funds sponsored and administered by
affiliates of Banc One Advisors. Purchases will be made in full and fractional
shares of the Funds calculated to three decimal places. Although the methodology
and procedures are identical, the net asset value per share of classes within
the Funds may differ because the distribution expenses charged to Class A shares
and Class B shares are not charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the Trust's
Transfer Agent nor the Trust will be responsible for any loss, liability, cost
or expense for acting upon telephone or wire instructions, and the investor will
bear all risk of loss. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If such procedures are not
employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans and Class A shares that are being offered to investors
in certain retirement plans such as 401(k) and similar plans, other than
Individual Retirement Accounts, will normally be held in the name of the
Shareholder Servicing Agent effecting the purchase on the Shareholder's behalf,
and it is the Shareholder Servicing Agent's responsibility to transmit purchase
orders to the Distributor. A Shareholder Servicing Agent may impose an earlier
cut-off time for receipt of purchase orders directed through it to allow for
processing and transmittal of these orders to the Distributor for effectiveness
the same day. The Shareholder should contact his or her Shareholder Servicing
Agent for information as to the Shareholder Servicing Agent's procedures for
transmitting purchase, exchange or redemption orders to the Trust. A Shareholder
who desires to transfer the registration of shares beneficially owned by him or
her, but held of record by a Shareholder Servicing Agent, should contact the
Shareholder Servicing Agent to accomplish such change. Other Shareholders who
desire to transfer the registration of their shares should contact the Transfer
Agent.
No certificates representing the shares of the Funds will be issued. In
communications to Shareholders, the Funds will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
SALES CHARGE
The following table shows the initial sales charge on Class A shares of the
Ultra Short-Term Income Fund and the Limited Volatility Bond Fund to a "single
purchaser" (defined below) together with the commission paid to financial
institutions and intermediaries:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE COMMISSION
AS A AS APPROPRIATE AS A
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
OFFERING NET AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
- ------------------------------------------------------- ------------- -------------- -------------
<S> <C> <C> <C>
less than $100,000..................................... 3.00% 3.09% 2.70%
$100,000 but less than $250,000........................ 2.50% 2.56% 2.18%
$250,000 but less than $500,000........................ 2.00% 2.04% 1.64%
$500,000 but less than $1,000,000...................... 1.50% 1.52% 1.20%
$1,000,000 or more..................................... 0.00% 0.00% 0.00%
</TABLE>
This table shows the initial sales charge on Class A shares of the Intermediate
Bond Fund, the Income Bond Fund and the Government Bond Fund to a "single
purchaser" (defined below) together with the commission paid to financial
institutions and intermediaries:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE COMMISSION
AS A AS APPROPRIATE AS A
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
OFFERING NET AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
- ------------------------------------------------------- ------------- -------------- -------------
<S> <C> <C> <C>
less than $100,000..................................... 4.50% 4.71% 4.05%
$100,000 but less than $250,000........................ 3.50% 3.63% 3.05%
$250,000 but less than $500,000........................ 2.50% 2.56% 2.05%
$500,000 but less than $1,000,000...................... 2.00% 2.04% 1.60%
$1,000,000 or more..................................... 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial institutions
and intermediaries. Under certain circumstances, the Distributor will use its
own funds to compensate financial institutions and intermediaries in amounts
that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a
PROSPECTUS
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<PAGE> 31
sales charge is 4.50% of the offering price (including the commission shown
above and additional cash compensation described below). In addition, the
Distributor will, from time to time and at its own expense, provide promotional
incentives to financial institutions and intermediaries, whose registered
representatives have sold or are expected to sell significant amounts of shares
of the Funds, in the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered representatives
to places within or outside the United States, and additional compensation in an
amount up to 1.00% of the offering price of Class A shares of the Funds for
sales of $1 million to $5 million, and 0.50% for sales over $5 million. An
investor who purchases $1 million or more of Class A shares and is not assessed
a sales charge at the time of purchase, will be assessed a sales charge
equivalent to 1% of the purchase price if such investor redeems any or all of
the Class A shares prior to the first anniversary of purchase. Under certain
circumstances, commissions up to the amount of the entire sales charge will be
reallowed to financial institutions and intermediaries, which might then be
deemed to be "underwriters" under the Securities Act of 1933.
RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class A
shares, a "single purchaser" is entitled to cumulate current purchases with the
current value at the offering price of previously purchased Class A and Class B
shares of the Funds and other eligible funds of the Trust, other than the
Trust's money market funds, that are sold subject to a comparable sales charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Funds for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), and including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their minor
children, and give the age of such children. The Funds may amend or terminate
this right of accumulation at any time as to subsequent purchases.
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds of
the Trust that impose a comparable sales charge over the next 13 months, the
sales charge may be reduced by completing the Letter of Intent section of the
Account Application Form. The Letter of Intent includes a provision for a sales
charge adjustment depending on the amount actually purchased within the 13-month
period. In addition, pursuant to a Letter of Intent, the Custodian will hold in
escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of the investment,
which is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000 of
Class A shares of one (or more) of the funds of the Trust that impose a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. With respect to the
Ultra Short-Term Income Fund and the Limited Volatility Bond Fund, the investor
would pay an initial sales charge of 2.00% (the sales charge applicable to
purchases of $250,000) and .50% of the investment (representing the difference
between the 2.50% sales charge applicable to purchases of $100,000 and the 2.00%
sales charge already paid) would be held in escrow until the investor has
purchased the remaining $150,000 or more in Class A shares under the investor's
Letter of Intent. Using the same formula, investors in the Intermediate Bond
Fund, the Income Bond Fund and the Government Bond Fund would pay an initial
sales charge of 2.50%, and 1.00% of the investment would be held in escrow.
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Funds: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired through
the exercise of exchange privileges where a comparable sales charge has been
paid for exchanged shares; (iii) purchased by officers, directors or trustees,
retirees and employees (and their spouses and immediate family members) of the
Trust, of BANC ONE CORPORATION and its subsidiaries and affiliates, of the
Distributor and its subsidiaries and affiliates, of the Custodian and Transfer
Agent and their subsidiaries and affiliates, of broker-dealers who have entered
into dealer agreements with the Trust and their subsidiaries and affiliates, or
of an investment sub-advisor of a fund of the Trust and such sub-advisor's
subsidiaries and affiliates; (iv) sold to affiliates of
PROSPECTUS
27
<PAGE> 32
BANC ONE CORPORATION and certain accounts (other than Individual Retirement
Accounts) for which Authorized Financial Organizations act in fiduciary,
advisory, agency, custodial or similar capacities, or purchased by investment
advisors, financial planners or other intermediaries who have a dealer
arrangement with the Distributor, who place trades for their own accounts or for
the accounts of their clients and who charge a management, consulting or other
fee for their services, as well as clients of such investment advisors,
financial planners or other intermediaries who place trades for their own
accounts if the accounts are linked to the master account of such investment
advisor, financial planner or other intermediary; (v) purchased with proceeds
from the recent redemption of Fiduciary Class shares of a fund of the Trust or
acquired in an exchange of Fiduciary Class shares of a fund for Class A shares
of the same fund; (vi) purchased with proceeds from the recent redemption of
shares of a mutual fund (other than a fund of the Trust) for which a sales
charge was paid; (vii) purchased in an Individual Retirement Account with the
proceeds of a distribution from an employee benefit plan, provided that, at the
time of distribution, the employee benefit plan had plan assets invested in a
fund of the Trust; (viii) purchased with Trust assets; (ix) purchased in
accounts as to which a bank or broker-dealer charges an asset allocation fee,
provided the bank or broker-dealer has an agreement with the Distributor; (x)
directly purchased with the proceeds of a distribution on a bond for which a
BANC ONE CORPORATION affiliate bank or trust company is the Trustee or Paying
Agent; or (xi) purchased in connection with plans of reorganization of a Fund,
such as mergers, asset acquisitions and exchange offers to which a Fund is a
party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi) and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi) and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at 1-800-480-4111 to
determine whether they are eligible to purchase shares without paying a sales
charge through the use of proceeds from a recent redemption or distribution as
described above, and to confirm continued availability of the waiver policies
prior to initiating the procedures described in clauses (v), (vi) and (vii).
ALTERNATIVE SALES ARRANGEMENTS
CLASS B SHARES
Class B shares of the Intermediate Bond Fund, the Income Bond Fund and the
Government Bond Fund are not subject to a sales charge when they are purchased,
but are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the sixth anniversary of purchase. Class B
shares of the Ultra Short-Term Income Fund and the Limited Volatility Bond Fund
also are not subject to an initial sales charge, but are subject to a Contingent
Deferred Sales Charge if redeemed prior to the fourth anniversary of purchase.
When a Shareholder purchases Class B shares of any of the Funds, the full
purchase amount is invested directly in the Funds.
Class B shares of the Funds also are subject to an ongoing distribution and
Shareholder service fee at an annual rate of 1.00% of the Funds' average daily
net assets as provided in the Class B Plan (described below under "The
Distributor"). The Distributor has voluntarily agreed to reduce this fee to .90%
for the Intermediate Bond Fund, the Income Bond Fund, and the Government Bond
Fund, and to .75% for the Limited Volatility Bond Fund and the Ultra Short-Term
Income Fund. This ongoing fee will cause Class B shares to have a higher expense
ratio and to pay lower dividends than Class A shares.
Class B shares of the Intermediate Bond Fund, the Income Bond Fund and the
Government Bond Fund convert automatically to Class A shares after eight years,
commencing from the end of the calendar month in which the purchase order was
accepted under the circumstances and subject to the qualifications described in
this Prospectus. Similarly, Class B shares of the Ultra Short-Term Income Fund
and the Limited Volatility Bond Fund convert automatically to Class A shares
after six years.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the Class B Plan are payable to the Distributor
and financial intermediaries to defray the expenses of advance brokerage
commissions and expenses related to providing distribution-related and
Shareholder services to the Funds in connection with the sale of the Class B
shares, such as the payment of compensation to dealers and agents for selling
Class B shares. A dealer commission of 4.00% of the original purchase price of
the Class B shares of the Intermediate Bond Fund, the Income Bond Fund and the
Government Bond Fund will be paid to financial institutions and intermediaries.
The dealer commission for Class B shares of the Ultra Short-Term Income Fund and
the Limited Volatility Bond Fund is 2.75%.
PROSPECTUS
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<PAGE> 33
CONTINGENT DEFERRED SALES CHARGE
If the Shareholder redeems Class B shares prior to the specified anniversaries,
the Shareholder will pay a Contingent Deferred Sales Charge at the rates set
forth below. The Contingent Deferred Sales Charge is assessed on an amount equal
to the lesser of the then-current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no charge is assessed on
shares derived from reinvestment of dividends or capital gain distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the Fund and on the number of years from the time of payment for the purchase of
Class B shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the purchase
of shares, all payments during a month are aggregated and deemed to have been
made on the first day of the month.
The following Contingent Deferred Sales Charge is applicable to investors in the
Intermediate Bond Fund, the Income Bond Fund, and the Government Bond Fund:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
- -------- --------------------
<S> <C>
0-1.............................................................................. 5.00%
1-2.............................................................................. 4.00%
2-3.............................................................................. 3.00%
3-4.............................................................................. 3.00%
4-5.............................................................................. 2.00%
5-6.............................................................................. 1.00%
6-7.............................................................................. None
7-8.............................................................................. None
</TABLE>
Investors in the Ultra Short-Term Income Fund and the Limited Volatility Bond
Fund will be subject to the following Contingent Deferred Sales Charge:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
- -------- --------------------
<S> <C>
0-1.............................................................................. 3.00%
1-2.............................................................................. 3.00%
2-3.............................................................................. 2.00%
3-4.............................................................................. 1.00%
4-5.............................................................................. None
5-6.............................................................................. None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class A
shares in the Shareholder's Fund account (unless the Shareholder elects to have
Class B shares redeemed first) or shares representing capital appreciation, next
of shares acquired pursuant to reinvestment of dividends and capital gain
distributions, and finally of other shares held by the Shareholder for the
longest period of time. This method should result in the lowest possible sales
charge.
To provide an example, assume you purchased 100 shares of the Intermediate Bond
Fund at $10 per share (a total cost of $1,000) and prior to the second
anniversary after purchase, the net asset value per share is $12 and during such
time you have acquired 10 additional shares through dividends paid in shares. If
you then make your first redemption of 50 shares (proceeds of $600), 10 shares
will not be subject to charge because you received them as dividends. With
respect to the remaining 40 shares, the charge is applied only to the original
cost of $10 per share and not to the increase in net asset value of $2 per
share. Therefore, $400 of the $600 redemption proceeds is subject to a
Contingent Deferred Sales Charge at a rate of 4.00% (the applicable rate prior
to the second anniversary after purchase). The same calculations would be
applied to shares of the Ultra Short-Term Income Fund and the Limited Volatility
Bond Fund, except that the Contingent Deferred Sale Charge would be 3.00% (the
applicable rate prior to the second anniversary after purchase).
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code), of a
Shareholder or a participant or beneficiary of a qualified or non-qualified
retirement plan if redemption is made within one
PROSPECTUS
29
<PAGE> 34
year of such death or disability; (iii) to the extent that the redemption
represents a minimum required distribution from an Individual Retirement Account
or other qualifying retirement plan to a Shareholder who has attained the age of
70 1/2; or (iv) purchased by investors in certain retirement plans, such as
401(k) and similar qualified plans. A Shareholder or his or her representative
should contact the Transfer Agent to determine whether a retirement plan
qualifies for a waiver and must notify the Transfer Agent prior to the time of
redemption if such circumstances exist and the Shareholder is eligible for this
waiver. In addition, the following circumstances are not deemed to result in a
"redemption" of Class B shares for purposes of the assessment of a Contingent
Deferred Sales Charge, which is therefore waived: (i) plans of reorganization of
a Fund, such as mergers, asset acquisitions and exchange offers to which a Fund
is a party; or (ii) exchanges for Class B shares of other funds of the Trust as
described under "Exchanges."
CONVERSION FEATURE
Class B shares include all shares purchased pursuant to the Contingent Deferred
Sales Charge which have been outstanding for less than the period ending six or
eight years (depending on the Fund as discussed above) after the end of the
month in which the shares were purchased. At the end of this period, Class B
shares will automatically convert to Class A shares and will be subject to the
lower distribution and Shareholder service fees charged to Class A shares. Such
conversion will be on the basis of the relative net asset values of the two
classes, without the imposition of any sales charge, fee or other charge. The
conversion is not a taxable event to a Shareholder.
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B shares in a Shareholder's Fund account will
be considered to be held in a separate sub-account. Each time any Class B shares
in a Shareholder's Fund account (other than those in the sub-account) convert to
Class A shares, a pro-rata portion of the Class B shares in the sub-account will
also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B shares of the funds
of the Trust during the six- or eight-year period, the Trust will aggregate the
holding periods for the shares of each fund of the Trust for purposes of
calculating that six- or eight-year period. Because the per share net asset
value of the Class A shares may be higher than that of the Class B shares at the
time of conversion, a Shareholder may receive fewer Class A shares than the
number of Class B shares converted, although the dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of a Fund may exchange their shares for Class A
shares of that Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders of a Fund may exchange their shares for Fiduciary Class
shares of that Fund or for Fiduciary Class shares or Class A shares of another
fund of the Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares of
a Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares, except
as provided below. The Trust does not impose a charge for processing exchanges
of shares. If a Shareholder seeks to exchange Class A shares of a fund that does
not impose a sales charge for Class A shares of a fund that does or the fund
being exchanged into has a higher sales charge, the Shareholder will be required
to pay a sales charge in the amount equal to the difference between the sales
charge applicable to the fund into which the shares are being exchanged and any
sales charges previously paid for the exchanged shares, including any sales
charges incurred on any earlier exchanges of the shares (unless such sales
charge is otherwise waived, as provided in "Other Circumstances"). The exchange
of Fiduciary Class shares for Class A shares also will require payment of the
sales charge unless the sales charge is waived, as provided in "Other
Circumstances."
CLASS B
Class B Shareholders of the Funds may exchange their shares for Class B shares
of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the newly
acquired Class B shares, the newly acquired Class B
PROSPECTUS
30
<PAGE> 35
shares shall be deemed to have been issued on the date of receipt of the
Shareholder's order to purchase the outstanding Class B shares of the fund from
which the initial exchange was made.
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the Transfer Agent by 4:00 p.m., eastern
time, on any Business Day, the exchange usually will occur on that day. Any
Shareholder who wishes to make an exchange must receive a current prospectus of
the fund of the Trust in which he or she wishes to invest before the exchange
will be effected.
The Trust reserves the right to change the terms and conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax advisors for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Funds.
A more detailed description of the above is set forth in the Statement of
Additional Information.
The Trust's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (AT LEAST 30 DAYS APART) from the Fund during
any twelve month period. Notwithstanding these limitations, the Trust reserves
the right to reject any purchase request (including exchange purchases from
other funds of the Trust) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares without charge (except Class B shares, as
provided above) on any Business Day; shares may ordinarily be redeemed by mail,
by telephone or by wire. All redemption orders are effected at the net asset
value per share next determined for Class A and Fiduciary Class shares, and at
net asset value per share next determined reduced by any applicable Contingent
Deferred Sales Charge for Class B shares, after receipt of a valid request for
redemption. Payment to Shareholders for shares redeemed will be made within
seven days after receipt by the Transfer Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in order
to constitute a valid request for redemption. All requests for redemptions from
IRA accounts must be in writing. Redemption request forms may be obtained from
the Transfer Agent by calling (800) 480-4111. All written redemption requests
should be sent to The One Group(R), c/o State Street Bank and Trust Company,
P.O. Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing Agent, if
applicable. The Transfer Agent may require that the signature on the written
request be guaranteed by a commercial bank, a member firm of a domestic stock
exchange or by a member of the Securities Transfer Association Medallion Program
or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $50,000 worth of shares or less;
(ii) the redemption check is payable to the Shareholder(s) of record; and (iii)
the redemption check is mailed to the Shareholder(s) at the address of record.
The Shareholder may also have the proceeds mailed to a commercial bank account
previously designated on the Account Application Form or by written instruction
to the Transfer Agent or the Shareholder Servicing Agent, if applicable. There
is no charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE AND WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
telephone to the Transfer Agent at 1-800-480-4111, provided that the Shareholder
has elected the telephone redemption privilege in writing to the Distributor, or
to the Shareholder Servicing Agent, if applicable. The Transfer Agent may reduce
the amount of a wire redemption payment by its then-current wire redemption
charge, which, as of the date of this Prospectus, is $7.00.
PROSPECTUS
31
<PAGE> 36
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each, unless the
withdrawal plan is part of a required minimum distribution from an IRA or other
qualified retirement plan. There is no charge for this service. Purchases of
additional Class A shares while the Systematic Withdrawal Plan is in effect are
generally undesirable because a sales charge is incurred whenever purchases are
made.
Pursuant to the Systematic Withdrawal Plan, Class B Shareholders may elect to
receive, or may designate another person to receive, distributions provided the
distributions are limited to no more than 10% of their account value annually,
determined in the first year as of the date the redemption request is received
by the Transfer Agent, and in subsequent years, as of the most recent
anniversary of that date. In addition, Shareholders who have attained the age of
70 1/2 may elect to receive distributions, to the extent that the redemption
represents a minimum required distribution from an Individual Retirement Account
or other qualifying retirement plan.
If the amount of the systematic withdrawal exceeds the income accrued since the
previous withdrawal under the Systematic Withdrawal Plan, the principal balance
invested will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Funds may be requested to redeem shares for which they
have not yet received good payment. In such circumstances, the forwarding of
proceeds may be delayed for 10 or more days until payment has been collected for
the purchase of such shares. The Funds intend to pay cash for all shares
redeemed. See "How to Invest In The One Group(R) -- by Mail."
Due to the relatively high costs of handling small investments, a Fund reserves
the right to redeem, at net asset value, the shares of any Shareholder if,
because of redemptions of shares by or on behalf of the Shareholder, the account
of such Shareholder in the Funds has a value of less than $1,000, the minimum
initial purchase amount. Accordingly, an investor purchasing shares of a Fund in
only the minimum investment amount may be subject to such involuntary redemption
if he or she thereafter redeems any of these shares. Before a Fund exercises its
right to redeem such shares and to send the proceeds to the Shareholder, the
Shareholder will be given notice that the value of the shares in his or her
account is less than the minimum amount and will be allowed 60 days to make an
additional investment in the Fund in an amount which will increase the value of
the account to at least $1,000.
See the Statement of Additional Information for examples of when the Trust may
suspend the right of redemption or redeem shares involuntarily if it appears
appropriate to do so in light of the Trust's responsibilities under the
Investment Company Act of 1940.
MANAGEMENT OF THE FUNDS
THE TRUSTEES
The Trustees oversee the management and administration of the Funds. Among their
other duties, the Trustees are responsible for making major decisions relating
to each Fund's investment objectives and policies. The Trustees delegate the
day-to-day management of the Funds to the officers of the Trust and meet at
least quarterly to review the Funds' investment policies, performance, expenses
and other business affairs.
THE ADVISOR
The Trust and Banc One Advisors have entered into an investment advisory
agreement (the "Advisory Agreement"). Under the Advisory Agreement, Banc One
Advisors makes the day-by-day investment decisions for the Funds and
continuously reviews, supervises and administers the Funds' investment programs.
Banc One Advisors discharges its responsibilities subject to the supervision of,
and policies established by, the Trustees of the Trust. Banc One Advisors began
serving as investment advisor to the Trust in 1993 and currently serves as
investment advisor to all of the funds of the Trust, as well as advisor to other
mutual funds and individual, corporate, charitable and retirement accounts. Banc
One Advisors and its affiliates have considerable investment management
experience dating back to 1985.
PROSPECTUS
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<PAGE> 37
Banc One Advisors is an indirect, wholly-owned subsidiary of BANC ONE
CORPORATION, a bank holding company incorporated in the state of Ohio. BANC ONE
CORPORATION currently has affiliate banking organizations in Arizona, Colorado,
Illinois, Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West
Virginia and Wisconsin. In addition, BANC ONE CORPORATION has several affiliates
that engage in data processing, venture capital, investment and merchant
banking, and other diversified services including trust management, investment
management, brokerage, equipment leasing, mortgage banking, consumer finance and
insurance. The Trust's shares are not deposits or obligations of, or endorsed or
guaranteed by BANC ONE CORPORATION or its affiliates. The Trust's shares are not
insured or guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or
by any other governmental agency or government sponsored agency of the Federal
government or any state.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
THE FUND MANAGERS
Gary J. Madich, CFA is Senior Managing Director and Chief Investment Officer of
Fixed Income Securities and Co-Portfolio Manager of the Ultra Short-Term Income
Fund. Mr. Madich joined Banc One Advisors in February, 1995. Prior to joining
Banc One Advisors, Mr. Madich was a Senior Vice President and Portfolio Manager
with Federated Investors. Mr. Madich has been in the investment management
business since 1979.
Roger A. Craig, has been Manager of the Income Bond Fund since June 1, 1993. In
addition, Mr. Craig manages the Limited Volatility Bond Fund. Mr. Craig has
served as a fixed income manager for Banc One Advisors and it affiliates since
1986.
Thomas E. Donne, CFA, has been Manager of the Government Bond Fund since
January, 1995. Since 1988, Mr. Donne has held various investment management
positions with Banc One Advisors and its affiliates.
Michael J. Sais, CFA, is head of mortgage research for Banc One Advisors and
co-Portfolio Manager of the Ultra Short-Term Income Fund. Prior to joining Banc
One Advisors, Mr. Sais was a Eurodollar trader with Citibank, a senior portfolio
manager for Valley National Bank of Arizona (now Banc One Arizona), and head
portfolio manager for PRIMERIT Bank FSB. As of November, 1996, Mr. Sais has
served as co-Manager of the Government Bond Fund. Mr. Sais has eight years of
investment management experience.
James A. Sexton, CFA, has served as the Manager of the Intermediate Bond Fund
since the Fund commenced operations in January, 1994 as the successor to the Sun
Eagle Intermediate Fixed-Income Fund, which was acquired by the Trust. Since
1994 Mr. Sexton has served as Managing Director of Fixed Income Mutual Funds.
Mr. Sexton has been employed by Banc One Advisors or its affiliates since 1980.
Each Fund pays Banc One Advisors an investment advisory fee which is calculated
daily and paid monthly. Banc One Advisors may voluntarily agree to waive a part
of its fees. See "About the Fund -- Expense Summary." These fee waivers are
voluntary and may be terminated at any time. Shareholders will be notified in
advance if and when these waivers are terminated. The following investment
advisory fee schedule (expressed as a percentage of average daily net assets),
is applicable to each Fund:
<TABLE>
<CAPTION>
FEES PAID FOR FISCAL
ANNUAL RATE (%) YEAR ENDED JUNE 30, 1996
--------------- ------------------------
<S> <C> <C>
The One Group(R) Intermediate Bond Fund.................. .60% .27%
The One Group(R) Income Bond Fund........................ .60% .38%
The One Group(R) Government Bond Fund.................... .45% .44%
The One Group(R) Ultra Short-Term Income Fund............ .55% .12%
The One Group(R) Limited Volatility Bond Fund............ .60% .29%
</TABLE>
THE DISTRIBUTOR
The One Group(R) Services Company (the "Distributor"), a wholly-owned subsidiary
of The BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Funds are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Funds. Currently,
the Distributor has voluntarily agreed to limit payments under the Plan to .25%
of the average daily net assets of the Class A shares of the Funds. Up to .25%
of the fees payable under the Plan may be used as compensation for Shareholder
services by the Distributor and/or financial institutions and intermediaries.
All such fees that may be paid under the Plan will be paid pursuant to Rule
12b-1 of the Investment Company Act of 1940. The Distributor may apply these
fees toward: (i) compensation for its services in connection with distribution
assistance or provision of Shareholder services; or (ii) payments to financial
institutions and intermediaries such as banks (including affiliates of Banc One
Advisors),
PROSPECTUS
33
<PAGE> 38
savings and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries, as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class B shares of the
Funds are subject to an ongoing distribution and Shareholder service fee as
provided in the Class B distribution and Shareholder services plan (the "Class B
Plan") at an annual rate of 1.00% of each Fund's average daily net assets, which
includes Shareholder servicing fees of .25% of each Fund's average daily net
assets.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the Class B Plan are payable to the Distributor
and financial intermediaries to defray the expenses of advance brokerage
commissions and expenses related to providing distribution-related and
Shareholder services to the Funds in connection with the sale of Class B shares,
such as the payment of compensation to dealers and agents for selling Class B
shares. The combination of the Contingent Deferred Sales Charge and the
distribution and Shareholder service fees facilitate the ability of the Funds to
sell the Class B shares without a sales charge being deducted at the time of
purchase.
The Plan and the Class B Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Funds
also may execute brokerage or other agency transactions through an affiliate of
Banc One Advisors or through the Distributor for which the affiliate or the
Distributor receives compensation. Pursuant to guidelines adopted by the Board
of Trustees of the Trust, any such compensation will be reasonable and fair
compared to compensation received by other brokers in connection with comparable
transactions.
During the fiscal year ended June 30, 1996, The One Group(R) Services Company
received fees aggregating .25% of the average daily net assets of the Class A
shares of the Funds. In addition, The One Group(R) Services Company received
annualized fees of .90% of the average daily net assets of the Class B shares of
each Fund other than the Ultra Short-Term Income Fund and the Limited Volatility
Bond Fund, for which it received .75% of the average daily net assets of the
Class B shares of such Funds.
Fiduciary Class shares of the Funds are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record owner
of shares for the account of its customers may impose separate fees for account
services to its customers.
THE ADMINISTRATOR
The One Group Services Company (the "Administrator"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to an administration
agreement relating to the Funds (the "Administration Agreement"). Under the
terms of the Administration Agreement, the Administrator is responsible for
providing the Trust with administrative services (other than investment advisory
services), including regulatory reporting and all necessary office space,
equipment, personnel and facilities.
Banc One Advisors also serves as Sub-Administrator to each fund of the Trust,
pursuant to an agreement between the Administrator and Banc One Advisors.
Pursuant to this agreement, Banc One Advisors performs many of the
Administrator's duties, for which Banc One Advisors receives a fee paid by the
Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .20% of each fund's
average daily net assets on the first $1.5 billion in Trust assets (excluding
The One Group(R) Treasury Only Money Market Fund, The One Group(R) Government
Money Market Fund and The One Group(R) Investor Funds), .18% of each fund's
average daily net assets to $2 billion in Trust assets (excluding The One
Group(R) Treasury Only Money Market Fund, The One Group(R) Government Money
Market Fund and The One Group(R) Investor Funds), and .16% of each fund's
average daily net assets when Trust assets exceed $2 billion (excluding The One
Group(R) Treasury Only Money Market Fund, The One Group(R) Government Money
Market Fund and The One Group(R) Investor Funds).
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust Company
and Bank One Trust Company. Bank One Trust Company receives a fee paid by the
Trust.
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COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to offer
separate funds and different classes of each fund. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses. The total expenses for each Fund for the most
recent fiscal year are set forth in this Prospectus under the heading "Expense
Summary."
Banc One Advisors and the Administrator of the Funds each bears all expenses
incurred in connection with the performance of their services as investment
advisor and administrator, respectively, other than the cost of securities
(including brokerage commissions, if any) purchased for the Funds.
As a general matter, expenses are allocated to each class of shares of each Fund
on the basis of the net asset value of that class in relation to the net asset
value of the Fund. At present, the only expenses that are allocated to Class A
and Class B shares, other than in accordance with the relative net asset value
of the class, are the different distribution and Shareholder services costs. See
"Expense Summary." At present, no expenses are allocated to Fiduciary Class
shares as a class that are not also borne by the other classes of shares of the
Funds in proportion to the relative net asset values of the shares of such
classes.
VOTING RIGHTS
Each share held entitles the Shareholder of record to one vote. Therefore, the
number of votes a Shareholder is entitled to depends on the number of shares
owned by that Shareholder. Each fund of the Trust will vote separately on
matters relating solely to that fund. In addition, each class of a fund shall
have exclusive voting rights on any matter submitted to Shareholders that
relates solely to that class, and shall have separate voting rights on any
matter submitted to Shareholders in which the interests of one class differ from
the interests of any other class. However, all fund Shareholders will have equal
voting rights on matters that affect all fund Shareholders equally. As a
Massachusetts Business Trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be elected or removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
DIVIDENDS
For each of the Funds, net investment income (exclusive of capital gains) is
determined and declared daily, and is distributed in the form of daily dividends
to Shareholders of record on the first Business Day of each month. Capital gains
of the Funds, if any, will be distributed at least annually.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B or Fiduciary Class shares, as
applicable, at the net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in cash. Such election,
or any revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500, and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
Class B shares received as dividends and capital gains distributions at the net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares. (See "Conversion
Feature.")
Dividends and distributions of the Funds are paid on a per-share basis. The
value of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital
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gains, a Shareholder will pay the full price for the shares and receive some
portion of the price back as a taxable dividend or distribution even though such
distribution would, in effect, represent a return of the Shareholder's
investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A and Class B shares because of the distribution
expenses charged to Class A and Class B shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group(R)
Services Company, 3435 Stelzer Road, Columbus, OH 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE POSITION
For temporary defensive purposes during periods when Banc One Advisors
determines that market conditions warrant, each Fund may invest up to 100% of
its assets in money market instruments, and may hold a portion of its assets in
cash for liquidity purposes.
To the extent that a Fund is engaged in a temporary defensive position, it will
not be pursuing its investment objective.
PORTFOLIO TURNOVER
Portfolio turnover rates may vary greatly from year to year, as well as within a
particular year. For the fiscal year ended June 30, 1996, the portfolio turnover
rates for the Funds were as follows:
<TABLE>
<CAPTION>
PORTFOLIO
TURNOVER RATE
-------------
<S> <C>
The One Group(R) Intermediate Bond Fund................................................ 101.06%
The One Group(R) Income Bond Fund...................................................... 95.52%
The One Group(R) Government Bond Fund.................................................. 62.70%
The One Group(R) Ultra Short-Term Income Fund.......................................... 67.65%
The One Group(R) Limited Volatility Bond Fund.......................................... 75.20%
</TABLE>
Higher portfolio turnover rates will likely result in higher transaction costs
to the Funds and may result in additional tax consequences to the Funds'
Shareholders.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of each Fund. Fundamental policies cannot be changed
without the consent of the holders of a majority of a Fund's outstanding shares.
The term "majority of the outstanding shares" means the vote of (i) 67% or more
of the Fund's shares present at a meeting, if more than 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the Fund's outstanding shares, whichever is less.
Each Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities and, if consistent with a
Fund's investment objective and policies, repurchase agreements involving such
securities) if as a result more than 5% of the total assets of a Fund would be
invested in the securities of such issuer or a Fund would own more than 10% of
the outstanding voting securities of such issuer. This restriction applies to
75% of a Fund's assets. For purposes of these limitations, a security is
considered to be issued by the government entity whose assets and revenues
guarantee or back the security. With respect to private activity bonds or
industrial development bonds backed only by the assets and revenues of a
non-governmental user, such user would be considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets of
a Fund to be invested in the securities of one or more issuers conducting their
principal business activities in the same industry, provided that this
limitation does not apply to investments in the obligations issued or guaranteed
by the U.S. government or its agencies and instrumentalities and repurchase
agreements involving such securities. For purposes of this limitation (i)
utilities will be divided according to their services (for example, gas, gas
transmission, electric and telephone will each be considered a
PROSPECTUS
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separate industry); and (ii) wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of their parents.
3. Make loans, except that a Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.
DESCRIPTION OF PERMITTED INVESTMENTS
Listed below is a more complete description of some of the types of securities
and other instruments in which the Funds may invest. For a more detailed
description, see the Statement of Additional Information. Not all Funds are
permitted to invest in all of the securities and instruments listed below. If an
investment is limited to certain Funds, that limitation will be noted.
U.S. TREASURY OBLIGATIONS -- The Funds may invest in bills, notes and bonds
issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS") and Coupon Under Book Entry Safekeeping ("CUBES").
RECEIPTS -- The Funds may purchase interests in separately traded interest and
principal component parts of U.S. Treasury obligations that are issued by banks
or brokerage firms and are created by depositing U.S. Treasury notes and U.S.
Treasury bonds into a special account at a custodian bank. Receipts include
Treasury Receipts ("TRS"), Treasury Investment Growth Receipts ("TIGRS"), and
Certificates of Accrual on Treasury Securities ("CATS").
STRIPS, CUBES, TRS, TIGRS and CATS are sold as zero coupon securities, which
means that they are sold at a substantial discount and redeemed at face value at
their maturity date without interim cash payments of interest or principal. This
discount is amortized over the life of the security, and such amortization will
constitute the income earned on the security for both accounting and tax
purposes. Because of these features, these securities may be subject to greater
interest rate volatility than interest-paying U.S. Treasury obligations.
U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific types
of activities. Select agencies, such as Ginnie Mae and the Export-Import Bank,
are supported by the full faith and credit of the U.S. Treasury; others, such as
Fannie Mae are supported by the credit of the instrumentality and have the right
to borrow from the U.S. Treasury; others are supported by the authority of the
U.S. government to purchase the agency's obligations; while still others, such
as the Federal Farm Credit Banks and the Freddie Mac, are supported solely by
the credit of the instrumentality itself. No assurance can be given that the
U.S. government would provide financial support to U.S. government sponsored
agencies or instrumentalities if it is not obligated to do so by law.
Obligations of U.S. government agencies include debt issues and mortgage-backed
securities issued or guaranteed by select agencies.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a person
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. The custodian or
its agent will hold the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 100% of the
repurchase price. The Funds bear a risk of loss in the event the other party
defaults on its obligations and the Funds are delayed or prevented from their
right to dispose of the collateral securities or if the Funds realize a loss on
the sale of the collateral securities. Repurchase agreements typically are
short-term in nature, generally overnight, and normally are used to invest
temporary cash balances held by the Funds. The SEC considers repurchase
agreement to be loans.
REVERSE REPURCHASE AGREEMENTS -- The Funds may borrow funds for temporary
purposes by entering into reverse repurchase agreements. Pursuant to such
agreements, the Funds would sell portfolio securities to financial institutions
such as banks and broker-dealers, and agree to repurchase them at a mutually
agreed-upon date and price. The Funds will enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time the Funds enter into a reverse
repurchase agreement, they will place liquid high grade debt securities having a
value equal to the repurchase price (including accrued interest), in a
segregated custodial account and will subsequently monitor the account to ensure
that such equivalent value is maintained. Reverse repurchase agreements involve
the risk that the market value of the securities sold by the Funds may decline
below the price at which the Funds are obligated to repurchase the securities.
The SEC considers reverse repurchase agreements to be borrowings by the Funds.
SECURITIES LENDING -- In order to generate additional income, the Funds may lend
up to 33% of the securities in which they are invested pursuant to agreements
requiring that the loan be continuously secured by cash, securities of the U.S.
PROSPECTUS
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government or its agencies, 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 will continue to receive interest on the securities lent while
simultaneously seeking to earn interest on the investment of cash collateral in
U.S. government securities, shares of an investment trust or mutual fund, or
other short-term, highly liquid investments. Collateral is marked to market
daily to provide a level of collateral at least equal to the market value of the
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 only be made to borrowers deemed by Banc One
Advisors to be of good standing under guidelines established by the Trust's
Board of Trustees and when, in the judgment of Banc One Advisors, the
consideration which can be earned currently from such securities loans justifies
the attendant risk. The Funds will enter into loan arrangements only with
counter parties which Banc One Advisors has deemed to be creditworthy under
guidelines established by the Board of Trustees. Loans are subject to
termination by the Funds or the borrower at any time, and are therefore, not
considered to be illiquid investments.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND FORWARD COMMITMENTS -- The Funds
may purchase securities on a when-issued basis when deemed by Banc One Advisors
to present attractive investment opportunities. When-issued securities are
purchased for delivery beyond the normal settlement date at a stated price and
yield, thereby involving the risk that the yield obtained will be less than that
available in the market at delivery. Although the purchase of securities on a
when issued basis is not considered leveraging, it has the effect of leveraging.
When Banc One Advisors purchases a when-issued security, the Custodian will set
aside cash or liquid securities to satisfy the purchase commitment. The Funds
generally will not pay for such securities or earn interest on them until
received. In a forward commitment transaction, the Funds contract to purchase
securities for a fixed price at a future date beyond customary settlement time.
The Funds are required to hold and maintain in a segregated account until the
settlement date, cash, U.S. government securities or liquid high-grade debt
obligations in an amount sufficient to meet the purchase price. Alternatively,
the Funds may enter into offsetting contracts for the forward sale of other
securities that they own. The purchase of securities on a when-issued or forward
commitment basis involves a risk of loss if the value of the security to be
purchased declines prior to the settlement date.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the Funds may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate changes. A demand instrument with a demand notice period exceeding
seven days will be considered illiquid. There is a risk that the current
interest rate on such obligations may not accurately reflect existing market
interest rates.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The Funds may acquire
securities representing an interest in a pool of mortgage loans that are issued
or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac or other U.S. government
agencies or instrumentalities. Mortgage-backed securities may also be issued by
non-governmental entities and may or may not have private insurer guarantees of
timely payments. Each Fund, other than the Government Bond Fund, may invest in
mortgage-backed securities issued by non-government entities. Each Fund may
invest in Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage
Investment Conduits ("REMICs"). CMOs and REMICs are structures providing for
redistribution of the cash flows of mortgage-related products to different bond
classes (commonly referred to as tranches). This redistribution is achieved
through a set of rules for the monthly distribution of coupon interest and
principal. This reallocation of interest and principal results in the
redistribution of prepayment risk across the different bond classes. This allows
for the creation of bonds with more or less prepayment risk than the underlying
collateral exhibits.
Mortgage-backed securities are in most cases "pass-through" instruments, through
which the holder receives a share of all interest and principal payments from
the mortgages underlying the certificate. Because the prepayment characteristics
of the underlying mortgages vary, it is not possible to predict accurately the
average life or realized yield of a particular issue of pass-through
certificates. During periods of declining interest rates, prepayment of
mortgages underlying mortgage-backed securities can be expected to accelerate.
When the mortgage obligations are prepaid, the Funds may have to reinvest in
securities with a lower yield. Moreover, prepayment of mortgages which underlie
securities purchased at a premium could result in capital losses.
MORTGAGE DOLLAR ROLLS -- The Funds may enter into mortgage "dollar rolls" in
which the Funds sell securities for delivery in the current month and
simultaneously contract with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The Funds benefit to the extent of any difference between the price
received for the securities sold and the lower forward price for the future
purchase (often referred to as the "drop") or fee income plus the interest
earned on the cash proceeds of the securities sold until the settlement date of
the forward purchase. Unless such benefits exceed the income, capital
appreciation and gain or loss due to mortgage prepayments that would have been
realized on the securities sold as part of the mortgage dollar roll, the
PROSPECTUS
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use of this technique will diminish the investment performance of the Funds
compared with what such performance would have been without the use of mortgage
dollar rolls.
ADJUSTABLE RATE MORTGAGE LOANS ("ARMS") -- ARMs eligible for inclusion in a
mortgage pool will generally provide for a fixed initial mortgage interest rate
for a specified period of time. Thereafter, the interest rates (the "Mortgage
Interest Rates") may be subject to periodic adjustment based on changes in the
applicable index rate (the "Index Rate"). The adjusted rate would be equal to
the Index Rate plus a gross margin, which is a fixed percentage spread over the
Index Rate established for each ARM at the time of its origination.
Adjustable interest rates can cause payment increases that some borrowers may
find difficult to make. However, certain ARMs may provide that the Mortgage
Interest Rate may not be adjusted to a rate above an applicable lifetime maximum
rate or below an applicable lifetime minimum rate for such ARM. Certain ARMs may
also be subject to limitations on the maximum amount by which the Mortgage
Interest Rate may adjust for any single adjustment period (the "Maximum
Adjustment"). Other ARMs ("Negatively Amortizing ARMs") may provide instead or
as well for limitations on changes in the monthly payment on such ARMs.
Limitations on monthly payments can result in monthly payments which are greater
or less than the amount necessary to amortize a Negatively Amortizing ARM by its
maturity at the Mortgage Interest Rate in effect in any particular month. In the
event that a monthly payment is not sufficient to pay the interest accruing on a
Negatively Amortizing ARM, any such excess interest is added to the principal
balance of the loan, causing negative amortization and will be repaid through
future monthly payments. It may take borrowers under Negatively Amortizing ARMs
longer periods of time to achieve equity and may increase the likelihood of
default by such borrowers. In the event that a monthly payment exceeds the sum
of the interest accrued at the applicable Mortgage Interest Rate and the
principal payment which would have been necessary to amortize the outstanding
principal balance over the remaining term of the loan, the excess (or
"accelerated amortization") further reduces the principal balance of the ARM.
Negatively Amortizing ARMs do not provide for the extension of their original
maturity to accommodate changes in their Mortgage Interest Rate. As a result,
unless there is a periodic recalculation of the payment amount (which there
generally is), the final payment may be substantially larger than the other
payments. These limitations on periodic increases in interest rates and on
changes in monthly payment protect borrowers from unlimited interest rate and
payment increases.
There are two main categories of indices which provide the basis for rate
adjustments on ARMs: those based on U.S. Treasury securities and those derived
from a calculated measure such as a cost of funds index or a moving average of
mortgage rates. Commonly utilized indices include the one-year, three-year and
five-year constant maturity Treasury bill rates, the three-month Treasury bill
rate, the 180-day Treasury bill rate, rates on longer-term Treasury securities,
the 11th District Federal Home Loan Bank Cost of Funds, the National Median Cost
of Funds, the one-month, three-month, six-month or one-year London Interbank
Offered Rate ("LIBOR"), the prime rate of a specific bank, or commercial paper
rates. Some indices, such as the one-year constant maturity Treasury rate,
closely mirror changes in market interest rate levels. Others, such as the 11th
District Federal Home Loan Bank Cost of Funds index, tend to lag behind changes
in market rate levels and tend to be somewhat less volatile. The degree of
volatility in the market value of the Fund's portfolio and therefore in the net
asset value of the Fund's shares will be a function of the length of the
interest rate reset periods and the degree of volatility in the applicable
indices.
REGULATION OF MORTGAGE LOANS -- Mortgage loans are subject to a variety of state
and Federal regulations designed to protect borrowers which may impair the
ability of the mortgage lender to enforce its rights under the mortgage
documents. These regulations include legal restraints on foreclosures, homeowner
rights of redemption after foreclosure, Federal and state bankruptcy and debtor
relief laws, restrictions on enforcement of mortgage loan "due on sale" clauses
and state usury laws. Even when the Funds invest in mortgage-backed securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities,
these regulations may adversely affect the Fund's investments by delaying the
Fund's receipt of payments derived from principal or interest on mortgage loans
affected by such regulations.
EACH OF THE FUNDS, OTHER THAN THE GOVERNMENT BOND FUND
MAY INVEST IN THE FOLLOWING:
ZERO-COUPON DEBT SECURITIES -- Zero coupons securities bear no interest, but are
issued at a discount from their value at maturity. When held to maturity, their
entire return equals the difference between their issue price and their maturity
value. Because zero-coupon bonds do not pay current interest, their value is
generally subject to greater fluctuation in response to changes in market
interest rates than bonds that pay interest currently. Even though zero coupon
bonds do not pay current interest in cash, the Fund is nonetheless required to
accrue interest income on such investments and to distribute such amounts at
least annually to shareholders. Thus, the Fund could be required at times to
liquidate other investments in order to satisfy its dividend requirements.
ZERO-FIXED-COUPON DEBT SECURITIES -- These securities are zero-coupon debt
securities which convert on a specified date to interest-bearing debt
securities.
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LOAN PARTICIPATIONS AND ASSIGNMENTS -- Large loans to corporations or to
governments, including governments of the less developed countries ("LDCs"), may
be shared or syndicated among several lenders, usually banks. The Fund's
investments in loans are expected in most instances to be in the form of loan
participations or assignments of all or a portion of loans from third parties.
In a participation, the Fund will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the lender
selling the participations and only upon the lender's receipt of payments from
the borrower. As a result, the Fund may be subject to the credit risk of both
the borrower and the lender. LDC debt also may involve the risk that the
governmental entity responsible for repayment of the debt may be unable or
unwilling to do so. Because loan participations and assignments are illiquid,
the Fund will not invest more than 15% of its total assets in loan
participations, assignments and other illiquid securities. In addition, the Fund
may have difficulty disposing of assignments and participations where
disposition involves assigning such interests to third parties.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by (i.e., made an obligation of) a commercial bank.
Maturities are generally six months or less.
COMMERCIAL PAPER -- Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few days to nine months.
CERTIFICATES OF DEPOSIT -- Certificates of deposit ("CDS") are negotiable
interest bearing instruments with a specific maturity. CDS are issued by banks
and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a time deposit
("TD") earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market. Time deposits with a
withdrawal penalty are considered to be illiquid for purposes of the Funds'
limitations on illiquid securities.
DEMAND FEATURES -- The Funds may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount at a fixed price (usually with accrued interest) within a fixed
period (usually seven days) following a demand by the Funds. The purpose of
engaging in transactions involving puts is to maintain flexibility and liquidity
to permit the Funds to meet redemption requests and remain as fully invested as
possible.
PREFERRED STOCK -- Preferred stock is a class of stock that generally pays
dividends at a specified rate and has preference over common stock in the
payment of dividends and liquidation. Preferred stock generally does not carry
voting rights. As with all equity securities, the price of preferred stock
fluctuates based on changes in a company's financial condition and on overall
market and economic conditions.
INVESTMENT COMPANY SECURITIES -- The Funds may invest up to 5% of their total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of their assets in the securities of other investment companies. Other
investment company securities may include securities of a money market fund of
the Trust, and securities of other investment companies for which Banc One
Advisors serves as investment advisor or administrator. Because other investment
companies employ an investment advisor, such investments by the Funds may cause
Shareholders to bear duplicative fees. Banc One Advisors will waive its fee
attributable to the assets of the investing fund invested in a money market fund
of the Trust and in other funds advised by Banc One Advisors; and, to the extent
required by the laws of any state in which shares of the Trust are sold, Banc
One Advisors will waive its fees attributable to the assets of any Fund invested
in any investment company.
ASSET-BACKED SECURITIES -- Asset-backed securities consist of securities secured
by company receivables, home equity loans, truck and auto loans, leases, credit
card receivables and other securities backed by other types of receivables or
other assets. These securities are generally pass-through securities, which
means that principal and interest payments on the underlying securities (less
servicing fees) are passed through to shareholders on a pro rata basis. These
securities may involve prepayment risk, which is the risk that the underlying
debt may be refinanced or paid off prior to their maturities during periods of
declining interest rates. In that case, a portfolio manager may have to reinvest
the proceeds from the securities at a lower rate. Potential market gains on a
security subject to prepayment risk may be more limited than potential market
gains on a comparable security that is not subject to prepayment risk. Under
certain prepayment rate scenarios, the Funds may fail to recoup any premium paid
on asset-backed securities.
CORPORATE SECURITIES -- Corporate securities include corporate bonds,
convertible and non-convertible debt securities, and preferred stock, as well as
commercial paper (short-term promissory notes issued by corporations). Issuers
of corporate bonds and notes are divided into many different categories by bond
market sector, such as electric utilities, gas utilities, telephone utilities,
consumer finance companies, wholesale finance companies and industrial
companies. Within each major category of issuer, there are many subcategories.
RESTRICTED SECURITIES -- The Funds may invest in commercial paper issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under Federal securities law and is generally sold to institutional
investors, such as the Funds, who agree that
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they are purchasing the paper for investment purposes and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Funds through or with the assistance of the
issuer or investment dealers who make a market in Section 4(2) commercial paper,
thus providing liquidity. The Funds believe that Section 4(2) commercial paper
and possibly certain other restricted securities that meet the criteria for
liquidity established by the Trustees (such as Rule 144A securities and private
placements) are quite liquid. The Funds intend, therefore, to treat the
restricted securities that meet the criteria for liquidity established by the
Trustees, including Section 4(2) commercial paper and Rule 144A securities, as
determined by the Banc One Advisors, as liquid and not subject to the investment
limitation applicable to illiquid securities.
FIXED RATE MORTGAGE LOANS -- Generally, fixed rate mortgage loans eligible for
inclusion in a mortgage pool will bear simple interest at fixed annual rates and
have original terms to maturity ranging from 5 to 40 years. Fixed rate mortgage
loans generally provide for monthly payments of principal and interest in
substantially equal installments for the contractual term of the mortgage note
in sufficient amounts to fully amortize principal by maturity although certain
fixed rate mortgage loans provide for a large final balloon payment upon
maturity. The Fund may invest in fixed rate mortgage loans or mortgage loan
pools to enhance yield.
MUNICIPAL SECURITIES -- Municipal Securities are issued by a state or political
subdivision to obtain funds for various public purposes. In addition, municipal
securities also may consist of certain debt obligations known as private
activity bonds and industrial development bonds may be issued to finance certain
public and privately operated facilities. Municipal securities are generally
classified as "general obligation" bonds and "revenue" bonds. General obligation
bonds are obligations involving the credit of an issuer possessing taxing power
and are payable from the issuer's general unrestricted revenues. Revenue bonds
are payable only from the revenues derived from a particular facility or class
of facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source. Revenue bonds are not payable from the issuer's general
revenues. Private activity bonds and industrial developments bonds are
categorized as revenue bonds. The Funds also may purchase short-term tax-exempt
General Obligation Notes, Tax Anticipation Notes, Bond Anticipation Notes,
Revenue Anticipation Notes, Project Notes, and other forms of short-term
tax-exempt obligations. Such notes are issued with a short-term maturity in
anticipation of the receipt of tax funds, the proceeds of bond placements, or
other revenues. Municipal securities may include municipal leases which may be
considered illiquid for purposes of the Funds' limitations on illiquid
investments.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal bankruptcy code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on and principal of its municipal
securities may be materially adversely affected by litigation or other
conditions. Such litigation or conditions may from time to time have the effect
of introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a Fund's municipal
securities in the same manner. The payment of principal and interest on private
activity bonds and industrial development bonds generally is dependent solely on
the ability of the facilities user to meet its financial obligations and the
pledge, if any, of real and personal property as security for such payment. In
addition, the Internal Revenue Code of 1986, as amended (the "Code") imposes
certain continuing requirements on issuers of tax-exempt bonds regarding the
use, expenditure and investment of bond proceeds and the payment of rebates to
the United States of America. Failure by the issuer to comply subsequent to the
issuance of tax-exempt bonds with certain of these requirements could cause
interest on the bonds to become includable in gross income retroactive to the
date of issuance. Municipal securities may include obligations of municipal
housing authorities and single family revenue bonds. Weaknesses in Federal
housing subsidy programs may result in a decrease of subsidies available for
payment of principal and interest on housing authority bonds.
SECURITIES OF FOREIGN ISSUERS -- The Funds may invest in securities of foreign
issuers to achieve income or capital appreciation. These securities may include
debt obligations of foreign governments, foreign corporations, domestic
subsidiaries of foreign corporations, and foreign banks. The Funds also may
invest in commercial paper of foreign issuers and obligations of foreign
branches of U.S. banks, U.S. and London branches of foreign banks, and
supranational entities which are established through the joint participation of
several governments (e.g., the Asian Development Bank and the Inter-American
Development Bank). Generally, the Funds will limit their investments to dollar
denominated foreign securities.
SHORT-TERM FUNDING AGREEMENTS -- The Funds may, in order to enhance yield, make
limited investments in short-term funding agreements issued by banks and highly
rated U.S. insurance companies. Short-term funding agreements issued by
insurance companies are sometimes referred to as Guaranteed Investment Contracts
("GICs"), while those issued by banks are referred to as Bank Investment
Contracts ("BICs"). Pursuant to such agreements, the Funds make cash
contributions to a deposit account at a bank or insurance company. The bank or
insurance company then credits to
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the Funds on a monthly basis guaranteed interest at either a fixed, variable or
floating rate. These contracts are general obligations of the issuing bank or
insurance company (although they may be the obligations of an insurance company
separate account) and are paid from the general assets of the issuing entity.
The Funds will purchase short-term funding agreements only from banks and
insurance companies which, at the time of purchase, are rated in one of the
three highest rating categories described below in "Description of Ratings" and
have assets of $1 billion or more. Generally, there is no active secondary
market in short-term funding agreements. Therefore, short-term funding
agreements may be considered by the Funds to be illiquid investments. To the
extent that a short-term funding agreement is determined to be illiquid, such
agreements will be acquired by the Funds only if, at the time of purchase, no
more than 15% of the Fund's net assets will be invested in short-term funding
agreements and other illiquid securities.
EACH OF THE FUNDS, OTHER THAN THE LIMITED VOLATILITY BOND FUND
MAY INVEST IN THE FOLLOWING:
STRUCTURED INSTRUMENTS -- Structured instruments are debt securities issued by
agencies or instrumentalities of the U.S. government (such as the Student Loan
Marketing Association ("Sallie Mae"), Ginnie Mae, Fannie Mae, and Freddie Mac),
banks, municipalities, corporations, and other business entities whose interest
and/or principal payments are indexed to certain specific foreign currency
exchange rates, interest rates, or one or more other reference indices. As a
result, interest and/or principal payments may vary widely, depending on a
variety of factors, including the volatility of the referenced index and the
effect of changes in the reference index on principal and/or interest payments.
Structured instruments frequently are assembled in the form of medium-term
notes, but a variety of forms are available. Structured instruments are commonly
considered to be derivatives.
While structured instruments may offer the potential for a favorable rate of
return from time to time, they also entail certain risks. Structured instruments
may be less liquid than other debt securities, and the price of structured
instruments may be more volatile. If the value of the reference index changes in
a manner other than that expected by Banc One Advisors, principal and/or
interest payments on the structured instrument may be substantially less than
expected. In addition, although structured instruments may be sold in the form
of a corporate debt obligation, they may not have some of the protection against
counterparty default that may be available with respect to publicly traded debt
securities (i.e., the existence of a trust indenture).
OPTIONS -- The Funds may purchase call and put options, and write (i.e., sell)
covered call options and secured put options on securities and indices. A call
option gives the purchaser the right to buy, and obligates the writer of the
option to sell, the underlying security at the agreed upon exercise (or
"strike") price during the option period. A put option gives the purchaser the
right to sell, and obligates the writer to buy, the underlying security at the
strike price during the option period. The Funds may invest in options either to
hedge or to increase yield. There are risks associated with options
transactions, including the following: (i) the success of a hedging strategy may
depend on the ability of Banc One Advisors to predict movements in the prices of
the individual securities, fluctuations in markets and movements in interest
rates; (ii) there may be an imperfect or no correlation between the changes in
market value of the securities held by the Funds and the prices of options;
(iii) there may not be a liquid secondary market for options; and (iv) while the
Funds will receive a premium when they write covered call options, they may not
participate fully in a rise in the market value of the underlying security. It
is expected that the Funds will only engage in option transactions with respect
to permitted investments and related indices.
FUTURES CONTRACTS AND RELATED OPTIONS -- The Funds may enter into futures
contracts, options on futures contracts, index futures and options thereon that
are traded on an exchange regulated by the Commodities Futures Trading
Commission ("CFTC") if, to the extent that such futures and options are not for
"bona fide hedging purposes" (as defined by the CFTC), the aggregate initial
margin and premiums on such positions (excluding the amount by which options are
in the money) do not exceed 5% of each Funds' total assets at current value. The
Funds, however, may invest more than such amount for bona fide hedging purposes.
Options and futures can be volatile instruments, and involve certain risks. If
Banc One Advisors applies a hedge at an inappropriate time or judges interest
rates incorrectly, options and futures strategies may lower a Fund's return. The
Funds could also experience losses if the prices of their options and futures
positions were poorly correlated with their other instruments, or if they could
not close out their positions because of an illiquid secondary market. The Funds
also may engage in option transactions referred to as straddles and spreads.
Certain provisions of the Internal Revenue Code may limit the extent to which
the Funds invest in futures contracts and related options.
SWAPS, CAPS AND FLOORS -- In order to protect the value of a Fund from interest
rate fluctuations and to hedge against fluctuations in the floating rate market
in which the Fund's investments are traded, the Funds may enter into swaps,
caps, and floors on various securities (such as U.S. government securities),
securities indexes, interest rates, prepayment rates, foreign currencies or
other financial instruments or indexes, for both hedging and non-hedging
purposes. A Fund may enter into these transactions to manage its exposure to
changing interest rates and other factors. Some transactions may reduce the
Fund's exposure to market fluctuations while others will tend to increase market
exposure. Swap contracts typically involve an exchange of obligations by two
sophisticated parties. For example, in an interest rate swap,
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a fund may exchange with another party their respective rights to receive
interest, such as an exchange of fixed rate payments for floating rate payments.
Currency swaps involve the exchange of respective rights to make or receive
payments in specified currencies. Mortgage swaps are similar to interest rate
swaps in that they represent commitments to pay and receive interest. The
notional principal amount, however, is tied to a reference pool or pools of
mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles the
purchaser to receive a principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and floors are similar in many respects to over-the-counter options
transactions, and may involve investment risks that are similar to those
associated with options transactions and options on futures contracts.
Because swap contracts are individually negotiated, they remain the obligations
of the respective counterparties, and there is a risk that a counterparty will
be unable to meet is obligations under a particular swap contract. If a
counterparty defaults, the Fund may suffer a loss. In addition, because swap
contracts are individually negotiated and ordinarily non-transferable, there
also may be circumstances in which it would be impossible for a Fund to close
out its obligations under the swap contract prior to its maturity. Under such
circumstances, a Fund might be able to negotiate another swap contract with a
different counterparty to offset the risk associated with the first swap
contract. Unless the Fund is able to negotiate such an offsetting swap contract,
however, the Fund could be subject to continued adverse developments, even after
Banc One Advisors has determined that it would be prudent to close out or offset
the first swap contract.
The use of swaps involves investment techniques and risks different from and
potentially greater than those associated with ordinary portfolio securities
transactions. If Banc One Advisors is incorrect in its expectations of market
values or interest rates, the investment performance of a Fund would be less
favorable that it would have been if this investment technique were not used.
STRIPPED MORTGAGE-BACKED SECURITIES -- the Funds may, to enhance revenues or
hedge against interest rate risk, invest in stripped mortgage-backed securities
("SMBS"), which are derivative multi-class mortgage securities. The Funds may
only invest in SMBS issued or guaranteed by the U.S. government, its agencies or
instrumentalities. SMBS are usually structured with two classes that receive
different proportions of the interest and principal distributions from a pool of
mortgage assets. A common type of SMBS will have one class receiving all of the
interest from the mortgage assets ("IOs"), while the other class will receive
all of the principal ("POs"). Mortgage IOs receive monthly interest payments
based upon a notional amount that declines over time as a result of the normal
monthly amortization and unscheduled prepayments of principal on the associated
mortgage POs. Changes in prepayment rates can cause the return on investments in
IOs to be highly volatile, and under extremely high prepayment conditions IOs
can incur significant losses. POs are bought at a discount to the ultimate
principal repayment value. The rate of return on a PO will vary with
prepayments, rising as prepayments increase and falling as prepayments decrease.
Although the market for such securities is increasingly liquid, certain SMBS may
not be readily marketable and will be considered illiquid for purposes of the
Funds' limitations on investments in illiquid securities. The market value of
the class consisting entirely of principal payments generally is unusually
volatile in response to changes in interest rates. The yields on a class of SMBS
that receives all or most of the interest from mortgage assets are generally
higher than prevailing market yields on other mortgage-backed securities because
their cash flow patterns are more volatile and there is a greater risk that any
premium paid will be lost as a result of unexpectedly high prepayments. Banc One
Advisors will seek to manage these risks (and potential benefits) by investing
in a variety of such securities and by using certain analytical and hedging
techniques.
INVERSE FLOATING RATE INSTRUMENTS -- the Fund may seek to increase yield by
investing in leveraged inverse floating rate debt instruments ("inverse
floaters"). The interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse floater is
indexed. An inverse floater may be considered to be leveraged to the extent that
its interest rate varies by a magnitude that exceeds the magnitude of the change
in the index rate of interest. The higher degree of leverage inherent in inverse
floaters is associated with greater volatility in their market values.
Accordingly, the duration of an inverse floater may exceed its stated final
maturity. The Fund will generally limit its investments in inverse floating rate
instruments to 15% of its total assets.
NEW FINANCIAL PRODUCTS -- New options and futures contracts and other financial
products, and various combinations thereof, continue to be developed and the
Funds may invest in any such options, contracts and products as may be developed
to the extent consistent with their investment objective, policies and
restrictions and the regulatory requirements applicable to investment companies.
These various products may be used to adjust the risk and return characteristics
of the Funds' portfolio of investments. These various products may increase or
decrease exposure to security prices, interest rates, commodity prices, or other
factors that affect security values, regardless of the issuer's credit risk. If
market conditions do not perform consistent with expectations, the performance
of the Funds would be less favorable than it would have been if these products
were not used. In addition, losses may occur if counterparties involved in
transactions do not perform as promised. These products may expose the Funds to
potentially greater return as well as potentially greater risk of loss than more
traditional fixed-income investments.
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THE INTERMEDIATE BOND FUND,
THE ULTRA SHORT-TERM INCOME FUND AND THE INCOME BOND FUND
MAY INVEST IN THE FOLLOWING:
CONVERTIBLE SECURITIES -- Convertible securities have characteristics similar to
both fixed income and equity securities. Convertible securities may be issued as
bonds or preferred stock. Because of the conversion feature, the market value of
convertible securities tends to move together with the market value of the
underlying stock. As a result, the Funds' selection of convertible securities is
based, to a great extent, on the potential for capital appreciation that may
exist in the underlying stock. The value of convertible securities is also
affected by prevailing interest rates, the credit quality of the issuer, and any
call provisions.
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated A-1+
are those with an "overwhelming degree" of credit protection. Those rated A-1
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2 reflect a high degree of safety regarding timely payment but not as high as
A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality, respectively, on
the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
DESCRIPTION OF BANK RATINGS
Moody's Bank Financial Strength Ratings represent Moody's opinion of a bank's
intrinsic safety and soundness. The definitions for Moody's Bank Financial
Strength Ratings are as follows:
"A" -- Banks rated A possess exceptional intrinsic financial strength. Typically
they will be major financial institutions with highly valuable and defensible
business franchises, strong financial fundamentals, and a very attractive and
stable operating environment.
"B" -- Banks rated B possess strong intrinsic financial strength. Typically,
they will be important institutions with valuable and defensible business
franchises, good financial fundamentals, and an attractive and stable operating
environment.
"C" -- Banks rated C possess good intrinsic financial strength. Typically, they
will be institutions with valuable and defensible business franchises. These
banks will demonstrate either acceptable financial fundamentals within a stable
operating environment, or better than average financial fundamentals within an
unstable operating environment.
S&P's issue credit rating is a current opinion of the creditworthiness of an
obligor with respect to a specific financial obligation, a specific class of
financial obligations, or a specific financial program. S&P's ratings are as
follows:
"AAA" -- An obligation rated AAA has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
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"AA" -- An obligation rated AA differs from the highest rated obligations only
in small degree. The obligor's capacity to meet its financial commitments on the
obligation is very strong.
"A" -- An obligation rated A is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
DESCRIPTION OF INSURANCE RATINGS
Moody's Insurance Financial Strength Ratings are Moody's opinions of the ability
of insurance companies to pay punctually senior policyholder claims and
obligations.
"AAA" -- Insurance companies rated Aaa offer exceptional financial security.
While the financial strength of these companies is likely to change, such
changes as can be visualized are most unlikely to impair their fundamentally
strong position.
"AA" -- Insurance companies rated Aa offer excellent financial security.
Together with the Aaa group, they constitute what are generally known as high
grade companies. They are rated lower than Aaa companies because long-term risks
appear somewhat larger.
"A" -- Insurance companies rated A offer good financial security. However,
elements may be present which suggest a susceptibility to impairment sometime in
the future.
S&P's issue credit rating is a current opinion of the creditworthiness of an
obligor with respect to a specific financial obligation, a specific class of
financial obligations, or a specific financial program. S&P's ratings are as
follows:
"AAA" -- An obligation rated AAA has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
"AA" -- An obligation rated AA differs from the highest rated obligations only
in small degree. The obligor's capacity to meet its financial commitments on the
obligation is very strong.
"A" -- An obligation rated A is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
STANDARD & POOR'S RATING SERVICES
Investment Grade
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay interest and repay
principal. Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in a small degree. Debt rated A has a
strong capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
Bonds rated BBB by S&P are regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher categories.
Speculative Grade
Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB rating.
Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
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Bonds rated CCC have a currently identifiable vulnerability to default, and are
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, they are not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
The rating CC typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating.
The rating C typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC- rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.
The rating C1 is reserved for income bonds on which no interest is being paid.
Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless Standard & Poor's believes
that such payments will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or minus (-). Ratings from AA to CCC may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
MOODY'S INVESTOR SERVICE, INC.
Investment Grade
Bonds that are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present that make the
long-term risks appear somewhat larger than in Aaa securities. Bonds that are
rated A possess many favorable investment attributes and are to be considered as
upper-medium grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Bonds that are rated Baa by Moody's are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity of the issuers of securities rated BBB or Baa to make
principal and interest payments than is the case with higher grade securities.
Non-Investment Grade
Bonds rated Ba are judged to have speculative elements; their future cannot be
considered as well assured. The protection of interest and principal payments
may be very moderate and thereby not well safeguarded during good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
Bonds rated B lack the characteristics of a desirable investment (i.e.,
potentially low assurance of timely interest and principal payments or
maintenance of other contract terms over any long period of time may be small).
Bonds rated Caa have poor standing and may be in default. These bonds carry an
element of danger with respect to principal and interest payments. Bonds rated
Ca are speculative to a high degree and could be in default or have other marked
shortcomings. C is the lowest rating. Bonds in this category have extremely poor
prospects of ever attaining any real investment standing.
Unrated securities will be treated as non-investment grade securities unless
Banc One Advisors determines that such securities are the equivalent of
investment grade securities. Securities that have received different ratings
from more than one agency are considered investment grade if at least one agency
has rated the security investment grade.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
Moody's highest rating for state, municipal and other short-term notes is MIG-1
and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of the
best quality. They have strong protection from established cash flows of
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funds for their servicing or from established and broad-based access to the
market for refinancing or both. Short-term municipal securities rated MIG-2 and
VMIG-2 are of high quality. Margins of protection are ample although not so
large as in the preceding group. MIG-3 and VMIG-3 denote favorable quality. All
security elements are accounted for, but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and marketing access for refinancing is likely to be less well
established.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
- - Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
- - Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
SP-3 Speculative capacity to pay principal and interest.
DESCRIPTION OF PREFERRED STOCK RATINGS
The following descriptions of S&P's and Moody's preferred stock ratings have
been published by S&P and Moody's respectively.
MOODY'S INVESTOR SERVICES, INC.
"AAA" -- An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of preferred stocks.
"AA" -- An issue which is rated "aa" is considered a high-grade preferred stock.
This rating indicates that there is a reasonable assurance the earnings and
asset protection will remain relatively well maintained in the foreseeable
future.
"A" -- An issue which is rated "a" is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the "aaa"
and "aa" classification, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
"BAA" -- An issue which is rated "baa" is considered to be a medium-grade
preferred stock, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time.
STANDARD & POOR'S RATING SERVICES
A S&P's preferred stock rating is an assessment of the capacity and willingness
of an issuer to pay preferred stock dividends and any applicable sinking fund
obligations. A preferred stock rating differs from a bond rating inasmuch as it
is assigned to an equity issue, which is intrinsically different from, and
subordinated to, a debt issue. Therefore, to reflect this difference, the
preferred stock rating symbol will normally not be higher than the debt rating
symbol assigned to, or that would be assigned to, the senior debt of the same
issuer.
AAA -- This is the highest rating that may be assigned by S&P to a preferred
stock issue and indicates an extremely strong capacity to pay the preferred
stock obligations.
AA -- A preferred stock issue rated "AA" also qualifies as a high-quality,
fixed-income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated "AAA."
A -- An issue rated "A" is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
BBB -- An issue rated "BBB" is regarded as backed by an adequate capacity to pay
the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the "A" category.
PROSPECTUS
47
<PAGE> 52
MISCELLANEOUS
The Trust believes that as of April 9, 1997, BANC ONE CORPORATION (100 East
Broad Street, Columbus, OH 43271), through its affiliates, owned of record
substantially all the Fiduciary Class shares of the Funds. The Trust believes
that as of the same date, BANC ONE CORPORATION, through its affiliates,
possessed on behalf of its underlying accounts, voting or investment power with
respect to the following percentage of Fiduciary Class shares of the Funds.
<TABLE>
<CAPTION>
FUND PERCENTAGE OF SHARES
- -------- --------------------
<S> <C>
The One Group(R) Intermediate Bond Fund 97.00%
The One Group(R) Government Bond Fund 96.30%
The One Group(R) Limited Volatility Bond Fund 95.42%
The One Group(R) Income Bond Fund 97.15%
The One Group(R) Ultra Short-Term Income Fund 95.59%
</TABLE>
As a consequence, BANC ONE CORPORATION may be deemed to be a controlling person
of the Fiduciary Class shares of the Fund under the Investment Company Act of
1940.
The Trust believes that as of April 9, 1997, the following shareholders owned
25% or more of the shares of the Funds.
<TABLE>
<CAPTION>
FUND SHAREHOLDER & ADDRESS PERCENTAGE OWNERSHIP TYPES OF OWNERSHIP
- ----- --------------------------------- --------------------- -------------------
<S> <C> <C> <C>
Ultra Short-Term Income Fund Dean Witter for the Benefit of 30.16% Record
Class A St. Joseph Hospital
Attn: Rick West
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
As a consequence, the aforementioned persons may be deemed to be a controlling
person of the Class A shares of the Fund under the Investment Company Act of
1940.
PERFORMANCE
From time to time, the Funds may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of a Fund refers to the
annualized income generated by an investment in the Fund over a specified 30-day
period. The yield is calculated by assuming that the income generated by the
investment during that period is generated over a one-year period and is shown
as a percentage of the investment.
Total return is the change in value of an investment in a Fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results.
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of a Fund. This figure is then
"annualized" (multiplied by 365 days and divided by the applicable number of
days in the period). Funds with a front-end sales charge would incorporate the
offering price into the distribution yield in place of month-end net asset
value.
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return and
is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of a Fund in any advertisement
or information containing performance data for the Funds. The performance of
Fiduciary Class shares may be higher than for Class A shares and Class B shares
because Fiduciary Class shares are not subject to sales charges and distribution
expenses.
The performance of each class of a Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that may
assume investment of dividends but do not reflect deductions for administrative
and management costs. In addition, the performance of each class of a Fund may
be compared to other funds or to relevant indices that may calculate total
return without reflecting sales charges; in which case, a Fund may advertise its
total return in the same manner. If reflected, sales charges would reduce these
total return calculations.
PROSPECTUS
48
<PAGE> 53
Further information about the performance of each class of the Funds is
contained in the Trust's Annual Report to Shareholders for The One Group, which
may be obtained without charge by calling 1-800-480-4111.
TAXES
The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial, or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign tax treatment of the Funds
or their Shareholders. Accordingly, Shareholders are urged to consult their tax
advisors regarding specific questions as to the tax consequences of investing in
the Funds.
TAX STATUS OF THE FUNDS
Each Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other funds. Each Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
Each Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders of
each class of shares of the Fund on at least an annual basis. Generally,
dividends from net investment income will be taxable to Shareholders as ordinary
income whether received in cash or in additional shares, and any net capital
gains will be distributed at least annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares.
Distributions by the Funds to retirement plans that qualify for tax-exempt
treatment under the Code ("qualified retirement plans") will not be taxable. The
Federal tax treatment of qualified retirement plans, as well as distributions
from such plans, is governed by specific provisions of the Code. If shares are
held by a plan that ceases to qualify for tax-exempt treatment under the Code or
by an individual who has received such shares as a distribution from a
retirement plan, the Funds' distributions will be taxable to such plan or
individual as described in the preceding paragraph. Persons considering
directing the investment of their qualified retirement plan account in the Funds
and qualified retirement plan trusts considering purchasing such shares, should
consult their tax advisors for a more complete explanation of the Federal tax
consequences, and for an explanation of the state, local and (if applicable)
foreign tax consequences of making such an investment.
The Funds will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Funds (such as STRIPS, CUBES, TRS, TIGRS and
CATS), as defined in the "Description of Permitted Investments," are sold at
original issue discount and thus do not make periodic cash interest payments.
The Funds will be required to include as part of their current income the
imputed interest on such obligations even though the Funds have not received any
interest payments on such obligations during that period. Because the Funds
distribute substantially all of their net investment income to their
Shareholders (including such imputed interest), the Funds may have to sell
portfolio securities in order to generate the cash necessary for the required
distributions. Such sales may occur at a time when Banc One Advisors would not
have chosen to sell such securities and may result in a taxable gain or loss.
Dividends declared by the Funds in October, November or December of any year and
payable to Shareholders of record on a date in such a month will be deemed to
have been paid by the Funds and received by Shareholders on December 31 of that
year, if paid by the Funds at any time during the following January.
The Funds intend to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Funds' investments
in U.S. government obligations may not be entitled to the exemptions from state
and local income taxes that would be available if the Shareholder had purchased
U.S. government obligations directly. The Funds will inform Shareholders
annually of the percentage of income and distributions derived from U.S.
government obligations. Shareholders should consult their tax advisors regarding
the state and local tax treatment of the dividends received from the Funds.
Certain income received by the Funds may be subject to foreign taxes. If more
than 50% in value of a Fund's total assets at the close of any taxable year
consists of stocks or securities of foreign corporations, the Fund may elect to
treat any foreign taxes paid by it as paid by its Shareholders. If eligible, the
Funds intend to make this election. If a Fund makes this election, Shareholders
will generally be required to include in their income, their respective pro rata
portions of foreign taxes and, if they itemize their deductions, will be
entitled to deduct such respective pro rata portions in computing their
PROSPECTUS
49
<PAGE> 54
taxable income or, alternatively, to claim foreign tax credits (subject, in
either case, to certain limitations). Each year that a Fund makes this election,
it will report to its Shareholders the amount per share of foreign taxes it has
elected to have treated as paid by its Shareholders. See the Statement of
Additional Information.
Sale, exchange, or redemption of shares of the Funds by a Shareholder will
generally be a taxable event to such Shareholder.
PROSPECTUS
50
<PAGE> 55
Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
1111 Polaris Parkway
P.O. Box 712011
Columbus, OH 43271
Distributor
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TOG-F-122
<PAGE> 56
THE ONE GROUP(R)
FAMILY OF MUTUAL FUNDS
June , 1997
THE ONE GROUP(R) INVESTOR GROWTH FUND
Investment Advisor: BANC ONE INVESTMENT ADVISORS CORPORATION
The One Group(R) (the "Trust") is a mutual fund seeking to provide a convenient
and economical means of investing in one or more professionally managed
portfolios of securities. This Prospectus relates to The One Group(R) Investor
Growth Fund Class A, Class B, Class C and Fiduciary Class shares.
THE ONE GROUP(R) INVESTOR GROWTH FUND (THE "FUND") SEEKS LONG-TERM CAPITAL
APPRECIATION BY INVESTING PRIMARILY IN A DIVERSIFIED GROUP OF ONE GROUP(R)
MUTUAL FUNDS WHICH INVEST PRIMARILY IN EQUITY SECURITIES.
Class A, Class B, and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors.
Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodian or similar capacities (each an
"Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT OR
ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. BANC ONE
INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUND FOR INVESTMENT
ADVISORY AND OTHER SERVICES.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated November 1, 1996, as amended June , 1997, has been filed
with the Securities and Exchange Commission and is available without charge
through the Distributor, The One Group(R) Services Company, 3435 Stelzer Road,
Columbus, OH 43219 or by calling 1-800-480-4111 during business hours. The
Statement of Additional Information is incorporated into this Prospectus by
reference. The Securities and Exchange Commission maintains a Web Site
(http://www.sec.gov.) that contains the Statement of Additional Information,
material incorporated by reference, and other information regarding The One
Group(R).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS
<PAGE> 57
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY.............................................................................. 3
ABOUT THE FUND....................................................................... 5
Expense Summary.................................................................... 5
The Fund........................................................................... 7
Investment Objective............................................................... 7
Investment Policies of the Fund.................................................... 7
Description of the Underlying Funds................................................ 8
Risk Factors....................................................................... 11
HOW TO DO BUSINESS WITH THE ONE GROUP(R)............................................. 12
How to Invest in The One Group..................................................... 12
Contingent Deferred Sales Charge................................................... 16
Exchanges.......................................................................... 18
Redemptions........................................................................ 19
FUND MANAGEMENT...................................................................... 20
The Advisor........................................................................ 20
The Distributor.................................................................... 21
The Administrator.................................................................. 22
The Transfer Agent and Custodian................................................... 22
Counsel and Independent Accountants................................................ 22
OTHER INFORMATION.................................................................... 22
The Trust.......................................................................... 22
Other Investment Policies.......................................................... 23
Description of Permitted Investments............................................... 24
Description of Ratings............................................................. 29
Performance........................................................................ 31
Taxes.............................................................................. 32
</TABLE>
PROSPECTUS
2
<PAGE> 58
SUMMARY
The One Group(R) (the "Trust") is an open-end management investment company that
provides a convenient way to invest in professionally managed portfolios of
securities. The following provides basic information about the Class A, Class B,
Class C and Fiduciary Class shares of The One Group(R) Investor Growth Fund.
WHAT IS THE INVESTMENT OBJECTIVE? The Fund seeks long-term capital appreciation
by investing primarily in a diversified group of One Group(R) mutual funds which
invest primarily in equity securities. See "Investment Objective." Shares of the
Fund are available to tax advantaged retirement accounts and other persons
investing for long-term investment purposes. The Fund should not be used for
short-term trading purposes. There is no assurance that the Fund will achieve
its investment objective.
WHAT ARE THE PERMITTED INVESTMENTS? The Fund offers Shareholders a
professionally-managed investment program by purchasing shares of existing
mutual funds of The One Group(R) (the "Underlying Funds"), which are managed by
Banc One Investment Advisors Corporation (the "Advisor"). The Fund will invest
80% to 100% of its total assets in Underlying Funds which invest primarily in
equity securities, up to 20% in Underlying Funds which invest primarily in
fixed-income securities, and up to 10% in Money Market Funds. The Fund will
normally allocate its assets among the Underlying Funds according to the
Advisor's outlook for the economy, financial markets and relative market
valuation of the Underlying Funds. The Advisor may vary the allocation within
the above ranges. There is no assurance that the Fund will achieve its stated
objective.
WHAT ARE THE CHARACTERISTICS OF THE UNDERLYING FUNDS? The Underlying Funds in
which the Fund will invest have the following characteristics:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
UNDERLYING FUND TYPE OF INVESTMENTS
-------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................... Money Market
The One Group(R) Limited Volatility Bond Fund.......................... Fixed Income
The One Group(R) Intermediate Bond Fund................................ Fixed Income
The One Group(R) Income Bond Fund...................................... Fixed Income
The One Group(R) Government Bond Fund.................................. Fixed Income
The One Group(R) Ultra Short-Term Income Fund.......................... Fixed Income
The One Group(R) Disciplined Value Fund................................ Equity
The One Group(R) International Equity Index Fund....................... Equity
The One Group(R) Large Company Growth Fund............................. Equity
The One Group(R) Large Company Value Fund.............................. Equity
The One Group(R) Growth Opportunities Fund............................. Equity
The One Group(R) Value Growth Fund..................................... Equity
The One Group(R) Gulf South Growth Fund................................ Equity
The One Group(R) Income Equity Fund.................................... Equity
The One Group(R) Equity Index Fund..................................... Equity
</TABLE>
The Fund's net asset value will fluctuate with changes in the equity and bond
markets and the value of the Underlying Funds in which it invests. The Fund's
investment return is diversified by its investment in the Underlying Funds which
invest in growth and income stocks, foreign securities, debt securities, and
cash and cash equivalents. See page 6 for a complete description of the
Underlying Funds and page 23 for other investment policies.
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation, an indirect
subsidiary of BANC ONE CORPORATION, serves as the Advisor of the Trust. The
Advisor is entitled to a fee for advisory services provided to the Trust. The
Advisor may voluntarily agree to waive a part of its fees. See "The Advisor" and
"Expense Summary."
WHO IS THE ADMINISTRATOR? The One Group(R) Services Company serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Investment Advisors Corporation serves as the
Sub-Administrator of the Trust, pursuant to an agreement with the Administrator
for which Banc One Investment Advisors Corporation receives a fee paid by the
Administrator. See "The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust, for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
PROSPECTUS
3
<PAGE> 59
WHO IS THE DISTRIBUTOR? The One Group(R) Services Company acts as Distributor
of the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A, Class B and Class C shares. No compensation is paid to
the Distributor for the distribution services for the Fiduciary Class shares of
the Fund. See "The Distributor."
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Distributor on any day that the New York Stock Exchange is open for
trading ("Business Days"). See "How to Invest in The One Group(R)" and
"Redemptions."
HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is determined and declared monthly, and
is distributed in the form of monthly dividends to Shareholders of the Fund on
the first Business Day of each month. Any capital gains are distributed at least
annually. Distributions are paid in additional shares of the same class unless
the Shareholder elects to take the payment in cash. See "Dividends."
PROSPECTUS
4
<PAGE> 60
ABOUT THE FUND
EXPENSE SUMMARY -- THE ONE GROUP(R) INVESTOR GROWTH FUND
<TABLE>
<CAPTION>
FIDUCIARY
CLASS A CLASS B CLASS C CLASS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price).......................... 4.50% none none none
Maximum Contingent Deferred Sales Charge(2) (as a percentage of
original purchase price or redemption proceeds, as
applicable).................................................. none 5.00% 1.00% none
Redemption Fees................................................ none none none none
Exchange Fees.................................................. none none none none
ANNUAL OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Advisory Fees(3).................................... .01% .01% .01% .01%
12b-1 Fees (after fee waiver)(4)............................... .25% 1.00% 1.00% none
Other Expenses(5).............................................. .19% .19% .19% .19%
- --------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES(6).................................... .45% 1.20% 1.20% .20%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more of Class A shares and is not
assessed a sales charge at the time of purchase, will be assessed a sales
charge equivalent to 1% of the purchase price if such purchaser redeems any
or all of the Class A shares prior to the first anniversary of purchase.
(3) Investment Advisory fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Absent this voluntary reduction,
Investment Advisory Fees would be .05% for all classes of shares.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plan, 12b-1 fees (as a percentage of average daily net
assets) would be .35% for Class A shares. The 12b-1 fees include a
Shareholder servicing fee of .25% of the average daily net assets of the
Fund's Class B and Class C shares and may include a shareholder servicing
fee of .25% of the average daily net assets of the Fund's Class A shares.
See "The Distribution."
(5) Other Expenses have been revised to reflect fee waivers and reimbursements
effective as of the date of this Prospectus. Absent this voluntary waiver
and reimbursement, Other Expenses would be .29%.
(6) Absent the voluntary reduction of fees, Total Operating Expenses would be
.69% for Class A Shares, 1.34% for Class B Shares, 1.34% for Class C Shares,
and .34% for Fiduciary Class Shares.
The Fund will indirectly bear its pro rata share of fees and expenses incurred
by the Underlying Funds, and the investment returns of the Fund will be net of
the expenses of the Underlying Funds. The following chart provides the expense
ratio for each of the Underlying Funds in which the Fund invests (based on the
current Underlying Fund prospectus). Certain of these expense ratios may include
a voluntary reduction of investment advisory fees.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
NAME OF UNDERLYING FUND EXPENSE RATIO
-----------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund...................................... .50%
The One Group(R) Limited Volatility Bond Fund................................. .62%
The One Group(R) Intermediate Bond Fund....................................... .67%
The One Group(R) Income Bond Fund............................................. .61%
The One Group(R) Government Bond Fund......................................... .69%
The One Group(R) Ultra Short-Term Income Fund................................. .60%
The One Group(R) Disciplined Value Fund....................................... 1.00%
The One Group(R) International Equity Index Fund.............................. 1.36%
The One Group(R) Large Company Growth Fund.................................... .99%
The One Group(R) Large Company Value Fund..................................... .98%
The One Group(R) Growth Opportunities Fund.................................... 1.00%
The One Group(R) Value Growth Fund............................................ 1.05%
The One Group(R) Gulf South Growth Fund....................................... 1.06%
The One Group(R) Income Equity Fund........................................... 1.01%
The One Group(R) Equity Index Fund............................................ .39%
</TABLE>
PROSPECTUS
5
<PAGE> 61
After combining the total operating expenses of the Fund with those of the
Underlying Funds, the estimated average weighted expense ratio for Class A
shares is 1.33%, for Class B shares is 2.08%, for Class C shares is 2.08%, and
for Fiduciary Class shares is 1.08%.
On the basis of these estimated expenses, the following example illustrates the
expenses an investor would pay on a $1,000 investment in Class A and Fiduciary
class shares of the Fund, assuming: (1) imposition of the maximum sales charge
for Class A shares; (2) 5% annual return; and (3) redemption at the end of each
time period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 58 $ 85 $115 $ 198
Fiduciary Class $ 11 $ 34 $ 60 $ 132
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 61 $ 94 $130 $ 230
Fiduciary Class $ 13 $ 41 $ 70 $ 155
</TABLE>
On the basis of the estimated expenses set forth above, the following example
illustrates the expenses an investor would pay on a $1,000 investment in Class B
shares, assuming: (1) deduction of the applicable maximum Contingent Deferred
Sales Charge; and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 71 $ 95 $132 $ 222
Assuming no redemption $ 21 $ 65 $112 $ 222
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 73 $101 $142 $ 245
Assuming no redemption $ 23 $ 71 $122 $ 245
</TABLE>
On the basis of the estimated expenses set forth above, the following example
illustrates the expenses an investor would pay on a $1,000 investment in Class C
shares, assuming: (1) imposition of the maximum sales charge for Class C shares
and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period.... $ 31 $ 65 $112 $ 204
Assuming no redemption............................. $ 21 $ 65 $112 $ 204
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 33 $ 71 $122 $ 230
Assuming no redemption $ 23 $ 71 $122 $ 230
</TABLE>
Class B and Class C shares automatically convert to Class A shares after eight
(8) and six (6) years, respectively. Therefore, the "10 Years" examples above
reflect the effect of such conversion.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
purpose of these tables is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Trust.
The rules of the Securities and Exchange Commission require that the maximum
sales load be reflected in the above tables. However, Shareholders in the Fund
may, under certain circumstances, qualify for reduced sales charges. See "How to
Invest in The One Group(R)." Long-term Shareholders of Class A, Class B, and
Class C shares may pay more than the equivalent of the maximum front-end sales
charges otherwise permitted by the National Association of Securities Dealers'
Rules.
PROSPECTUS
6
<PAGE> 62
THE FUND
The One Group(R) Investor Growth Fund (the "Fund") is part of The One Group(R)
(the "Trust"), which is an open-end management investment company that offers
shares in 40 separate funds and different classes of certain of the funds. The
Trust was organized as a Massachusetts Business Trust on May 23, 1985. This
Prospectus relates to Class A, Class B, Class C and Fiduciary Class shares of
The One Group(R) Investor Growth Fund, a diversified, open-end management
investment company. Each class of shares provides for variations in distribution
costs, voting rights, dividends and per share net asset value pursuant to a
multiple class plan (the "Multiple Class Plan") adopted by the Board of Trustees
of the Trust. Except for these differences between classes, each share of the
Fund represents an undivided, proportionate interest in the Fund. The
Information regarding the Trust's other funds and their classes is contained in
separate prospectuses which may be obtained from the Trust's Distributor, The
One Group(R) Services Company, 3435 Stelzer Road, Columbus, OH 43219, or by
calling 1-800-480-4111.
INVESTMENT OBJECTIVE
The Fund seeks long-term capital appreciation by investing primarily in a
diversified group of One Group(R) mutual funds which invest primarily in equity
securities.
The investment objective of the Fund is fundamental and may not be changed
without a vote of the holders of a majority of the Fund's outstanding shares (as
defined in the Statement of Additional Information).
There is no assurance that the Fund will meet its investment objective.
INVESTMENT POLICIES OF THE FUND
The investment policies of the Fund may be changed without an affirmative vote
of the holders of a majority of the Fund's outstanding shares unless a policy is
expressly deemed to be fundamental. Shareholders will be notified of any
material change in the Fund's investment policies.
PERMISSIBLE INVESTMENTS
The Fund will invest 80% to 100% of its total assets in nine Underlying Funds of
The One Group(R) which invest primarily in equity securities, up to 20% of its
total assets in five Underlying Funds of The One Group(R) which invest primarily
in fixed income securities, and up to 10% of its total assets in one money
market fund of The One Group(R). The Fund will invest its assets in the
Underlying Funds, within the ranges indicated below.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
INVESTMENT RANGE
INVESTOR GROWTH FUND (PERCENT OF FUND ASSETS)
------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................ 0 - 10%
The One Group(R) Limited Volatility Bond Fund....................... 0 - 20%
The One Group(R) Intermediate Bond Fund............................. 0 - 20%
The One Group(R) Income Bond Fund................................... 0 - 20%
The One Group(R) Government Bond Fund............................... 0 - 20%
The One Group(R) Ultra Short-Term Income Fund....................... 0 - 20%
The One Group(R) Disciplined Value Fund............................. 0 - 30%
The One Group(R) International Equity Index Fund.................... 0 - 30%
The One Group(R) Large Company Growth Fund.......................... 0 - 48%
The One Group(R) Large Company Value Fund........................... 0 - 55%
The One Group(R) Growth Opportunities Fund.......................... 0 - 30%
The One Group(R) Value Growth Fund.................................. 0 - 50%
The One Group(R) Gulf South Growth Fund............................. 0 - 30%
The One Group(R) Income Equity Fund................................. 0 - 50%
The One Group(R) Equity Index Fund.................................. 0 - 50%
</TABLE>
The allocation of the Fund's assets among the Underlying Funds will be made by
the Advisor under the supervision of the Trust's Board of Trustees, within the
percentage ranges set forth in the table above.
The Fund and the Underlying Funds are permitted for temporary defensive purposes
to invest up to 100% of their assets in short-term fixed income securities. Such
securities include obligations of the U.S. Government and its agencies and
instrumentalities, commercial paper, bank certificates of deposit, repurchase
agreements, bankers acceptances, variable amount master demand notes and bank
money market deposit accounts. The Fund and the Underlying Funds may also hold
cash or cash equivalents for liquidity purposes.
PROSPECTUS
7
<PAGE> 63
To the extent the Fund or the Underlying Funds are engaged in a temporary
defensive position, they will not be pursuing their investment objective.
DESCRIPTION OF THE UNDERLYING FUNDS
The following is a brief description of the principal investment policies of the
Underlying Funds. Additional investment practices are described in "Investment
Policies of the Underlying Funds," the Statement of Additional Information and
the prospectus for each of the Underlying Funds.
THE ONE GROUP(R) INTERNATIONAL EQUITY INDEX FUND
The One Group(R) International Equity Index Fund is an equity fund. The
objective of the fund is to provide investment results that correspond to the
aggregate price and dividend performance of the securities in the Gross Domestic
Product Weighted Morgan Stanley Capital International Europe, Australia and Far
East Index ("MSCI EAFE GDP Index" or "EAFE GDP Index"). ((1)) Under normal
conditions, the fund will invest substantially all of its assets in foreign
securities and at least 65% of the value of its total assets in foreign equity
securities, consisting of common stocks (including sponsored and unsponsored
American Depository Receipts ("ADRs")) and preferred stocks, securities
convertible into common stocks (only if they are listed on registered exchanges
or actively traded in the over-the-counter market), warrants and depository
receipts for such securities of issuers located in at least three different
countries. In attempting to duplicate the capital performance and dividend
income of the MSCI EAFE GDP Index, the fund will normally invest in the stocks
which comprise the Index and secondarily in stock index futures. It is expected
that cash reserve items normally will not exceed 10% of the fund's net assets.
The Fund may invest up to 10% of its net assets in securities of emerging
international markets such as Mexico, Brazil and Chile. A substantial portion of
the fund's assets will be denominated in foreign currencies.
THE ONE GROUP(R) LARGE COMPANY GROWTH FUND
The One Group(R) Large Company Growth Fund seeks long-term capital appreciation
and growth of income by investing primarily in equity securities. To achieve its
objective, the fund will, under normal market conditions, invest substantially
all, but in no event less than 65%, of the value of its total assets in equity
securities consisting of common stocks, warrants and any rights to purchase
common stocks. The weighted average capitalization of the companies in which the
fund invests will under normal market conditions always be in excess of the
market median capitalization of the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index"). ((2)) The fund may invest the remainder of its assets
in any combination of nonconvertible fixed income securities, repurchase
agreements, options and futures contracts.
THE ONE GROUP(R) LARGE COMPANY VALUE FUND
The One Group(R) Large Company Value Fund is an equity fund that seeks capital
appreciation with the incidental goal of achieving current income by investing
primarily in equity securities. The fund will invest in equity securities of
companies that are believed to be selling below their long-term intrinsic
investment values. Companies held will typically be large capitalization issuers
with current price/earnings and/or price/book ratios which are lower than that
of the general market as measured by the S&P 500 Index. In addition, the fund
may invest in stock of companies which have been analyzed to have breakup values
well in excess of current market values or which have uniquely undervalued
corporate assets. The general approach to purchasing stocks will emphasize
individual security selection. Macroeconomic data and industry profit forecasts
will be utilized to gauge the best sectors of the economy in which to be
positioned.
Under normal market conditions, the fund will invest at least 80% of the value
of its total assets in equity securities consisting of common stocks and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The remainder of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) GROWTH OPPORTUNITIES FUND
The One Group(R) Growth Opportunities Fund seeks growth of capital and,
secondarily, current income by investing primarily in equity securities. The
fund will invest in issues which are identified and selected based on the
potential to produce above-average earnings growth per share over a one-to-three
year period. It is expected that issuers will generally include established
companies with a history of above-average growth or companies that are expected
to enter
- ---------------
(1) "MSCI EAFE GDP Index" is a registered service mark of Morgan Stanley Capital
International, which does not sponsor and is in no way affiliated with the
fund.
(2) "Standard & Poor's 500" is a registered trademark of Standard & Poor's
Corporation, which does not sponsor and is in no way affiliated with the
fund.
PROSPECTUS
8
<PAGE> 64
periods of above-average growth, and smaller companies which are positioned in
emerging growth industries. The fund may invest in securities listed on a stock
exchange as well as those traded over-the-counter. At least 80% of the value of
the fund's total assets will, under normal conditions, be invested in equity
securities consisting of common stocks and debt securities and preferred stocks
that are convertible into common stocks. The fund also may enter into options
and futures transactions. The remainder of the fund's assets will be held in
cash equivalents.
THE ONE GROUP(R) VALUE GROWTH FUND
The One Group(R) Value Growth Fund seeks long-term capital growth and growth of
income while, as a secondary objective providing a moderate level of current
income. The fund pursues its objectives by investing primarily in a portfolio of
common stocks, debt securities, preferred stocks, convertible securities,
warrants, and other equity securities of companies that show the potential for
growth of earnings over time. Stock selection is guided by current valuation
relative to a stock's historical valuation and relative to the Advisor's
estimates of future growth of earnings and dividends. Accordingly, the fund may
emphasize securities of companies that the Advisor believes are overlooked or
undervalued by investors, which fact should contribute to an increase in the
market value of the security over time.
The fund will ordinarily invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents.
THE ONE GROUP(R) GULF SOUTH GROWTH FUND
The One Group(R) Gulf South Growth Fund seeks long-term capital growth by
investing in a portfolio of equity securities of small-capitalization, emerging
growth and medium capitalization companies, which are either headquartered in or
whose primary market is in the southeastern region of the United States. The
fund invests primarily in a portfolio of common stocks, debt securities,
preferred stocks, convertible securities, warrants and other equity securities
of such companies.
The Advisor anticipates that the fund's portfolio will normally consist of
securities of approximately twenty-five to sixty emerging growth companies from
Virginia, North Carolina, South Carolina, Florida, Georgia, Tennessee, Alabama,
Mississippi, Arkansas, Louisiana, Kentucky and Texas. It is expected that
companies selected would generally have market capitalizations ranging from
$50,000,000 to $2,000,000,000, although the fund may occasionally hold
securities of companies whose market capitalizations are considerably larger if
doing so contributes to the fund's investment objective.
The fund will normally invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents, when the Advisor's
assessment of the attractiveness of the entire stock market and individual
market sectors changes.
Because the fund is non-diversified, its share price may be subject to greater
fluctuations as a result of changes in an issuer's financial condition or the
market's assessment of an individual issuer. In addition, smaller, less seasoned
companies may be subject to greater business risk than larger, established
companies.
THE ONE GROUP(R) INCOME EQUITY FUND
The One Group(R) Income Equity Fund seeks current income through regular payment
of dividends with the secondary goal of achieving capital appreciation by
investing primarily in equity securities. The fund will make investments in an
attempt to keep its yield above the S&P 500 Index. Achieving such a yield will
be the primary consideration in selecting securities. Investments will be made
in common stocks of corporations which regularly pay dividends, although
continued payment of dividends cannot be assured. The fund will invest primarily
in stocks with favorable, long-term fundamental characteristics, but stocks of
companies that are out of favor in the financial community may also be
purchased.
The fund will under normal conditions invest at least 80% of the value of its
total assets in equity securities consisting of common stocks, and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) EQUITY INDEX FUND
The One Group(R) Equity Index Fund seeks investment results that correspond to
the aggregate price and dividend performance of the securities on the S&P 500
Index. The fund will, in attempting to duplicate the capital performance and
dividend income of the S&P 500 Index, normally invest in many of the stocks
which comprise the S&P 500 Index and secondarily in stock index futures. Cash
reserves will not normally exceed 10% of the fund's net assets.
The Advisor generally selects stocks for the fund in the order of their
weightings in the S&P 500 Index beginning with the heaviest weighted stocks. The
percentage of the fund's assets to be invested in each stock is approximately
the same as the percentage it represents in the S&P 500 Index. From time to
time, administrative adjustments may be made in the
PROSPECTUS
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<PAGE> 65
fund because of changes in the composition of the S&P 500 Index, but such
changes should be infrequent. The fund will attempt to achieve a correlation
between the performance of its portfolio and that of the S&P 500 Index of at
least 0.95, without taking into account expenses. A correlation of 1.00 would
indicate perfect correlation, which would be achieved when the fund's net asset
value, including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the S&P 500 Index.
THE ONE GROUP(R) PRIME MONEY MARKET FUND
The One Group(R) Prime Money Market Fund seeks current income with liquidity and
stability of principal. The fund intends to comply with the regulations of the
Securities and Exchange Commission applicable to money market funds using the
amortized cost method for calculating net asset value. These regulations impose
certain quality, maturity and diversification restraints on investments by the
fund. Under these regulations, the fund will invest only in U.S. dollar-
denominated securities, will maintain an average maturity on a dollar-weighted
basis of 90 days or less, and will acquire only "eligible securities" that
present minimal credit risks and have a maturity of 397 days or less.
THE ONE GROUP(R) DISCIPLINED VALUE FUND
The One Group(R) Disciplined Value Fund seeks capital appreciation with the
secondary goal of achieving current income by investing primarily in equity
securities. The fund will invest in equity securities with below-market average
price-to-earnings and price-to-book value ratios. The issuer's soundness and
earnings prospects will also be considered. Although capital appreciation is the
primary purpose for investing in the security, all common stocks must be paying
a current dividend to shareholders to be eligible for purchase. While the
Advisor may sell fund securities in its discretion at any time, it is unlikely
to move toward elimination of the fund's holdings of a stock when the Advisor
determines that there is a fundamental change that impairs a company's ability
to pay dividends, or if the company's 12-month earnings per share comparison is
declining.
The fund will, under normal conditions, invest at least 80% of the value of its
total assets in equity securities consisting of common stocks and debt
securities and preferred stocks that are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
The One Group(R) Limited Volatility Bond Fund seeks current income consistent
with preservation of capital through investment in high and medium-grade
fixed-income securities. The fund will normally invest at least 80% of total
assets in debt securities of all types with short to intermediate maturities.
Under normal market conditions, it is anticipated that the fund's average
weighted maturity will range between one and five years. At least 65% of the
fund's total assets will consist of bonds rated in one of the three highest
rating categories by at least one nationally recognized statistical rating
organization ("NRSRO") at the time of investment, or, if unrated, determined by
the Advisor to be of comparable quality. In addition, at least 65% of total
assets will consist of obligations issued by the U.S. government or its agencies
and instrumentalities, some of which may be subject to repurchase agreements.
The fund also may purchase taxable or tax-exempt municipal securities. Up to 20%
of the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INTERMEDIATE BOND FUND
The One Group(R) Intermediate Bond Fund seeks current income consistent with the
preservation of capital through investments in high and medium-grade
fixed-income securities with intermediate maturities. The fund will normally
invest at least 80% of total assets in debt securities of all types. Under
normal market conditions, it is anticipated that the fund's average weighted
maturity will range between three and ten years. At least 65% of the fund's
total assets will consist of bonds rated in one of the three highest rating
categories by at least one NRSRO at the time of investment, or, if unrated,
determined by the Advisor to be of comparable quality. However, the Advisor
reserves the right to invest in more speculative debt securities if they present
attractive opportunities and are rated in the fourth highest rating category by
at least one NRSRO at the time of investment or, if unrated, determined by the
Advisor to be of comparable quality. In addition, at least 50% of total assets
will consist of obligations issued by the U.S. government or its agencies and
instrumentalities, some of which may be subject to repurchase agreements. The
fund may also purchase taxable and tax-exempt municipal securities. Up to 20% of
the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INCOME BOND FUND
The One Group(R) Income Bond Fund seeks a high level of current income by
investing primarily in a diversified portfolio of high, medium and low grade
debt securities. The fund will normally invest at least 70% of total assets in
debt securities of all types rated in one of the four highest rating categories
("investment grade") by at least one NRSRO at the time of investment or, if
unrated, determined by the Advisor to be of comparable quality. In addition, up
to 30% of the fund's total assets may be invested in convertible securities,
preferred stock, loan participations and debt securities rated below
PROSPECTUS
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<PAGE> 66
investment grade. Securities rated below investment grade are called "high
yield" and "junk bonds." Under normal market conditions, it is anticipated that
the fund's average weighted maturity will range between five and twenty years.
As a matter of fundamental policy, at least 65% of the fund's total assets will
consist of bonds. The fund may also purchase taxable or tax-exempt municipal
securities.
THE ONE GROUP(R) GOVERNMENT BOND FUND
The One Group(R) Government Bond Fund seeks a high level of current income with
liquidity and safety of principal. The fund seeks to achieve its objective
principally through investment in securities issued by the U.S. government and
its agencies and instrumentalities. At least 65% of the total assets of the fund
will be invested in obligations guaranteed as to principal and interest by the
U.S. government or its agencies and instrumentalities, some of which may be
subject to repurchase agreements, and other securities representing an interest
in or collateralized by mortgages that are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. The balance of the fund's assets
may be invested in debt securities and taxable or tax-exempt municipal
securities. The average weighted remaining maturity of the fund is expected to
be between three and fifteen years.
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
The One Group(R) Ultra Short-Term Income Fund seeks a high level of current
income consistent with low volatility of principal by investing in a diversified
portfolio of short-term investment grade securities. The fund will normally
invest at least 80% of its total assets in debt securities of all types,
including money market instruments. In addition, up to 20% of the fund's total
assets may be invested in other securities, including preferred stock. The fund
will invest in adjustable rate mortgage pass-through securities and other
securities representing an interest in or collateralized by mortgages with
periodic interest rate resets, some of which may be subject to repurchase
agreements. These securities often are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. However, the fund also may
purchase mortgage-backed securities that are issued by non-governmental
entities. Such securities may or may not have private insurer guarantees as to
timely payments. The fund also may purchase mortgage and interest rate swaps and
interest rate floors and caps. The fund also may employ other investment
techniques to enhance returns, such as loans of fund securities, mortgage dollar
rolls, repurchase agreements, options contracts and reverse repurchase
agreements.
The Fund will maintain a maximum duration of approximately two years. Under
normal interest rate conditions, the Fund's actual duration is expected to be in
a range of approximately six months to one year.
RISK FACTORS
The investments of the Fund are concentrated in the Underlying Funds, so the
Fund's investment performance is directly related to the performance of the
Underlying Funds. In addition, as a matter of fundamental policy, the Fund must
allocate its investments among the Underlying Funds within certain ranges. As a
result, the Fund does not have the same flexibility to invest as a mutual fund
without such constraints.
The Fund may invest in Underlying Funds which invest in medium or lower grade
bonds. If these bonds are downgraded, the Advisor will consider whether to
increase or decrease the Fund's investment in the affected Underlying Fund.
Further, the Fund may invest in Underlying Funds which concentrate their assets
in certain industries. Under certain circumstances, this could result in the
Fund being concentrated in those industries. If this were to occur, the Advisor
would consider whether to maintain or change the Fund's investments in such
Underlying Funds.
SPECIAL RISKS OF INVESTING IN EQUITY FUNDS
Changes in the value of an equity fund's portfolio securities will not affect
cash income, if any, derived from these securities but will affect the fund's
net asset value. Because equity funds invest primarily in equity securities,
which fluctuate in value, the funds' shares also will fluctuate in value. In
addition, certain investment management techniques that the funds may use, such
as the purchase and sale of futures, options and forward commitments, could
expose the funds to potentially greater risk of loss than more traditional
equity investments.
SPECIAL RISKS OF INVESTING IN FIXED-INCOME FUNDS
The market value of a fund's fixed-income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed-income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these
PROSPECTUS
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<PAGE> 67
investments. Except under condition of default, changes in the value of
fixed-income securities will not affect cash income derived from these
securities but will affect the funds' net asset value.
SPECIAL RISKS OF INVESTING IN INDEX FUNDS
Because of the funds' investment objectives, securities may be purchased,
retained and sold by the funds when such transactions would not be consistent
with traditional investment criteria. Accordingly, an investor is exposed to a
greater risk of loss (and a correspondingly greater prospect of gain) from
fluctuations in the value of such securities than would be the case if the funds
were not fully invested in such securities. In addition, the Advisor may
eliminate one or more securities or elect not to increase the funds' position in
such securities notwithstanding the continued listing of such securities on the
relevant index in the following circumstances: (i) the stock is no longer
publicly traded; or (ii) an unexpected adverse development occurs with respect
to a company such as bankruptcy or insolvency. As a result of these risk
factors, the share price of an index fund is expected to be volatile, and
investors should be able to sustain sudden, sometimes substantial, fluctuations
in the value of their investment.
SPECIAL RISKS OF INVESTING IN FOREIGN SECURITIES
Investments in securities of foreign issuers involve risks that are different
from investments in securities of U.S. issuers. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls, higher transaction costs, and
delayed settlements of transactions. Securities of some foreign companies are
less liquid, and their prices more volatile, than securities of comparable U.S.
companies. Additionally, there may be less public information available about
foreign issuers. Finally, since the funds may invest in securities denominated
in foreign currencies, changes in exchange rates may affect the value of
investments in the funds.
SPECIAL RISKS OF INVESTING IN SMALL CAPITALIZATION COMPANIES
Smaller, less seasoned companies may be subject to greater business risk than
larger, established companies. They may be more vulnerable to changes in
economic conditions, specific industry conditions, market fluctuations and other
factors affecting the profitability of companies. Therefore, the stock price of
smaller capitalization companies may be subject to greater price fluctuations
than that of larger, established companies. Due to these and other risk factors,
the price movement of the securities held by the funds may be volatile and the
net asset value of shares of the funds may fluctuate.
SPECIAL RISKS OF INVESTING IN MORTGAGE-RELATED SECURITIES
Some of the funds invest in mortgage-related securities, such as mortgage-backed
securities, adjustable rate mortgage loans ("ARMs"), fixed rate mortgage loans,
and mortgage dollar rolls. The investment characteristics of mortgage-related
securities differ from traditional debt securities. These differences can result
in significantly greater price and yield volatility than is the case with
traditional fixed-income securities. The major differences typically include
more frequent interest and principal payments, usually monthly, the
adjustability of interest rates, and the possibility that prepayments of
principal may be made at any time. Prepayment rates are influenced by changes in
current interest rates and a variety of economic, geographic, social, and other
factors. During periods of declining interest rates, prepayment rates can be
expected to accelerate. Under certain interest rate and prepayment rate
scenarios, a fund may fail to recoup fully its investment in mortgage-related
securities notwithstanding a direct or indirect governmental or agency
guarantee. The funds intend to use hedging techniques to control this risk. In
general, changes in the rate of prepayments on a mortgage-related security will
change that security's market value and its yield to maturity. When interest
rates fall, high prepayments could force a fund to reinvest principal at a time
when investment opportunities are not attractive. Thus, mortgage-related
securities may not be an affective means for a fund to lock in long-term
interest rates. Conversely, during periods when interest rates rise, slow
prepayments could cause the average life of the security to lengthen and the
value to decline more than anticipated.
HOW TO DO BUSINESS WITH THE ONE GROUP(R)
HOW TO INVEST IN THE ONE GROUP(R)
Shares of the Fund are sold on a continuous basis and may be purchased directly
from the Trust's Distributor, The One Group(R) Services Company, by mail, by
telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor, or through a broker-dealer that has
established a dealer agreement with the Distributor.
Purchases and redemptions of shares of the Fund may be made on any day that the
New York Stock Exchange is open for trading ("Business Days"). The minimum
initial and subsequent investments in the Fund are $1,000 and $100 respectively
($100 and $25, respectively, for employees of BANC ONE CORPORATION and its
affiliates). Initial and
PROSPECTUS
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<PAGE> 68
subsequent investment minimums may be waived at the Distributor's discretion.
Investors may purchase up to a maximum of $250,000 of Class B and Class C shares
per individual purchase order.
Class A, Class B and Class C shares are offered to IRA Account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors. Fiduciary Class shares are offered to
institutional investors, including affiliates of BANC ONE CORPORATION and any
bank, depository institution, insurance company, pension plan or other
organization authorized to act in fiduciary, advisory, agency, custodial or
similar capacities (each an "Authorized Financial Organization"). For additional
details regarding eligibility, call the Distributor at 1-800-480-4111.
BY MAIL
Investors may purchase Class A, Class B and Class C shares of the Fund by
completing and signing an Account Application Form and mailing it, along with a
personal check (or other negotiable bank instrument or money order) payable to
"The One Group(R)," the Fund, The One Group Services Company, or State Street
Bank and Trust Company (the Trust's Transfer Agent and Custodian), to the
Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500. If the purchase order is
to be credited to a Fund Direct IRA, the check should be payable to State Street
Bank and Trust Company for the benefit of the Shareholder. Subsequent purchases
of shares may be made at any time by mailing a personal check to the Transfer
Agent. Account Application Forms are available through the Distributor by
calling 1-800-480-4111. All purchases made by check should be in U.S. dollars.
Third party checks will not be accepted. When purchases are made by check or
under the Systematic Investment Plans (see below), redemptions will not be
allowed until the investment being redeemed has been in the Fund for 10 calendar
days.
Purchases of Fiduciary Class shares, and Class A, Class B and Class C shares
that are being offered to investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, are made by an
institutional investor and/or other intermediary on behalf of an investor (each
also a "Shareholder Servicing Agent"). The Shareholder Servicing Agent may
require an investor to complete forms in addition to the Account Application
Form and to follow procedures established by the Shareholder Servicing Agent.
Such Shareholders should contact their Shareholder Servicing Agents regarding
purchases, exchanges and redemptions of shares. See "Additional Information
Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible to
make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agents, if applicable.
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
SYSTEMATIC INVESTMENT PLAN
Class A, Class B and Class C investors may make automatic monthly investments in
the Fund from their bank, savings and loan or other depository institution
accounts. The minimum initial investment must be $1000 and subsequent
investments must be $25 under the Systematic Investment Plan, which minimum may
be reduced at the discretion of the Distributor. The Trust pays the costs
associated with these transfers, but reserves the right, upon thirty days'
written notice, to impose reasonable charges for this service. A depository
institution may impose a charge for debiting an investor's account which would
reduce the investor's return from an investment in the Fund.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which the Fund may be an
appropriate investment. The Trust's retirement plan allows participants to defer
taxes while helping them build their retirement savings.
The One Group(R) Fund-Direct IRA is a retirement plan with a wide choice of
investments offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A, Class B
and Class C shares, and the investor could be liable for any fees or expenses
incurred by the Trust. Federal funds are monies credited to a bank's account
with a Federal Reserve Bank. The purchase price of
PROSPECTUS
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<PAGE> 69
shares of the Fund is the net asset value next determined after a purchase order
is effected plus any applicable sales charge (the "offering price"). The net
asset value per share of the Fund is determined by dividing the total market
value of the Fund's investments and other assets allocable to a class, less any
liabilities allocable to that class, by the total number of outstanding shares
of such class. Net asset value per share is determined daily as of 4:00 p.m.,
eastern time, on each Business Day. For a further discussion of the calculation
of net asset value, see the Statement of Additional Information. Shares may also
be issued in transactions involving the acquisition by the Fund of securities
held by collective investment funds sponsored and administered by affiliates of
the Advisor. Purchases will be made in full and fractional shares of the Fund
calculated to three decimal places. Although the methodology and procedures are
identical, the net asset value per share of classes within the Fund may differ
because the distribution expenses charged to Class A, Class B and Class C shares
are not charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the Trust's
Transfer Agent nor the Trust will be responsible for any loss, liability, cost
or expense for acting upon telephone or wire instructions, and the investor will
bear all risk of loss. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If such procedures are not
employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans, and Class A, Class B and Class C shares offered to IRA
account participants and investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, will normally be
held in the name of the Shareholder Servicing Agent effecting the purchase on
the Shareholder's behalf, and it is the Shareholder Servicing Agent's
responsibility to transmit purchase orders to the Distributor. A Shareholder
Servicing Agent may impose an earlier cut-off time for receipt of purchase
orders directed through it to allow for processing and transmittal of these
orders to the Distributor for effectiveness the same day. The Shareholder should
contact his or her Shareholder Servicing Agent for information as to the
Shareholder Servicing Agent's procedures for transmitting purchase, exchange or
redemption orders to the Trust. A Shareholder who desires to transfer the
registration of shares beneficially owned by him or her, but held of record by a
Shareholder Servicing Agent, should contact the Shareholder Servicing Agent to
accomplish such change. Other Shareholders who desire to transfer the
registration of their shares should contact the Transfer Agent.
No certificates representing shares of the Fund will be issued. In
communications to Shareholders, the Fund will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
SALES CHARGE
CLASS A SHARES
The following table shows the initial sales charge on Class A shares to a
"single purchaser" (defined below) together with the sales charge reallowed to
financial institutions and intermediaries (the "commission"):
<TABLE>
<CAPTION>
SALES CHARGE
SALES CHARGE AS APPROPRIATE COMMISSION
AS A PERCENTAGE OF AS A
PERCENTAGE OF NET AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- --------------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
less than $100,000....................................... 4.50% 4.71% 4.05%
$100,000 but less than $250,000.......................... 3.50% 3.53% 3.05%
$250,000 but less than $500,000.......................... 2.50% 2.36% 2.05%
$500,000 but less than $1,000,000........................ 2.00% 2.04% 1.60%
$1,000,000 or more....................................... 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial institutions
and intermediaries. Under certain circumstances, the Distributor will use its
own funds to compensate financial institutions and intermediaries in amounts
that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a sales charge is 3.00% of the
offering price (including the commission shown above and additional cash
compensation described below). In addition, the Distributor will, from time to
time and at its own expense, provide promotional incentives to financial
institutions and intermediaries, whose registered representatives have sold or
are expected to sell significant amounts of the shares of the Fund in the form
of payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives to places within or outside
the United States, and additional compensation in an amount up to 1.00% of the
offering price of Class A shares of the Fund for sales of $1 million to $5
million, and 0.50% for sales over $5 million. A Shareholder who purchases $1
million or more of Class A shares and is not assessed a sales charge the time of
purchase, will be assessed a sales charge equivalent to 1% of the purchase price
if such Shareholder redeems any or all of the Class A shares prior to the first
anniversary of purchase.
PROSPECTUS
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<PAGE> 70
Under certain circumstances, commissions up to the amount of the entire sales
charge will be reallowed to financial institutions and intermediaries, which
might then be deemed to be "underwriters" under the Securities Act of 1933.
RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class A
shares, a "single purchaser" is entitled to cumulate current purchases with the
current value at the offering price of previously purchased Class A, Class B,
and Class C shares of the Fund and other eligible funds of the Trust, other than
the Trust's money market funds, that are sold subject to a comparable sales
charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), and including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their minor
children, and give the age of such children. The Fund may amend or terminate
this right of accumulation at any time as to subsequent purchases.
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds
that impose a comparable sales charge over the next 13 months, the sales charge
may be reduced by completing the Letter of Intent section of the Account
Application Form. The Letter of Intent includes a provision for a sales charge
adjustment depending on the amount actually purchased within the 13-month
period. In addition, pursuant to a Letter of Intent, the Custodian will hold in
escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of investment, which
is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000 in
Class A shares of one (or more) of the funds of the Trust that imposes a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. The investor would
pay an initial sales charge of 2.00% (the sales charge applicable to purchases
of $250,000) and .50% of the investment (representing the difference between the
2.50% sales charge applicable to purchases of $100,000 and the 2.00% sales
charge already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more in Class A shares under the investor's Letter of
Intent.
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Fund: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired through
the exercise of exchange privileges where a comparable sales charge has been
paid for exchanged shares; (iii) purchased by officers, directors or trustees,
retirees and employees (and their spouses and immediate family members) of the
Trust, of BANC ONE CORPORATION and its subsidiaries and affiliates, of the
Distributor and its subsidiaries and affiliates, of the Custodian and Transfer
Agent and their subsidiaries and affiliates, of broker-dealers who have entered
into dealer agreements with the Trust and their subsidiaries and affiliates, or
of an investment sub-advisor of a fund of the Trust and such sub-advisor's
subsidiaries and affiliates; (iv) sold to affiliates of BANC ONE CORPORATION and
certain accounts (other than Individual Retirement Accounts) for which
Authorized Financial Organizations act in fiduciary, advisory, agency, custodial
or similar capacities, or purchased by investment advisors, financial planners
or other intermediaries who have a dealer arrangement with the Distributor, who
place trades for their own accounts or for the accounts of their clients and who
charge a management, consulting or other fee for their services, as well as
clients of such investment advisors, financial planners or other intermediaries
who place trades for their own accounts if the accounts are linked to the master
account of such investment advisor, financial planner or other intermediary; (v)
purchased with proceeds from the recent redemption of Fiduciary Class shares of
a fund of the Trust or acquired in an exchange of Fiduciary Class shares of a
fund for Class A shares of the same fund; (vi) purchased with proceeds from the
recent redemption of shares of a mutual fund (other than a fund of the Trust)
for which a sales charge was paid; (vii) purchased in an Individual Retirement
Account with the proceeds of a distribution from an employee benefit plan,
provided that, at the time of distribution, the employee benefit plan had plan
assets invested in a fund of the Trust; (viii) purchased with Trust assets; (ix)
purchased in accounts as to which a bank or broker-dealer charges an
PROSPECTUS
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<PAGE> 71
asset allocation fee, provided the bank or broker-dealer has an agreement with
the Distributor; (x) directly purchased with the proceeds of a distribution on a
bond for which a BANC ONE CORPORATION affiliate bank or trust company is the
Trustee or Paying Agent; or (xi) purchased in connection with plans of
reorganization of the Fund, such as mergers, asset acquisitions and exchange
offers to which the Fund is a party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi), and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at 1-800-480-4111 to
determine whether they are eligible to purchase shares without paying a sales
charge through the use of proceeds from a recent redemption or distribution as
described above, and to confirm continued availability of these waiver policies
prior to initiating the procedures described in clauses (v), (vi), and (vii).
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES AND CLASS C SHARES
Class B shares are not subject to a sales charge when they are purchased, but
are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the sixth anniversary of purchase. Class C
shares also are not subject to a sales charge when they are purchased, but are
subject to a Contingent Deferred Sales Charge if a Shareholder redeems them
prior to the first anniversary of purchase. When a Shareholder purchases Class B
and Class C shares, the full purchase amount is invested directly in the Fund.
Class B and Class C shares of the Fund are also subject to an ongoing
distribution and Shareholder service fee at an annual rate of 1.00% of the
Fund's average daily net assets as provided in the CDSC Plan (described below
under "The Distributor"). This ongoing fee will cause Class B and Class C shares
to have a higher expense ratio and to pay lower dividends than Class A shares.
Class B shares convert automatically to Class A shares after eight years,
commencing from the end of the calendar month in which the purchase order was
accepted under the circumstances and subject to the qualifications described in
this Prospectus.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of the Class B and Class C shares, such
as the payment of compensation to dealers and agents for selling such shares. A
dealer reallowance of 4.00% of the original purchase price of the Class B shares
and 1.00% of the original purchase price of Class C shares will be paid to
financial institutions and intermediaries.
Class B and Class C shareholders will pay a Contingent Deferred Sales Charge at
the rates set forth below. The Contingent Deferred Sales Charge is assessed on
an amount equal to the lesser of the then-current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on increases
in net asset value above the initial purchase price. In addition, no charge is
assessed on shares derived from reinvestment of dividends or capital gain
distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the number of years from the time of payment for the purchase of shares until
the time of redemption of such shares. Solely for purposes of determining the
number of years from the time of any payment for the purchase of shares, all
payments during a month are aggregated and deemed to have been made on the first
day of the month.
PROSPECTUS
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<PAGE> 72
CLASS B SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 5.00%
1-2..................................................................... 4.00%
2-3..................................................................... 3.00%
3-4..................................................................... 3.00%
4-5..................................................................... 2.00%
5-6..................................................................... 1.00%
6-7..................................................................... None
7-8..................................................................... None
</TABLE>
To provide an example, assume you purchased 100 shares at $10 per share (a total
cost of $1,000) and prior to the second anniversary after purchase, the net
asset value per share is $12 and during such time you have acquired 10
additional shares through dividends paid in shares. If you then make your first
redemption of 50 shares (proceeds of $600), 10 shares will not be subject to
charge because you received them as dividends. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds is subject to a Contingent Deferred Sales Charge at a rate
of 4.00% (the applicable rate prior to the second anniversary after purchase).
CLASS C SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 1.00%
After first year........................................................ None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class A
shares in the Shareholder's Fund account (unless the Shareholder elects to have
Class B and Class C shares redeemed first) or shares representing capital
appreciation, next of shares acquired pursuant to reinvestment of dividends and
capital gain distributions, next Class C shares, and finally of other shares
held by the Shareholder for the longest period of time. This method should
result in the lowest possible sales charge.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code) of a
Shareholder or a participant or beneficiary of a qualified retirement plan if
redemption is made within one year of such death or disability; (iii) to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan to a
Shareholder who has attained the age of 70 1/2; or (iv) purchased by investors
in certain retirement plans, such as 401(k) and similar qualified plans. A
Shareholder or his or her representative should contact the Transfer Agent to
determine whether a retirement plan qualifies for a waiver and must notify the
Transfer Agent prior to the time of redemption if such circumstances exist and
the Shareholder is eligible for this waiver. In addition, the following
circumstances are not deemed to result in a "redemption" of Class B shares for
purposes of the assessment of a Contingent Deferred Sales Charge, which is
therefore waived: (i) plans of reorganization of the Fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or (ii)
exchanges for Class B shares of other funds of the Trust as described under
"Exchanges."
CONVERSION FEATURE
Class B shares will automatically convert to Class A shares eight years after
the end of the month in which the shares were purchased and will be subject to
the lower distribution and Shareholder service fees charged to Class A shares.
Class C shares will convert to Class A shares after six years. Such conversion
will be on the basis of the relative net asset values of the two classes,
without the imposition of any sales charge, fee or other charge. The conversion
is not a taxable event to a Shareholder.
PROSPECTUS
17
<PAGE> 73
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B and Class C shares in a Shareholder's Fund
account will be considered to be held in a separate sub-account. Each time any
Class B or Class C shares in a Shareholder's Fund account (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B or
Class C shares in the sub-account will also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B or Class C shares
of the funds of the Trust during the eight or six year period, the Trust will
aggregate the holding periods for the shares of each fund of the Trust for
purposes of calculating that eight or six year period. Because the per share net
asset value of the Class A shares may be higher than that of the Class B or
Class C shares at the time of conversion, a Shareholder may receive fewer Class
A shares than the number of Class B or Class C shares converted, although the
dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of the Fund may exchange their shares for Class A
shares of the Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders may exchange their shares for Fiduciary Class shares of the
Fund or for Fiduciary Class shares or Class A shares of another fund of the
Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares of
the Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares, except
as provided below. The Trust does not impose a charge for processing exchanges
of shares. If a Shareholder seeks to exchange Class A shares of a fund that does
not impose a sales charge for Class A shares of a fund that does or the fund
being exchanged into has a higher sales charge, the Shareholder will be required
to pay a sales charge in the amount equal to the difference between the sales
charge applicable to the fund into which the shares are being exchanged and any
sales charges previously paid for the exchanged shares, including any sales
charges incurred on any earlier exchanges of the shares (unless such sales
charge is otherwise waived, as provided in "Other Circumstances"). The exchange
of Fiduciary Class shares for Class A shares also will require payment of the
sales charge unless the sales charge is waived, as provided in "Other
Circumstances."
CLASS B
Class B Shareholders of the Fund may exchange their shares only for Class B
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the newly
acquired Class B shares, the newly acquired Class B shares shall be deemed to
have been issued on the date of receipt of the Shareholder's order to purchase
the outstanding Class B shares of the fund from which the initial exchange was
made.
CLASS C
Class C Shareholders of the Fund may exchange their shares only for Class C
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class C shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class C
shares. The requirements applicable to computing the Contingent Deferred Sales
Charge on the exchange of Class B shares are also applicable to the exchange of
Class C shares.
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the Transfer Agent by 4:00 p.m., eastern
time, on any Business Day, the exchange usually will occur on that day. Any
Shareholder who wishes to make an exchange must receive a current prospectus of
the fund of the Trust in which he or she wishes to invest before the exchange
will be effected.
PROSPECTUS
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<PAGE> 74
The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax advisors for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Fund.
A more detailed description of the above is set forth in the Statement of
Additional Information.
The Trust's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (AT LEAST 30 DAYS APART) from the Fund during
any twelve month period. Notwithstanding these limitations, the Trust reserves
the right to reject any purchase request (including exchange purchases from
other funds of the Trust) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares without charge (except Class B and Class C
shares, as provided above) on any Business Day; shares may ordinarily be
redeemed by mail, by telephone or by wire. All redemption orders are effected at
the net asset value per share next determined for Class A and Fiduciary Class
shares, and at net asset value per share next determined reduced by any
applicable contingent deferred sales charge for Class B and Class C shares,
after receipt of a valid request for redemption. Payment to Shareholders for
shares redeemed will be made within seven days after receipt by the Transfer
Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in order
to constitute a valid request for redemption. All requests for redemptions from
IRA accounts must be in writing. Redemption request forms may be obtained from
the Transfer Agent by calling (800) 480-4111. All written redemption requests
should be sent to The One Group(R), c/o State Street Bank and Trust Company,
P.O. Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing Agent, if
applicable. The Transfer Agent may require that the signature on the written
request be guaranteed by a commercial bank, a member firm of a domestic stock
exchange, or by a member of the Securities Transfer Association Medallion
Program or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $50,000 worth of shares or less;
(ii) the redemption check is payable to the Shareholder(s) of record; and (iii)
the redemption check is mailed to the Shareholder(s) at the address of record.
The Shareholder may also have the proceeds mailed to a commercial bank account
previously designated on the Account Application Form or by written instruction
to the Transfer Agent or the Shareholder Servicing Agent, if applicable. There
is no charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE OR BY WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
telephone to the Transfer Agent at 1-800-480-4111, provided that the Shareholder
has elected the telephone redemption privilege in writing to the Distributor, or
to the Shareholder Servicing Agent, if applicable. The Transfer Agent may reduce
the amount of a wire redemption payment by its then-current wire redemption
charge, which, as of the date of this Prospectus, is $7.00.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each, unless the
withdrawal plan is part of a required minimum distribution from an IRA or other
qualified plan. There is no charge for this service.
PROSPECTUS
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<PAGE> 75
Purchases of additional Class A shares while the Systematic Withdrawal Plan is
in effect are generally undesirable because a sales charge is incurred whenever
purchases are made.
Pursuant to the Systematic Withdrawal Plan, Class B and Class C shareholders may
elect to receive, or may designate another person to receive, distributions
provided the distributions are limited to no more than 10% of their account
value annually, determined in the first year as of the date the redemption
request is received by the Transfer Agent, and in subsequent years, as of the
most recent anniversary of that date.
In addition, Shareholders who have attained the age of 70 1/2 may elect to
receive distributions, to the extent that the redemption represents a minimum
required distribution from an Individual Retirement Account or other qualifying
retirement plan.
If the amount of systematic withdrawal exceeds income accrued since the previous
withdrawal under the Systematic Withdrawal Plan, the principal balance invested
will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, the forwarding of proceeds
may be delayed for 10 or more days until payment has been collected for the
purchase of such shares. The Fund intends to pay cash for all shares redeemed.
Due to the relatively high costs of handling small investments, the Fund
reserves the right to redeem, at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in the Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
the Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any of these shares.
Before the Fund exercises its right to redeem such shares and to send the
proceeds to the Shareholder, the Shareholder will be given notice that the value
of the shares in his or her account is less than the minimum amount and will be
allowed 60 days to make an additional investment in the Fund in an amount which
will increase the value of the account to at least $1,000.
See the Statement of Additional Information for examples of when the Trust may
suspend the right of redemption or redeem shares involuntarily if it appears
appropriate to do so in light of the Trust's responsibilities under the
Investment Company Act of 1940.
FUND MANAGEMENT
THE ADVISOR
The Trust and Banc One Investment Advisors Corporation (the "Advisor") have
entered into an investment advisory agreement (the "Advisory Agreement"). Under
the Advisory Agreement, the Advisor makes the investment decisions for the
assets of the Fund and continuously reviews, supervises and administers the
Fund's investment program. The Advisor discharges its responsibilities subject
to the supervision of, and policies established by, the Trustees of the Trust.
The Trust's shares are not deposits or obligations of, or endorsed or guaranteed
by BANC ONE CORPORATION or its bank or non-bank affiliates. The Trust's shares
are not insured or guaranteed by the Federal Deposit Insurance Corporation
("FDIC") or by any other governmental agency or government sponsored agency of
the Federal government or any state.
The Advisor is an indirect, wholly-owned subsidiary of BANC ONE CORPORATION, a
bank holding company incorporated in the state of Ohio. BANC ONE CORPORATION
currently has affiliate banking organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West Virginia and
Wisconsin. In addition, BANC ONE CORPORATION has several affiliates that engage
in data processing, venture capital, investment and merchant banking, and other
diversified services including trust management, investment management,
brokerage, equipment leasing, mortgage banking, consumer finance and insurance.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
The Advisor represents a consolidation of the investment advisory staffs of a
number of bank affiliates of BANC ONE CORPORATION, which have considerable
experience in the management of open-end management investment company
portfolios, including The One Group(R) since 1985 (then known as "The Helmsman
Fund").
No single person is responsible for managing the assets of the Fund. Rather,
investment decisions for the Fund are made by committee.
The Advisor is entitled to a fee which is calculated daily and paid monthly, at
an annual rate of .05% of the average daily net assets of the Fund. The Advisor
may voluntarily waive all or part of its fee.
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The Advisor also serves as investment advisor to each of the Underlying Funds.
As a shareholder of each of the Underlying Funds, the Fund will indirectly bear
is proportionate share of investment advisory fees paid by those funds. The
Underlying Funds pay the Advisor an advisory fee at the following rates:
<TABLE>
<S> <C>
The One Group(R) Prime Money Market Fund............................................... .30%
The One Group(R) Limited Volatility Bond Fund.......................................... .40%
The One Group(R) Intermediate Bond Fund................................................ .40%
The One Group(R) Income Bond Fund...................................................... .40%
The One Group(R) Government Bond Fund.................................................. .45%
The One Group(R) Ultra Short-Term Income Fund.......................................... .30%
The One Group(R) Disciplined Value Fund................................................ .74%
The One Group(R) International Equity Index Fund....................................... .55%
The One Group(R) Large Company Growth Fund............................................. .74%
The One Group(R) Large Company Value Fund.............................................. .74%
The One Group(R) Growth Opportunities Fund............................................. .74%
The One Group(R) Value Growth Fund..................................................... .74%
The One Group(R) Gulf South Growth Fund................................................ .74%
The One Group(R) Income Equity Fund.................................................... .74%
The One Group(R) Equity Index Fund..................................................... .10%
</TABLE>
THE DISTRIBUTOR
The One Group(R) Services Company (the "Distributor"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Fund are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Fund. Currently,
the Distributor has voluntarily agreed to limit payments under the Plan to .25%
of the average daily net assets of Class A shares of the Fund. Up to .25% of the
fees payable under the Plan may be used as compensation for Shareholder services
by the Distributor and/or financial institutions and intermediaries. All such
fees that may be paid under the Plan will be paid pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Distributor may apply these fees toward: (i)
compensation for its services in connection with distribution assistance or
provision of Shareholder services; or (ii) payments to financial institutions
and intermediaries such as banks (including affiliates of the Advisor), savings
and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries, as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class C shares are
subject to a contingent Deferred Sales Charge if such shares are redeemed prior
to the first anniversary of purchase. Class B and Class C shares of the Fund are
subject to an ongoing distribution and Shareholder service fee as provided in
the CDSC Distribution and Shareholder Services Plan (the "CDSC Plan") at an
annual rate of 1.00% of the Fund's average daily net assets, which includes
Shareholder servicing fees of .25% of the Fund's average daily net assets.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of Class B and Class C shares, such as
the payment of compensation to dealers and agents for selling such shares. The
combination of the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees facilitate the ability of the Fund to sell the Class B
and Class C shares without a sales charge being deducted at the time of
purchase.
The Plan and the CDSC Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Fund
also may execute brokerage or other agency transactions through an affiliate of
the Advisor or through the Distributor for which the affiliate or the
Distributor receives compensation. Pursuant to guidelines adopted by the Board
of Trustees of the Trust, any such compensation will be reasonable and fair
compared to compensation received by other brokers in connection with comparable
transactions.
Fiduciary Class shares of the Fund are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record owner
of shares for the account of its customers may impose separate fees for account
services to its customers.
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THE ADMINISTRATOR
The One Group(R) Services Company, (the "Administrator"), a wholly-owned
subsidiary of the BISYS Group, Inc., and the Trust are parties to an
administration agreement relating to the Fund (the "Administration Agreement").
Under the terms of the Administration Agreement, the Administrator is
responsible for providing the Trust with administrative services (other than
investment advisory services), including regulatory reporting and all necessary
office space, equipment, personnel and facilities.
The Advisor also serves as Sub-Administrator to each fund of the Trust, pursuant
to an agreement between the Administrator and the Advisor. Pursuant to this
agreement, the Advisor performs many of the Administrator's duties, for which
the Advisor receives a fee paid by the Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .10% of the Fund's
average daily net assets on the first $500,000,000 in Fund assets, .075% of the
Fund's average daily net assets between $500,000,000 and $1 billion, and .05% of
the Fund's average daily net assets when Fund assets exceed $1 billion.
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust, for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust
Company. Bank One Trust Company receives a fee paid by the Trust.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to offer
separate funds and different classes of each fund. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses.
The Advisor and the Administrator of the Fund each bears all expenses incurred
in connection with the performance of their services as investment advisor and
administrator, respectively, other than the cost of securities (including
brokerage commissions, if any) purchased for the Fund.
As a general matter, as set forth in the Multiple Class Plan, expenses are
allocated to each class of shares of the Fund on the basis of the net asset
value of that class in relation to the net asset value of the Fund. At present,
the only expenses that are allocated to Class A, Class B, and Class C shares,
other than in accordance with the relative net asset value of the class, are the
distribution and Shareholder services costs. See "Expense Summary." At present,
no expenses are allocated to Fiduciary Class shares as a class that are not also
borne by the other classes of shares of the Fund in proportion to the relative
net asset value of the shares of such classes.
The organizational expenses of the Fund have been capitalized and are being
amortized in the first five years of the Fund's operations. Such amortization
will reduce the amount of income available for payment as dividends.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved contracts under which, as described above, certain
companies provide essential management services to the Trust.
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<PAGE> 78
VOTING RIGHTS
As set forth in the Multiple Class Plan, each share held entitles the
Shareholder of record to one vote. Each fund of the Trust will vote separately
on matters relating solely to that fund. In addition, each class of a fund shall
have exclusive voting rights on any matter submitted to Shareholders that
relates solely to that class, and shall have separate voting rights on any
matter submitted to Shareholders in which the interests of one class differ from
the interests of any other class. However, all fund Shareholders will have equal
voting rights on matters that affect all fund Shareholders equally. As a
Massachusetts Business Trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be elected or removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
DIVIDENDS
Net investment income (exclusive of capital gains) is determined and declared
monthly, and is distributed in the form of monthly dividends to Shareholders of
Record on the first Business Day of each month. Capital gains of the Fund, if
any, will be distributed at least annually.
To maintain a relatively even rate of distributions from the Fund rather than
having substantial fluctuations from period to period, the monthly distributions
level from the Fund may be fixed from time to time at rates consistent with the
Advisor's long-term earnings expectations.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B, Class C or Fiduciary Class shares,
as applicable, at the net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in cash. Such election,
or any revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500, and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
Class B shares received as dividends and capital gains distributions at the net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro rata portion of the Class B
shares in the sub-account will also convert to Class A shares. See "Conversion
Feature."
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution even though
such distribution would, in effect, represent a return of the Shareholder's
investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A, Class B, and Class C shares because of the
distribution expenses charged to Class A, Class B, and Class C shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group(R)
Services Company, 3435 Stelzer Road, Columbus, OH 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
OTHER INVESTMENT POLICIES
PORTFOLIO TURNOVER
Portfolio turnover may vary greatly from year to year as well as within a
particular year. It is presently estimated that the annual portfolio turnover
rate for the Fund will not exceed 180%. Higher portfolio turnover rates will
likely result in higher transaction costs to the Fund and may result in
additional tax consequences to the Fund's Shareholders.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed without
the consent of the holders of a majority of the Fund's outstanding shares. The
term "majority of the outstanding shares" means the vote of (i) 67% or more of
the Fund's shares present at a meeting, if
PROSPECTUS
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<PAGE> 79
more than 50% of the outstanding shares of the Fund are present or represented
by proxy, or (ii) more than 50% of the Fund's outstanding shares, whichever is
less.
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities, securities of regulated
investment companies and, if consistent with a Fund's investment objective and
policies, repurchase agreements involving such securities) if as a result more
than 5% of the total assets of a Fund would be invested in the securities of
such issuer or a Fund would own more than 10% of the outstanding voting
securities of such issuer. This restriction applies to 75% of a Fund's assets.
For purposes of these limitations, a security is considered to be issued by the
government entity whose assets and revenues guarantee or back the security. With
respect to private activity bonds or industrial development bonds backed only by
the assets and revenues of a non-governmental user, such user would be
considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets of
the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, except for investments
in funds of the One Group(R), provided that this limitation does not apply to
investments in obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities and repurchase agreements involving such
securities. For purposes of this limitation (i) utilities will be divided
according to their services (for example, gas, gas transmission, electric and
telephone will each be considered a separate industry); and (ii) wholly-owned
finance companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of their
parents.
3. Make loans, except that the Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security.
As described above in "Investment Policies of the Fund -- Permissible
Investments," the Fund may also invest directly in certain of the following
instruments for temporary defensive purposes. Additional investment limitations
are set forth in the Statement of Additional Information. For the investment
limitations of the Underlying Funds, see the applicable prospectuses.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain of the permitted investments for the
Underlying Funds. As described above in "Investment Policies of the
Fund -- Permissible Investments," the Fund may also invest directly in certain
of the following instruments for temporary defensive purposes. For a more
detailed description, see the Statement of Additional Information or the
prospectuses of the Underlying Funds.
U.S. TREASURY OBLIGATIONS -- The funds may invest in bills, notes and bonds
issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS").
RECEIPTS -- The funds may purchase interests in separately traded interest and
principal component parts of U.S. Treasury obligations that are issued by banks
or brokerage firms and are created by depositing U.S. Treasury notes and U.S.
Treasury bonds into a special account at a custodian bank. Receipts include
Treasury Receipts ("TRS"), Treasury Investment Growth Receipts ("TIGRS"), and
Certificates of Accrual on Treasury Securities ("CATS").
CERTIFICATES OF DEPOSIT -- Certificates of deposit ("CDs") are negotiable
interest bearing instruments with a specific maturity. CDs are issued by banks
and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a time deposit
("TD") earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by (i.e., made an obligation of) a commercial bank.
Maturities are generally six months or less.
COMMERCIAL PAPER -- Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few days to nine months.
U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific types
of activities. Select agencies, such as the Government National Mortgage
Association ("Ginnie Mae") and the Export-Import Bank, are supported by the full
faith and credit of the U.S. Treasury; others, such as the Federal National
Mortgage Association ("Fannie Mae"), are supported by the credit of the
instrumentality and have the right to borrow from the U.S. Treasury; others are
supported by the authority of the U.S.
PROSPECTUS
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<PAGE> 80
government to purchase the agency's obligations; while still others, such as the
Federal Farm Credit Banks and the Federal Home Loan Mortgage Corporation
("Freddie Mac"), are supported solely by the credit of the instrumentality
itself. No assurance can be given that the U.S. government would provide
financial support to U.S. government sponsored agencies or instrumentalities if
it is not obligated to do so by law. Obligations of U.S. government agencies
include debt issues and mortgage-backed securities issued or guaranteed by
select agencies.
CORPORATE SECURITIES -- Corporate securities include corporate bonds,
convertible and non-convertible debt securities, and preferred stocks, as well
as commercial paper (short-term promissory notes issued by corporations).
Issuers of corporate bonds and notes are divided into many different categories
by bond market sector, such as electric utilities, gas utilities, telephone
utilities, consumer finance companies, wholesale finance companies and
industrial companies. Within each major category of issuer, there are many
subcategories.
WARRANTS -- Warrants are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of common
stock at a specified price, usually at a price that is higher than the market
price at the time of issuance of the warrant. The right may last for a period of
years or indefinitely.
COMMON STOCK -- Common stock represents a share of ownership in a company and
usually carries voting rights and earns dividends. Unlike preferred stock,
dividends on common stock are not fixed but are declared at the discretion of
the issuer's board of directors.
INVESTMENT COMPANY SECURITIES -- The funds may invest up to 5% of their total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of their assets in the securities of other investment companies.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a person
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. The custodian or
its agent will hold the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 100% of the
repurchase price. The funds bear a risk of loss in the event the other party
defaults on its obligations and the funds are delayed or prevented from their
right to dispose of the collateral securities or if the funds realize a loss on
the sale of the collateral securities.
REVERSE REPURCHASE AGREEMENTS -- The funds may borrow funds for temporary
purposes by entering into reverse repurchase agreements. Pursuant to such
agreements, the funds would sell portfolio securities to financial institutions
such as banks and broker-dealers, and agree to repurchase them at a mutually
agreed-upon date and price. The funds will enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time the funds enter into a reverse
repurchase agreement, they would place liquid high grade debt securities having
a value equal to the repurchase price (including accrued interest), in a
segregated custodial account and would subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the funds may
decline below the price at which the funds are obligated to repurchase the
securities.
DEMAND FEATURES -- The funds may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount at a fixed price (usually with accrued interest) within a fixed
period (usually seven days) following a demand by the funds. The purpose of
engaging in transactions involving puts is to maintain flexibility and liquidity
to permit the funds to meet redemption requests and remain as fully invested as
possible.
ASSET-BACKED SECURITIES -- Asset-backed securities consist of securities secured
by company receivables, home equity loans, truck and auto loans, leases, credit
card receivables and other securities backed by other types of receivables or
other assets. These securities are generally pass-through securities, which
means that principal and interest payments on the underlying securities (less
servicing fees) are passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the underlying debt
will be refinanced or paid off prior to their maturities during periods of
declining interest rates. In that case, a portfolio manager may have to reinvest
the proceeds from the securities at a lower rate. Potential market gains on a
security subject to prepayment risk may be more limited than potential market
gains on a comparable security that is not subject to prepayment risk. Under
certain interest rate and prepayment rate scenarios, the funds may fail to
recoup fully their investment in asset-backed securities. Asset-backed
securities are commonly considered to be derivatives.
SHORT-TERM FUNDING AGREEMENTS -- The funds may, in order to enhance yield, make
limited investments in short-term funding agreements issued by banks and highly
rated insurance companies. Short-term funding agreements issued by insurance
companies are sometimes referred to as Guaranteed Investment Contracts ("GIBS"),
while those issued by banks are referred to as Bank Investment Contracts
("BICs"). Pursuant to such agreements, the funds make cash contributions to a
deposit account at a bank or insurance company. The bank or insurance company
then credits to the funds on a monthly basis guaranteed interest at either a
fixed, variable or floating rate. These contracts are general obligations of the
issuing bank or insurance company and are paid from the general assets of the
issuing entity. The funds
PROSPECTUS
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<PAGE> 81
will purchase short-term funding agreements only from banks and insurance
companies which, at the time of purchase, are rated "A" or the equivalent by at
least one NRSRO and have assets of $1 billion or more. Generally, there is no
active secondary market in short-term funding agreements.
SECURITIES OF FOREIGN ISSUERS -- The funds may invest in securities of foreign
issuers to achieve income or capital appreciation. The funds also may invest in
commercial paper of foreign issuers and obligations of foreign branches of U.S.
banks, U.S. and London branches of foreign banks, and supranational entities
which are established through the joint participation of several governments
(e.g., the Asian Development Bank and the Inter-American Development Bank).
Securities of foreign issuers may include sponsored and unsponsored American
Depository Receipts ("ADRs"), which are securities typically issued by a U.S.
financial institution that evidence ownership interests in a pool of securities
issued by a foreign issuer. ADRs include American Depository Shares and New York
Shares. There may be less information available on the foreign issuers of
unsponsored ADRs than on the issuers of sponsored ADRs.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The funds may acquire
securities representing an interest in a pool of mortgage loans that are issued
or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac. Mortgage-backed
securities may also be issued by non-governmental entities and may or may not
have private insurer guarantees of timely payments. The funds also may invest in
mortgage-backed securities issued by non-government entities, which consist of
Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage Investment
Conduits ("REMICs"). Mortgage-backed securities are in most cases "pass-through"
instruments, through which the holder receives a share of all interest and
principal payments from the mortgages underlying the certificate. Because the
prepayment characteristics of the underlying mortgages vary, it is not possible
to predict accurately the average life or realized yield of a particular issue
of pass-through certificates. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected to
accelerate. When the mortgage obligations are prepaid, the funds may have to
reinvest in securities with a lower yield. Moreover, prepayment of mortgages
which underlie securities purchased at a premium could result in capital losses.
STRIPPED MORTGAGE-BACKED SECURITIES -- The funds may, to enhance revenues or
hedge against interest rate risk, invest in stripped mortgage-backed securities
("SMBS"), which are derivative multi-class mortgage securities. The funds may
only invest in SMBS issued or guaranteed by the U.S. government, its agencies or
instrumentalities. SMBS are usually structured with two classes that receive
different proportions of the interest and principal distributions from a pool of
mortgage assets. A common type of SMBS will have one class receiving all of the
interest from the mortgage assets ("IOs"), while the other class will receive
all of the principal ("POs"). If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the funds may fail to fully
recoup their initial investment in these securities. Although the market for
such securities is increasingly liquid, certain SMBS may not be readily
marketable and will be considered illiquid for purposes of the funds'
limitations on investments in illiquid securities. The market value of the class
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates.
MORTGAGE DOLLAR ROLLS -- The funds may enter into mortgage "dollar rolls" in
which the funds sell securities for delivery in the current month and
simultaneously contract with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The funds benefit to the extent of any difference between the price
received for the securities sold and the lower forward price for the future
purchase (often referred to as the "drop") or fee income plus the interest
earned on the cash proceeds of the securities sold until the settlement date of
the forward purchase. Unless such benefits exceed the income, capital
appreciation and gain or loss due to mortgage prepayments that would have been
realized on the securities sold as part of the mortgage dollar roll, the use of
this technique will diminish the investment performance of the funds compared
with what such performance would have been without the use of mortgage dollar
rolls.
FIXED RATE MORTGAGE LOANS -- Generally, fixed rate mortgage loans eligible for
inclusion in a mortgage pool will bear simple interest at fixed annual rates and
have original terms to maturity ranging from 5 to 40 years. The funds may invest
in fixed rate mortgage loans that are privately issued and are not issued or
guaranteed by the U.S. government.
SECURITIES LENDING -- In order to generate additional income, the funds may lend
up to 33% of the securities in which they are invested pursuant to agreements
requiring that the loan be continuously secured by cash, securities of the U.S.
government or its agencies, 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 will continue to receive interest on the securities lent while
simultaneously seeking to earn interest on the investment of cash collateral in
U.S. government securities, shares of an investment trust or mutual fund, or
other short-term, highly liquid investments. Collateral is marked to market
daily to provide a level of collateral at least equal to the market value of the
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 only be made to borrowers deemed by the Advisor
to be of good standing under guidelines established by the Trust's Board of
Trustees and when, in the judgment of the Advisor, the consideration which can
be earned currently from such securities loans justifies the attendant risk. The
funds will enter into loan arrangements only with counterparties which the
Advisor has deemed to be creditworthy
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under guidelines established by the Board of Trustees. Loans are subject to
termination by the funds or the borrower at any time, and are therefore, not
considered to be illiquid investments.
RESTRICTED SECURITIES -- The funds may invest in commercial paper issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under Federal securities law and is generally sold to institutional
investors, such as the funds, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the funds may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate changes. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND FORWARD COMMITMENTS -- The funds
may purchase securities on a when-issued basis when deemed by the Advisor to
present attractive investment opportunities. When-issued securities are
purchased for delivery beyond the normal settlement date at a stated price and
yield, thereby involving the risk that the yield obtained will be less than that
available in the market at delivery. When the Advisor purchases a when-issued
security, the Custodian will set aside cash or liquid securities to satisfy the
purchase commitment. The funds generally will not pay for such securities or
earn interest on them until received. In a forward commitment transaction, the
funds contract to purchase securities for a fixed price at a future date beyond
customary settlement time. The funds are required to hold and maintain in a
segregated account until the settlement date, cash, U.S. government securities
or liquid high-grade debt obligations in an amount sufficient to meet the
purchase price. Alternatively, the funds may enter into offsetting contracts for
the forward sale of other securities that they own. The purchase of securities
on a when-issued or forward commitment basis involves a risk of loss if the
value of the security to be purchased declines prior to the settlement date.
OPTIONS -- The funds may purchase and write (i.e., sell) call options and put
options on securities and indices, which options are traded on national
securities exchanges. A call option gives the purchaser the right to buy, and
obligates the writer of the option to sell, the underlying security at the
agreed upon exercise (or "strike") price during the option period. A put option
gives the purchaser the right to sell, and obligates the writer to buy, the
underlying security at the strike price during the option period. There are
risks associated with options transactions, including the following: (i) the
success of a hedging strategy may depend on the ability of the Advisor to
predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be an imperfect or no
correlation between the changes in market value of the securities held by the
funds and the prices of options; (iii) there may not be a liquid secondary
market for options; and (iv) while the funds will receive a premium when they
write covered call options, they may not participate fully in a rise in the
market value of the underlying security. It is expected that the funds will only
engage in option transactions with respect to permitted investments and related
indices.
FUTURES CONTRACTS AND RELATED OPTIONS -- Certain of the funds may enter into
futures contracts, options on futures contracts, index futures and options
thereon that are traded on an exchange regulated by the Commodities Futures
Trading Commission ("CFTC") if, to the extent that such futures and options are
not for "bona fide hedging purposes" (as defined by the CFTC), the aggregate
initial margin and premiums on such positions (excluding the amount by which
options are in the money) do not exceed 5% of the funds' total assets at current
value. Options and futures can be volatile instruments, and involve certain
risks. If the Advisor applies a hedge at an inappropriate time or judges
interest rates incorrectly, options and futures strategies may lower a fund's
return. The funds could also experience losses if the prices of their options
and futures positions were poorly correlated with their other instruments, or if
they could not close out their positions because of an illiquid secondary
market.
SWAPS, CAPS AND FLOORS -- In order to protect the value of the funds from
interest rate fluctuations and to hedge against fluctuations in the floating
rate market in which the funds' investments are traded, the funds may enter into
swaps, caps, and floors on various securities (such as U.S. government
securities), securities indexes, interest rates, prepayment rates, foreign
currencies or other financial instruments or indexes, for both hedging and
non-hedging purposes. Swap contracts typically involve an exchange of
obligations by two sophisticated parties. For example, in an interest rate swap,
a fund may exchange with another party their respective rights to receive
interest, such as an exchange of fixed rate payments for floating rate payments.
Currency swaps involve the exchange of respective rights to make or receive
payments in specified currencies. Mortgage swaps are similar to interest rate
swaps in that they represent commitments to pay and receive interest. The
notional principal amount, however, is tied to a reference pool or pools of
mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles the
purchaser to receive a principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and
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floors are similar in many respects to over-the-counter options transactions,
and may involve investment risks that are similar to those associated with
options transactions and options on futures contracts.
NEW FINANCIAL PRODUCTS -- New options and futures contracts and other financial
products, and various combinations thereof, continue to be developed and the
funds may invest in any such options, contracts and products as may be developed
to the extent consistent with their investment objective, policies and
restrictions and the regulatory requirements applicable to investment companies.
These various products may be used to adjust the risk and return characteristics
of the funds' portfolio of investments. These various products may increase or
decrease exposure to security prices, interest rates, commodity prices, or other
factors that affect security values, regardless of the issuer's credit risk. If
market conditions do not perform consistent with expectations, the performance
of the funds would be less favorable than it would have been if these products
were not used. In addition, losses may occur if counterparties involved in
transactions do not perform as promised. These products may expose the funds to
potentially greater return as well as potentially greater risk of loss than more
traditional fixed-income investments.
STRUCTURED INSTRUMENTS -- Structured instruments are debt securities issued by
agencies or instrumentalities of the U.S. government (such as Sallie Mae, Ginnie
Mae, Fannie Mae, and Freddie Mac), banks, municipalities, corporations, and
other business entities whose interest and/or principal payments are indexed to
certain specific foreign currency exchange rates, interest rates, or one or more
other reference indices. Structured instruments frequently are assembled in the
form of medium-term notes, but a variety of forms are available. Structured
instruments are commonly considered to be derivatives.
While structured instruments may offer the potential for a favorable rate of
return from time to time, they also entail certain risks. Structured instruments
may be less liquid than other debt securities, and the price of structured
instruments may be more volatile. If the value of the reference index changes in
a manner other than that expected by the Advisor, principal and/or interest
payments on the structured instrument may be substantially less than expected.
In addition, although structured instruments may be sold in the form of a
corporate debt obligation, they may not have some of the protection against
counterparty default that may be available with respect to publicly traded debt
securities (i.e., the existence of a trust indenture).
MUNICIPAL SECURITIES -- Municipal Securities are issued by a state or political
subdivision to obtain funds for various public purposes. Municipal securities
are generally classified as "general obligation" bonds and "revenue" bonds.
General obligation bonds are obligations involving the credit of an issuer
possessing taxing power and are payable from the issuer's general unrestricted
revenues. Revenue bonds are payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other specific revenue source. Revenue bonds are not
payable from the issuer's general revenues. The funds also may purchase
short-term tax-exempt General Obligation Notes, Tax Anticipation Notes, Bond
Anticipation Notes, Revenue Anticipation Notes, Project Notes, and other forms
of short-term tax-exempt obligations. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements, or other revenues.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal bankruptcy code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on and principal of its municipal
securities may be materially adversely affected by litigation or other
conditions. Such litigation or conditions may from time to time have the effect
of introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a fund's municipal
securities in the same manner. In addition, the Internal Revenue Code of 1986,
as amended (the "Code") imposes certain continuing requirements on issuers of
tax-exempt bonds regarding the use, expenditure and investment of bond proceeds
and the payment of rebates to the United States of America. Failure by the
issuer to comply subsequent to the issuance of tax-exempt bonds with certain of
these requirements could cause interest on the bonds to become includable in
gross income retroactive to the date of issuance.
INVERSE FLOATING RATE INSTRUMENTS -- The funds may seek to increase yield by
investing in leveraged inverse floating rate debt instruments ("inverse
floaters"). The interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse floater is
indexed. An inverse floater may be considered to be leveraged to the extent that
its interest rate varies by a magnitude that exceeds the magnitude of the change
in the index rate of interest. The higher degree of leverage inherent in inverse
floaters is associated with greater volatility in their market values.
Accordingly, the duration of an inverse floater may exceed its stated final
maturity.
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DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated A-1+
are those with an "overwhelming degree" of credit protection. Those rated A-1
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2 reflect a high degree of safety regarding timely payment but not as high as
A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality, respectively, on
the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
STANDARD & POOR'S RATING SERVICES
Investment Grade
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree. Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
Bonds rated BBB by S&P are regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher categories.
Non-Investment Grade
Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB rated
category is also used for debt subordinated to senior debt that is assigned an
actual or implied BBB rating.
Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
Bonds rated CCC have currently identifiable vulnerability to default, and are
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business,
PROSPECTUS
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<PAGE> 85
financial, or economic conditions, they are not likely to have the capacity to
pay interest and repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or B-
rating.
The rating CC typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating.
The rating C typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.
The rating C1 is reserved for income bonds on which no interest is being paid.
Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless Standard & Poor believes
that such payments will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or minus (-). Ratings from AA to CCC may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
MOODY'S INVESTOR SERVICE, INC.
Investment Grade
Bonds that are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present that make the
long-term risks appear somewhat larger than in Aaa securities. Bonds that are
rated A possess many favorable investment attributes and are to be considered as
upper-medium grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Bonds that are rated Baa by Moody's are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity of the issuers of securities rated BBB or Baa to make
principal and interest payments than is the case with higher grade securities.
Non-Investment Grade
Bonds rated Ba are more uncertain and have speculative elements. The protection
of interest and principal payments is not well safeguarded during good and bad
times. Bonds rated B lack the characteristics of a desirable investment (i.e.,
potentially low assurance of timely interest and principal payments or
maintenance of other contract terms over time).
Bonds rated Caa have poor standing and may be in default. These bonds carry an
element of danger with respect to principal and interest payments. Bonds rated
Ca are speculative to a high degree and could be in default or have other marked
shortcomings. C is the lowest rating. Bonds in this category have extremely poor
prospects of ever attaining investment standing.
Unrated securities will be treated as non-investment grade securities unless the
Advisor determines that such securities are the equivalent of investment grade
securities. Securities that have received different ratings from more than one
agency are considered investment grade if at least one agency has rated the
security investment grade.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
Moody's highest rating for state, municipal and other short-term notes is MIG-1
and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of the
best quality. They have strong protection from established cash flows of funds
for their servicing or from established and broad-based access to the market for
refinancing or both. Short-term municipal securities rated MIG-2 and VMIG-2 are
of high quality. Margins of protection are ample although not so large as in the
preceding group.
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An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
- - Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
- - Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MISCELLANEOUS
The Trust believes that as of April 9, 1997, BANC ONE CORPORATION (100 East
Broad Street, Columbus, OH 43271), through its affiliates, owned of record
substantially all the Fiduciary Class shares of the Fund. The Trust believes
that as of the same date, BANC ONE CORPORATION, through its affiliates,
possessed on behalf of its underlying accounts, voting or investment power with
respect to 90.26% of Fiduciary Class shares of the Fund.
As a consequence, BANC ONE CORPORATION may be deemed to be a controlling person
of the Fiduciary Class shares of the Fund under the Investment Company Act of
1940.
PERFORMANCE
From time to time, the Funds may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of the Funds refers to
the annualized income generated by an investment in the Funds over a specified
30-day period. The yield is calculated by assuming that the income generated by
the investment during that period is generated over a one-year period and is
shown as a percentage of the investment.
Total return is the change in value of an investment in the Funds over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results.
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of the Funds. This figure is
then "annualized" (multiplied by 365 days and divided by the applicable number
of days in the period). Funds with a front-end sales charge would incorporate
the offering price into the distribution yield in place of month-end net asset
value.
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return and
is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of shares of the Funds in any
advertisement or information including performance data for the Fund. The
performance for Fiduciary Class shares may be higher than for Class A, Class B
and Class C shares because Fiduciary Class shares are not subject to sales
charges and distribution expenses.
The performance of each class of the Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that may
assume investment of dividends but do not reflect deductions for administrative
and management costs. In addition, the performance of each class of the Fund may
be compared to other funds or to relevant indices that may calculate total
return without reflecting sales charges; in which case, the Fund may advertise
its total return in the same manner. If reflected, sales charges would reduce
these total return calculations.
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<PAGE> 87
TAXES
The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
advisors regarding specific questions as to the tax consequences of investing in
the Fund.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other funds. The Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders of
each class of shares of the Fund on at least an annual basis. Generally,
dividends from net investment income will be taxable to Shareholders as ordinary
income whether received in cash or in additional shares, and any net capital
gains will be distributed at least annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares.
Distributions by the Fund to retirement plans that qualify for tax-exempt
treatment under the Code ("qualified retirement plans") will not be taxable. The
Federal tax treatment of qualified retirement plans, as well as distributions
from such plans, is governed by specific provisions of the Code. If shares are
held by a retirement plan that ceases to qualify for tax-exempt treatment under
the Code or by an individual who has received such shares as a distribution from
a retirement plan, the Fund's distributions will be taxable to such plan or
individual as described in the preceding paragraph. Persons considering
directing the investment of their qualified retirement plan account in the Fund
and qualified retirement plan trusts considering purchasing such shares, should
consult their tax advisors for a more complete explanation of the Federal tax
consequences, and for an explanation of the state, local and (if applicable)
foreign tax consequences of making such an investment.
The Fund will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Fund (such as STRIPS, CUBES, TRS, TIGRS and
CATS), as defined in the "Description of Permitted Investments," are sold at
original issue discount and thus do not make periodic cash interest payments.
The Fund will be required to include as part of its current income the imputed
interest on such obligations even though the Fund has not received any interest
payments on such obligations during that period. Because the Fund distributes
substantially all of its net investment income to its Shareholders (including
such imputed interest), the Fund may have to sell portfolio securities in order
to generate the cash necessary for the required distributions. Such sales may
occur at a time when the Advisor would not have chosen to sell such securities
and may result in a taxable gain or loss.
Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in such a month will be deemed to
have been paid by the Fund and received by Shareholders on December 31 of that
year, if paid by the Fund at any time during the following January.
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Fund's investments
in U.S. government obligations may not be entitled to the exemptions from state
and local income taxes that would be available if the Shareholder had purchased
U.S. government obligations directly. The Fund will inform Shareholders annually
of the percentage of income and distributions derived from U.S. government
obligations. Shareholders should consult their tax advisors regarding the state
and local tax treatment of the dividends received from the Fund.
The Fund may be subject to foreign withholding taxes on income derived from
obligations of foreign issuers. The Fund will not be able to elect to treat
Shareholders as having paid their proportionate share of such foreign taxes.
Sale, exchange or redemption of Fund shares by a Shareholder will generally be a
taxable event to such Shareholder.
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<PAGE> 88
Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
1111 Polaris Parkway
2nd Floor, Suite 100
Columbus, OH 43271-0211
Distributor
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TOG-F-128
<PAGE> 89
THE ONE GROUP(R)
FAMILY OF MUTUAL FUNDS
June , 1997
THE ONE GROUP(R) INVESTOR GROWTH & INCOME FUND
Investment Advisor: BANC ONE INVESTMENT ADVISORS CORPORATION
The One Group(R) (the "Trust") is a mutual fund seeking to provide a convenient
and economical means of investing in one or more professionally managed
portfolios of securities. This Prospectus relates to The One Group(R) Investor
Growth & Income Fund Class A, Class B, Class C and Fiduciary Class shares.
THE ONE GROUP(R) INVESTOR GROWTH & INCOME FUND (THE "FUND") SEEKS LONG-TERM
CAPITAL APPRECIATION AND GROWTH OF INCOME BY INVESTING PRIMARILY IN A
DIVERSIFIED GROUP OF ONE GROUP(R) MUTUAL FUNDS WHICH INVEST PRIMARILY IN EQUITY
SECURITIES.
Class A, Class B, and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors.
Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodian or similar capacities (each an
"Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT OR
ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. BANC ONE
INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUND FOR INVESTMENT
ADVISORY AND OTHER SERVICES.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated November 1, 1996 as amended June , 1997, has been filed with
the Securities and Exchange Commission and is available without charge through
the Distributor, The One Group(R) Services Company, 3435 Stelzer Road, Columbus,
OH 43219 or by calling 1-800-480-4111 during business hours. The Statement of
Additional Information is incorporated into this Prospectus by reference. The
Securities and Exchange Commission maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding The One Group(R).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS
<PAGE> 90
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY.............................................................................. 3
ABOUT THE FUND....................................................................... 5
Expense Summary.................................................................... 5
The Fund........................................................................... 7
Investment Objective............................................................... 7
Investment Policies of the Fund.................................................... 7
Description of the Underlying Funds................................................ 8
Risk Factors....................................................................... 11
HOW TO DO BUSINESS WITH THE ONE GROUP(R)............................................. 12
How to Invest in The One Group..................................................... 12
Contingent Deferred Sales Charge................................................... 16
Exchanges.......................................................................... 18
Redemptions........................................................................ 19
FUND MANAGEMENT...................................................................... 20
The Advisor........................................................................ 20
The Distributor.................................................................... 21
The Administrator.................................................................. 22
The Transfer Agent and Custodian................................................... 22
Counsel and Independent Accountants................................................ 22
OTHER INFORMATION.................................................................... 22
The Trust.......................................................................... 22
Other Investment Policies.......................................................... 24
Description of Permitted Investments............................................... 24
Description of Ratings............................................................. 29
Performance........................................................................ 31
Taxes.............................................................................. 32
</TABLE>
PROSPECTUS
2
<PAGE> 91
SUMMARY
The One Group(R) (the "Trust") is an open-end management investment company that
provides a convenient way to invest in professionally managed portfolios of
securities. The following provides basic information about the Class A, Class B,
Class C and Fiduciary Class shares of The One Group(R) Investor Growth & Income
Fund.
WHAT IS THE INVESTMENT OBJECTIVE? The Fund seeks long-term capital appreciation
and growth of income by investing primarily in a diversified group of One Group
mutual funds which invest primarily in equity securities. See "Investment
Objective." Shares of the Fund are available to tax advantaged retirement
accounts and other persons investing for long-term investment purposes. The Fund
should not be used for short-term trading purposes. There is no assurance that
the Fund will achieve its investment objective.
WHAT ARE THE PERMITTED INVESTMENTS? The Fund offers Shareholders a
professionally-managed investment program by purchasing shares of existing
mutual funds of The One Group(R) (the "Underlying Funds"), which are managed by
Banc One Investment Advisors Corporation (the "Advisor"). The Fund will invest
60% to 80% of its total assets in Underlying Funds which invest primarily in
equity securities, 20% to 40% in Underlying Funds which invest primarily in
fixed-income securities, and up to 10% in Money Market Funds. The Fund will
normally allocate its assets among the Underlying Funds according to the
Advisor's outlook for the economy, financial markets and relative market
valuation of the Underlying Funds. The Advisor may vary the allocation within
the above ranges. There is no assurance that the Fund will achieve its stated
objective.
WHAT ARE THE CHARACTERISTICS OF THE UNDERLYING FUNDS? The Underlying Funds in
which the Fund will invest have the following characteristics:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
UNDERLYING FUND TYPE OF INVESTMENTS
-------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................... Money Market
The One Group(R) Limited Volatility Bond Fund.......................... Fixed Income
The One Group(R) Intermediate Bond Fund................................ Fixed Income
The One Group(R) Income Bond Fund...................................... Fixed Income
The One Group(R) Government Bond Fund.................................. Fixed Income
The One Group(R) Ultra Short-Term Income Fund.......................... Fixed Income
The One Group(R) Disciplined Value Fund................................ Equity
The One Group(R) International Equity Index Fund....................... Equity
The One Group(R) Large Company Growth Fund............................. Equity
The One Group(R) Large Company Value Fund.............................. Equity
The One Group(R) Growth Opportunities Fund............................. Equity
The One Group(R) Value Growth Fund..................................... Equity
The One Group(R) Gulf South Growth Fund................................ Equity
The One Group(R) Income Equity Fund.................................... Equity
The One Group(R) Equity Index Fund..................................... Equity
</TABLE>
The Fund's net asset value will fluctuate with changes in the equity and bond
markets and the value of the Underlying Funds in which it invests. The Fund's
investment return is diversified by its investment in the Underlying Funds which
invest in growth and income stocks, foreign securities, debt securities, and
cash and cash equivalents. See page 6 for a complete description of the
Underlying Funds and page 23 for other investment policies.
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation, an indirect
subsidiary of BANC ONE CORPORATION, serves as the Advisor of the Trust. The
Advisor is entitled to a fee for advisory services provided to the Trust. The
Advisor may voluntarily agree to waive a part of its fees. See "The Advisor" and
"Expense Summary."
WHO IS THE ADMINISTRATOR? The One Group(R) Services Company serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Investment Advisors Corporation serves as the
Sub-Administrator of the Trust, pursuant to an agreement with the Administrator
for which Banc One Investment Advisors Corporation receives a fee paid by the
Administrator. See "The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust, for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
WHO IS THE DISTRIBUTOR? The One Group(R) Services Company acts as Distributor
of the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A, Class B and Class C shares. No compensation is paid to
the Distributor for the distribution services for the Fiduciary Class shares of
the Fund. See "The Distributor."
PROSPECTUS
3
<PAGE> 92
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Distributor on any day that the New York Stock Exchange is open for
trading ("Business Days"). See "How to Invest in The One Group(R)" and
"Redemptions."
HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is determined and declared monthly, and
is distributed in the form of monthly dividends to Shareholders of the Fund on
the first Business Day of each month. Any capital gains are distributed at least
annually. Distributions are paid in additional shares of the same class unless
the Shareholder elects to take the payment in cash. See "Dividends."
PROSPECTUS
4
<PAGE> 93
ABOUT THE FUND
EXPENSE SUMMARY -- THE ONE GROUP(R) INVESTOR GROWTH & INCOME FUND
<TABLE>
<CAPTION>
FIDUCIARY
CLASS A CLASS B CLASS C CLASS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)............................................... 4.50% none none none
Maximum Contingent Deferred Sales Charge(2) (as a percentage of
original purchase price or redemption proceeds, as
applicable)................................................... none 5.00% 1.00% none
Redemption Fees................................................. none none none none
Exchange Fees................................................... none none none none
ANNUAL OPERATING EXPENSES (as a percentage of average daily net
assets)
Investment Advisory Fees(3)..................................... .01% .01% .01% .01%
12b-1 Fees (after fee waiver)(4)................................ .25% 1.00% 1.00% none
Other Expenses(5)............................................... .19% .19% .19% .19%
- ------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES(6)..................................... .45% 1.20% 1.20% .20%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more of Class A shares and is not
assessed a sales charge at the time of purchase, will be assessed a sales
charge equivalent to 1% of the purchase price if the purchaser redeems any
or all Class A shares prior to the first anniversary of purchase.
(3) Investment Advisory fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Absent this voluntary reduction,
Investment Advisory fees would be .05% for all classes of shares.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plan, 12b-1 fees (as a percentage of average daily net
assets) would be .35% for Class A. The 12b-1 fees include a Shareholder
servicing fee of .25% of average daily net assets of the Fund's Class B and
Class C shares and may include a Shareholder servicing fee of .25% of the
average daily net assets of the Fund's Class A shares. See "The
Distributor".
(5) Other Expenses have been revised to reflect fee waivers and reimbursements
effective as of the date of this Prospectus. Absent this voluntary waiver
and reimbursement, Other Expenses would be .29%.
(6) Absent the voluntary reduction of fees, Total Operating Expenses would be
.69% for Class A Shares, 1.34% for Class B Shares, 1.34% for Class C Shares,
and .34% for Fiduciary Class Shares.
The Fund will indirectly bear its pro rata share of fees and expenses incurred
by the Underlying Funds, and the investment returns of the Fund will be net of
the expenses of the Underlying Funds. The following chart provides the expense
ratio for each of the Underlying Funds in which the Fund invests (based on the
current Underlying Fund prospectus). Certain of these expense ratios may include
a voluntary reduction of investment advisory fees.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
NAME OF UNDERLYING FUND EXPENSE RATIO
-----------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund...................................... .50%
The One Group(R) Limited Volatility Bond Fund................................. .62%
The One Group(R) Intermediate Bond Fund....................................... .67%
The One Group(R) Income Bond Fund............................................. .61%
The One Group(R) Government Bond Fund......................................... .69%
The One Group(R) Ultra Short-Term Income Fund................................. .60%
The One Group(R) Disciplined Value Fund....................................... 1.00%
The One Group(R) International Equity Index Fund.............................. 1.36%
The One Group(R) Large Company Growth Fund.................................... .99%
The One Group(R) Large Company Value Fund..................................... .98%
The One Group(R) Growth Opportunities Fund.................................... 1.00%
The One Group(R) Value Growth Fund............................................ 1.05%
The One Group(R) Gulf South Growth Fund....................................... 1.06%
The One Group(R) Income Equity Fund........................................... 1.01%
The One Group(R) Equity Index Fund............................................ .39%
</TABLE>
PROSPECTUS
5
<PAGE> 94
After combining the total operating expenses of the Fund with those of the
Underlying Funds, the estimated average weighted expense ratio for Class A
shares is 1.31%, for Class B shares is 2.06%, for Class C shares is 2.06%, and
for Fiduciary shares Class is 1.06%.
On the basis of these estimated expenses, the following example illustrates the
expenses an investor would pay on a $1,000 investment in Class A and Fiduciary
Class shares of the Fund, assuming: (1) imposition of the maximum sales charge
for Class A shares; (2) 5% annual return; and (3) redemption at the end of each
time period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 58 $ 85 $114 $ 196
Fiduciary Class $ 11 $ 35 $ 58 $ 129
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 61 $ 94 $129 $ 228
Fiduciary Class $ 13 $ 40 $ 69 $ 152
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class B shares,
assuming: (1) deduction of the applicable maximum Contingent Deferred Sales
Charge; and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 71 $ 95 $131 $ 220
Assuming no redemption $ 21 $ 65 $111 $ 220
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of the period $ 73 $101 $141 $ 243
Assuming no redemption $ 23 $ 71 $121 $ 243
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class C shares of
the Fund, assuming: (1) imposition of the maximum sales charge for Class C
shares and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 31 $ 65 $111 $ 202
Assuming no redemption $ 21 $ 65 $111 $ 202
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of the period $ 33 $ 71 $121 $ 228
Assuming no redemption $ 23 $ 71 $121 $ 228
</TABLE>
Class B and Class C shares automatically convert to Class A shares after eight
(8) and six (6) years, respectively. Therefore, the "10 Years" examples above
reflect the effect of such conversion.
THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
purpose of these tables is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Trust.
The rules of the Securities and Exchange Commission require that the maximum
sales load be reflected in the above tables. However, Shareholders in the Fund
may, under certain circumstances, qualify for reduced sales charges. See "How to
Invest in The One Group(R)." Long-term Shareholders of Class A, Class B, and
Class C shares may pay more than the equivalent of the maximum front-end sales
charges otherwise permitted by the National Association of Securities Dealers'
Rules.
PROSPECTUS
6
<PAGE> 95
THE FUND
The One Group(R) Investor Growth & Income Fund ( the "Fund") is part of The One
Group(R) (the "Trust"), which is an open-end management investment company that
offers shares in 40 separate funds and different classes of certain of the
funds. The Trust was organized as a Massachusetts Business Trust on May 23,
1985. This Prospectus relates to Class A, Class B, Class C, and Fiduciary Class
shares of The One Group(R) Investor Growth & Income Fund, a diversified open-end
management investment company. Each class of shares provides for variations in
distribution costs, voting rights, dividends and per share net asset value
pursuant to a multiple class plan (the "Multiple Class Plan") adopted by the
Board of Trustees of the Trust. Except for these differences between classes,
each share of the Fund represents an undivided, proportionate interest in the
Fund. The Information regarding the Trust's other funds and their classes is
contained in separate prospectuses which may be obtained from the Trust's
Distributor, The One Group(R) Services Company, 3435 Stelzer Road, Columbus, OH
43219, or by calling 1-800-480-4111.
INVESTMENT OBJECTIVE
The Fund seeks long-term capital appreciation and growth of income by investing
primarily in a diversified group of One Group mutual funds which invest
primarily in equity securities.
The investment objective of the Fund is fundamental and may not be changed
without a vote of a majority of the holders of the Fund's outstanding shares (as
defined in the Statement of Additional Information).
There is no assurance that the Fund will meet its investment objective.
INVESTMENT POLICIES OF THE FUND
The investment policies of the Fund may be changed without an affirmative vote
of the holders of a majority of the Fund's outstanding shares unless a policy is
expressly deemed to be fundamental. Shareholders will be notified of any
material change in the Fund's investment policies.
PERMISSIBLE INVESTMENTS
The Fund will invest 60% to 80% of its total assets in nine Underlying Funds of
The One Group(R) which invest primarily in equity securities, 20% to 40% of its
total assets in five Underlying Funds of The One Group(R) which invest primarily
in fixed income securities, and up to 10% of its total assets in one money
market fund of The One Group(R). The Fund will invest its assets in the
Underlying Funds, within the ranges indicated below.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
INVESTMENT RANGE
INVESTOR GROWTH & INCOME FUND (PERCENT OF FUND ASSETS)
------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................. 0 - 10%
The One Group(R) Limited Volatility Bond Fund........................ 0 - 30%
The One Group(R) Intermediate Bond Fund.............................. 0 - 30%
The One Group(R) Income Bond Fund.................................... 0 - 30%
The One Group(R) Government Bond Fund................................ 0 - 30%
The One Group(R) Ultra Short-Term Income Fund........................ 0 - 30%
The One Group(R) Disciplined Value Fund.............................. 0 - 30%
The One Group(R) International Equity Index Fund..................... 0 - 30%
The One Group(R) Large Company Growth Fund........................... 0 - 50%
The One Group(R) Large Company Value Fund............................ 0 - 60%
The One Group(R) Growth Opportunities Fund........................... 0 - 30%
The One Group(R) Value Growth Fund................................... 0 - 60%
The One Group(R) Gulf South Growth Fund.............................. 0 - 30%
The One Group(R) Income Equity Fund.................................. 0 - 60%
The One Group(R) Equity Index Fund................................... 0 - 60%
</TABLE>
The allocation of the Fund's assets among the Underlying Funds will be made by
the Advisor under the supervision of the Trust's Board of Trustees, within the
percentage ranges set forth in the table above.
The Fund and the Underlying Funds are permitted for temporary defensive purposes
to invest up to 100% of their assets in short-term fixed income securities. Such
securities include obligations of the U.S. Government and its agencies and
instrumentalities; commercial paper, bank certificates of deposit, repurchase
agreements, bankers acceptances, variable amount master demand notes and bank
money market deposit accounts. The Fund and the Underlying Funds may also hold
cash or cash equivalents for liquidity purposes.
PROSPECTUS
7
<PAGE> 96
To the extent the Fund or the Underlying Funds are engaged in a temporary
defensive position, they will not be pursuing their investment objective.
DESCRIPTION OF THE UNDERLYING FUNDS
The following is a brief description of the principal investment policies of the
Underlying Funds. Additional investment practices are described in "Investment
Policies of the Underlying Funds," the Statement of Additional Information and
the prospectus for each of the Underlying Funds.
THE ONE GROUP(R) INTERNATIONAL EQUITY INDEX FUND
The One Group(R) International Equity Index Fund is an equity fund. The
objective of the fund is to provide investment results that correspond to the
aggregate price and dividend performance of the securities in the Gross Domestic
Product Weighted Morgan Stanley Capital International Europe, Australia and Far
East Index ("MSCI EAFE GDP Index" or "EAFE GDP Index").((1)) Under normal
conditions, the fund will invest substantially all of its assets in foreign
securities and at least 65% of the value of its total assets in foreign equity
securities, consisting of common stocks (including sponsored and unsponsored
American Depository Receipts ("ADRs")) and preferred stocks, securities
convertible into common stocks (only if they are listed on registered exchanges
or actively traded in the over-the-counter market), warrants and depository
receipts for such securities of issuers located in at least three different
countries. In attempting to duplicate the capital performance and dividend
income of the MSCI EAFE GDP Index, the fund will normally invest in the stocks
which comprise the Index and secondarily in stock index futures. It is expected
that cash reserve items normally will not exceed 10% of the fund's net assets.
The fund may invest up to 10% of its net assets in securities of emerging
international markets such as Mexico, Brazil and Chile. A substantial portion of
the fund's assets will be denominated in foreign currencies.
THE ONE GROUP(R) LARGE COMPANY GROWTH FUND
The One Group(R) Large Company Growth Fund seeks long-term capital appreciation
and growth of income by investing primarily in equity securities. To achieve its
objective, the fund will, under normal market conditions, invest substantially
all, but in no event less than 65%, of the value of its total assets in equity
securities consisting of common stocks, warrants and any rights to purchase
common stocks. The weighted average capitalization of the companies in which the
fund invests will under normal market conditions always be in excess of the
market median capitalization of the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index").((2)) The fund may invest the remainder of its assets in
any combination of nonconvertible fixed income securities, repurchase
agreements, options and futures contracts.
THE ONE GROUP(R) LARGE COMPANY VALUE FUND
The One Group(R) Large Company Value Fund is an equity fund that seeks capital
appreciation with the incidental goal of achieving current income by investing
primarily in equity securities. The fund will invest in equity securities of
companies that are believed to be selling below their long-term intrinsic
investment values. Companies held will typically be large capitalization issuers
with current price/earnings and/or price/book ratios which are lower than that
of the general market as measured by the S&P 500 Index. In addition, the fund
may invest in stock of companies which have been analyzed to have breakup values
well in excess of current market values or which have uniquely undervalued
corporate assets. The general approach to purchasing stocks will emphasize
individual security selection. Macroeconomic data and industry profit forecasts
will be utilized to gauge the best sectors of the economy in which to be
positioned.
Under normal market conditions, the fund will invest at least 80% of the value
of its total assets in equity securities consisting of common stocks and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The remainder of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) GROWTH OPPORTUNITIES FUND
The One Group(R) Growth Opportunities Fund seeks growth of capital and,
secondarily, current income by investing primarily in equity securities. The
fund will invest in issues which are identified and selected based on the
potential to produce above-average earnings growth per share over a one-to-three
year period. It is expected that issuers will generally include established
companies with a history of above-average growth or companies that are expected
to enter
- ---------------
(1) "MSCI EAFE GDP Index" is a registered service mark of Morgan Stanley Capital
International, which does not sponsor and is in no way affiliated with the
fund.
(2) "Standard & Poor's 500" is a registered trademark of Standard & Poor's
Corporation, which does not sponsor and is in no way affiliated with the
fund.
PROSPECTUS
8
<PAGE> 97
periods of above-average growth, and smaller companies which are positioned in
emerging growth industries. The fund may invest in securities listed on a stock
exchange as well as those traded over-the-counter. At least 80% of the value of
the fund's total assets will, under normal conditions, be invested in equity
securities consisting of common stocks and debt securities and preferred stocks
that are convertible into common stocks. The fund also may enter into options
and futures transactions. The remainder of the fund's assets will be held in
cash equivalents.
THE ONE GROUP(R) VALUE GROWTH FUND
The One Group(R) Value Growth Fund seeks long-term capital growth and growth of
income while, as a secondary objective providing a moderate level of current
income. The fund pursues its objectives by investing primarily in a portfolio of
common stocks, debt securities, preferred stocks, convertible securities,
warrants, and other equity securities of companies that show the potential for
growth of earnings over time. Stock selection is guided by current valuation
relative to a stock's historical valuation and relative to the Advisor's
estimates of future growth of earnings and dividends. Accordingly, the Fund may
emphasize securities of companies that the Advisor believes are overlooked or
undervalued by investors, which fact should contribute to an increase in the
market value of the security over time.
The fund will ordinarily invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents.
THE ONE GROUP(R) GULF SOUTH GROWTH FUND
The One Group(R) Gulf South Growth Fund seeks long-term capital growth by
investing in a portfolio of equity securities of small-capitalization, emerging
growth and medium capitalization companies, which are either headquartered in or
whose primary market is in the southeastern region of the United States. The
fund invests primarily in a portfolio of common stocks, debt securities,
preferred stocks, convertible securities, warrants and other equity securities
of such companies. The Advisor anticipates that the fund's portfolio will
normally consist of securities of approximately twenty-five to sixty emerging
growth companies from Virginia, North Carolina, South Carolina, Florida,
Georgia, Tennessee, Alabama, Mississippi, Arkansas, Louisiana, Kentucky and
Texas. It is expected that companies selected would generally have market
capitalizations ranging from $50,000,000 to $2,000,000,000, although the fund
may occasionally hold securities of companies whose market capitalizations are
considerably larger if doing so contributes to the fund's investment objective.
The fund will normally invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents, when the Advisor's
assessment of the attractiveness of the entire stock market and individual
market sectors changes.
Because the fund is non-diversified, its share price may be subject to greater
fluctuations as a result of changes in an issuer's financial condition or the
market's assessment of an individual issuer. In addition, smaller, less seasoned
companies may be subject to greater business risk than larger, established
companies.
THE ONE GROUP(R) INCOME EQUITY FUND
The One Group(R) Income Equity Fund seeks current income through regular payment
of dividends with the secondary goal of achieving capital appreciation by
investing primarily in equity securities. The fund will make investments in an
attempt to keep its yield above the S&P 500 Index. Achieving such a yield will
be the primary consideration in selecting securities. Investments will be made
in common stocks of corporations which regularly pay dividends, although
continued payment of dividends cannot be assured. The fund will invest primarily
in stocks with favorable, long-term fundamental characteristics, but stocks of
companies that are out of favor in the financial community may also be
purchased.
The fund will under normal conditions invest at least 80% of the value of its
total assets in equity securities consisting of common stocks, and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) EQUITY INDEX FUND
The One Group(R) Equity Index Fund seeks investment results that correspond to
the aggregate price and dividend performance of the securities on the S&P 500
Index. The fund will, in attempting to duplicate the capital performance and
dividend income of the S&P 500 Index, normally invest in many of the stocks
which comprise the S&P 500 Index and secondarily in stock index futures. Cash
reserves will not normally exceed 10% of the fund's net assets.
The Advisor generally selects stocks for the fund in the order of their
weightings in the S&P 500 Index beginning with the heaviest weighted stocks. The
percentage of the fund's assets to be invested in each stock is approximately
the same as the percentage it represents in the S&P 500 Index. From time to
time, administrative adjustments may be made in the fund because of changes in
the composition of the S&P 500 Index, but such changes should be infrequent. The
fund will
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attempt to achieve a correlation between the performance of its portfolio and
that of the S&P 500 Index of at least 0.95, without taking into account
expenses. A correlation of 1.00 would indicate perfect correlation, which would
be achieved when the fund's net asset value, including the value of its dividend
and capital gains distributions, increases or decreases in exact proportion to
changes in the S&P 500 Index.
THE ONE GROUP(R) PRIME MONEY MARKET FUND
The One Group(R) Prime Money Market Fund seeks current income with liquidity and
stability of principal. The fund intends to comply with the regulations of the
Securities and Exchange Commission applicable to money market funds using the
amortized cost method for calculating net asset value. These regulations impose
certain quality, maturity and diversification restraints on investments by the
fund. Under these regulations, the fund will invest only in U.S. dollar-
denominated securities, will maintain an average maturity on a dollar-weighted
basis of 90 days or less, and will acquire only "eligible securities" that
present minimal credit risks and have a maturity of 397 days or less.
THE ONE GROUP(R) DISCIPLINED VALUE FUND
The One Group(R) Disciplined Value Fund seeks capital appreciation with the
secondary goal of achieving current income by investing primarily in equity
securities. The fund will invest in equity securities with below-market average
price-to-earnings and price-to-book value ratios. The issuer's soundness and
earnings prospects will also be considered. Although capital appreciation is the
primary purpose for investing in the security, all common stocks must be paying
a current dividend to shareholders to be eligible for purchase. While the
Advisor may sell fund securities in its discretion at any time, it is unlikely
to move toward elimination of the fund's holdings of a stock when the Advisor
determines that there is a fundamental change that impairs a company's ability
to pay dividends, or if the company's 12-month earnings per share comparison is
declining.
The fund will, under normal conditions, invest at least 80% of the value of its
total assets in equity securities consisting of common stocks and debt
securities and preferred stocks that are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
The One Group(R) Limited Volatility Bond Fund seeks current income consistent
with preservation of capital through investment in high and medium-grade
fixed-income securities. The fund will normally invest at least 80% of total
assets in debt securities of all types with short to intermediate maturities.
Under normal market conditions, it is anticipated that the fund's average
weighted maturity will range between one and five years. At least 65% of the
fund's total assets will consist of bonds rated in one of the three highest
rating categories by at least one nationally recognized statistical rating
organization ("NRSRO") at the time of investment, or, if unrated, determined by
the Advisor to be of comparable quality. In addition, at least 65% of total
assets will consist of obligations issued by the U.S. government or its agencies
and instrumentalities, some of which may be subject to repurchase agreements.
The fund may also purchase taxable or tax-exempt municipal securities. Up to 20%
of the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INTERMEDIATE BOND FUND
The One Group(R) Intermediate Bond Fund seeks current income consistent with the
preservation of capital through investments in high and medium-grade
fixed-income securities with intermediate maturities. The fund will normally
invest at least 80% of total assets in debt securities of all types. Under
normal market conditions, it is anticipated that the fund's average weighted
maturity will range between three and ten years. At least 65% of the fund's
total assets will consist of bonds rated in one of the three highest rating
categories by at least one NRSRO at the time of investment or, if unrated,
determined by the Advisor to be of comparable quality. However, the Advisor
reserves the right to invest in more speculative debt securities if they present
attractive opportunities and are rated in the fourth highest rating category by
at least one NRSRO at the time of investment or, if unrated, determined by the
Advisor to be of comparable quality. In addition, at least 50% of total assets
will consist of obligations issued by the U.S. government or its agencies and
instrumentalities, some of which may be subject to repurchase agreements. The
fund may also purchase taxable or tax-exempt municipal securities. Up to 20% of
the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INCOME BOND FUND
The One Group(R) Income Bond Fund seeks a high level of current income by
investing primarily in a diversified portfolio of high, medium and low grade
debt securities. The fund will normally invest at least 70% of total assets in
debt securities of all types rated in one of the four highest rating categories
("investment grade") by at least one NRSRO at the time of investment or, if
unrated, determined by the Advisor to be of comparable quality. In addition, up
to 30% of the fund's total assets may be invested in convertible securities,
preferred stock, loan participations and debt securities rated below investment
grade. Securities rated below investment grade are called "high yield" and "junk
bonds." Under normal
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market conditions, it is anticipated that the fund's average weighted maturity
will range between five and twenty years. As a matter of fundamental policy, at
least 65% of the fund's total assets will consist of bonds. The fund may also
purchase taxable or tax-exempt municipal securities.
THE ONE GROUP(R) GOVERNMENT BOND FUND
The One Group(R) Government Bond Fund seeks a high level of current income with
liquidity and safety of principal. The fund seeks to achieve its objective
principally through investment in securities issued by the U.S. government and
its agencies and instrumentalities. At least 65% of the total assets of the fund
will be invested in obligations guaranteed as to principal and interest by the
U.S. Government or its agencies and instrumentalities, some of which may be
subject to repurchase agreements, and other securities representing an interest
in or collateralized by mortgages that are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. The balance of the fund's assets
may be invested in debt securities and taxable or tax-exempt municipal
securities. The average weighted remaining maturity of the fund is expected to
be between three and fifteen years.
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
The One Group(R) Ultra Short-Term Income Fund seeks a high level of current
income consistent with low volatility of principal by investing in a diversified
portfolio of short-term investment grade securities. The fund will normally
invest at least 80% of its total assets in debt securities of all types,
including money market instruments. In addition, up to 20% of the fund's total
assets may be invested in other securities, including preferred stock. The fund
will invest in adjustable rate mortgage pass-through securities and other
securities representing an interest in or collateralized by mortgages with
periodic interest rate resets, some of which may be subject to repurchase
agreements. These securities often are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. However, the fund also may
purchase mortgage-backed securities that are issued by non-governmental
entities. Such securities may or may not have private insurer guarantees as to
timely payments. The fund also may purchase mortgage and interest rate swaps and
interest rate floors and caps. The fund also may employ other investment
techniques to enhance returns, such as loans of fund securities, mortgage dollar
rolls, repurchase agreements, options contracts and reverse repurchase
agreements.
The Fund will maintain a maximum duration of approximately two years. Under
normal interest rate conditions, the Fund's actual duration is expected to be in
a range of approximately six months to one year.
RISK FACTORS
The investments of the Fund are concentrated in the Underlying Funds, so the
Fund's investment performance is directly related to the performance of the
Underlying Funds. In addition, as a matter of fundamental policy, the Fund must
allocate its investments among the Underlying Funds within certain ranges. As a
result, the Fund does not have the same flexibility to invest as a mutual fund
without such constraints.
The Fund may invest in Underlying Funds which invest in medium or lower grade
bonds. If these bonds are downgraded, the Advisor will consider whether to
increase or decrease the Fund's investment in the affected Underlying Fund.
Further, the Fund may invest in Underlying Funds which concentrate their assets
in certain industries. Under certain circumstances, this could result in the
Fund being concentrated in those industries. If this were to occur, the Advisor
would consider whether to maintain or change the Fund's investments in such
Underlying Funds.
SPECIAL RISKS OF INVESTING IN EQUITY FUNDS
Changes in the value of an equity fund's portfolio securities will not affect
cash income, if any, derived from these securities but will affect the fund's
net asset value. Because equity funds invest primarily in equity securities,
which fluctuate in value, the funds' shares will fluctuate in value. In
addition, certain investment management techniques that the funds may use, such
as the purchase and sale of futures, options and forward commitments, could
expose the funds to potentially greater risk of loss than more traditional
equity investments.
SPECIAL RISKS OF INVESTING IN FIXED-INCOME FUNDS
The market value of a fund's fixed-income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed-income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these investments. Except under condition of default, changes in
the value of fixed-income securities will not affect cash income derived from
these securities but will affect the funds' net asset value.
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SPECIAL RISKS OF INVESTING IN INDEX FUNDS
Because of the funds' investment objectives, securities may be purchased,
retained and sold by the funds when such transactions would not be consistent
with traditional investment criteria. Accordingly, an investor is exposed to a
greater risk of loss (and a correspondingly greater prospect of gain) from
fluctuations in the value of such securities than would be the case if the funds
were not fully invested in such securities. In addition, the Advisor may
eliminate one or more securities or elect not to increase the funds' position in
such securities notwithstanding the continued listing of such securities on the
relevant index in the following circumstances: (i) the stock is no longer
publicly traded; or (ii) an unexpected adverse development occurs with respect
to a company such as bankruptcy or insolvency. As a result of these risk
factors, the share price of an index fund is expected to be volatile, and
investors should be able to sustain sudden, sometimes substantial, fluctuations
in the value of their investment.
SPECIAL RISKS OF FOREIGN SECURITIES
Investments in securities of foreign issuers involve risks that are different
from investments in securities of U.S. issuers. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls, higher transaction costs, and
delayed settlements of transactions. Securities of some foreign companies are
less liquid, and their prices more volatile, than securities of comparable U.S.
companies. Additionally, there may be less public information available about
foreign issuers. Finally, since the funds may invest in securities denominated
in foreign currencies, changes in exchange rates may affect the value of
investments in the funds.
SPECIAL RISKS OF SMALL CAPITALIZATION COMPANIES
Smaller, less seasoned companies may be subject to greater business risk than
larger, established companies. They may be more vulnerable to changes in
economic conditions, specific industry conditions, market fluctuations and other
factors affecting the profitability of companies. Therefore, the stock price of
smaller capitalization companies may be subject to greater price fluctuations
than that of larger, established companies. Due to these and other risk factors,
the price movement of the securities held by the funds may be volatile and the
net asset value of shares of the funds may fluctuate.
SPECIAL RISKS OF MORTGAGE-RELATED SECURITIES
Some of the funds invest in mortgage-related securities, such as mortgage-backed
securities, adjustable rate mortgage loans ("ARMs"), fixed rate mortgage loans,
and mortgage dollar rolls. The investment characteristics of mortgage-related
securities differ from traditional debt securities. These differences can result
in significantly greater price and yield volatility than is the case with
traditional fixed-income securities. The major differences typically include
more frequent interest and principal payments, usually monthly, the
adjustability of interest rates, and the possibility that prepayments of
principal may be made at any time. Prepayment rates are influenced by changes in
current interest rates and a variety of economic, geographic, social, and other
factors. During periods of declining interest rates, prepayment rates can be
expected to accelerate. Under certain interest rate and prepayment rate
scenarios, a fund may fail to recoup fully its investment in mortgage-related
securities notwithstanding a direct or indirect governmental or agency
guarantee. The funds intend to use hedging techniques to control this risk. In
general, changes in the rate of prepayments on a mortgage-related security will
change that security's market value and its yield to maturity. When interest
rates fall, high prepayments could force a fund to reinvest principal at a time
when investment opportunities are not attractive. Thus, mortgage-related
securities may not be an effective means for a fund to lock in long-term
interest rates. Conversely, during periods when interest rates rise, slow
prepayments could cause the average life of the security to lengthen and the
value to decline more than anticipated.
HOW TO DO BUSINESS WITH THE ONE GROUP(R)
HOW TO INVEST IN THE ONE GROUP(R)
Shares of the Fund are sold on a continuous basis and may be purchased directly
from the Trust's Distributor, The One Group(R) Services Company, by mail, by
telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor, or through a broker-dealer that has
established a dealer agreement with the Distributor.
Purchases and redemptions of shares of the Fund may be made on any day that the
New York Stock Exchange is open for trading ("Business Days"). The minimum
initial and subsequent investments in the Fund are $1,000 and $100 respectively
($100 and $25, respectively, for employees of BANC ONE CORPORATION and its
affiliates). Initial and subsequent investment minimums may be waived at the
Distributor's discretion. Investors may purchase up to a maximum of $250,000 of
Class B and Class C shares per individual purchase order.
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Class A, Class B and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors. Fiduciary Class shares are offered to
institutional investors, including affiliates of BANC ONE CORPORATION and any
bank, depository institution, insurance company, pension plan or other
organization authorized to act in fiduciary, advisory, agency, custodial or
similar capacities (each an "Authorized Financial Organization"). For additional
details regarding eligibility, call the Distributor at 1-800-480-4111.
BY MAIL
Investors may purchase Class A, Class B and Class C shares of the Fund by
completing and signing an Account Application Form and mailing it, along with a
personal check (or other negotiable bank instrument or money order) payable to
"The One Group(R)," the Fund, The One Group Services Company, or State Street
Bank and Trust Company (the Trust's Transfer Agent and Custodian), to the
Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500. If the purchase order is
to be credited to a Fund Direct IRA, the check should be payable to State Street
Bank and Trust Company for the benefit of the Shareholder. Subsequent purchases
of shares may be made at any time by mailing a personal check to the Transfer
Agent. Account Application Forms are available through the Distributor by
calling 1-800-480-4111. All purchases made by check should be in U.S. dollars.
Third party checks will not be accepted. When purchases are made by check or
under the Systematic Investment Plans (see below), redemptions will not be
allowed until the investment being redeemed has been in the Fund for 10 calendar
days.
Purchases of Fiduciary Class shares, and Class A, Class B and Class C shares
that are being offered to investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, are made by an
institutional investor and/or other intermediary on behalf of an investor (each
also a "Shareholder Servicing Agent"). The Shareholder Servicing Agent may
require an investor to complete forms in addition to the Account Application
Form and to follow procedures established by the Shareholder Servicing Agent.
Such Shareholders should contact their Shareholder Servicing Agents regarding
purchases, exchanges and redemptions of shares. See "Additional Information
Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible to
make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agents, if applicable.
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
SYSTEMATIC INVESTMENT PLAN
Class A, Class B and Class C investors may make automatic monthly investments in
the Fund from their bank, savings and loan or other depository institution
accounts. The minimum initial investment must be $1000 and subsequent
investments must be $25 under the Systematic Investment Plan, which minimum may
be reduced at the discretion of the Distributor. The Trust pays the costs
associated with these transfers, but reserves the right, upon thirty days'
written notice, to impose reasonable charges for this service. A depository
institution may impose a charge for debiting an investor's account which would
reduce the investor's return from an investment in the Fund.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which the Fund may be an
appropriate investment. The Trust's retirement plan allows participants to defer
taxes while helping them build their retirement savings.
The One Group(R) Fund-Direct IRA is a retirement plan with a wide choice of
investments offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A, Class B
and Class C shares, and the investor could be liable for any fees or expenses
incurred by the Trust. Federal funds are monies credited to a bank's account
with a Federal Reserve Bank. The purchase price of shares of the Fund is the net
asset value next determined after a purchase order is effected plus any
applicable sales charge (the "offering price"). The net asset value per share of
the Fund is determined by dividing the total market value
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of the Fund's investments and other assets allocable to a class, less any
liabilities allocable to that class, by the total number of outstanding shares
of such class. Net asset value per share is determined daily as of 4:00 p.m.,
eastern time, on each Business Day. For a further discussion of the calculation
of net asset value, see the Statement of Additional Information. Shares may also
be issued in transactions involving the acquisition by the Fund of securities
held by collective investment funds sponsored and administered by affiliates of
the Advisor. Purchases will be made in full and fractional shares of the Fund
calculated to three decimal places. Although the methodology and procedures are
identical, the net asset value per share of classes within the Fund may differ
because the distribution expenses charged to Class A, Class B and Class C shares
are not charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the Trust's
Transfer Agent nor the Trust will be responsible for any loss, liability, cost
or expense for acting upon telephone or wire instructions, and the investor will
bear all risk of loss. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If such procedures are not
employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans, and Class A, Class B and Class C shares offered to IRA
account participants and investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, will normally be
held in the name of the Shareholder Servicing Agent effecting the purchase on
the Shareholder's behalf, and it is the Shareholder Servicing Agent's
responsibility to transmit purchase orders to the Distributor. A Shareholder
Servicing Agent may impose an earlier cut-off time for receipt of purchase
orders directed through it to allow for processing and transmittal of these
orders to the Distributor for effectiveness the same day. The Shareholder should
contact his or her Shareholder Servicing Agent for information as to the
Shareholder Servicing Agent's procedures for transmitting purchase, exchange or
redemption orders to the Trust. A Shareholder who desires to transfer the
registration of shares beneficially owned by him or her, but held of record by a
Shareholder Servicing Agent, should contact the Shareholder Servicing Agent to
accomplish such change. Other Shareholders who desire to transfer the
registration of their shares should contact the Transfer Agent.
No certificates representing shares of the Fund will be issued. In
communications to Shareholders, the Fund will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
SALES CHARGE
CLASS A SHARES
The following table shows the initial sales charge on Class A shares to a
"single purchaser" (defined below) together with the sales charge reallowed to
financial institutions and intermediaries (the "commission"):
<TABLE>
<CAPTION>
SALES CHARGE
SALES CHARGE AS APPROPRIATE COMMISSION
AS A PERCENTAGE OF AS A
PERCENTAGE OF NET AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- --------------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
less than $100,000....................................... 4.50% 4.71% 4.05%
$100,000 but less than $250,000.......................... 3.50% 3.53% 3.05%
$250,000 but less than $500,000.......................... 2.50% 2.36% 2.05%
$500,000 but less than $1,000,000........................ 2.00% 2.04% 1.60%
$1,000,000 or more....................................... 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial institutions
and intermediaries. Under certain circumstances, the Distributor will use its
own funds to compensate financial institutions and intermediaries in amounts
that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a sales charge is 3.00% of the
offering price (including the commission shown above and additional cash
compensation described below). In addition, the Distributor will, from time to
time and at its own expense, provide promotional incentives to financial
institutions and intermediaries, whose registered representatives have sold or
are expected to sell significant amounts of the shares of the Fund in the form
of payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives to places within or outside
the United States, and additional compensation in an amount up to 1.00% of the
offering price of Class A shares of the Fund for sales of $1 million to $5
million, and 0.50% for sales over $5 million. A Shareholder who purchases $1
million or more of Class A shares and is not assessed a sales charge at the time
of purchase, will be assessed a sales charge equivalent to 1% of the purchase
price if such Shareholder redeems any or all of the Class A shares prior to the
first anniversary of purchase. Under certain circumstances, commissions up to
the amount of the entire sales charge will be reallowed to financial
institutions and intermediaries, which might then be deemed to be "underwriters"
under the Securities Act of 1933.
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RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class A
shares, a "single purchaser" is entitled to cumulate current purchases with the
current value at the offering price of previously purchased Class A, Class B and
Class C shares of the Fund and other eligible funds of the Trust, other than the
Trust's money market funds, that are sold subject to a comparable sales charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), and including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their minor
children, and give the age of such children. The Fund may amend or terminate
this right of accumulation at any time as to subsequent purchases.
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds
that impose a comparable sales charge over the next 13 months, the sales charge
may be reduced by completing the Letter of Intent section of the Account
Application Form. The Letter of Intent includes a provision for a sales charge
adjustment depending on the amount actually purchased within the 13-month
period. In addition, pursuant to a Letter of Intent, the Custodian will hold in
escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of investment, which
is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000 in
Class A shares of one (or more) of the funds of the Trust that imposes a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. The investor would
pay an initial sales charge of 1.50% (the sales charge applicable to purchases
of $250,000) and .50% of the investment (representing the difference between the
2.00% sales charge applicable to purchases of $100,000 and the 1.50% sales
charge already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more in Class A shares under the investor's Letter of
Intent.
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Fund: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired through
the exercise of exchange privileges where a comparable sales charge has been
paid for exchanged shares; (iii) purchased by officers, directors or trustees,
retirees and employees (and their spouses and immediate family members) of the
Trust, of BANC ONE CORPORATION and its subsidiaries and affiliates, of the
Distributor and its subsidiaries and affiliates, of the Custodian and Transfer
Agent and their subsidiaries and affiliates, of broker-dealers who have entered
into dealer agreements with the Trust and their subsidiaries and affiliates, or
of an investment sub-advisor of a fund of the Trust and such sub-advisor's
subsidiaries and affiliates; (iv) sold to affiliates of BANC ONE CORPORATION and
certain accounts (other than Individual Retirement Accounts) for which
Authorized Financial Organizations act in fiduciary, advisory, agency, custodial
or similar capacities, or purchased by investment advisors, financial planners
or other intermediaries who have a dealer arrangement with the Distributor, who
place trades for their own accounts or for the accounts of their clients and who
charge a management, consulting or other fee for their services, as well as
clients of such investment advisors, financial planners or other intermediaries
who place trades for their own accounts if the accounts are linked to the master
account of such investment advisor, financial planner or other intermediary; (v)
purchased with proceeds from the recent redemption of Fiduciary Class shares of
a fund of the Trust or acquired in an exchange of Fiduciary Class shares of a
fund for Class A shares of the same fund; (vi) purchased with proceeds from the
recent redemption of shares of a mutual fund (other than a fund of the Trust)
for which a sales charge was paid; (vii) purchased in an Individual Retirement
Account with the proceeds of a distribution from an employee benefit plan,
provided that, at the time of distribution, the employee benefit plan had plan
assets invested in a fund of the Trust; (viii) purchased with Trust assets; (ix)
purchased in accounts as to which a bank or broker-dealer charges an asset
allocation fee, provided the bank or broker-dealer has an agreement with the
Distributor; (x) directly purchased with the proceeds of a distribution on a
bond for which a BANC ONE CORPORATION affiliate bank or trust company is
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the Trustee or Paying Agent; or (xi) purchased in connection with plans of
reorganization of the Fund, such as mergers, asset acquisitions and exchange
offers to which the Fund is a party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi), and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at 1-800-480-4111 to
determine whether they are eligible to purchase shares without paying a sales
charge through the use of proceeds from a recent redemption or distribution as
described above, and to confirm continued availability of these waiver policies
prior to initiating the procedures described in clauses (v), (vi), and (vii).
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES AND CLASS C SHARES
Class B shares are not subject to a sales charge when they are purchased, but
are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the sixth anniversary of purchase. Class C
shares also are not subject to a sales charge when they are purchased, but are
subject to a Contingent Deferred Sales Charge if a Shareholder redeems them
prior to the first anniversary of purchase. When a Shareholder purchases Class B
and Class C shares, the full purchase amount is invested directly in the Fund.
Class B and Class C shares of the Fund are also subject to an ongoing
distribution and Shareholder service fee at an annual rate of 1.00% of the
Fund's average daily net assets as provided in the CDSC Plan (described below
under "The Distributor"). This ongoing fee will cause Class B and Class C shares
to have a higher expense ratio and to pay lower dividends than Class A shares.
Class B shares convert automatically to Class A shares after eight years,
commencing from the end of the calendar month in which the purchase order was
accepted under the circumstances and subject to the qualifications described in
this Prospectus.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of the Class B and Class C shares, such
as the payment of compensation to dealers and agents for selling such shares. A
dealer reallowance of 4.00% of the original purchase price of the Class B shares
and 1.00% of the original purchase price of Class C shares will be paid to
financial institutions and intermediaries.
Class B and Class C Shareholders will pay a Contingent Deferred Sales Charge at
the rates set forth below. The Contingent Deferred Sales Charge is assessed on
an amount equal to the lesser of the then-current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on increases
in net asset value above the initial purchase price. In addition, no charge is
assessed on shares derived from reinvestment of dividends or capital gain
distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the number of years from the time of payment for the purchase of shares until
the time of redemption of such shares. Solely for purposes of determining the
number of years from the time of any payment for the purchase of shares, all
payments during a month are aggregated and deemed to have been made on the first
day of the month.
PROSPECTUS
16
<PAGE> 105
CLASS B SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 5.00%
1-2..................................................................... 4.00%
2-3..................................................................... 3.00%
3-4..................................................................... 3.00%
4-5..................................................................... 2.00%
5-6..................................................................... 1.00%
6-7..................................................................... None
7-8..................................................................... None
</TABLE>
To provide an example, assume you purchased 100 shares at $10 per share (a total
cost of $1,000) and prior to the second anniversary after purchase, the net
asset value per share is $12 and during such time you have acquired 10
additional shares through dividends paid in shares. If you then make your first
redemption of 50 shares (proceeds of $600), 10 shares will not be subject to
charge because you received them as dividends. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds is subject to a Contingent Deferred Sales Charge at a rate
of 4.00% (the applicable rate prior to the second anniversary after purchase).
CLASS C SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 1.00%
After first year........................................................ None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class A
shares in the Shareholder's Fund account (unless the Shareholder elects to have
Class B or Class C shares redeemed first) or shares representing capital
appreciation, next of shares acquired pursuant to reinvestment of dividends and
capital gain distributions, next Class C shares, and finally of other shares
held by the Shareholder for the longest period of time. This method should
result in the lowest possible sales charge.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code) of a
Shareholder or a participant or beneficiary of a qualified retirement plan if
redemption is made within one year of such death or disability; (iii) to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan to a
Shareholder who has attained the age of 70 1/2; or (iv) purchased by investors
in certain retirement plans, such as 401(k) and similar qualified plans. A
Shareholder or his or her representative should contact the Transfer Agent to
determine whether a retirement plan qualifies for a waiver and must notify the
Transfer Agent prior to the time of redemption if such circumstances exist and
the Shareholder is eligible for this waiver. In addition, the following
circumstances are not deemed to result in a "redemption" of Class B shares for
purposes of the assessment of a Contingent Deferred Sales Charge, which is
therefore waived: (i) plans of reorganization of the Fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or (ii)
exchanges for Class B shares of other funds of the Trust as described under
"Exchanges."
CONVERSION FEATURE
Class B shares will automatically convert to Class A shares eight years after
the end of the month in which the shares were purchased and will be subject to
the lower distribution and Shareholder service fees charged to Class A shares.
PROSPECTUS
17
<PAGE> 106
Class C shares will convert to Class A shares after six years. Such conversion
will be on the basis of the relative net asset values of the two classes,
without the imposition of any sales charge, fee or other charge. The conversion
is not a taxable event to a Shareholder.
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B and Class C shares in a Shareholder's Fund
account will be considered to be held in a separate sub-account. Each time any
Class B or Class C shares in a Shareholder's Fund account (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B or
Class C shares in the sub-account will also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B or Class C shares
of the funds of the Trust during the eight or six year period, the Trust will
aggregate the holding periods for the shares of each fund of the Trust for
purposes of calculating that eight or six year period. Because the per share net
asset value of the Class A shares may be higher than that of the Class B or
Class C shares at the time of conversion, a Shareholder may receive fewer Class
A shares than the number of Class B or Class C shares converted, although the
dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of the Fund may exchange their shares for Class A
shares of the Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders may exchange their shares for Fiduciary Class shares of the
Fund or for Fiduciary Class shares or Class A shares of another fund of the
Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares of
the Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares, except
as provided below.
The Trust does not impose a charge for processing exchanges of shares. If a
Shareholder seeks to exchange Class A shares of a fund that does not impose a
sales charge for Class A shares of a fund that does or the fund being exchanged
into has a higher sales charge, the Shareholder will be required to pay a sales
charge in the amount equal to the difference between the sales charge applicable
to the fund into which the shares are being exchanged and any sales charges
previously paid for the exchanged shares, including any sales charges incurred
on any earlier exchanges of the shares (unless such sales charge is otherwise
waived, as provided in "Other Circumstances"). The exchange of Fiduciary Class
shares for Class A shares also will require payment of the sales charge unless
the sales charge is waived, as provided in "Other Circumstances."
CLASS B
Class B Shareholders of the Fund may exchange their shares only for Class B
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the newly
acquired Class B shares, the newly acquired Class B shares shall be deemed to
have been issued on the date of receipt of the Shareholder's order to purchase
the outstanding Class B shares of the fund from which the initial exchange was
made.
CLASS C
Class C Shareholders of the Fund may exchange their shares only for Class C
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class C shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class C
shares. The requirements applicable to computing the Contingent Deferred Sales
Charge on the exchange of Class B shares are also applicable to the exchange of
Class C shares.
PROSPECTUS
18
<PAGE> 107
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the Transfer Agent by 4:00 p.m., eastern
time, on any Business Day, the exchange usually will occur on that day. Any
Shareholder who wishes to make an exchange must receive a current prospectus of
the fund of the Trust in which he or she wishes to invest before the exchange
will be effected.
The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax advisors for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Fund.
A more detailed description of the above is set forth in the Statement of
Additional Information.
The Trust's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (AT LEAST 30 DAYS APART) from the Fund during
any twelve month period. Notwithstanding these limitations, the Trust reserves
the right to reject any purchase request (including exchange purchases from
other funds of the Trust) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares without charge (except Class B and Class C
shares, as provided above) on any Business Day; shares may ordinarily be
redeemed by mail, by telephone or by wire. All redemption orders are effected at
the net asset value per share next determined for Class A and Fiduciary Class
shares, and at net asset value per share next determined reduced by any
applicable Contingent Deferred Sales Charge for Class B and Class C shares,
after receipt of a valid request for redemption. Payment to Shareholders for
shares redeemed will be made within seven days after receipt by the Transfer
Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in order
to constitute a valid request for redemption. All requests for redemptions from
IRA accounts must be in writing. Redemption request forms may be obtained from
the Transfer Agent by calling (800) 480-4111. All written redemption requests
should be sent to The One Group(R), c/o State Street Bank and Trust Company,
P.O. Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing Agent, if
applicable. The Transfer Agent may require that the signature on the written
request be guaranteed by a commercial bank, a member firm of a domestic stock
exchange, or by a member of the Securities Transfer Association Medallion
Program or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $50,000 worth of shares or less;
(ii) the redemption check is payable to the Shareholder(s) of record; and (iii)
the redemption check is mailed to the Shareholder(s) at the address of record.
The Shareholder may also have the proceeds mailed to a commercial bank account
previously designated on the Account Application Form or by written instruction
to the Transfer Agent or the Shareholder Servicing Agent, if applicable. There
is no charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE OR BY WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
telephone to the Transfer Agent at 1-800-480-4111, provided that the Shareholder
has elected the telephone redemption privilege in writing to the Distributor, or
to the Shareholder Servicing Agent, if applicable. The Transfer Agent may reduce
the amount of a wire redemption payment by its then-current wire redemption
charge, which, as of the date of this Prospectus, is $7.00.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting
PROSPECTUS
19
<PAGE> 108
from unauthorized or fraudulent telephone transactions if it does not employ
those procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each, unless the
withdrawal plan is part of a required distribution from an IRA or other
qualified retirement plan. There is no charge for this service. Purchases of
additional Class A shares while the Systematic Withdrawal Plan is in effect are
generally undesirable because a sales charge is incurred whenever purchases are
made.
Pursuant to the Systematic Withdrawal Plan, Class B and Class C Shareholders may
elect to receive, or may designate another person to receive, distributions
provided the distributions are limited to no more than 10% of their account
value annually, determined in the first year as of the date the redemption
request is received by the Transfer Agent, and in subsequent years, as of the
most recent anniversary of that date.
In addition, Shareholders who have attained the age of 70 1/2 may elect to
receive distributions, to the extent that the redemption represents a minimum
required distribution from an Individual Retirement Account or other qualifying
retirement plan.
If the amount of systematic withdrawal exceeds income accrued since the previous
withdrawal under the Systematic Withdrawal Plan, the principal balance invested
will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, the forwarding of proceeds
may be delayed for 10 or more days until payment has been collected for the
purchase of such shares. The Fund intends to pay cash for all shares redeemed.
Due to the relatively high costs of handling small investments, the Fund
reserves the right to redeem, at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in the Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
the Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any of these shares.
Before the Fund exercises its right to redeem such shares and to send the
proceeds to the Shareholder, the Shareholder will be given notice that the value
of the shares in his or her account is less than the minimum amount and will be
allowed 60 days to make an additional investment in the Fund in an amount which
will increase the value of the account to at least $1,000.
See the Statement of Additional Information for examples of when the Trust may
suspend the right of redemption or redeem shares involuntarily if it appears
appropriate to do so in light of the Trust's responsibilities under the
Investment Company Act of 1940.
FUND MANAGEMENT
THE ADVISOR
The Trust and Banc One Investment Advisors Corporation (the "Advisor") have
entered into an investment advisory agreement (the "Advisory Agreement"). Under
the Advisory Agreement, the Advisor makes the investment decisions for the
assets of the Fund and continuously reviews, supervises and administers the
Fund's investment program. The Advisor discharges its responsibilities subject
to the supervision of, and policies established by, the Trustees of the Trust.
The Trust's shares are not deposits or obligations of, or endorsed or guaranteed
by BANC ONE CORPORATION or its bank or non-bank affiliates. The Trust's shares
are not insured or guaranteed by the Federal Deposit Insurance Corporation
("FDIC") or by any other governmental agency or government sponsored agency of
the Federal government or any state.
The Advisor is an indirect, wholly-owned subsidiary of BANC ONE CORPORATION, a
bank holding company incorporated in the state of Ohio. BANC ONE CORPORATION
currently has affiliate banking organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West Virginia and
Wisconsin. In addition, BANC ONE CORPORATION has several affiliates that engage
in data processing, venture capital, investment and merchant banking, and other
diversified services including trust management, investment management,
brokerage, equipment leasing, mortgage banking, consumer finance and insurance.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
PROSPECTUS
20
<PAGE> 109
The Advisor represents a consolidation of the investment advisory staffs of a
number of bank affiliates of BANC ONE CORPORATION, which have considerable
experience in the management of open-end management investment company
portfolios, including The One Group(R) since 1985 (then known as "The Helmsman
Fund").
No single person is responsible for managing the assets of the Fund. Rather,
investment decisions for the Fund are made by committee.
The Advisor is entitled to a fee which is calculated daily and paid monthly, at
an annual rate of .05% of the average daily net assets of the Fund. The Advisor
may voluntarily waive all or part of this fee.
The Advisor also serves as investment advisor to each of the Underlying Funds.
As a shareholder of each of the Underlying Funds, the Fund will indirectly bear
its proportionate share of investment advisory fees paid by those funds. The
Underlying Funds pay the Advisor an advisory fee at the following rates:
<TABLE>
<S> <C>
The One Group(R) Prime Money Market Fund............................................... .32%
The One Group(R) Limited Volatility Bond Fund.......................................... .40%
The One Group(R) Intermediate Bond Fund................................................ .40%
The One Group(R) Income Bond Fund...................................................... .40%
The One Group(R) Government Bond Fund.................................................. .45%
The One Group(R) Ultra Short-Term Income Fund.......................................... .30%
The One Group(R) Disciplined Value Fund................................................ .74%
The One Group(R) International Equity Index Fund....................................... .55%
The One Group(R) Large Company Growth Fund............................................. .74%
The One Group(R) Large Company Value Fund.............................................. .74%
The One Group(R) Growth Opportunities Fund............................................. .74%
The One Group(R) Value Growth Fund..................................................... .74%
The One Group(R) Gulf South Growth Fund................................................ .74%
The One Group(R) Income Equity Fund.................................................... .74%
The One Group(R) Equity Index Fund..................................................... .10%
</TABLE>
THE DISTRIBUTOR
The One Group(R) Services Company (the "Distributor"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Fund are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Fund. Currently,
the Distributor has voluntarily agreed to limit payments under the Plan to .25%
of the average daily net assets of Class A shares of the Fund. Up to .25% of the
fees payable under the Plan may be used as compensation for Shareholder services
by the Distributor and/or financial institutions and intermediaries. All such
fees that may be paid under the Plan will be paid pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Distributor may apply these fees toward: (i)
compensation for its services in connection with distribution assistance or
provision of Shareholder services; or (ii) payments to financial institutions
and intermediaries such as banks (including affiliates of the Advisor), savings
and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries, as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class C shares are
subject to a contingent Deferred Sales Charge if such shares are redeemed prior
to the first anniversary of purchase. Class B and Class C shares of the Fund are
subject to an ongoing distribution and Shareholder service fee as provided in
the CDSC Distribution and Shareholder Services Plan (the "CDSC Plan") at an
annual rate of 1.00% of the Fund's average daily net assets, which includes
Shareholder servicing fees of .25% of the Fund's average daily net assets.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of Class B and Class C shares, such as
the payment of compensation to dealers and agents for selling such shares. The
combination of the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees facilitate the ability of the Fund to sell the Class B
and Class C shares without a sales charge being deducted at the time of
purchase.
The Plan and the CDSC Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Fund
also may execute brokerage or other agency
PROSPECTUS
21
<PAGE> 110
transactions through an affiliate of the Advisor or through the Distributor for
which the affiliate or the Distributor receives compensation. Pursuant to
guidelines adopted by the Board of Trustees of the Trust, any such compensation
will be reasonable and fair compared to compensation received by other brokers
in connection with comparable transactions.
Fiduciary Class shares of the Fund are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record owner
of shares for the account of its customers may impose separate fees for account
services to its customers.
THE ADMINISTRATOR
The One Group(R) Services Company, (the "Administrator"), a wholly-owned
subsidiary of the BISYS Group, Inc., and the Trust are parties to an
administration agreement relating to the Fund (the "Administration Agreement").
Under the terms of the Administration Agreement, the Administrator is
responsible for providing the Trust with administrative services (other than
investment advisory services), including regulatory reporting and all necessary
office space, equipment, personnel and facilities.
The Advisor also serves as Sub-Administrator to each fund of the Trust, pursuant
to an agreement between the Administrator and the Advisor. Pursuant to this
agreement, the Advisor performs many of the Administrator's duties, for which
the Advisor receives a fee paid by the Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .10% of the Fund's
average daily net assets on the first $500,000,000 in Fund assets, .075% of the
Fund's average daily net assets between $500,000,000 and $1 billion, and .05% of
the Fund's average daily net assets when Fund assets exceed $1 billion.
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust, for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust
Company. Bank One Trust Company receives a fee paid by the Trust.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to offer
separate funds and different classes of each fund. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses.
The Advisor and the Administrator of the Fund each bears all expenses incurred
in connection with the performance of their services as investment advisor and
administrator, respectively, other than the cost of securities (including
brokerage commissions, if any) purchased for the Fund.
As a general matter, as set forth in the Multiple Class Plan, expenses are
allocated to each class of shares of the Fund on the basis of the net asset
value of that class in relation to the net asset value of the Fund. At present,
the only expenses that are allocated to Class A, Class B and Class C shares,
other than in accordance with the relative net asset value of the class, are the
distribution and Shareholder services costs. See "Expense Summary." At present,
no expenses are allocated to Fiduciary Class shares as a class that are not also
borne by the other classes of shares of the Fund in proportion to the relative
net asset value of the shares of such classes.
PROSPECTUS
22
<PAGE> 111
The organizational expenses of the Fund have been capitalized and are being
amortized in the first five years of the Fund's operations. Such amortization
will reduce the amount of income available for payment as dividends.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved contracts under which, as described above, certain
companies provide essential management services to the Trust.
VOTING RIGHTS
As set forth in the Multiple Class Plan, each share held entitles the
Shareholder of record to one vote. Each fund of the Trust will vote separately
on matters relating solely to that fund. In addition, each class of a fund shall
have exclusive voting rights on any matter submitted to Shareholders that
relates solely to that class, and shall have separate voting rights on any
matter submitted to Shareholders in which the interests of one class differ from
the interests of any other class. However, all fund Shareholders will have equal
voting rights on matters that affect all fund Shareholders equally. As a
Massachusetts Business Trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be elected or removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
DIVIDENDS
Net investment income (exclusive of capital gains) is determined and declared
monthly, and is distributed in the form of monthly dividends to Shareholders of
Record on the first Business Day of each month. Capital gains of the Fund, if
any, will be distributed at least annually.
To maintain a relatively even rate of distributions from the Fund rather than
having substantial fluctuations from period to period, the monthly distributions
level from the Fund may be fixed from time to time at rates consistent with the
Advisor's long-term earnings expectations.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B, Class C or Fiduciary Class shares,
as applicable, at the net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in cash. Such election,
or any revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500, and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
Class B shares received as dividends and capital gains distributions at net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares. See "Conversion
Feature."
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution even though
such distribution would, in effect, represent a return of the Shareholder's
investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A, Class B, and Class C shares because of the
distribution expenses charged to Class A, Class B, and Class C shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group(R)
Services Company, 3435 Stelzer Road, Columbus, OH 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
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OTHER INVESTMENT POLICIES
PORTFOLIO TURNOVER
Portfolio turnover may vary greatly from year to year as well as within a
particular year. It is presently estimated that the annual portfolio turnover
rate for the Fund will not exceed 160%. Higher portfolio turnover rates will
likely result in higher transaction costs to the Fund and may result in
additional tax consequences to the Fund's Shareholders.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed without
the consent of the holders of a majority of the Fund's outstanding shares. The
term "majority of the outstanding shares" means the vote of (i) 67% or more of
the Fund's shares present at a meeting, if more that 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the Fund's outstanding shares, whichever is less.
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities, securities of regulated
investment companies and, if consistent with a Fund's investment objective and
policies, repurchase agreements involving such securities) if as a result more
than 5% of the total assets of a Fund would be invested in the securities of
such issuer or a Fund would own more than 10% of the outstanding voting
securities of such issuer. This restriction applies to 75% of a Fund's assets.
For purposes of these limitations, a security is considered to be issued by the
government entity whose assets and revenues guarantee or back the security. With
respect to private activity bonds or industrial development bonds backed only by
the assets and revenues of a non-governmental user, such user would be
considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets of
the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, except for investments
in funds of The One Group(R), provided that this limitation does not apply to
investments in obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities and repurchase agreements involving such
securities. For purposes of this limitation (i) utilities will be divided
according to their services (for example, gas, gas transmission, electric and
telephone will each be considered a separate industry); and (ii) wholly-owned
finance companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of their
parents.
3. Make loans, except that the Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information. For the investment limitations of the Underlying Funds, see the
applicable prospectuses.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain of the permitted investments for the
Underlying Funds. As described above in "Investment Policies of the
Fund-Permissible Investments," the Fund may also invest directly in certain of
the following instruments for temporary defensive purposes. For a more detailed
description, see the Statement of Additional Information or the prospectuses of
the Underlying Funds.
U.S. TREASURY OBLIGATIONS -- The funds may invest in bills, notes and bonds
issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS") and Coupon Under Book Entry Safekeeping ("CUBES").
RECEIPTS -- The funds may purchase interests in separately traded interest and
principal component parts of U.S. Treasury obligations that are issued by banks
or brokerage firms and are created by depositing U.S. Treasury notes and U.S.
Treasury bonds into a special account at a custodian bank. Receipts include
Treasury Receipts ("TRS"), Treasury Investment Growth Receipts ("TIGRS"), and
Certificates of Accrual on Treasury Securities ("CATS").
CERTIFICATES OF DEPOSIT -- Certificates of deposit ("CDs") are negotiable
interest bearing instruments with a specific maturity. CDs are issued by banks
and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
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TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a time deposit
("TD") earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by (i.e., made an obligation of) a commercial bank.
Maturities are generally six months or less.
COMMERCIAL PAPER -- Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few days to nine months.
U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific types
of activities. Select agencies, such as the Government National Mortgage
Association ("Ginnie Mae") and the Export-Import Bank, are supported by the full
faith and credit of the U.S. Treasury; others, such as the Federal National
Mortgage Association ("Fannie Mae"), are supported by the credit of the
instrumentality and have the right to borrow from the U.S. Treasury; others are
supported by the authority of the U.S. government to purchase the agency's
obligations; while still others, such as the Federal Farm Credit Banks and the
Federal Home Loan Mortgage Corporation ("Freddie Mac"), are supported solely by
the credit of the instrumentality itself. No assurance can be given that the
U.S. government would provide financial support to U.S. government sponsored
agencies or instrumentalities if it is not obligated to do so by law.
Obligations of U.S. government agencies include debt issues and mortgage-backed
securities issued or guaranteed by select agencies.
CORPORATE SECURITIES -- Corporate securities include corporate bonds,
convertible and non-convertible debt securities, and preferred stocks, as well
as commercial paper (short-term promissory notes issued by corporations).
Issuers of corporate bonds and notes are divided into many different categories
by bond market sector, such as electric utilities, gas utilities, telephone
utilities, consumer finance companies, wholesale finance companies and
industrial companies. Within each major category of issuer, there are many
subcategories.
WARRANTS -- Warrants are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of common
stock at a specified price, usually at a price that is higher than the market
price at the time of issuance of the warrant. The right may last for a period of
years or indefinitely.
COMMON STOCK -- Common stock represents a share of ownership in a company and
usually carries voting rights and earns dividends. Unlike preferred stock,
dividends on common stock are not fixed but are declared at the discretion of
the issuer's board of directors.
INVESTMENT COMPANY SECURITIES -- The funds may invest up to 5% of their total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of their assets in the securities of other investment companies.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a person
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. The custodian or
its agent will hold the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 100% of the
repurchase price. The funds bear a risk of loss in the event the other party
defaults on its obligations and the funds are delayed or prevented from their
right to dispose of the collateral securities or if the funds realize a loss on
the sale of the collateral securities.
REVERSE REPURCHASE AGREEMENTS -- The funds may borrow funds for temporary
purposes by entering into reverse repurchase agreements. Pursuant to such
agreements, the funds would sell portfolio securities to financial institutions
such as banks and broker-dealers, and agree to repurchase them at a mutually
agreed-upon date and price. The funds will enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time the funds enter into a reverse
repurchase agreement, they would place liquid high grade debt securities having
a value equal to the repurchase price (including accrued interest), in a
segregated custodial account and would subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the funds may
decline below the price at which the funds are obligated to repurchase the
securities.
DEMAND FEATURES -- The funds may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount at a fixed price (usually with accrued interest) within a fixed
period (usually seven days) following a demand by the funds. The purpose of
engaging in transactions involving puts is to maintain flexibility and liquidity
to permit the funds to meet redemption requests and remain as fully invested as
possible.
ASSET-BACKED SECURITIES -- Asset-backed securities consist of securities secured
by company receivables, home equity loans, truck and auto loans, leases, credit
card receivables and other securities backed by other types of receivables or
other assets. These securities are generally pass-through securities, which
means that principal and
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interest payments on the underlying securities (less servicing fees) are passed
through to shareholders on a pro rata basis. These securities involve prepayment
risk, which is the risk that the underlying debt will be refinanced or paid off
prior to their maturities during periods of declining interest rates. In that
case, a portfolio manager may have to reinvest the proceeds from the securities
at a lower rate. Potential market gains on a security subject to prepayment risk
may be more limited than potential market gains on a comparable security that is
not subject to prepayment risk. Under certain interest rate and prepayment rate
scenarios, the funds may fail to recoup fully their investment in asset-backed
securities. Asset-backed securities are commonly considered to be derivatives.
SHORT-TERM FUNDING AGREEMENTS -- The funds may, in order to enhance yield, make
limited investments in short-term funding agreements issued by banks and highly
rated insurance companies. Short-term funding agreements issued by insurance
companies are sometimes referred to as Guaranteed Investment Contracts ("GICs"),
while those issued by banks are referred to as Bank Investment Contracts
("BICs"). Pursuant to such agreements, the funds make cash contributions to a
deposit account at a bank or insurance company. The bank or insurance company
then credits to the funds on a monthly basis guaranteed interest at either a
fixed, variable or floating rate. These contracts are general obligations of the
issuing bank or insurance company and are paid from the general assets of the
issuing entity. The funds will purchase short-term funding agreements only from
banks and insurance companies which, at the time of purchase, are rated "A" or
the equivalent by at least one NRSRO and have assets of $1 billion or more.
Generally, there is no active secondary market in short-term funding agreements.
SECURITIES OF FOREIGN ISSUERS -- The funds may invest in securities of foreign
issuers to achieve income or capital appreciation. The funds also may invest in
commercial paper of foreign issuers and obligations of foreign branches of U.S.
banks, U.S. and London branches of foreign banks, and supranational entities
which are established through the joint participation of several governments
(e.g., the Asian Development Bank and the Inter-American Development Bank).
Securities of foreign issuers may include sponsored and unsponsored American
Depository Receipts ("ADRs"), which are securities typically issued by a U.S.
financial institution that evidence ownership interests in a pool of securities
issued by a foreign issuer. ADRs include American Depository Shares and New York
Shares. There may be less information available on the foreign issuers of
unsponsored ADRs than on the issuers of sponsored ADRs.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The funds may acquire
securities representing an interest in a pool of mortgage loans that are issued
or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac. Mortgage-backed
securities may also be issued by non-governmental entities and may or may not
have private insurer guarantees of timely payments. The funds also may invest in
mortgage-backed securities issued by non-government entities, which consist of
Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage Investment
Conduits ("REMICs"). Mortgage-backed securities are in most cases "pass-through"
instruments, through which the holder receives a share of all interest and
principal payments from the mortgages underlying the certificate. Because the
prepayment characteristics of the underlying mortgages vary, it is not possible
to predict accurately the average life or realized yield of a particular issue
of pass-through certificates. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected to
accelerate. When the mortgage obligations are prepaid, the funds may have to
reinvest in securities with a lower yield. Moreover, prepayment of mortgages
which underlie securities purchased at a premium could result in capital losses.
STRIPPED MORTGAGE-BACKED SECURITIES -- The funds may, to enhance revenues or
hedge against interest rate risk, invest in stripped mortgage-backed securities
("SMBS"), which are derivative multiclass mortgage securities. The funds may
only invest in SMBS issued or guaranteed by the U.S. government, its agencies or
instrumentalities. SMBS are usually structured with two classes that receive
different proportions of the interest and principal distributions from a pool of
mortgage assets. A common type of SMBS will have one class receiving all of the
interest from the mortgage assets ("IOs"), while the other class will receive
all of the principal ("POs"). If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the funds may fail to fully
recoup their initial investments in these securities. Although the market for
such securities is increasingly liquid, certain SMBS may not be readily
marketable and will be considered illiquid for purposes of the funds'
limitations on investments in illiquid securities. The market value of the Class
A consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates.
MORTGAGE DOLLAR ROLLS -- The funds may enter into mortgage "dollar rolls" in
which the funds sell securities for delivery in the current month and
simultaneously contract with the same counterpart to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The funds benefit to the extent of any difference between the price
received for the securities sold and the lower forward price for the future
purchase (often referred to as the "drop") or fee income plus the interest
earned on the cash proceeds of the securities sold until the settlement date of
the forward purchase. Unless such benefits exceed the income, capital
appreciation and gain or loss due to mortgage prepayments that would have been
realized on the securities sold as part of the mortgage dollar roll, the use of
this technique will diminish the investment performance of the funds compared
with what such performance would have been without the use of mortgage dollar
rolls.
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FIXED RATE MORTGAGE LOANS -- Generally, fixed rate mortgage loans eligible for
inclusion in a mortgage pool will bear simple interest at fixed annual rates and
have original terms to maturity ranging from 5 to 40 years. The funds may invest
in fixed rate mortgage loans that are privately issued and are not issued or
guaranteed by the U.S. government.
SECURITIES LENDING -- In order to generate additional income, the funds may lend
up to 33% of the securities in which they are invested pursuant to agreements
requiring that the loan be continuously secured by cash, securities of the U.S.
government or its agencies, 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 will continue to receive interest on the securities lent while
simultaneously seeking to earn interest on the investment of cash collateral in
U.S. government securities, shares of an investment trust or mutual fund, or
other short-term, highly liquid investments. Collateral is marked to market
daily to provide a level of collateral at least equal to the market value of the
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 only be made to borrowers deemed by the Advisor
to be of good standing under guidelines established by the Trust's Board of
Trustees and when, in the judgment of the Advisor, the consideration which can
be earned currently from such securities loans justifies the attendant risk. The
funds will enter into loan arrangements only with counterparties which the
Advisor has deemed to be creditworthy under guidelines established by the Board
of Trustees. Loans are subject to termination by the funds or the borrower at
any time, and are therefore, not considered to be illiquid investments.
RESTRICTED SECURITIES -- The funds may invest in commercial paper issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under Federal securities law and is generally sold to institutional
investors, such as the funds, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the funds may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate changes. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND FORWARD COMMITMENTS -- The funds
may purchase securities on a when-issued basis when deemed by the Advisor to
present attractive investment opportunities. When-issued securities are
purchased for delivery beyond the normal settlement date at a stated price and
yield, thereby involving the risk that the yield obtained will be less than that
available in the market at delivery. When the Advisor purchases a when-issued
security, the Custodian will set aside cash or liquid securities to satisfy the
purchase commitment. The funds generally will not pay for such securities or
earn interest on them until received. In a forward commitment transaction, the
funds contract to purchase securities for a fixed price at a future date beyond
customary settlement time. The funds are required to hold and maintain in a
segregated account until the settlement date, cash, U.S. government securities
or liquid high-grade debt obligations in an amount sufficient to meet the
purchase price. Alternatively, the funds may enter into offsetting contracts for
the forward sale of other securities that they own. The purchase of securities
on a when-issued or forward commitment basis involves a risk of loss if the
value of the security to be purchased declines prior to the settlement date.
OPTIONS -- The funds may purchase and write (i.e., sell) call options and put
options on securities and indices, which options are traded on national
securities exchanges. A call option gives the purchaser the right to buy, and
obligates the writer of the option to sell, the underlying security at the
agreed upon exercise (or "strike") price during the option period. A put option
gives the purchaser the right to sell, and obligates the writer to buy, the
underlying security at the strike price during the option period. There are
risks associated with options transactions, including the following: (i) the
success of a hedging strategy may depend on the ability of the Advisor to
predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be an imperfect or no
correlation between the changes in market value of the securities held by the
funds and the prices of options; (iii) there may not be a liquid secondary
market for options; and (iv) while the funds will receive a premium when they
write covered call options, they may not participate fully in a rise in the
market value of the underlying security. It is expected that the funds will only
engage in option transactions with respect to permitted investments and related
indices.
FUTURES CONTRACTS AND RELATED OPTIONS -- Certain of the funds may enter into
futures contracts, options on futures contracts, index futures and options
thereon that are traded on an exchange regulated by the Commodities Futures
Trading Commission ("CFTC") if, to the extent that such futures and options are
not for "bona fide hedging purposes" (as defined by the CFTC), the aggregate
initial margin and premiums on such positions (excluding the amount by which
options are in the money) do not exceed 5% of the funds' total assets at current
value. Options and futures can be volatile instruments, and involve certain
risks. If the Advisor applies a hedge at an inappropriate time or judges
interest rates incorrectly, options and futures strategies may lower a fund's
return. The funds could also experience losses if the prices of their options
and futures positions were poorly correlated with their other instruments, or if
they could not close out its positions because of an illiquid secondary market.
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SWAPS, CAPS AND FLOORS -- In order to protect the value of the funds from
interest rate fluctuations and to hedge against fluctuations in the floating
rate market in which the funds' investments are traded, the funds may enter into
swaps, caps, and floors on various securities (such as U.S. government
securities), securities indexes, interest rates, prepayment rates, foreign
currencies or other financial instruments or indexes, for both hedging and
non-hedging purposes. Swap contracts typically involve an exchange of
obligations by two sophisticated parties. For example, in an interest rate swap,
a fund may exchange with another party their respective rights to receive
interest, such as an exchange of fixed rate payments for floating rate payments.
Currency swaps involve the exchange of respective rights to make or receive
payments in specified currencies. Mortgage swaps are similar to interest rate
swaps in that they represent commitments to pay and receive interest. The
notional principal amount, however, is tied to a reference pool or pools of
mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles the
purchaser to receive a principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and floors are similar in many respects to over-the-counter options
transactions, and may involve investment risks that are similar to those
associated with options transactions and options on futures contracts.
NEW FINANCIAL PRODUCTS -- New options and futures contracts and other financial
products, and various combinations thereof, continue to be developed and the
funds may invest in any such options, contracts and products as may be developed
to the extent consistent with their investment objective, policies and
restrictions and the regulatory requirements applicable to investment companies.
These various products may be used to adjust the risk and return characteristics
of the funds' portfolio of investments. These various products may increase or
decrease exposure to security prices, interest rates, commodity prices, or other
factors that affect security values, regardless of the issuer's credit risk. If
market conditions do not perform consistent with expectations, the performance
of the funds would be less favorable than it would have been if these products
were not used. In addition, losses may occur if counterparties involved in
transactions do not perform as promised. These products may expose the funds to
potentially greater return as well as potentially greater risk of loss than more
traditional fixed-income investments.
STRUCTURED INSTRUMENTS -- Structured instruments are debt securities issued by
agencies or instrumentalities of the U.S. government (such as Sallie Mae, Ginnie
Mae, Fannie Mae, and Freddie Mac), banks, municipalities, corporations, and
other business entities whose interest and/or principal payments are indexed to
certain specific foreign currency exchange rates, interest rates, or one or more
other reference indices. Structured instruments frequently are assembled in the
form of medium-term notes, but a variety of forms are available. Structured
instruments are commonly considered to be derivatives. While structured
instruments may offer the potential for a favorable rate of return from time to
time, they also entail certain risks. Structured instruments may be less liquid
than other debt securities, and the price of structured instruments may be more
volatile. If the value of the reference index changes in a manner other than
that expected by the Advisor, principal and/or interest payments on the
structured instrument may be substantially less than expected. In addition,
although structured instruments may be sold in the form of a corporate debt
obligation, they may not have some of the protection against counterparty
default that may be available with respect to publicly traded debt securities
(i.e., the existence of a trust indenture).
MUNICIPAL SECURITIES -- Municipal Securities are issued by a state or political
subdivision to obtain funds for various public purposes. Municipal securities
are generally classified as "general obligation" bonds and "revenue" bonds.
General obligation bonds are obligations involving the credit of an issuer
possessing taxing power and are payable from the issuer's general unrestricted
revenues. Revenue bonds are payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other specific revenue source. Revenue bonds are not
payable from the issuer's general revenues. The funds also may purchase
short-term tax-exempt General Obligation Notes, Tax Anticipation Notes, Bond
Anticipation Notes, Revenue Anticipation Notes, Project Notes, and other forms
of short-term tax-exempt obligations. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements, or other revenues.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal bankruptcy code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on and principal of its municipal
securities may be materially adversely affected by litigation or other
conditions. Such litigation or conditions may from time to time have the effect
of introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a fund's municipal
securities in the same manner. In addition, the Internal Revenue Code of 1986,
as amended (the "Code") imposes certain continuing requirements on issuers of
tax-exempt bonds regarding the use, expenditure and investment of bond proceeds
and the payment of rebates to the United States of America. Failure by the
issuer to
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comply subsequent to the issuance of tax-exempt bonds with certain of these
requirements could cause interest on the bonds to become includable in gross
income retroactive to the date of issuance.
INVERSE FLOATING RATE INSTRUMENTS -- The funds may seek to increase yield by
investing in leveraged inverse floating rate debt instruments ("inverse
floaters"). The interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse floater is
indexed. An inverse floater may be considered to be leveraged to the extent that
its interest rate varies by a magnitude that exceeds the magnitude of the change
in the index rate of interest. The higher degree of leverage inherent in inverse
floaters is associated with greater volatility in their market values.
Accordingly, the duration of an inverse floater may exceed its stated final
maturity.
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated A-1+
are those with an "overwhelming degree" of credit protection. Those rated A-1
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2 reflect a high degree of safety regarding timely payment but not as high as
A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality, respectively, on
the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor.
Paper rated Duff-2 is regarded as having good certainty of timely payment, good
access to capital markets and sound liquidity factors and company fundamentals.
Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
STANDARD & POOR'S RATING SERVICES
Investment Grade
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree. Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
Bonds rated BBB by S&P are regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher categories.
PROSPECTUS
29
<PAGE> 118
Non-Investment Grade
Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB rated
category is also used for debt subordinated to senior debt that is assigned an
actual or implied BBB rating.
Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
Bonds rated CCC have currently identifiable vulnerability to default, and are
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, they are not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
The rating CC typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating.
The rating C typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.
The rating C1 is reserved for income bonds on which no interest is being paid.
Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless Standard & Poor believes
that such payments will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or minus (-). Ratings from AA to CCC may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
MOODY'S INVESTOR SERVICE, INC.
Investment Grade
Bonds that are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present that make the
long-term risks appear somewhat larger than in Aaa securities. Bonds that are
rated A possess many favorable investment attributes and are to be considered as
upper-medium grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Bonds that are rated Baa by Moody's are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity of the issuers of securities rated BBB or Baa to make
principal and interest payments than is the case with higher grade securities.
Non-Investment Grade
Bonds rated Ba are more uncertain and have speculative elements. The protection
of interest and principal payments is not well safeguarded during good and bad
times. Bonds rated B lack the characteristics of a desirable investment (i.e.,
potentially low assurance of timely interest and principal payments or
maintenance of other contract terms over time).
Bonds rated Caa have poor standing and may be in default. These bonds carry an
element of danger with respect to principal and interest payments. Bonds rated
Ca are speculative to a high degree and could be in default or have other marked
shortcomings. C is the lowest rating. Bonds in this category have extremely poor
prospects of ever attaining investment standing.
PROSPECTUS
30
<PAGE> 119
Unrated securities will be treated as non-investment grade securities unless the
Advisor determines that such securities are the equivalent of investment grade
securities. Securities that have received different ratings from more than one
agency are considered investment grade if at least one agency has rated the
security investment grade.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
Moody's highest rating for state, municipal and other short-term notes is MIG-1
and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of the
best quality. They have strong protection from established cash flows of funds
for their servicing or from established and broad-based access to the market for
refinancing or both. Short-term municipal securities rated MIG-2 and VMIG-2 are
of high quality. Margins of protection are ample although not so large as in the
preceding group.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
- - Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
- - Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MISCELLANEOUS
The Trust believes that as of April 9, 1997, BANC ONE CORPORATION (100 East
Broad Street, Columbus, OH 43271), through its affiliates, owned of record
substantially all the Fiduciary Class shares of the Fund. The Trust believes
that as of the same date, BANC ONE CORPORATION, through its affiliates,
possessed on behalf of its underlying accounts, voting or investment power with
respect to 93.28% of Fiduciary Class shares of the Fund.
As a consequence, BANC ONE CORPORATION may be deemed to be a controlling person
of the Fiduciary Class shares of the Fund under the Investment Company Act of
1940.
The Trust believes that as of April 9, 1997, the following shareholders owned
25% or more of the shares of the Funds.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE TYPES OF
FUND SHAREHOLDER & ADDRESS OWNERSHIP OWNERSHIP
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Investor Growth & Income Fund Dean Witter for the Benefit of 30.80% Record
Class A Superior Carpet Installers, Inc.
1027 E. Georgia
Indianapolis, IN 46202-3925
</TABLE>
As a consequence, the aforementioned person may be deemed to be a controlling
person of the Class A shares of the Fund under the Investment Company Act of
1940.
PERFORMANCE
From time to time, the Fund may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of the Fund refers to the
annualized income generated by an investment in the Fund over a specified 30-day
period. The yield is calculated by assuming that the income generated by the
investment during that period is generated over a one-year period and is shown
as a percentage of the investment.
Total return is the change in value of an investment in the Fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results.
PROSPECTUS
31
<PAGE> 120
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of the Fund. This figure is
then "annualized" (multiplied by 365 days and divided by the applicable number
of days in the period). Funds with a front-end sales charge would incorporate
the offering price into the distribution yield in place of month-end net asset
value.
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return and
is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of shares of the Fund in any
advertisement or information including performance data for the Fund. The
performance for Fiduciary Class shares may be higher than for Class A, Class B
and Class C shares because Fiduciary Class shares are not subject to sales
charges and distribution expenses.
The performance of each class of the Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that may
assume investment of dividends but do not reflect deductions for administrative
and management costs. In addition, the performance of each class of the Fund may
be compared to other funds or to relevant indices that may calculate total
return without reflecting sales charges; in which case, the Fund may advertise
its total return in the same manner. If reflected, sales charges would reduce
these total return calculations.
TAXES
The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
advisors regarding specific questions as to the tax consequences of investing in
the Fund.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other funds. The Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders of
each class of shares of the Fund on at least an annual basis. Generally,
dividends from net investment income will be taxable to Shareholders as ordinary
income whether received in cash or in additional shares, and any net capital
gains will be distributed at least annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares.
Distributions by the Fund to retirement plans that qualify for tax-exempt
treatment under the Code ("qualified retirement plans") will not be taxable. The
Federal tax treatment of qualified retirement plans, as well as distributions
from such plans, is governed by specific provisions of the Code. If shares are
held by a retirement plan that ceases to qualify for tax-exempt treatment under
the Code or by an individual who has received such shares as a distribution from
a retirement plan, the Fund's distributions will be taxable to such plan or
individual as described in the preceding paragraph. Persons considering
directing the investment of their qualified retirement plan account in the Fund
and qualified retirement plan trusts considering purchasing such shares, should
consult their tax advisors for a more complete explanation of the Federal tax
consequences, and for an explanation of the state, local and (if applicable)
foreign tax consequences of making such an investment.
The Fund will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Fund (such as STRIPS, CUBES, TRS, TIGRS and
CATS), as defined in the "Description of Permitted Investments," are sold at
original issue discount and thus do not make periodic cash interest payments.
The Fund will be required to include as part of its current income the imputed
interest on such obligations even though the Fund has not received any interest
payments on such obligations during that period. Because the Fund distributes
substantially all of its net investment income to its Shareholders (including
such imputed interest), the Fund may have to sell portfolio securities in order
to generate the cash necessary for the required distributions. Such sales may
occur at a time when the Advisor would not have chosen to sell such securities
and may result in a taxable gain or loss.
PROSPECTUS
32
<PAGE> 121
Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in such a month will be deemed to
have been paid by the Fund and received by Shareholders on December 31 of that
year, if paid by the Fund at any time during the following January.
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Fund's investments
in U.S. government obligations may not be entitled to the exemptions from state
and local income taxes that would be available if the Shareholder had purchased
U.S. government obligations directly. The Fund will inform Shareholders annually
of the percentage of income and distributions derived from U.S. government
obligations. Shareholders should consult their tax advisors regarding the state
and local tax treatment of the dividends received from the Fund.
The Fund may be subject to foreign withholding taxes on income derived from
obligations of foreign issuers. The Fund will not be able to elect to treat
Shareholders as having paid their proportionate share of such foreign taxes.
Sale, exchange or redemption of Fund shares by a Shareholder will generally be a
taxable event to such Shareholder.
PROSPECTUS
33
<PAGE> 122
Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
1111 Polaris Parkway
2nd Floor, Suite 100
Columbus, OH 43271-0211
Distributor
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TOG-F-126
<PAGE> 123
THE ONE GROUP(R)
FAMILY OF MUTUAL FUNDS
June , 1997
THE ONE GROUP(R) INVESTOR CONSERVATIVE GROWTH FUND
Investment Advisor: BANC ONE INVESTMENT ADVISORS CORPORATION
The One Group(R) (the "Trust") is a mutual fund seeking to provide a convenient
and economical means of investing in one or more professionally managed
portfolios of securities. This Prospectus relates to The One Group(R) Investor
Conservative Growth Fund Class A, Class B, Class C and Fiduciary Class shares.
THE ONE GROUP(R) INVESTOR CONSERVATIVE GROWTH FUND (THE "FUND") SEEKS INCOME AND
CAPITAL APPRECIATION BY INVESTING PRIMARILY IN A DIVERSIFIED GROUP OF ONE
GROUP(R) MUTUAL FUNDS WHICH INVEST PRIMARILY IN FIXED INCOME AND EQUITY
SECURITIES.
Class A, Class B, and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors.
Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodian or similar capacities (each an
"Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT OR
ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. BANC ONE
INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUND FOR INVESTMENT
ADVISORY AND OTHER SERVICES.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated November 1, 1996, as amended June , 1997, has been filed
with the Securities and Exchange Commission and is available without charge
through the Distributor, The One Group(R) Services Company, 3435 Stelzer Road,
Columbus, OH 43219 or by calling 1-800-480-4111 during business hours. The
Statement of Additional Information is incorporated into this Prospectus by
reference. The Securities and Exchange Commission maintains a Web Site
(http://www.sec.gov.) that contains the Statement of Additional Information,
material incorporated by reference, and other information regarding The One
Group(R).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS
<PAGE> 124
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY.............................................................................. 3
ABOUT THE FUND....................................................................... 5
Expense Summary.................................................................... 5
The Fund........................................................................... 8
Investment Objective............................................................... 8
Investment Policies of the Fund.................................................... 8
Description of the Underlying Funds................................................ 9
Risk Factors....................................................................... 12
HOW TO DO BUSINESS WITH THE ONE GROUP(R)............................................. 13
How to Invest in The One Group..................................................... 13
Contingent Deferred Sales Charge................................................... 17
Exchanges.......................................................................... 19
Redemptions........................................................................ 20
FUND MANAGEMENT...................................................................... 21
The Advisor........................................................................ 21
The Distributor.................................................................... 22
The Administrator.................................................................. 23
The Transfer Agent and Custodian................................................... 23
Counsel and Independent Accountants................................................ 23
OTHER INFORMATION.................................................................... 23
The Trust.......................................................................... 23
Other Investment Policies.......................................................... 24
Description of Permitted Investments............................................... 25
Description of Ratings............................................................. 30
Performance........................................................................ 32
Taxes.............................................................................. 33
</TABLE>
PROSPECTUS
2
<PAGE> 125
SUMMARY
The One Group(R) (the "Trust") is an open-end management investment company that
provides a convenient way to invest in professionally managed portfolios of
securities. The following provides basic information about the Class A, Class B,
Class C and Fiduciary Class shares of The One Group(R) Investor Conservative
Growth Fund.
WHAT IS THE INVESTMENT OBJECTIVE? The Fund seeks income and capital
appreciation by investing primarily in a diversified group of One Group mutual
funds which invest primarily in fixed income and equity securities. See
"Investment Objective." Shares of the Fund are available to tax advantaged
retirement accounts and other persons investing for long-term investment
purposes. The Fund should not be used for short-term trading purposes. There is
no assurance that the Fund will achieve its investment objective.
WHAT ARE THE PERMITTED INVESTMENTS? The Fund offers Shareholders a
professionally-managed investment program by purchasing shares of existing
mutual funds of The One Group(R) (the "Underlying Funds"), which are managed by
Banc One Investment Advisors Corporation (the "Advisor"). The Fund will invest
20% to 40% of its assets in Underlying Funds which invest primarily in equity
securities, 60% to 80% in Underlying Funds which invest primarily in
fixed-income securities, and up to 10% in Money Market Funds. The Fund will
normally allocate its assets among the Underlying Funds according to the
Advisor's outlook for the economy, financial markets and relative market
valuation of the Underlying Funds. The Advisor may vary the allocation within
the above ranges. There is no assurance that the Fund will achieve its stated
objective.
WHAT ARE THE CHARACTERISTICS OF THE UNDERLYING FUNDS? The Underlying Funds in
which the Fund will invest have the following characteristics:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERLYING FUND TYPE OF INVESTMENTS
<S> <C>
-------------------------------------------------------------------------------------------------
The One Group(R) Prime Money Market Fund............................... Money Market
The One Group(R) Limited Volatility Bond Fund.......................... Fixed Income
The One Group(R) Intermediate Bond Fund................................ Fixed Income
The One Group(R) Income Bond Fund...................................... Fixed Income
The One Group(R) Government Bond Fund.................................. Fixed Income
The One Group(R) Ultra Short-Term Income Fund.......................... Fixed Income
The One Group(R) Disciplined Value Fund................................ Equity
The One Group(R) International Equity Index Fund....................... Equity
The One Group(R) Large Company Growth Fund............................. Equity
The One Group(R) Large Company Value Fund.............................. Equity
The One Group(R) Growth Opportunities Fund............................. Equity
The One Group(R) Value Growth Fund..................................... Equity
The One Group(R) Gulf South Growth Fund................................ Equity
The One Group(R) Income Equity Fund.................................... Equity
The One Group(R) Equity Index Fund..................................... Equity
</TABLE>
The Fund's net asset value will fluctuate with changes in the equity and bond
markets and the value of the Underlying Funds in which it invests. The Fund's
investment return is diversified by its investment in the Underlying Funds which
invest in growth and income stocks, foreign securities, debt securities, and
cash and cash equivalents. See page 6 for a complete description of the
Underlying Funds and page 23 for other investment policies.
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation, an indirect
subsidiary of BANC ONE CORPORATION, serves as the Advisor of the Trust. The
Advisor is entitled to a fee for advisory services provided to the Trust. The
Advisor may voluntarily agree to waive a part of its fees. See "The Advisor" and
"Expense Summary."
WHO IS THE ADMINISTRATOR? The One Group(R) Services Company serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Investment Advisors Corporation serves as the
Sub-Administrator of the Trust, pursuant to an agreement with the Administrator
for which Banc One Investment Advisors Corporation receives a fee paid by the
Administrator. See "The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust, for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
WHO IS THE DISTRIBUTOR? The One Group(R) Services Company acts as Distributor
of the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A, Class B and Class C shares. No compensation is paid to
the Distributor for the distribution services for the Fiduciary Class shares of
the Fund. See "The Distributor."
PROSPECTUS
3
<PAGE> 126
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Distributor on any day that the New York Stock Exchange is open for
trading ("Business Days"). See "How to Invest in The One Group (R)" and
"Redemptions."
HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is determined and declared monthly and
is distributed in the form of monthly dividends to Shareholders of the Fund on
the first Business Day of each month. Any capital gains are distributed at least
annually. Distributions are paid in additional shares of the same class unless
the Shareholder elects to take the payment in cash. See "Dividends."
PROSPECTUS
4
<PAGE> 127
ABOUT THE FUND
EXPENSE SUMMARY -- THE ONE GROUP(R) INVESTOR CONSERVATIVE GROWTH FUND
<TABLE>
<CAPTION>
FIDUCIARY
CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)............................................... 4.50% none none none
Maximum Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds, as
applicable)(2)................................................ none 5.00% 1.00% none
Redemption Fees................................................. none none none none
Exchange Fees................................................... none none none none
ANNUAL OPERATING EXPENSES (as a percentage of average daily net
assets)
Investment Advisory Fees(3)..................................... .01% .01% .01% .01%
12b-1 Fees (after fee waiver)(4)................................ .25% 1.00% 1.00% none
Other Expenses(5)............................................... .19% .19% .19% .19%
- ---------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES(6)..................................... .45% 1.20% 1.20% .20%
- ---------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more of Class A shares and is not
assessed a sales charge at the time of purchase, will be assessed a sales
charge equivalent to 1% of the purchase price if such purchaser redeems any
or all of the Class A shares prior to the first anniversary of purchase.
(3) Investment Advisory fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Absent this voluntary reduction,
Investment Advisory fees would be .05% for all classes of shares.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plan, 12b-1 fees (as a percentage of average daily net
assets) would be .35% for Class A shares. The 12b-1 fees include a
Shareholder servicing fee of .25% of average daily net assets of the Fund's
Class B and Class C shares and may include a Shareholder servicing fee of
.25% of the average daily net assets of the Fund's Class A shares. See "The
Distributor".
(5) Other Expenses have been revised to reflect fee waivers and reimbursements
effective as of the date of this Prospectus. Absent this voluntary waiver
and reimbursement, Other Expenses would be .29%.
(6) Absent the voluntary reduction of fees, Total Operating Expenses would be
.69% for Class A Shares, 1.34% for Class B Shares, 1.34% for Class C Shares,
and .34% for Fiduciary Class Shares.
The Fund will indirectly bear its pro rata share of fees and expenses incurred
by the Underlying Funds, and the investment returns of the Fund will be net of
the expenses of the Underlying Funds. The following chart provides the expense
ratio for each of the Underlying Funds in which the Fund invests (based on the
current Underlying Fund prospectus). Certain of these expense ratios may include
a voluntary reduction of investment advisory fees.
PROSPECTUS
5
<PAGE> 128
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME OF UNDERLYING FUND EXPENSE RATIO
<S> <C>
-----------------------------------------------------------------------------------------------
The One Group(R) Prime Money Market Fund...................................... .50%
The One Group(R) Limited Volatility Bond Fund................................. .62%
The One Group(R) Intermediate Bond Fund....................................... .67%
The One Group(R) Income Bond Fund............................................. .61%
The One Group(R) Government Bond Fund......................................... .69%
The One Group(R) Ultra Short-Term Income Fund................................. .60%
The One Group(R) Disciplined Value Fund....................................... 1.00%
The One Group(R) International Equity Index Fund.............................. 1.36%
The One Group(R) Large Company Growth Fund.................................... .99%
The One Group(R) Large Company Value Fund..................................... .98%
The One Group(R) Growth Opportunities Fund.................................... 1.00%
The One Group(R) Value Growth Fund............................................ 1.05%
The One Group(R) Gulf South Growth Fund....................................... 1.06%
The One Group(R) Income Equity Fund........................................... 1.01%
The One Group(R) Equity Index Fund............................................ .39%
</TABLE>
After combining the total operating expenses of the Fund with those of the
Underlying Funds, the estimated average weighted expense ratio for Class A
Shares is 1.17%, for Class B Shares is 1.92%, for Class C shares is 1.92%, and
for Fiduciary Class shares is .92%.
On the basis of these estimated expenses, the following example illustrates the
expenses an investor would pay on a $1,000 investment in Class A and Fiduciary
Class shares of the Fund, assuming: (1) imposition of the maximum sales charge
for Class A shares; (2) 5% annual return; and (3) redemption at the end of each
time period.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Class A $ 56 $ 80 $106 $ 181
Fiduciary Class $ 19 $ 29 $ 51 $ 113
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Class A $ 60 $ 91 $125 $ 220
Fiduciary Class $ 12 $ 38 $ 65 $ 144
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class B shares,
assuming: (1) deduction of the applicable maximum Contingent Deferred Sales
Charge; and (2) 5% annual return.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Assuming a complete redemption at end of period $ 69 $ 90 $124 $ 205
Assuming no redemption $ 19 $ 60 $104 $ 205
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Assuming a complete redemption at end of period $ 72 $ 99 $137 $ 236
Assuming no redemption $ 22 $ 69 $117 $ 236
</TABLE>
PROSPECTUS
6
<PAGE> 129
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class C shares of
the Fund, assuming: (1) imposition of the maximum sales charge for Class C
shares and (2) 5% annual return.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Assuming a complete redemption at end of period $ 29 $ 60 $104 $ 187
Assuming no redemption $ 19 $ 60 $104 $ 187
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Assuming a complete redemption at end of period $ 32 $ 69 $117 $ 221
Assuming no redemption $ 22 $ 69 $117 $ 221
</TABLE>
Class B and Class C shares automatically convert to Class A shares after eight
(8) and six (6) years, respectively. Therefore, the "10 Years" examples above
reflect the effect of such conversion.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
purpose of these tables is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Trust.
The rules of the Securities and Exchange Commission require that the maximum
sales load be reflected in the above tables. However, Shareholders in the Fund
may, under certain circumstances, qualify for reduced sales charges. See "How to
Invest in The One Group(R)." Long-term Shareholders of Class A, Class B, and
Class C shares may pay more than the equivalent of the maximum front-end sales
charges otherwise permitted by the National Association of Securities Dealers'
Rules.
PROSPECTUS
7
<PAGE> 130
THE FUND
The One Group(R) Investor Conservative Growth Fund ( the "Fund") is part of The
One Group(R) (the "Trust"), which is an open-end management investment company
that offers shares in 40 separate funds and different classes of certain of the
funds. The Trust was organized as a Massachusetts Business Trust on May 23,
1985. This Prospectus relates to Class A, Class B, Class C, and Fiduciary Class
shares of The One Group(R) Investor Conservative Growth Fund, a diversified
open-end management investment company. Each class of shares provides for
variations in distribution costs, voting rights, dividends and per share net
asset value pursuant to a multiple class plan (the "Multiple Class Plan")
adopted by the Board of Trustees of the Trust. Except for these differences
between classes, each share of the Fund represents an undivided, proportionate
interest in the Fund. The Information regarding the Trust's other funds and
their classes is contained in separate prospectuses which may be obtained from
the Trust's Distributor, The One Group(R) Services Company, 3435 Stelzer Road,
Columbus, OH 43219, or by calling 1-800-480-4111.
INVESTMENT OBJECTIVE
The Fund seeks capital appreciation and income by investing primarily in a
diversified group of One Group(R) mutual funds which invest primarily in fixed
income and equity securities. Current income is a secondary objective.
The investment objective of the Fund is fundamental and may not be changed
without a vote of the holders of a majority of the Fund's outstanding shares (as
defined in the Statement of Additional Information).
There is no assurance that the Fund will meet its investment objective.
INVESTMENT POLICIES OF THE FUND
The investment policies of the Fund may be changed without an affirmative vote
of the holders of a majority of the Fund's outstanding shares unless a policy is
expressly deemed to be fundamental. Shareholders will be notified of any
material change in the Fund's investment policies.
PERMISSIBLE INVESTMENTS
The Fund will invest 20% to 40% of its total assets in nine Underlying Funds of
The One Group(R) which invest primarily in equity securities, 60% to 80% of its
total assets in five Underlying Funds of The One Group(R) which invest primarily
in fixed income securities, and up to 10% of its total assets in one money
market fund of The One Group(R). The Fund will invest its assets in the
Underlying Funds, within the ranges indicated below.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT RANGE
INVESTOR CONSERVATIVE GROWTH FUND (PERCENT OF FUND ASSETS)
<S> <C>
------------------------------------------------------------------------------------------------
The One Group(R) Prime Money Market Fund............................ 0 - 10%
The One Group(R) Limited Volatility Bond Fund....................... 0 - 70%
The One Group(R) Intermediate Bond Fund............................. 0 - 70%
The One Group(R) Income Bond Fund................................... 0 - 70%
The One Group(R) Government Bond Fund............................... 0 - 70%
The One Group(R) Ultra Short-Term Income Fund....................... 0 - 70%
The One Group(R) Disciplined Value Fund............................. 0 - 10%
The One Group(R) International Equity Index Fund.................... 0 - 10%
The One Group(R) Large Company Growth Fund.......................... 0 - 20%
The One Group(R) Large Company Value Fund........................... 0 - 20%
The One Group(R) Growth Opportunities Fund.......................... 0 - 10%
The One Group(R) Value Growth Fund.................................. 0 - 20%
The One Group(R) Gulf South Growth Fund............................. 0 - 10%
The One Group(R) Income Equity Fund................................. 0 - 20%
The One Group(R) Equity Index Fund.................................. 0 - 20%
</TABLE>
The allocation of the Fund's assets among the Underlying Funds will be made by
the Advisor under the supervision of the Trust's Board of Trustees, within the
percentage ranges set forth in the table above.
The Fund and the Underlying Funds are permitted for temporary defensive purposes
to invest up to 100% of their assets in short-term fixed income securities. Such
securities include obligations of the U.S. Government and its agencies and
instrumentalities; commercial paper, bank certificates of deposit, repurchase
agreements, bankers acceptances, variable amount master demand notes and bank
money market deposit accounts. The Fund and the Underlying Funds may also hold
cash or cash equivalents for liquidity purposes.
PROSPECTUS
8
<PAGE> 131
To the extent the Fund or the Underlying Funds are engaged in a temporary
defensive position, they will not be pursuing their investment objective.
DESCRIPTION OF THE UNDERLYING FUNDS
The following is a brief description of the principal investment policies of the
Underlying Funds. Additional investment practices are described in "Investment
Policies of the Underlying Funds," the Statement of Additional Information and
the prospectus for each of the Underlying Funds.
THE ONE GROUP(R) INTERNATIONAL EQUITY INDEX FUND
The One Group(R) International Equity Index Fund is an equity fund. The
objective of the fund is to provide investment results that correspond to the
aggregate price and dividend performance of the securities in the Gross Domestic
Product Weighted Morgan Stanley Capital International Europe, Australia and Far
East Index ("MSCI EAFE GDP Index" or "EAFE GDP Index").((1)) Under normal
conditions, the fund will invest substantially all of its assets in foreign
securities and at least 65% of the value of its total assets in foreign equity
securities, consisting of common stocks (including sponsored and unsponsored
American Depository Receipts ("ADRs")) and preferred stocks, securities
convertible into common stocks (only if they are listed on registered exchanges
or actively traded in the over-the-counter market), warrants and depository
receipts for such securities of issuers located in at least three different
countries. In attempting to duplicate the capital performance and dividend
income of the MSCI EAFE GDP Index, the fund will normally invest in the stocks
which comprise the Index and secondarily in stock index futures. It is expected
that cash reserve items normally will not exceed 10% of the fund's net assets.
The Fund may invest up to 10% of its net assets in securities of emerging
international markets such as Mexico, Brazil and Chile. A substantial portion of
the fund's assets will be denominated in foreign currencies.
THE ONE GROUP(R) LARGE COMPANY GROWTH FUND
The One Group(R) Large Company Growth Fund seeks long-term capital appreciation
and growth of income by investing primarily in equity securities. To achieve its
objective, the fund will, under normal market conditions, invest substantially
all, but in no event less than 65%, of the value of its total assets in equity
securities consisting of common stocks, warrants and any rights to purchase
common stocks. The weighted average capitalization of the companies in which the
fund invests will under normal market conditions always be in excess of the
market median capitalization of the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index").((2)) The fund may invest the remainder of its assets in
any combination of nonconvertible fixed income securities, repurchase
agreements, options and futures contracts.
THE ONE GROUP(R) LARGE COMPANY VALUE FUND
The One Group(R) Large Company Value Fund is an equity fund that seeks capital
appreciation with the incidental goal of achieving current income by investing
primarily in equity securities. The fund will invest in equity securities of
companies that are believed to be selling below their long-term intrinsic
investment values. Companies held will typically be large capitalization issuers
with current price/earnings and/or price/book ratios which are lower than that
of the general market as measured by the S&P 500 Index. In addition, the fund
may invest in stock of companies which have been analyzed to have breakup values
well in excess of current market values or which have uniquely undervalued
corporate assets. The general approach to purchasing stocks will emphasize
individual security selection. Macroeconomic data and industry profit forecasts
will be utilized to gauge the best sectors of the economy in which to be
positioned.
Under normal market conditions, the fund will invest at least 80% of the value
of its total assets in equity securities consisting of common stocks and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The remainder of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) GROWTH OPPORTUNITIES FUND
The One Group(R) Growth Opportunities Fund seeks growth of capital and,
secondarily, current income by investing primarily in equity securities. The
fund will invest in issues which are identified and selected based on the
potential to produce above-average earnings growth per share over a one-to-three
year period. It is expected that issuers will generally include established
companies with a history of above-average growth or companies that are expected
to enter
- ---------------
(1) "MSCI EAFE GDP Index" is a registered service mark of Morgan Stanley Capital
International, which does not sponsor and is in no way affiliated with the
fund.
(2) "Standard & Poor's 500" is a registered trademark of Standard & Poor's
Corporation, which does not sponsor and is in no way affiliated with the
fund.
PROSPECTUS
9
<PAGE> 132
periods of above-average growth, and smaller companies which are positioned in
emerging growth industries. The fund may invest in securities listed on a stock
exchange as well as those traded over-the-counter. At least 80% of the value of
the fund's total assets will, under normal conditions, be invested in equity
securities consisting of common stocks and debt securities and preferred stocks
that are convertible into common stocks. The fund also may enter into options
and futures transactions. The remainder of the fund's assets will be held in
cash equivalents.
THE ONE GROUP(R) VALUE GROWTH FUND
The One Group(R) Value Growth Fund seeks long-term capital growth and growth of
income while, as a secondary objective providing a moderate level of current
income. The fund pursues its objectives by investing primarily in a portfolio of
common stocks, debt securities, preferred stocks, convertible securities,
warrants, and other equity securities of companies that show the potential for
growth of earnings over time. Stock selection is guided by current valuation
relative to a stock's historical valuation and relative to the Advisor's
estimates of future growth of earnings and dividends. Accordingly, the Fund may
emphasize securities of companies that the Advisor believes are overlooked or
undervalued by investors, which fact should contribute to an increase in the
market value of the security over time.
The fund will ordinarily invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents.
THE ONE GROUP(R) GULF SOUTH GROWTH FUND
The One Group(R) Gulf South Growth Fund seeks long-term capital growth by
investing in a portfolio of equity securities of small-capitalization, emerging
growth and medium capitalization companies, which are either headquartered in or
whose primary market is in the southeastern region of the United States. The
fund invests primarily in a portfolio of common stocks, debt securities,
preferred stocks, convertible securities, warrants and other equity securities
of such companies. The Advisor anticipates that the fund's portfolio will
normally consist of securities of approximately twenty-five to sixty emerging
growth companies from Virginia, North Carolina, South Carolina, Florida,
Georgia, Tennessee, Alabama, Mississippi, Arkansas, Louisiana, Kentucky and
Texas. It is expected that companies selected would generally have market
capitalizations ranging from $50,000,000 to $2,000,000,000, although the fund
may occasionally hold securities of companies whose market capitalizations are
considerably larger if doing so contributes to the fund's investment objective.
The fund will normally invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents, when the Advisor's
assessment of the attractiveness of the entire stock market and individual
market sectors changes.
Because the fund is non-diversified, its share price may be subject to greater
fluctuations as a result of changes in an issuer's financial condition or the
market's assessment of an individual issuer. In addition, smaller, less seasoned
companies may be subject to greater business risk than larger, established
companies.
THE ONE GROUP(R) INCOME EQUITY FUND
The One Group(R) Income Equity Fund seeks current income through regular payment
of dividends with the secondary goal of achieving capital appreciation by
investing primarily in equity securities. The fund will make investments in an
attempt to keep its yield above the S&P 500 Index. Achieving such a yield will
be the primary consideration in selecting securities. Investments will be made
in common stocks of corporations which regularly pay dividends, although
continued payment of dividends cannot be assured. The fund will invest primarily
in stocks with favorable, long-term fundamental characteristics, but stocks of
companies that are out of favor in the financial community may also be
purchased.
The fund will under normal conditions invest at least 80% of the value of its
total assets in equity securities consisting of common stocks, and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) EQUITY INDEX FUND
The One Group(R) Equity Index Fund seeks investment results that correspond to
the aggregate price and dividend performance of the securities on the S&P 500
Index. The fund will, in attempting to duplicate the capital performance and
dividend income of the S&P 500 Index, normally invest in many of the stocks
which comprise the S&P 500 Index and secondarily in stock index futures. Cash
reserves will not normally exceed 10% of the fund's net assets.
The Advisor generally selects stocks for the fund in the order of their
weightings in the S&P 500 Index beginning with the heaviest weighted stocks. The
percentage of the fund's assets to be invested in each stock is approximately
the same as the percentage it represents in the S&P 500 Index. From time to
time, administrative adjustments may be made in the
PROSPECTUS
10
<PAGE> 133
fund because of changes in the composition of the S&P 500 Index, but such
changes should be infrequent. The fund will attempt to achieve a correlation
between the performance of its portfolio and that of the S&P 500 Index of at
least 0.95, without taking into account expenses. A correlation of 1.00 would
indicate perfect correlation, which would be achieved when the fund's net asset
value, including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the S&P 500 Index.
THE ONE GROUP(R) PRIME MONEY MARKET FUND
The One Group(R) Prime Money Market Fund seeks current income with liquidity and
stability of principal. The fund intends to comply with the regulations of the
Securities and Exchange Commission applicable to money market funds using the
amortized cost method for calculating net asset value. These regulations impose
certain quality, maturity and diversification restraints on investments by the
fund. Under these regulations, the fund will invest only in U.S. dollar-
denominated securities, will maintain an average maturity on a dollar-weighted
basis of 90 days or less, and will acquire only "eligible securities" that
present minimal credit risks and have a maturity of 397 days or less.
THE ONE GROUP(R) DISCIPLINED VALUE FUND
The One Group(R) Disciplined Value Fund seeks capital appreciation with the
secondary goal of achieving current income by investing primarily in equity
securities. The fund will invest in equity securities with below-market average
price-to-earnings and price-to-book value ratios. The issuer's soundness and
earnings prospects will also be considered. Although capital appreciation is the
primary purpose for investing in the security, all common stocks must be paying
a current dividend to shareholders to be eligible for purchase. While the
Advisor may sell fund securities in its discretion at any time, it is unlikely
to move toward elimination of the fund's holdings of a stock when the Advisor
determines that there is a fundamental change that impairs a company's ability
to pay dividends, or if the company's 12-month earnings per share comparison is
declining.
The fund will, under normal conditions, invest at least 80% of the value of its
total assets in equity securities consisting of common stocks and debt
securities and preferred stocks that are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
The One Group(R) Limited Volatility Bond Fund seeks current income consistent
with preservation of capital through investment in high and medium-grade
fixed-income securities. The fund will normally invest at least 80% of total
assets in debt securities of all types with short to intermediate maturities.
Under normal market conditions, it is anticipated that the fund's average
weighted maturity will range between one and five years. At least 65% of the
fund's total assets will consist of bonds rated in one of the three highest
rating categories by at least one nationally recognized statistical rating
organization ("NRSRO") at the time of investment, or, if unrated, determined by
the Advisor to be of comparable quality. In addition, at least 65% of total
assets will consist of obligations issued by the U.S. government or its agencies
and instrumentalities, some of which may be subject to repurchase agreements.
The fund also may purchase taxable or tax-exempt municipal securities. Up to 20%
of the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INTERMEDIATE BOND FUND
The One Group(R) Intermediate Bond Fund seeks current income consistent with the
preservation of capital through investments in high and medium-grade
fixed-income securities with intermediate maturities. The fund will normally
invest at least 80% of total assets in debt securities of all types. Under
normal market conditions, it is anticipated that the fund's average weighted
maturity will range between three and ten years. At least 65% of the fund's
total assets will consist of bonds rated in one of the three highest rating
categories by at least one NRSRO at the time of investment or, if unrated,
determined by the Advisor to be of comparable quality. However, the Advisor
reserves the right to invest in more speculative debt securities if they present
attractive opportunities and are rated in the fourth highest rating category by
at least one NRSRO at the time of investment or, if unrated, determined by the
Advisor to be of comparable quality. In addition, at least 50% of total assets
will consist of obligations issued by the U.S. government or its agencies and
instrumentalities, some of which may be subject to repurchase agreements. The
fund also may purchase taxable or tax-exempt municipal securities. Up to 20% of
the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INCOME BOND FUND
The One Group(R) Income Bond Fund seeks a high level of current income by
investing primarily in a diversified portfolio of high, medium and low grade
debt securities. The fund will normally invest at least 70% of total assets in
debt securities of all types rated in one of the four highest rating categories
("investment grade") by at least one NRSRO at the time of investment or, if
unrated, determined by the Advisor to be of comparable quality. In addition, up
to 30% of the fund's total assets may be invested in convertible securities,
preferred stock, loan participations and debt securities rated below
PROSPECTUS
11
<PAGE> 134
investment grade. Securities rated below investment grade are called "high
yield" and "junk bonds." Under normal market conditions, it is anticipated that
the fund's average weighted maturity will range between five and twenty years.
As a matter of fundamental policy, at least 65% of the fund's total assets will
consist of bonds. The fund may also purchase taxable or tax-exempt municipal
securities.
THE ONE GROUP(R) GOVERNMENT BOND FUND
The One Group(R) Government Bond Fund seeks a high level of current income with
liquidity and safety of principal. The fund seeks to achieve its objective
principally through investment in securities issued by the U.S. government and
its agencies and instrumentalities. At least 65% of the total assets of the fund
will be invested in obligations guaranteed as to principal and interest by the
U.S. government or its agencies and instrumentalities, some of which may be
subject to repurchase agreements, and other securities representing an interest
in or collateralized by mortgages that are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. The balance of the fund's assets
may be invested in debt securities and taxable or tax-exempt municipal
securities. The average weighted remaining maturity of the fund is expected to
be between three and fifteen years.
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
The One Group(R) Ultra-Short Term Income Fund seeks a high level of current
income consistent with low volatility of principal by investing in a diversified
portfolio of short-term investment grade securities. The fund will normally
invest at least 80% of its total assets in debt securities of all types,
including money market instruments. In addition, up to 20% of the fund's total
assets may be invested in other securities, including preferred stock. The fund
will invest in adjustable rate mortgage pass-through securities and other
securities representing an interest in or collateralized by mortgages with
periodic interest rate resets, some of which may be subject to repurchase
agreements. These securities often are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. However, the fund also may
purchase mortgage-backed securities that are issued by non-governmental
entities. Such securities may or may not have private insurer guarantees as to
timely payments. The fund also may purchase mortgage and interest rate swaps and
interest rate floors and caps. The fund also may employ other investment
techniques to enhance returns, such as loans of fund securities, mortgage dollar
rolls, repurchase agreements, options contracts and reverse repurchase
agreements.
The Fund will maintain a maximum duration of approximately two years. Under
normal interest rate conditions, the Fund's actual duration is expected to be in
a range of approximately six months to one year.
RISK FACTORS
The investments of the Fund are concentrated in the Underlying Fund, so the
Fund's investment performance is directly related to the performance of the
Underlying Funds. In addition, as a matter of fundamental policy, the Fund must
allocate its investments among the Underlying Funds within certain ranges. As a
result, the Fund does not have the same flexibility to invest as a mutual fund
without such constraints.
The Fund may invest in Underlying Funds which invest in medium or lower grade
bonds. If these bonds are downgraded, the Advisor will consider whether to
increase or decrease the Fund's investment in the affected Underlying Fund.
Further, the Fund may invest in Underlying Funds which concentrate their assets
in certain industries. Under certain circumstances, this could result in the
Fund being concentrated in those industries. If this were to occur, the Advisor
would consider whether to maintain or change the Fund's investments in such
Underlying Funds.
SPECIAL RISKS OF INVESTING IN EQUITY FUNDS
Changes in the value of an equity fund's portfolio securities will not affect
cash income, if any, derived from these securities but will affect the fund's
net asset value. Because equity funds invest primarily in equity securities,
which fluctuate in value, the funds' shares also will fluctuate in value. In
addition, certain investment management techniques that the funds may use, such
as the purchase and sale of futures, options and forward commitments, could
expose the funds to potentially greater risk of loss than more traditional
equity investments.
SPECIAL RISKS OF INVESTING IN FIXED-INCOME FUNDS
The market value of a fund's fixed-income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed-income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these
PROSPECTUS
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<PAGE> 135
investments. Except under condition of default, changes in the value of
fixed-income securities will not affect cash income derived from these
securities but will affect the funds' net asset value.
SPECIAL RISKS OF INVESTING IN INDEX FUNDS
Because of the funds' investment objectives, securities may be purchased,
retained and sold by the funds when such transactions would not be consistent
with traditional investment criteria. Accordingly, an investor is exposed to a
greater risk of loss (and a correspondingly greater prospect of gain) from
fluctuations in the value of such securities than would be the case if the funds
were not fully invested in such securities. In addition, the Advisor may
eliminate one or more securities or elect not to increase the funds' position in
such securities notwithstanding the continued listing of such securities on the
relevant index in the following circumstances: (i) the stock is no longer
publicly traded; or (ii) an unexpected adverse development occurs with respect
to a company such as bankruptcy or insolvency. As a result of these risk
factors, the share price of an index fund is expected to be volatile, and
investors should be able to sustain sudden, sometimes substantial, fluctuations
in the value of their investment.
SPECIAL RISKS OF INVESTING IN FOREIGN SECURITIES
Investments in securities of foreign issuers involve risks that are different
from investments in securities of U.S. issuers. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls, higher transaction costs, and
delayed settlements of transactions. Securities of some foreign companies are
less liquid, and their prices more volatile, than securities of comparable U.S.
companies. Additionally, there may be less public information available about
foreign issuers. Finally, since the funds may invest in securities denominated
in foreign currencies, changes in exchange rates may affect the value of
investments in the funds.
SPECIAL RISKS OF INVESTING IN SMALL CAPITALIZATION COMPANIES
Smaller, less seasoned companies may be subject to greater business risk than
larger, established companies. They may be more vulnerable to changes in
economic conditions, specific industry conditions, market fluctuations and other
factors affecting the profitability of companies. Therefore, the stock price of
smaller capitalization companies may be subject to greater price fluctuations
than that of larger, established companies. Due to these and other risk factors,
the price movement of the securities held by the funds may be volatile and the
net asset value of shares of the funds may fluctuate.
SPECIAL RISKS OF INVESTING IN MORTGAGE-RELATED SECURITIES
Some of the funds invest in mortgage-related securities, such as mortgage-backed
securities, adjustable rate mortgage loans ("ARMs"), fixed rate mortgage loans,
and mortgage dollar rolls. The investment characteristics of mortgage-related
securities differ from traditional debt securities. These differences can result
in significantly greater price and yield volatility than is the case with
traditional fixed-income securities. The major differences typically include
more frequent interest and principal payments, usually monthly, the
adjustability of interest rates, and the possibility that prepayments of
principal may be made at any time. Prepayment rates are influenced by changes in
current interest rates and a variety of economic, geographic, social, and other
factors. During periods of declining interest rates, prepayment rates can be
expected to accelerate. Under certain interest rate and prepayment rate
scenarios, a fund may fail to recoup fully its investment in mortgage-related
securities notwithstanding a direct or indirect governmental or agency
guarantee. The funds intend to use hedging techniques to control this risk. In
general, changes in the rate of prepayments on a mortgage-related security will
change that security's market value and its yield to maturity. When interest
rates fall, high prepayments could force a fund to reinvest principal at a time
when investment opportunities are not attractive. Thus, mortgage-related
securities may not be an effective means for a fund to lock in long-term
interest rates. Conversely, during periods when interest rates rise, slow
prepayments could cause the average life of the security to lengthen and the
value to decline more than anticipated.
HOW TO DO BUSINESS WITH THE ONE GROUP(R)
HOW TO INVEST IN THE ONE GROUP(R)
Shares of the Fund are sold on a continuous basis and may be purchased directly
from the Trust's Distributor, The One Group(R) Services Company, by mail, by
telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor, or through a broker-dealer that has
established a dealer agreement with the Distributor.
Purchases and redemptions of shares of the Fund may be made on any day that the
New York Stock Exchange is open for trading ("Business Days"). The minimum
initial and subsequent investments in the Fund are $1,000 and $100 respectively
($100 and $25, respectively, for employees of BANC ONE CORPORATION and its
affiliates). Initial and
PROSPECTUS
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<PAGE> 136
subsequent investment minimums may be waived at the Distributor's discretion.
Investors may purchase up to a maximum of $250,000 of Class B and Class C shares
per individual purchase order.
Class A, Class B and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors. Fiduciary Class shares are offered to
institutional investors, including affiliates of BANC ONE CORPORATION and any
bank, depository institution, insurance company, pension plan or other
organization authorized to act in fiduciary, advisory, agency, custodial or
similar capacities (each an "Authorized Financial Organization"). For additional
details regarding eligibility, call the Distributor at 1-800-480-4111.
BY MAIL
Investors may purchase Class A, Class B and Class C shares of the Fund by
completing and signing an Account Application Form and mailing it, along with a
personal check (or other negotiable bank instrument or money order) payable to
"The One Group(R),", the Fund, The One Group Services Company, or State Street
Bank and Trust Company (the Trust's Transfer Agent and Custodian), to the
Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500. If the purchase order is
to be credited to a Fund Direct IRA, the check should be payable to State Street
Bank and Trust Company for the benefit of the Shareholder. Subsequent purchases
of shares may be made at any time by mailing a personal check to the Transfer
Agent. Account Application Forms are available through the Distributor by
calling 1-800-480-4111. All purchases made by check should be in U.S. dollars.
Third party checks will not be accepted. When purchases are made by check or
under the Systematic Investment Plans (see below), redemptions will not be
allowed until the investment being redeemed has been in the Fund for 10 calendar
days.
Purchases of Fiduciary Class shares, and Class A, Class B and Class C shares
that are being offered to investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, are made by an
institutional investor and/or other intermediary on behalf of an investor (each
also a "Shareholder Servicing Agent"). The Shareholder Servicing Agent may
require an investor to complete forms in addition to the Account Application
Form and to follow procedures established by the Shareholder Servicing Agent.
Such Shareholders should contact their Shareholder Servicing Agents regarding
purchases, exchanges and redemptions of shares. See "Additional Information
Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible to
make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agents, if applicable.
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
SYSTEMATIC INVESTMENT PLAN
Class A, Class B and Class C investors may make automatic monthly investments in
the Fund from their bank, savings and loan or other depository institution
accounts. The minimum initial investment must be $1000 and subsequent
investments must be $25 under the Systematic Investment Plan, which minimum may
be reduced at the discretion of the Distributor. The Trust pays the costs
associated with these transfers, but reserves the right, upon thirty days'
written notice, to impose reasonable charges for this service. A depository
institution may impose a charge for debiting an investor's account which would
reduce the investor's return from an investment in the Fund.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which the Fund may be an
appropriate investment. The Trust's retirement plan allows participants to defer
taxes while helping them build their retirement savings.
The One Group(R) Fund-Direct IRA is a retirement plan with a wide choice of
investments offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A, Class B
and Class C shares, and the investor could be liable for any fees or expenses
incurred by the Trust. Federal funds are monies credited to a bank's account
with a Federal Reserve Bank. The purchase price of
PROSPECTUS
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<PAGE> 137
shares of the Fund is the net asset value next determined after a purchase order
is effected plus any applicable sales charge (the "offering price"). The net
asset value per share of the Fund is determined by dividing the total market
value of the Fund's investments and other assets allocable to a class, less any
liabilities allocable to that class, by the total number of outstanding shares
of such class. Net asset value per share is determined daily as of 4:00 p.m.,
eastern time, on each Business Day. For a further discussion of the calculation
of net asset value, see the Statement of Additional Information. Shares may also
be issued in transactions involving the acquisition by the Fund of securities
held by collective investment funds sponsored and administered by affiliates of
the Advisor. Purchases will be made in full and fractional shares of the Fund
calculated to three decimal places. Although the methodology and procedures are
identical, the net asset value per share of classes within the Fund may differ
because the distribution expenses charged to Class A, Class B, and Class C
shares are not charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the Trust's
Transfer Agent nor the Trust will be responsible for any loss, liability, cost
or expense for acting upon telephone or wire instructions, and the investor will
bear all risk of loss. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If such procedures are not
employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans, and Class A, Class B and Class C shares offered to IRA
account participants and investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, will normally be
held in the name of the Shareholder Servicing Agent effecting the purchase on
the Shareholder's behalf, and it is the Shareholder Servicing Agent's
responsibility to transmit purchase orders to the Distributor. A Shareholder
Servicing Agent may impose an earlier cut-off time for receipt of purchase
orders directed through it to allow for processing and transmittal of these
orders to the Distributor for effectiveness the same day. The Shareholder should
contact his or her Shareholder Servicing Agent for information as to the
Shareholder Servicing Agent's procedures for transmitting purchase, exchange or
redemption orders to the Trust. A Shareholder who desires to transfer the
registration of shares beneficially owned by him or her, but held of record by a
Shareholder Servicing Agent, should contact the Shareholder Servicing Agent to
accomplish such change. Other Shareholders who desire to transfer the
registration of their shares should contact the Transfer Agent.
No certificates representing shares of the Fund will be issued. In
communications to Shareholders, the Fund will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
SALES CHARGE
CLASS A SHARES
The following table shows the initial sales charge on Class A shares to a
"single purchaser" (defined below) together with the sales charge reallowed to
financial institutions and intermediaries (the "commission"):
<TABLE>
<CAPTION>
SALES CHARGE
SALES CHARGE AS APPROPRIATE COMMISSION
AS A PERCENTAGE OF AS A
PERCENTAGE OF NET AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- --------------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
less than $100,000....................................... 4.50% 4.71% 4.05%
$100,000 but less than $250,000.......................... 3.50% 3.53% 3.05%
$250,000 but less than $500,000.......................... 2.50% 2.36% 2.05%
$500,000 but less than $1,000,000........................ 2.00% 2.04% 1.60%
$1,000,000 or more....................................... 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial institutions
and intermediaries. Under certain circumstances, the Distributor will use its
own funds to compensate financial institutions and intermediaries in amounts
that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a sales charge is 3.00% of the
offering price (including the commission shown above and additional cash
compensation described below). In addition, the Distributor will, from time to
time and at its own expense, provide promotional incentives to financial
institutions and intermediaries, whose registered representatives have sold or
are expected to sell significant amounts of the shares of the Fund in the form
of payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives to places within or outside
the United States, and additional compensation in an amount up to 1.00% of the
offering price of Class A shares of the Fund for sales of $1 million to $5
million, and 0.50% for sales over $5 million. A Shareholder who purchases $1
million or more of Class A shares and is not assessed a sales charge at the time
of purchase, will be assessed a sales charge equivalent to 1% of the purchase
price if such Shareholder redeems any or all of the Class A shares prior to the
first anniversary of purchase.
PROSPECTUS
15
<PAGE> 138
Under certain circumstances, commissions up to the amount of the entire sales
charge will be reallowed to financial institutions and intermediaries, which
might then be deemed to be "underwriters" under the Securities Act of 1933.
RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class A
shares, a "single purchaser" is entitled to cumulate current purchases with the
current value at the offering price of previously purchased Class A, Class B,
and Class C shares of the Fund and other eligible funds of the Trust, other than
the Trust's money market funds, that are sold subject to a comparable sales
charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), and including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their minor
children, and give the age of such children. The Fund may amend or terminate
this right of accumulation at any time as to subsequent purchases.
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds
that impose a comparable sales charge over the next 13 months, the sales charge
may be reduced by completing the Letter of Intent section of the Account
Application Form. The Letter of Intent includes a provision for a sales charge
adjustment depending on the amount actually purchased within the 13-month
period. In addition, pursuant to a Letter of Intent, the Custodian will hold in
escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of investment, which
is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000 in
Class A shares of one (or more) of the funds of the Trust that imposes a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. The investor would
pay an initial sales charge of 2.00% (the sales charge applicable to purchases
of $250,000) and .50% of the investment (representing the difference between the
2.50% sales charge applicable to purchases of $100,000 and the 2.00% sales
charge already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more in Class A shares under the investor's Letter of
Intent.
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Fund: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired through
the exercise of exchange privileges where a comparable sales charge has been
paid for exchanged shares; (iii) purchased by officers, directors or trustees,
retirees and employees (and their spouses and immediate family members) of the
Trust, of BANC ONE CORPORATION and its subsidiaries and affiliates, of the
Distributor and its subsidiaries and affiliates, of the Custodian and Transfer
Agent and their subsidiaries and affiliates, of broker-dealers who have entered
into dealer agreements with the Trust and their subsidiaries and affiliates, or
of an investment sub-advisor of a fund of the Trust and such sub-advisor's
subsidiaries and affiliates; (iv) sold to affiliates of BANC ONE CORPORATION and
certain accounts (other than Individual Retirement Accounts) for which
Authorized Financial Organizations act in fiduciary, advisory, agency, custodial
or similar capacities, or purchased by investment advisors, financial planners
or other intermediaries who have a dealer arrangement with the Distributor, who
place trades for their own accounts or for the accounts of their clients and who
charge a management, consulting or other fee for their services, as well as
clients of such investment advisors, financial planners or other intermediaries
who place trades for their own accounts if the accounts are linked to the master
account of such investment advisor, financial planner or other intermediary; (v)
purchased with proceeds from the recent redemption of Fiduciary Class shares of
a fund of the Trust or acquired in an exchange of Fiduciary Class shares of a
fund for Class A shares of the same fund; (vi) purchased with proceeds from the
recent redemption of shares of a mutual fund (other than a fund of the Trust)
for which a sales charge was paid; (vii) purchased in an Individual Retirement
Account with the proceeds of a distribution from an employee benefit plan,
provided that, at the time of distribution, the employee benefit plan had plan
assets invested in a fund of the
PROSPECTUS
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<PAGE> 139
Trust; (viii) purchased with Trust assets; (ix) purchased in accounts as to
which a bank or broker-dealer charges an asset allocation fee, provided the bank
or broker-dealer has an agreement with the Distributor; (x) directly purchased
with the proceeds of a distribution on a bond for which a BANC ONE CORPORATION
affiliate bank or trust company is the Trustee or Paying Agent; or (xi)
purchased in connection with plans of reorganization of the Fund, such as
mergers, asset acquisitions and exchange offers to which the Fund is a party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi), and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at 1-800-480-4111 to
determine whether they are eligible to purchase shares without paying a sales
charge through the use of proceeds from a recent redemption or distribution as
described above, and to confirm continued availability of these waiver policies
prior to initiating the procedures described in clauses (v), (vi), and (vii).
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES AND CLASS C SHARES
Class B shares are not subject to a sales charge when they are purchased, but
are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the sixth anniversary of purchase. Class C
shares also are not subject to a sales charge when they are purchased, but are
subject to a Contingent Deferred Sales Charge if a Shareholder redeems them
prior to the first anniversary of purchase. When a Shareholder purchases Class B
and Class C shares, the full purchase amount is invested directly in the Fund.
Class B and Class C shares of the Fund are also subject to an ongoing
distribution and Shareholder service fee at an annual rate of 1.00% of the
Fund's average daily net assets as provided in the CDSC Plan (described below
under "The Distributor"). This ongoing fee will cause Class B and Class C shares
to have a higher expense ratio and to pay lower dividends than Class A shares.
Class B shares convert automatically to Class A shares after eight years,
commencing from the end of the calendar month in which the purchase order was
accepted under the circumstances and subject to the qualifications described in
this Prospectus.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of the Class B and Class C shares, such
as the payment of compensation to dealers and agents for selling such shares. A
dealer reallowance of 4.00% of the original purchase price of the Class B shares
and 1.00% of the original purchase price of Class C shares will be paid to
financial institutions and intermediaries.
Class B and Class C Shareholders will pay a Contingent Deferred Sales Charge at
the rates set forth below. The Contingent Deferred Sales Charge is assessed on
an amount equal to the lesser of the then-current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on increases
in net asset value above the initial purchase price. In addition, no charge is
assessed on shares derived from reinvestment of dividends or capital gain
distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the number of years from the time of payment for the purchase of shares until
the time of redemption of such shares. Solely for purposes of determining the
number of years from the time of any payment for the purchase of shares, all
payments during a month are aggregated and deemed to have been made on the first
day of the month.
PROSPECTUS
17
<PAGE> 140
CLASS B SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 5.00%
1-2..................................................................... 4.00%
2-3..................................................................... 3.00%
3-4..................................................................... 3.00%
4-5..................................................................... 2.00%
5-6..................................................................... 1.00%
6-7..................................................................... None
7-8..................................................................... None
</TABLE>
To provide an example, assume you purchased 100 shares at $10 per share (a total
cost of $1,000) and prior to the second anniversary after purchase, the net
asset value per share is $12 and during such time you have acquired 10
additional shares through dividends paid in shares. If you then make your first
redemption of 50 shares (proceeds of $600), 10 shares will not be subject to
charge because you received them as dividends. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds is subject to a Contingent Deferred Sales Charge at a rate
of 4.00% (the applicable rate prior to the second anniversary after purchase).
CLASS C SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 1.00%
After first year........................................................ None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class A
shares in the Shareholder's Fund account (unless the Shareholder elects to have
Class B or Class C shares redeemed first) or shares representing capital
appreciation, next of shares acquired pursuant to reinvestment of dividends and
capital gain distributions, next Class C shares, and finally of other shares
held by the Shareholder for the longest period of time. This method should
result in the lowest possible sales charge.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code) of a
Shareholder or a participant or beneficiary of a qualified retirement plan if
redemption is made within one year of such death or disability; (iii) to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan to a
Shareholder who has attained the age of 70 1/2; or (iv) purchased by investors
in certain retirement plans, such as 401(k) and similar qualified plans. A
Shareholder or his or her representative should contact the Transfer Agent to
determine whether a retirement plan qualifies for a waiver and must notify the
Transfer Agent prior to the time of redemption if such circumstances exist and
the Shareholder is eligible for this waiver. In addition, the following
circumstances are not deemed to result in a "redemption" of Class B shares for
purposes of the assessment of a Contingent Deferred Sales Charge, which is
therefore waived: (i) plans of reorganization of the Fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or (ii)
exchanges for Class B shares of other funds of the Trust as described under
"Exchanges."
CONVERSION FEATURE
Class B shares will automatically convert to Class A shares eight years after
the end of the month in which the shares were purchased and will be subject to
the lower distribution and Shareholder service fees charged to Class A shares.
PROSPECTUS
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<PAGE> 141
Class C shares will convert to Class A shares after six years. Such conversion
will be on the basis of the relative net asset values of the two classes,
without the imposition of any sales charge, fee or other charge. The conversion
is not a taxable event to a Shareholder.
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B and Class C shares in a Shareholder's Fund
account will be considered to be held in a separate sub-account. Each time any
Class B or Class C shares in a Shareholder's Fund account (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B or
Class C shares in the sub-account will also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B or Class C shares
of the funds of the Trust during the eight or six year period, the Trust will
aggregate the holding periods for the shares of each fund of the Trust for
purposes of calculating that eight or six year period. Because the per share net
asset value of the Class A shares may be higher than that of the Class B or
Class C shares at the time of conversion, a Shareholder may receive fewer Class
A shares than the number of Class B or Class C shares converted, although the
dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of the Fund may exchange their shares for Class A
shares of the Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders may exchange their shares for Fiduciary Class shares of the
Fund or for Fiduciary Class shares or Class A shares of another fund of the
Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares of
the Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares, except
as provided below. The Trust does not impose a charge for processing exchanges
of shares. If a Shareholder seeks to exchange Class A shares of a fund that does
not impose a sales charge for Class A shares of a fund that does or the fund
being exchanged into has a higher sales charge, the Shareholder will be required
to pay a sales charge in the amount equal to the difference between the sales
charge applicable to the fund into which the shares are being exchanged and any
sales charges previously paid for the exchanged shares, including any sales
charges incurred on any earlier exchanges of the shares (unless such sales
charge is otherwise waived, as provided in "Other Circumstances"). The exchange
of Fiduciary Class shares for Class A shares also will require payment of the
sales charge unless the sales charge is waived, as provided in "Other
Circumstances."
CLASS B
Class B Shareholders of the Fund may exchange their shares only for Class B
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the newly
acquired Class B shares, the newly acquired Class B shares shall be deemed to
have been issued on the date of receipt of the Shareholder's order to purchase
the outstanding Class B shares of the fund from which the initial exchange was
made.
CLASS C
Class C Shareholders of the Fund may exchange their shares only for Class C
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class C shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class C
shares. The requirements applicable to computing the Contingent Deferred Sales
Charge on the exchange of Class B shares are also applicable to the exchange of
Class C shares.
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the
PROSPECTUS
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<PAGE> 142
Transfer Agent by 4:00 p.m., eastern time, on any Business Day, the exchange
usually will occur on that day. Any Shareholder who wishes to make an exchange
must receive a current prospectus of the fund of the Trust in which he or she
wishes to invest before the exchange will be effected.
The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax advisors for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Fund.
A more detailed description of the above is set forth in the Statement of
Additional Information.
The Trust's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (AT LEAST 30 DAYS APART) from the Fund during
any twelve month period. Notwithstanding these limitations, the Trust reserves
the right to reject any purchase request (including exchange purchases from
other funds of the Trust) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares without charge (except Class B and Class C
shares, as provided above) on any Business Day; shares may ordinarily be
redeemed by mail, by telephone or by wire. All redemption orders are effected at
the net asset value per share next determined for Class A and Fiduciary Class
shares, and at net asset value per share next determined reduced by any
applicable Contingent Deferred Sales Charge for Class B and Class C shares,
after receipt of a valid request for redemption. Payment to Shareholders for
shares redeemed will be made within seven days after receipt by the Transfer
Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in order
to constitute a valid request for redemption. All requests for redemptions from
IRA accounts must be in writing. Redemption request forms may be obtained from
the Transfer Agent by calling (800) 480-4111. All written redemption requests
should be sent to The One Group(R), c/o State Street Bank and Trust Company,
P.O. Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing Agent, if
applicable. The Transfer Agent may require that the signature on the written
request be guaranteed by a commercial bank, a member firm of a domestic stock
exchange, or by a member of the Securities Transfer Association Medallion
Program or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $50,000 worth of shares or less;
(ii) the redemption check is payable to the Shareholder(s) of record; and (iii)
the redemption check is mailed to the Shareholder(s) at the address of record.
The Shareholder may also have the proceeds mailed to a commercial bank account
previously designated on the Account Application Form or by written instruction
to the Transfer Agent or the Shareholder Servicing Agent, if applicable. There
is no charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE OR BY WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
telephone to the Transfer Agent at 1-800-480-4111, provided that the Shareholder
has elected the telephone redemption privilege in writing to the Distributor, or
to the Shareholder Servicing Agent, if applicable. The Transfer Agent may reduce
the amount of a wire redemption payment by its then-current wire redemption
charge, which, as of the date of this Prospectus, is $7.00.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
PROSPECTUS
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SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each, unless the
withdrawal plan is part of a required minimum distribution from an IRA or other
qualified retirement plan. There is no charge for this service. Purchases of
additional Class A shares while the Systematic Withdrawal Plan is in effect are
generally undesirable because a sales charge is incurred whenever purchases are
made.
Pursuant to the Systematic Withdrawal Plan, Class B and Class C Shareholders may
elect to receive, or may designate another person to receive, distributions
provided the distributions are limited to no more than 10% of their account
value annually, determined in the first year as of the date the redemption
request is received by the Transfer Agent, and in subsequent years, as of the
most recent anniversary of that date.
In addition, Shareholders who have attained the age of 70 1/2 may elect to
receive distributions, to the extent that the redemption represents a minimum
required distribution from an Individual Retirement Account or other qualifying
retirement plan.
If the amount of systematic withdrawal exceeds income accrued since the previous
withdrawal under the Systematic Withdrawal Plan, the principal balance invested
will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, the forwarding of proceeds
may be delayed for 10 or more days until payment has been collected for the
purchase of such shares. The Fund intends to pay cash for all shares redeemed.
Due to the relatively high costs of handling small investments, the Fund
reserves the right to redeem, at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in the Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
the Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any of these shares.
Before the Fund exercises its right to redeem such shares and to send the
proceeds to the Shareholder, the Shareholder will be given notice that the value
of the shares in his or her account is less than the minimum amount and will be
allowed 60 days to make an additional investment in the Fund in an amount which
will increase the value of the account to at least $1,000.
See the Statement of Additional Information for examples of when the Trust may
suspend the right of redemption or redeem shares involuntarily if it appears
appropriate to do so in light of the Trust's responsibilities under the
Investment Company Act of 1940.
FUND MANAGEMENT
THE ADVISOR
The Trust and Banc One Investment Advisors Corporation (the "Advisor") have
entered into an investment advisory agreement (the "Advisory Agreement"). Under
the Advisory Agreement, the Advisor makes the investment decisions for the
assets of the Fund and continuously reviews, supervises and administers the
Fund's investment program. The Advisor discharges its responsibilities subject
to the supervision of, and policies established by, the Trustees of the Trust.
The Trust's shares are not deposits or obligations of, or endorsed or guaranteed
by BANC ONE CORPORATION or its bank or non-bank affiliates. The Trust's shares
are not insured or guaranteed by the Federal Deposit Insurance Corporation
("FDIC") or by any other governmental agency or government sponsored agency of
the Federal government or any state.
The Advisor is an indirect, wholly-owned subsidiary of BANC ONE CORPORATION, a
bank holding company incorporated in the state of Ohio. BANC ONE CORPORATION
currently has affiliate banking organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West Virginia and
Wisconsin. In addition, BANC ONE CORPORATION has several affiliates that engage
in data processing, venture capital, investment and merchant banking, and other
diversified services including trust management, investment management,
brokerage, equipment leasing, mortgage banking, consumer finance and insurance.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
The Advisor represents a consolidation of the investment advisory staffs of a
number of bank affiliates of BANC ONE CORPORATION, which have considerable
experience in the management of open-end management investment company
portfolios, including The One Group(R) since 1985 (then known as "The Helmsman
Fund").
PROSPECTUS
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No single person is responsible for managing the assets of the Fund. Rather,
investment decisions for the Fund are made by committee.
The Advisor is entitled to a fee which is calculated daily and paid monthly, at
an annual rate of .05% of the average daily net assets of the Fund. The Advisor
may voluntarily waive all or part of this fee.
The Advisor also serves as investment advisor to each of the Underlying Funds.
As a shareholder of each of the Underlying Funds, the Fund will indirectly bear
its proportionate share of investment advisory fees paid by those funds. The
Underlying Funds pay the Advisor an advisory fee at the following rates:
<TABLE>
<S> <C>
The One Group(R) Prime Money Market Fund............................................... .30%
The One Group(R) Limited Volatility Bond Fund.......................................... .40%
The One Group(R) Intermediate Bond Fund................................................ .40%
The One Group(R) Income Bond Fund...................................................... .40%
The One Group(R) Government Bond Fund.................................................. .45%
The One Group(R) Ultra-Short Term Income Fund.......................................... .30%
The One Group(R) Disciplined Value Fund................................................ .74%
The One Group(R) International Equity Index Fund....................................... .55%
The One Group(R) Large Company Growth Fund............................................. .74%
The One Group(R) Large Company Value Fund.............................................. .74%
The One Group(R) Growth Opportunities Fund............................................. .74%
The One Group(R) Value Growth Fund..................................................... .74%
The One Group(R) Gulf South Growth Fund................................................ .74%
The One Group(R) Income Equity Fund.................................................... .74%
The One Group(R) Equity Index Fund..................................................... .10%
</TABLE>
THE DISTRIBUTOR
The One Group(R) Services Company (the "Distributor"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Fund are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Fund. Currently,
the Distributor has voluntarily agreed to limit payments under the Plan to .25%
of the average daily net assets of Class A shares of the Fund. Up to .25% of the
fees payable under the Plan may be used as compensation for Shareholder services
by the Distributor and/or financial institutions and intermediaries. All such
fees that may be paid under the Plan will be paid pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Distributor may apply these fees toward: (i)
compensation for its services in connection with distribution assistance or
provision of Shareholder services; or (ii) payments to financial institutions
and intermediaries such as banks (including affiliates of the Advisor), savings
and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries, as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class C shares are
subject to a contingent Deferred Sales Charge if such shares are redeemed prior
to the first anniversary of purchase. Class B and Class C shares of the Fund are
subject to an ongoing distribution and Shareholder service fee as provided in
the CDSC Distribution and Shareholder Services Plan (the "CDSC Plan") at an
annual rate of 1.00% of the Fund's average daily net assets, which includes
Shareholder servicing fees of .25% of the Fund's average daily net assets.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of Class B and Class C shares, such as
the payment of compensation to dealers and agents for selling such shares. The
combination of the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees facilitate the ability of the Fund to sell the Class B
and Class C shares without a sales charge being deducted at the time of
purchase.
The Plan and the CDSC Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Fund
also may execute brokerage or other agency transactions through an affiliate of
the Advisor or through the Distributor for which the affiliate or the
Distributor receives compensation. Pursuant to guidelines adopted by the Board
of Trustees of the Trust, any such compensation will be reasonable and fair
compared to compensation received by other brokers in connection with comparable
transactions.
PROSPECTUS
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Fiduciary Class shares of the Fund are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record owner
of shares for the account of its customers may impose separate fees for account
services to its customers.
THE ADMINISTRATOR
The One Group(R) Services Company, (the "Administrator"), a wholly-owned
subsidiary of the BISYS Group, Inc., and the Trust are parties to an
administration agreement relating to the Fund (the "Administration Agreement").
Under the terms of the Administration Agreement, the Administrator is
responsible for providing the Trust with administrative services (other than
investment advisory services), including regulatory reporting and all necessary
office space, equipment, personnel and facilities.
The Advisor also serves as Sub-Administrator to each fund of the Trust, pursuant
to an agreement between the Administrator and the Advisor. Pursuant to this
agreement, the Advisor performs many of the Administrator's duties, for which
the Advisor receives a fee paid by the Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .10% of the Fund's
average daily net assets on the first $500,000,000 in Fund assets, .075% of the
Fund's average daily net assets between $500,000,000 and $1 billion, and .05% of
the Fund's average daily net assets when Fund assets exceed $1 billion.
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust, for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust
Company. Bank One Trust Company receives a fee paid by the Trust.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to offer
separate funds and different classes of each fund. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses.
The Advisor and the Administrator of the Fund each bears all expenses incurred
in connection with the performance of their services as investment advisor and
administrator, respectively, other than the cost of securities (including
brokerage commissions, if any) purchased for the Fund.
As a general matter, as set forth in the Multiple Class Plan, expenses are
allocated to each class of shares of the Fund on the basis of the net asset
value of that class in relation to the net asset value of the Fund. At present,
the only expenses that are allocated to Class A, Class B and Class C shares,
other than in accordance with the relative net asset value of the class, are the
distribution and Shareholder services costs. See "Expense Summary." At present,
no expenses are allocated to Fiduciary Class shares as a class that are not also
borne by the other classes of shares of the Fund in proportion to the relative
net asset value of the shares of such classes.
The organizational expenses of the Fund have been capitalized and are being
amortized in the first five years of the Fund's operations. Such amortization
will reduce the amount of income available for payment as dividends.
PROSPECTUS
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<PAGE> 146
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved contracts under which, as described above, certain
companies provide essential management services to the Trust.
VOTING RIGHTS
As set forth in the Multiple Class Plan, each share held entitles the
Shareholder of record to one vote. Each fund of the Trust will vote separately
on matters relating solely to that fund. In addition, each class of a fund shall
have exclusive voting rights on any matter submitted to Shareholders that
relates solely to that class, and shall have separate voting rights on any
matter submitted to Shareholders in which the interests of one class differ from
the interests of any other class. However, all fund Shareholders will have equal
voting rights on matters that affect all fund Shareholders equally. As a
Massachusetts Business Trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be elected or removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
DIVIDENDS
Net investment income (exclusive of capital gains) is determined and declared
monthly, and is distributed in the form of monthly dividends to Shareholders of
Record on the first Business Day of each month. Capital gains of the Fund, if
any, will be distributed at least annually.
To maintain a relatively even rate of distributions from the Fund rather than
having substantial fluctuations from period to period, the monthly distributions
level from the Fund may be fixed from time to time at rates consistent with the
Advisor's long-term earnings expectations.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B, Class C or Fiduciary Class shares,
as applicable, at the net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in cash. Such election,
or any revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500, and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
Class B shares received as dividends and capital gains distributions at net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares. See "Conversion
Feature."
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution even though
such distribution would, in effect, represent a return of the Shareholder's
investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A, Class B, and Class C shares because of the
distribution expenses charged to Class A, Class B, and Class C shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group (R)
Services Company, 3435 Stelzer Road, Columbus, OH 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
OTHER INVESTMENT POLICIES
PORTFOLIO TURNOVER
Portfolio turnover may vary greatly from year to year as well as within a
particular year. It is presently estimated that the annual portfolio turnover
rate for the Fund will not exceed 80%.
PROSPECTUS
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<PAGE> 147
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed without
the consent of the holders of a majority of the Fund's outstanding shares. The
term "majority of the outstanding shares" means the vote of (i) 67% or more of
the Fund's shares present at a meeting, if more that 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the Fund's outstanding shares, whichever is less.
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities, securities of regulated
investment companies and, if consistent with a Fund's investment objective and
policies, repurchase agreements involving such securities) if as a result more
than 5% of the total assets of a Fund would be invested in the securities of
such issuer or a Fund would own more than 10% of the outstanding voting
securities of such issuer. This restriction applies to 75% of a Fund's assets.
For purposes of these limitations, a security is considered to be issued by the
government entity whose assets and revenues guarantee or back the security. With
respect to private activity bonds or industrial development bonds backed only by
the assets and revenues of a non-governmental user, such user would be
considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets of
the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, except for investments
in funds of The One Group(R), provided that this limitation does not apply to
investments in obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities and repurchase agreements involving such
securities. For purposes of this limitation (i) utilities will be divided
according to their services (for example, gas, gas transmission, electric and
telephone will each be considered a separate industry); and (ii) wholly-owned
finance companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of their
parents.
3. Make loans, except that the Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information. For the investment limitations of the Underlying Funds, see the
applicable prospectuses.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain of the permitted investments for the
Underlying Funds. As described above in "Investment Policies of the
Fund-Permissible Investments," the Fund may also invest directly in certain of
the following instruments for temporary defensive purposes. For a more detailed
description, see the Statement of Additional Information or the prospectuses of
the Underlying Funds.
U.S. TREASURY OBLIGATIONS -- The funds may invest in bills, notes and bonds
issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS") and Coupon Under Book Entry Safekeeping ("CUBES").
RECEIPTS -- The funds may purchase interests in separately traded interest and
principal component parts of U.S. Treasury obligations that are issued by banks
or brokerage firms and are created by depositing U.S. Treasury notes and U.S.
Treasury bonds into a special account at a custodian bank. Receipts include
Treasury Receipts ("TRS"), Treasury Investment Growth Receipts ("TIGRS"), and
Certificates of Accrual on Treasury Securities ("CATS").
CERTIFICATES OF DEPOSIT -- Certificates of deposit ("CDs") are negotiable
interest bearing instruments with a specific maturity. CDs are issued by banks
and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a time deposit
("TD") earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by (i.e., made an obligation of) a commercial bank.
Maturities are generally six months or less.
COMMERCIAL PAPER -- Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few days to nine months.
PROSPECTUS
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U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific types
of activities. Select agencies, such as the Government National Mortgage
Association ("Ginnie Mae") and the Export-Import Bank, are supported by the full
faith and credit of the U.S. Treasury; others, such as the Federal National
Mortgage Association ("Fannie Mae"), are supported by the credit of the
instrumentality and have the right to borrow from the U.S. Treasury; others are
supported by the authority of the U.S. government to purchase the agency's
obligations; while still others, such as the Federal Farm Credit Banks and the
Federal Home Loan Mortgage Corporation ("Freddie Mac"), are supported solely by
the credit of the instrumentality itself. No assurance can be given that the
U.S. government would provide financial support to U.S. government sponsored
agencies or instrumentalities if it is not obligated to do so by law.
Obligations of U.S. government agencies include debt issues and mortgage-backed
securities issued or guaranteed by select agencies.
CORPORATE SECURITIES -- Corporate securities include corporate bonds,
convertible and non-convertible debt securities, and preferred stocks, as well
as commercial paper (short-term promissory notes issued by corporations).
Issuers of corporate bonds and notes are divided into many different categories
by bond market sector, such as electric utilities, gas utilities, telephone
utilities, consumer finance companies, wholesale finance companies and
industrial companies. Within each major category of issuer, there are many
subcategories.
WARRANTS -- Warrants are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of common
stock at a specified price, usually at a price that is higher than the market
price at the time of issuance of the warrant. The right may last for a period of
years or indefinitely.
COMMON STOCK -- Common stock represents a share of ownership in a company and
usually carries voting rights and earns dividends. Unlike preferred stock,
dividends on common stock are not fixed but are declared at the discretion of
the issuer's board of directors.
INVESTMENT COMPANY SECURITIES -- The funds may invest up to 5% of their total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of their assets in the securities of other investment companies.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a person
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. The custodian or
its agent will hold the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 100% of the
repurchase price. The funds bear a risk of loss in the event the other party
defaults on its obligations and the funds are delayed or prevented from their
right to dispose of the collateral securities or if the funds realize a loss on
the sale of the collateral securities.
REVERSE REPURCHASE AGREEMENTS -- The funds may borrow funds for temporary
purposes by entering into reverse repurchase agreements. Pursuant to such
agreements, the funds would sell portfolio securities to financial institutions
such as banks and broker-dealers, and agree to repurchase them at a mutually
agreed-upon date and price. The funds will enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time the funds enter into a reverse
repurchase agreement, they would place liquid high grade debt securities having
a value equal to the repurchase price (including accrued interest), in a
segregated custodial account and would subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the funds may
decline below the price at which the funds are obligated to repurchase the
securities.
DEMAND FEATURES -- The funds may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount at a fixed price (usually with accrued interest) within a fixed
period (usually seven days) following a demand by the funds. The purpose of
engaging in transactions involving puts is to maintain flexibility and liquidity
to permit the funds to meet redemption requests and remain as fully invested as
possible.
ASSET-BACKED SECURITIES -- Asset-backed securities consist of securities secured
by company receivables, home equity loans, truck and auto loans, leases, credit
card receivables and other securities backed by other types of receivables or
other assets. These securities are generally pass-through securities, which
means that principal and interest payments on the underlying securities (less
servicing fees) are passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the underlying debt
will be refinanced or paid off prior to their maturities during periods of
declining interest rates. In that case, a portfolio manager may have to reinvest
the proceeds from the securities at a lower rate. Potential market gains on a
security subject to prepayment risk may be more limited than potential market
gains on a comparable security that is not subject to prepayment risk. Under
certain interest rate and prepayment rate scenarios, the funds may fail to
recoup fully their investment in asset-backed securities. Asset-backed
securities are commonly considered to be derivatives.
PROSPECTUS
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<PAGE> 149
SHORT-TERM FUNDING AGREEMENTS -- The funds may, in order to enhance yield, make
limited investments in short-term funding agreements issued by banks and highly
rated insurance companies. Short-term funding agreements issued by insurance
companies are sometimes referred to as Guaranteed Investment Contracts ("GICs"),
while those issued by banks are referred to as Bank Investment Contracts
("BICs"). Pursuant to such agreements, the funds make cash contributions to a
deposit account at a bank or insurance company. The bank or insurance company
then credits to the funds on a monthly basis guaranteed interest at either a
fixed, variable or floating rate. These contracts are general obligations of the
issuing bank or insurance company and are paid from the general assets of the
issuing entity. The funds will purchase short-term funding agreements only from
banks and insurance companies which, at the time of purchase, are rated "A" or
the equivalent by at least one NRSRO and have assets of $1 billion or more.
Generally, there is no active secondary market in short-term funding agreements.
SECURITIES OF FOREIGN ISSUERS -- The funds may invest in securities of foreign
issuers to achieve income or capital appreciation. The funds also may invest in
commercial paper of foreign issuers and obligations of foreign branches of U.S.
banks, U.S. and London branches of foreign banks, and supranational entities
which are established through the joint participation of several governments
(e.g., the Asian Development Bank and the Inter-American Development Bank).
Securities of foreign issuers may include sponsored and unsponsored American
Depository Receipts ("ADRs"), which are securities typically issued by a U.S.
financial institution that evidence ownership interests in a pool of securities
issued by a foreign issuer. ADRs include American Depository Shares and New York
Shares. There may be less information available on the foreign issuers of
unsponsored ADRs than on the issuers of sponsored ADRs.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The funds may acquire
securities representing an interest in a pool of mortgage loans that are issued
or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac. Mortgage-backed
securities may also be issued by non-governmental entities and may or may not
have private insurer guarantees of timely payments. The funds also may invest in
mortgage-backed securities issued by non-government entities, which consist of
Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage Investment
Conduits ("REMICs"). Mortgage-backed securities are in most cases "pass-through"
instruments, through which the holder receives a share of all interest and
principal payments from the mortgages underlying the certificate. Because the
prepayment characteristics of the underlying mortgages vary, it is not possible
to predict accurately the average life or realized yield of a particular issue
of pass-through certificates. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected to
accelerate. When the mortgage obligations are prepaid, the funds may have to
reinvest in securities with a lower yield. Moreover, prepayment of mortgages
which underlie securities purchased at a premium could result in capital losses.
STRIPPED MORTGAGE-BACKED SECURITIES -- The funds may, to enhance revenues or
hedge against interest rate risk, invest in stripped mortgage-backed securities
("SMBS"), which are derivative multi-class mortgage securities. The funds may
only invest in SMBS issued or guaranteed by the U.S. government, its agencies or
instrumentalities. SMBS are usually structured with two classes that receive
different proportions of the interest and principal distributions from a pool of
mortgage assets. A common type of SMBS will have one class receiving all of the
interest from the mortgage assets ("IOs"), while the other class will receive
all of the principal ("POs"). If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the funds may fail to fully
recoup their initial investment in these securities. Although the market for
such securities is increasingly liquid, certain SMBS may not be readily
marketable and will be considered illiquid for purposes of the funds'
limitations on investments in illiquid securities. The market value of the class
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates.
MORTGAGE DOLLAR ROLLS -- The funds may enter into mortgage "dollar rolls" in
which the funds sell securities for delivery in the current month and
simultaneously contract with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The funds benefit to the extent of any difference between the price
received for the securities sold and the lower forward price for the future
purchase (often referred to as the "drop") or fee income plus the interest
earned on the cash proceeds of the securities sold until the settlement date of
the forward purchase. Unless such benefits exceed the income, capital
appreciation and gain or loss due to mortgage prepayments that would have been
realized on the securities sold as part of the mortgage dollar roll, the use of
this technique will diminish the investment performance of the funds compared
with what such performance would have been without the use of mortgage dollar
rolls.
FIXED RATE MORTGAGE LOANS -- Generally, fixed rate mortgage loans eligible for
inclusion in a mortgage pool will bear simple interest at fixed annual rates and
have original terms to maturity ranging from 5 to 40 years. The funds may invest
in fixed rate mortgage loans that are privately issued and are not issued or
guaranteed by the U.S. government.
SECURITIES LENDING -- In order to generate additional income, the funds may lend
up to 33% of the securities in which they are invested pursuant to agreements
requiring that the loan be continuously secured by cash, securities of the U.S.
government or its agencies, 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 will continue to receive interest on the securities lent while
simultaneously seeking to earn interest on the investment of
PROSPECTUS
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cash collateral in U.S. government securities, shares of an investment trust or
mutual fund, or other short-term, highly liquid investments. Collateral is
marked to market daily to provide a level of collateral at least equal to the
market value of the 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 only be made to borrowers
deemed by the Advisor to be of good standing under guidelines established by the
Trust's Board of Trustees and when, in the judgment of the Advisor, the
consideration which can be earned currently from such securities loans justifies
the attendant risk. The funds will enter into loan arrangements only with
counterparties which the Advisor has deemed to be creditworthy under guidelines
established by the Board of Trustees. Loans are subject to termination by the
funds or the borrower at any time, and are therefore, not considered to be
illiquid investments.
RESTRICTED SECURITIES -- The funds may invest in commercial paper issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under Federal securities law and is generally sold to institutional
investors, such as the funds, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the funds may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate changes. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND FORWARD COMMITMENTS -- The funds
may purchase securities on a when-issued basis when deemed by the Advisor to
present attractive investment opportunities. When-issued securities are
purchased for delivery beyond the normal settlement date at a stated price and
yield, thereby involving the risk that the yield obtained will be less than that
available in the market at delivery. When the Advisor purchases a when-issued
security, the Custodian will set aside cash or liquid securities to satisfy the
purchase commitment. The funds generally will not pay for such securities or
earn interest on them until received. In a forward commitment transaction, the
funds contract to purchase securities for a fixed price at a future date beyond
customary settlement time. The funds are required to hold and maintain in a
segregated account until the settlement date, cash, U.S. government securities
or liquid high-grade debt obligations in an amount sufficient to meet the
purchase price. Alternatively, the funds may enter into offsetting contracts for
the forward sale of other securities that they own. The purchase of securities
on a when-issued or forward commitment basis involves a risk of loss if the
value of the security to be purchased declines prior to the settlement date.
OPTIONS -- The funds may purchase and write (i.e., sell) call options and put
options on securities and indices, which options are traded on national
securities exchanges. A call option gives the purchaser the right to buy, and
obligates the writer of the option to sell, the underlying security at the
agreed upon exercise (or "strike") price during the option period. A put option
gives the purchaser the right to sell, and obligates the writer to buy, the
underlying security at the strike price during the option period. There are
risks associated with options transactions, including the following: (i) the
success of a hedging strategy may depend on the ability of the Advisor to
predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be an imperfect or no
correlation between the changes in market value of the securities held by the
funds and the prices of options; (iii) there may not be a liquid secondary
market for options; and (iv) while the funds will receive a premium when they
write covered call options, they may not participate fully in a rise in the
market value of the underlying security. It is expected that the funds will only
engage in option transactions with respect to permitted investments and related
indices.
FUTURES CONTRACTS AND RELATED OPTIONS -- Certain of the funds may enter into
futures contracts, options on futures contracts, index futures and options
thereon that are traded on an exchange regulated by the Commodities Futures
Trading Commission ("CFTC") if, to the extent that such futures and options are
not for "bona fide hedging purposes" (as defined by the CFTC), the aggregate
initial margin and premiums on such positions (excluding the amount by which
options are in the money) do not exceed 5% of the funds' total assets at current
value. Options and futures can be volatile instruments, and involve certain
risks. If the Advisor applies a hedge at an inappropriate time or judges
interest rates incorrectly, options and futures strategies may lower a fund's
return. The funds could also experience losses if the prices of their options
and futures positions were poorly correlated with their other instruments, or if
they could not close out their positions because of an illiquid secondary
market.
SWAPS, CAPS AND FLOORS -- In order to protect the value of the funds from
interest rate fluctuations and to hedge against fluctuations in the floating
rate market in which the funds' investments are traded, the funds may enter into
swaps, caps, and floors on various securities (such as U.S. government
securities), securities indexes, interest rates, prepayment rates, foreign
currencies or other financial instruments or indexes, for both hedging and
non-hedging purposes. Swap contracts typically involve an exchange of
obligations by two sophisticated parties. For example, in an interest rate swap,
a fund may exchange with another party their respective rights to receive
interest, such as an exchange of fixed rate payments for floating rate payments.
Currency swaps involve the exchange of respective rights to make or receive
payments in specified currencies. Mortgage swaps are similar to interest rate
swaps in that they
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represent commitments to pay and receive interest. The notional principal
amount, however, is tied to a reference pool or pools of mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles the
purchaser to receive a principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and floors are similar in many respects to over-the-counter options
transactions, and may involve investment risks that are similar to those
associated with options transactions and options on futures contracts.
NEW FINANCIAL PRODUCTS -- New options and futures contracts and other financial
products, and various combinations thereof, continue to be developed and the
funds may invest in any such options, contracts and products as may be developed
to the extent consistent with their investment objective, policies and
restrictions and the regulatory requirements applicable to investment companies.
These various products may be used to adjust the risk and return characteristics
of the funds' portfolio of investments. These various products may increase or
decrease exposure to security prices, interest rates, commodity prices, or other
factors that affect security values, regardless of the issuer's credit risk. If
market conditions do not perform consistent with expectations, the performance
of the funds would be less favorable than it would have been if these products
were not used. In addition, losses may occur if counterparties involved in
transactions do not perform as promised. These products may expose the funds to
potentially greater return as well as potentially greater risk of loss than more
traditional fixed-income investments.
STRUCTURED INSTRUMENTS -- Structured instruments are debt securities issued by
agencies or instrumentalities of the U.S. government (such as Sallie Mae, Ginnie
Mae, Fannie Mae, and Freddie Mac), banks, municipalities, corporations, and
other business entities whose interest and/or principal payments are indexed to
certain specific foreign currency exchange rates, interest rates, or one or more
other reference indices. Structured instruments frequently are assembled in the
form of medium-term notes, but a variety of forms are available. Structured
instruments are commonly considered to be derivatives.
While structured instruments may offer the potential for a favorable rate of
return from time to time, they also entail certain risks. Structured instruments
may be less liquid than other debt securities, and the price of structured
instruments may be more volatile. If the value of the reference index changes in
a manner other than that expected by the Advisor, principal and/or interest
payments on the structured instrument may be substantially less than expected.
In addition, although structured instruments may be sold in the form of a
corporate debt obligation, they may not have some of the protection against
counterparty default that may be available with respect to publicly traded debt
securities (i.e., the existence of a trust indenture).
MUNICIPAL SECURITIES -- Municipal Securities are issued by a state or political
subdivision to obtain funds for various public purposes. Municipal securities
are generally classified as "general obligation" bonds and "revenue" bonds.
General obligation bonds are obligations involving the credit of an issuer
possessing taxing power and are payable from the issuer's general unrestricted
revenues. Revenue bonds are payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other specific revenue source. Revenue bonds are not
payable from the issuer's general revenues. The funds also may purchase
short-term tax-exempt General Obligation Notes, Tax Anticipation Notes, Bond
Anticipation Notes, Revenue Anticipation Notes, Project Notes, and other forms
of short-term tax-exempt obligations. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements, or other revenues.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal bankruptcy code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on and principal of its municipal
securities may be materially adversely affected by litigation or other
conditions. Such litigation or conditions may from time to time have the effect
of introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a fund's municipal
securities in the same manner. In addition, the Internal Revenue Code of 1986,
as amended (the "Code") imposes certain continuing requirements on issuers of
tax-exempt bonds regarding the use, expenditure and investment of bond proceeds
and the payment of rebates to the United States of America. Failure by the
issuer to comply subsequent to the issuance of tax-exempt bonds with certain of
these requirements could cause interest on the bonds to become includable in
gross income retroactive to the date of issuance.
INVERSE FLOATING RATE INSTRUMENTS -- The funds may seek to increase yield by
investing in leveraged inverse floating rate debt instruments ("inverse
floaters"). The interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse floater is
indexed. An inverse floater may be considered to be leveraged to the extent that
its interest rate varies by a magnitude that exceeds the magnitude of the change
in the
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index rate of interest. The higher degree of leverage inherent in inverse
floaters is associated with greater volatility in their market values.
Accordingly, the duration of an inverse floater may exceed its stated final
maturity.
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated A-1+
are those with an "overwhelming degree" of credit protection. Those rated A-1
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2 reflect a high degree of safety regarding timely payment but not as
high as A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality, respectively, on
the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
STANDARD & POOR'S RATING SERVICES
Investment Grade
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree. Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
Bonds rated BBB by S&P are regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher categories.
Non-Investment Grade
Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB rated
category is also used for debt subordinated to senior debt that is assigned an
actual or implied BBB rating.
Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay
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interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
Bonds rated CCC have currently identifiable vulnerability to default, and are
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, they are not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
The rating CC typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating.
The rating C typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.
The rating C1 is reserved for income bonds on which no interest is being paid.
Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless Standard & Poor believes
that such payments will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or minus (-). Ratings from AA to CCC may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
MOODY'S INVESTOR SERVICE, INC.
Investment Grade
Bonds that are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present that make the
long-term risks appear somewhat larger than in Aaa securities. Bonds that are
rated A possess many favorable investment attributes and are to be considered as
upper-medium grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Bonds that are rated Baa by Moody's are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity of the issuers of securities rated BBB or Baa to make
principal and interest payments than is the case with higher grade securities.
Non-Investment Grade
Bonds rated Ba are more uncertain and have speculative elements. The protection
of interest and principal payments is not well safeguarded during good and bad
times. Bonds rated B lack the characteristics of a desirable investment (i.e.,
potentially low assurance of timely interest and principal payments or
maintenance of other contract terms over time).
Bonds rated Caa have poor standing and may be in default. These bonds carry an
element of danger with respect to principal and interest payments. Bonds rated
Ca are speculative to a high degree and could be in default or have other marked
shortcomings. C is the lowest rating. Bonds in this category have extremely poor
prospects of ever attaining investment standing.
Unrated securities will be treated as non-investment grade securities unless the
Advisor determines that such securities are the equivalent of investment grade
securities. Securities that have received different ratings from more than one
agency are considered investment grade if at least one agency has rated the
security investment grade.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
Moody's highest rating for state, municipal and other short-term notes is MIG-1
and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of the
best quality. They have strong protection from established cash flows of
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funds for their servicing or from established and broad-based access to the
market for refinancing or both. Short-term municipal securities rated MIG-2 and
VMIG-2 are of high quality. Margins of protection are ample although not so
large as in the preceding group.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
- - Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
- - Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MISCELLANEOUS
The Trust believes that as of April 9, 1997, BANC ONE CORPORATION (100 East
Broad Street, Columbus, OH 43271), through its affiliates, owned of record
substantially all the Fiduciary Class shares of the Fund. The Trust believes
that as of the same date, BANC ONE CORPORATION, through its affiliates,
possessed on behalf of its underlying accounts, voting or investment power with
respect to 98.31% of Fiduciary Class shares of the Fund.
As a consequence, BANC ONE CORPORATION may be deemed to be a controlling person
of the Fiduciary Class shares of the Fund under the Investment Company Act of
1940.
The Trust believes that as of April 9, 1997, the following shareholders owned
25% or more of the shares of the Funds.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
PERCENTAGE TYPES OF
FUND SHAREHOLDER & ADDRESS OWNERSHIP OWNERSHIP
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------
Investor Conservative Growth Fund Dean Witter for the Benefit of 32.79% Record
Class A James W. Blair
95 Elizabeth Street
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
As a consequence, the aforementioned persons may be deemed to be controlling
persons of the Class A shares of the Fund under the Investment Company Act of
1940.
PERFORMANCE
From time to time, the Fund may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of the Fund refers to the
annualized income generated by an investment in the Fund over a specified 30-day
period. The yield is calculated by assuming that the income generated by the
investment during that period is generated over a one-year period and is shown
as a percentage of the investment.
Total return is the change in value of an investment in the Fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results.
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of the Fund. This figure is
then "annualized" (multiplied by 365 days and divided by the applicable number
of days in the period). Funds with a front-end sales charge would incorporate
the offering price into the distribution yield in place of month-end net asset
value.
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<PAGE> 155
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return and
is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of shares of the Fund in any
advertisement or information including performance data for the Fund. The
performance for Fiduciary Class shares may be higher than for Class A, Class B
and Class C shares because Fiduciary Class shares are not subject to sales
charges and distribution expenses.
The performance of each class of the Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that may
assume investment of dividends but do not reflect deductions for administrative
and management costs. In addition, the performance of each class of the Fund may
be compared to other funds or to relevant indices that may calculate total
return without reflecting sales charges; in which case, the Fund may advertise
its total return in the same manner. If reflected, sales charges would reduce
these total return calculations.
TAXES
The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
advisors regarding specific questions as to the tax consequences of investing in
the Fund.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other funds. The Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders of
each class of shares of the Fund on at least an annual basis. Generally,
dividends from net investment income will be taxable to Shareholders as ordinary
income whether received in cash or in additional shares, and any net capital
gains will be distributed at least annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares.
Distributions by the Fund to retirement plans that qualify for tax-exempt
treatment under the Code ("qualified retirement plans") will not be taxable. The
Federal tax treatment of qualified retirement plans, as well as distributions
from such plans, is governed by specific provisions of the Code. If shares are
held by a retirement plan that ceases to qualify for tax-exempt treatment under
the Code or by an individual who has received such shares as a distribution from
a retirement plan, the Fund's distributions will be taxable to such plan or
individual as described in the preceding paragraph. Persons considering
directing the investment of their qualified retirement plan account in the Fund
and qualified retirement plan trusts considering purchasing such shares, should
consult their tax advisors for a more complete explanation of the Federal tax
consequences, and for an explanation of the state, local and (if applicable)
foreign tax consequences of making such an investment.
The Fund will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Fund (such as STRIPS, CUBES, TRS, TIGRS and
CATS), as defined in the "Description of Permitted Investments," are sold at
original issue discount and thus do not make periodic cash interest payments.
The Fund will be required to include as part of its current income the imputed
interest on such obligations even though the Fund has not received any interest
payments on such obligations during that period. Because the Fund distributes
substantially all of its net investment income to its Shareholders (including
such imputed interest), the Fund may have to sell portfolio securities in order
to generate the cash necessary for the required distributions. Such sales may
occur at a time when the Advisor would not have chosen to sell such securities
and may result in a taxable gain or loss.
Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in such a month will be deemed to
have been paid by the Fund and received by Shareholders on December 31 of that
year, if paid by the Fund at any time during the following January.
PROSPECTUS
33
<PAGE> 156
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Fund's investments
in U.S. government obligations may not be entitled to the exemptions from state
and local income taxes that would be available if the Shareholder had purchased
U.S. government obligations directly. The Fund will inform Shareholders annually
of the percentage of income and distributions derived from U.S. government
obligations. Shareholders should consult their tax advisors regarding the state
and local tax treatment of the dividends received from the Fund.
The Fund may be subject to foreign withholding taxes on income derived from
obligations of foreign issuers. The Fund will not be able to elect to treat
Shareholders as having paid their proportionate share of such foreign taxes.
Sale, exchange or redemption of Fund shares by a Shareholder will generally be a
taxable event to such Shareholder.
PROSPECTUS
34
<PAGE> 157
Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
1111 Polaris Parkway
2nd Floor, Suite 100
Columbus, OH 43271-0211
Distributor
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TOG-F-125
<PAGE> 158
THE ONE GROUP(R)
FAMILY OF MUTUAL FUNDS
June , 1997
THE ONE GROUP(R) INVESTOR BALANCED FUND
Investment Advisor: BANC ONE INVESTMENT ADVISORS CORPORATION
The One Group(R) (the "Trust") is a mutual fund seeking to provide a convenient
and economical means of investing in one or more professionally managed
portfolios of securities. This Prospectus relates to The One Group(R) Investor
Balanced Fund Class A, Class B, Class C and Fiduciary Class shares.
THE ONE GROUP(R) INVESTOR BALANCED FUND (THE "FUND") SEEKS HIGH TOTAL RETURN
CONSISTENT WITH THE PRESERVATION OF CAPITAL BY INVESTING PRIMARILY IN A
DIVERSIFIED GROUP OF ONE GROUP(R) MUTUAL FUNDS WHICH INVEST PRIMARILY IN EQUITY
AND FIXED INCOME SECURITIES.
Class A, Class B, and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors.
Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodian or similar capacities (each an
"Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT OR
ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. BANC ONE
INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUND FOR INVESTMENT
ADVISORY AND OTHER SERVICES.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated November 1, 1996, as amended June , 1997, has been filed
with the Securities and Exchange Commission and is available without charge
through the Distributor, The One Group(R) Services Company, 3435 Stelzer Road,
Columbus, OH 43219 or by calling 1-800-480-4111 during business hours. The
Statement of Additional Information is incorporated into this Prospectus by
reference. The Securities and Exchange Commission maintains a Web Site
(http://www.sec.gov.) that contains the Statement of Additional Information,
material incorporated by reference, and other information regarding The One
Group(R).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS
<PAGE> 159
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY.............................................................................. 3
ABOUT THE FUND....................................................................... 5
Expense Summary.................................................................... 5
The Fund........................................................................... 7
Investment Objective............................................................... 7
Investment Policies of the Fund.................................................... 7
Description of the Underlying Funds................................................ 8
Risk Factors....................................................................... 11
HOW TO DO BUSINESS WITH THE ONE GROUP(R)............................................. 12
How to Invest in The One Group..................................................... 12
Contingent Deferred Sales Charge................................................... 16
Exchanges.......................................................................... 18
Redemptions........................................................................ 19
FUND MANAGEMENT...................................................................... 20
The Advisor........................................................................ 20
The Distributor.................................................................... 21
The Administrator.................................................................. 22
The Transfer Agent and Custodian................................................... 22
Counsel and Independent Accountants................................................ 22
OTHER INFORMATION.................................................................... 22
The Trust.......................................................................... 22
Other Investment Policies.......................................................... 23
Description of Permitted Investments............................................... 24
Description of Ratings............................................................. 29
Performance........................................................................ 31
Taxes.............................................................................. 32
</TABLE>
PROSPECTUS
2
<PAGE> 160
SUMMARY
The One Group(R) (the "Trust") is an open-end management investment company that
provides a convenient way to invest in professionally managed portfolios of
securities. The following provides basic information about the Class A, Class B,
Class C, and Fiduciary Class shares of The One Group(R) Investor Balanced Fund.
WHAT IS THE INVESTMENT OBJECTIVE? The Fund seeks high total return consistent
with the preservation of capital by investing primarily in a diversified group
of One Group mutual funds which invest primarily in equity and fixed income
securities. See "Investment Objective." Shares of the Fund are available to tax
advantaged retirement accounts and other persons investing for long-term
investment purposes. The Fund should not be used for short-term trading
purposes. There is no assurance that the Fund will achieve its investment
objective.
WHAT ARE THE PERMITTED INVESTMENTS? The Fund offers Shareholders a
professionally-managed investment program by purchasing shares of existing
mutual funds of The One Group(R) (the "Underlying Funds"), which are managed by
Banc One Investment Advisors Corporation (the "Advisor"). The Fund will invest
40% to 60% of its total assets in Underlying Funds which invest primarily in
equity securities, 40 to 60% in Underlying Funds which invest primarily in
fixed-income securities, and up to 10% in Money Market Funds. The Fund will
normally allocate its assets among the Underlying Funds according to the
Advisor's outlook for the economy, financial markets and relative market
valuation of the Underlying Funds. The Advisor may vary the allocation within
the above ranges. There is no assurance that the Fund will achieve its stated
objective
WHAT ARE THE CHARACTERISTICS OF THE UNDERLYING FUNDS? The Underlying Funds in
which the Fund will invest have the following characteristics:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
UNDERLYING FUND TYPE OF INVESTMENTS
-------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................... Money Market
The One Group(R) Limited Volatility Bond Fund.......................... Fixed Income
The One Group(R) Intermediate Bond Fund................................ Fixed Income
The One Group(R) Income Bond Fund...................................... Fixed Income
The One Group(R) Government Bond Fund.................................. Fixed Income
The One Group(R) Ultra Short-Term Income Fund.......................... Fixed Income
The One Group(R) Disciplined Value Fund................................ Equity
The One Group(R) International Equity Index Fund....................... Equity
The One Group(R) Large Company Growth Fund............................. Equity
The One Group(R) Large Company Value Fund.............................. Equity
The One Group(R) Growth Opportunities Fund............................. Equity
The One Group(R) Value Growth Fund..................................... Equity
The One Group(R) Gulf South Growth Fund................................ Equity
The One Group(R) Income Equity Fund.................................... Equity
The One Group(R) Equity Index Fund..................................... Equity
</TABLE>
The Fund's net asset value will fluctuate with changes in the equity and bond
markets and the value of the Underlying Funds in which it invests. The Fund's
investment return is diversified by its investment in the Underlying Funds which
invest in growth and income stocks, foreign securities, debt securities, and
cash and cash equivalents. See page 6 for a complete description of the
Underlying Funds and page 23 for other investment policies.
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation, an indirect
subsidiary of BANC ONE CORPORATION, serves as the Advisor of the Trust. The
Advisor is entitled to a fee for advisory services provided to the Trust. The
Advisor may voluntarily agree to waive a part of its fees. See "The Advisor" and
"Expense Summary."
WHO IS THE ADMINISTRATOR? The One Group(R) Services Company serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Investment Advisors Corporation serves as the
Sub-Administrator of the Trust, pursuant to an agreement with the Administrator
for which Banc One Investment Advisors Corporation receives a fee paid by the
Administrator. See "The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust, for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
WHO IS THE DISTRIBUTOR? The One Group(R) Services Company acts as Distributor
of the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A, Class B and Class C shares. No compensation is paid to
the Distributor for the distribution services for the Fiduciary Class shares of
the Fund. See "The Distributor."
PROSPECTUS
3
<PAGE> 161
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Distributor on any day that the New York Stock Exchange is open for
trading ("Business Days"). See "How to Invest in The One Group(R)" and
"Redemptions."
HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is determined and declared monthly and
is distributed in the form of monthly dividends to Shareholders of the Fund on
the first Business Day of each month. Any capital gains are distributed at least
annually. Distributions are paid in additional shares of the same class unless
the Shareholder elects to take the payment in cash. See "Dividends."
PROSPECTUS
4
<PAGE> 162
ABOUT THE FUND
EXPENSE SUMMARY -- THE ONE GROUP(R) INVESTOR BALANCED FUND
<TABLE>
<CAPTION>
FIDUCIARY
CLASS A CLASS B CLASS C CLASS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)............................................ 4.50% none none none
Maximum Contingent Deferred Sales Charge(2) (as a percentage
of original purchase price or redemption proceeds, as
applicable)................................................ none 5.00% 1.00% none
Redemption Fees.............................................. none none none none
Exchange Fees................................................ none none none none
ANNUAL OPERATING EXPENSES (as a percentage of average daily
net assets)
Investment Advisory Fees(3).................................. .01% .01% .01% .01%
12b-1 Fees (after fee waiver)(4)............................. .25% 1.00% 1.00% None
Other Expenses(5)............................................ .19% .19% .19% .19%
- ------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES(6).................................. .45% 1.20% 1.20% .20%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more of Class A shares and is not
assessed a sales charge at the time of purchase, will be assessed a sales
charge equivalent to 1% of the purchase price if such purchaser redeems any
or all of the Class A shares prior to the first anniversary of purchase.
(3) Investment Advisory fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Absent this voluntary reduction,
Investment Advisory fees would be .05% for all classes of shares.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plan, 12b-1 fees (as a percentage of average daily net
assets) would be .35% for Class A shares. The 12b-1 fees include a
Shareholder servicing fee of .25% of average daily net assets of the Fund's
Class B and Class C shares and may include a Shareholder servicing fee of
.25% of the average daily net assets of the Fund's Class A shares. See "The
Distributor."
(5) Other Expenses have been revised to reflect fee waivers and reimbursements
effective as of the date of this Prospectus. Absent this voluntary waiver
and reimbursement, Other Expenses would be .29%.
(6) Absent the voluntary reduction of fees, Total Operating Expenses would be
.69% for Class A Shares, 1.34% for Class B Shares, 1.34% for Class C Shares,
and .34% for Fiduciary Class Shares.
The Fund will indirectly bear its pro rata share of fees and expenses incurred
by the Underlying Funds, and the investment returns of the Fund will be net of
the expenses of the Underlying Funds. The following chart provides the expense
ratio for each of the Underlying Funds in which the Fund invests (based on the
current Underlying Fund prospectus). Certain of these expense ratios may include
a voluntary reduction of investment advisory fees.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
NAME OF UNDERLYING FUND EXPENSE RATIO
-----------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund...................................... .50%
The One Group(R) Limited Volatility Bond Fund................................. .62%
The One Group(R) Intermediate Bond Fund....................................... .67%
The One Group(R) Income Bond Fund............................................. .61%
The One Group(R) Government Bond Fund......................................... .69%
The One Group(R) Ultra Short-Term Income Fund................................. .60%
The One Group(R) Disciplined Value Fund....................................... 1.00%
The One Group(R) International Equity Index Fund.............................. 1.36%
The One Group(R) Large Company Growth Fund.................................... .99%
The One Group(R) Large Company Value Fund..................................... .98%
The One Group(R) Growth Opportunities Fund.................................... 1.00%
The One Group(R) Value Growth Fund............................................ 1.05%
The One Group(R) Gulf South Growth Fund....................................... 1.06%
The One Group(R) Income Equity Fund........................................... 1.01%
The One Group(R) Equity Index Fund............................................ .39%
</TABLE>
PROSPECTUS
5
<PAGE> 163
After combining the total operating expenses of the Fund with those of the
Underlying Funds, the estimated average weighted expense ratio for Class A
shares is 1.25%, for Class B shares is 2.00%, for Class C shares is 2.00%, and
for Fiduciary Class shares is 1.00%.
On the basis of these estimated expenses, the following example illustrates the
expenses an investor would pay on a $1,000 investment in Class A and Fiduciary
Class shares of the Fund, assuming: (1) imposition of the maximum sales charge
for Class A shares; (2) 5% annual return; and (3) redemption at the end of each
time period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 57 $ 83 $111 $ 189
Fiduciary Class $ 10 $ 32 $ 55 $ 122
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 60 $ 93 $127 $ 224
Fiduciary Class $ 13 $ 39 $ 68 $ 149
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on $1,000 investment in Class B shares,
assuming: (1) deduction of the applicable maximum Contingent Deferred Sales
Charge; and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 70 $ 93 $128 $ 213
Assuming no redemption $ 20 $ 63 $108 $ 213
</TABLE>
Absent a voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at the end of the
period $ 73 $100 $139 $ 240
Assuming no redemption $ 23 $ 70 $119 $ 240
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class C shares of
the Fund, assuming: (1) imposition of the maximum sales charge for Class C
shares and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 30 $ 63 $108 $ 196
Assuming no redemption $ 20 $ 63 $108 $ 196
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 33 $ 70 $119 $ 225
Assuming no redemption $ 23 $ 70 $119 $ 225
</TABLE>
Class B and Class C shares automatically convert to Class A shares after eight
(8) and six (6) years, respectively. Therefore, the "10 Years" examples above
reflect the effect of such conversion.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
purpose of these tables is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Trust.
The rules of the Securities and Exchange Commission require that the maximum
sales load be reflected in the above tables. However, Shareholders in the Fund
may, under certain circumstances, qualify for reduced sales charges. See "How to
Invest in The One Group(R)." Long-term Shareholders of Class A, Class B, and
Class C shares may pay more than the equivalent of the maximum front-end sales
charges otherwise permitted by the National Association of Securities Dealers'
Rules.
PROSPECTUS
6
<PAGE> 164
THE FUND
The One Group(R) Investor Balanced Fund ( the "Fund") is part of The One
Group(R) (the "Trust"), which is an open-end management investment company that
offers shares in 40 separate funds and different classes of certain of the
funds. The Trust was organized as a Massachusetts Business Trust on May 23,
1985. This Prospectus relates to Class A, Class B, Class C, and Fiduciary Class
shares of The One Group(R) Investor Balanced Fund, a diversified open-end
management investment company. Each class of shares provides for variations in
distribution costs, voting rights, dividends and per share net asset value
pursuant to a multiple class plan (the "Multiple Class Plan") adopted by the
Board of Trustees of the Trust. Except for these differences between classes,
each share of the Fund represents an undivided, proportionate interest in the
Fund. The Information regarding the Trust's other funds and their classes is
contained in separate prospectuses which may be obtained from the Trust's
Distributor, The One Group(R) Services Company, 3435 Stelzer Road, Columbus, OH
43219, or by calling 1-800-480-4111.
INVESTMENT OBJECTIVE
The Fund seeks high total return consistent with the preservation of capital by
investing primarily in a diversified group of One Group mutual funds which
invest primarily in equity and fixed income securities.
The investment objective of the Fund is fundamental and may not be changed
without a vote of the holders of a majority of the Fund's outstanding shares (as
defined in the Statement of Additional Information).
There is no assurance that the Fund will meet its investment objective.
INVESTMENT POLICIES OF THE FUND
The investment policies of the Fund may be changed without an affirmative vote
of the holders of a majority of the Fund's outstanding shares unless a policy is
expressly deemed to be fundamental. Shareholders will be notified of any
material change in the Fund's investment policies.
PERMISSIBLE INVESTMENTS
The Fund will invest 40% to 60% of its total assets in nine Underlying Funds of
The One Group(R) which invest primarily in equity securities, 40% to 60% of its
total assets in five Underlying Funds of The One Group(R) which invest primarily
in fixed income securities, and up to 10% of its total assets in one money
market fund of The One Group(R). The Fund will invest its assets in the
Underlying Funds, within the ranges indicated below:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
INVESTMENT RANGE
INVESTOR BALANCED FUND (PERCENT OF FUND ASSETS)
------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................ 0 - 10%
The One Group(R) Limited Volatility Bond Fund....................... 0 - 50%
The One Group(R) Intermediate Bond Fund............................. 0 - 50%
The One Group(R) Income Bond Fund................................... 0 - 50%
The One Group(R) Government Bond Fund............................... 0 - 50%
The One Group(R) Ultra Short-Term Income Fund....................... 0 - 50%
The One Group(R) Disciplined Value Fund............................. 0 - 20%
The One Group(R) International Equity Index Fund.................... 0 - 20%
The One Group(R) Large Company Growth Fund.......................... 0 - 40%
The One Group(R) Large Company Value Fund........................... 0 - 50%
The One Group(R) Growth Opportunities Fund.......................... 0 - 20%
The One Group(R) Value Growth Fund.................................. 0 - 40%
The One Group(R) Gulf South Growth Fund............................. 0 - 20%
The One Group(R) Income Equity Fund................................. 0 - 40%
The One Group(R) Equity Index Fund.................................. 0 - 40%
</TABLE>
The allocation of the Fund's assets among the Underlying Funds will be made by
the Advisor under the supervision of the Trust's Board of Trustees, within the
percentage ranges set forth in the table above.
The Fund and the Underlying Funds are permitted for temporary defensive purposes
to invest up to 100% of their assets in short-term fixed income securities. Such
securities include obligations of the U.S. Government and its agencies and
instrumentalities; commercial paper, bank certificates of deposit, repurchase
agreements, bankers acceptances, variable amount master demand notes and bank
money market deposit accounts. The Fund and the Underlying Funds may also hold
cash or cash equivalents for liquidity purposes.
PROSPECTUS
7
<PAGE> 165
To the extent the Fund or the Underlying Funds are engaged in a temporary
defensive position, they will not be pursuing their investment objective.
DESCRIPTION OF THE UNDERLYING FUNDS
The following is a brief description of the principal investment policies of the
Underlying Funds. Additional investment practices are described in "Investment
Policies of the Underlying Funds," the Statement of Additional Information and
the prospectus for each of the Underlying Funds.
THE ONE GROUP(R) INTERNATIONAL EQUITY INDEX FUND
The One Group(R) International Equity Index Fund is an equity fund. The
objective of the fund is to provide investment results that correspond to the
aggregate price and dividend performance of the securities in the Gross Domestic
Product Weighted Morgan Stanley Capital International Europe, Australia and Far
East Index ("MSCI EAFE GDP Index" or "EAFE GDP Index")((1)) Under normal
conditions, the fund will invest substantially all of its assets in foreign
securities and at least 65% of the value of its total assets in foreign equity
securities, consisting of common stocks (including sponsored and unsponsored
American Depository Receipts ("ADRs")) and preferred stocks, securities
convertible into common stocks (only if they are listed on registered exchanges
or actively traded in the over-the-counter market), warrants and depository
receipts for such securities of issuers located in at least three different
countries. In attempting to duplicate the capital performance and dividend
income of the MSCI EAFE GDP Index, the fund will normally invest in the stocks
which comprise the Index and secondarily in stock index futures. It is expected
that cash reserve items normally will not exceed 10% of the fund's net assets.
The Fund may invest up to 10% of its net assets in securities of emerging
international markets such as Mexico, Brazil and Chile. A substantial portion of
the fund's assets will be denominated in foreign currencies.
THE ONE GROUP(R) LARGE COMPANY GROWTH FUND
The One Group(R) Large Company Growth Fund seeks long-term capital appreciation
and growth of income by investing primarily in equity securities. To achieve its
objective, the fund will, under normal market conditions, invest substantially
all, but in no event less than 65%, of the value of its total assets in equity
securities consisting of common stocks, warrants and any rights to purchase
common stocks. The weighted average capitalization of the companies in which the
fund invests will under normal market conditions always be in excess of the
market median capitalization of the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index").((2)) The fund may invest the remainder of its assets in
any combination of nonconvertible fixed income securities, repurchase
agreements, options and futures contracts.
THE ONE GROUP(R) LARGE COMPANY VALUE FUND
The One Group(R) Large Company Value Fund is an equity fund that seeks capital
appreciation with the incidental goal of achieving current income by investing
primarily in equity securities. The fund will invest in equity securities of
companies that are believed to be selling below their long-term intrinsic
investment values. Companies held will typically be large capitalization issuers
with current price/earnings and/or price/book ratios which are lower than that
of the general market as measured by the S&P 500 Index. In addition, the fund
may invest in stock of companies which have been analyzed to have breakup values
well in excess of current market values or which have uniquely undervalued
corporate assets. The general approach to purchasing stocks will emphasize
individual security selection. Macroeconomic data and industry profit forecasts
will be utilized to gauge the best sectors of the economy in which to be
positioned.
Under normal market conditions, the fund will invest at least 80% of the value
of its total assets in equity securities consisting of common stocks and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The remainder of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) GROWTH OPPORTUNITIES FUND
The One Group(R) Growth Opportunities Fund seeks growth of capital and,
secondarily, current income by investing primarily in equity securities. The
fund will invest in issues which are identified and selected based on the
potential to produce above-average earnings growth per share over a one-to-three
year period. It is expected that issuers will generally include established
companies with a history of above-average growth or companies that are expected
to enter
- ---------------
(1) "MSCI EAFE GDP Index" is a registered service mark of Morgan Stanley Capital
International, which does not sponsor and is in no way affiliated with the
fund.
(2) "Standard & Poor's 500" is a registered trademark of Standard & Poor's
Corporation, which does not sponsor and is in no way affiliated with the
fund.
PROSPECTUS
8
<PAGE> 166
periods of above-average growth, and smaller companies which are positioned in
emerging growth industries. The fund may invest in securities listed on a stock
exchange as well as those traded over-the-counter. At least 80% of the value of
the fund's total assets will, under normal conditions, be invested in equity
securities consisting of common stocks and debt securities and preferred stocks
that are convertible into common stocks. The fund also may enter into options
and futures transactions. The remainder of the fund's assets will be held in
cash equivalents.
THE ONE GROUP(R) VALUE GROWTH FUND
The One Group(R) Value Growth Fund seeks long-term capital growth and growth of
income while, as a secondary objective providing a moderate level of current
income. The fund pursues its objectives by investing primarily in a portfolio of
common stocks, debt securities, preferred stocks, convertible securities,
warrants, and other equity securities of companies that show the potential for
growth of earnings over time. Stock selection is guided by current valuation
relative to a stock's historical valuation and relative to the Advisor's
estimates of future growth of earnings and dividends. Accordingly, the Fund may
emphasize securities of companies that the Advisor believes are overlooked or
undervalued by investors, which fact should contribute to an increase in the
market value of the security over time.
The fund will ordinarily invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents.
THE ONE GROUP(R) GULF SOUTH GROWTH FUND
The One Group(R) Gulf South Growth Fund seeks long-term capital growth by
investing in a portfolio of equity securities of small-capitalization, emerging
growth and medium capitalization companies, which are either headquartered in or
whose primary market is in the southeastern region of the United States. The
fund invests primarily in a portfolio of common stocks, debt securities,
preferred stocks, convertible securities, warrants and other equity securities
of such companies. The Advisor anticipates that the fund's portfolio will
normally consist of securities of approximately twenty-five to sixty emerging
growth companies from Virginia, North Carolina, South Carolina, Florida,
Georgia, Tennessee, Alabama, Mississippi, Arkansas, Louisiana, Kentucky and
Texas. It is expected that companies selected would generally have market
capitalizations ranging from $50,000,000 to $2,000,000,000, although the fund
may occasionally hold securities of companies whose market capitalizations are
considerably larger if doing so contributes to the fund's investment objective.
The fund will normally invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents, when the Advisor's
assessment of the attractiveness of the entire stock market and individual
market sectors changes.
Because the fund is non-diversified, its share price may be subject to greater
fluctuations as a result of changes in an issuer's financial condition or the
market's assessment of an individual issuer. In addition, smaller, less seasoned
companies may be subject to greater business risk than larger, established
companies.
THE ONE GROUP(R) INCOME EQUITY FUND
The One Group(R) Income Equity Fund seeks current income through regular payment
of dividends with the secondary goal of achieving capital appreciation by
investing primarily in equity securities. The fund will make investments in an
attempt to keep its yield above the S&P 500 Index. Achieving such a yield will
be the primary consideration in selecting securities. Investments will be made
in common stocks of corporations which regularly pay dividends, although
continued payment of dividends cannot be assured. The fund will invest primarily
in stocks with favorable, long-term fundamental characteristics, but stocks of
companies that are out of favor in the financial community may also be
purchased.
The fund will under normal conditions invest at least 80% of the value of its
total assets in equity securities consisting of common stocks, and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) EQUITY INDEX FUND
The One Group(R) Equity Index Fund seeks investment results that correspond to
the aggregate price and dividend performance of the securities on the S&P 500
Index. The fund will, in attempting to duplicate the capital performance and
dividend income of the S&P 500 Index, normally invest in many of the stocks
which comprise the S&P 500 Index and secondarily in stock index futures. Cash
reserves will not normally exceed 10% of the fund's net assets.
The Advisor generally selects stocks for the fund in the order of their
weightings in the S&P 500 Index beginning with the heaviest weighted stocks. The
percentage of the fund's assets to be invested in each stock is approximately
the same as the percentage it represents in the S&P 500 Index. From time to
time, administrative adjustments may be made in the
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fund because of changes in the composition of the S&P 500 Index, but such
changes should be infrequent. The fund will attempt to achieve a correlation
between the performance of its portfolio and that of the S&P 500 Index of at
least 0.95, without taking into account expenses. A correlation of 1.00 would
indicate perfect correlation, which would be achieved when the fund's net asset
value, including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the S&P 500 Index.
THE ONE GROUP(R) PRIME MONEY MARKET FUND
The One Group(R) Prime Money Market Fund seeks current income with liquidity and
stability of principal. The fund intends to comply with the regulations of the
Securities and Exchange Commission applicable to money market funds using the
amortized cost method for calculating net asset value. These regulations impose
certain quality, maturity and diversification restraints on investments by the
fund. Under these regulations, the fund will invest only in U.S. dollar-
denominated securities, will maintain an average maturity on a dollar-weighted
basis of 90 days or less, and will acquire only "eligible securities" that
present minimal credit risks and have a maturity of 397 days or less.
THE ONE GROUP(R) DISCIPLINED VALUE FUND
The One Group(R) Disciplined Value Fund seeks capital appreciation with the
secondary goal of achieving current income by investing primarily in equity
securities. The fund will invest in equity securities with below-market average
price-to-earnings and price-to-book value ratios. The issuer's soundness and
earnings prospects will also be considered. Although capital appreciation is the
primary purpose for investing in the security, all common stocks must be paying
a current dividend to shareholders to be eligible for purchase. While the
Advisor may sell fund securities in its discretion at any time, it is unlikely
to move toward elimination of the fund's holdings of a stock when the Advisor
determines that there is a fundamental change that impairs a company's ability
to pay dividends, or if the company's 12-month earnings per share comparison is
declining.
The fund will, under normal conditions, invest at least 80% of the value of its
total assets in equity securities consisting of common stocks and debt
securities and preferred stocks that are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
The One Group(R) Limited Volatility Bond Fund seeks current income consistent
with preservation of capital through investment in high and medium-grade
fixed-income securities. The fund will normally invest at least 80% of total
assets in debt securities of all types with short to intermediate maturities.
Under normal market conditions, it is anticipated that the fund's average
weighted maturity will range between one and five years. At least 65% of the
fund's total assets will consist of bonds rated in one of the three highest
rating categories by at least one nationally recognized statistical rating
organization ("NRSRO") at the time of investment, or, if unrated, determined by
the Advisor to be of comparable quality. In addition , at least 65% of total
assets will consist of obligations issued by the U.S. government or its agencies
and instrumentalities, some of which may be subject to repurchase agreements.
The fund may also purchase taxable or tax-exempt municipal securities. Up to 20%
of the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INTERMEDIATE BOND FUND
The One Group(R) Intermediate Bond Fund seeks current income consistent with the
preservation of capital through investments in high and medium-grade
fixed-income securities with intermediate maturities. The fund will normally
invest at least 80% of total assets in debt securities of all types. Under
normal market conditions, it is anticipated that the fund's average weighted
maturity will range between three and ten years. At least 65% of the fund's
total assets will consist of bonds rated in one of the three highest rating
categories by at least one NRSRO at the time of investment, or, if unrated,
determined by the Advisor to be of comparable quality. However, the Advisor
reserves the right to invest in more speculative debt securities if they present
attractive opportunities and are rated in the fourth highest rating category by
at least one NRSRO at the time of investment or, if unrated, determined by the
Advisor to be of comparable quality. In addition, at least 50% of total assets
will consist of obligations issued by the U.S. government or its agencies and
instrumentalities, some of which may be subject to repurchase agreements. The
fund may also purchase taxable or tax-exempt municipal securities. Up to 20% of
the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INCOME BOND FUND
The One Group(R) Income Bond Fund seeks a high level of current income by
investing primarily in a diversified portfolio of high, medium and low grade
debt securities. The fund will normally invest at least 70% of total assets in
debt securities of all types rated in one of the four highest rating categories
("investment grade") by at least one NRSRO at the time of investment or, if
unrated, determined by the Advisor to be of comparable quality. In addition, up
to 30% of the fund's total assets may be invested in convertible securities,
preferred stock, loan participations and debt securities rated below
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investment grade. Securities rated below investment grade are called "high
yield" and "junk bonds." Under normal market conditions, it is anticipated that
the fund's average weighted maturity will range between five and twenty years.
As a matter of fundamental policy, at least 65% of the fund's total assets will
consist of bonds. The fund may also purchase taxable or tax-exempt municipal
securities.
THE ONE GROUP(R) GOVERNMENT BOND FUND
The One Group(R) Government Bond Fund seeks a high level of current income with
liquidity and safety of principal. The fund seeks to achieve its objective
principally through investment in securities issued by the U.S. government and
its agencies and instrumentalities. At least 65% of the total assets of the fund
will be invested in obligations guaranteed as to principal and interest by the
U.S. Government or its agencies and instrumentalities, some of which may be
subject to repurchase agreements, and other securities representing an interest
in or collateralized by mortgages that are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. The balance of the fund's assets
may be invested in debt securities and taxable or tax-exempt municipal
securities. The average weighted remaining maturity of the Fund is expected to
be between three and fifteen years.
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
The One Group(R) Ultra-Short Term Fund seeks a high level of current income
consistent with low volatility of principal by investing in a diversified
portfolio of short-term investment grade securities. The fund will normally
invest at least 80% of its total assets in debt securities of all types,
including money market instruments. In addition, up to 20% of the fund's total
assets may be invested in other securities, including preferred stock. The fund
will invest in adjustable rate mortgage pass-through securities and other
securities representing an interest in or collateralized by mortgages with
periodic interest rate resets, some of which may be subject to repurchase
agreements. These securities often are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. However, the fund also may
purchase mortgage-backed securities that are issued by non-governmental
entities. Such securities may or may not have private insurer guarantees as to
timely payments. The fund also may purchase mortgage and interest rate swaps and
interest rate floors and caps. The fund also may employ other investment
techniques to enhance returns, such as loans of fund securities, mortgage dollar
rolls, repurchase agreements, options contracts and reverse repurchase
agreements.
The Fund will maintain a maximum duration approximately two years. Under normal
interest rate conditions, the Fund's actual duration is expected to be in a
range approximately six months to one year.
RISK FACTORS
The investments of the Fund are concentrated in the Underlying Funds, so the
Fund's investment performance is directly related to the performance of the
Underlying Funds. In addition, as a matter of fundamental policy, the Fund must
allocate its investments among the Underlying Funds within certain ranges. As a
result, the Fund does not have the same flexibility to invest as a mutual fund
without such constraints.
The Fund may invest in Underlying Funds which invest in medium or lower grade
bonds. If these bonds are downgraded, the Advisor will consider whether to
increase or decrease the Fund's investment in the affected Underlying Fund.
Further, the Fund may invest in Underlying Funds which concentrate their assets
in certain industries. Under certain circumstances, this could result in the
Fund being concentrated in those industries. If this were to occur, the Advisor
would consider whether to maintain or change the Fund's investments in such
Underlying Funds.
SPECIAL RISKS OF INVESTING IN EQUITY FUNDS
Changes in the value of an equity fund's portfolio securities will not affect
cash income, if any, derived from these securities but will affect the fund's
net asset value. Because equity funds invest primarily in equity securities,
which fluctuate in value, the funds' shares will fluctuate in value. In
addition, certain investment management techniques that the funds may use, such
as the purchase and sale of futures, options and forward commitments, could
expose the funds to potentially greater risk of loss than more traditional
equity investments.
SPECIAL RISKS OF INVESTING IN FIXED-INCOME FUNDS
The market value of a fund's fixed-income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed-income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these
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investments. Except under condition of default, changes in the value of
fixed-income securities will not affect cash income derived from these
securities but will affect the funds' net asset value.
SPECIAL RISKS OF INVESTING IN INDEX FUNDS
Because of the funds' investment objectives, securities may be purchased,
retained and sold by the funds when such transactions would not be consistent
with traditional investment criteria. Accordingly, an investor is exposed to a
greater risk of loss (and a correspondingly greater prospect of gain) from
fluctuations in the value of such securities than would be the case if the funds
were not fully invested in such securities. In addition, the Advisor may
eliminate one or more securities or elect not to increase the funds' position in
such securities notwithstanding the continued listing of such securities on the
relevant index in the following circumstances: (i) the stock is no longer
publicly traded; or (ii) an unexpected adverse development occurs with respect
to the company such as bankruptcy or insolvency. As a result of these risk
factors, the share price of an index fund is expected to be volatile, and
investors should be able to sustain sudden, sometimes substantial, fluctuations
in the value of their investment.
SPECIAL RISKS OF INVESTING IN FOREIGN SECURITIES
Investments in securities of foreign issuers involve risks that are different
from investments in securities of U.S. issuers. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls, higher transaction costs, and
delayed settlements of transactions. Securities of some foreign companies are
less liquid, and their prices more volatile, than securities of comparable U.S.
companies. Additionally, there may be less public information available about
foreign issuers. Finally, since the funds may invest in securities denominated
in foreign currencies, changes in exchange rates may affect the value of
investments in the funds.
SPECIAL RISKS OF INVESTING IN SMALL CAPITALIZATION COMPANIES
Smaller, less seasoned companies may be subject to greater business risk than
larger, established companies. They may be more vulnerable to changes in
economic conditions, specific industry conditions, market fluctuations and other
factors affecting the profitability of companies. Therefore, the stock price of
smaller capitalization companies may be subject to greater price fluctuations
than that of larger, established companies. Due to these and other risk factors,
the price movement of the securities held by the funds may be volatile and the
net asset value of shares of the funds may fluctuate.
SPECIAL RISKS OF INVESTING IN MORTGAGE RELATED SECURITIES
Some of the funds invest in mortgage-related securities, such as mortgage-backed
securities, adjustable rate mortgage loans ("ARMs"), fixed rate mortgage loans,
and mortgage dollar rolls. The investment characteristics of mortgage-related
securities differ from traditional debt securities. These differences can result
in significantly greater price and yield volatility than is the case with
traditional fixed-income securities. The major differences typically include
more frequent interest and principal payments, usually monthly, the
adjustability of interest rates, and the possibility that prepayments of
principal may be made at any time. Prepayment rates are influenced by changes in
current interest rates and a variety of economic, geographic, social, and other
factors. During periods of declining interest rates, prepayment rates can be
expected to accelerate. Under certain interest rate and prepayment rate
scenarios, a fund may fail to recoup fully its investment in mortgage-related
securities notwithstanding a direct or indirect governmental or agency
guarantee. The funds intend to use hedging techniques to control this risk. In
general, changes in the rate of prepayments on a mortgage-related security will
change that security's market value and its yield to maturity. When interest
rates fall, high prepayments could force a fund to reinvest principal at a time
when investment opportunities are not attractive. Thus, mortgage-related
securities may not be an effective means for a fund to lock in long-term
interest rates. Conversely, during periods when interest rates rise, slow
prepayments could cause the average life of the security to lengthen and the
value to decline more than anticipated.
HOW TO DO BUSINESS WITH THE ONE GROUP(R)
HOW TO INVEST IN THE ONE GROUP(R)
Shares of the Fund are sold on a continuous basis and may be purchased directly
from the Trust's Distributor, The One Group(R) Services Company, by mail, by
telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor, or through a broker-dealer that has
established a dealer agreement with the Distributor.
Purchases and redemptions of shares of the Fund may be made on any day that the
New York Stock Exchange is open for trading ("Business Days"). The minimum
initial and subsequent investments in the Fund are $1,000 and $100 respectively
($100 and $25, respectively, for employees of BANC ONE CORPORATION and its
affiliates). Initial and
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subsequent investment minimums may be waived at the Distributor's discretion.
Investors may purchase up to a maximum of $250,000 of Class B and Class C shares
per individual purchase order.
Class A, Class B and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans., and other long-term investors. Fiduciary Class shares are offered to
institutional investors, including affiliates of BANC ONE CORPORATION and any
bank, depository institution, insurance company, pension plan or other
organization authorized to act in fiduciary, advisory, agency, custodial or
similar capacities (each an "Authorized Financial Organization"). For additional
details regarding eligibility, call the Distributor at 1-800-480-4111.
BY MAIL
Investors may purchase Class A, Class B and Class C shares of the Fund by
completing and signing an Account Application Form and mailing it, along with a
personal check (or other negotiable bank instrument or money order) payable to
"The One Group(R),", the Fund, The One Group Services Company, or State Street
Bank and Trust Company (the Trust's Transfer Agent and Custodian), to the
Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500. If the purchase order is
to be credited to a Fund Direct IRA, the check should be payable to State Street
Bank and Trust Company for the benefit of the Shareholder. Subsequent purchases
of shares may be made at any time by mailing a personal check to the Transfer
Agent. Account Application Forms are available through the Distributor by
calling 1-800-480-4111. All purchases made by check should be in U.S. dollars.
Third party checks will not be accepted. When purchases are made by check or
under the Systematic Investment Plan (see below), redemptions will not be
allowed until the investment being redeemed has been in the Fund for 10 calendar
days.
Purchases of Fiduciary Class shares, and Class A, Class B and Class C shares
that are being offered to investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, are made by an
institutional investor and/or other intermediary on behalf of an investor (each
also a "Shareholder Servicing Agent"). The Shareholder Servicing Agent may
require an investor to complete forms in addition to the Account Application
Form and to follow procedures established by the Shareholder Servicing Agent.
Such Shareholders should contact their Shareholder Servicing Agents regarding
purchases, exchanges and redemptions of shares. See "Additional Information
Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible to
make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agents, if applicable.
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
SYSTEMATIC INVESTMENT PLAN
Class A, Class B and Class C investors may make automatic monthly investments in
the Fund from their bank, savings and loan or other depository institution
accounts. The minimum initial investment must be $1,000 and subsequent
investments must be $25 under the Systematic Investment Plan, which minimum may
be reduced at the discretion of the Distributor. The Trust pays the costs
associated with these transfers, but reserves the right, upon thirty days'
written notice, to impose reasonable charges for this service. A depository
institution may impose a charge for debiting an investor's account which would
reduce the investor's return from an investment in the Fund.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which the Fund may be an
appropriate investment. The Trust's retirement plan allows participants to defer
taxes while helping them build their retirement savings.
The One Group(R) Fund-Direct IRA is a retirement plan with a wide choice of
investments offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A, Class B
and Class C shares, and the investor could be liable for any fees or expenses
incurred by the Trust. Federal funds are monies credited to a bank's account
with a Federal Reserve Bank. The purchase price of
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shares of the Fund is the net asset value next determined after a purchase order
is effected plus any applicable sales charge (the "offering price"). The net
asset value per share of the Fund is determined by dividing the total market
value of the Fund's investments and other assets allocable to a class, less any
liabilities allocable to that class, by the total number of outstanding shares
of such class. Net asset value per share is determined daily as of 4:00 p.m.,
eastern time, on each Business Day. For a further discussion of the calculation
of net asset value, see the Statement of Additional Information. Shares may also
be issued in transactions involving the acquisition by the Fund of securities
held by collective investment funds sponsored and administered by affiliates of
the Advisor. Purchases will be made in full and fractional shares of the Fund
calculated to three decimal places. Although the methodology and procedures are
identical, the net asset value per share of classes within the Fund may differ
because the distribution expenses charged to Class A, Class B and Class C shares
are not charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the Trust's
Transfer Agent nor the Trust will be responsible for any loss, liability, cost
or expense for acting upon telephone or wire instructions, and the investor will
bear all risk of loss. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If such procedures are not
employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans, and Class A, Class B and Class C shares offered to IRA
account participants and investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, will normally be
held in the name of the Shareholder Servicing Agent effecting the purchase on
the Shareholder's behalf, and it is the Shareholder Servicing Agent's
responsibility to transmit purchase orders to the Distributor. A Shareholder
Servicing Agent may impose an earlier cut-off time for receipt of purchase
orders directed through it to allow for processing and transmittal of these
orders to the Distributor for effectiveness the same day. The Shareholder should
contact his or her Shareholder Servicing Agent for information as to the
Shareholder Servicing Agent's procedures for transmitting purchase, exchange or
redemption orders to the Trust. A Shareholder who desires to transfer the
registration of shares beneficially owned by him or her, but held of record by a
Shareholder Servicing Agent, should contact the Shareholder Servicing Agent to
accomplish such change. Other Shareholders who desire to transfer the
registration of their shares should contact the Transfer Agent.
No certificates representing shares of the Fund will be issued. In
communications to Shareholders, the Fund will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
SALES CHARGE
CLASS A SHARES
The following table shows the initial sales charge on Class A shares to a
"single purchaser" (defined below) together with the sales charge reallowed to
financial institutions and intermediaries (the "commission"):
<TABLE>
<CAPTION>
SALES CHARGE
SALES CHARGE AS APPROPRIATE COMMISSION
AS A PERCENTAGE OF AS A
PERCENTAGE OF NET AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- --------------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
less than $100,000....................................... 4.50% 4.71% 4.05%
$100,000 but less than $250,000.......................... 3.50% 3.53% 3.05%
$250,000 but less than $500,000.......................... 2.50% 2.36% 2.05%
$500,000 but less than $1,000,000........................ 2.00% 2.04% 1.60%
$1,000,000 or more....................................... 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial institutions
and intermediaries. Under certain circumstances, the Distributor will use its
own funds to compensate financial institutions and intermediaries in amounts
that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a sales charge is 3.00% of the
offering price (including the commission shown above and additional cash
compensation described below). In addition, the Distributor will, from time to
time and at its own expense, provide promotional incentives to financial
institutions and intermediaries, whose registered representatives have sold or
are expected to sell significant amounts of the shares of the Fund in the form
of payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives to places within or outside
the United States, and additional compensation in an amount up to 1.00% of the
offering price of Class A shares of the Fund for sales of $1 million to $5
million, and 0.50% for sales over $5 million. A Shareholder who purchases $1
million or more of Class A shares and is not assessed a sales charge at the time
of purchase, will be assessed a sales charge equivalent to 1% of the purchase
price if such Shareholder redeems any or all of the Class A shares prior to the
first anniversary of purchase.
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Under certain circumstances, commissions up to the amount of the entire sales
charge will be reallowed to financial institutions and intermediaries, which
might then be deemed to be "underwriters" under the Securities Act of 1933.
RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class A
shares, a "single purchaser" is entitled to cumulate current purchases with the
current value at the offering price of previously purchased Class A, Class B,
and Class C shares of the Fund and other eligible funds of the Trust, other than
the Trust's money market funds, that are sold subject to a comparable sales
charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), and including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their minor
children, and give the age of such children. The Fund may amend or terminate
this right of accumulation at any time as to subsequent purchases.
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds
that impose a comparable sales charge over the next 13 months, the sales charge
may be reduced by completing the Letter of Intent section of the Account
Application Form. The Letter of Intent includes a provision for a sales charge
adjustment depending on the amount actually purchased within the 13-month
period. In addition, pursuant to a Letter of Intent, the Custodian will hold in
escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of investment, which
is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000 in
Class A shares of one (or more) of the funds of the Trust that imposes a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. The investor would
pay an initial sales charge of 2.00% (the sales charge applicable to purchases
of $250,000) and .50% of the investment (representing the difference between the
2.50% sales charge applicable to purchases of $100,000 and the 2.00% sales
charge already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more in Class A shares under the investor's Letter of
Intent.
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Fund: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired through
the exercise of exchange privileges where a comparable sales charge has been
paid for exchanged shares; (iii) purchased by officers, directors or trustees,
retirees and employees (and their spouses and immediate family members) of the
Trust, of BANC ONE CORPORATION and its subsidiaries and affiliates, of the
Distributor and its subsidiaries and affiliates, of the Custodian and Transfer
Agent and their subsidiaries and affiliates, of broker-dealers who have entered
into dealer agreements with the Trust and their subsidiaries and affiliates, or
of an investment sub-advisor of a fund of the Trust and such sub-advisor's
subsidiaries and affiliates; (iv) sold to affiliates of BANC ONE CORPORATION and
certain accounts (other than Individual Retirement Accounts) for which
Authorized Financial Organizations act in fiduciary, advisory, agency, custodial
or similar capacities, or purchased by investment advisors, financial planners
or other intermediaries who have a dealer arrangement with the Distributor, who
place trades for their own accounts or for the accounts of their clients and who
charge a management, consulting or other fee for their services, as well as
clients of such investment advisors, financial planners or other intermediaries
who place trades for their own accounts if the accounts are linked to the master
account of such investment advisor, financial planner or other intermediary; (v)
purchased with proceeds from the recent redemption of Fiduciary Class shares of
a fund of the Trust or acquired in an exchange of Fiduciary Class shares of a
fund for Class A shares of the same fund; (vi) purchased with proceeds from the
recent redemption of shares of a mutual fund (other than a fund of the Trust)
for which a sales charge was paid; (vii) purchased in an Individual Retirement
Account with the proceeds of a distribution from an employee benefit plan,
provided that, at the time of distribution, the employee benefit plan had plan
assets invested in a fund of the Trust; (viii) purchased with Trust assets; (ix)
purchased in accounts as to which a bank or broker-dealer charges an
PROSPECTUS
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<PAGE> 173
asset allocation fee, provided the bank or broker-dealer has an agreement with
the Distributor; (x) directly purchased with the proceeds of a distribution on a
bond for which a BANC ONE CORPORATION affiliate bank or trust company is the
Trustee or Paying Agent; or (xi) purchased in connection with plans of
reorganization of the Fund, such as mergers, asset acquisitions and exchange
offers to which the Fund is a party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi), and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at 1-800-480-4111 to
determine whether they are eligible to purchase shares without paying a sales
charge through the use of proceeds from a recent redemption or distribution as
described above, and to confirm continued availability of these waiver policies
prior to initiating the procedures described in clauses (v), (vi), and (vii).
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES AND CLASS C SHARES
Class B shares are not subject to a sales charge when they are purchased, but
are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the sixth anniversary of purchase. Class C
shares also are not subject to a sales charge when they are purchased, but are
subject to a Contingent Deferred Sales Charge if a Shareholder redeems them
prior to the first anniversary of purchase. When a Shareholder purchases Class B
and Class C shares, the full purchase amount is invested directly in the Fund.
Class B and Class C shares of the Fund are also subject to an ongoing
distribution and Shareholder service fee at an annual rate of 1.00% of the
Fund's average daily net assets as provided in the CDSC Plan (described below
under "The Distributor"). This ongoing fee will cause Class B and Class C shares
to have a higher expense ratio and to pay lower dividends than Class A shares.
Class B shares convert automatically to Class A shares after eight years,
commencing from the end of the calendar month in which the purchase order was
accepted under the circumstances and subject to the qualifications described in
this Prospectus.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of the Class B and Class C shares, such
as the payment of compensation to dealers and agents for selling such shares. A
dealer reallowance of 4.00% of the original purchase price of the Class B shares
and 1.00% of the original purchase price of Class C shares will be paid to
financial institutions and intermediaries.
Class B and Class C Shareholders will pay a Contingent Deferred Sales Charge at
the rates set forth below. The Contingent Deferred Sales Charge is assessed on
an amount equal to the lesser of the then-current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on increases
in net asset value above the initial purchase price. In addition, no charge is
assessed on shares derived from reinvestment of dividends or capital gain
distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the number of years from the time of payment for the purchase of shares until
the time of redemption of such shares. Solely for purposes of determining the
number of years from the time of any payment for the purchase of shares, all
payments during a month are aggregated and deemed to have been made on the first
day of the month.
PROSPECTUS
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<PAGE> 174
CLASS B SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 5.00%
1-2..................................................................... 4.00%
2-3..................................................................... 3.00%
3-4..................................................................... 3.00%
4-5..................................................................... 2.00%
5-6..................................................................... 1.00%
6-7..................................................................... None
7-8..................................................................... None
</TABLE>
To provide an example, assume you purchased 100 shares at $10 per share (a total
cost of $1,000) and prior to the second anniversary after purchase, the net
asset value per share is $12 and during such time you have acquired 10
additional shares through dividends paid in shares. If you then make your first
redemption of 50 shares (proceeds of $600), 10 shares will not be subject to
charge because you received them as dividends. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds is subject to a Contingent Deferred Sales Charge at a rate
of 4.00% (the applicable rate prior to the second anniversary after purchase).
CLASS C SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 1.00%
After first year........................................................ None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class A
shares in the Shareholder's Fund account (unless the Shareholder elects to have
Class B or Class C shares redeemed first) or shares representing capital
appreciation, next of shares acquired pursuant to reinvestment of dividends and
capital gain distributions, next Class C shares, and finally of other shares
held by the Shareholder for the longest period of time. This method should
result in the lowest possible sales charge.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code) of a
Shareholder or a participant or beneficiary of a qualified retirement plan if
redemption is made within one year of such death or disability; (iii) to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan to a
Shareholder who has attained the age of 70 1/2; or (iv) purchased by investors
in certain retirement plans, such as 401(k) and similar qualified plans. A
Shareholder or his or her representative should contact the Transfer Agent to
determine whether a retirement plan qualifies for a waiver and must notify the
Transfer Agent prior to the time of redemption if such circumstances exist and
the Shareholder is eligible for this waiver. In addition, the following
circumstances are not deemed to result in a "redemption" of Class B shares for
purposes of the assessment of a Contingent Deferred Sales Charge, which is
therefore waived: (i) plans of reorganization of the Fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or (ii)
exchanges for Class B shares of other funds of the Trust as described under
"Exchanges."
CONVERSION FEATURE
Class B shares will automatically convert to Class A shares eight years after
the end of the month in which the shares were purchased and will be subject to
the lower distribution and Shareholder service fees charged to Class A shares.
Class C shares will convert to Class A shares after six years. Such conversion
will be on the basis of the relative net asset values of the two classes,
without the imposition of any sales charge, fee or other charge. The conversion
is not a taxable event to a Shareholder.
PROSPECTUS
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<PAGE> 175
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B and Class C shares in a Shareholder's Fund
account will be considered to be held in a separate sub-account. Each time any
Class B or Class C shares in a Shareholder's Fund account (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B or
Class C shares in the sub-account will also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B or Class C shares
of the funds of the Trust during the eight or six year period, the Trust will
aggregate the holding periods for the shares of each fund of the Trust for
purposes of calculating that eight or six year period. Because the per share net
asset value of the Class A shares may be higher than that of the Class B or
Class C shares at the time of conversion, a Shareholder may receive fewer Class
A shares than the number of Class B or Class C shares converted, although the
dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of the Fund may exchange their shares for Class A
shares of the Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders may exchange their shares for Fiduciary Class shares of the
Fund or for Fiduciary Class shares or Class A shares of another fund of the
Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares of
the Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares, except
as provided below. The Trust does not impose a charge for processing exchanges
of shares. If a Shareholder seeks to exchange Class A shares of a fund that does
not impose a sales charge for Class A shares of a fund that does or the fund
being exchanged into has a higher sales charge, the Shareholder will be required
to pay a sales charge in the amount equal to the difference between the sales
charge applicable to the fund into which the shares are being exchanged and any
sales charges previously paid for the exchanged shares, including any sales
charges incurred on any earlier exchanges of the shares (unless such sales
charge is otherwise waived, as provided in "Other Circumstances"). The exchange
of Fiduciary Class shares for Class A shares also will require payment of the
sales charge unless the sales charge is waived, as provided in "Other
Circumstances."
CLASS B
Class B Shareholders of the Fund may exchange their shares only for Class B
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the newly
acquired Class B shares, the newly acquired Class B shares shall be deemed to
have been issued on the date of receipt of the Shareholder's order to purchase
the outstanding Class B shares of the fund from which the initial exchange was
made.
CLASS C
Class C Shareholders of the Fund may exchange their shares only for Class C
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class C shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class C
shares. The requirements applicable to computing the Contingent Deferred Sales
Charge on the exchange of Class B shares are also applicable to the exchange of
Class C shares.
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the Transfer Agent by 4:00 p.m., eastern
time, on any Business Day, the exchange usually will occur on that day. Any
Shareholder who wishes to make an exchange must receive a current prospectus of
the fund of the Trust in which he or she wishes to invest before the exchange
will be effected.
PROSPECTUS
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<PAGE> 176
The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax advisors for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Fund.
A more detailed description of the above is set forth in the Statement of
Additional Information.
The Trust's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (AT LEAST 30 DAYS APART) from the Fund during
any twelve month period. Notwithstanding these limitations, the Trust reserves
the right to reject any purchase request (including exchange purchases from
other funds of the Trust) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares without charge (except Class B and Class C
shares, as provided above) on any Business Day; shares may ordinarily be
redeemed by mail, by telephone or by wire. All redemption orders are effected at
the net asset value per share next determined for Class A and Fiduciary Class
shares, and at net asset value per share next determined reduced by any
applicable Contingent Deferred Sales Charge for Class B and Class C shares,
after receipt of a valid request for redemption. Payment to Shareholders for
shares redeemed will be made within seven days after receipt by the Transfer
Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in order
to constitute a valid request for redemption. All requests for redemptions from
IRA accounts must be in writing. Redemption request forms may be obtained from
the Transfer Agent by calling (800) 480-4111. All written redemption requests
should be sent to The One Group(R), c/o State Street Bank and Trust Company,
P.O. Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing Agent, if
applicable. The Transfer Agent may require that the signature on the written
request be guaranteed by a commercial bank, a member firm of a domestic stock
exchange, or by a member of the Securities Transfer Association Medallion
Program or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $50,000 worth of shares or less;
(ii) the redemption check is payable to the Shareholder(s) of record; and (iii)
the redemption check is mailed to the Shareholder(s) at the address of record.
The Shareholder may also have the proceeds mailed to a commercial bank account
previously designated on the Account Application Form or by written instruction
to the Transfer Agent or the Shareholder Servicing Agent, if applicable. There
is no charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE OR BY WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
telephone to the Transfer Agent at 1-800-480-4111, provided that the Shareholder
has elected the telephone redemption privilege in writing to the Distributor, or
to the Shareholder Servicing Agent, if applicable. The Transfer Agent may reduce
the amount of a wire redemption payment by its then-current wire redemption
charge, which, as of the date of this Prospectus, is $7.00.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each, unless the
withdrawal plan is part of a required minimum distribution from an IRA or other
qualified retirement plan. There is no charge for this
PROSPECTUS
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<PAGE> 177
service. Purchases of additional Class A shares while the Systematic Withdrawal
Plan is in effect are generally undesirable because a sales charge is incurred
whenever purchases are made.
Pursuant to the Systematic Withdrawal Plan, Class B and Class C Shareholders may
elect to receive, or may designate another person to receive, distributions
provided the distributions are limited to no more than 10% of their account
value annually, determined in the first year as of the date the redemption
request is received by the Transfer Agent, and in subsequent years, as of the
most recent anniversary of that date.
In addition, Shareholders who have attained the age of 70 1/2 may elect to
receive distributions, to the extent that the redemption represents a minimum
required distribution from an Individual Retirement Account or other qualifying
retirement plan.
If the amount of systematic withdrawal exceeds income accrued since the previous
withdrawal under the Systematic Withdrawal Plan, the principal balance invested
will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, the forwarding of proceeds
may be delayed for 10 or more days until payment has been collected for the
purchase of such shares. The Fund intends to pay cash for all shares redeemed.
Due to the relatively high costs of handling small investments, the Fund
reserves the right to redeem, at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in the Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
the Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any of these shares.
Before the Fund exercises its right to redeem such shares and to send the
proceeds to the Shareholder, the Shareholder will be given notice that the value
of the shares in his or her account is less than the minimum amount and will be
allowed 60 days to make an additional investment in the Fund in an amount which
will increase the value of the account to at least $1,000.
See the Statement of Additional Information for examples of when the Trust may
suspend the right of redemption or redeem shares involuntarily if it appears
appropriate to do so in light of the Trust's responsibilities under the
Investment Company Act of 1940.
FUND MANAGEMENT
THE ADVISOR
The Trust and Banc One Investment Advisors Corporation (the "Advisor") have
entered into an investment advisory agreement (the "Advisory Agreement"). Under
the Advisory Agreement, the Advisor makes the investment decisions for the
assets of the Fund and continuously reviews, supervises and administers the
Fund's investment program. The Advisor discharges its responsibilities subject
to the supervision of, and policies established by, the Trustees of the Trust.
The Trust's shares are not deposits or obligations of, or endorsed or guaranteed
by BANC ONE CORPORATION or its bank or non-bank affiliates. The Trust's shares
are not insured or guaranteed by the Federal Deposit Insurance Corporation
("FDIC") or by any other governmental agency or government sponsored agency of
the Federal government or any state.
The Advisor is an indirect, wholly-owned subsidiary of BANC ONE CORPORATION, a
bank holding company incorporated in the state of Ohio. BANC ONE CORPORATION
currently has affiliate banking organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West Virginia and
Wisconsin. In addition, BANC ONE CORPORATION has several affiliates that engage
in data processing, venture capital, investment and merchant banking, and other
diversified services including trust management, investment management,
brokerage, equipment leasing, mortgage banking, consumer finance and insurance.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
The Advisor represents a consolidation of the investment advisory staffs of a
number of bank affiliates of BANC ONE CORPORATION, which have considerable
experience in the management of open-end management investment company
portfolios, including The One Group(R) since 1985 (then known as "The Helmsman
Fund").
No single person is responsible for managing the assets of the Fund. Rather,
investment decisions for the Fund are made by committee.
The Advisor is entitled to a fee which is calculated daily and paid monthly, at
an annual rate of .05% of the average daily net assets of the Fund. The Advisor
may voluntarily waive all or part of this fee.
PROSPECTUS
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<PAGE> 178
The Advisor also serves as investment advisor to each of the Underlying Funds.
As a shareholder of each of the Underlying Funds, the Fund will indirectly bear
its proportionate share of investment advisory fees paid by those funds. The
Underlying Funds pay the Advisor an advisory fee at the following rates:
<TABLE>
<S> <C>
The One Group(R) Prime Money Market Fund............................................... .30%
The One Group(R) Limited Volatility Bond Fund.......................................... .40%
The One Group(R) Intermediate Bond Fund................................................ .40%
The One Group(R) Income Bond Fund...................................................... .40%
The One Group(R) Government Bond Fund.................................................. .45%
The One Group(R) Ultra Short-Term Income Fund.......................................... .30%
The One Group(R) Disciplined Value Fund................................................ .74%
The One Group(R) International Equity Index Fund....................................... .55%
The One Group(R) Large Company Growth Fund............................................. .74%
The One Group(R) Large Company Value Fund.............................................. .74%
The One Group(R) Growth Opportunities Fund............................................. .74%
The One Group(R) Value Growth Fund..................................................... .74%
The One Group(R) Gulf South Growth Fund................................................ .74%
The One Group(R) Income Equity Fund.................................................... .74%
The One Group(R) Equity Index Fund..................................................... .10%
</TABLE>
THE DISTRIBUTOR
The One Group(R) Services Company (the "Distributor"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Fund are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Fund. Currently,
the Distributor has voluntarily agreed to limit payments under the Plan to .25%
of the average daily net assets of Class A shares of the Fund. Up to .25% of the
fees payable under the Plan may be used as compensation for Shareholder services
by the Distributor and/or financial institutions and intermediaries. All such
fees that may be paid under the Plan will be paid pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Distributor may apply these fees toward: (i)
compensation for its services in connection with distribution assistance or
provision of Shareholder services; or (ii) payments to financial institutions
and intermediaries such as banks (including affiliates of the Advisor), savings
and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries, as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class C shares are
subject to a contingent Deferred Sales Charge if such shares are redeemed prior
to the first anniversary of purchase. Class B and Class C shares of the Fund are
subject to an ongoing distribution and Shareholder service fee as provided in
the CDSC Distribution and Shareholder Services Plan (the "CDSC Plan") at an
annual rate of 1.00% of the Fund's average daily net assets, which includes
Shareholder servicing fees of .25% of the Fund's average daily net assets.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of Class B and Class C shares, such as
the payment of compensation to dealers and agents for selling such shares. The
combination of the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees facilitate the ability to the Fund to sell the Class B
and Class C shares without a sales charge being deducted at the time of
purchase.
The Plan and the CDSC Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Fund
also may execute brokerage or other agency transactions through an affiliate of
the Advisor or through the Distributor for which the affiliate or the
Distributor receives compensation. Pursuant to guidelines adopted by the Board
of Trustees of the Trust, any such compensation will be reasonable and fair
compared to compensation received by other brokers in connection with comparable
transactions.
Fiduciary Class shares of the Fund are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record owner
of shares for the account of its customers may impose separate fees for account
services to its customers.
PROSPECTUS
21
<PAGE> 179
THE ADMINISTRATOR
The One Group(R) Services Company, (the "Administrator"), a wholly-owned
subsidiary of the BISYS Group, Inc., and the Trust are parties to an
administration agreement relating to the Fund (the "Administration Agreement").
Under the terms of the Administration Agreement, the Administrator is
responsible for providing the Trust with administrative services (other than
investment advisory services), including regulatory reporting and all necessary
office space, equipment, personnel and facilities.
The Advisor also serves as Sub-Administrator to each fund of the Trust, pursuant
to an agreement between the Administrator and the Advisor. Pursuant to this
agreement, the Advisor performs many of the Administrator's duties, for which
the Advisor receives a fee paid by the Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .10% of the Fund's
average daily net assets on the first $500,000,000 in Fund assets, .075% of the
Fund's average daily net assets between $500,000,000 and $1 billion, and .05% of
the Fund's average daily net assets when Fund assets exceed $1 billion.
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust, for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust
Company. Bank One Trust Company receives a fee paid by the Trust.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to offer
separate funds and different classes of each fund. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses.
The Advisor and the Administrator of the Fund each bears all expenses incurred
in connection with the performance of their services as investment advisor and
administrator, respectively, other than the cost of securities (including
brokerage commissions, if any) purchased for the Fund.
As a general matter, as set forth in the Multiple Class Plan, expenses are
allocated to each class of shares of the Fund on the basis of the net asset
value of that class in relation to the net asset value of the Fund. At present,
the only expenses that are allocated to Class A, Class B and Class C shares,
other than in accordance with the relative net asset value of the class, are the
distribution and Shareholder services costs. See "Expense Summary." At present,
no expenses are allocated to Fiduciary Class shares as a class that are not also
borne by the other classes of shares of the Fund in proportion to the relative
net asset value of the shares of such classes.
The organizational expenses of the Fund have been capitalized and are being
amortized in the first five years of the Fund's operations. Such amortization
will reduce the amount of income available for payment as dividends.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved contracts under which, as described above, certain
companies provide essential management services to the Trust.
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VOTING RIGHTS
As set forth in the Multiple Class Plan, each share held entitles the
Shareholder of record to one vote. Each fund of the Trust will vote separately
on matters relating solely to that fund. In addition, each class of a fund shall
have exclusive voting rights on any matter submitted to Shareholders that
relates solely to that class, and shall have separate voting rights on any
matter submitted to Shareholders in which the interests of one class differ from
the interests of any other class. However, all fund Shareholders will have equal
voting rights on matters that affect all fund Shareholders equally. As a
Massachusetts Business Trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be elected or removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
DIVIDENDS
Net investment income (exclusive of capital gains) is determined and declared
monthly, and is determined and distributed in the form of monthly dividends to
Shareholders of Record on the first Business Day of each month. Capital gains of
the Fund, if any, will be distributed at least annually.
To maintain a relatively even rate of distributions from the Fund rather than
having substantial fluctuations from period to period, the monthly distributions
level from the Fund may be fixed from time to time at rates consistent with the
Advisor's long-term earnings expectations.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B, Class C or Fiduciary Class shares,
as applicable, at the net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in cash. Such election,
or any revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500, and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
Class B shares received as dividends and capital gains distributions at net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares. See "Conversion
Features."
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution even though
such distribution would, in effect, represent a return of the Shareholder's
investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A, Class B, and Class C shares because of the
distribution expenses charged to Class A, Class B, and Class C shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group(R)
Services Company, 3435 Stelzer Road, Columbus, OH 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
OTHER INVESTMENT POLICIES
PORTFOLIO TURNOVER
Portfolio turnover rates vary greatly from year to year as well as within a
particular year. It is presently estimated that the annual portfolio turnover
rate for the Fund will not exceed 120%. Higher portfolio turnover rates will
likely result in higher transaction costs to the Funds and may result in
additional tax consequences to the Fund's Shareholders.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed without
the consent of the holders of a majority of the Fund's outstanding shares. The
term
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"majority of the outstanding shares" means the vote of (i) 67% or more of the
Fund's shares present at a meeting, if more than 50% of the outstanding shares
of the Fund are present or represented by proxy, or (ii) more than 50% of the
Fund's outstanding shares, whichever is less.
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities, securities of regulated
investment companies and, if consistent with a Fund's investment objective and
policies, repurchase agreements involving such securities) if as a result more
than 5% of the total assets of a Fund would be invested in the securities of
such issuer or a Fund would own more than 10% of the outstanding voting
securities of such issuer. This restriction applies to 75% of a Fund's assets.
For purposes of these limitations, a security is considered to be issued by the
government entity whose assets and revenues guarantee or back the security. With
respect to private activity bonds or industrial development bonds backed only by
the assets and revenues of a non-governmental user, such user would be
considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets of
the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, except for investments
in funds of The One Group(R), provided that this limitation does not apply to
investments in obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities and repurchase agreements involving such
securities. For purposes of this limitation (i) utilities will be divided
according to their services (for example, gas, gas transmission, electric and
telephone will each be considered a separate industry); and (ii) wholly-owned
finance companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of their
parents.
3. Make loans, except that the Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information. For the investment limitations of the Underlying Funds, see the
applicable prospectuses.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain of the permitted investments for the
Underlying Funds. As described above in "Investment Policies of the
Fund-Permissible Investments," the Fund may also invest directly in certain of
the following instruments for temporary defensive purposes. For a more detailed
description, see the Statement of Additional Information or the prospectuses of
the Underlying Funds.
U.S. TREASURY OBLIGATIONS -- The funds may invest in bills, notes and issued by
the U.S. Treasury and separately traded interest and principal component parts
of such obligations that are transferable through the Federal book-entry system
known as Separately Traded Registered Interest and Principal Securities
("STRIPS").
RECEIPTS -- The funds may purchase interests in separately traded interest and
principal component parts of U.S. Treasury obligations that are issued by banks
or brokerage firms and are created by depositing U.S. Treasury notes and U.S.
Treasury bonds into a special account at a custodian bank. Receipts include
Treasury Receipts ("TRS"), Treasury Investment Growth Receipts ("TIGRS"), and
Certificates of Accrual on Treasury Securities ("CATS").
CERTIFICATES OF DEPOSIT -- Certificates of deposit ("CDs") are negotiable
interest bearing instruments with a specific maturity. CDs are issued by banks
and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a time deposit
("TD") earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by (i.e., made an obligation of) a commercial bank.
Maturities are generally six months or less.
COMMERCIAL PAPER -- Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few days to nine months.
U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific types
of activities. Select agencies, such as the Government National Mortgage
Association ("Ginnie Mae") and the Export-Import Bank, are supported by the full
faith and credit of the U.S. Treasury; others, such as the Federal National
Mortgage Association ("Fannie Mae"), are supported by the credit of the
instrumentality and have the right to borrow from the U.S. Treasury; others are
supported by the authority of the U.S.
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government to purchase the agency's obligations; while still others, such as the
Federal Farm Credit Banks and the Federal Home Loan Mortgage Corporation
("Freddie Mac"), are supported solely by the credit of the instrumentality
itself. No assurance can be given that the U.S. government would provide
financial support to U.S. government sponsored agencies or instrumentalities if
it is not obligated to do so by law. Obligations of U.S. government agencies
include debt issues and mortgage-backed securities issued or guaranteed by
select agencies.
CORPORATE SECURITIES -- Corporate securities include corporate bonds,
convertible and non-convertible debt securities, and preferred stocks, as well
as commercial paper (short-term promissory notes issued by corporations).
Issuers of corporate bonds and notes are divided into many different categories
by bond market sector, such as electric utilities, gas utilities, telephone
utilities, consumer finance companies, wholesale finance companies and
industrial companies. Within each major category of issuer, there are many
subcategories.
WARRANTS -- Warrants are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of common
stock at a specified price, usually at a price that is higher than the market
price at the time of issuance of the warrant. The right may last for a period of
years or indefinitely.
COMMON STOCK -- Common stock represents a share of ownership in a company and
usually carries voting rights and earns dividends. Unlike preferred stock,
dividends on common stock are not fixed but are declared at the discretion of
the issuer's board of directors.
INVESTMENT COMPANY SECURITIES -- The funds may invest up to 5% of their total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of their assets in the securities of other investment companies.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a person
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. The custodian or
its agent will hold the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 100% of the
repurchase price. The funds bear a risk of loss in the event the other party
defaults on its obligations and the funds are delayed or prevented from their
right to dispose of the collateral securities or if the funds realize a loss on
the sale of the collateral securities.
REVERSE REPURCHASE AGREEMENTS -- The funds may borrow funds for temporary
purposes by entering into reverse repurchase agreements. Pursuant to such
agreements, the funds would sell portfolio securities to financial institutions
such as banks and broker-dealers, and agree to repurchase them at a mutually
agreed-upon date and price. The funds will enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time the funds enter into a reverse
repurchase agreement, they would place liquid high grade debt securities having
a value equal to the repurchase price (including accrued interest), in a
segregated custodial account and would subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the funds may
decline below the price at which the funds are obligated to repurchase the
securities.
DEMAND FEATURES -- The funds may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount at a fixed price (usually with accrued interest) within a fixed
period (usually seven days) following a demand by the funds. The purpose of
engaging in transactions involving puts is to maintain flexibility and liquidity
to permit the funds to meet redemption requests and remain as fully invested as
possible.
ASSET-BACKED SECURITIES -- Asset-backed securities consist of securities secured
by company receivables, home equity loans, truck and auto loans, leases, credit
card receivables and other securities backed by other types of receivables or
other assets. These securities are generally pass-through securities, which
means that principal and interest payments on the underlying securities (less
servicing fees) are passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the underlying debt
will be refinanced or paid off prior to their maturities during periods of
declining interest rates. In that case, a portfolio manager may have to reinvest
the proceeds from the securities at a lower rate. Potential market gains on a
security subject to prepayment risk may be more limited than potential market
gains on a comparable security that is not subject to prepayment risk. Under
certain interest rate and prepayment rate scenarios, the funds may fail to
recoup fully their investment in asset-backed securities. Asset-backed
securities are commonly considered to be derivatives.
SHORT-TERM FUNDING AGREEMENTS -- The funds may, in order to enhance yield, make
limited investments in short-term funding agreements issued by banks and highly
rated insurance companies. Short-term funding agreements issued by insurance
companies are sometimes referred to as Guaranteed Investment Contracts ("GICs"),
while those issued by banks are referred to as Bank Investment Contracts
("BICs"). Pursuant to such agreements, the funds make cash contributions to a
deposit account at a bank or insurance company. The bank or insurance company
then credits to the funds on a monthly basis guaranteed interest at either a
fixed, variable or floating rate. These contracts are general
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obligations of the issuing bank or insurance company and are paid from the
general assets of the issuing entity. The funds will purchase short-term funding
agreements only from banks and insurance companies which, at the time of
purchase, are rated "A" or the equivalent by at least one NRSRO and have assets
of $1 billion or more. Generally, there is no active secondary market in
short-term funding agreements.
SECURITIES OF FOREIGN ISSUERS -- The funds may invest in securities of foreign
issuers to achieve income or capital appreciation. The funds also may invest in
commercial paper of foreign issuers and obligations of foreign branches of U.S.
banks, U.S. and London branches of foreign banks, and supranational entities
which are established through the joint participation of several governments
(e.g., the Asian Development Bank and the Inter-American Development Bank).
Securities of foreign issuers may include sponsored and unsponsored American
Depository Receipts ("ADRs"), which are securities typically issued by a U.S.
financial institution that evidence ownership interests in a pool of securities
issued by a foreign issuer. ADRs include American Depository Shares and New York
Shares. There may be less information available on the foreign issuers of
unsponsored ADRs than on the issuers of sponsored ADRs.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The funds may acquire
securities representing an interest in a pool of mortgage loans that are issued
or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac. Mortgage-backed
securities may also be issued by non-governmental entities and may or may not
have private insurer guarantees of timely payments. The funds also may invest in
mortgage-backed securities issued by non-government entities, which consist of
Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage Investment
Conduits ("REMICs"). Mortgage-backed securities are in most cases "pass-through"
instruments, through which the holder receives a share of all interest and
principal payments from the mortgages underlying the certificate. Because the
prepayment characteristics of the underlying mortgages vary, it is not possible
to predict accurately the average life or realized yield of a particular issue
of pass-through certificates. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected to
accelerate. When the mortgage obligations are prepaid, the funds may have to
reinvest in securities with a lower yield. Moreover, prepayment of mortgages
which underlie securities purchased at a premium could result in capital losses.
STRIPPED MORTGAGE-BACKED SECURITIES -- The funds may, to enhance revenues or
hedge against interest rate risk, invest in stripped mortgage-backed securities
("SMBS"), which are derivative multi-class mortgage securities. The funds may
only invest in SMBS issued or guaranteed by the U.S. government, its agencies or
instrumentalities. SMBS are usually structured with two classes that receive
different proportions of the interest and principal distributions from a pool of
mortgage assets. A common type of SMBS will have one class receiving all of the
interest from the mortgage assets ("IOs"), while the other class will receive
all of the principal ("POs"). If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the funds may fail to fully
recoup their initial investment in these securities. Although the market for
such securities is increasingly liquid, certain SMBS may not be readily
marketable and will be considered illiquid for purposes of the funds'
limitations on investments in illiquid securities. The market value of the class
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates.
MORTGAGE DOLLAR ROLLS -- The funds may enter into mortgage "dollar rolls" in
which the funds sell securities for delivery in the current month and
simultaneously contract with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The funds benefit to the extent of any difference between the price
received for the securities sold and the lower forward price for the future
purchase (often referred to as the "drop") or fee income plus the interest
earned on the cash proceeds of the securities sold until the settlement date of
the forward purchase. Unless such benefits exceed the income, capital
appreciation and gain or loss due to mortgage prepayments that would have been
realized on the securities sold as part of the mortgage dollar roll, the use of
this technique will diminish the investment performance of the funds compared
with what such performance would have been without the use of mortgage dollar
rolls.
FIXED RATE MORTGAGE LOANS -- Generally, fixed rate mortgage loans eligible for
inclusion in a mortgage pool will bear simple interest at fixed annual rates and
have original terms to maturity ranging from 5 to 40 years. The funds may invest
in fixed rate mortgage loans that are privately issued and are not issued or
guaranteed by the U.S. government.
SECURITIES LENDING -- In order to generate additional income, the funds may lend
up to 33% of the securities in which they are invested pursuant to agreements
requiring that the loan be continuously secured by cash, securities of the U.S.
government or its agencies, 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 will continue to receive interest on the securities lent while
simultaneously seeking to earn interest on the investment of cash collateral in
U.S. government securities, shares of an investment trust or mutual fund, or
other short-term, highly liquid investments. Collateral is marked to market
daily to provide a level of collateral at least equal to the market value of the
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 only be made to borrowers deemed by the Advisor
to be of good standing under guidelines established by the Trust's Board of
Trustees and when, in the judgment of the Advisor, the consideration which can
be earned currently from such securities loans justifies the attendant risk.
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The funds will enter into loan arrangements only with counterparties which the
Advisor has deemed to be creditworthy under guidelines established by the Board
of Trustees. Loans are subject to termination by the funds or the borrower at
any time, and are therefore, not considered to be illiquid investments.
RESTRICTED SECURITIES -- The funds may invest in commercial paper issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under Federal securities law and is generally sold to institutional
investors, such as the funds, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the funds may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate changes. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND FORWARD COMMITMENTS -- The funds
may purchase securities on a when-issued basis when deemed by the Advisor to
present attractive investment opportunities. When-issued securities are
purchased for delivery beyond the normal settlement date at a stated price and
yield, thereby involving the risk that the yield obtained will be less than that
available in the market at delivery. When the Advisor purchases a when-issued
security, the Custodian will set aside cash or liquid securities to satisfy the
purchase commitment. The funds generally will not pay for such securities or
earn interest on them until received. In a forward commitment transaction, the
funds contract to purchase securities for a fixed price at a future date beyond
customary settlement time. The funds are required to hold and maintain in a
segregated account until the settlement date, cash, U.S. government securities
or liquid high-grade debt obligations in an amount sufficient to meet the
purchase price. Alternatively, the funds may enter into offsetting contracts for
the forward sale of other securities that they own. The purchase of securities
on a when-issued or forward commitment basis involves a risk of loss if the
value of the security to be purchased declines prior to the settlement date.
OPTIONS -- The funds may purchase and write (i.e., sell) call options and put
options on securities and indices, which options are traded on national
securities exchanges. A call option gives the purchaser the right to buy, and
obligates the writer of the option to sell, the underlying security at the
agreed upon exercise (or "strike") price during the option period. A put option
gives the purchaser the right to sell, and obligates the writer to buy, the
underlying security at the strike price during the option period. There are
risks associated with options transactions, including the following: (i) the
success of a hedging strategy may depend on the ability of the Advisor to
predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be an imperfect or no
correlation between the changes in market value of the securities held by the
funds and the prices of options; (iii) there may not be a liquid secondary
market for options; and (iv) while the funds will receive a premium when they
write covered call options, they may not participate fully in a rise in the
market value of the underlying security. It is expected that the funds will only
engage in option transactions with respect to permitted investments and related
indices.
FUTURES CONTRACTS AND RELATED OPTIONS -- Certain of the funds may enter into
futures contracts, options on futures contracts, index futures and options
thereon that are traded on an exchange regulated by the Commodities Futures
Trading Commission ("CFTC") if, to the extent that such futures and options are
not for "bona fide hedging purposes" (as defined by the CFTC), the aggregate
initial margin and premiums on such positions (excluding the amount by which
options are in the money) do not exceed 5% of the funds' total assets at current
value. Options and futures can be volatile instruments, and involve certain
risks. If the Advisor applies a hedge at an inappropriate time or judges
interest rates incorrectly, options and futures strategies may lower a fund's
return. The funds could also experience losses if the prices of their options
and futures positions were poorly correlated with their other instruments, or if
they could not close out their positions because of an illiquid secondary
market.
SWAPS, CAPS AND FLOORS -- In order to protect the value of the funds from
interest rate fluctuations and to hedge against fluctuations in the floating
rate market in which the funds' investments are traded, the funds may enter into
swaps, caps, and floors on various securities (such as U.S. government
securities), securities indexes, interest rates, prepayment rates, foreign
currencies or other financial instruments or indexes, for both hedging and
non-hedging purposes. Swap contracts typically involve an exchange of
obligations by two sophisticated parties. For example, in an interest rate swap,
a fund may exchange with another party their respective rights to receive
interest, such as an exchange of fixed rate payments for floating rate payments.
Currency swaps involve the exchange of respective rights to make or receive
payments in specified currencies. Mortgage swaps are similar to interest rate
swaps in that they represent commitments to pay and receive interest. The
notional principal amount, however, is tied to a reference pool or pools of
mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles the
purchaser to receive a principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the
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party selling the floor to the extent that a specified index falls below a
predetermined interest rate or amount. Caps and floors are similar in many
respects to over-the-counter options transactions, and may involve investment
risks that are similar to those associated with options transactions and options
on futures contracts.
NEW FINANCIAL PRODUCTS -- New options and futures contracts and other financial
products, and various combinations thereof, continue to be developed and the
funds may invest in any such options, contracts and products as may be developed
to the extent consistent with their investment objective, policies and
restrictions and the regulatory requirements applicable to investment companies.
These various products may be used to adjust the risk and return characteristics
of the funds' portfolio of investments.
These various products may increase or decrease exposure to security prices,
interest rates, commodity prices, or other factors that affect security values,
regardless of the issuer's credit risk. If market conditions do not perform
consistent with expectations, the performance of the funds would be less
favorable than it would have been if these products were not used. In addition,
losses may occur if counterparties involved in transactions do not perform as
promised. These products may expose the funds to potentially greater return as
well as potentially greater risk of loss than more traditional fixed-income
investments.
STRUCTURED INSTRUMENTS -- Structured instruments are debt securities issued by
agencies or instrumentalities of the U.S. government (such as Sallie Mae, Ginnie
Mae, Fannie Mae, and Freddie Mac), banks, municipalities, corporations, and
other business entities whose interest and/or principal payments are indexed to
certain specific foreign currency exchange rates, interest rates, or one or more
other reference indices. Structured instruments frequently are assembled in the
form of medium-term notes, but a variety of forms are available. Structured
instruments are commonly considered to be derivatives.
While structured instruments may offer the potential for a favorable rate of
return from time to time, they also entail certain risks. Structured instruments
may be less liquid than other debt securities, and the price of structured
instruments may be more volatile. If the value of the reference index changes in
a manner other than that expected by the Advisor, principal and/or interest
payments on the structured instrument may be substantially less than expected.
In addition, although structured instruments may be sold in the form of a
corporate debt obligation, they may not have some of the protection against
counterparty default that may be available with respect to publicly traded debt
securities (i.e., the existence of a trust indenture).
MUNICIPAL SECURITIES -- Municipal Securities are issued by a state or political
subdivision to obtain funds for various public purposes. Municipal securities
are generally classified as "general obligation" bonds and "revenue" bonds.
General obligation bonds are obligations involving the credit of an issuer
possessing taxing power and are payable from the issuer's general unrestricted
revenues. Revenue bonds are payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other specific revenue source. Revenue bonds are not
payable from the issuer's general revenues. The funds also may purchase
short-term tax-exempt General Obligation Notes, Tax Anticipation Notes, Bond
Anticipation Notes, Revenue Anticipation Notes, Project Notes, and other forms
of short-term tax-exempt obligations. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements, or other revenues.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal bankruptcy code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on and principal of its municipal
securities may be materially adversely affected by litigation or other
conditions. Such litigation or conditions may from time to time have the effect
of introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a fund's municipal
securities in the same manner. In addition, the Internal Revenue Code of 1986,
as amended (the "Code") imposes certain continuing requirements on issuers of
tax-exempt bonds regarding the use, expenditure and investment of bond proceeds
and the payment of rebates to the United States of America. Failure by the
issuer to comply subsequent to the issuance of tax-exempt bonds with certain of
these requirements could cause interest on the bonds to become includable in
gross income retroactive to the date of issuance.
INVERSE FLOATING RATE INSTRUMENTS -- The funds may seek to increase yield by
investing in leveraged inverse floating rate debt instruments ("inverse
floaters"). The interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse floater is
indexed. An inverse floater may be considered to be leveraged to the extent that
its interest rate varies by a magnitude that exceeds the magnitude of the change
in the index rate of interest. The higher degree of leverage inherent in inverse
floaters is associated with greater volatility in their market values.
Accordingly, the duration of an inverse floater may exceed its stated final
maturity.
PROSPECTUS
28
<PAGE> 186
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated A-1+
are those with an "overwhelming degree" of credit protection. Those rated A-1
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2 reflect a high degree of safety regarding timely payment but not as high as
A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality, respectively, on
the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
STANDARD & POOR'S RATING SERVICES
Investment Grade
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree. Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
Bonds rated BBB by S&P are regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher categories.
Non-Investment Grade
Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB rated
category is also used for debt subordinated to senior debt that is assigned an
actual or implied BBB rating.
Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
PROSPECTUS
29
<PAGE> 187
Bonds rated CCC have currently identifiable vulnerability to default, and are
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, they are not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
The rating CC typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating.
The rating C typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.
The rating C1 is reserved for income bonds on which no interest is being paid.
Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless Standard & Poor believes
that such payments will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or minus (-). Ratings from AA to CCC may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
MOODY'S INVESTOR SERVICE, INC.
Investment Grade
Bonds that are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present that make the
long-term risks appear somewhat larger than in Aaa securities. Bonds that are
rated A possess many favorable investment attributes and are to be considered as
upper-medium grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Bonds that are rated Baa by Moody's are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity of the issuers of securities rated BBB or Baa to make
principal and interest payments than is the case with higher grade securities.
Non-Investment Grade
Bonds rated Ba are more uncertain and have speculative elements. The protection
of interest and principal payments is not well safeguarded during good and bad
times. Bonds rated B lack the characteristics of a desirable investment (i.e.,
potentially low assurance of timely interest and principal payments or
maintenance of other contract terms over time).
Bonds rated Caa have poor standing and may be in default. These bonds carry an
element of danger with respect to principal and interest payments. Bonds rated
Ca are speculative to a high degree and could be in default or have other marked
shortcomings. C is the lowest rating. Bonds in this category have extremely poor
prospects of ever attaining investment standing.
Unrated securities will be treated as non-investment grade securities unless the
Advisor determines that such securities are the equivalent of investment grade
securities. Securities that have received different ratings from more than one
agency are considered investment grade if at least one agency has rated the
security investment grade.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
Moody's highest rating for state, municipal and other short-term notes is MIG-1
and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of the
best quality. They have strong protection from established cash flows of funds
for their servicing or from established and broad-based access to the market for
refinancing or both. Short-term municipal securities rated MIG-2 and VMIG-2 are
of high quality. Margins of protection are ample although not so large as in the
preceding group.
PROSPECTUS
30
<PAGE> 188
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
- - Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
- - Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MISCELLANEOUS
The Trust believes that as of April 9, 1997, BANC ONE CORPORATION (100 East
Broad Street, Columbus, OH 43271), through its affiliates, owned of record
substantially all the Fiduciary Class shares of the Fund. The Trust believes
that as of the same date, BANC ONE CORPORATION, through its affiliates,
possessed on behalf of its underlying accounts, voting or investment power with
respect to 96.94% of Fiduciary Class shares of the Fund.
As a consequence, BANC ONE CORPORATION may be deemed to be a controlling person
of the Fiduciary Class shares of the Fund under the Investment Company Act of
1940.
PERFORMANCE
From time to time, the Fund may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of the Fund refers to the
annualized income generated by an investment in the Fund over a specified 30-day
period. The yield is calculated by assuming that the income generated by the
investment during that period is generated over a one-year period and is shown
as a percentage of the investment.
Total return is the change in value of an investment in the Fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results.
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of the Fund. This figure is
then "annualized" (multiplied by 365 days and divided by the applicable number
of days in the period). Funds with a front-end sales charge would incorporate
the offering price into the distribution yield in place of month-end net asset
value.
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return and
is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of shares of the Fund in any
advertisement or information including performance data for the Fund. The
performance for Fiduciary Class shares may be higher than for Class A, Class B
and Class C shares because Fiduciary Class shares are not subject to sales
charges and distribution expenses.
The performance of each class of the Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that may
assume investment of dividends but do not reflect deductions for administrative
and management costs. In addition, the performance of each class of the Fund may
be compared to other funds or to relevant indices that may calculate total
return without reflecting sales charges; in which case, the Fund may advertise
its total return in the same manner. If reflected, sales charges would reduce
these total return calculations.
PROSPECTUS
31
<PAGE> 189
TAXES
The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
advisors regarding specific questions as to the tax consequences of investing in
the Fund.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other funds. The Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders of
each class of shares of the Fund on at least an annual basis. Generally,
dividends from net investment income will be taxable to Shareholders as ordinary
income whether received in cash or in additional shares, and any net capital
gains will be distributed at least annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares.
Distributions by the Fund to retirement plans that qualify for tax-exempt
treatment under the Code ("qualified retirement plans") will not be taxable. The
Federal tax treatment of qualified retirement plans, as well as distributions
from such plans, is governed by specific provisions of the Code. If shares are
held by a retirement plan that ceases to qualify for tax-exempt treatment under
the Code or by an individual who has received such shares as a distribution from
a retirement plan, the Fund's distributions will be taxable to such plan or
individual as described in the preceding paragraph. Persons considering
directing the investment of their qualified retirement plan account in the Fund
and qualified retirement plan trusts considering purchasing such shares, should
consult their tax advisors for a more complete explanation of the Federal tax
consequences, and for an explanation of the state, local and (if applicable)
foreign tax consequences of making such an investment.
The Fund will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Fund (such as STRIPS, CUBES, TRS, TIGRS and
CATS), as defined in the "Description of Permitted Investments," are sold at
original issue discount and thus do not make periodic cash interest payments.
The Fund will be required to include as part of its current income the imputed
interest on such obligations even though the Fund has not received any interest
payments on such obligations during that period. Because the Fund distributes
substantially all of its net investment income to its Shareholders (including
such imputed interest), the Fund may have to sell portfolio securities in order
to generate the cash necessary for the required distributions. Such sales may
occur at a time when the Advisor would not have chosen to sell such securities
and may result in a taxable gain or loss.
Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in such a month will be deemed to
have been paid by the Fund and received by Shareholders on December 31 of that
year, if paid by the Fund at any time during the following January.
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Fund's investments
in U.S. government obligations may not be entitled to the exemptions from state
and local income taxes that would be available if the Shareholder had purchased
U.S. government obligations directly. The Fund will inform Shareholders annually
of the percentage of income and distributions derived from U.S. government
obligations. Shareholders should consult their tax advisors regarding the state
and local tax treatment of the dividends received from the Fund.
The Fund may be subject to foreign withholding taxes on income derived from
obligations of foreign issuers. The Fund will not be able to elect to treat
Shareholders as having paid their proportionate share of such foreign taxes.
Sale, exchange or redemption of Fund shares by a Shareholder will generally be a
taxable event to such Shareholder.
PROSPECTUS
32
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<PAGE> 193
Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
1111 Polaris Parkway
2nd Floor, Suite 100
Columbus, OH 43271-0211
Distributor
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TOG-F-127
<PAGE> 194
THE ONE GROUP(R)
FAMILY OF MUTUAL FUNDS
June , 1997
THE ONE GROUP(R) INVESTOR AGGRESSIVE GROWTH FUND
Investment Advisor: BANC ONE INVESTMENT ADVISORS CORPORATION
The One Group(R) (the "Trust") is a mutual fund seeking to provide a convenient
and economical means of investing in one or more professionally managed
portfolios of securities. This Prospectus relates to The One Group(R) Investor
Aggressive Growth Fund Class A, Class B, Class C and Fiduciary Class shares.
THE ONE GROUP(R) INVESTOR AGGRESSIVE GROWTH FUND (THE "FUND") SEEKS CAPITAL
APPRECIATION BY INVESTING PRIMARILY IN A DIVERSIFIED GROUP OF ONE GROUP(R)
MUTUAL FUNDS WHICH INVEST PRIMARILY IN EQUITY SECURITIES.
Class A, Class B and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors.
Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodian or similar capacities (each an
"Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT OR
ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. BANC ONE
INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUND FOR INVESTMENT
ADVISORY AND OTHER SERVICES.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated November 1, 1996, as amended June , 1997, has been filed
with the Securities and Exchange Commission and is available without charge
through the Distributor, The One Group(R) Services Company, 3435 Stelzer Road,
Columbus, OH 43219 or by calling 1-800-480-4111 during business hours. The
Statement of Additional Information is incorporated into this Prospectus by
reference. The Securities and Exchange Commission maintains a Web Site
(http://www.sec.gov.) that contains the Statement of Additional Information,
material incorporated by reference, and other information regarding The One
Group(R).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS
<PAGE> 195
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY.............................................................................. 3
ABOUT THE FUND....................................................................... 4
Expense Summary.................................................................... 4
The Fund........................................................................... 6
Investment Objective............................................................... 6
Investment Policies................................................................ 6
HOW TO DO BUSINESS WITH THE ONE GROUP(R)............................................. 10
How to Invest in The One Group(R).................................................. 10
Contingent Deferred Sales Charge................................................... 14
Exchanges.......................................................................... 15
Redemptions........................................................................ 16
FUND MANAGEMENT...................................................................... 18
The Advisor........................................................................ 18
The Distributor.................................................................... 18
The Administrator.................................................................. 19
The Transfer Agent and Custodian................................................... 19
Counsel and Independent Accountants................................................ 20
OTHER INFORMATION.................................................................... 20
The Trust.......................................................................... 20
Other Investment Policies.......................................................... 21
Description of Permitted Investments............................................... 22
Performance........................................................................ 28
Taxes.............................................................................. 29
</TABLE>
PROSPECTUS
2
<PAGE> 196
SUMMARY
The One Group(R) (the "Trust") is an open-end management investment company that
provides a convenient way to invest in professionally managed portfolios of
securities. The following provides basic information about the Class A, Class B,
Class C and Fiduciary Class shares of The One Group(R) Investor Aggressive
Growth Fund.
WHAT IS THE INVESTMENT OBJECTIVE? The Fund seeks capital appreciation by
investing primarily in a diversified group of One Group mutual funds which
invest primarily in equity securities. See "Investment Objective." Shares of the
Fund are available to tax advantaged retirement accounts and other persons
investing for long-term investment purposes. The Fund should not be used for
short-term trading purposes. There is no assurance that the Fund will achieve
its investment objective.
WHAT ARE THE PERMITTED INVESTMENTS? The Fund offers Shareholders a
professionally-managed investment program by purchasing shares of existing
mutual funds of The One Group(R) (the "Underlying Funds"), which are managed by
Banc One Investment Advisors Corporation (the "Advisor"). The Fund will invest
90% to 100% of its assets in Underlying Funds which invest primarily in equity
securities, and up to 10% in Money Market Funds. The Fund will normally allocate
its assets among the Underlying Funds according to the Advisor's outlook for the
economy, financial markets and relative market valuation of the Underlying
Funds. The Advisor may vary the allocation within the above ranges. There is no
assurance that the Fund will achieve its stated objective.
WHAT ARE THE CHARACTERISTICS OF THE UNDERLYING FUNDS? The Underlying Funds in
which the Fund will invest have the following characteristics:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
UNDERLYING FUND CHARACTERISTIC
------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund.................................... Money Market
The One Group(R) Disciplined Value Fund..................................... Equity
The One Group(R) International Equity Index Fund............................ Equity
The One Group(R) Large Company Growth Fund.................................. Equity
The One Group(R) Large Company Value Fund................................... Equity
The One Group(R) Growth Opportunities Fund.................................. Equity
The One Group(R) Value Growth Fund.......................................... Equity
The One Group(R) Gulf South Growth Fund..................................... Equity
The One Group(R) Income Equity Fund......................................... Equity
The One Group(R) Equity Index Fund.......................................... Equity
</TABLE>
The Fund's net asset value will fluctuate with changes in the equity and bond
markets and the value of the Underlying Funds in which it invests. The Fund's
investment return is diversified by its investment in the Underlying Funds which
invest in growth and income stocks, foreign securities, debt securities, and
cash and cash equivalents. See page 6 for a complete description of the
Underlying Funds and page 21 for other investment policies.
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation, an indirect
subsidiary of BANC ONE CORPORATION, serves as the Advisor of the Trust. The
Advisor is entitled to a fee for advisory services provided to the Trust. The
Advisor may voluntarily agree to waive a part of its fees. See "The Advisor" and
"Expense Summary."
WHO IS THE ADMINISTRATOR? The One Group(R) Services Company serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Investment Advisors Corporation serves as the
Sub-Administrator of the Trust, pursuant to an agreement with the Administrator
for which Banc One Investment Advisors Corporation receives a fee paid by the
Administrator. See "The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust, for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
WHO IS THE DISTRIBUTOR? The One Group(R) Services Company acts as Distributor
of the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A, Class B and Class C shares. No compensation is paid to
the Distributor for the distribution services for the Fiduciary Class shares of
the Fund. See "The Distributor."
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Distributor on any day that the New York Stock Exchange is open for
trading ("Business Days"). See "How to Invest in The One Group(R)," and
"Redemptions."
HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is determined and declared monthly, and
is distributed in the form of monthly dividends to Shareholders of the Fund on
the first Business Day of each month. Any capital gains are distributed at least
annually. Distributions are paid in additional shares of the same class unless
the Shareholder elects to take the payment in cash. See "Dividends."
PROSPECTUS
3
<PAGE> 197
ABOUT THE FUND
EXPENSE SUMMARY -- THE ONE GROUP(R) AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
FIDUCIARY
CLASS A CLASS B CLASS C CLASS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)................................................ 4.50% none none none
Maximum Contingent Deferred Sales Charge(2) (as a percentage of
original purchase price or redemption proceeds, as
applicable).................................................... none 5.00% 1.00% none
Redemption Fees.................................................. none none none none
Exchange Fees.................................................... none none none none
ANNUAL OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Advisory Fees(3)...................................... .01% .01% .01% .01%
12b-1 Fees (after fee waiver)(4)................................. .25% 1.00% 1.00% none
Other Expenses(5)................................................ .19% .19% .19% .19%
- -----------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES(6)...................................... .45% 1.20% 1.20% .20%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more of Class A shares and is not
assessed a sales charge at the time of purchase, will be assessed a sales
charge equivalent to 1% of the purchase price if such purchaser redeems any
or all of the Class A shares prior to the first anniversary of purchase.
(3) Investment Advisory fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Absent this voluntary reduction,
Investment Advisory fees would be .05% for all classes of shares.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plan, 12b-1 fees (as a percentage of average daily net
assets) would be .35% for Class A shares. The 12b-1 fees include a
Shareholder servicing fee of .25% of average daily net assets of the Fund's
Class B and Class C shares and may include a Shareholder servicing fee of
.25% of the average daily net assets of the Fund's Class A shares. See "The
Distributor."
(5) Other Expenses have been revised to reflect fee waivers and reimbursements
effective as of the effective date of this Prospectus. Absent this voluntary
waiver and reimbursement, Other Expenses would be .29%.
(6) Absent the voluntary reduction of fees, Total Operating Expenses would be
.69% for Class A Shares, 1.34% for Class B Shares, 1.34% for Class C Shares,
and .34% for Fiduciary Class Shares.
The Fund will indirectly bear its pro rata share of fees and expenses incurred
by the Underlying Funds and the investment returns of the Fund will be net of
the expenses of the Underlying Funds. The following chart provides the expense
ratio for each of the Underlying Funds in which the Fund invests (based on the
current Underlying Fund Prospectus). Certain of these expense ratios may include
a voluntary reduction in investment advisory fees.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
NAME OF UNDERLYING FUND EXPENSE RATIO
-----------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund...................................... .50%
The One Group(R) Disciplined Value Fund....................................... 1.00%
The One Group(R) International Equity Index Fund.............................. 1.36%
The One Group(R) Large Company Growth Fund.................................... .97%
The One Group(R) Large Company Value Fund..................................... .98%
The One Group(R) Growth Opportunities Fund.................................... 1.00%
The One Group(R) Value Growth Fund............................................ 1.05%
The One Group(R) Gulf South Growth Fund....................................... 1.06%
The One Group(R) Income Equity Fund........................................... 1.01%
The One Group(R) Equity Index Fund............................................ .39%
</TABLE>
PROSPECTUS
4
<PAGE> 198
After combining the total operating expenses of the Fund with those of the
Underlying Funds, the estimated average weighted expense ratio for Class A
shares is 1.39%, for Class B shares is 2.14%, for Class C shares is 2.14%, and
for Fiduciary Class shares is 1.14%.
On the basis of these estimated expenses, the following example illustrates the
expenses an investor would pay on a $1,000 investment in Class A and Fiduciary
Class shares of the Fund, assuming: (1) imposition of the maximum sales charge
for Class A shares; (2) 5% annual return; and (3) redemption at the end of each
time period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 59 $ 87 $118 $ 204
Fiduciary Class $ 12 $ 36 $ 63 $ 139
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 61 $ 95 $131 $ 233
Fiduciary Class $ 13 $ 42 $ 72 $ 158
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class B shares,
assuming: (1) deduction of the applicable maximum Contingent Deferred Sales
Charge; and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 72 $ 97 $135 $ 228
Assuming no redemption $ 22 $ 67 $115 $ 228
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 73 $102 $144 $ 248
Assuming no redemption $ 23 $ 72 $124 $ 248
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class C shares of
the Fund, assuming: (1) imposition of the maximum sales charge for Class C
shares and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 32 $ 67 $115 $ 211
Assuming no redemption $ 22 $ 67 $115 $ 211
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 33 $ 72 $124 $ 233
Assuming no redemption $ 23 $ 72 $124 $ 233
</TABLE>
Class B and Class C shares automatically convert to Class A shares after eight
(8) and six (6) years, respectively. Therefore, the "10 Years" examples above
reflect the effect of such conversion.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
purpose of these tables is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Trust.
The rules of the Securities and Exchange Commission require that the maximum
sales load be reflected in the above tables. However, Shareholders in the Fund
may, under certain circumstances, qualify for reduced sales charges. See "How to
Invest in The One Group(R)." Long-term Shareholders of Class A, Class B, and
Class C shares may pay more than the equivalent of the maximum front-end sales
charges otherwise permitted by the National Association of Securities Dealers'
Rules.
PROSPECTUS
5
<PAGE> 199
THE FUND
The One Group(R) Investor Aggressive Growth Fund (the "Fund") is part of The One
Group(R) (the "Trust"), which is an open-end management investment company that
offers shares in 40 separate funds and different classes of certain of the
funds. The Trust was organized as a Massachusetts Business Trust on May 23,
1985. This Prospectus relates to Class A, Class B, Class C, and Fiduciary Class
shares of The One Group(R) Investor Aggressive Growth Fund. Each class of shares
provides for variations in distribution costs, voting rights, dividends and per
share net asset value pursuant to a multiple class plan (the "Multiple Class
Plan") adopted by the Board of Trustees of the Trust. Except for these
differences between classes, each share of the Fund represents an undivided,
proportionate interest in the Fund. The Information regarding the Trust's other
funds and their classes is contained in separate prospectuses which may be
obtained from the Trust's Distributor, The One Group(R) Services Company, 3435
Stelzer Road, Columbus, OH 43219, or by calling 1-800-480-4111.
INVESTMENT OBJECTIVE
The Fund seeks capital appreciation by investing primarily in a diversified
group of One Group(R) mutual funds which invest primarily in equity securities.
The investment objective of the Fund is fundamental and may not be changed
without a vote of the holders of a majority of the Fund's outstanding shares (as
defined in the Statement of Additional Information).
There is no assurance that the Fund will meet its investment objective.
INVESTMENT POLICIES OF THE FUND
The investment policies of the Fund may be changed without an affirmative vote
of the holders of a majority of the Fund's outstanding shares unless a policy is
expressly deemed to be fundamental. Shareholders will be notified of any
material change in the Fund's investment policies.
PERMISSIBLE INVESTMENTS
The Fund will invest 90% to 100% of its assets in nine Underlying Funds of The
One Group(R) which invest primarily in equity securities and up to 10% of its
assets in one money market fund of The One Group(R). The Fund will invest its
assets in the Underlying Funds, within the ranges indicated below.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
INVESTMENT RANGE
INVESTOR AGGRESSIVE GROWTH FUND (PERCENT OF FUND ASSETS)
------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................ 0 - 10%
The One Group(R) Disciplined Value Fund............................. 0 - 30%
The One Group(R) International Equity Index Fund.................... 0 - 30%
The One Group(R) Large Company Growth Fund.......................... 0 - 48%
The One Group(R) Large Company Value Fund........................... 0 - 55%
The One Group(R) Growth Opportunities Fund.......................... 0 - 30%
The One Group(R) Value Growth Fund.................................. 0 - 50%
The One Group(R) Gulf South Growth Fund............................. 0 - 30%
The One Group(R) Income Equity Fund................................. 0 - 50%
The One Group(R) Equity Index Fund.................................. 0 - 50%
</TABLE>
The allocation of the Fund's assets among the Underlying Funds will be made by
the Advisor under the supervision of the Trust's Board of Trustees, within the
percentage ranges set forth in the table above.
The Fund and the Underlying Funds are permitted for temporary defensive purposes
to invest up to 100% of their assets in short-term fixed income securities. Such
securities include obligations of the U.S. government and its agencies and
instrumentalities; commercial paper, bank certificates of deposit, repurchase
agreements, bankers acceptances, variable amount master demand notes and bank
money market deposit accounts. The Fund and the Underlying Funds may also hold
cash or cash equivalents for liquidity purposes.
To the extent the Fund or the Underlying Funds are engaged in a temporary
defensive position, they will not be pursuing their investment objective.
PROSPECTUS
6
<PAGE> 200
DESCRIPTION OF THE UNDERLYING FUNDS
The following is a brief description of the principal investment policies of the
Underlying Funds. Additional investment practices are described in "Investment
Policies of the Underlying Funds," the Statement of Additional Information and
the prospectus for each of the Underlying Funds.
THE ONE GROUP(R) INTERNATIONAL EQUITY INDEX FUND
The One Group(R) International Equity Index Fund is an equity fund. The
objective of the fund is to provide investment results that correspond to the
aggregate price and dividend performance of the securities in the Gross Domestic
Product Weighted Morgan Stanley Capital International Europe, Australia and Far
East Index ("MSCI EAFE GDP Index" or "EAFE GDP Index")((1)) Under normal
conditions, the fund will invest substantially all of its assets in foreign
securities and at least 65% of the value of its total assets in foreign equity
securities, consisting of common stocks (including sponsored and unsponsored
American Depository Receipts ("ADRs")) and preferred stocks, securities
convertible into common stocks (only if they are listed on registered exchanges
or actively traded in the over-the-counter market), warrants and depository
receipts for such securities of issuers located in at least three different
countries. In attempting to duplicate the capital performance and dividend
income of the MSCI EAFE GDP Index, the fund will normally invest in the stocks
which comprise the Index and secondarily in stock index futures. It is expected
that cash reserve items normally will not exceed 10% of the fund's net assets.
The fund may invest up to 10% of its net assets in securities of emerging
international markets such as Mexico, Brazil and Chile. A substantial portion of
the fund's assets will be denominated in foreign currencies.
THE ONE GROUP(R) LARGE COMPANY GROWTH FUND
The One Group(R) Large Company Growth Fund seeks long-term capital appreciation
and growth of income by investing primarily in equity securities. To achieve its
objective, the fund will, under normal market conditions, invest substantially
all, but in no event less than 65%, of the value of its total assets in equity
securities consisting of common stocks, warrants and any rights to purchase
common stocks. The weighted average capitalization of the companies in which the
fund invests will under normal market conditions always be in excess of the
market median capitalization of the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index").((2)) The fund may invest the remainder of its assets in
any combination of nonconvertible fixed income securities, repurchase
agreements, options and futures contracts.
THE ONE GROUP(R) LARGE COMPANY VALUE FUND
The One Group(R) Large Company Value Fund is an equity fund that seeks capital
appreciation with the incidental goal of achieving current income by investing
primarily in equity securities. The fund will invest in equity securities of
companies that are believed to be selling below their long-term intrinsic
investment values. Companies held will typically be large capitalization issuers
with current price/earnings and/or price/book ratios which are lower than that
of the general market as measured by the S&P 500 Index. In addition, the fund
may invest in stock of companies which have been analyzed to have breakup values
well in excess of current market values or which have uniquely undervalued
corporate assets. The general approach to purchasing stocks will emphasize
individual security selection. Macroeconomic data and industry profit forecasts
will be utilized to gauge the best sectors of the economy in which to be
positioned.
Under normal market conditions, the fund will invest at least 80% of the value
of its total assets in equity securities consisting of common stocks and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The remainder of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) GROWTH OPPORTUNITIES FUND
The One Group(R) Growth Opportunities Fund seeks growth of capital and,
secondarily, current income by investing primarily in equity securities. The
fund will invest in issues which are identified and selected based on the
potential to produce above-average earnings growth per share over a one-to-three
year period. It is expected that issuers will generally include established
companies with a history of above-average growth or companies that are expected
to enter periods of above-average growth, and smaller companies which are
positioned in emerging growth industries. The fund may invest in securities
listed on a stock exchange as well as those traded over-the-counter. At least
80% of the value of the fund's total assets will, under normal conditions, be
invested in equity securities consisting of common stocks and
- ---------------
(1) "MSCI EAFE GDP Index" is a registered service mark of Morgan Stanley Capital
International, which does not sponsor and is in no way affiliated with the
fund.
(2) "Standard & Poor's 500" is a registered trademark of Standard & Poor's
Corporation, which does not sponsor and is in no way affiliated with the
fund.
PROSPECTUS
7
<PAGE> 201
debt securities and preferred stocks that are convertible into common stocks.
The fund also may enter into options and futures transactions. The remainder of
the fund's assets will be held in cash equivalents.
THE ONE GROUP(R) VALUE GROWTH FUND
The One Group(R) Value Growth Fund seeks long-term capital growth and growth of
income while, as a secondary objective providing a moderate level of current
income. The fund pursues its objectives by investing primarily in a portfolio of
common stocks, debt securities, preferred stocks, convertible securities,
warrants, and other equity securities of companies that show the potential for
growth of earnings over time. Stock selection is guided by current valuation
relative to a stock's historical valuation and relative to the Advisor's
estimates of future growth of earnings and dividends. Accordingly, the fund may
emphasize securities of companies that the Advisor believes are overlooked or
undervalued by investors, which fact should contribute to an increase in the
market value of the security over time.
The fund will ordinarily invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents.
THE ONE GROUP(R) GULF SOUTH GROWTH FUND
The One Group(R) Gulf South Growth Fund seeks long-term capital growth by
investing in a portfolio of equity securities of small capitalization, emerging
growth and medium capitalization companies, which are either headquartered in or
whose primary market is in the southeastern region of the United States. The
fund invests primarily in a portfolio of common stocks, debt securities,
preferred stocks, convertible securities, warrants and other equity securities
of such companies. The Advisor anticipates that the fund's portfolio will
normally consist of securities of approximately twenty-five to sixty emerging
growth companies from Virginia, North Carolina, South Carolina, Florida,
Georgia, Tennessee, Alabama, Mississippi, Arkansas, Louisiana, Kentucky and
Texas. It is expected that companies selected would generally have market
capitalizations ranging from $50,000,000 to $2,000,000,000, although the fund
may occasionally hold securities of companies whose market capitalizations are
considerably larger if doing so contributes to the fund's investment objective.
The fund will normally invest at least 65% of the value of its total assets in
securities with the characteristics described above. Although the fund intends
to invest all of its assets in such securities, up to 35% of its total assets
may be held in cash or invested in U.S. Government Securities, other investment
grade fixed-income securities and cash equivalents, when the Advisor's
assessment of the attractiveness of the entire stock market and individual
market sectors changes.
Because the fund is non-diversified, its share price may be subject to greater
fluctuations as a result of changes in an issuer's financial condition or the
market's assessment of an individual issuer. In addition, smaller, less seasoned
companies may be subject to greater business risk than larger, established
companies.
THE ONE GROUP(R) INCOME EQUITY FUND
The One Group(R) Income Equity Fund seeks current income through regular payment
of dividends with the secondary goal of achieving capital appreciation by
investing primarily in equity securities. The fund will make investments in an
attempt to keep its yield above the S&P 500 Index. Achieving such a yield will
be the primary consideration in selecting securities. Investments will be made
in common stocks of corporations which regularly pay dividends, although
continued payment of dividends cannot be assured. The fund will invest primarily
in stocks with favorable, long-term fundamental characteristics, but stocks of
companies that are out of favor in the financial community may also be
purchased.
The fund will under normal conditions invest at least 80% of the value of its
total assets in equity securities consisting of common stocks, and debt
securities and preferred stocks which are convertible into common stocks. The
fund also may enter into options and futures transactions. The balance of the
fund's assets will be held in cash equivalents.
THE ONE GROUP(R) EQUITY INDEX FUND
The One Group(R) Equity Index Fund seeks investment results that correspond to
the aggregate price and dividend performance of the securities on the S&P 500
Index. The fund will, in attempting to duplicate the capital performance and
dividend income of the S&P 500 Index, normally invest in many of the stocks
which comprise the S&P 500 Index and secondarily in stock index futures. Cash
reserves will not normally exceed 10% of the fund's net assets.
The Advisor generally selects stocks for the fund in the order of their
weightings in the S&P 500 Index beginning with the heaviest weighted stocks. The
percentage of the fund's assets to be invested in each stock is approximately
the same as the percentage it represents in the S&P 500 Index. From time to
time, administrative adjustments may be made in the fund because of changes in
the composition of the S&P 500 Index, but such changes should be infrequent. The
fund will attempt to achieve a correlation between the performance of its
portfolio and that of the S&P 500 Index of at least 0.95, without taking into
account expenses. A correlation of 1.00 would indicate perfect correlation,
which would be achieved
PROSPECTUS
8
<PAGE> 202
when the fund's net asset value, including the value of its dividend and capital
gains distributions, increases or decreases in exact proportion to changes in
the S&P 500 Index.
THE ONE GROUP(R) PRIME MONEY MARKET FUND
The One Group(R) Prime Money Market Fund seeks current income with liquidity and
stability of principal. The fund intends to comply with the regulations of the
Securities and Exchange Commission applicable to money market funds using the
amortized cost method for calculating net asset value. These regulations impose
certain quality, maturity and diversification restraints on investments by the
fund. Under these regulations, the fund will invest only in U.S. dollar-
denominated securities, will maintain an average maturity on a dollar-weighted
basis of 90 days or less, and will acquire only "eligible securities" that
present minimal credit risks and have a maturity of 397 days or less.
RISK FACTORS
The investments of the Fund are concentrated in the Underlying Funds, so the
Fund's investment performance is directly related to the performance of the
Underlying Funds. In addition, as a matter of fundamental policy, the Fund must
allocate its investments among the Underlying Funds within certain ranges. As a
result, the Fund does not have the same flexibility to invest as a mutual fund
without such constraints.
The Fund may invest in Underlying Funds which invest in medium or lower grade
bonds. If these bonds are downgraded, the Advisor will consider whether to
increase or decrease the Fund's investment in the affected Underlying Fund.
Further, the Fund may invest in Underlying Funds which concentrate their assets
in certain industries. Under certain circumstances, this could result in the
Fund being concentrated in those industries. If this were to occur, the Advisor
would consider whether to maintain or change the Fund's investments in such
Underlying Funds.
SPECIAL RISKS OF INVESTING IN EQUITY FUNDS
Changes in the value of an equity fund's portfolio securities will not affect
cash income, if any, derived from these securities but will affect the fund's
net asset value. Because equity funds invest primarily in equity securities,
which fluctuate in value, the funds' shares will fluctuate in value. In
addition, certain investment management techniques that the funds may use, such
as the purchase and sale of futures, options and forward commitments, could
expose the funds to potentially greater risk of loss than more traditional
equity investments.
SPECIAL RISKS OF INVESTING IN FIXED-INCOME FUNDS
The market value of a fund's fixed-income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed-income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these investments. Except under condition of default, changes in
the value of fixed-income securities will not affect cash income derived from
these securities but will affect the funds' net asset value.
SPECIAL RISKS OF INVESTING IN INDEX FUNDS
Because of the funds' investment objectives, securities may be purchased,
retained and sold by the funds when such transactions would not be consistent
with traditional investment criteria. Accordingly, an investor is exposed to a
greater risk of loss (and a correspondingly greater prospect of gain) from
fluctuations in the value of such securities than would be the case if the funds
were not fully invested in such securities. In addition, the Advisor may
eliminate one or more securities or elect not to increase the funds' position in
such securities notwithstanding the continued listing of such securities on the
relevant index in the following circumstances: (i) the stock is no longer
publicly traded; or (ii) an unexpected adverse development occurs with respect
to a company such as bankruptcy or insolvency. As a result of these risk
factors, the share price of an index fund is expected to be volatile, and
investors should be able to sustain sudden, sometimes substantial, fluctuations
in the value of their investment.
SPECIAL RISKS OF FOREIGN SECURITIES
Investments in securities of foreign issuers involve risks that are different
from investments in securities of U.S. issuers. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls, higher transaction costs, and
delayed settlements of transactions. Securities of some foreign companies are
less liquid, and their prices more volatile, than securities of comparable U.S.
companies.
PROSPECTUS
9
<PAGE> 203
Additionally, there may be less public information available about foreign
issuers. Finally, since the funds may invest in securities denominated in
foreign currencies, changes in exchange rates may affect the value of
investments in the funds.
SPECIAL RISKS OF SMALL CAPITALIZATION COMPANIES
Smaller, less seasoned companies may be subject to greater business risk than
larger, established companies. They may be more vulnerable to changes in
economic conditions, specific industry conditions, market fluctuations and other
factors affecting the profitability of companies. Therefore, the stock price of
smaller capitalization companies may be subject to greater price fluctuations
than that of larger, established companies. Due to these and other risk factors,
the price movement of the securities held by the funds may be volatile and the
net asset value of shares of the funds may fluctuate.
SPECIAL RISKS OF MORTGAGE RELATED SECURITIES
Some of the funds invest in mortgage-related securities, such as mortgage-backed
securities, adjustable rate mortgage loans ("ARMs"), fixed rate mortgage loans,
and mortgage dollar rolls. The investment characteristics of mortgage related
securities differ from traditional debt securities. These differences can result
in significantly greater price and yield volatility than is the case with
traditional fixed-income securities. The major differences typically include
more frequent interest and principal payments, usually monthly, the
adjustability of interest rates, and the possibility that prepayments of
principal may be made at any time. Prepayment rates are influenced by changes in
current interest rates and a variety of economic, geographic, social, and other
factors. During periods of declining interest rates, prepayment rates can be
expected to accelerate. Under certain interest rate and prepayment rate
scenarios, a fund may fail to recoup fully its investment in mortgage-related
securities notwithstanding a direct or indirect governmental or agency
guarantee. The funds intend to use hedging techniques to control this risk. In
general, changes in the rate of prepayments on a mortgage-related security will
change that security's market value and its yield to maturity. When interest
rates fall, high prepayments could force a fund to reinvest principal at a time
when investment opportunities are not attractive. Thus, mortgage-related
securities may not be an effective means for a fund to lock in long-term
interest rates. Conversely, during periods when interest rates rise, slow
prepayments could cause the average life of the security to lengthen and the
value to decline more than anticipated.
HOW TO DO BUSINESS WITH THE ONE GROUP(R)
HOW TO INVEST IN THE ONE GROUP(R)
Shares of the Fund are sold on a continuous basis and may be purchased directly
from the Trust's Distributor, The One Group(R) Services Company, by mail, by
telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor, or through a broker-dealer that has
established a dealer agreement with the Distributor.
Purchases and redemptions of shares of the Fund may be made on any day that the
New York Stock Exchange is open for trading ("Business Days"). The minimum
initial and subsequent investments in the Fund are $1,000 and $100 respectively
($100 and $25, respectively, for employees of BANC ONE CORPORATION and its
affiliates). Initial and subsequent investment minimums may be waived at the
Distributor's discretion. Investors may purchase up to a maximum of $250,000 of
Class B and Class C shares per individual purchase order.
Class A, Class B and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors. Fiduciary Class shares are offered to
institutional investors, including affiliates of BANC ONE CORPORATION and any
bank, depository institution, insurance company, pension plan or other
organization authorized to act in fiduciary, advisory, agency, custodial or
similar capacities (each an "Authorized Financial Organization"). For additional
details regarding eligibility, call the Distributor at 1-800-480-4111.
BY MAIL
Investors may purchase Class A, Class B and Class C shares of the Fund by
completing and signing an Account Application Form and mailing it, along with a
personal check (or other negotiable bank instrument or money order) payable to
"The One Group(R)," the Fund, The One Group Services Company, or State Street
Bank and Trust Company (the Trust's Transfer Agent and Custodian), to the
Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500. If the purchase order is
to be credited to a Fund Direct IRA, the check should be payable to State Street
Bank and Trust Company for the benefit of the Shareholder. Subsequent purchases
of shares may be made at any time by mailing a personal check to the Transfer
Agent. Account Application Forms are available through the Distributor by
calling 1-800-480-4111. Third party checks will not be accepted. When purchases
are made by check or under the Systematic Investment Plan (see below),
redemptions will not be allowed until the investment being redeemed has been in
the Fund for 10 calendar days.
PROSPECTUS
10
<PAGE> 204
Purchases of Fiduciary Class shares, and Class A, Class B, and Class C shares
that are being offered to investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, are made by an
institutional investor and/or other intermediary on behalf of an investor (each
also a "Shareholder Servicing Agent"). The Shareholder Servicing Agent may
require an investor to complete forms in addition to the Account Application
Form and to follow procedures established by the Shareholder Servicing Agent.
Such Shareholders should contact their Shareholder Servicing Agents regarding
purchases, exchanges and redemptions of shares. See "Additional Information
Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible to
make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agents, if applicable.
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
SYSTEMATIC INVESTMENT PLAN
Class A, Class B and Class C investors may make automatic monthly investments in
the Fund from their bank, savings and loan or other depository institution
accounts. The minimum initial investment must be $1000 and subsequent
investments must be $25 under the Systematic Investment Plan, which minimum may
be reduced at the discretion of the Distributor. The Trust pays the costs
associated with these transfers, but reserves the right, upon thirty days'
written notice, to impose reasonable charges for this service. A depository
institution may impose a charge for debiting an investor's account which would
reduce the investor's return from an investment in the Fund.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which the Fund may be an
appropriate investment. The Trust's retirement plan allows participants to defer
taxes while helping them build their retirement savings.
The One Group(R) Fund-Direct IRA is a retirement plan with a wide choice of
investments offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A, Class B
and Class C shares, and the investor could be liable for any fees or expenses
incurred by the Trust. Federal funds are monies credited to a bank's account
with a Federal Reserve Bank. The purchase price of shares of the Fund is the net
asset value next determined after a purchase order is effected plus any
applicable sales charge (the "offering price"). The net asset value per share of
the Fund is determined by dividing the total market value of the Fund's
investments and other assets allocable to a class, less any liabilities
allocable to that class, by the total number of outstanding shares of such
class. Net asset value per share is determined daily as of 4:00 p.m., eastern
time, on each Business Day. For a further discussion of the calculation of net
asset value, see the Statement of Additional Information. Shares may also be
issued in transactions involving the acquisition by the Fund of securities held
by collective investment funds sponsored and administered by affiliates of the
Advisor. Purchases will be made in full and fractional shares of the Fund
calculated to three decimal places. Although the methodology and procedures are
identical, the net asset value per share of classes within the Fund may differ
because the distribution expenses charged to Class A, Class B and Class C shares
are not charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the Trust's
Transfer Agent nor the Trust will be responsible for any loss, liability, cost
or expense for acting upon telephone or wire instructions, and the investor will
bear all risk of loss. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If such procedures are not
employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans, Class A, Class B and Class C shares offered to IRA
account participants and investors in certain retirement plans such as 401(k)
and similar
PROSPECTUS
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plans, other than Individual Retirement Accounts, will normally be held in the
name of the Shareholder Servicing Agent effecting the purchase on the
Shareholder's behalf, and it is the Shareholder Servicing Agent's responsibility
to transmit purchase orders to the Distributor. A Shareholder Servicing Agent
may impose an earlier cut-off time for receipt of purchase orders directed
through it to allow for processing and transmittal of these orders to the
Distributor for effectiveness the same day. The Shareholder should contact his
or her Shareholder Servicing Agent for information as to the Shareholder
Servicing Agents procedures for transmitting purchase, exchange or redemption
orders to the Trust. A Shareholder who desires to transfer the registration of
shares beneficially owned by him or her, but held of record by a Shareholder
Servicing Agent, should contact the Shareholder Servicing Agent to accomplish
such change. Other Shareholders who desire to transfer the registration of their
shares should contact the Transfer Agent.
No certificates representing shares of the Fund will be issued. In
communications to Shareholders, the Fund will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
SALES CHARGE
CLASS A SHARES
The following table shows the initial sales charge on Class A shares to a
"single purchaser" (defined below) together with the sales charge reallowed to
financial institutions and intermediaries (the "commission"):
<TABLE>
<CAPTION>
SALES CHARGE
SALES CHARGE AS APPROPRIATE COMMISSION
AS A PERCENTAGE OF AS A
PERCENTAGE OF NET AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- --------------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
less than $100,000....................................... 4.50% 4.71% 4.05%
$100,000 but less than $250,000.......................... 3.50% 3.53% 3.05%
$250,000 but less than $500,000.......................... 2.50% 2.36% 2.05%
$500,000 but less than $1,000,000........................ 2.00% 2.04% 1.60%
$1,000,000 or more....................................... 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial institutions
and intermediaries. Under certain circumstances, the Distributor will use its
own funds to compensate financial institutions and intermediaries in amounts
that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a sales charge is 3.00% of the
offering price (including the commission shown above and additional cash
compensation described below). In addition, the Distributor will, from time to
time and at its own expense, provide promotional incentives to financial
institutions and intermediaries, whose registered representatives have sold or
are expected to sell significant amounts of the shares of the Fund in the form
of payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives to places within or outside
the United States, and additional compensation in an amount up to 1.00% of the
offering price of Class A shares of the Fund for sales of $1 million to $5
million, and 0.50% for sales over $5 million. A Shareholder who purchases $1
million or more of Class A shares and is not assessed a sales charge at the time
of purchase, will be assessed a sales charge equivalent to 1% of the purchase
price if such Shareholder redeems any or all of the Class A shares prior to the
first anniversary of purchase. Under certain circumstances, commissions up to
the amount of the entire sales charge will be reallowed to financial
institutions and intermediaries, which might then be deemed to be "underwriters"
under the Securities Act of 1933.
RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class A
shares, a "single purchaser" is entitled to cumulate current purchases with the
current value at the offering price of previously purchased Class A, Class B,
and Class C shares of the Fund and other eligible funds of the Trust, other than
the Trust's money market funds, that are sold subject to a comparable sales
charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), and including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their minor
children, and give the age of such children. The Fund may amend or terminate
this right of accumulation at any time as to subsequent purchases.
PROSPECTUS
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<PAGE> 206
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds
that impose a comparable sales charge over the next 13 months, the sales charge
may be reduced by completing the Letter of Intent section of the Account
Application Form. The Letter of Intent includes a provision for a sales charge
adjustment depending on the amount actually purchased within the 13-month
period. In addition, pursuant to a Letter of Intent, the Custodian will hold in
escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of investment, which
is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000 in
Class A shares of one (or more) of the funds of the Trust that imposes a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. The investor would
pay an initial sales charge of 2.00% (the sales charge applicable to purchases
of $250,000) and .50% of the investment (representing the difference between the
2.50% sales charge applicable to purchases of $100,000 and the 2.50% sales
charge already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more in Class A shares under the investor's Letter of
Intent.
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Fund: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired through
the exercise of exchange privileges where a comparable sales charge has been
paid for exchanged shares; (iii) purchased by officers, directors or trustees,
retirees and employees (and their spouses and immediate family members) of the
Trust, of BANC ONE CORPORATION and its subsidiaries and affiliates, of the
Distributor and its subsidiaries and affiliates, of broker-dealers who have
entered into dealer agreements with the Trust and their subsidiaries and
affiliates, or of an investment sub-Advisor of a fund of the Trust and such
sub-Advisor's subsidiaries and affiliates; (iv) sold to affiliates of BANC ONE
CORPORATION and certain accounts (other than Individual Retirement Accounts) for
which Authorized Financial Organizations act in fiduciary, advisory, agency,
custodial or similar capacities, or purchased by investment Advisors, financial
planners or other intermediaries who have a dealer arrangement with the
Distributor, who place trades for their own accounts or for the accounts of
their clients and who charge a management, consulting or other fee for their
services, as well as clients of such investment Advisors, financial planners or
other intermediaries who place trades for their own accounts if the accounts are
linked to the master account of such investment Advisor, financial planner or
other intermediary; (v) purchased with proceeds from the recent redemption of
Fiduciary Class shares of a fund of the Trust or acquired in an exchange of
Fiduciary Class shares of a fund for Class A shares of the same fund; (vi)
purchased with proceeds from the recent redemption of shares of a mutual fund
(other than a fund of the Trust) for which a sales charge was paid; (vii)
purchased in an Individual Retirement Account with the proceeds of a
distribution from an employee benefit plan, provided that, at the time of
distribution, the employee benefit plan had plan assets invested in a fund of
the Trust; (viii) purchased with Trust assets; (ix) purchased in accounts as to
which a bank or broker-dealer charges an asset allocation fee, provided the bank
or broker-dealer has an agreement with the Distributor; (x) directly purchased
with the proceeds of a distribution on a bond for which a BANC ONE CORPORATION
affiliate bank or trust company is the Trustee or Paying Agent; or (xi)
purchased in connection with plans of reorganization of the Fund, such as
mergers, asset acquisitions and exchange offers to which the Fund is a party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi), and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at 1-800-480-4111 to
determine whether they are eligible to purchase shares without paying a sales
charge through the use of proceeds from a recent redemption or distribution as
described above, and to confirm continued availability of these waiver policies
prior to initiating the procedures described in clauses (v), (vi), and (vii).
PROSPECTUS
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<PAGE> 207
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES AND CLASS C SHARES
Class B shares are not subject to a sales charge when they are purchased, but
are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the sixth anniversary of purchase. Class C
shares also are not subject to a sales charge when they are purchased, but are
subject to a Contingent Deferred Sales Charge if a Shareholder redeems them
prior to the first anniversary of purchase. When a Shareholder purchases Class B
and Class C shares, the full purchase amount is invested directly in the Fund.
Class B and Class C shares of the Fund are also subject to an ongoing
distribution and Shareholder service fee at an annual rate of 1.00% of the
Fund's average daily net assets as provided in the CDSC Plan (described below
under "The Distributor"). This ongoing fee will cause Class B and Class C shares
to have a higher expense ratio and to pay lower dividends than Class A shares.
Class B shares convert automatically to Class A shares after eight years,
commencing from the end of the calendar month in which the purchase order was
accepted under the circumstances and subject to the qualifications described in
this Prospectus.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of the Class B and Class C shares, such
as the payment of compensation to dealers and agents for selling such shares. A
dealer reallowance of 4.00% of the original purchase price of the Class B shares
and 1.00% of the original purchase price of Class C shares will be paid to
financial institutions and intermediaries.
Class B and Class C Shareholders will pay a Contingent Deferred Sales Charge at
the rates set forth below. The Contingent Deferred Sales Charge is assessed on
an amount equal to the lesser of the then-current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on increases
in net asset value above the initial purchase price. In addition, no charge is
assessed on shares derived from reinvestment of dividends or capital gain
distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the number of years from the time of payment for the purchase of Class B shares
until the time of redemption of such shares. Solely for purposes of determining
the number of years from the time of any payment for the purchase of shares, all
payments during a month are aggregated and deemed to have been made on the first
day of the month.
CLASS B SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 5.00%
1-2..................................................................... 4.00%
2-3..................................................................... 3.00%
3-4..................................................................... 3.00%
4-5..................................................................... 2.00%
5-6..................................................................... 1.00%
6-7..................................................................... None
7-8..................................................................... None
</TABLE>
To provide an example, assume you purchased 100 shares at $10 per share (a total
cost of $1,000) and prior to the second anniversary after purchase, the net
asset value per share is $12 and during such time you have acquired 10
additional shares through dividends paid in shares. If you then make your first
redemption of 50 shares (proceeds of $600), 10 shares will not be subject to
charge because you received them as dividends. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds is subject to a Contingent Deferred Sales Charge at a rate
of 4.00% (the applicable rate prior to the second anniversary after purchase).
PROSPECTUS
14
<PAGE> 208
CLASS C SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------------------------------------------------------------------ -------------------
<S> <C>
0-1..................................................................... 1.00%
After first year........................................................ None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class A
shares in the Shareholders Fund account (unless the Shareholder elects to have
Class B shares redeemed first) or shares representing capital appreciation, next
of shares acquired pursuant to reinvestment of dividends and capital gain
distributions, next Class C shares, and finally of other shares held by the
Shareholder for the longest period of time. This method should result in the
lowest possible sales charge.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code) of a
Shareholder or a participant or beneficiary of a qualified retirement plan if
redemption is made within one year of such death or disability; or (iii) to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan to a
Shareholder who has attained the age of 70 1/2; or (iv) purchased by investors
in certain retirement plans, such as 401(k) and similar qualified plans. A
Shareholder or his or her representative should contact the Transfer Agent to
determine whether a retirement plan qualifies for a waiver and must notify the
Transfer Agent prior to the time of redemption if such circumstances exist and
the Shareholder is eligible for this waiver. In addition, the following
circumstances are not deemed to result in a "redemption" of Class B shares for
purposes of the assessment of a Contingent Deferred Sales Charge, which is
therefore waived: (i) plans of reorganization of the Fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or (ii)
exchanges for Class B shares of other funds of the Trust as described under
"Exchanges."
CONVERSION FEATURE
At the end of this period, Class B shares will automatically convert to Class A
shares eight years after the end of the month in which the shares were purchased
and will be subject to the lower distribution and Shareholder service fees
charged to Class A shares. Class C shares will convert to Class A shares after
six years. Such conversion will be on the basis of the relative net asset values
of the two classes, without the imposition of any sales charge, fee or other
charge. The conversion is not a taxable event to a Shareholder.
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B and Class C shares in a Shareholders Fund
account will be considered to be held in a separate sub-account. Each time any
Class B or Class C shares in a Shareholder's Fund account (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B or
Class C shares in the sub-account will also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B or Class C shares
of the funds of the Trust during the eight or six year period, the Trust will
aggregate the holding periods for the shares of each fund of the Trust for
purposes of calculating that eight or six year period. Because the per share net
asset value of the Class A shares may be higher than that of the Class B or
Class C shares at the time of conversion, a Shareholder may receive fewer Class
A shares than the number of Class B or Class C shares converted, although the
dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of the Fund may exchange their shares for Class A
shares of the Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders may exchange their shares for Fiduciary Class shares of the
Fund or for Fiduciary Class shares or Class A shares of another fund of the
Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares of
the Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares, except
as provided below. The Trust does not impose a charge for processing exchanges
of shares. If a Shareholder seeks to
PROSPECTUS
15
<PAGE> 209
exchange Class A shares of a fund that does not impose a sales charge for Class
A shares of a fund that does or the fund being exchanged into has a higher sales
charge, the Shareholder will be required to pay a sales charge in the amount
equal to the difference between the sales charge applicable to the fund into
which the shares are being exchanged and any sales charges previously paid for
the exchanged shares, including any sales charges incurred on any earlier
exchanges of the shares (unless such sales charge is otherwise waived, as
provided in "Other Circumstances"). The exchange of Fiduciary Class shares for
Class A shares also will require payment of the sales charge unless the sales
charge is waived, as provided in "Other Circumstances."
CLASS B
Class B Shareholders of the Fund may exchange their shares only for Class B
Shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the newly
acquired Class B shares, the newly acquired Class B shares shall be deemed to
have been issued on the date of receipt of the Shareholder's order to purchase
the outstanding Class B shares of the fund from which the initial exchange was
made.
CLASS C
Class C Shareholders of the Fund may exchange their shares only for Class C
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class C shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class C
shares. The requirements applicable to computing the Contingent Deferred Sales
Charge on the exchange of Class B shares are also applicable to the exchange of
Class C shares.
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the Transfer Agent by 4:00 p.m., eastern
time, on any Business Day, the exchange usually will occur on that day. Any
Shareholder who wishes to make an exchange must receive a current prospectus of
the fund of the Trust in which he or she wishes to invest before the exchange
will be effected.
The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax Advisors for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Fund.
A more detailed description of the above is set forth in the Statement of
Additional Information.
The Trust's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to two
substantive exchange redemptions (at least 30 days apart) from the Fund during
any twelve month period. Notwithstanding these limitations, the Trust reserves
the right to reject any purchase request (including exchange purchases from
other funds of the Trust) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares (except Class B and Class C shares, as
provided above) without charge on any Business Day; shares may ordinarily be
redeemed by mail, by telephone or by wire. All redemption orders are effected at
the net asset value per share next determined for Class A and Fiduciary Class
shares, and at net asset value per share
PROSPECTUS
16
<PAGE> 210
next determined reduced by any applicable Contingent Deferred Sales Charge for
Class B and Class C shares, after receipt of a valid request for redemption.
Payment to Shareholders for shares redeemed will be made within seven days after
receipt by the Transfer Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in order
to constitute a valid request for redemption. All requests for redemptions from
IRA accounts must be in writing. Redemption request forms may be obtained from
the Transfer Agent by calling (800) 480-1111. All written redemption requests
should be sent to The One Group(R), c/o State Street Bank and Trust Company,
P.O. Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing Agent, if
applicable. The Transfer Agent may require that the signature on the written
request be guaranteed by a commercial bank, a member firm of a domestic stock
exchange, or by a member of the Securities Transfer Association Medallion
Program or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $5,000 worth of shares or less; (ii)
the redemption check is payable to the Shareholder(s) of record; and (iii) the
redemption check is mailed to the Shareholder(s) at the address of record. The
Shareholder may also have the proceeds mailed to a commercial bank account
previously designated on the Account Application Form or by written instruction
to the Transfer Agent or the Shareholder Servicing Agent, if applicable. There
is no charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE OR BY WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
telephone to the Transfer Agent at 1-800-480-4111, provided that the Shareholder
has elected the telephone redemption privilege in writing to the Distributor, or
to the Shareholder Servicing Agent, if applicable. The Transfer Agent may reduce
the amount of a wire redemption payment by its then-current wire redemption
charge, which, as of the date of this Prospectus, is $7.00.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each, unless the
withdrawal plan is part of a required minimum distribution from an IRA or other
qualified retirement plan. There is no charge for this service. Under the
Systematic Withdrawal Plan, all dividends and distributions must be reinvested
in shares of the Fund. Purchases of additional Class A shares while the
Systematic Withdrawal Plan is in effect are generally undesirable because a
sales charge is incurred whenever purchases are made.
Pursuant to the Systematic Withdrawal Plan, Class B and Class C Shareholders may
elect to receive, or may designate another person to receive, distributions
provided the distributions are limited to no more than 10% of their account
value annually, determined in the first year as of the date of the redemption
request is received by the Transfer Agent, and in subsequent years, as of the
most recent anniversary of that date.
In addition, Shareholders who have attained the age of 70 1/2 may elect to
receive distributions, to the extent that the redemption represents a minimum
required distribution from an Individual Retirement Account or other qualifying
retirement plan.
If the amount of systematic withdrawal exceeds income accrued since the previous
withdrawal under the Systematic Withdrawal Plan, the principal balance invested
will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, the forwarding of proceeds
may be delayed for 10 or more days until payment has been collected for the
purchase of such shares. The Fund intends to pay cash for all shares redeemed.
Due to the relatively high costs of handling small investments, the Fund
reserves the right to redeem, at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such
PROSPECTUS
17
<PAGE> 211
Shareholder in the Fund has a value of less than $1,000, the minimum initial
purchase amount. Accordingly, an investor purchasing shares of the Fund in only
the minimum investment amount may be subject to such involuntary redemption if
he or she thereafter redeems any of these shares. Before the Fund exercises its
right to redeem such shares and to send the proceeds to the Shareholder, the
Shareholder will be given notice that the value of the shares in his or her
account is less than the minimum amount and will be allowed 60 days to make an
additional investment in the Fund in an amount which will increase the value of
the account to at least $1,000.
See the Statement of Additional Information for examples of when the Trust may
suspend the right of redemption or redeem shares involuntarily if it appears
appropriate to do so in light of the Trust's responsibilities under the
Investment Company Act of 1940.
FUND MANAGEMENT
THE ADVISOR
The Trust and Banc One Investment Advisors Corporation (the "Advisor") have
entered into an investment advisory agreement (the "Advisory Agreement"). Under
the Advisory Agreement, the Advisor makes the investment decisions for the
assets of the Fund and continuously reviews, supervises and administers the
Fund's investment program. The Advisor discharges its responsibilities subject
to the supervision of, and policies established by, the Trustees of the Trust.
The Trust's shares are not deposits or obligations of, or endorsed or guaranteed
by BANC ONE CORPORATION or its bank or non-bank affiliates. The Trust's shares
are not insured or guaranteed by the Federal Deposit Insurance Corporation
("FDIC") or by any other governmental agency or government sponsored agency of
the Federal government or any state.
The Advisor is an indirect, wholly-owned subsidiary of BANC ONE CORPORATION, a
bank holding company incorporated in the state of Ohio. BANC ONE CORPORATION
currently has affiliate banking organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West Virginia and
Wisconsin. In addition, BANC ONE CORPORATION has several affiliates that engage
in data processing, venture capital, investment and merchant banking, and other
diversified services including trust management, investment management,
brokerage, equipment leasing, mortgage banking, consumer finance and insurance.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
The Advisor represents a consolidation of the investment advisory staffs of a
number of bank affiliates of BANC ONE CORPORATION, which have considerable
experience in the management of open-end management investment company
portfolios, including The One Group(R) since 1985 (then known as "The Helmsman
Fund").
No single person is responsible for managing the assets of the Fund. Rather,
investment decisions for the Fund are made by committee.
The Advisor is entitled to a fee which is calculated daily and paid monthly, at
an annual rate of .05% of the average daily net assets of the Fund. The Advisor
may voluntarily waive all or part of this fee.
The Advisor also serves as investment Advisor to each of the Underlying Funds.
As a shareholder of each of the Underlying Funds, the Fund will indirectly bear
its proportional share of investment advisory fees paid by those funds. The
Underlying Funds pay the Advisor an advisory fee at the following rates:
<TABLE>
<S> <C>
The One Group(R) Prime Money Market Fund............................................... .30%
The One Group(R) Disciplined Value Fund................................................ .74%
The One Group(R) International Equity Index Fund....................................... .55%
The One Group(R) Large Company Growth Fund............................................. .74%
The One Group(R) Large Company Value Fund.............................................. .74%
The One Group(R) Growth Opportunities Fund............................................. .74%
The One Group(R) Value Growth Fund..................................................... .65%
The One Group(R) Gulf South Growth Fund................................................ .65%
The One Group(R) Income Equity Fund.................................................... .74%
The One Group(R) Equity Index Fund..................................................... .10%
</TABLE>
THE DISTRIBUTOR
The One Group(R) Services Company (the "Distributor"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Fund are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Fund. Currently,
the
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Distributor has voluntarily agreed to limit payments under the Plan to .25% of
the average daily net assets of Class A shares of the Fund. Up to .25% of the
fees payable under the Plan may be used as compensation for Shareholder services
by the Distribution and/or financial institutions and intermediaries. All such
fees that may be paid under the Plan will be paid pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Distributor may apply these fees toward: (i)
compensation for its services in connection with distribution assistance or
provision of Shareholder services; or (ii) payments to financial institutions
and intermediaries such as banks (including affiliates of the Advisor), savings
and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries, as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class C shares are
subject to a contingent Deferred Sales Charge if such shares are redeemed prior
to the first anniversary of purchase. Class B and Class C shares of the Fund are
subject to an ongoing distribution and Shareholder service fee as provided in
the CDSC Distribution and Shareholder Services Plan (the "CDSC Plan") at an
annual rate of 1.00% of the Fund's average daily net assets, which includes
Shareholder servicing fees of .25% of the Fund's average daily net assets.
Proceeds from the Contingent Deferred Sales Charge and the distribution and the
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of Class B and Class C shares, such as
the payment of compensation to dealers and agents for selling such shares. The
combination of the Contingent Deferred Sales Charge and the distribution and
Shareholder service fee facilitate the ability of the Fund to sell the Class B
and Class C shares without a sales charge being deducted at the time of
purchase.
The Plan and the CDSC Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Fund
also may execute brokerage or other agency transactions through an affiliate of
the Advisor or through the Distributor for which the affiliate or the
Distributor receives compensation. Pursuant to guidelines adopted by the Board
of Trustees of the Trust, any such compensation will be reasonable and fair
compared to compensation received by other brokers in connection with comparable
transactions.
Fiduciary Class shares of the Fund are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record owner
of shares for the account of its customers may impose separate fees for account
services to its customers.
THE ADMINISTRATOR
The One Group(R) Services Company, (the "Administrator"), a wholly-owned
subsidiary of the BISYS Group, Inc., and the Trust are parties to an
administration agreement relating to the Fund (the "Administration Agreement").
Under the terms of the Administration Agreement, the Administrator is
responsible for providing the Trust with administrative services (other than
investment advisory services), including regulatory reporting and all necessary
office space, equipment, personnel and facilities.
The Advisor also serves as Sub-Administrator to each fund of the Trust, pursuant
to an agreement between the Administrator and the Advisor. Pursuant to this
agreement, the Advisor performs many of the Administrator's duties, for which
the Advisor receives a fee paid by the Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .10% of the Fund's
average daily net assets on the first $500,000,000 in Fund assets, .075% of the
Fund's average daily net assets between $500,000,000 and $1 billion, and .05% of
the Fund's average daily net assets when Fund assets exceed $1 billion.
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust, for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust
Company. Bank One Trust Company receives a fee paid by the Trust.
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COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to offer
separate funds and different classes of each fund. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses.
The Advisor and the Administrator of the Fund each bears all expenses incurred
in connection with the performance of their services as investment Advisor and
administrator, respectively, other than the cost of securities (including
brokerage commissions, if any) purchased for the Fund.
As a general matter, as set forth in the Multiple Class Plan, expenses are
allocated to each class of shares of the Fund on the basis of the net asset
value of that class in relation to the net asset value of the Fund. At present,
the only expenses that are allocated to Class A, Class B, and Class C shares,
other than in accordance with the relative net asset value of the class, are the
distribution and Shareholder services costs. See "Expense Summary." At present,
no expenses are allocated to Fiduciary Class shares as a class that are not also
borne by the other classes of shares of the Fund in proportion to the relative
net asset value of the shares of such classes.
The organizational expenses of the Fund have been capitalized and are being
amortized in the first five years of the Fund's operations. Such amortization
will reduce the amount of income available for payment as dividends.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved contracts under which, as described above, certain
companies provide essential management services to the Trust.
VOTING RIGHTS
As set forth in the Multiple Class Plan, each share held entitles the
Shareholder of record to one vote. Each fund of the Trust will vote separately
on matters relating solely to that fund. In addition, each class of a fund shall
have exclusive voting rights on any matter submitted to Shareholders that
relates solely to that class, and shall have separate voting rights on any
matter submitted to Shareholders in which the interests of one class differ from
the interests of any other class. However, all fund Shareholders will have equal
voting rights on matters that affect all fund Shareholders equally. As a
Massachusetts Business Trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be elected or removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
DIVIDENDS
Net investment income (exclusive of capital gains) is determined and declared
monthly, and is distributed in the form of monthly dividends to Shareholders of
Record on the first Business Day of each month. Capital gains of the Fund, if
any, will be distributed at least annually.
To maintain a relatively even rate of distributions from the Fund rather than
having substantial fluctuations from period to period, the monthly distributions
level from the Fund may be fixed from time to time at rates consistent with the
Advisor's long-term earnings expectations.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B, Class C or Fiduciary Class shares,
as applicable, at the net asset value next determined following the record date,
unless
PROSPECTUS
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the Shareholder has elected to take such payment in cash. Such election, or any
revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500, and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
Class B shares received as dividends and capital gains distributions at net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares. See "Conversion
Feature."
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution even though
such distribution would, in effect, represent a return of the Shareholder's
investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A, Class B, and Class C shares because of the
distribution expenses charged to Class A, Class B, and Class C shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group(R)
Services Company, 3435 Stelzer Road, Columbus, OH 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
OTHER INVESTMENT POLICIES
PORTFOLIO TURNOVER
Portfolio turnover may vary greatly from year to year as well as within a
particular year. It is presently estimated that the annual portfolio turnover
rate for the Fund will not exceed 200%. Higher portfolio turnover rates will
likely result in higher transaction costs to the Fund and may result in
additional tax consequences to the Fund's shareholders.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed without
the consent of the holders of a majority of the Fund's outstanding shares. The
term "majority of the outstanding shares" means the vote of (i) 67% or more of
the Fund's shares present at a meeting, if more than 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the Fund's outstanding shares, whichever is less.
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities, securities issued by
regulated investment companies, and if consistent with the Fund's investment
objective and policies, repurchase agreements involving such securities) if as a
result more than 5% of the total assets of the Fund would be invested in the
securities of such issuer or a Fund would own more than 10% of the outstanding
voting securities of such issuer. This restriction applies to 75% of the Fund's
assets. For purposes of this limitation, a security is considered to be issued
by the government entity whose assets and revenues guarantee or back the
security. With respect to private activity bonds or industrial development bonds
backed only by the assets and revenues of a non-governmental user, such user
would be considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets of
the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, except for investments
in funds of The One Group(R), provided that this limitation does not apply to
investments in obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities and repurchase agreements involving such
securities. For purposes of this limitation (i) utilities will be divided
according to their services (for example, gas, gas transmission, electric and
telephone will each be considered a separate industry); and (ii) wholly-owned
finance companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of their
parents.
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3. Make loans, except that the Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information. For the investment limitations of the Underlying Funds, see the
applicable prospectuses.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain of the permitted investments for the
Underlying Funds. As described above in "Investment Policies of the
Fund -- Permissible Investments," the Fund may also invest directly in certain
of the following instruments for temporary defensive purposes. For a more
detailed description, see the Statement of Additional Information or the
prospectuses of the Underlying Funds.
U.S. TREASURY OBLIGATIONS -- The funds may invest in bills, notes and bonds
issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS") and Coupon Under Book Entry Safekeeping ("CUBES").
RECEIPTS -- The funds may purchase interests in separately traded interest and
principal component parts of U.S. Treasury obligations that are issued by banks
or brokerage firms and are created by depositing U.S. Treasury notes and U.S.
Treasury bonds into a special account at a custodian bank. Receipts include
Treasury Receipts ("TRS"), Treasury Investment Growth Receipts ("TIGRS"), and
Certificates of Accrual on Treasury Securities ("CATS").
CERTIFICATES OF DEPOSIT -- Certificates of deposit ("CDS") are negotiable
interest bearing instruments with a specific maturity. CDS are issued by banks
and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a time deposit
("TD") earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by (i.e., made an obligation of) a commercial bank.
Maturities are generally six months or less.
COMMERCIAL PAPER -- Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few days to nine months.
U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific types
of activities. Select agencies, such as the Government National Mortgage
Association ("Ginnie Mae") and the Export-Import Bank, are supported by the full
faith and credit of the U.S. Treasury; others, such as the Federal National
Mortgage Association ("Fannie Mae"), are supported by the credit of the
instrumentality and have the right to borrow from the U.S. Treasury; others are
supported by the authority of the U.S. government to purchase the agency's
obligations; while still others, such as the Federal Farm Credit Banks and the
Federal Home Loan Mortgage Corporation ("Freddie Mac"), are supported solely by
the credit of the instrumentality itself. No assurance can be given that the
U.S. government would provide financial support to U.S. government sponsored
agencies or instrumentalities if it is not obligated to do so by law.
Obligations of U.S. government agencies include debt issues and mortgage-backed
securities issued or guaranteed by select agencies.
CORPORATE SECURITIES -- Corporate securities include corporate bonds,
convertible and non-convertible debt securities, and preferred stocks, as well
as commercial paper (short-term promissory notes issued by corporations).
Issuers of corporate bonds and notes are divided into many different categories
by bond market sector, such as electric utilities, gas utilities, telephone
utilities, consumer finance companies, wholesale finance companies and
industrial companies. Within each major category of issuer, there are many
subcategories.
WARRANTS -- Warrants are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of common
stock at a specified price, usually at a price that is higher than the market
price at the time of issuance of the warrant. The right may last for a period of
years or indefinitely.
COMMON STOCK -- Common stock represents a share of ownership in a company and
usually carries voting rights and earns dividends. Unlike preferred stock,
dividends on common stock are not fixed but are declared at the discretion of
the issuer's board of directors.
INVESTMENT COMPANY SECURITIES -- The funds may invest up to 5% of their total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of their assets in the securities of other investment companies.
PROSPECTUS
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REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a person
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. The custodian or
its agent will hold the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 100% of the
repurchase price. The funds bear a risk of loss in the event the other party
defaults on its obligations and the funds are delayed or prevented from their
right to dispose of the collateral securities or if the funds realize a loss on
the sale of the collateral securities.
REVERSE REPURCHASE AGREEMENTS -- The funds may borrow funds for temporary
purposes by entering into reverse repurchase agreements. Pursuant to such
agreements, the funds would sell portfolio securities to financial institutions
such as banks and broker-dealers, and agree to repurchase them at a mutually
agreed-upon date and price. The funds will enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time the funds enter into a reverse
repurchase agreement, they would place liquid high grade debt securities having
a value equal to the repurchase price (including accrued interest), in a
segregated custodial account and would subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the funds may
decline below the price at which the funds are obligated to repurchase the
securities.
DEMAND FEATURES -- The funds may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount at a fixed price (usually with accrued interest) within a fixed
period (usually seven days) following a demand by the funds. The purpose of
engaging in transactions involving puts is to maintain flexibility and liquidity
to permit the funds to meet redemption requests and remain as fully invested as
possible.
ASSET-BACKED SECURITIES -- Asset-backed securities consist of securities secured
by company receivables, home equity loans, truck and auto loans, leases, credit
card receivables and other securities backed by other types of receivables or
other assets. These securities are generally pass-through securities, which
means that principal and interest payments on the underlying securities (less
servicing fees) are passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the underlying debt
will be refinanced or paid off prior to their maturities during periods of
declining interest rates. In that case, a portfolio manager may have to reinvest
the proceeds from the securities at a lower rate. Potential market gains on a
security subject to prepayment risk may be more limited than potential market
gains on a comparable security that is not subject to prepayment risk. Under
certain interest rate and prepayment rate scenarios, the funds may fail to
recoup fully their investment in asset-backed securities. Asset-backed
securities are commonly considered to be derivatives.
SHORT-TERM FUNDING AGREEMENTS -- The funds may, in order to enhance yield, make
limited investments in short-term funding agreements issued by banks and highly
rated insurance companies. Short-term funding agreements issued by insurance
companies are sometimes referred to as Guaranteed Investment Contracts ("GICs"),
while those issued by banks are referred to as Bank Investment Contracts
("BICs"). Pursuant to such agreements, the funds make cash contributions to a
deposit account at a bank or insurance company. The bank or insurance company
then credits to the funds on a monthly basis guaranteed interest at either a
fixed, variable or floating rate. These contracts are general obligations of the
issuing bank or insurance company and are paid from the general assets of the
issuing entity. The funds will purchase short-term funding agreements only from
banks and insurance companies which, at the time of purchase, are rated "A" or
the equivalent by at least one NRSRO and have assets of $1 billion or more.
Generally, there is no active secondary market in short-term funding agreements.
SECURITIES OF FOREIGN ISSUERS -- The funds may invest in securities of foreign
issuers to achieve income or capital appreciation. The funds also may invest in
commercial paper of foreign issuers and obligations of foreign branches of U.S.
banks, U.S. and London branches of foreign banks, and supranational entities
which are established through the joint participation of several governments
(e.g., the Asian Development Bank and the Inter-American Development Bank).
Securities of foreign issuers may include sponsored and unsponsored American
Depository Receipts ("ADRs"), which are securities typically issued by a U.S.
financial institution that evidence ownership interests in a pool of securities
issued by a foreign issuer. ADRs include American Depository Shares and New York
Shares. There may be less information available on the foreign issuers of
unsponsored ADRs than on the issuers of sponsored ADRS.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The funds may acquire
securities representing an interest in a pool of mortgage loans that are issued
or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac. Mortgage-backed
securities may also be issued by nongovernmental entities and may or may not
have private insurer guarantees of timely payments. The funds also may invest in
mortgage-backed securities issued by non-government entities, which consist of
Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage Investment
Conduits ("REMICs"). Mortgage-backed securities are in most cases "pass-through"
instruments, through which the holder receives a share of all interest and
principal payments from the mortgages underlying the certificate. Because the
prepayment characteristics of the underlying mortgages vary, it is not possible
to predict accurately the average life or realized yield of a particular issue
of pass-through certificates.
PROSPECTUS
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During periods of declining interest rates, prepayment of mortgages underlying
mortgage-backed securities can be expected to accelerate. When the mortgage
obligations are prepaid, the funds may have to reinvest in securities with a
lower yield. Moreover, prepayment of mortgages which underlie securities
purchased at a premium could result in capital losses.
STRIPPED MORTGAGE-BACKED SECURITIES -- The funds may, to enhance revenues or
hedge against interest rate risk, invest in stripped mortgage-backed securities
("SMBS"), which are derivative multi-class mortgage securities. The funds may
only invest in SMBS issued or guaranteed by the U.S. government, its agencies or
instrumentalities. SMBS are usually structured with two classes that receive
different proportions of the interest and principal distributions from a pool of
mortgage assets. A common type of SMBS will have one class receiving all of the
interest from the mortgage assets ("I0s"), while the other class will receive
all of the principal ("POs"). If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the funds may fail to fully
recoup their initial investment in these securities. Although the market for
such securities is increasingly liquid, certain SMBS may not be readily
marketable and will be considered illiquid for purposes of the funds'
limitations on investments in illiquid securities. The market value of the class
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates.
MORTGAGE DOLLAR ROLLS -- The funds may enter into mortgage "dollar rolls" in
which the funds sell securities for delivery in the current month and
simultaneously contract with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The funds benefit to the extent of any difference between the price
received for the securities sold and the lower forward price for the future
purchase (often referred to as the "drop") or fee income plus the interest
earned on the cash proceeds of the securities sold until the settlement date of
the forward purchase. Unless such benefits exceed the income, capital
appreciation and gain or loss due to mortgage prepayments that would have been
realized on the securities sold as part of the mortgage dollar roll, the use of
this technique will diminish the investment performance of the funds compared
with what such performance would have been without the use of mortgage dollar
rolls.
FIXED RATE MORTGAGE LOANS -- Generally, fixed rate mortgage loans eligible for
inclusion in a mortgage pool will bear simple interest at fixed annual rates and
have original terms to maturity ranging from 5 to 40 years. The funds may invest
in fixed rate mortgage loans that are privately issued and are not issued or
guaranteed by the U.S. government.
SECURITIES LENDING -- In order to generate additional income, the funds may lend
up to 33% of the securities in which they are invested pursuant to agreements
requiring that the loan be continuously secured by cash, securities of the U.S.
government or its agencies, 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 will continue to receive interest on the securities lent while
simultaneously seeking to earn interest on the investment of cash collateral in
U.S. government securities, shares of an investment trust or mutual fund, or
other short-term, highly liquid investments. Collateral is marked to market
daily to provide a level of collateral at least equal to the market value of the
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 only be made to borrowers deemed by the Advisor
to be of good standing under guidelines established by the Trust's Board of
Trustees and when, in the judgment of the Advisor, the consideration which can
be earned currently from such securities loans justifies the attendant risk. The
funds will enter into loan arrangements only with counterparties which the
Advisor has deemed to be creditworthy under guidelines established by the Board
of Trustees. Loans are subject to termination by the funds or the borrower at
any time, and are therefore, not considered to be illiquid investments.
RESTRICTED SECURITIES -- The funds may invest in commercial paper issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under Federal securities law and is generally sold to institutional
investors, such as the funds, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the funds may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate changes. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND FORWARD COMMITMENTS -- The funds
may purchase securities on a when-issued basis when deemed by the Advisor to
present attractive investment opportunities. When-issued securities are
purchased for delivery beyond the normal settlement date at a stated price and
yield, thereby involving the risk that the yield obtained will be less than that
available in the market at delivery. When the Advisor purchases a when-issued
security, the Custodian will set aside cash or liquid securities to satisfy the
purchase commitment. The funds generally will not pay for such securities or
earn interest on them until received. In a forward commitment transaction, the
funds contract to purchase securities for a fixed price at a future date beyond
customary
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settlement time. The funds are required to hold and maintain in a segregated
account until the settlement date, cash, U.S. government securities or liquid
high-grade debt obligations in an amount sufficient to meet the purchase price.
Alternatively, the funds may enter into offsetting contracts for the forward
sale of other securities that they own. The purchase of securities on a
when-issued or forward commitment basis involves a risk of loss if the value of
the security to be purchased declines prior to the settlement date.
OPTIONS -- The funds may purchase and write (i.e., sell) call options and put
options on securities and indices, which options are traded on national
securities exchanges. A call option gives the purchaser the right to buy, and
obligates the writer of the option to sell, the underlying security at the
agreed upon exercise (or "strike") price during the option period. A put option
gives the purchaser the right to sell, and obligates the writer to buy, the
underlying security at the strike price during the option period. There are
risks associated with options transactions, including the following: (i) the
success of a hedging strategy may depend on the ability of the Advisor to
predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be an imperfect or no
correlation between the changes in market value of the securities held by the
funds and the prices of options; (iii) there may not be a liquid secondary
market for options; and (iv) while the funds will receive a premium when they
write covered call options, they may not participate fully in a rise in the
market value of the underlying security. It is expected that the funds will only
engage in option transactions with respect to permitted investments and related
indices.
FUTURES CONTRACTS AND RELATED OPTIONS -- Certain of the funds may enter into
futures contracts, options on futures contracts, index futures and options
thereon that are traded on an exchange regulated by the Commodities Futures
Trading Commission ("CFTC") if, to the extent that such futures and options are
not for "bona fide hedging purposes" (as defined by the CFTC), the aggregate
initial margin and premiums on such positions (excluding the amount by which
options are in the money) do not exceed 5% of the funds' total assets at current
value. Options and futures can be volatile instruments, and involve certain
risks. If the Advisor applies a hedge at an inappropriate time or judges
interest rates incorrectly, options and futures strategies may lower a fund's
return. The funds could also experience losses if the prices of their options
and futures positions were poorly correlated with their other instruments, or if
they could not close out their positions because of an illiquid secondary
market.
SWAPS, CAPS AND FLOORS -- In order to protect the value of the funds from
interest rate fluctuations and to hedge against fluctuations in the floating
rate market in which the funds' investments are traded, the funds may enter into
swaps, caps, and floors on various securities (such as U.S. government
securities), securities indexes, interest rates, prepayment rates, foreign
currencies or other financial instruments or indexes, for both hedging and
non-hedging purposes. Swap contracts typically involve an exchange of
obligations by two sophisticated parties. For example, in an interest rate swap,
a fund may exchange with another party their respective rights to receive
interest, such as an exchange of fixed rate payments for floating rate payments.
Currency swaps involve the exchange of respective rights to make or receive
payments in specified currencies. Mortgage swaps are similar to interest rate
swaps in that they represent commitments to pay and receive interest. The
notional principal amount, however, is tied to a reference pool or pools of
mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles the
purchaser to receive a principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and floors are similar in many respects to over-the-counter options
transactions, and may involve investment risks that are similar to those
associated with options transactions and options on futures contracts.
NEW FINANCIAL PRODUCTS -- New options and futures contracts and other financial
products, and various combinations thereof, continue to be developed and the
funds may invest in any such options, contracts and products as may be developed
to the extent consistent with their investment objective, policies and
restrictions and the regulatory requirements applicable to investment companies.
These various products may be used to adjust the risk and return characteristics
of the funds' portfolio of investments. These various products may increase or
decrease exposure to security prices, interest rates, commodity prices, or other
factors that affect security values, regardless of the issuer's credit risk. If
market conditions do not perform consistent with expectations, the performance
of the funds would be less favorable than it would have been if these products
were not used. In addition, losses may occur if counterparties involved in
transactions do not perform as promised. These products may expose the funds to
potentially greater return as well as potentially greater risk of loss than more
traditional fixed-income investments.
STRUCTURED INSTRUMENTS -- Structured instruments are debt securities issued by
agencies or instrumentalities of the U.S. government (such as Sallie Mae, Ginnie
Mae, Fannie Mae, and Freddie Mac), banks, municipalities, corporations, and
other business entities whose interest and/or principal payments are indexed to
certain specific foreign currency exchange rates, interest rates, or one or more
other reference indices. Structured instruments frequently are assembled in the
form of medium-term notes, but a variety of forms are available. Structured
instruments are commonly considered to be derivatives.
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While structured instruments may offer the potential for a favorable rate of
return from time to time, they also entail certain risks. Structured instruments
may be less liquid than other debt securities, and the price of structured
instruments may be more volatile. If the value of the reference index changes in
a manner other than that expected by the Advisor, principal and/or interest
payments on the structured instrument may be substantially less than expected.
In addition, although structured instruments may be sold in the form of a
corporate debt obligation, they may not have some of the protection against
counterparty default that may be available with respect to publicly traded debt
securities (i.e., the existence of a trust indenture).
MUNICIPAL SECURITIES -- Municipal Securities are issued by a state or political
subdivision to obtain funds for various public purposes. Municipal securities
are generally classified as "general obligation" bonds and "revenue" bonds.
General obligation bonds are obligations involving the credit of an issuer
possessing taxing power and are payable from the issuer's general unrestricted
revenues. Revenue bonds are payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other specific revenue source. Revenue bonds are not
payable from the issuer's general revenues. The funds also may purchase
short-term tax-exempt General Obligation Notes, Tax Anticipation Notes, Bond
Anticipation Notes, Revenue Anticipation Notes, Project Notes, and other forms
of short-term tax-exempt obligations. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements, or other revenues.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal bankruptcy code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on and principal of its municipal
securities may be materially adversely affected by litigation or other
conditions. Such litigation or conditions may from time to time have the effect
of introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a fund's municipal
securities in the same manner. In addition, the Internal Revenue Code of 1986,
as amended (the "Code") imposes certain continuing requirements on issuers of
tax-exempt bonds regarding the use, expenditure and investment of bond proceeds
and the payment of rebates to the United States of America. Failure by the
issuer to comply subsequent to the issuance of tax-exempt bonds with certain of
these requirements could cause interest on the bonds to become includable in
gross income retroactive to the date of issuance.
INVERSE FLOATING RATE INSTRUMENTS -- The funds may seek to increase yield by
investing in leveraged inverse floating rate debt instruments ("inverse
floaters"). The interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse floater is
indexed. An inverse floater may be considered to be leveraged to the extent that
its interest rate varies by a magnitude that exceeds the magnitude of the change
in the index rate of interest. The higher degree of leverage inherent in inverse
floaters is associated with greater volatility in their market values.
Accordingly, the duration of an inverse floater may exceed its stated final
maturity.
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated A-1+
are those with an "overwhelming degree" of credit protection. Those rated A-1
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2 reflect a high degree of safety regarding timely payment but not as high as
A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality, respectively, on
the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
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factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
STANDARD & POOR'S RATING SERVICES
Investment Grade
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree. Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
Bonds rated BBB by S&P are regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher categories.
Non-Investment Grade
Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB rated
category is also used for debt subordinated to senior debt that is assigned an
actual or implied BBB rating.
Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
Bonds rated CCC have currently identifiable vulnerability to default, and are
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, they are not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
The rating CC typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating.
The rating C typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.
The rating C1 is reserved for income bonds on which no interest is being paid.
Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless Standard & Poor believes
that such payments will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or minus (-). Ratings from AA to CCC may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
MOODY'S INVESTOR SERVICE, INC.
Investment Grade
Bonds that are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be
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visualized are most unlikely to impair the fundamentally strong position of such
issues. Bonds rated Aa by Moody's are judged by Moody's to be of high quality by
all standards. Together with bonds rated Aaa, they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present that make the long-term risks appear somewhat larger than in Aaa
securities. Bonds that are rated A possess many favorable investment attributes
and are to be considered as upper-medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Bonds that are rated Baa by Moody's are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity of the issuers of securities rated BBB or Baa to make
principal and interest payments than is the case with higher grade securities.
Non-Investment Grade
Bonds rated Ba are more uncertain and have speculative elements. The protection
of interest and principal payments is not well safeguarded during good and bad
times. Bonds rated B lack the characteristics of a desirable investment (i.e.,
potentially low assurance of timely interest and principal payments or
maintenance of other contract terms over time).
Bonds rated Caa have poor standing and may be in default. These bonds carry an
element of danger with respect to principal and interest payments. Bonds rated
Ca are speculative to a high degree and could be in default or have other marked
shortcomings. C is the lowest rating. Bonds in this category have extremely poor
prospects of ever attaining investment standing.
Unrated securities will be treated as non-investment grade securities unless the
Advisor determines that such securities are the equivalent of investment grade
securities. Securities that have received different ratings from more than one
agency are considered investment grade if at least one agency has rated the
security investment grade.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
Moody's highest rating for state, municipal and other short-term notes is MIG-1
and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of the
best quality. They have strong protection from established cash flows of funds
for their servicing or from established and broad-based access to the market for
refinancing or both. Short-term municipal securities rated MIG-2 and VMIG-2 are
of high quality. Margins of protection are ample although not so large as in the
preceding group.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
- - Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
- - Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
PERFORMANCE
From time to time, the Fund may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of the Fund refers to the
annualized income generated by an investment in the Fund over a specified 30-day
period. The yield is calculated by assuming that the income generated by the
investment during that period is generated over a one-year period and is shown
as a percentage of the investment.
Total return is the change in value of an investment in the Fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
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average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results.
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of the Fund. This figure is
then "annualized" (multiplied by 365 days and divided by the applicable number
of days in the period). Funds with a front-end sales charge would incorporate
the offering price into the distribution yield in place of month-end net asset
value.
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return and
is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of shares of the Fund in any
advertisement or information including performance data for the Fund. The
performance for Fiduciary Class shares may be higher than for Class A shares and
Class B and Class C shares because Fiduciary Class shares are not subject to
sales charges and distribution expenses.
The performance of each class of the Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that may
assume investment of dividends but do not reflect deductions for administrative
and management costs. In addition, the performance of each class of the Fund may
be compared to other funds or to relevant indices that may calculate total
return without reflecting sales charges; in which case, the Fund may advertise
its total return in the same manner. If reflected, sales charges would reduce
these total return calculations.
TAXES
The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
Advisors regarding specific questions as to the tax consequences of investing in
the Fund.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other funds. The Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders of
each class of shares of the Fund on at least an annual basis. Generally,
dividends from net investment income will be taxable to Shareholders as ordinary
income whether received in cash or in additional shares, and any net capital
gains will be distributed at least annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares.
Distributions by the Fund to retirement plans that qualify for tax-exempt
treatment under the Code ("qualified retirement plans") will not be taxable. The
Federal tax treatment of qualified retirement plans, as well as distributions
from such plans, is governed by specific provisions of the Code. If shares are
held by a retirement plan that ceases to qualify for tax-exempt treatment under
the Code or by an individual who has received such shares as a distribution from
a retirement plan, the Fund's distributions will be taxable to such plan or
individual as described in the preceding paragraph. Persons considering
directing the investment of their qualified retirement plan account in the Fund
and qualified retirement plan trusts considering purchasing such shares, should
consult their tax Advisors for a more complete explanation of the Federal tax
consequences, and for an explanation of the state, local and (if applicable)
foreign tax consequences of making such an investment.
The Fund will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Fund (such as STRIPS, CUBES, TRS, TIGRS and
CATS), as defined in the "Description of Permitted Investments," are sold at
original issue discount and thus do not make periodic cash interest payments.
The Fund will be required to include as part of its current income the imputed
interest on such obligations
PROSPECTUS
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even though the Fund has not received any interest payments on such obligations
during that period. Because the Fund distributes substantially all of its net
investment income to its Shareholders (including such imputed interest), the
Fund may have to sell portfolio securities in order to generate the cash
necessary for the required distributions. Such sales may occur at a time when
the Advisor would not have chosen to sell such securities and may result in a
taxable gain or loss.
Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in such a month will be deemed to
have been paid by the Fund and received by Shareholders on December 31 of that
year, if paid by the Fund at any time during the following January.
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Fund's investments
in U.S. government obligations may not be entitled to the exemptions from state
and local income taxes that would be available if the Shareholder had purchased
U.S. government obligations directly. The Fund will inform Shareholders annually
of the percentage of income and distributions derived from U.S. government
obligations. Shareholders should consult their tax Advisors regarding the state
and local tax treatment of the dividends received from the Fund.
The Fund may be subject to foreign withholding taxes on income derived from
obligations of foreign issuers. The Fund will not be able to elect to treat
Shareholders as having paid their proportionate share of such foreign taxes.
Sale, exchange or redemption of Fund shares by a Shareholder will generally be a
taxable event to such Shareholder.
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Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
1111 Polaris Parkway
2nd Floor, Suite 100
Columbus, OH 43271-0211
Distributor
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group(R) Services Company
343 5 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TOG-F-119
<PAGE> 228
THE ONE GROUP(R)
FAMILY OF MUTUAL FUNDS
June , 1997
INVESTOR FIXED INCOME FUND
Investment Adviser: BANC ONE INVESTMENT ADVISORS CORPORATION
The One Group(R) (the "Trust") is a mutual fund seeking to provide a convenient
and economical means of investing in one or more professionally managed
portfolios of securities. This Prospectus relates to The One Group(R) Investor
Fixed Income Fund Class A, Class B, Class C and Fiduciary Class shares.
THE ONE GROUP(R) INVESTOR FIXED INCOME FUND (THE "FUND") SEEKS CURRENT INCOME
WITH LIQUIDITY AND STABILITY OF PRINCIPAL BY INVESTING PRIMARILY IN A
DIVERSIFIED GROUP OF ONE GROUP(R) MUTUAL FUNDS WHICH INVEST PRIMARILY IN EQUITY
AND FIXED INCOME SECURITIES.
Class A, Class B and Class C, shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors.
Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodian or similar capacities (each an
"Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT OR
ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. BANC ONE
INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUND FOR INVESTMENT
ADVISORY AND OTHER SERVICES.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated November 1, 1996 as amended June , 1997, has been filed with
the Securities and Exchange Commission and is available without charge through
the Distributor, The One Group(R) Services Company, 3435 Stelzer Road, Columbus,
OH 43219 or by calling 1-800-480-4111 during business hours. The Statement of
Additional Information is incorporated into this Prospectus by reference. The
Securities and Exchange Commission maintains a Web Site (http://www.sec.gov.)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding The One Group(R).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY.............................................................................. 3
ABOUT THE FUND....................................................................... 4
Expense Summary.................................................................... 4
The Fund........................................................................... 6
Investment Objective............................................................... 6
Investment Policies................................................................ 6
HOW TO DO BUSINESS WITH THE ONE GROUP(R)............................................. 9
How to Invest in The One Group(R).................................................. 9
Contingent Deferred Sales Charge................................................... 12
Exchanges.......................................................................... 14
Redemptions........................................................................ 15
FUND MANAGEMENT...................................................................... 16
The Advisor........................................................................ 16
The Distributor.................................................................... 17
The Administrator.................................................................. 18
The Transfer Agent and Custodian................................................... 18
Counsel and Independent Accountants................................................ 18
OTHER INFORMATION.................................................................... 18
The Trust.......................................................................... 18
Other Investment Policies.......................................................... 20
Description of Permitted Investments............................................... 20
Description of Ratings............................................................. 25
Performance........................................................................ 27
Taxes.............................................................................. 28
</TABLE>
PROSPECTUS
2
<PAGE> 230
SUMMARY
The One Group(R) (the "Trust") is an open-end management investment company that
provides a convenient way to invest in professionally managed portfolios of
securities. The following provides basic information about the Class A, Class B,
Class C and Fiduciary Class shares of The One Group(R) Investor Fixed Income
Fund.
WHAT IS THE INVESTMENT OBJECTIVE? The Fund seeks current income with liquidity
and stability of principal by investing primarily in a diversified group of One
Group mutual funds which invest primarily in fixed income securities. See
"Investment Objective." Shares of the Fund are available to tax advantaged
retirement accounts and other persons investing for long-term investment
purposes. The Fund should not be used for short-term trading purposes. There is
no assurance that the Fund will achieve its investment objective.
WHAT ARE THE PERMITTED INVESTMENTS? The Fund offers Shareholders a
professionally-managed investment program by purchasing shares of existing
mutual funds of The One Group(R) (the "Underlying Funds"), which are managed by
Banc One Investment Advisors Corporation (the "Advisor"). The Fund will invest
90% to 100% of its assets in Underlying Funds which invest primarily in
fixed-income securities, and up to 10% in Money Market Funds. The Fund will
normally allocate its assets among the Underlying Funds according to the
Advisor's outlook for the economy, financial markets and relative market
valuation of the Underlying Funds. The Advisor may vary the allocation within
the above ranges. There is no assurance that the Fund will achieve its stated
objective.
WHAT ARE THE CHARACTERISTICS OF THE UNDERLYING FUNDS? The Underlying Funds in
which the Fund will invest have the following characteristics:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
UNDERLYING FUND TYPE OF INVESTMENTS
-------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................... Money Market
The One Group(R) Limited Volatility Bond Fund.......................... Fixed Income
The One Group(R) Intermediate Bond Fund................................ Fixed Income
The One Group(R) Income Bond Fund...................................... Fixed Income
The One Group(R) Government Bond Fund.................................. Fixed Income
The One Group(R) Ultra Short-Term Income Fund.......................... Fixed Income
</TABLE>
The Fund's net asset value will fluctuate with changes in the equity and bond
markets and the value of the Underlying Funds in which it invests. The Fund's
investment return is diversified by its investment in the Underlying Funds which
invest in growth and income stocks, foreign securities, debt securities, and
cash and cash equivalents. See page 6 for a complete description of the
Underlying Funds and page 23 for other investment policies.
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation, an indirect
subsidiary of BANC ONE CORPORATION, serves as the Advisor of the Trust. The
Advisor is entitled to a fee for advisory services provided to the Trust. The
Advisor may voluntarily agree to waive a part of its fees. See "The Advisor" and
"Expense Summary."
WHO IS THE ADMINISTRATOR? The One Group(R) Services Company serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Investment Advisors Corporation serves as the
Sub-Administrator of the Trust, pursuant to an agreement with the Administrator
for which Banc One Investment Advisors Corporation receives a fee paid by the
Administrator. See "The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust, for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
WHO IS THE DISTRIBUTOR? The One Group(R) Services Company acts as Distributor
of the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A, Class B and Class C shares. No compensation is paid to
the Distributor for the distribution services for the Fiduciary Class shares of
the Fund. See "The Distributor."
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Distributor on any day that the New York Stock Exchange is open for
trading ("Business Days"). See "How to Invest in The One Group(R)" and
"Redemptions."
HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is determined and declared monthly, and
is distributed in the form of monthly dividends to Shareholders of the Fund on
the first Business Day of each month. Any capital gains are distributed at least
annually. Distributions are paid in additional shares of the same class unless
the Shareholder elects to take the payment in cash. See "Dividends."
PROSPECTUS
3
<PAGE> 231
ABOUT THE FUND
EXPENSE SUMMARY -- THE ONE GROUP(R) INVESTOR FIXED INCOME FUND
<TABLE>
<CAPTION>
FIDUCIARY
CLASS A CLASS B CLASS C CLASS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price).............................................. 4.50% none none none
Maximum Contingent Deferred Sales Charge(2) (as a percentage of
original purchase price or redemption proceeds, as
applicable).................................................. none 5.00% 1.00% none
Redemption Fees................................................ none none none none
Exchange Fees.................................................. none none none none
ANNUAL OPERATING EXPENSES (as a percentage of average daily net
assets)
Investment Advisory Fees(3).................................... .01% .01% .01% .01%
12b-1 Fees (after fee waiver)(4)............................... .25% 1.00% 1.00% none
Other Expenses(5).............................................. .19% .19% .19% .19%
- --------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES(6).................................... .45% 1.20% 1.20% .20%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more of Class A shares and is not
assessed a sales charge at the time of purchase, will be assessed a sales
charge equivalent to 1% of the purchase price if such purchaser redeems any
or all of the Class A shares prior to the first anniversary of purchase.
(3) Investment Advisory fees have been revised to reflect waivers effective as
of the date of this Prospectus. Absent this voluntary reduction, Investment
Advisory fees would be .05% for all classes of shares.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plan, 12b-1 fees (as a percentage of average daily net
assets) would be .35% for Class A shares and 1.00% for Class B shares. The
12b-1 fees include a Shareholder servicing fee of .25% of average daily net
assets of the Fund's Class B and Class C shares and may include a
Shareholder servicing fee of .25% of the average daily net assets of the
Fund's Class A shares. See "The Distributor."
(5) Other Expenses have been revised to reflect fee waivers and reimbursements
effective as of the date of this Prospectus. Absent this voluntary waiver
and reimbursement, Other Expenses would be .29%.
(6) Absent the voluntary reduction of fees, Total Operating Expenses would be
.69% for Class A shares, 1.34% for Class B shares, 1.34% for Class C shares,
and .34% for Fiduciary Class shares.
The Fund will indirectly bear its pro rata share of fees and expenses incurred
by the Underlying Funds, and the investment returns of the Fund will be net of
the expenses of the Underlying Funds. The following chart provides the expense
ratio for each of the Underlying Funds in which the Fund invests (based on the
current Underlying Fund prospectus). Certain of these expenses ratios may
include a voluntary reduction of investment advisory fees.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
NAME OF UNDERLYING FUND EXPENSE RATIO
-----------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund...................................... .50%
The One Group(R) Limited Volatility Bond Fund................................. .62%
The One Group(R) Intermediate Bond Fund....................................... .67%
The One Group(R) Income Bond Fund............................................. .61%
The One Group(R) Government Bond Fund......................................... .69%
The One Group(R) Ultra Short-Term Income Fund................................. .60%
</TABLE>
After combining the total operating expenses of the Fund with those of the
Underlying Funds, the estimated average weighted expense ratio for Class A
shares is 1.09%, for Class B shares is 1.84%, for Class C shares is 1.84%, and
for Fiduciary Class shares is .84%.
PROSPECTUS
4
<PAGE> 232
On the basis of these estimated expenses, the following example illustrates the
expenses an investor would pay on a $1,000 investment in Class A and Fiduciary
Class shares of the Fund, assuming: (1) imposition of the maximum sales charge
for Class A shares; (2) 5% annual return; and (3) redemption at the end of each
time period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 56 $ 78 $102 $ 172
Fiduciary Class $ 9 $ 27 $ 47 $ 104
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 59 $ 90 $123 $ 215
Fiduciary $ 12 $ 36 $ 63 $ 139
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class B shares,
assuming: (1) deduction of the applicable maximum Contingent Deferred Sales
Charge; and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 69 $ 88 $120 $ 196
Assuming no redemption $ 19 $ 58 $100 $ 196
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 72 $ 97 $135 $ 231
Assuming no redemption $ 22 $ 67 $115 $ 231
</TABLE>
On the basis of the estimated expenses above, the following example illustrates
the expenses an investor would pay on a $1,000 investment in Class C shares of
the Fund, assuming: (1) imposition of the maximum sales charge for Class C
shares and (2) 5% annual return.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 29 $ 58 $100 $ 178
Assuming no redemption $ 19 $ 58 $100 $ 178
</TABLE>
Absent the voluntary reduction of any fees, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assuming a complete redemption at end of period $ 32 $ 67 $115 $ 216
Assuming no redemption $ 22 $ 67 $115 $ 216
</TABLE>
Class B and Class C shares automatically convert to Class A shares after eight
(8) and six (6) years, respectively. Therefore, the "10 Years" examples above
reflect the effect of such conversion.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
purpose of these tables is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Trust.
The rules of the Securities and Exchange Commission require that the maximum
sales load be reflected in the above tables. However, Shareholders in the Fund
may, under certain circumstances, qualify for reduced sales charges. See "How to
Invest in The One Group(R)." Long-term Shareholders of Class A, Class B, and
Class C shares may pay more than the equivalent of the maximum front-end sales
charges otherwise permitted by the National Association of Securities Dealers'
Rules.
PROSPECTUS
5
<PAGE> 233
THE FUND
The One Group(R) Investor Fixed Income Fund (the "Fund") is part of The One
Group(R) (the "Trust"), which is an open-end management investment company that
offers shares in 40 separate funds and different classes of certain of the
funds. The Trust was organized as a Massachusetts Business Trust on May 23,
1985. This Prospectus relates to Class A, Class B, Class C, and Fiduciary Class
shares of The One Group(R) Investor Fixed Income Fund. Each class of shares
provides for variations in distribution costs, voting rights, dividends and per
share net asset value pursuant to a multiple class plan (the "Multiple Class
Plan") adopted by the Board of Trustees of the Trust. Except for these
differences between classes, each share of the Fund represents an undivided,
proportionate interest in the Fund. The Information regarding the Trust's other
funds and their classes is contained in separate prospectuses which may be
obtained from the Trust's Distributor, The One Group(R) Services Company, 3435
Stelzer Road, Columbus, OH 43219, or by calling 1-800-480-4111.
INVESTMENT OBJECTIVE
The Fund seeks current income with liquidity and stability of principal by
investing primarily in a diversified group of One Group(R) mutual funds which
invest primarily in fixed income securities.
The investment objective of the Fund is fundamental and may not be changed
without a vote of the holders of a majority of the Fund's outstanding shares (as
defined in the Statement of Additional Information).
There is no assurance that the Fund will meet its investment objective.
INVESTMENT POLICIES OF THE FUND
The investment policies of the Fund may be changed without an affirmative vote
of the holders of a majority of the Fund's outstanding shares unless a policy is
expressly deemed to be fundamental. Shareholders will be notified of any
material change in the Fund's investment policies.
PERMISSIBLE INVESTMENTS
The Fund will invest 90 to 100% of its assets in five Underlying Funds of The
One Group(R) which invest primarily in fixed income securities, and up to 10% of
its assets in one money market fund of The One Group. The Fund will invest its
assets in the Underlying Funds, within the ranges indicated below.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
INVESTMENT RANGE
INVESTOR FIXED INCOME FUND (PERCENT OF FUND ASSETS)
------------------------------------------------------------------------------------------------
<S> <C>
The One Group(R) Prime Money Market Fund............................ 0 - 10%
The One Group(R) Limited Volatility Bond Fund....................... 0 - 90%
The One Group(R) Intermediate Bond Fund............................. 0 - 90%
The One Group(R) Income Bond Fund................................... 0 - 90%
The One Group(R) Government Bond Fund............................... 0 - 90%
The One Group(R) Ultra Short-Term Income Fund....................... 0 - 90%
</TABLE>
The allocation of the Fund's assets among the Underlying Funds will be made by
the Advisor under the supervision of the Trust's Board of Trustees, within the
percentage ranges set forth in the table above.
The Fund and the Underlying Funds are permitted for temporary defensive purposes
to invest up to 100% of their assets in short-term fixed income securities. Such
securities include obligations of the U.S. government and its agencies and
instrumentalities; commercial paper, bank certificates of deposit, repurchase
agreements, bankers acceptance, variable amount master demand notes and bank
money market deposit accounts. The Fund and the Underlying Funds may also hold
cash or cash equivalents for liquidity purposes.
To the extent the Fund or the Underlying Funds are engaged in a temporary
defensive position, they will not be pursuing their investment objective.
DESCRIPTION OF THE UNDERLYING FUNDS
The following is a brief description of the principal investment policies of the
Underlying Funds. Additional investment practices are described in "Investment
Policies of the Underlying Funds," the Statement of Additional Information and
the prospectus for each of the Underlying Funds.
PROSPECTUS
6
<PAGE> 234
THE ONE GROUP(R) PRIME MONEY MARKET FUND
The One Group(R) Prime Money Market Fund seeks current income with liquidity and
stability of principal. The fund intends to comply with the regulations of the
Securities and Exchange Commission applicable to money market funds using the
amortized cost method for calculating net asset value. These regulations impose
certain quality, maturity and diversification restraints on investments by the
fund. Under these regulations, the fund will invest only in U.S. dollar-
denominated securities, will maintain an average maturity on a dollar-weighted
basis of 90 days or less, and will acquire only "eligible securities" that
present minimal credit risks and have a maturity of 397 days or less.
THE ONE GROUP(R) LIMITED VOLATILITY BOND FUND
The One Group(R) Limited Volatility Bond Fund seeks current income consistent
with preservation of capital through investment in high and medium-grade
fixed-income securities. The fund will normally invest at least 80% of total
assets in debt securities of all types with short to intermediate maturities.
Under normal market conditions, it is anticipated that the fund's average
weighted maturity will range between one and five years. At least 65% of the
fund's total assets will consist of bonds rated in one of the three highest
rating categories by at least one nationally recognized statistical rating
organization ("NRSRO") at the time of investment, or, if unrated, determined by
the Advisor to be of comparable quality. In addition , at least 65% of total
assets will consist of obligations issued by the U.S. government or its agencies
and instrumentalities, some of which may be subject to repurchase agreements.
The fund may also purchase taxable or tax-exempt municipal securities. Up to 20%
of the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INTERMEDIATE BOND FUND
The One Group(R) Intermediate Bond Fund seeks current income consistent with the
preservation of capital through investments in high and medium-grade
fixed-income securities with intermediate maturities. The fund will normally
invest at least 80% of total assets in debt securities of all types. Under
normal market conditions, it is anticipated that the fund's average weighted
maturity will range between three and ten years. At least 65% of the fund's
total assets will consist of bonds rated in one of the three highest rating
categories by at least one NRSRO at the time of investment, or, if unrated,
determined by the Advisor to be of comparable quality. However, the Advisor
reserves the right to invest in more speculative debt securities if they present
attractive opportunities and are rated in the fourth highest rating category by
at least one NRSRO at the time of investment or, if unrated, determined by the
Advisor to be of comparable quality. In addition, at least 50% of total assets
will consist of obligations issued by the U.S. government or its agencies and
instrumentalities, some of which may be subject to repurchase agreements. The
fund may also purchase taxable or tax-exempt municipal securities. Up to 20% of
the fund's total assets may be invested in preferred stocks.
THE ONE GROUP(R) INCOME BOND FUND
The One Group(R) Income Bond Fund seeks a high level of current income by
investing primarily in a diversified portfolio of high, medium and low grade
debt securities. The fund will normally invest at least 70% of total assets in
debt securities of all types rated in one of the four highest rating categories
("investment grade") by at least one NRSRO at the time of investment or, if
unrated, determined by the Advisor to be of comparable quality. In addition, up
to 30% of the fund's total assets may be invested in convertible securities,
preferred stock, loan participations and debt securities rated below investment
grade. Securities rated below investment grade are called "high yield" and "junk
bonds." Under normal market conditions, it is anticipated that the fund's
average weighted maturity will range between five and twenty years. As a matter
of fundamental policy, at least 65% of the fund's total assets will consist of
bonds. The fund may also purchase taxable or tax-exempt municipal securities.
THE ONE GROUP(R) GOVERNMENT BOND FUND
The One Group(R) Government Bond Fund seeks a high level of current income with
liquidity and safety of principal. The fund seeks to achieve its objective
principally through investment in securities issued by the U.S. government and
its agencies and instrumentalities. At least 65% of the total assets of the fund
will be invested in obligations guaranteed as to principal and interest by the
U.S. government or its agencies and instrumentalities, some of which may be
subject to repurchase agreements, and other securities representing an interest
in or collateralized by mortgages that are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. The balance of the fund's assets
may be invested in debt securities and taxable or tax-exempt municipal
securities. The average weighted remaining maturity of the fund is expected to
be between three and fifteen years.
THE ONE GROUP(R) ULTRA SHORT-TERM INCOME FUND
The One Group(R) Ultra Short-Term Income Fund seeks a high level of current
income consistent with low volatility of principal by investing in a diversified
portfolio of short-term investment grade securities. The fund will normally
invest at least 80% of its total assets in debt securities of all types,
including money market instruments. In addition, up to 20% of
PROSPECTUS
7
<PAGE> 235
the fund's total assets may be invested in other securities, including preferred
stock. The fund will invest in adjustable rate mortgage pass-through securities
and other securities representing an interest in or collateralized by mortgages
with periodic interest rate resets, some of which may be subject to repurchase
agreements. These securities often are issued or guaranteed by the U.S.
government, its agencies or instrumentalities. However, the fund also may
purchase mortgage-backed securities that are issued by non-governmental
entities. Such securities may or may not have private insurer guarantees as to
timely payments. The fund also may purchase mortgage and interest rate swaps and
interest rate floors and caps. The fund also may employ other investment
techniques to enhance returns, such as loans of fund securities, mortgage dollar
rolls, repurchase agreements, options contracts and reverse repurchase
agreements.
The Fund will maintain a maximum duration approximately two years. Under normal
interest rate conditions, the Fund's actual duration is expected to be in a
range of approximately six months to one year.
RISK FACTORS
The investments of the Fund are concentrated in the Underlying Funds, so the
Fund's investment performance is directly related to the performance of the
Underlying Funds. In addition, as a matter of fundamental policy, the Fund must
allocate its investments among the Underlying Funds within certain ranges. As a
result, the Fund does not have the same flexibility to invest as a mutual fund
without such constraints.
The Fund may invest in Underlying Funds which invest in medium or lower grade
bonds. If these bonds are downgraded, the Advisor will consider whether to
increase or decrease the Fund's investment in the affected Underlying Fund.
Further, the Fund may invest in Underlying Funds which concentrate their assets
in certain industries. Under certain circumstances, this could result in the
Fund being concentrated in those industries. If this were to occur, the Advisor
would consider whether to maintain or change the Fund's investments in such
Underlying Funds.
SPECIAL RISKS OF INVESTING IN FIXED-INCOME FUNDS
The market value of a fund's fixed-income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed-income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these investments. Except under condition of default, changes in
the value of fixed-income securities will not affect cash income derived from
these securities but will affect the funds' net asset value.
SPECIAL RISKS OF FOREIGN SECURITIES
Investments in securities of foreign issuers involve risks that are different
from investments in securities of U.S. issuers. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls, higher transaction costs, and
delayed settlements of transactions. Securities of some foreign companies are
less liquid, and their prices more volatile, than securities of comparable U.S.
companies. Additionally, there may be less public information available about
foreign issuers. Finally, since the funds may invest in securities denominated
in foreign currencies, changes in exchange rates may affect the value of
investments in the funds.
SPECIAL RISKS OF SMALL CAPITALIZATION COMPANIES
Smaller, less seasoned companies may be subject to greater business risk than
larger, established companies. They may be more vulnerable to changes in
economic conditions, specific industry conditions, market fluctuations and other
factors affecting the profitability of companies. Therefore, the stock price of
smaller capitalization companies may be subject to greater price fluctuations
than that of larger, established companies. Due to these and other risk factors,
the price movement of the securities held by the funds may be volatile and the
net asset value of shares of the funds may fluctuate.
SPECIAL RISKS OF MORTGAGE RELATED SECURITIES
Some of the funds invest in mortgage-related securities, such as mortgage-backed
securities, adjustable rate mortgage loans ("ARMs"), fixed rate mortgage loans,
and mortgage dollar rolls. The investment characteristics of mortgage-related
securities differ from traditional debt securities. These differences can result
in significantly greater price and yield volatility than is the case with
traditional fixed-income securities. The major differences typically include
more frequent interest and principal payments, usually monthly, the
adjustability of interest rates, and the possibility that prepayments of
principal may be made at any time. Prepayment rates are influenced by changes in
current interest rates and a variety of economic, geographic, social, and other
factors. During periods of declining interest rates, prepayment rates can be
expected to accelerate. Under certain interest rate and prepayment rate
scenarios, a fund may fail to recoup
PROSPECTUS
8
<PAGE> 236
fully its investment in mortgage-related securities notwithstanding a direct or
indirect governmental or agency guarantee. The funds intend to use hedging
techniques to control this risk. In general, changes in the rate of prepayments
on a mortgage-related security will change that security's market value and its
yield to maturity. When interest rates fall, high prepayments could force a fund
to reinvest principal at a time when investment opportunities are not
attractive. Thus, mortgage-related securities may not be an effective means for
a fund to lock in long-term interest rates. Conversely, during periods when
interest rates rise, slow prepayments could cause the average life of the
security to lengthen and the value to decline more than anticipated.
HOW TO DO BUSINESS WITH THE ONE GROUP(R)
HOW TO INVEST IN THE ONE GROUP(R)
Shares of the Fund are sold on a continuous basis and may be purchased directly
from the Trust's Distributor, The One Group(R) Services Company, by mail, by
telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor, or through a broker-dealer that has
established a dealer agreement with the Distributor. Purchases and redemptions
of shares of the Fund may be made on any day that the New York Stock Exchange is
open for trading ("Business Days"). The minimum initial and subsequent
investments in the Fund are $1,000 and $100 respectively ($100 and $25,
respectively, for employees of BANC ONE CORPORATION and its affiliates). Initial
and subsequent investment minimums may be waived at the Distributor's
discretion. Investors may purchase up to a maximum of $250,000 of Class B and
Class C shares per individual purchase order.
Class A, Class B and Class C shares are offered to IRA account participants,
investors in certain retirement plans such as 401(k) and similar qualified
plans, and other long-term investors. Fiduciary Class shares are offered to
institutional investors, including affiliates of BANC ONE CORPORATION and any
bank, depository institution, insurance company, pension plan or other
organization authorized to act in fiduciary, advisory, agency, custodial or
similar capacities (each an "Authorized Financial Organization"). For additional
details regarding eligibility, call the Distributor at 1-800-480-4111.
BY MAIL
Investors may purchase Class A, Class B and Class C shares of the Fund by
completing and signing an Account Application Form and mailing it, along with a
personal check (or other negotiable bank instrument or money order) payable to
"The One Group(R)," the Fund, The One Group Services Company, or State Street
Bank and Trust Company (the Trust's Transfer Agent and Custodian), to the
Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500. If the purchase order is
to be credited to a Fund Direct IRA, the check should be payable to State Street
Bank and Trust Company for the benefit of the Shareholder. Subsequent purchases
of shares may be made at any time by mailing a personal check to the Transfer
Agent. Account Application Forms are available through the Distributor by
calling 1-800-480-4111. Third party checks will not be accepted. When purchases
are made by check or under the Systematic Investment Plan (see below),
redemptions will not be allowed until the investment being redeemed has been in
the Fund for 10 calendar days.
Purchases of Fiduciary Class shares, and Class A, Class B and Class C shares
that are being offered to investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, are made by an
institutional investor and/or other intermediary on behalf of an investor (each
also a "Shareholder Servicing Agent"). The Shareholder Servicing Agent may
require an investor to complete forms in addition to the Account Application
Form and to follow procedures established by the Shareholder Servicing Agent.
Such Shareholders should contact their Shareholder Servicing Agents regarding
purchases, exchanges and redemptions of shares. See "Additional Information
Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible to
make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agents, if applicable.
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
SYSTEMATIC INVESTMENT PLAN
Class A, Class B and Class C investors may make automatic monthly investments in
the Fund from their bank, savings and loan or other depository institution
accounts. The minimum initial investment must be $1000 and subsequent
PROSPECTUS
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<PAGE> 237
investments must be $25 under the Systematic Investment Plan, which minimum may
be reduced at the discretion of the Distributor. The Trust pays the costs
associated with these transfers, but reserves the right, upon thirty days'
written notice, to impose reasonable charges for this service. A depository
institution may impose a charge for debiting an investor's account which would
reduce the investor's return from an investment in the Fund.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which the Fund may be an
appropriate investment. The Trust's retirement plan allows participants to defer
taxes while helping them build their retirement savings.
The One Group(R) Fund-Direct IRA is a retirement plan with a wide choice of
investments offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A, Class B
and Class C shares, and the investor could be liable for any fees or expenses
incurred by the Trust. Federal funds are monies credited to a bank's account
with a Federal Reserve Bank. The purchase price of shares of the Fund is the net
asset value next determined after a purchase order is effected plus any
applicable sales charge (the "offering price"). The net asset value per share of
the Fund is determined by dividing the total market value of the Fund's
investments and other assets allocable to a class, less any liabilities
allocable to that class, by the total number of outstanding shares of such
class. Net asset value per share is determined daily as of 4:00 p.m., eastern
time, on each Business Day. For a further discussion of the calculation of net
asset value, see the Statement of Additional Information. Shares may also be
issued in transactions involving the acquisition by the Fund of securities held
by collective investment funds sponsored and administered by affiliates of the
Advisor. Purchases will be made in full and fractional shares of the Fund
calculated to three decimal places. Although the methodology and procedures are
identical, the net asset value per share of classes within the Fund may differ
because the distribution expenses charged to Class A shares, Class B and Class C
shares are not charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the Trust's
Transfer Agent nor the Trust will be responsible for any loss, liability, cost
or expense for acting upon telephone or wire instructions, and the investor will
bear all risk of loss. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If such procedures are not
employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans, and Class A, Class B and Class C shares offered to IRA
account participants and investors in certain retirement plans such as 401(k)
and similar plans, other than Individual Retirement Accounts, will normally be
held in the name of the Shareholder Servicing Agent effecting the purchase on
the Shareholder's behalf, and it is the Shareholder Servicing Agent's
responsibility to transmit purchase orders to the Distributor. A Shareholder
Servicing Agent may impose an earlier cut-off time for receipt of purchase
orders directed through it to allow for processing and transmittal of these
orders to the Distributor for effectiveness the same day. The Shareholder should
contact his or her Shareholder Servicing Agent for information as to the
Shareholder Servicing Agent's procedures for transmitting purchase, exchange or
redemption orders to the Trust. A Shareholder who desires to transfer the
registration of shares beneficially owned by him or her, but held of record by a
Shareholder Servicing Agent, should contact the Shareholder Servicing Agent to
accomplish such change. Other Shareholders who desire to transfer the
registration of their shares should contact the Transfer Agent.
No certificates representing shares of the Fund will be issued. In
communications to Shareholders, the Fund will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
PROSPECTUS
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SALES CHARGE
CLASS A SHARES
The following table shows the initial sales charge on Class A shares to a
"single purchaser" (defined below) together with the sales charge reallowed to
financial institutions and intermediaries (the "commission"):
<TABLE>
<CAPTION>
SALES CHARGE
SALES CHARGE AS APPROPRIATE COMMISSION
AS A PERCENTAGE OF AS A
PERCENTAGE OF NET AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- ------------------ -------------- -------------- --------------
<S> <C> <C> <C>
less than $100,000....................................... 4.50% 4.71% 4.05%
$100,000 but less than $250,000.......................... 3.50% 3.53% 3.05%
$250,000 but less than $500,000.......................... 2.50% 2.36% 2.05%
$500,000 but less than $1,000,000........................ 2.00% 2.04% 1.60%
$1,000,000 or more....................................... 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial institutions
and intermediaries. Under certain circumstances, the Distributor will use its
own funds to compensate financial institutions and intermediaries in amounts
that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a sales charge is 3.00% of the
offering price (including the commission shown above and additional cash
compensation described below). In addition, the Distributor will, from time to
time and at its own expense, provide promotional incentives to financial
institutions and intermediaries, whose registered representatives have sold or
are expected to sell significant amounts of the shares of the Fund in the form
of payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives to places within or outside
the United States, and additional compensation in an amount up to 1.00% of the
offering price of Class A shares of the Fund for sales of $1 million to $5
million, and 0.50% for sales over $5 million. A Shareholder who purchases $1
million or more of Class A shares and is not assessed a sales charge at the time
of purchase, will be assessed a sales charge equivalent to 1% of the purchase
price if such Shareholder redeems any or all of the Class A shares prior to the
first anniversary of purchase. Under certain circumstances, commissions up to
the amount of the entire sales charge will be reallowed to financial
institutions and intermediaries, which might then be deemed to be "underwriters"
under the Securities Act of 1933.
RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class A
shares, a "single purchaser" is entitled to cumulate current purchases with the
current value at the offering price of previously purchased Class A, Class B,
and Class C shares of the Fund and other eligible funds of the Trust, other than
the Trust's money market funds, that are sold subject to a comparable sales
charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), and including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their minor
children, and give the age of such children. The Fund may amend or terminate
this right of accumulation at any time as to subsequent purchases.
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds
that impose a comparable sales charge over the next 13 months, the sales charge
may be reduced by completing the Letter of Intent section of the Account
Application Form. The Letter of Intent includes a provision for a sales charge
adjustment depending on the amount actually purchased within the 13-month
period. In addition, pursuant to a Letter of Intent, the Custodian will hold in
escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of investment, which
is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000 in
Class A shares of one (or more) of the funds of the Trust that imposes a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. The investor would
pay an initial sales charge of 2.00% (the sales charge applicable to purchases
of $250,000) and .50% of the investment (representing the difference between the
2.50% sales charge applicable to purchases of $100,000 and the 2.00% sales
charge already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more in Class A shares under the investor's Letter of
Intent.
PROSPECTUS
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<PAGE> 239
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Fund: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired through
the exercise of exchange privileges where a comparable sales charge has been
paid for exchanged shares; (iii) purchased by officers, directors or trustees,
retirees and employees (and their spouses and immediate family members) of the
Trust, of BANC ONE CORPORATION and its subsidiaries and affiliates, of the
Distributor and its subsidiaries and affiliates, of broker-dealers who have
entered into dealer agreements with the Trust and their subsidiaries and
affiliates, or of an investment sub-Advisor of a fund of the Trust and such
sub-Advisor's subsidiaries and affiliates; (iv) sold to affiliates of BANC ONE
CORPORATION and certain accounts (other than Individual Retirement Accounts) for
which Authorized Financial Organizations act in fiduciary, advisory, agency,
custodial or similar capacities, or purchased by investment Advisors, financial
planners or other intermediaries who have a dealer arrangement with the
Distributor, who place trades for their own accounts or for the accounts of
their clients and who charge a management, consulting or other fee for their
services, as well as clients of such investment Advisors, financial planners or
other intermediaries who place trades for their own accounts if the accounts are
linked to the master account of such investment Advisor, financial planner or
other intermediary; (v) purchased with proceeds from the recent redemption of
Fiduciary Class shares of a fund of the Trust or acquired in an exchange of
Fiduciary Class shares of a fund for Class A shares of the same fund; (vi)
purchased with proceeds from the recent redemption of shares of a mutual fund
(other than a fund of the Trust) for which a sales charge was paid; (vii)
purchased in an Individual Retirement Account with the proceeds of a
distribution from an employee benefit plan, provided that, at the time of
distribution, the employee benefit plan had plan assets invested in a fund of
the Trust; (viii) purchased with Trust assets; (ix) purchased in accounts as to
which a bank or broker-dealer charges an asset allocation fee, provided the bank
or broker-dealer has an agreement with the Distributor; (x) directly purchased
with the proceeds of a distribution on a bond for which a BANC ONE CORPORATION
affiliate bank or trust company is the Trustee or Paying Agent; or (xi)
purchased in connection with plans of reorganization of the Fund, such as
mergers, asset acquisitions and exchange offers to which the Fund is a party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi), and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at 1-800-480-4111 to
determine whether they are eligible to purchase shares without paying a sales
charge through the use of proceeds from a recent redemption or distribution as
described above, and to confirm continued availability of these waiver policies
prior to initiating the procedures described in clauses (v), (vi), and (vii).
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES AND CLASS C SHARES
Class B shares are not subject to a sales charge when they are purchased, but
are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the sixth anniversary of purchase. Class C
shares also are not subject to a sales charge when they are purchased, but are
subject to a Contingent Deferred Sales Charge if a Shareholder redeems them
prior to the first anniversary of purchase. When a Shareholder purchases Class B
and Class C shares, the full purchase amount is invested directly in the Fund.
Class B and Class C shares of the Fund are subject to an ongoing distribution
and Shareholder service fee at an annual rate of 1.00% of the Fund's average
daily net assets as provided in the CDSC Plan (described below under "The
Distributor"). This ongoing fee will cause Class B and Class C shares to have a
higher expense ratio and to pay lower dividends than Class A shares. Class B
shares convert automatically to Class A shares after eight years, commencing
from the end of the calendar month in which the purchase order was accepted
under the circumstances and subject to the qualifications described in this
Prospectus.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
PROSPECTUS
12
<PAGE> 240
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of the Class B and Class C shares, such
as the payment of compensation to dealers and agents for selling such shares. A
dealer reallowance of 4.00% of the original purchase price of the Class B shares
and 1.00% of the original purchase price of Class C shares will be paid to
financial institutions and intermediaries.
Class B and Class C Shareholders will pay a Contingent Deferred Sales Charge at
the rates set forth below. The Contingent Deferred Sales Charge is assessed on
an amount equal to the lesser of the then-current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on increases
in net asset value above the initial purchase price. In addition, no charge is
assessed on shares derived from reinvestment of dividends or capital gain
distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the number of years from the time of payment for the purchase of shares until
the time of redemption of such shares. Solely for purposes of determining the
number of years from the time of any payment for the purchase of shares, all
payments during a month are aggregated and deemed to have been made on the first
day of the month.
CLASS B SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT-TO CHARGE
-------- -------------------
<S> <C>
0-1..................................................................... 5.00%
1-2..................................................................... 4.00%
2-3..................................................................... 3.00%
3-4..................................................................... 3.00%
4-5..................................................................... 2.00%
5-6..................................................................... 1.00%
6-7..................................................................... None
7-8..................................................................... None
</TABLE>
To provide an example, assume you purchased 100 shares at $10 per share (a total
cost of $1,000) and prior to the second anniversary after purchase, the net
asset value per share is $12 and during such time you have acquired 10
additional shares through dividends paid in shares. If you then make your first
redemption of 50 shares (proceeds of $600), 10 shares will not be subject to
charge because you received them as dividends. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds is subject to a Contingent Deferred Sales Charge at a rate
of 4.00% (the applicable rate prior to the second anniversary after purchase).
CLASS C SHARES
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT-TO CHARGE
-------- -------------------
<S> <C>
0-1..................................................................... 1.00%
After first year........................................................ None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class A
shares in the Shareholder's Fund account (unless the Shareholder elects to have
Class B or Class C shares redeemed first) or shares representing capital
appreciation, next of shares acquired pursuant to reinvestment of dividends and
capital gain distributions, next Class C shares, and finally of other shares
held by the Shareholder for the longest period of time. This method should
result in the lowest possible sales charge.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code) of a
Shareholder or a participant or beneficiary of a qualified retirement plan if
redemption is made within one year of such death or disability; or (iii) to the
extent that the redemption represents a minimum required distribution from an
PROSPECTUS
13
<PAGE> 241
Individual Retirement Account or other qualifying retirement plan to a
Shareholder who has attained the age of 70 1/2 or (iv) purchased by investors in
certain retirement plans, such as 401(k) and similar qualified plans. A
Shareholder or his or her representative should contact the Transfer Agent to
determine whether a retirement plan qualifies for a waiver and must notify the
Transfer Agent prior to the time of redemption if such circumstances exist and
the Shareholder is eligible for this waiver. In addition, the following
circumstances are not deemed to result in a "redemption" of Class B shares for
purposes of the assessment of a Contingent Deferred Sales Charge, which is
therefore waived: (i) plans of reorganization of the Fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or (ii)
exchanges for Class B shares of other funds of the Trust as described under
"Exchanges."
CONVERSION FEATURE
Class B shares will automatically convert to Class A shares eight years after
the end of the month in which the shares were purchased and will be subject to
the lower distribution and Shareholder service fees charged to Class A shares.
Class C shares will convert to Class A shares after six years. Such conversion
will be on the basis of the relative net asset values of the two classes,
without the imposition of any sales charge, fee or other charge. The conversion
is not a taxable event to a Shareholder.
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B and Class C shares in a Shareholder's Fund
account will be considered to be held in a separate sub-account. Each time any
Class B or Class C shares in a Shareholder's Fund account (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B or
Class C shares in the sub-account will also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B or Class C shares
of the funds of the Trust during the eight or six year period, the Trust will
aggregate the holding periods for the shares of each fund of the Trust for
purposes of calculating that eight or six year period. Because the per share net
asset value of the Class A shares may be higher than that of the Class B or
Class C shares at the time of conversion, a Shareholder may receive fewer Class
A shares than the number of Class B or Class C shares converted, although the
dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of the Fund may exchange their shares for Class A
shares of the Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders may exchange their shares for Fiduciary Class shares of the
Fund or for Fiduciary Class shares or Class A shares of another fund of the
Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares of
the Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares, except
as provided below. The Trust does not impose a charge for processing exchanges
of shares. If a Shareholder seeks to exchange Class A shares of a fund that does
not impose a sales charge for Class A shares of a fund that does or the fund
being exchanged into has a higher sales charge, the Shareholder will be required
to pay a sales charge in the amount equal to the difference between the sales
charge applicable to the fund into which the shares are being exchanged and any
sales charges previously paid for the exchanged shares, including any sales
charges incurred on any earlier exchanges of the shares (unless such sales
charge is otherwise waived, as provided in "Other Circumstances"). The exchange
of Fiduciary Class shares for Class A shares also will require payment of the
sales charge unless the sales charge is waived, as provided in "Other
Circumstances."
CLASS B
Class B Shareholders of the Fund may exchange their shares only for Class B
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the newly
acquired Class B shares, the newly acquired Class B shares shall be deemed to
have been issued on the date of receipt of the Shareholder's order to purchase
the outstanding Class B shares of the fund from which the initial exchange was
made.
PROSPECTUS
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<PAGE> 242
CLASS C
Class C Shareholders of the Fund may exchange their shares only for Class C
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class C shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class C
shares. The requirements applicable to computing the Contingent Deferred Sales
Charge on the exchange of Class B shares are also applicable to the exchange of
Class C shares.
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the Transfer Agent by 4:00 p.m., eastern
time, on any Business Day, the exchange usually will occur on that day. Any
Shareholder who wishes to make an exchange must receive a current prospectus of
the fund of the Trust in which he or she wishes to invest before the exchange
will be effected.
The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax Advisors for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Fund.
A more detailed description of the above is set forth in the Statement of
Additional Information.
The Trust's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (AT LEAST 30 DAYS APART) from the Fund during
any twelve month period. Notwithstanding these limitations, the Trust reserves
the right to reject any purchase request (including exchange purchases from
other funds of the Trust) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares without charge (except Class B and Class C
shares, as provided above) on any Business Day; shares may ordinarily be
redeemed by mail, by telephone or by wire. All redemption orders are effected at
the net asset value per share next determined for Class A and Fiduciary Class
shares, and at net asset value per share next determined reduced by any
applicable Contingent Deferred Sales Charge for Class B and Class C shares,
after receipt of a valid request for redemption. Payment to Shareholders for
shares redeemed will be made within seven days after receipt by the Transfer
Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in order
to constitute a valid request for redemption. All requests for redemptions from
IRA accounts must be in writing. Redemption request forms may be obtained from
the Transfer Agent by calling (800) 480-1111. All written redemption requests
should be sent to The One Group(R), c/o State Street Bank and Trust Company,
P.O. Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing Agent, if
applicable. The Transfer Agent may require that the signature on the written
request be guaranteed by a commercial bank, a member firm of a domestic stock
exchange, or by a member of the Securities Transfer Association Medallion
Program or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $5,000 worth of shares or less; (ii)
the redemption check is payable to the Shareholder(s) of record; and (iii) the
redemption check is mailed to the Shareholder(s) at the address of record. The
Shareholder may also have the proceeds mailed to a commercial bank account
previously designated on the Account Application Form or by written instruction
to the Transfer Agent or the Shareholder Servicing Agent, if applicable. There
is no charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE OR BY WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
PROSPECTUS
15
<PAGE> 243
telephone to the Transfer Agent at 1-800-480-4111, provided that the Shareholder
has elected the telephone redemption privilege in writing to the Distributor, or
to the Shareholder Servicing Agent, if applicable. The Transfer Agent may reduce
the amount of a wire redemption payment by its then-current wire redemption
charge, which, as of the date of this Prospectus, is $7.00.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each, unless the
withdrawal plan is part of a required minimum distribution from an IRA or other
qualified retirement plan. There is no charge for this service. Purchases of
additional Class A shares while the Systematic Withdrawal Plan is in effect are
generally undesirable because a sales charge is incurred whenever purchases are
made.
Pursuant to the Systematic Withdrawal Plan, Class B and Class C Shareholders may
elect to receive, or may designate another person to receive, distributions
provided the distributions are limited to no more than 10% of their account
value annually, determined in the first year as of the date of redemption
request is received by the Transfer Agent, and in subsequent years, as of the
most recent anniversary of that date.
In addition, Shareholders who have attained the age of 70 1/2 may elect to
receive distributions, to the extent that the redemption represents a minimum
required distribution from an Individual Retirement Account or other qualifying
retirement plan.
If the amount of systematic withdrawal exceeds income accrued since the previous
withdrawal under the Systematic Withdrawal Plan, the principal balance invested
will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, the forwarding of proceeds
may be delayed for 15 or more days until payment has been collected for the
purchase of such shares. The Fund intends to pay cash for all shares redeemed.
Due to the relatively high costs of handling small investments, the Fund
reserves the right to redeem, at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in the Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
the Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any of these shares.
Before the Fund exercises its right to redeem such shares and to send the
proceeds to the Shareholder, the Shareholder will be given notice that the value
of the shares in his or her account is less than the minimum amount and will be
allowed 60 days to make an additional investment in the Fund in an amount which
will increase the value of the account to at least $1,000.
See the Statement of Additional Information for examples of when the Trust may
suspend the right of redemption or redeem shares involuntarily if it appears
appropriate to do so in light of the Trust's responsibilities under the
Investment Company Act of 1940.
FUND MANAGEMENT
THE ADVISOR
The Trust and Banc One Investment Advisors Corporation (the "Advisor") have
entered into an investment advisory agreement (the "Advisory Agreement"). Under
the Advisory Agreement, the Advisor makes the investment decisions for the
assets of the Fund and continuously reviews, supervises and administers the
Fund's investment program. The Advisor discharges its responsibilities subject
to the supervision of, and policies established by, the Trustees of the Trust.
The Trust's shares are not deposits or obligations of, or endorsed or guaranteed
by BANC ONE CORPORATION or its bank or non-bank affiliates. The Trust's shares
are not insured or guaranteed by the Federal Deposit Insurance Corporation
("FDIC") or by any other governmental agency or government sponsored agency of
the Federal government or any state.
The Advisor is an indirect, wholly-owned subsidiary of BANC ONE CORPORATION, a
bank holding company incorporated in the state of Ohio. BANC ONE CORPORATION
currently has affiliate banking organizations in Arizona,
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Colorado, Illinois, Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah,
West Virginia and Wisconsin. In addition, BANC ONE CORPORATION has several
affiliates that engage in data processing, venture capital, investment and
merchant banking, and other diversified services including trust management,
investment management, brokerage, equipment leasing, mortgage banking, consumer
finance and insurance.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
The Advisor represents a consolidation of the investment advisory staffs of a
number of bank affiliates of BANC ONE CORPORATION, which have considerable
experience in the management of open-end management investment company
portfolios, including The One Group(R) since 1985 (then known as "The Helmsman
Fund").
No single person is responsible for managing the assets of the Fund. Rather,
investment decisions for the Fund are made by committee.
The Advisor is entitled to a fee which is calculated daily and paid monthly, at
a rate of .05% of the average daily net assets of the Fund. The Advisor may
voluntarily waive all or part of this fee.
The Advisor also serves as investment Advisor to each of the Underlying Funds.
As a shareholder of each of the Underlying Funds, the Fund will indirectly bear
its proportionate share of investment advisory fees paid by those funds. The
Underlying Funds pay the Advisor an advisory fee at the following rates:
<TABLE>
<S> <C>
The One Group(R) Prime Money Market Fund................................................ .30%
The One Group(R) Limited Volatility Bond Fund........................................... .40%
The One Group(R) Intermediate Bond Fund................................................. .40%
The One Group(R) Income Bond Fund....................................................... .40%
The One Group(R) Government Bond Fund................................................... .45%
The One Group(R) Ultra Short-Term Income Fund........................................... .30%
</TABLE>
THE DISTRIBUTOR
The One Group(R) Services Company (the "Distributor"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Fund are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Fund. Currently,
the Distributor has voluntarily agreed to limit payments under the Plan to .25%
of the average daily net assets of Class A shares of the Fund. Up to .25% of the
fees payable under the Plan may be used as compensation for Shareholder services
by the Distributor and/or financial institutions and intermediaries. All such
fees that may be paid under the Plan will be paid pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Distributor may apply these fees toward: (i)
compensation for its services in connection with distribution assistance or
provision of Shareholder services; or (ii) payments to financial institutions
and intermediaries such as banks (including affiliates of the Advisor), savings
and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries, as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class C shares are
subject to a contingent Deferred Sales Charge if such shares are redeemed prior
to the first anniversary of purchase. Class B and Class C shares of the Fund are
subject to an ongoing distribution and Shareholder service fee as provided in
the CDSC Distribution and Shareholder Services plan (the "CDSC Plan") at an
annual rate of 1.00% of the Fund's average daily net assets, which includes
Shareholder servicing fees of .25% of the Fund's average daily net assets.
Currently, the Distributor has voluntarily agreed to limit payments under the
Class B Plan to .90% of the average daily net assets of the Class B shares of
the Fund.
Proceeds from the Contingent Deferred Sales Charge and the distribution and the
Shareholder service fees under the CDSC Plan are payable to the Distributor and
financial intermediaries to defray the expenses of advance brokerage commissions
and expenses related to providing distribution-related and Shareholder services
to the Fund in connection with the sale of Class B and Class C shares, such as
the payment of compensation to dealers and agents for selling such shares. The
combination of the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees facilitate the ability of the Fund to sell the Class B
and Class C shares without a sales charge being deducted at the time of
purchase.
The Plan and the CDSC Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Fund
also may execute brokerage or other agency transactions through an affiliate of
the Advisor or through the Distributor for which the affiliate or the
Distributor
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receives compensation. Pursuant to guidelines adopted by the Board of Trustees
of the Trust, any such compensation will be reasonable and fair compared to
compensation received by other brokers in connection with comparable
transactions.
Fiduciary Class shares of the Fund are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record owner
of shares for the account of its customers may impose separate fees for account
services to its customers.
THE ADMINISTRATOR
The One Group(R) Services Company, (the "Administrator"), a wholly-owned
subsidiary of the BISYS Group, Inc., and the Trust are parties to an
administration agreement relating to the Fund (the "Administration Agreement").
Under the terms of the Administration Agreement, the Administrator is
responsible for providing the Trust with administrative services (other than
investment advisory services), including regulatory reporting and all necessary
office space, equipment, personnel and facilities.
The Advisor also serves as Sub-Administrator to each fund of the Trust, pursuant
to an agreement between the Administrator and the Advisor. Pursuant to this
agreement, the Advisor performs many of the Administrator's duties, for which
the Advisor receives a fee paid by the Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .10% of the Fund's
average daily net assets on the first $500,000,000 in Fund assets, .075% of the
Fund's average daily net assets between $500,000,000 and $1 billion, and .05% of
the Fund's average daily net assets when Fund assets exceed $1 billion.
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust, for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust
Company. Bank One Trust Company receives a fee paid by the Trust.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to offer
separate funds and different classes of each fund. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses.
The Advisor and the Administrator of the Fund each bears all expenses incurred
in connection with the performance of their services as investment Advisor and
administrator, respectively, other than the cost of securities (including
brokerage commissions, if any) purchased for the Fund.
As a general matter, as set forth in the Multiple Class Plan, expenses are
allocated to each class of shares of the Fund on the basis of the net asset
value of that class in relation to the net asset value of the Fund. At present,
the only expenses that are allocated to Class A, Class B and Class C shares,
other than in accordance with the relative net asset value of the class, are the
distribution and Shareholder services costs. See "Expense Summary." At present,
no expenses are allocated to Fiduciary Class shares as a class that are not also
borne by the other classes of shares of the Fund in proportion to the relative
net asset value of the shares of such classes.
The organizational expenses of the Fund have been capitalized and are being
amortized in the first five years of the Fund's operations. Such amortization
will reduce the amount of income available for payment as dividends.
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TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved contracts under which, as described above, certain
companies provide essential management services to the Trust.
VOTING RIGHTS
As set forth in the Multiple Class Plan, each share held entitles the
Shareholder of record to one vote. Each fund of the Trust will vote separately
on matters relating solely to that fund. In addition, each class of a fund shall
have exclusive voting rights on any matter submitted to Shareholders that
relates solely to that class, and shall have separate voting rights on any
matter submitted to Shareholders in which the interests of one class differ from
the interests of any other class. However, all fund Shareholders will have equal
voting rights on matters that affect all fund Shareholders equally. As a
Massachusetts Business Trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be elected or removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
DIVIDENDS
Net investment income (exclusive of capital gains) is determined and declared
monthly, and is determined and distributed in the form of monthly dividends to
Shareholders of Record on the first Business Day of each month. Capital gains of
the Fund, if any, will be distributed at least annually.
To maintain a relatively even rate of distributions from the Fund rather than
having substantial fluctuations from period to period, the monthly distributions
level from the Fund may be fixed from time to time at rates consistent with the
Advisor's long-term earnings expectations.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B, Class C or Fiduciary Class shares,
as applicable, at the net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in cash. Such election,
or any revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500, and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
Class B shares received as dividends and capital gains distributions at net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares. See "Conversion
Feature."
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution even though
such distribution would, in effect, represent a return of the Shareholder's
investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A, Class B, and Class C shares because of the
distribution expenses charged to Class A, Class B, and Class C shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group(R)
Services Company, 3435 Stelzer Road, Columbus, OH 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
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OTHER INVESTMENT POLICIES
PORTFOLIO TURNOVER
Portfolio turnover may vary greatly from year to year as well as within a
particular year. It is presently estimated that the annual portfolio turnover
rate for the Fund will not exceed 100%. Higher portfolio turnover rates will
likely result in higher transaction costs to the Fund and may result in
additional tax consequences to the Fund's Shareholders.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed without
the consent of the holders of a majority of the Fund's outstanding shares. The
term "majority of the outstanding shares" means the vote of (i) 67% or more of
the Fund's shares present at a meeting, if more than 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the Fund's outstanding shares, whichever is less.
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities, securities of regulated
investment companies, and if consistent with the Fund's investment objective and
policies, repurchase agreements involving such securities) if as a result more
than 5% of the total assets of the Fund would be invested in the securities of
such issuer or a Fund would own more than 10% of the outstanding voting
securities of such issuer. This restriction applies to 75% of the Fund's total
assets. For purposes of this limitation, a security is considered to be issued
by the government entity whose assets and revenues guarantee or back the
security. With respect to private activity bonds or industrial development bonds
backed only by the assets and revenues of a non-governmental user, such user
would be considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets of
the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, except for investments
in funds of The One Group(R), provided that this limitation does not apply to
investments in obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities and repurchase agreements involving such
securities. For purposes of this limitation (i) utilities will be divided
according to their services (for example, gas, gas transmission, electric and
telephone will each be considered a separate industry); and (ii) wholly-owned
finance companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of their
parents.
3. Make loans, except that the Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information. For the investment limitations of the Underlying Funds, see the
applicable prospectuses.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain of the permitted investments for the
Underlying Funds. As described above in "Investment Polices of the
Fund -- Permissible Investments," the Fund may also invest directly in certain
of the following instruments for temporary defensive purposes. For a more
detailed description, see the Statement of Additional Information or the
prospectuses of the Underlying Funds.
U.S. TREASURY OBLIGATIONS -- The funds may invest in bills, notes and bonds
issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS").
RECEIPTS -- The funds may purchase interests in separately traded interest and
principal component parts of U.S. Treasury obligations that are issued by banks
or brokerage firms and are created by depositing U.S. Treasury notes and U.S.
Treasury bonds into a special account at a custodian bank. Receipts include
Treasury Receipts ("TRS"), Treasury Investment Growth Receipts ("TIGRS"), and
Certificates of Accrual on Treasury Securities ("CATS").
CERTIFICATES OF DEPOSIT -- Certificates of deposit ("CDs") are negotiable
interest bearing instruments with a specific maturity. CDs are issued by banks
and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
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TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a time deposit
("TD") earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by (i.e., made an obligation of) a commercial bank.
Maturities are generally six months or less.
COMMERCIAL PAPER -- Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few days to nine months.
U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific types
of activities. Select agencies, such as the Government National Mortgage
Association ("Ginnie Mae") and the Export-Import Bank, are supported by the full
faith and credit of the U.S. Treasury; others, such as the Federal National
Mortgage Association ("Fannie Mae"), are supported by the credit of the
instrumentality and have the right to borrow from the U.S. Treasury; others are
supported by the authority of the U.S. government to purchase the agency's
obligations; while still others, such as the Federal Farm Credit Banks and the
Federal Home Loan Mortgage Corporation ("Freddie Mac"), are supported solely by
the credit of the instrumentality itself. No assurance can be given that the
U.S. government would provide financial support to U.S. government sponsored
agencies or instrumentalities if it is not obligated to do so by law.
Obligations of U.S. government agencies include debt issues and mortgage-backed
securities issued or guaranteed by select agencies.
CORPORATE SECURITIES -- Corporate securities include corporate bonds,
convertible and non-convertible debt securities, and preferred stocks, as well
as commercial paper (short-term promissory notes issued by corporations).
Issuers of corporate bonds and notes are divided into many different categories
by bond market sector, such as electric utilities, gas utilities, telephone
utilities, consumer finance companies, wholesale finance companies and
industrial companies. Within each major category of issuer, there are many
subcategories.
WARRANTS -- Warrants are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of common
stock at a specified price, usually at a price that is higher than the market
price at the time of issuance of the warrant. The right may last for a period of
years or indefinitely.
COMMON STOCK -- Common stock represents a share of ownership in a company and
usually carries voting rights and earns dividends. Unlike preferred stock,
dividends on common stock are not fixed but are declared at the discretion of
the issuer's board of directors.
INVESTMENT COMPANY SECURITIES -- The funds may invest up to 5% of their total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of their assets in the securities of other investment companies.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a person
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. The custodian or
its agent will hold the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 100% of the
repurchase price. The funds bear a risk of loss in the event the other party
defaults on its obligations and the funds are delayed or prevented from their
right to dispose of the collateral securities or if the funds realize a loss on
the sale of the collateral securities.
REVERSE REPURCHASE AGREEMENTS -- The funds may borrow funds for temporary
purposes by entering into reverse repurchase agreements. Pursuant to such
agreements, the funds would sell portfolio securities to financial institutions
such as banks and broker-dealers, and agree to repurchase them at a mutually
agreed-upon date and price. The funds will enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time the funds enter into a reverse
repurchase agreement, they would place liquid high grade debt securities having
a value equal to the repurchase price (including accrued interest), in a
segregated custodial account and would subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the funds may
decline below the price at which the funds are obligated to repurchase the
securities.
DEMAND FEATURES -- The funds may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount at a fixed price (usually with accrued interest) within a fixed
period (usually seven days) following a demand by the funds. The purpose of
engaging in transactions involving puts is to maintain flexibility and liquidity
to permit the funds to meet redemption requests and remain as fully invested as
possible.
ASSET-BACKED SECURITIES -- Asset-backed securities consist of securities secured
by company receivables, home equity loans, truck and auto loans, leases, credit
card receivables and other securities backed by other types of receivables or
other assets. These securities are generally pass-through securities, which
means that principal and
PROSPECTUS
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interest payments on the underlying securities (less servicing fees) are passed
through to shareholders on a pro rata basis. These securities involve prepayment
risk, which is the risk that the underlying debt will be refinanced or paid off
prior to their maturities during periods of declining interest rates. In that
case, a portfolio manager may have to reinvest the proceeds from the securities
at a lower rate. Potential market gains on a security subject to prepayment risk
may be more limited than potential market gains on a comparable security that is
not subject to prepayment risk. Under certain interest rate and prepayment rate
scenarios, the funds may fail to recoup fully their investment in asset-backed
securities. Asset-backed securities are commonly considered to be derivatives.
SHORT-TERM FUNDING AGREEMENTS -- The funds may, in order to enhance yield, make
limited investments in short-term funding agreements issued by banks and highly
rated insurance companies. Short-term funding agreements issued by insurance
companies are sometimes referred to as Guaranteed Investment Contracts ("GICs"),
while those issued by banks are referred to as Bank Investment Contracts
("BICs"). Pursuant to such agreements, the funds make cash contributions to a
deposit account at a bank or insurance company. The bank or insurance company
then credits to the funds on a monthly basis guaranteed interest at either a
fixed, variable or floating rate. These contracts are general obligations of the
issuing bank or insurance company and are paid from the general assets of the
issuing entity. The funds will purchase short-term funding agreements only from
banks and insurance companies which, at the time of purchase, are rated "A" or
the equivalent by at least one NRSRO and have assets of $1 billion or more.
Generally, there is no active secondary market in short-term funding agreements.
SECURITIES OF FOREIGN ISSUERS -- The funds may invest in securities of foreign
issuers to achieve income or capital appreciation. The funds also may invest in
commercial paper of foreign issuers and obligations of foreign branches of U.S.
banks, U.S. and London branches of foreign banks, and supranational entities
which are established through the joint participation of several governments
(e.g., the Asian Development Bank and the Inter-American Development Bank).
Securities of foreign issuers may include sponsored and unsponsored American
Depository Receipts ("ADRs"), which are securities typically issued by a U.S.
financial institution that evidence ownership interests in a pool of securities
issued by a foreign issuer. ADRs include American Depository Shares and New York
Shares. There may be less information available on the foreign issuers of
unsponsored ADRs than on the issuers of sponsored ADRs.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The funds may acquire
securities representing an interest in a pool of mortgage loans that are issued
or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac. Mortgage-backed
securities may also be issued by non-governmental entities and may or may not
have private insurer guarantees of timely payments. The funds also may invest in
mortgage-backed securities issued by non-government entities, which consist of
Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage Investment
Conduits ("REMICs"). Mortgage-backed securities are in most cases "pass-through"
instruments, through which the holder receives a share of all interest and
principal payments from the mortgages underlying the certificate. Because the
prepayment characteristics of the underlying mortgages vary, it is not possible
to predict accurately the average life or realized yield of a particular issue
of pass-through certificates. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected to
accelerate. When the mortgage obligations are prepaid, the funds may have to
reinvest in securities with a lower yield. Moreover, prepayment of mortgages
which underlie securities purchased at a premium could result in capital losses.
STRIPPED MORTGAGE-BACKED SECURITIES -- The funds may, to enhance revenues or
hedge against interest rate risk, invest in stripped mortgage-backed securities
("SMBS"), which are derivative multiclass mortgage securities. The funds may
only invest in SMBS issued or guaranteed by the U.S. government, its agencies or
instrumentalities. SMBS are usually structured with two classes that receive
different proportions of the interest and principal distributions from a pool of
mortgage assets. A common type of SMBS 21 will have one class receiving all of
the interest from the mortgage assets ("IOs"), while the other class will
receive all of the principal ("POs"). If the underlying mortgage assets
experience greater than anticipated prepayments of principal, the funds may fail
to fully recoup their initial investment in these securities. Although the
market for such securities is increasingly liquid, certain SMBS may not be
readily marketable and will be considered illiquid for purposes of the funds'
limitations on investments in illiquid securities. The market value of the class
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates.
MORTGAGE DOLLAR ROLLS -- The funds may enter into mortgage "dollar rolls" in
which the funds sell securities for delivery in the current month and
simultaneously contract with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The funds benefit to the extent of any difference between the price
received for the securities sold and the lower forward price for the future
purchase (often referred to as the "drop") or fee income plus the interest
earned on the cash proceeds of the securities sold until the settlement date of
the forward purchase. Unless such benefits exceed the income, capital
appreciation and gain or loss due to mortgage prepayments that would have been
realized on the securities sold as part of the mortgage dollar roll, the use of
this technique will diminish the investment performance of the funds compared
with what such performance would have been without the use of mortgage dollar
rolls.
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FIXED RATE MORTGAGE LOANS -- Generally, fixed rate mortgage loans eligible for
inclusion in a mortgage pool will bear simple interest at fixed annual rates and
have original terms to maturity ranging from 5 to 40 years. The funds may invest
in fixed rate mortgage loans that are privately issued and are not issued or
guaranteed by the U.S. government.
SECURITIES LENDING -- In order to generate additional income, the funds may lend
up to 33% of the securities in which they are invested pursuant to agreements
requiring that the loan be continuously secured by cash, securities of the U.S.
government or its agencies, 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 will continue to receive interest on the securities lent while
simultaneously seeking to earn interest on the investment of cash collateral in
U.S. government securities, shares of an investment trust or mutual fund, or
other short-term, highly liquid investments. Collateral is marked to market
daily to provide a level of collateral at least equal to the market value of the
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 only be made to borrowers deemed by the Advisor
to be of good standing under guidelines established by the Trust's Board of
Trustees and when, in the judgment of the Advisor, the consideration which can
be earned currently from such securities loans justifies the attendant risk. The
funds will enter into loan arrangements only with counterparties which the
Advisor has deemed to be creditworthy under guidelines established by the Board
of Trustees. Loans are subject to termination by the funds or the borrower at
any time, and are therefore, not considered to be illiquid investments.
RESTRICTED SECURITIES -- The funds may invest in commercial paper issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under Federal securities law and is generally sold to institutional
investors, such as the funds, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the funds may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate changes. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND FORWARD COMMITMENTS -- The funds
may purchase securities on a when-issued basis when deemed by the Advisor to
present attractive investment opportunities. When-issued securities are
purchased for delivery beyond the normal settlement date at a stated price and
yield, thereby involving the risk that the yield obtained will be less than that
available in the market at delivery. When the Advisor purchases a when-issued
security, the Custodian will set aside cash or liquid securities to satisfy the
purchase commitment. The funds generally will not pay for such securities or
earn interest on them until received. In a forward commitment transaction, the
funds contract to purchase securities for a fixed price at a future date beyond
customary settlement time. The funds are required to hold and maintain in a
segregated account until the settlement date, cash, U.S. government securities
or liquid high-grade debt obligations in an amount sufficient to meet the
purchase price. Alternatively, the funds may enter into offsetting contracts for
the forward sale of other securities that they own. The purchase of securities
on a when-issued or forward commitment basis involves a risk of loss if the
value of the security to be purchased declines prior to the settlement date.
OPTIONS -- The funds may purchase and write (i.e., sell) call options and put
options on securities and indices, which options are traded on national
securities exchanges. A call option gives the purchaser the right to buy, and
obligates the writer of the option to sell, the underlying security at the
agreed upon exercise (or "strike") price during the option period. A put option
gives the purchaser the right to sell, and obligates the writer to buy, the
underlying security at the strike price during the option period. There are
risks associated with options transactions, including the following: (i) the
success of a hedging strategy may depend on the ability of the Advisor to
predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be an imperfect or no
correlation between the changes in market value of the securities held by the
funds and the prices of options; (iii) there may not be a liquid secondary
market for options; and (iv) while the funds will receive a premium when they
write covered call options, they may not participate fully in a rise in the
market value of the underlying security. It is expected that the funds will only
engage in option transactions with respect to permitted investments and related
indices.
FUTURES CONTRACTS AND RELATED OPTIONS -- Certain of the funds may enter into
futures contracts, options on futures contracts, index futures and options
thereon that are traded on an exchange regulated by the Commodities Futures
Trading Commission ("CFTC") if, to the extent that such futures and options are
not for "bona fide hedging purposes" (as defined by the CFTC), the aggregate
initial margin and premiums on such positions (excluding the amount by which
options are in the money) do not exceed 5% of the funds' total assets at current
value. Options and futures can be volatile instruments, and involve certain
risks. If the Advisor applies a hedge at an inappropriate time or judges
interest rates incorrectly, options and futures strategies may lower a fund's
return. The funds could also experience losses if the prices of their options
and futures positions were poorly correlated with their other instruments, or if
they could not close out their positions because of an illiquid secondary
market.
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SWAPS, CAPS AND FLOORS -- In order to protect the value of the funds from
interest rate fluctuations and to hedge against fluctuations in the floating
rate market in which the funds' investments are traded, the funds may enter into
swaps, caps, and floors on various securities (such as U.S. government
securities), securities indexes, interest rates, prepayment rates, foreign
currencies or other financial instruments or indexes, for both hedging and
non-hedging purposes. Swap contracts typically involve an exchange of
obligations by two sophisticated parties. For example, in an interest rate swap,
a fund may exchange with another party their respective rights to receive
interest, such as an exchange of fixed rate payments for floating rate payments.
Currency swaps involve the exchange of respective rights to make or receive
payments in specified currencies. Mortgage swaps are similar to interest rate
swaps in that they represent commitments to pay and receive interest. The
notional principal amount, however, is tied to a reference pool or pools of
mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles the
purchaser to receive a principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and floors are similar in many respects to over-the-counter options
transactions, and may involve investment risks that are similar to those
associated with options transactions and options on futures contracts.
NEW FINANCIAL PRODUCTS -- New options and futures contracts and other financial
products, and various combinations thereof, continue to be developed and the
funds may invest in any such options, contracts and products as may be developed
to the extent consistent with their investment objective, policies and
restrictions and the regulatory requirements applicable to investment companies.
These various products may be used to adjust the risk and return characteristics
of the funds' portfolio of investments. These various products may increase or
decrease exposure to security prices, interest rates, commodity prices, or other
factors that affect security values, regardless of the issuer's credit risk. If
market conditions do not perform consistent with expectations, the performance
of the funds would be less favorable than it would have been if these products
were not used. In addition, losses may occur if counterparties involved in
transactions do not perform as promised. These products may expose the funds to
potentially greater return as well as potentially greater risk of loss than more
traditional fixed-income investments.
STRUCTURED INSTRUMENTS -- Structured instruments are debt securities issued by
agencies or instrumentalities of the U.S. government (such as Sallie Mae, Ginnie
Mae, Fannie Mae, and Freddie Mac), banks, municipalities, corporations, and
other business entities whose interest and/or principal payments are indexed to
certain specific foreign currency exchange rates, interest rates, or one or more
other reference indices. Structured instruments frequently are assembled in the
form of medium-term notes, but a variety of forms are available. Structured
instruments are commonly considered to be derivatives.
While structured instruments may offer the potential for a favorable rate of
return from time to time, they also entail certain risks. Structured instruments
may be less liquid than other debt securities, and the price of structured
instruments may be more volatile. If the value of the reference index changes in
a manner other than that expected by the Advisor, principal and/or interest
payments on the structured instrument may be substantially less than expected.
In addition, although structured instruments may be sold in the form of a
corporate debt obligation, they may not have some of the protection against
counterparty default that may be available with respect to publicly traded debt
securities (i.e., the existence of a trust indenture).
MUNICIPAL SECURITIES -- Municipal Securities are issued by a state or political
subdivision to obtain funds for various public purposes. Municipal securities
are generally classified as "general obligation" bonds and "revenue" bonds.
General obligation bonds are obligations involving the credit of an issuer
possessing taxing power and are payable from the issuer's general unrestricted
revenues. Revenue bonds are payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other specific revenue source. Revenue bonds are not
payable from the issuer's general revenues. The funds also may purchase
short-term tax-exempt General Obligation Notes, Tax Anticipation Notes, Bond
Anticipation Notes, Revenue Anticipation Notes, Project Notes, and other forms
of short-term tax-exempt obligations. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements, or other revenues.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal bankruptcy code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on and principal of its municipal
securities may be materially adversely affected by litigation or other
conditions. Such litigation or conditions may from time to time have the effect
of introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a fund's municipal
securities in the same manner. In addition, the Internal Revenue Code of 1986,
as amended (the "Code") imposes certain continuing requirements on issuers of
tax-exempt bonds regarding the use, expenditure
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and investment of bond proceeds and the payment of rebates to the United States
of America. Failure by the issuer to comply subsequent to the issuance of
tax-exempt bonds with certain of these requirements could cause interest on the
bonds to become includable in gross income retroactive to the date of issuance.
INVERSE FLOATING RATE INSTRUMENTS -- The funds may seek to increase yield by
investing in leveraged inverse floating rate debt instruments ("inverse
floaters"). The interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse floater is
indexed. An inverse floater may be considered to be leveraged to the extent that
its interest rate varies by a magnitude that exceeds the magnitude of the change
in the index rate of interest. The higher degree of leverage inherent in inverse
floaters is associated with greater volatility in their market values.
Accordingly, the duration of an inverse floater may exceed its stated final
maturity.
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated A-1+
are those with an "overwhelming degree" of credit protection. Those rated A-1
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2 reflect a high degree of safety regarding timely payment but not as high as
A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality, respectively, on
the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
STANDARD & POOR'S RATING SERVICES
Investment Grade
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree. Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
Bonds rated BBB by S&P are regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher categories.
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Non-Investment Grade
Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB rated
category is also used for debt subordinated to senior debt that is assigned an
actual or implied BBB rating.
Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
Bonds rated CCC have currently identifiable vulnerability to default, and are
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, they are not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
The rating CC typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating.
The rating C typically is applied to debt subordinated to senior debt that is
assigned an actual or implied CCC rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.
The rating C1 is reserved for income bonds on which no interest is being paid.
Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless Standard & Poor believes
that such payments will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or minus (-). Ratings from AA to CCC may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
MOODY'S INVESTOR SERVICE, INC.
Investment Grade
Bonds that are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present that make the
long-term risks appear somewhat larger than in Aaa securities. Bonds that are
rated A possess many favorable investment attributes and are to be considered as
upper-medium grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Bonds that are rated Baa by Moody's are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity of the issuers of securities rated BBB or Baa to make
principal and interest payments than is the case with higher grade securities.
Non-Investment Grade
Bonds rated Ba are more uncertain and have speculative elements. The protection
of interest and principal payments is not well safeguarded during good and bad
times. Bonds rated B lack the characteristics of a desirable investment (i.e.,
potentially low assurance of timely interest and principal payments or
maintenance of other contract terms over time).
Bonds rated Caa have poor standing and may be in default. These bonds carry an
element of danger with respect to principal and interest payments. Bonds rated
Ca are speculative to a high degree and could be in default or have other marked
shortcomings. C is the lowest rating. Bonds in this category have extremely poor
prospects of ever attaining investment standing.
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Unrated securities will be treated as non-investment grade securities unless the
Advisor determines that such securities are the equivalent of investment grade
securities. Securities that have received different ratings from more than one
agency are considered investment grade if at least one agency has rated the
security investment grade.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
Moody's highest rating for state, municipal and other short-term notes is MIG-1
and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of the
best quality. They have strong protection from established cash flows of funds
for their servicing or from established and broad-based access to the market for
refinancing or both. Short-term municipal securities rated MIG-2 and VMIG-2 are
of high quality. Margins of protection are ample although not so large as in the
preceding group.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
- - Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
- - Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MISCELLANEOUS
PERFORMANCE
From time to time, the Fund may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of the Fund refers to the
annualized income generated by an investment in the Fund over a specified 30-day
period. The yield is calculated by assuming that the income generated by the
investment during that period is generated over a one-year period and is shown
as a percentage of the investment.
Total return is the change in value of an investment in the Fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results.
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of the Fund. This figure is
then "annualized" (multiplied by 365 days and divided by the applicable number
of days in the period). Funds with a front-end sales charge would incorporate
the offering price into the distribution yield in place of month-end net asset
value.
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return and
is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of shares of the Fund in any
advertisement or information including performance data for the Fund. The
performance for Fiduciary Class shares may be higher than for Class A, Class B
and Class C shares because Fiduciary Class shares are not subject to sales
charges and distribution expenses.
The performance of each class of the Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that may
assume investment of dividends but do not reflect deductions for administrative
and management costs. In addition, the performance of each class of the Fund may
be compared to other funds or to relevant indices that may calculate total
return without reflecting sales charges; in which case, the Fund may advertise
its total return in the same manner. If reflected, sales charges would reduce
these total return calculations.
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TAXES
The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
Advisors regarding specific questions as to the tax consequences of investing in
the Fund.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other funds. The Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders of
each class of shares of the Fund on at least an annual basis. Generally,
dividends from net investment income will be taxable to Shareholders as ordinary
income whether received in cash or in additional shares, and any net capital
gains will be distributed at least annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares.
Distributions by the Fund to retirement plans that qualify for tax-exempt
treatment under the Code ("qualified retirement plans") will not be taxable. The
Federal tax treatment of qualified retirement plans, as well as distributions
from such plans, is governed by specific provisions of the Code. If shares are
held by a retirement plan that ceases to qualify for tax-exempt treatment under
the Code or by an individual who has received such shares as a distribution from
a retirement plan, the Fund's distributions will be taxable to such plan or
individual as described in the preceding paragraph. Persons considering
directing the investment of their qualified retirement plan account in the Fund
and qualified retirement plan trusts considering purchasing such shares, should
consult their tax advisors for a more complete explanation of the Federal tax
consequences, and for an explanation of the state, local and (if applicable)
foreign tax consequences of making such an investment.
The Fund will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Fund (such as STRIPS, CUBES, TRS, TIGRS and
CATS), as defined in the "Description of Permitted Investments," are sold at
original issue discount and thus do not make periodic cash interest payments.
The Fund will be required to include as part of its current income the imputed
interest on such obligations even though the Fund has not received any interest
payments on such obligations during that period. Because the Fund distributes
substantially all of its net investment income to its Shareholders (including
such imputed interest), the Fund may have to sell portfolio securities in order
to generate the cash necessary for the required distributions. Such sales may
occur at a time when the Advisor would not have chosen to sell such securities
and may result in a taxable gain or loss.
Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in such a month will be deemed to
have been paid by the Fund and received by Shareholders on December 31 of that
year, if paid by the Fund at any time during the following January.
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Fund's investments
in U.S. government obligations may not be entitled to the exemptions from state
and local income taxes that would be available if the Shareholder had purchased
U.S. government obligations directly. The Fund will inform Shareholders annually
of the percentage of income and distributions derived from U.S. government
obligations. Shareholders should consult their tax Advisors regarding the state
and local tax treatment of the dividends received from the Fund.
The Fund may be subject to foreign withholding taxes on income derived from
obligations of foreign issuers. The Fund will not be able to elect to treat
Shareholders as having paid their proportionate share of such foreign taxes.
Sale, exchange or redemption of Fund shares by a Shareholder will generally be a
taxable event to such Shareholder.
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<PAGE> 256
Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
1111 Polaris Parkway
2nd Floor, Suite 100
Columbus, OH 43271-0211
Distributor
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TOG
<PAGE> 257
STATEMENT OF ADDITIONAL INFORMATION
THE ONE GROUP(R)
The One Group U.S. Treasury Securities Money Market Fund
(the "U.S. Treasury Securities Money Market Fund")
The One Group Prime Money Market Fund (the "Prime Money Market Fund")
The One Group Municipal Money Market Fund (the "Municipal Money Market Fund")
The One Group Ohio Municipal Money Market Fund (the "Ohio Municipal Money Market
Fund")
The One Group Income Equity Fund (the "Income Equity Fund")
The One Group Disciplined Value Fund (the "Disciplined Value Fund")
The One Group Growth Opportunities Fund (the "Growth Opportunities Fund")
The One Group International Equity Index Fund (the "International Equity Index
Fund")
The One Group Equity Index Fund (the "Equity Index Fund")
The One Group Large Company Value Fund (the "Large Company Value Fund")
The One Group Large Company Growth Fund (the "Large Company Growth Fund")
The One Group Asset Allocation Fund (the "Asset Allocation Fund")
The One Group Income Bond Fund (the "Income Bond Fund")
The One Group Limited Volatility Bond Fund (the "Limited Volatility Bond Fund")
The One Group Intermediate Bond Fund (the "Intermediate Bond Fund")
The One Group Government Bond Fund (the "Government Bond Fund")
The One Group Ultra Short-Term Income Fund (the "Ultra Short-Term Income Fund")
The One Group Municipal Income Fund (the "Municipal Income Fund")
The One Group Intermediate Tax-Free Bond Fund (the "Intermediate Tax-Free Bond
Fund")
The One Group Ohio Municipal Bond Fund (the "Ohio Municipal Bond Fund")
The One Group Texas Tax-Free Bond Fund (the "Texas Tax-Free Bond Fund")
The One Group West Virginia Municipal Bond Fund (the "West Virginia Municipal
Bond Fund")
The One Group Kentucky Municipal Bond Fund (the "Kentucky Municipal Bond Fund")
The One Group Arizona Municipal Bond Fund (the "Arizona Municipal Bond Fund")
The One Group Treasury Money Market Fund (the "Treasury Money Market Fund")
The One Group Treasury Only Money Market Fund (the "Treasury Only Money Market
Fund")
The One Group Government Money Market Fund (the "Government Money Market Fund")
The One Group Tax Exempt Money Market Fund (the "Tax Exempt Money Market Fund")
The One Group Institutional Prime Money Market Fund (the "Institutional Prime
Money Market Fund")
The One Group Louisiana Municipal Bond Fund (the "Louisiana Municipal Bond
Fund")
The One Group Value Growth Fund (the "Value Growth Fund")
The One Group Gulf South Growth Fund (the "Gulf South Growth Fund")
The One Group Income Fund (the "Income Fund")
The One Group Investor Growth Fund (the "Investor Growth Fund) The
One Group Investor Growth & Income Fund (the "Investor Growth & Income Fund)
The One Group Investor Aggressive Growth Fund (the "Investor Aggressive Growth")
The One Group Investor Fixed Income Fund (the "Investor Fixed Income Fund")
The One Group Investor Conservative Growth Fund (the "Investor Conservative
Growth Fund")
The One Group Investor Balanced Fund (the "Investor Balanced Fund")
November 1, 1996
As amended June ___, 1997
This Statement of Additional Information is not a Prospectus, but should be read
in conjunction with the Prospectuses for the U.S. Treasury Securities Money
Market Fund, the Prime Money Market Fund, the Municipal Money Market Fund, the
Income Equity Fund, the Disciplined Value Fund, the Growth Opportunities Fund,
the International Equity Index Fund, the Equity Index Fund, the Large Company
Value Fund, the Large Company Growth Fund, the Income Bond Fund, the Limited
Volatility Bond Fund, the Intermediate
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Bond Fund, the Intermediate Tax-Free Bond Fund, the Ohio Municipal Bond Fund,
the Government Bond Fund, the Ultra Short-Term Income Fund, the Asset Allocation
Fund, the Municipal Income Fund, the Texas Tax-Free Bond Fund, the West Virginia
Municipal Bond Fund, the Kentucky Municipal Bond Fund, the Arizona Municipal
Bond Fund, the Ohio Municipal Money Market Fund, the Treasury Money Market Fund,
the Treasury Only Money Market Fund, the Government Money Market Fund, the Tax
Exempt Money Market Fund, the Institutional Prime Money Market Fund, the
Louisiana Municipal Bond Fund, the Value Growth Fund, the Gulf South Growth
Fund, the Income Fund, the Investor Growth Fund, the Investor Growth & Income
Fund, the Investor Aggressive Growth Fund, the Investor Fixed Income Fund, the
Investor Conservative Growth Fund, and the Investor Balanced Fund. The
Prospectuses for each of The One Group Funds are dated November 1, 1996 (except
the prospectuses for the Income Fund, the Investor Growth Fund, the Investor
Growth & Income Fund, the Investor Aggressive Growth Fund, the Investor Fixed
Income Fund, the Investor Conservative Growth Fund, the Investor Balanced Fund,
the Intermediate Bond Fund, the Government Bond Fund, the Limited Volatility
Bond Fund, the Income Bond Fund and the Ultra Short-Term Income Fund, which are
dated June ___, 1997). This Statement of Additional Information is incorporated
in its entirety into each of those Prospectuses. A copy of each of the
Prospectuses for the Trust may be obtained by writing to the Distributor for the
Trust, The One Group Services Company, 3435 Stelzer Road, Columbus, Ohio 43219,
or by telephoning toll free (800)-480-4111.
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TABLE OF CONTENTS
PAGE
THE TRUST
INVESTMENT OBJECTIVES AND POLICIES
Additional Information on Fund Instruments
High Quality Investments With Regard to the Money Market and
Institutional Money Market Funds
Bank Obligations
Commercial Paper
Repurchase Agreements
Reverse Repurchase Agreements
Government Securities
Futures and Options Trading
Futures Contracts
Restrictions on the Use of Futures Contracts
Risk Factors in Futures Transactions
Options Contracts
Covered Calls
Puts
Purchasing Call Options
Risk Factors in Options Transactions
Mortgage-related Securities
Yield, Market Value and Risk Considerations of Mortgage-Backed
Securities
Foreign Investments
PERCS*
When-Issued Securities
Securities Lending
Index Investing by the Equity Index and International Equity
Index Funds
Foreign Currency Transactions
Transaction Hedging
Position Hedging
Currency Forward and Futures Contracts
General Characteristics of Currency Futures Contracts
Foreign Currency Options
Foreign Currency Conversion
Variable and Floating Rate Notes
Municipal Securities
Demand Features
Swaps, Caps and Floors
Structured Instruments
New Financial Products
Restricted Securities
High Yield Securities
Ohio Municipal Securities
Risk Factors Regarding Investments in Ohio Municipal Securities
West Virginia Municipal Securities
Risk Factors Regarding Investments in West Virginia Municipal
Securities
Kentucky Municipal Securities
Risk Factors Regarding Investments in Kentucky Municipal
Securities
Texas Municipal Securities
Risk Factors Regarding Investments in Texas Municipal
Securities
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PAGE
Arizona Municipal Securities
Risk Factors Regarding Investments in Arizona Municipal
Securities
Louisiana Municipal Securities
Risk Factors Regarding Investments in Louisiana Municipal
Securities
Investment Restrictions
Portfolio Turnover
Additional Tax Information Concerning All Funds of the Trust
Additional Tax Information Concerning the Tax-Free Funds
Additional Tax Information Concerning the International Equity
Index Fund
Foreign Tax Credit
VALUATION
Valuation of the Money Market and Institutional Money Market Funds
Valuation of the Equity Funds, the Bond Funds and the Municipal
Bond Funds
ADDITIONAL INFORMATION REGARDING THE CALCULATION OF PER SHARE NET
ASSET VALUE
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
MANAGEMENT OF THE TRUST
Trustees & Officers
Investment Advisor
Banc One Investment Advisors Corporation
Boston International Advisors, Inc
Glass-Steagall Act
Portfolio Transactions
Administrator
Expenses
Distributor
Distribution Plan
Custodian and Transfer Agent
Experts
ADDITIONAL INFORMATION
Description of Shares
Shareholder and Trustee Liability
Calculation of Performance Data
Miscellaneous
APPENDIX
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THE TRUST
The One Group (the "Trust") is an open-end management investment
company. The Trust consists of Forty series of units of beneficial interest
("Shares") each representing interests in one of Forty separate investment
portfolios ("Funds", formerly "Portfolios"), I.E., the U.S. Treasury Securities
Money Market Fund (formerly the U.S. Treasury Money Market Portfolio), the Prime
Money Market Fund, the Municipal Money Market Fund (formerly the Tax-Free
Obligations Portfolio) and the Ohio Municipal Money Market Fund (these four
Funds being collectively referred to as the "Money Market Funds"), the Income
Equity Fund, the Disciplined Value Fund, the Growth Opportunities Fund (formerly
the Small Company Growth Fund and the Growth Equity Portfolio), the Equity Index
Fund, the International Equity Index Fund, the Large Company Value Fund
(formerly, the Quantitative Equity Portfolio), the Large Company Growth Fund,
the Asset Allocation Fund (formerly, the Flexible Balanced Portfolio), the Value
Growth Fund and the Gulf South Growth Fund (these ten Funds being collectively
referred to as the "Equity Funds"), the Income Bond Fund (formerly the Income
Portfolio), the Limited Volatility Bond Fund, the Intermediate Bond Fund, the
Government Bond Fund, the Income Fund and the Ultra Short-Term Income Fund
(formerly the Government ARM Fund) (these six Funds being collectively referred
to as the "Bond Funds"), the Intermediate Tax-Free Bond Fund, the Municipal
Income Fund (formerly the Tax-Free Bond Fund), the Ohio Municipal Bond Fund, the
Texas Tax-Free Bond Fund, the West Virginia Municipal Bond Fund, the Kentucky
Municipal Bond Fund, the Arizona Municipal Bond Fund, and the Louisiana
Municipal Bond Fund (these eight Funds being collectively referred to as the
"Municipal Bond Funds"), the Treasury Money Market Fund, the Treasury Only Money
Market Fund, the Government Money Market Fund, the Tax Exempt Money Market Fund,
and the Institutional Prime Money Market Fund (these five Funds being
collectively referred to as the "Institutional Money Market Funds"), the
Investor Growth Fund, the Investor Growth & Income Fund, the Investor Aggressive
Growth Fund, the Investor Fixed Income Fund, the Investor Conservative Growth
Fund, and the Investor Balanced Fund (these six Funds being collectively
referred to as the "Funds of Funds"). The Municipal Money Market Fund, the Ohio
Municipal Money Market Fund, the Ohio Municipal Bond Fund, the Intermediate
Tax-Free Bond Fund, the Municipal Income Fund, the Texas Tax-Free Bond Fund, the
West Virginia Municipal Bond Fund, the Kentucky Municipal Bond Fund, the Arizona
Municipal Bond Fund, the Tax Exempt Money Market Fund and the Louisiana
Municipal Bond Fund are sometimes referred to herein as the "Tax-Free Funds."
Information regarding the Treasury & Agency Fund is contained in a
separate Statement of Information dated November 1, 1996 which may be obtained
by writing to the Distributor for the Trust, The One Group Services Company,
3435 Stelzer Road, Columbus, Ohio 43219, or by telephoning toll free (800)
480-4111.
All of the Trust's Funds are diversified, as defined under the
Investment Company Act of 1940, as amended (the "1940 Act"), with the exception
of the Ohio Municipal Bond Fund, the Kentucky Municipal Bond Fund, the West
Virginia Municipal Bond Fund, the Texas Tax-Free Bond Fund, the Arizona
Municipal Bond Fund, the Ohio Municipal Money Market Fund, the Louisiana
Municipal Bond Fund, and the Gulf South Growth Fund, which are non-diversified.
The shares in the Funds of the Trust (other than the Institutional Money Market
Funds, the U.S. Treasury Securities Money Market Fund, the Prime Money Market
Fund and the Funds of Funds) are offered in three separate classes: Fiduciary
Class Shares, Class A Shares and Class B Shares. The U.S. Treasury Securities
Money Market Fund and the Prime Money Market Fund offer Class A Shares,
Fiduciary Class Shares and Service Class Shares. The Funds of Funds offer
Fiduciary Class Shares, Class A Shares, Class B Shares and Class C Shares. Much
of the information contained herein expands upon subjects discussed in the
Prospectuses for the respective Funds. No investment in a particular class of
Shares of a Fund should be made without first reading that Fund's Prospectus.
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INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement each Fund's investment objective and
policies as set forth in the respective Prospectus for that Fund.
ADDITIONAL INFORMATION ON FUND INSTRUMENTS
High Quality Investments With Regard to the Money Market and
Institutional Money Market Funds
As noted in the Prospectuses for the Money Market and Institutional
Money Market Funds, each such Fund may invest only in obligations determined by
the Fund's investment Advisor, Banc One Investment Advisors Corporation ("Banc
One Advisors") to present minimal credit risks under guidelines adopted by the
Trust's Board of Trustees.
The Treasury Money Market Fund and the Treasury Only Money Market Fund
may only invest in U.S. Treasury bills, notes and other U.S. Treasury
obligations issued or guaranteed by the U.S. Government. Some of the securities
held by the Treasury Money Market Fund may be subject to repurchase agreements.
The Government Money Market Fund invests exclusively in securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, some of which may be subject to repurchase agreements.
The Tax Exempt Money Market Fund may invest only in obligations which,
at the time of purchase, (i) possess the highest short-term ratings from a
nationally recognized statistical rating organization (an "NRSRO") in the case
of single-rated securities; or (ii) possess, in the case of multiple-rated
securities, the highest short-term ratings by at least two NRSROs; or (iii) do
not possess a rating (I.E., are unrated) but are determined by Banc One Advisors
to be of comparable quality to the rated instruments eligible for purchase by
the Fund under guidelines adopted by the Board of Trustees (collectively, "First
Tier Securities"). Some of the securities of the Tax Exempt Money Market Fund
may be subject to repurchase agreements.
With regard to the Money Market Funds and the Institutional Money
Market Funds other than the Tax Exempt Money Market Fund, investments will be
limited to those obligations which, at the time of purchase, (i) possess one of
the two highest short-term ratings from an NRSRO in the case of single-rated
securities; or (ii) possess, in the case of multiple-rated securities, one of
the two highest short-term ratings by at least two NRSROs or (iii) do not
possess a rating (I.E., are unrated) but are determined by Banc One Advisors to
be of comparable quality to the rated instruments eligible for purchase by the
Trust under guidelines adopted by the Board of Trustees (collectively, "Eligible
Securities"). A security that has not received a rating will be deemed to
possess the rating assigned to an outstanding class of the issuer's short-term
debt obligations if determined by Banc One Advisors to be comparable in priority
and security to the obligation selected for purchase by the Trust.
A security subject to a tender or demand feature will be considered an
Eligible Security only if both the demand feature and the underlying security
possess a high quality rating or, if such do not possess a rating, are
determined by Banc One Advisers to be of comparable quality; provided, however,
that where the demand feature would be readily exercisable in the event of a
default in payment of principal or interest on the underlying security, the
obligation may be acquired based on the rating possessed by the demand feature
or, if the demand feature does not possess a rating, a determination of
comparable quality by Banc One Advisors. A security which at the time of
issuance had a maturity exceeding 397 days but, at the time of purchase, has a
remaining maturity of 397 days or less, is not considered an Eligible Security
if it does not possess a high quality rating and the long-term rating, if any,
is not within the two highest rating categories.
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Eligible Securities include First-Tier Securities and Second-Tier
Securities. First-Tier Securities include those that possess a rating in the
highest category, in the case of a single-rated security, or at least two
ratings in the highest rating category, in the case of multiple-rated
securities, or, if the securities do not possess a rating, are determined to be
of comparable quality by Banc One Advisors pursuant to the guidelines adopted by
the Board of Trustees. Second-Tier Securities are all other Eligible Securities.
Each Money Market and Institutional Money Market Fund other than the
Ohio Municipal Money Market, the Municipal Money Market and the Tax Exempt Money
Market Funds will not invest more than 5% of its total assets in the First Tier
Securities of any one issuer. In addition, each Fund other than the Municipal
Money Market Fund, the Ohio Municipal Money Market Fund, and the Tax Exempt
Money Market Fund may not invest more than 5% of its total assets in Second Tier
Securities, with investment in the Second Tier Securities of any one issuer
further limited to the greater of 1% of the Fund's total assets or $1.0 million.
If a percentage limitation is satisfied at the time of purchase, a later
increase in such percentage resulting from a change in the Fund's net asset
value or a subsequent change in a security's qualification as a First Tier or
Second Tier Security will not constitute a violation of the limitation. In
addition, there is no limit on the percentage of a Fund's assets that may be
invested in obligations issued or guaranteed by the U.S. government, its
agencies, or instrumentalities and, with respect to each Money Market Fund and
each Institutional Money Market Fund other than the Treasury Only Money Market
Fund, repurchase agreements fully collateralized by such obligations.
Under the guidelines adopted by the Trust's Board of Trustees and in
accordance with Rule 2a-7 under the 1940 Act, Banc One Advisors may be required
to promptly dispose of an obligation held in a Fund's portfolio in the event of
certain developments that indicate a diminishment of the instrument's credit
quality, such as where an NRSRO downgrades an obligation below the second
highest rating category, or in the event of a default relating to the financial
condition of the issuer.
The Appendix to this Statement of Additional Information identifies
each NRSRO which may be utilized by Banc One Advisors with regard to portfolio
investments for the Funds and provides a description of relevant ratings
assigned by each such NRSRO. A rating by an NRSRO may be utilized only where the
NRSRO is neither controlling, controlled by, or under common control with the
issuer of, or any issuer, guarantor, or provider of credit support for, the
instrument.
Bank Obligations
Each Fund except the U.S. Treasury Securities Money Market Fund, the
International Equity Index Fund, the Treasury Money Market Fund, the Treasury
Only Money Market Fund, and the Government Money Market Fund may invest in bank
obligations such as bankers' acceptances, certificates of deposit, and demand
and time deposits. The International Equity Index Fund may invest in bank
obligations such as certificates of deposit and demand and time deposits.
Bankers' acceptances are negotiable drafts or bills of exchange
typically drawn by an importer or exporter to pay for specific merchandise,
which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Bankers' acceptances invested in by the Funds will be those guaranteed by
domestic and foreign banks having, at the time of investment, total assets in
excess of $1 billion (as of the date of their most recently published financial
statements).
Certificates of deposit are negotiable certificates issued against
funds deposited in a commercial bank or a savings and loan association for a
definite period of time and earning a specified return. Certificates of deposit
will be those of domestic and foreign branches of U.S. commercial banks which
are members of the Federal Reserve System or the deposits of which are insured
by the Federal Deposit Insurance Corporation and in certificates of deposit of
domestic savings and loan associations
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the deposits of which are insured by the Federal Deposit Insurance Corporation
if, at the time of purchase, such institutions have total assets in excess of $1
billion (as of the date of their most recently published financial statements).
Certificates of deposit may also include those issued by foreign banks outside
the United States with total assets at the time of purchase in excess of the
equivalent of $1 billion. The Funds may also invest in Eurodollar certificates
of deposit, which are U.S. dollar-denominated certificates of deposit issued by
branches of foreign and domestic banks located outside the United States, and
Yankee certificates of deposit, which are certificates of deposit issued by a
U.S. branch of a foreign bank denominated in U.S. dollars and held in the United
States. The International Equity Index Fund may also invest in obligations
(including banker's acceptances and certificates of deposit) denominated in
foreign currencies (see "Foreign Investments" herein).
Time deposits are interest-bearing non-negotiable deposits at a bank or
a savings and loan association that have a specific maturity date. Demand
deposits are funds deposited in a commercial bank or a savings and loan
association which, without prior notice to the bank, may be withdrawn generally
by negotiable draft. Time and demand deposits will be maintained only at banks
or savings and loan associations from which a Fund could purchase certificates
of deposit.
Commercial Paper
Commercial paper consists of unsecured promissory notes issued by
corporations. Except as noted below with respect to variable amount master
demand notes, issues of commercial paper normally have maturities of less than
nine months and fixed rates of return.
The Limited Volatility Bond Fund may purchase commercial paper
consisting of issues rated at the time of purchase in the highest rating
category by at least one NRSRO (such as A-1 by Standard & Poor's Corporation
("S&P"), P-1 by Moody's Investor Service, Inc. ("Moody's") or F-1 by Fitch
Investors Services ("Fitch")) or if unrated, determined by Banc One Advisors to
be of comparable quality. The Asset Allocation Fund, the Equity Funds other than
the International Equity Index Fund, the Municipal Bond Funds, the Income Bond
Fund, the Intermediate Bond Fund, and the Ultra Short-Term Income Fund may
purchase commercial paper consisting of issues rated at the time of purchase in
the highest or second highest rating category by at least one NRSRO (such as A-2
or better by S&P, P-2 or better by Moody's or F-2 or better by Fitch) or if
unrated, determined by Banc One Advisors to be of comparable quality. The Income
Fund may purchase commercial paper consisting of issues rated at the time of
purchase in all rating categories by at least one NRSRO, or, if unrated,
determined by Banc One Advisors to be of comparable quality.
Repurchase Agreements
Securities held by each Fund other than the Treasury Only Money Market
Fund may be subject to repurchase agreements. Under the terms of a repurchase
agreement, a Fund would acquire securities from member banks of the Federal
Deposit Insurance Corporation (or in the case of the International Equity Index
Fund, such banks or foreign banks) with total assets in excess of $1 billion (or
in the case of the International Equity Index Fund, the equivalent of $1
billion) and registered broker-dealers (or in the case of the International
Equity Index Fund, broker-dealers which may or may not be registered) which Banc
One Advisors deems creditworthy under guidelines approved by the Board of
Trustees, subject to the seller's agreement to repurchase such securities at a
mutually agreed-upon date and price. The repurchase price would generally equal
the price paid by the Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the underlying
portfolio securities. The seller under a repurchase agreement will be required
to maintain the value of collateral held pursuant to the agreement at not less
than the repurchase price (including accrued interest). If the seller were to
default on its repurchase obligation or become insolvent, the Fund holding such
obligation would suffer a loss to the extent that the proceeds from a sale of
the underlying portfolio securities were less than the repurchase price under
the agreement, or to the extent that the
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disposition of such securities by the Fund were delayed pending court action.
Additionally, there is no controlling legal precedent under U.S. law and there
may be no controlling legal precedents under the laws of certain foreign
jurisdictions confirming that a Fund would be entitled, as against a claim by
such seller or its receiver or trustee in bankruptcy, to retain the underlying
securities, although (with respect to repurchase agreements subject to U.S. law)
the Board of Trustees of the Trust believes that, under the regular procedures
normally in effect for custody of a Fund's securities subject to repurchase
agreements and under federal laws, a court of competent jurisdiction would rule
in favor of the Trust if presented with the question. Securities subject to
repurchase agreements will be held by the Trust's custodian or another qualified
custodian or in the Federal Reserve/Treasury book-entry system. Although there
is no current intention to do so, the International Equity Index Fund reserves
the right in the future to enter into repurchase agreements. Repurchase
agreements are considered by the Securities and Exchange Commission to be loans
by a Fund under the 1940 Act.
Reverse Repurchase Agreements
Each of the Funds other than the Treasury Only Money Market Fund, the
Ohio Municipal Money Market Fund and the Funds of Funds may borrow funds for
temporary purposes by entering into reverse repurchase agreements, although the
International Equity Index Fund has no current intention to do so. Pursuant to
such agreements, a Fund would sell portfolio securities to financial
institutions such as banks and broker-dealers, and agree to repurchase them at a
mutually agreed-upon date and price. A Fund would enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time a Fund entered into a reverse
repurchase agreement, it would place in a segregated custodial account assets,
such as liquid high grade debt securities consistent with the Fund's investment
restrictions and having a value equal to the repurchase price (including accrued
interest), and would subsequently monitor the account to ensure that such
equivalent value was maintained. Reverse repurchase agreements involve the risk
that the market value of the securities sold by a Fund may decline below the
price at which the Fund is obligated to repurchase the securities. Reverse
repurchase agreements are considered by the Securities and Exchange Commission
to be borrowings by a Fund under the 1940 Act.
Government Securities
With the exception of the U.S. Treasury Securities Money Market Fund,
the Treasury Money Market Fund and the Treasury Only Money Market Fund, which
will invest only in obligations issued or guaranteed by the U.S. Treasury, each
of the Funds may invest in obligations issued or guaranteed by agencies and
instrumentalities of the U.S. government. Obligations of certain agencies and
instrumentalities of the U.S. government are supported by the full faith and
credit of the U.S. Treasury; others are supported by the right of the issuer to
borrow from the Treasury; others are supported by the discretionary authority of
the U.S. government to purchase the agency's obligations; and still others are
supported only by the credit of the instrumentality. No assurance can be given
that the U.S. government would provide financial support to U.S.
government-sponsored agencies or instrumentalities if it is not obligated to do
so by law. A Fund will invest in the obligations of such agencies or
instrumentalities only when Banc One Advisors or the Investment Sub-Advisor
("Sub-Advisor") believes that the credit risk with respect thereto is minimal.
For information on mortgage-related securities issued by certain agencies or
instrumentalities of the U.S. government, see "Investment Objectives and
Policies--Mortgage-related Securities" in this Statement of Additional
Information.
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Futures and Options Trading
Futures Contracts. The Equity Funds and the Bond Funds, except the
Limited Volatility Bond Fund, may enter into futures contracts, options, options
on futures contracts and stock index futures contracts and options thereon for
the purposes of remaining fully invested , reducing transaction costs, or
managing interest rate risk. Futures contracts provide for the future sale by
one party and purchase by another party of a specified amount of a specific
security, class of securities, or an index at a specified future time and at a
specified price. A stock index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to a specified dollar amount times the difference between the stock
index value at the close of trading of the contracts and the price at which the
futures contract is originally struck. Futures contracts which are standardized
as to maturity date and underlying financial instrument are traded on national
futures exchanges. Futures exchanges and trading are regulated under the
Commodity Exchange Act by the Commodity Futures Trading Commission ("CFTC"), a
U.S. government agency.
Although most futures contracts by their terms call for actual delivery
and acceptance of the underlying securities, in most cases the contracts are
closed out before the settlement date without the making or taking of delivery.
Closing out an open futures position is done by taking an opposite position
("buying" a contract which has previously been "sold," or "selling" a contract
previously purchased) in an identical contract to terminate the position. A
futures contract on a securities index is an agreement obligating either party
to pay, and entitling the other party to receive, while the contract is
outstanding, cash payments based on the level of a specified securities index.
The acquisition of put and call options on futures contracts will, respectively,
give a Fund the right (but not the obligation), for a specified price, to sell
or to purchase the underlying futures contract, upon exercise of the option, at
any time during the option period. Brokerage commissions are incurred when a
futures contract is bought or sold.
When making future trades, the Funds are required to make a good faith
margin deposit in cash or government securities with a broker or custodian to
initiate and maintain open positions in futures contracts. A margin deposit is
intended to assure completion of the contract (delivery or acceptance of the
underlying security) if it is not terminated prior to the specified delivery
date. Minimal initial margin requirements are established by the futures
exchange and may be changed. Brokers may establish deposit requirements which
are higher than the exchange minimums. Initial margin deposits on futures
contracts are customarily set at levels much lower than the prices at which the
underlying securities are purchased and sold, typically ranging upward from less
than 5% of the value of the contract being traded.
After a futures contract position is opened, the value of the contract
is marked to market daily. If the futures contract price changes to the extent
that the margin on deposit does not satisfy margin requirements, payment of
additional "variation" margin will be required. Conversely, change in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to and
from the futures broker for as long as the contract remains open. The Funds
expect to earn interest income on their margin deposits.
Traders in futures contracts may be broadly classified as either
"hedgers" or "speculators." Hedgers use the futures markets primarily to offset
unfavorable changes in the value of securities otherwise held for investment
purposes or expected to be acquired by them. Speculators are less inclined to
own the securities underlying the futures contracts which they trade, and use
futures contracts with the expectation of realizing profits from fluctuations in
the prices of underlying securities. The Funds intend to enter into futures
contracts, options on futures contracts, index futures and options thereon that
are traded on an exchange regulated by the CFTC if, to the extent that such
futures and options are not for "bona fide hedging purposes" (as defined by the
CFTC), the aggregate initial margin and premiums on such positions (excluding
the amount by which options are in the money) do not exceed 5% of the Fund's
total assets
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at current value. A Fund, however, may invest more than such amount for bona
fide hedging purposes, and also may invest more than such amount if it obtains
authority to do so from the CFTC without rendering the fund a commodity pool
operator or adversely affecting its status as an investment company for federal
securities laws or income tax purposes.
A Fund may buy and sell futures contracts and related options to manage
its exposure to changing interest rates and security prices. When interest rates
are expected to rise or market values of portfolio securities are expected to
fall, a Fund can seek through the sale of futures contracts to offset a decline
in the value of its portfolio securities. When interest rates are expected to
fall or market values are expected to rise, a Fund, through the purchase of such
contracts, can attempt to secure better rates or prices for the Fund than might
later be available in the market when it effects anticipated purchases.
Although techniques other than the sale and purchase of futures
contracts could be used to control the Funds' exposure to market fluctuations,
the use of futures contracts may be a more effective means of managing this
exposure. While the Funds will incur commission expenses in both opening and
closing out futures positions, these costs may be lower than transaction costs
that would be incurred in the purchase and sale of the underlying securities.
A Fund's ability to effectively utilize futures trading depends on
several factors. First, it is possible that there will not be a perfect price
correlation between the futures contracts and their underlying reference
security or index. Second, it is possible that a lack of liquidity for futures
contracts could exist in the secondary market, resulting in an inability to
close a futures position prior to its maturity date. Third, the purchase of a
futures contract involves the risk that a Fund could lose more than the original
margin deposit required to initiate a futures transaction.
Restrictions on the Use of Futures Contracts. None of the Funds will
enter into futures contract transactions for purposes other than bona fide
hedging purposes to the extent that, immediately thereafter, the sum of its
initial margin deposits and premiums on open contracts exceeds 5% of the market
value of the respective Fund's total assets. The Funds of Funds will not enter
into futures contract transactions, however, the One Group mutual funds in which
they invest may do so as described herein. In addition, none of the Equity Funds
will enter into futures contracts to the extent that the value of the futures
contracts held would exceed 25% of the respective Fund's total assets. Futures
transactions will be limited to the extent necessary to maintain each Fund's
qualification as a regulated investment company.
The Funds have undertaken to restrict their futures contract trading as
follows: first, the Funds will not engage in transactions in futures contracts
for speculative purposes; second, the Funds will not market themselves to the
public as commodity pools or otherwise as vehicles for trading in the
commodities futures or commodity options markets; third, the Funds will disclose
to all prospective Shareholders the purpose of and limitations on their
commodity futures trading; fourth, the Funds will submit to the CFTC special
calls for information. Accordingly, registration as a commodities pool operator
with the CFTC is not required.
In addition to the margin restrictions discussed above, transactions in
futures contracts may involve the segregation of funds pursuant to requirements
imposed by the Securities and Exchange Commission. Under those requirements,
where a Fund has a long position in a futures contract, it may be required to
establish a segregated account (not with a futures commission merchant or
broker) containing cash or certain liquid assets equal to the purchase price of
the contract (less any margin on deposit). For a short position in futures or
forward contracts held by a Fund, those requirements may mandate the
establishment of a segregated account (not with a futures commission merchant or
broker) with cash or certain liquid assets that, when added to the amounts
deposited as margin, equal the market value of the instruments underlying the
futures contracts (but are not less than the price at which the short positions
were
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established). However, segregation of assets is not required if a Fund "covers"
a long position. For example, instead of segregating assets, a Fund, when
holding a long position in a futures contract, could purchase a put option on
the same futures contract with a strike price as high or higher than the price
of the contract held by the Fund. In addition, where a Fund takes short
positions, or engages in sales of call options, it need not segregate assets if
it "covers" these positions. For example, where a Fund holds a short position in
a futures contract, it may cover by owning the instruments underlying the
contract. The Funds may also cover such a position by holding a call option
permitting it to purchase the same futures contract at a price no higher than
the price at which the short position was established. Where a Fund sells a call
option on a futures contract, it may cover either by entering into a long
position in the same contract at a price no higher than the strike price of the
call option or by owning the instruments underlying the futures contract. A Fund
could also cover this position by holding a separate call option permitting it
to purchase the same futures contract at a price no higher than the strike price
of the call option sold by the Fund.
The Fund also may engage in straddles and spreads. In a straddle
transaction, the Fund either buys a call and a put or sells a call and a put on
the same security. In a spread, the Fund purchases and sells a call or a put.
The Fund will sell a straddle when Banc One Advisors believes the price of a
security will be stable. The Fund will receive a premium on the sale of the put
and the call. A spread permits the Fund to make a hedged investment that the
price of a security will increase or decline.
In addition, the extent to which a Fund may enter into transactions
involving futures contracts may be limited by the Internal Revenue Code's
requirements for qualification as a registered investment company and the
Trust's intention to qualify as such.
Risk Factors in Futures Transactions. Positions in futures contracts
may be closed out only on an exchange which provides a secondary market for such
futures. However, there can be no assurance that a liquid secondary market will
exist for any particular futures contract at any specific time. Thus, it may not
be possible to close a futures position. In the event of adverse price
movements, a Fund would continue to be required to make daily cash payments to
maintain the required margin. In such situations, if a Fund has insufficient
cash, it may have to sell portfolio securities to meet daily margin requirements
at a time when it may be disadvantageous to do so. In addition, a Fund may be
required to make delivery of the instruments underlying futures contracts it
holds. The inability to close options and futures positions also could have an
adverse impact on the ability to effectively hedge them. The Funds will minimize
the risk that they will be unable to close out a futures contract by only
entering into futures contracts which are traded on national futures exchanges
and for which there appears to be a liquid secondary market.
The risk of loss in trading futures contracts in some strategies can be
substantial, due both to the low margin deposits required, and the extremely
high degree of leverage involved in futures pricing. Because the deposit
requirements in the futures markets are less onerous than margin requirements in
the securities market, there may be increased participation by speculators in
the futures market which may also cause temporary price distortions. A
relatively small price movement in a futures contract may result in immediate
and substantial loss (as well as gain) to the investor. For example, if at the
time of purchase, 10% of the value of the futures contract is deposited as
margin, a subsequent 10% decrease in the value of the futures contract would
result in a total loss of the margin deposit, before any deduction for the
transaction costs, if the account were then closed out. A 15% decrease would
result in a loss equal to 150% of the original margin deposit if the contract
were closed out. Thus, a purchase or sale of a futures contract may result in
losses in excess of the amount invested in the contract. However, because the
futures strategies engaged in by the Funds are only for risk management
purposes, Banc One Advisors and the Sub-Advisor do not believe that the Funds
are subject to the risks of loss frequently associated with futures
transactions. Each Fund would presumably have sustained comparable losses
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if, instead of the futures contract, it had invested in the underlying financial
instrument and sold it after the decline.
Utilization of futures transactions by a Fund does involve the risk of
imperfect or no correlation where the securities underlying futures contracts
have different maturities than the portfolio securities being hedged. It is also
possible that a Fund could both lose money on futures contracts and also
experience a decline in value of its portfolio securities. There is also the
risk of loss by a Fund of margin deposits in the event of bankruptcy of a broker
with whom the Fund has an open position in a futures contract or related option.
Most futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. The daily limit establishes
the maximum amount that the price of a futures contract may vary either up or
down from the previous day's settlement price at the end of a trading session.
Once the daily limit has been reached in a particular type of contract, no
trades may be made on that day at a price beyond that limit. The daily limit
governs only price movement during a particular trading day and therefore does
not limit potential losses, because the limit may prevent the liquidation of
unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of future positions and subjecting some
futures traders to substantial losses.
Some futures strategies, including selling futures, buying puts and
writing covered calls, may reduce the Fund's exposure to price fluctuations.
Other strategies, including buying futures, and buying calls, tend to increase
market exposure. Futures and options may be combined with each other in order to
adjust the risk and return characteristics of the overall portfolio. The Fund
expects to enter into these transactions to manage a return or spread on a
particular investment or portion of its assets, to protect against any increase
in the price of securities the Fund anticipates purchasing at a later date, or
for other risk management strategies.
Options Contracts. Banc One Advisors or the Sub-Advisor of the Equity
and Bond Funds, except the Limited Volatility Bond Fund, may use trading of
options on securities or futures contracts as a hedging device. An option on a
futures contract gives the purchaser of the option the right (but not the
obligation) to take a position at a specified price (the "striking," "strike" or
"exercise" price) in the underlying futures contract or security. A "call"
option gives the purchaser the right to take a long position in the underlying
futures contract or security, and the purchaser of a "put" option acquires the
right to take a short position in the underlying futures contract or security.
The purchase price of an option is referred to as its "premium." The seller (or
"writer") of an option is obligated to take a futures or securities position at
a specified price if the option is exercised. In the case of a call option, the
seller must stand ready to take a short position in the underlying futures
contract or security at the strike price if the option is exercised. A seller of
a put option, on the other hand, stands ready to take a long position in the
underlying futures contract or security at the strike price if the option is
exercised. A "naked" option refers to an option written by a party which does
not possess the underlying futures contract or security.
A "covered" option refers to an option written by a party which does
possess the underlying position. The initial purchase (sale) of an option is an
"opening transaction." In order to close out an option position, the Fund may
enter into a "closing transaction," the sale (purchase) of an option contract on
the same security with the same exercise price and expiration date as the option
contract originally opened.
A call option on a futures contract or security is said to be
"in-the-money" if the strike price is below current market levels. Similarly, a
put option on a futures contract or security is said to be "out-of-the-money" if
the strike price is below current market levels.
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Options have limited life spans, usually tied to the delivery or
settlement date of the underlying futures contract or security. Some options,
however, expire significantly in advance of such dates. An option that is
"out-of-the-money" and not offset by the time it expires becomes worthless. On
certain exchanges "in-the-money" options are automatically exercised on their
expiration date, but on others unexercised options simply become worthless after
their expiration date. Options usually trade at a premium (referred to as the
"time value" of the option) above their intrinsic value (the difference between
the market price for the underlying futures contract or equity security and the
strike price). As an option nears its expiration date, the market value and the
intrinsic value move into parity as the time value diminishes.
The Funds, other than the Limited Volatility Bond Fund may enter into
over-the-counter option transactions. There will be an active over-the-counter
market for such options which will establish their pricing and liquidity.
Broker/Dealers with whom the Trust will enter into such option transactions
shall have a minimum net worth of $20,000,000. Each Fund will limit the writing
of put and call options to 25% of its net assets.
Increased market volatility generally increases the value of options by
increasing the probability of favorable market swings, putting outstanding
options "in-the-money." Although purchasing options is a limited risk trading
approach, significant losses can be incurred by doing so.
Covered Calls
Each Equity Fund and Bond Fund, (except the Limited Volatility Bond
Fund), and the Ohio Municipal Bond Fund may write (sell) only "covered" call
options and purchase options to close out options previously written by the
Fund. The Funds' purpose in writing covered call options is to generate
additional premium income. This premium income will serve to enhance a Fund's
total return and will reduce the effect of any price decline of the security
involved in the option. Although the International Equity Index Fund has no
current intention to write such options, it reserves the right to do so from
time to time when such activity will further its investment objective. Covered
call options will generally be written on securities which, in the opinion of
Banc One Advisors or the Sub-Advisor, are not expected to make any major price
moves in the near future but which, over the long term, are deemed to be
attractive investments for the Fund.
A call option gives the holder (buyer) the "right to purchase" a
security at a specified price (the exercise price) at any time until a certain
date (the expiration date). So long as the obligation of the writer of a call
option continues, the writer may be assigned an exercise notice by the
broker-dealer through whom such option was sold, requiring the writer to deliver
the underlying security against payment of the exercise price. This obligation
terminates upon the expiration of the call option, or such earlier time at which
the writer effects a closing purchase transaction by repurchasing an option
identical to that previously sold. To secure the writer's obligation to deliver
the underlying security in the case of a call option, subject to the rules of
the Options Clearing Corporation, a writer is required to deposit in escrow the
underlying security or other assets in accordance with such rules. The Funds
will write only covered call options. This means that a Fund will only write a
call option on a security which a Fund already owns. (In order to comply with
the requirements of the securities laws in several states, a Fund will not write
a covered call option if, as a result, the aggregate market value of all
portfolio securities covering call options or subject to put options exceeds 25%
of the market value of the Fund's net assets.)
Fund securities on which call options may be written will be purchased
solely on the basis of investment considerations consistent with each Fund's
investment objectives. The writing of covered call options is a conservative
investment technique believed to involve relatively little risk (in contrast to
the writing of naked or uncovered options, which a Fund will not do), but
capable of enhancing the Fund's total return. When writing a covered call
option, a Fund, in return for the premium, gives
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up the opportunity for profit from a price increase in the underlying security
above the exercise price, but conversely retains the risk of loss should the
price of the security decline. Unlike one who owns securities not subject to an
option, a Fund has no control over when it may be required to sell the
underlying securities, since it may be assigned an exercise notice at any time
prior to the expiration of its obligation as a writer. Thus, the security could
be "called away" at a price substantially below the fair market value of the
security. If a call option which a Fund has written expires, a Fund will realize
a gain in the amount of the premium; however, such gain may be offset by a
decline in the market value of the underlying security during the option period.
If the call option is exercised, a Fund will realize a gain or loss from the
sale of the underlying security. The security covering the call will be
maintained in a segregated account of the Fund's custodian. The Funds do not
consider a security covered by a call to be "pledged" as that term is used in
each Fund's policy which limits the pledging or mortgaging of its assets.
The premium received is the market value of an option. The premium each
Fund will receive from writing a call option will reflect, among other things,
the current market price of the underlying security, the relationship of the
exercise price to such market price, the historical price volatility of the
underlying security, and the length of the option period. Once the decision to
write a call option has been made, the Fund's Advisor or Sub-Advisor, in
determining whether a particular call option should be written on a particular
security, will consider the reasonableness of the anticipated premium and the
likelihood that a liquid secondary market will exist for those options. The
premium received by a Fund for writing covered call options will be recorded as
a liability in the Trust's statement of assets and liabilities. This liability
will be adjusted daily to the option's current market value, which will be the
latest sale price at the time at which the net asset value per Share of the Fund
is computed (close of the New York Stock Exchange), or, in the absence of such
sale, the latest asked price. The liability will be extinguished upon expiration
of the option, the purchase of an identical option in the closing transaction,
or delivery of the underlying security upon the exercise of the option.
Generally, a Fund, in order to avoid the exercise of an option sold by
it, will be able to cancel its obligation under the option by entering into a
closing purchase transaction, if available, unless selling (in the case of a
call option) or purchasing (in the case of a put option) the underlying
securities is determined to be in a Fund's interest. A closing purchase
transaction consists of a Fund purchasing an option having the same terms as the
option sold by a Fund, and has the effect of cancelling a Fund's position as a
seller. The premium which a Fund will pay in executing a closing purchase
transaction may be higher (or lower) than the premium received when the option
was sold, depending in large part upon the relative price of the underlying
security at the time of each transaction. To the extent options sold by a Fund
are exercised and a Fund delivers securities to the holder of a call option, a
Fund's turnover rate will increase, which would cause a Fund to incur additional
brokerage expenses.
Closing transactions will be effected in order to realize a profit on
an outstanding call option, to prevent an underlying security from being called,
or to permit the sale of the underlying security. Furthermore, effecting a
closing transaction will permit a Fund to write another call option on the
underlying security with either a different exercise price or expiration date or
both. If a Fund desires to sell a particular security from its portfolio on
which it has written a call option it will seek to effect a closing transaction
prior to, or concurrently with, the sale of the security. There is, of course,
no assurance that a Fund will be able to effect such closing transactions at a
favorable price. If a Fund cannot enter into such a transaction, it may be
required to hold a security that it might otherwise have sold, in which case it
would continue to be at market risk on the security. This could result in higher
transaction costs. A Fund will pay transaction costs in connection with the
writing of options to close out previously written options. Such transaction
costs are normally higher than those applicable to purchases and sales of
portfolio securities.
Call options written by a Fund will normally have expiration dates of
less than nine months from the date written. The exercise price of the options
may be below,
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equal to, or above the current market values of the underlying securities at the
time the options are written. From time to time, a Fund may purchase an
underlying security for delivery in accordance with an exercise notice of a call
option assigned to it, rather than delivering such security from its portfolio.
In such cases, additional costs will be incurred.
A Fund will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from the writing of the option. Because increases in the market price
of a call option will generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Fund.
Puts
Each Bond Fund, except the Limited Volatility Bond Fund, and each
Equity Fund may purchase put options to protect its portfolio holdings in an
underlying security against a decline in market value. Such hedge protection is
provided during the life of the put option since the Fund, as holder of the put
option, is able to sell the underlying security at the put exercise price
regardless of any decline in the underlying security's market price. For a put
option to be profitable, the market price of the underlying security must
decline sufficiently below the exercise price to cover the premium and
transaction costs. By using put options in this manner, the Fund will reduce any
profit it might otherwise have realized from appreciation of the underlying
security by the premium paid for the put option and by transaction cost.
However, any loss of premium may be offset by an increase in the value of the
Fund's securities.
Each Bond and Equity Fund may write secured puts. For the secured put
writer, substantial depreciation in the value of the underlying security would
result in the security being "put to" the writer at the strike price of the
option which may be substantially in excess of the fair market value of the
security. If a secured put option expires unexercised, the writer realizes a
gain in the amount of the premium.
Purchasing Call Options
Each Bond Fund, except the Limited Volatility Bond Fund, and each
Equity Fund may purchase call options to hedge against an increase in the price
of securities that the Fund wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Fund, as holder of the
call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the call
option. In the event that paying premiums for a call option, together with a
price movement in the underlying security, is such that exercise of the option
would not be profitable to the Fund, loss of the premium may be offset by a
decrease in the acquisition cost of securities by the Fund.
Risk Factors in Options Transactions
The successful use of the Bond Funds and the Equity Funds' options
strategies depends on the ability of Banc One Advisors or, in the case of the
International Equity Index Fund, the Sub-Advisor, to assess interest rate and
market movements correctly and to accurately calculate the fair price of the
option.
When it purchases an option, a Fund runs the risk that it will lose its
entire investment in the option in a relatively short period of time, unless the
Fund exercises the option or enters into a closing sale transaction with respect
to the option during the life of the option. If the price of the underlying
security does not rise (in the case of a call) or fall (in the case of a put) to
an extent sufficient to cover the option premium and transaction costs, a Fund
will lose part or all of its
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investment in the option. This contrasts with an investment by a Fund in the
underlying securities, since the Fund may continue to hold its investment in
those securities notwithstanding the lack of a change in price of those
securities.
The effective use of options also depends on a Fund's ability to
terminate option positions at times when Banc One Advisors or, in the case of
the International Equity Index Fund, the Sub-Advisor, deems it desirable to do
so. A Fund will take an option position only if Banc One Advisors or, in the
case of the International Equity Index Fund, the Sub-Advisor, believes there is
a liquid secondary market for the option, however, there is no assurance that a
Fund will be able to effect closing transactions at any particular time or at an
acceptable price.
If a secondary trading market in options were to become unavailable, a
Fund could no longer engage in closing transactions. Lack of investor interest
might adversely affect the liquidity of the market for particular options or
series of options. A marketplace may discontinue trading of a particular option
or options generally. In addition, a market could become temporarily unavailable
if unusual events, such as volume in excess of trading or clearing capability,
were to interrupt normal market operations. A marketplace may at times find it
necessary to impose restrictions on particular types of options transactions,
which may limit a Fund's ability to realize its profits or limit its losses.
Disruptions in the markets for the securities underlying options
purchased or sold by a Fund could result in losses on the options. If trading is
interrupted in an underlying security, the trading of options on that security
is normally halted as well. As a result, a Fund as purchaser or writer of an
option will be unable to close out its positions until option trading resumes,
and it may be faced with losses if trading in the security reopens at a
substantially different price. In addition, the Options Clearing Corporation
("OCC") or other options markets may impose exercise restrictions. If a
prohibition on exercise is imposed at the time when trading in the option has
also been halted, a Fund as purchaser or writer of an option will be locked into
its position until one of the two restrictions has been lifted. If a prohibition
on exercise remains in effect until an option owned by a Fund has expired, the
Fund could lose the entire value of its option.
Special risks are presented by internationally-traded options. Because
of time differences between the United States and the various foreign countries,
and because different holidays are observed in different countries, foreign
option markets may be open for trading during hours or on days when U.S. markets
are closed. As a result, option premiums may not reflect the current prices of
the underlying interest in the United States.
Mortgage-related Securities
Each of the Money Market Funds (other than the U.S. Treasury Securities
Money Market Fund), the Institutional Money Market Funds (other than the
Treasury Money Market Fund and Treasury Only Money Market Fund) the Bond Funds
and the Asset Allocation Fund may, consistent with its investment objective and
policies, invest in mortgage-related securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities.
Mortgage-related securities, for purposes of the Trust's Prospectuses
and this Statement of Additional Information, represent pools of mortgage loans
assembled for sale to investors by various governmental agencies such as the
Government National Mortgage Association ("Ginnie Mae") and government-related
organizations such as the Federal National Mortgage Association ("Fannie Mae")
and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), as well as by
nongovernmental issuers such as commercial banks, savings and loan institutions,
mortgage bankers, and private mortgage insurance companies. Such
non-governmental mortgage securities cannot be treated as U.S. government
securities for purposes of investment policies. The Government Bond and the
Government Money Market Funds may only invest in mortgage-related securities
issued or guaranteed by the U.S. government, or its agencies or
instrumentalities. The other
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Funds listed above also may invest in mortgage-backed securities issued by
non-government entities, which Consist of Collateralized Mortgage Obligations
("CMOs") and Real Estate Mortgage Investment Conduits ("REMICs") that are rated
in one of the four highest rating categories by at least one NRSRO at the time
of investment or, if unrated, determined by Banc One Advisors to be of
comparable quality. The Funds, including the Government Bond and Government
Money Market Funds, also may invest in multiple class securities issued by U.S.
government agencies and instrumentalities such as Fannie Mae, Freddie Mac and
Ginnie Mae. The Funds, except the Government Bond and Government Money Market
Funds may invest in multiple class securities issued by private issuers
including guaranteed CMOs and REMIC pass-through or participation certificates,
when consistent with a Fund's investment objective, policies and limitations. A
REMIC is a CMO that qualifies for special tax treatment under the code and
invests in certain mortgages principally secured by interests in real property
and other permitted investments.
CMOs and guaranteed REMIC pass-through certificates ("REMIC
Certificates") issued by Fannie Mae, Freddie Mac, Ginnie Mae and private issuers
are types of multiple class pass-through securities. Investors may purchase
beneficial interests in REMICs, which are known as "regular" interests or
"residual" interests. The Funds do not currently intend to purchase residual
interests in REMICs. The REMIC Certificates represent beneficial ownership
interests in a REMIC Trust, generally consisting of mortgage loans or Fannie
Mae, Freddie Mac or Ginnie Mae guaranteed mortgage pass-through certificates
(the "Mortgage Assets"). The obligations of Fannie Mae, Freddie Mac or Ginnie
Mae under their respective guaranty of the REMIC Certificates are obligations
solely of Fannie Mae, Freddie Mac or Ginnie Mae, respectively.
Fannie Mae REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by Fannie Mae. In addition, Fannie Mae
will be obligated to distribute the principal balance of each class of REMIC
Certificates in full, whether or not sufficient funds are otherwise available.
For Freddie Mac REMIC Certificates, Freddie Mac guarantees the timely
payment of interest, and also guarantees the payment of principal as payments
are required to be made on the underlying mortgage participation certificates
("PCS"). PCS represent undivided interests in specified residential mortgages or
participation therein purchased by Freddie Mac and placed in a PC pool. With
respect to principal payments on PCS, Freddie Mac generally guarantees ultimate
collection of all principal of the related mortgage loans without offset or
deduction. Freddie Mac also guarantees timely payment of principal on certain
PCS referred to as "Gold PCS."
Ginnie Mae REMIC Certificates guarantee the full and timely payment of
interest and principal on each class of securities (in accordance with the terms
of those classes as specified in the related offering circular supplement). The
Ginnie Mae guarantee is backed by the full faith and credit of the United States
of America.
REMIC Certificates issued by Fannie Mae, Freddie Mac and Ginnie Mae are
treated as U.S. government securities for purposes of investment policies. CMOs
and REMIC Certificates are issued in multiple classes. Each class of CMOs or
REMIC Certificates, often referred to as a "tranche," is issued at a specific
adjustable or fixed interest rate and must be fully retired no later than its
final distribution date. Principal prepayments on the mortgage loans or the
Mortgage Assets underlying the CMOs or REMIC Certificates may cause some or all
of the classes of CMOs or REMIC Certificates to be retired substantially earlier
than their final distribution dates. Generally, interest is paid or accrues on
all classes of CMOs or REMIC Certificates on a monthly basis.
The principal of and interest on the Mortgage Assets may be allocated
among the several classes of CMOs or REMIC Certificates in various ways. In
certain structures (known as "sequential pay" CMOs or REMIC Certificates),
payments of principal, including any principal prepayments, on the Mortgage
Assets generally are applied to the classes of CMOs or REMIC Certificates in the
order of their respective final distribution dates. Thus, no payment of
principal will be made on any class of
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sequential pay CMOs or REMIC Certificates until all other classes having an
earlier final distribution date have been paid in full.
Additional structures of CMOs and REMIC Certificates include, among
others, "parallel pay" CMOs and REMIC Certificates. Parallel pay CMOs or REMIC
Certificates are those which are structured to apply principal payments and
prepayments of the Mortgage Assets to two or more classes concurrently on a
proportionate or disproportionate basis. These simultaneous payments are taken
into account in calculating the final distribution date of each class.
A wide variety of REMIC Certificates may be issued in the parallel pay
or sequential pay structures. These securities include accrual certificates
(also know as "Z-Bonds"), which only accrue interest at a specified rate until
all other certificates having an earlier final distribution date have been
retired and are converted thereafter to an interest-paying security, and planned
amortization class ("PAC") certificates, which are parallel pay REMIC
Certificates which generally require that specified amounts of principal be
applied on each payment date to one or more classes of REMIC Certificates (the
"PAC Certificates"), even though all other principal payments and prepayments of
the Mortgage Assets are then required to be applied to one or more other classes
of the certificates. The scheduled principal payments for the PAC Certificates
generally have the highest priority on each payment date after interest due has
been paid to all classes entitled to receive interest currently. Shortfalls, if
any, are added to the amount of principal payable on the next payment date. The
PAC Certificate payment schedule is taken into account in calculating the final
distribution date of each class of PAC. In order to create PAC tranches, one or
more tranches generally must be created that absorb most of the volatility in
the underlying Mortgage Assets. These tranches tend to have market prices and
yields that are much more volatile than the PAC classes.
The Z-Bonds in which the Funds may invest may bear the same non-credit-
related risks as do other types of Z-Bonds. Z-Bonds in which the Fund may invest
will not include residual interest.
There can be no assurance that the United States government would
provide financial support to Fannie Mae, Freddie Mac or Ginnie Mae if necessary
in the future.
Although certain mortgage-related securities are guaranteed by a third
party or otherwise similarly secured, the market value of the security, which
may fluctuate, is not so secured. If a Fund of the Trust purchases a
mortgage-related security at a premium, that portion may be lost if there is a
decline in the market value of the security whether resulting from changes in
interest rates or prepayments in the underlying mortgage collateral. As with
other interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise, the converse is
not necessarily true since in periods of declining interest rates the mortgages
underlying the securities are prone to prepayment. For this and other reasons, a
mortgage-related security's stated maturity may be shortened by unscheduled
prepayments on the underlying mortgages and, therefore, it is not possible to
predict accurately the security's return to the Trust's Funds. In addition,
regular payments received in respect of mortgage-related securities include both
interest and principal. No assurance can be given as to the return the Funds of
the Trust will receive when these amounts are reinvested.
The market value of the Fund's adjustable rate Mortgage-Backed
Securities may be adversely affected if interest rates increase faster than the
rates of interest payable on such securities or by the adjustable rate mortgage
loans underlying such securities. Furthermore, adjustable rate Mortgage-Backed
Securities or the mortgage loans underlying such securities may contain
provisions limiting the amount by which rates may be adjusted upward and
downward and may limit the amount by which monthly payments may be increased or
decreased to accommodate upward and downward adjustments in interest rates.
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Certain adjustable rate mortgage loans may provide for periodic
adjustments of scheduled payments in order to amortize fully the mortgage loan
by its stated maturity. Other adjustable rate mortgage loans may permit their
stated maturity to be extended or shortened in accordance with the portion of
each payment that is applied to interest as affected by the periodic interest
rate adjustments.
Although having less risk of decline during periods of rising interest
rates, adjustable rate Mortgage-Backed Securities have less potential for
capital appreciation than fixed rate Mortgage-Backed Securities because their
coupon rates will decline in response to market interest rate declines. The
market value of fixed rate Mortgage-Backed Securities may be adversely affected
as a result of increases in interest rates and, because of the risk of
unscheduled principal prepayments, may benefit less than other fixed rate
securities of similar maturity from declining interest rates. Finally, to the
extent Mortgage-Backed Securities are purchased at a premium, mortgage
foreclosures and unscheduled principal prepayments may result in some loss of
the Fund's principal investment to the extent of the premium paid. On the other
hand, if such securities are purchased at a discount, both a scheduled payment
of principal and an unscheduled prepayment of principal will increase current
and total returns and will accelerate the recognition of income.
The Bond and Asset Allocation Funds may invest in mortgage-related
securities which are collateralized mortgage obligations structured on pools of
mortgage pass-through certificates or mortgage loans. Collateralized mortgage
obligations will be purchased only if rated in the four highest rating
categories by a nationally recognized rating organization such as Moody's or
S&P.
There are a number of important differences among the agencies and
instrumentalities of the U.S. government that issue mortgage-related securities
and among the securities that they issue. Mortgage-related securities issued by
Ginnie Mae include Ginnie Mae Mortgage Pass-Through Certificates which are
guaranteed as to the timely payment of principal and interest by Ginnie Mae and
such guarantee is backed by the full faith and credit of the United States.
Ginnie Mae is a wholly-owned U.S. government corporation within the Department
of Housing and Urban Development. Ginnie Mae certificates also are supported by
the authority of Ginnie Mae to borrow funds from the U.S. Treasury to make
payments under its guarantee. Mortgage-related securities issued by Fannie Mae
include Fannie Mae Guaranteed Mortgage Pass-Through Certificates which are
solely the obligations of Fannie Mae and are not backed by or entitled to the
full faith and credit of the United States. Fannie Mae is a government-sponsored
organization owned entirely by private stock-holders. Fannie Mae Certificates
are guaranteed as to timely payment of the principal and interest by Fannie Mae.
Mortgage-related securities issued by Freddie Mac include Freddie Mac Mortgage
Participation Certificates. Freddie Mac is a corporate instrumentality of the
United States, created pursuant to an Act of Congress, which is owned entirely
by Federal Home Loan Banks. Freddie Mac Certificates are not guaranteed by the
United States or by any Federal Home Loan Banks and do not constitute a debt or
obligation of the United States or of any Federal Home Loan Bank. Freddie Mac
Certificates entitle the holder to timely payment of interest, which is
guaranteed by Freddie Mac. Freddie Mac guarantees either ultimate collection or
timely payment of all principal payments on the underlying mortgage loans. When
Freddie Mac does not guarantee timely payment of principal, Freddie Mac may
remit the amount due on account of its guarantee of ultimate payment of
principal at any time after default on an underlying mortgage, but in no event
later than one year after it becomes payable.
The Funds may enter into mortgage "dollar rolls" in which the Funds
sell securities for delivery in the current month and simultaneously contract
with the same counterparty to repurchase similar (same type, coupon and
maturity) but not identical securities on a specified future date. When a Fund
enters into mortgage dollar rolls, the Fund will hold and maintain a segregated
account until the settlement date, cash or liquid, high grade debt securities in
an amount equal to the forward purchase price. The benefits derived from the use
of mortgage dollar rolls may depend upon Banc One Advisors' ability to predict
correctly mortgage prepayments and interest rates. There is no assurance that
mortgage dollar rolls can be successfully employed.
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The Funds currently intend to enter into mortgage dollar rolls that are
accounted for as a financing.
For purposes of diversification and investment limitations, mortgage
dollar rolls are considered to be mortgage-backed securities.
Yield, Market Value and Risk Considerations of Mortgage-Backed
Securities
The Bond Funds and the Asset Allocation Fund may invest in certain
Mortgage-Backed Securities, such as Interest Only Stripped Mortgage-Backed
Securities, that are extremely sensitive to changes in prepayments and interest
rates. Even though such securities have been guaranteed by an agency or
instrumentality of the U.S. government, under certain interest rate or
prepayment rate scenarios, the Funds may fail to fully recover their investment
in such securities.
The yield characteristics of Mortgage-Backed Securities differ from
those of traditional fixed income securities. The major differences typically
include more frequent interest and principal payments, usually monthly, and the
possibility that prepayments of principal may be made at any time. Prepayment
rates are influenced by changes in current interest rates and a variety of
economic, geographic, social and other factors and cannot be predicted with
certainty. As with fixed rate mortgage loans, adjustable rate mortgage loans may
be subject to a greater prepayment rate in a declining interest rate
environment. The yields to maturity of the Mortgage-Backed Securities in which
the Trust invests will be affected by the actual rate of payment (including
prepayments) of principal of the underlying mortgage loans. The mortgage loans
underlying such securities generally may be prepaid at any time without penalty.
In a fluctuating interest rate environment, a predominant factor affecting the
prepayment rate on a pool of mortgage loans is the difference between the
interest rates on the mortgage loans and prevailing mortgage loan interest rates
(giving consideration to the cost of any refinancing). In general, if mortgage
loan interest rates fall sufficiently below the interest rates on fixed rate
mortgage loans underlying mortgage pass-through securities, the rate of
prepayment would be expected to increase. Conversely, if mortgage loan interest
rates rise above the interest rates on the fixed rate mortgage loans underlying
the mortgage pass-through securities, the rate of prepayment may be expected to
decrease.
In general, changes in both prepayment rates and interest rates will
change the yield on Mortgage-Backed Securities. The rate of principal
prepayments with respect to adjustable rate mortgage loans ("ARMs") has
fluctuated in recent years. As is the case with fixed mortgage loans, ARMs may
be subject to a greater rate of principal prepayments in a declining interest
rate environment. For example, if prevailing interest rates fall significantly,
ARMs could be subject to higher prepayment rates than if prevailing interest
rates remain constant because the availability of fixed rate mortgage loans at
competitive interest rates may encourage mortgagors to refinance their ARMs to
"lock-in" a lower fixed interest rate. Conversely, if prevailing interest rates
rise significantly, ARMs may prepay at lower rates than if prevailing rates
remain at or below those in effect at the time such ARMs were originated. As
with fixed rate mortgages, there can be no certainty as to the rate of
prepayments on the ARMs in either stable or changing interest rate environments.
In addition, there can be no certainty as to whether increases in the principal
balances of the ARMs due to the addition of deferred interest may result in a
default rate higher than that on ARMs that do not provide for negative
amortization. Other factors affecting prepayment of ARMs include changes in
mortgagors' housing needs, job transfers, unemployment, mortgagors' net equity
in the mortgage properties and servicing decisions.
Foreign Investments
The International Equity Index Fund will invest primarily in, and the
Prime Money Market Fund, the Institutional Prime Money Market Fund, the Asset
Allocation Fund, the remaining Equity Funds (other than the Equity Index Fund),
the Income Bond Fund, the Limited Volatility Bond Fund, the Intermediate Bond
Fund, the Income Fund and the Ultra Short-Term Income Fund, subject to their
respective investment objectives and policies,
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may also invest in certain obligations or securities of foreign issuers.
Possible investments include equity securities of foreign entities, obligations
of foreign branches of U.S. banks and of foreign banks, including, without
limitation, European Certificates of Deposit, European Time Deposits, European
Banker's Acceptances, Canadian Time Deposits and Yankee Certificates of
Deposits, and investments in Canadian Commercial Paper, foreign securities and
Europaper (as those terms are defined in the relevant Prospectuses of the
Trust). Securities of foreign issuers may include sponsored and unsponsored
American Depository Receipts ("ADRs"). Sponsored ADRs are listed on the New York
Stock Exchange; unsponsored ADRs are not. Therefore, there may be less
information available about the issuers of unsponsored ADRs than the issuers of
sponsored ADRs. Unsponsored ADRs are restricted securities. These instruments
may subject a Fund to investment risks that differ in some respects from those
related to investments in obligations of U.S. domestic issuers. Such risks
include future adverse political and economic developments, the possible
imposition of withholding taxes on interest or other income, possible seizure,
nationalization or expropriation of foreign deposits, the possible establishment
of exchange controls or taxation at the source, greater fluctuations in value
due to changes in exchange rates, or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on such obligations. Such investments may also entail higher custodial fees and
sales commissions than domestic investments. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks. Investments in all types of foreign obligations or
securities will not exceed 25% of the net assets of the Asset Allocation Fund,
the Equity Funds (with the exception of the International Equity Index Fund) and
the Income Bond and Limited Volatility Bond Funds.
By investing in foreign securities, the International Equity Index Fund
attempts to take advantage of differences between both economic trends and the
performance of securities markets in the various countries, regions and
geographic areas as prescribed by the Fund's investment objective and policies.
During certain periods the investment return on securities in some or all
countries may exceed the return on similar investments in the United States,
while at other times the investment return may be less than that on similar U.S.
securities. Shares of the International Equity Index Fund, when included in
appropriate amounts in a portfolio otherwise consisting of domestic securities,
will provide a source of increased diversification. The International Equity
Index Fund itself seeks increased diversification by combining securities from
various countries and geographic areas that offer different investment
opportunities and are affected by different economic trends. The international
investments of the International Equity Index Fund may reduce the effect that
events in any one country or geographic area will have on its investment
holdings. Of course, negative movement by one of a Fund's investments in one
foreign market represented in its portfolio may offset potential gains from the
Fund's investments in another country's markets.
PERCS*
The Equity Funds may invest in Preferred Equity Redemption Cumulative
Stock ("PERCS") which is a form of convertible preferred stock that actually has
more of an equity component than it does fixed income characteristics. These
instruments permit companies to raise capital via a surrogate for common equity.
PERCS are preferred stock which convert to common stock after a specified period
of time, usually three years, and are considered the equivalent of equity by the
ratings agencies. Issuers pay holders a substantially higher dividend yield than
that on the underlying common, and in exchange, the holder's appreciation is
capped, usually at about 30 percent. PERCS are callable at any time. The PERC is
mandatorily convertible into common stock, but is callable at any time at an
initial call price that reflects a substantial premium to the stock's issue
price. PERCS offer a higher dividend than that available on the common stock,
but in exchange the investors agree to the company placing a cap on the
potential price appreciation. The call price declines daily in an amount that
reflects
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the incremental dividend that holders enjoy. PERCS are listed on an exchange
where the common stock is listed.
*PERCS are a registered trademark of Morgan Stanley, which does not sponsor and
is in no way affiliated with The One Group.
When-Issued Securities
As discussed in the Prospectuses, each Fund, except the Treasury Money
Market Fund and the Funds of Funds, may purchase securities on a "when-issued"
basis. When a Fund agrees to purchase securities, the Fund's custodian will set
aside cash or liquid portfolio securities equal to the amount of the commitment
in a separate account. Normally, the custodian will set aside portfolio
securities to satisfy a purchase commitment. In such a case, a Fund may be
required subsequently to place additional assets in the separate account in
order to assure that the value of the account remains equal to the amount of the
Fund's commitment. It may be expected that a Fund's net assets will fluctuate to
a greater degree when it sets aside portfolio securities to cover such purchase
commitments than when it sets aside cash. No Fund intends to purchase
"when-issued" securities for speculative purposes but only for the purpose of
acquiring portfolio securities. Because a Fund will set aside cash or liquid
portfolio securities to satisfy its purchase commitments in the manner
described, the Fund's liquidity and the ability of Banc One Advisors and the
Sub-Advisor to manage the Fund might, as described in the Prospectuses, be
affected in the event its commitments to purchase when-issued securities ever
exceeded 40% of the value of its assets. Commitments to purchase when-issued
securities will not, under normal market conditions, exceed 25% of a Fund's
total assets, and a commitment will not exceed 90 days. A Fund may dispose of a
when-issued security or forward commitment prior to settlement if Banc One
Advisors deems it appropriate to do so.
When a Fund engages in "when-issued" transactions, it relies on the
seller to consummate the trade. Failure of the seller to do so may result in the
Fund's incurring a loss or missing the opportunity to obtain a price considered
to be advantageous.
Securities Lending
Each of the Funds, except the Funds of Funds, may lend up to 33% of its
portfolio securities to broker-dealers, banks or institutional borrowers of
securities. A Fund must receive a minimum of 100% collateral in the form of
cash, U.S. government securities, shares of an investment trust or shares of an
investment company or any combination of such cash and securities. This
collateral must be valued daily and should the market value of the loaned
securities increase, the borrower must furnish additional collateral to the
Fund. During the time portfolio securities are on loan, the borrower will pay
the Fund any dividends or interest paid on such securities. Loans will be
subject to termination by a Fund or the borrower at any time and are therefore
not considered to be illiquid investments. While a Fund will not have the right
to vote securities on loan, it intends to terminate the loan and regain the
right to vote if that is considered important with respect to the investment. A
Fund will only enter into loan arrangements with broker-dealers, banks or other
institutions which Banc One Advisors has determined are creditworthy under
guidelines established by the Trust's Board of Trustees and when, in the
judgement of Banc One Advisors, the consideration that can be earned currently
from such securities loans justifies the attendant risk.
Index Investing by the Equity Index and International Equity Index
Funds
It is anticipated that the indexing approach that will be employed by
the Equity Index Fund will be an effective method of substantially duplicating
percentage changes in the S&P 500 Index (the "Index"). It is a reasonable
expectation that there will be a close correlation between the Fund's
performance and that of the Index in both rising and falling markets. The Fund
will attempt to achieve a correlation between the performance of its portfolio
and that of the Index of at least 0.95, without taking into account expenses. A
correlation of 1.00 would indicate perfect correlation, which would be achieved
when the Fund's net asset value, including the value of its dividend
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and capital gains distributions, increases or decreases in exact proportion to
changes in the Index. The Fund's ability to correlate its performance with the
Index, however, may be affected by, among other things, changes in securities
markets, the manner in which the Index is calculated by Standard & Poor's
Corporation ("S&P") and the timing of purchases and redemptions. In the future,
the Trustees of the Trust, subject to the approval of Shareholders, may select
another index if such a standard of comparison is deemed to be more
representative of the performance of common stocks.
S&P chooses the stocks to be included in the Index largely on a
statistical basis. Inclusion of a stock in the Index in no way implies an
opinion by S&P as to its attractiveness as an investment. The Index is
determined, composed and calculated by S&P without regard to the Equity Index
Fund. S&P is neither a sponsor of, nor in any way affiliated with the Equity
Index Fund, and S&P makes no representation or warranty, expressed or implied on
the advisability of investing in the Equity Index Fund or as to the ability of
the Index to track general stock market performance, and S&P disclaims all
warranties of merchantability or fitness for a particular purpose or use with
respect to the Index or any data included therein. "Standard and Poor's 500" is
a service mark of S&P.
The weightings of stocks in the Index are based on each stock's
relative total market value, i.e., market price per share times the number of
Shares outstanding. Because of this weighting, approximately 50% of the Index is
currently composed of the 50 largest companies in the Index, and the Index
currently represents over 65% of the market value of all U.S. common stocks
listed on the New York Stock Exchange. Typically, companies included in the
Index are the largest and most dominant firms in their respective industries.
Banc One Advisors generally selects stocks for the Equity Index Fund in
the order of their weightings in the Index beginning with the heaviest weighted
stocks. The percentage of the Equity Index Fund's assets to be invested in each
stock is approximately the same as the percentage it represents in the Index. No
attempt is made to manage the Equity Index Fund in the traditional sense using
economic, financial and market analysis. The Equity Index Fund is managed using
a computer program to determine which stocks are to be purchased and sold to
replicate the Index to the extent feasible. From time to time, administrative
adjustments may be made in the Fund because of changes in the composition of the
Index, but such changes should be infrequent.
It is anticipated that the indexing approach that will be employed by
the International Equity Index Fund will be an effective method of substantially
duplicating percentage changes in the GDP weighted MSCI EAFE Index (the
"International Index"). The Fund will attempt to achieve a correlation between
the performance of its portfolio and that of the International Index of at least
0.95, without taking into account expenses. It is a reasonable expectation that
there will be a close correlation between the Fund's performance and that of the
International Index in both rising and falling markets. A correlation of 1.00
would indicate perfect correlation, which would be achieved when the Fund's net
asset value, including the value of its dividend and capital gains
distributions, increases or decreases in exact proportion to changes in the
International Index. The Fund's ability to correlate its performance with the
International Index, however, may be affected by, among other things, changes in
securities markets, the manner in which the International Index is calculated by
Morgan Stanley International ("MSCI") and the timing of purchases and
redemptions. In the future, the Trustees of the Trust, subject to the approval
of Shareholders, may select another index if such a standard of comparison is
deemed to be more representative of the performance of common stocks.
MSCI computes and publishes the International Index. MSCI also computes
the country weights which are established based on annual GDP data. Gross
Domestic Product is defined as a country's Gross National Product, or total
output of goods and services, adjusted by the following two factors: net labor
income (labor income of domestic residents working abroad less labor income of
foreigners working domestically) plus net interest income (interest income
earned from foreign investments less interest income earned from domestic
investments by foreigners). Country weights are thus
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established in proportion to the size of their economies as measured by Gross
Domestic Product, which results in a more uniform distribution of capital across
the EAFE markets than if capitalization weights were used as the basis. The
country weights within the International Index are systematically rebalanced
annually to the most recent GDP weights.
MSCI chooses the stocks to be included in the International Index
largely on a statistical basis. Inclusion of a stock in the International Index
in no way implies an opinion by MSCI as to its attractiveness as an investment.
The International Index is determined, composed and calculated by MSCI without
regard to the International Equity Index Fund. MSCI is neither a sponsor of, nor
in any way affiliated with the International Equity Index Fund, and MSCI makes
no representation or warranty, expressed or implied on the advisability of
investing in the International Equity Index Fund or as to the ability of the
International Index to track general stock market performance, and MSCI
disclaims all warranties of merchantability or fitness for a particular purpose
or use with respect to the International Index or any data included therein.
"MSCI EAFE Index" is a service mark of MSCI.
Foreign Currency Transactions
Banc One Advisors or the Sub-Advisor of the International Equity Index
Fund may, if it so chooses, engage in Foreign Currency Transactions, as
discussed below.
Transaction Hedging. When a Fund engages in transaction hedging, it
enters into foreign currency transactions with respect to specific receivables
or payables of the Fund generally arising in connection with the purchase or
sale of its portfolio securities. The International Equity Index Fund will
engage in transaction hedging when it desires to "lock in" the U.S. dollar price
of a security it has agreed to purchase or sell, or the U.S. dollar equivalent
of a dividend or interest payment in a foreign currency. By transaction hedging,
the International Equity Index Fund will attempt to protect itself against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period between the
date on which the security is purchased or sold, or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.
The International Equity Index Fund may purchase or sell a foreign
currency on a spot (or cash) basis at the prevailing spot rate in connection
with the settlement of transactions in portfolio securities denominated in that
foreign currency. The Fund may also enter into contracts to purchase or sell
foreign currencies at a future date ("forward contracts"). Although there is no
current intention to do so, the International Equity Index Fund reserves the
right to purchase and sell foreign currency futures contracts traded in the
United States and subject to regulation by the CFTC.
For transaction hedging purposes the International Equity Index Fund
may also purchase U.S. exchange-listed call and put options on foreign currency
futures contracts and on foreign currencies. A put option on a futures contract
gives the Fund the right to assume a short position in the futures contract
until expiration of the option. A put option on currency gives the Fund the
right to sell a currency at an exercise price until the expiration of the
option. A call option on a futures contract gives the Fund the right to assume a
long position in the futures contract until the expiration of the option. A call
option on currency gives the Fund the right to purchase a currency at the
exercise price until the expiration of the option.
Position Hedging. When it engages in position hedging, the
International Equity Index Fund enters into foreign currency exchange
transactions to protect against a decline in the values of the foreign
currencies in which its portfolio securities are denominated (or an increase in
the value of currency for securities which Banc One Advisors or the Sub-Advisor
expects to purchase, when the Fund holds cash or short-term investments). In
connection with the position hedging, the Fund may purchase or sell foreign
currency forward contracts or foreign currency on a spot basis. The
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International Equity Index Fund may purchase U.S. exchange-listed put or call
options on foreign currency and foreign currency futures contracts and buy or
sell foreign currency futures contracts traded in the United States and subject
to regulation by the CFTC, although the International Equity Index Fund has no
current intention to do so.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature.
It is impossible to forecast with precision the market value of
portfolio securities at the expiration or maturity of a forward contract or
futures contract. Accordingly, it may be necessary for the Fund to purchase
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the security or securities being hedged is less
than the amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security or securities and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security or
securities if the market value of such security or securities exceeds the amount
of foreign currency the Fund is obligated to deliver.
Although the Fund has no current intention to do so, the International
Equity Index Fund may write covered call options on up to 100% of the currencies
in its portfolio to offset some of the costs of hedging against fluctuations in
currency exchange rates.
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which the International Equity Index Fund
owns or expects to purchase or sell. They simply establish a rate of exchange
which one can achieve at some future point in time. Additionally, although these
techniques tend to minimize the risk of loss due to a decline in the value of
the hedged currency, they tend to limit any potential gain which might result
from the increase in the value of such currency.
Currency Forward and Futures Contracts. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract as agreed by the parties, at a price set at the time of the contract.
In the case of a cancellable forward contract, the holder has the unilateral
right to cancel the contract at maturity by paying a specified fee. The
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. A foreign currency futures contract is a standardized contract
for the future delivery of a specified amount of a foreign currency at a future
date at a price set at the time of the contract. Foreign currency futures
contracts traded in the United States are designed by and traded on exchanges
regulated by the CFTC, such as the New York Mercantile Exchange. The
International Equity Index Fund would enter into foreign currency futures
contracts solely for bona fide hedging or other appropriate risk management
purposes as defined in CFTC regulations.
Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity date
of a forward contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date in a given
month. Forward contracts may be in any amounts agreed upon by the parties rather
than predetermined amounts. Also, forward foreign exchange contracts are entered
into directly between currency traders so that no intermediary is required. A
forward contract generally requires no margin or other deposit.
At the maturity of a forward or futures contract, the Fund may either
accept or make delivery of the currency specified in the contract, or at or
prior to maturity
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enter into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are usually
effected with the currency trader who is a party to the original forward
contract. Closing transactions with respect to futures contracts are effected on
a commodities exchange; a clearing corporation associated with the exchange
assumes responsibility for closing out such contracts.
Positions in the foreign currency futures contracts may be closed out
only on an exchange or board of trade which provides a secondary market in such
contracts. Although the International Equity Index Fund intends to purchase or
sell foreign currency futures contracts only on exchanges or boards of trade
where there appears to be an active secondary market, there is no assurance that
a secondary market on an exchange or board of trade will exist for any
particular contract or at any particular time. In such event, it may not be
possible to close a futures position and, in the event of adverse price
movements, the Fund would continue to be required to make daily cash payments of
variation margin.
General Characteristics of Currency Futures Contracts
When a Fund purchases or sells a futures contract, it is required to
deposit with its custodian an amount of cash or U.S. Treasury bills known as
"initial margin." The nature of initial margin is different from that of margin
in security transactions in that it does not involve borrowing money to finance
transactions. Rather, initial margin is similar to a performance bond or good
faith deposit that is returned to the Fund upon termination of the contract,
assuming the Fund satisfies its contractual obligation.
Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market." These payments are called "variation
margin" and are made as the value of the underlying futures contract fluctuates.
For example, when a Fund sells a futures contract and the price of the
underlying currency rises above the delivery price, the Fund's position declines
in value. The Fund then pays a broker a variation margin payment equal to the
difference between the delivery price of the futures contract and the market
price of the currency underlying the futures contract. Conversely, if the price
of the underlying currency falls below the delivery price of the contract, the
Fund's futures position increases in value. The broker then must make a
variation margin payment equal to the difference between the delivery price of
the futures contract and the market price of the currency underlying the futures
contract.
When a Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Fund, and the Fund realizes a loss or gain. Such closing transactions involve
additional commission costs.
In addition to the margin requirements discussed above, transactions in
currency futures contracts may involve the segregation of funds pursuant to
requirements imposed by the Securities and Exchange Commission. Under those
requirements, where a Fund has a long position in a futures or forward contract,
it may be required to establish a segregated account (not with a futures
commission merchant or broker) containing cash or certain liquid assets equal to
the purchase price of the contract (less any margin on deposit). For a short
position in futures or forward contracts held by a Fund, those requirements may
mandate the establishment of a segregated account (not with a futures commission
merchant or broker) with cash or certain liquid assets that, when added to the
amounts deposited as margin, equal the market value of the instruments or
currency underlying the futures or forward contracts (but are not less than the
price at which the short positions were established). However, segregation of
assets is not required if the Fund "covers" a long position. For example,
instead of segregating assets, a Fund, when holding a long position in a futures
or forward contract, could purchase a put option on the same futures or forward
contract with a strike price as high or higher than the price of the contract
held by the Fund. In addition, where a Fund takes short positions, or engages in
sales of call options, it need not segregate assets if it "covers" these
positions. For example, where a Fund holds a short position in a futures or
forward contract, it may cover by owning the instruments or currency
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underlying the contract. A Fund may also cover such a position by holding a call
option permitting it to purchase the same futures or forward contract at a price
no higher than the price at which the short position was established. Where a
Fund sells a call option on a futures or forward contract, it may cover either
by entering into a long position in the same contract at a price no higher than
the strike price of the call option or by owning the instruments or currency
underlying the futures or forward contract. The Fund could also cover this
position by holding a separate call option permitting it to purchase the same
futures or forward contract at a price no higher than the strike price of the
call option sold by the Fund.
Foreign Currency Options. The International Equity Index Fund may
purchase U.S. exchange-listed call and put options on foreign currencies. Such
options on foreign currencies operate similarly to options on securities.
Options on foreign currencies are affected by all of those factors which
influence foreign exchange rates and investments generally.
The value of a foreign currency option is dependent upon the value of
the foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealer or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the options market.
Foreign Currency Conversion. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to a
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.
Variable and Floating Rate Notes
Variable amount master demand notes, in which the Prime Money Market
Fund, the Tax Exempt Money Market Fund, the Institutional Prime Money Market
Fund, the Bond Funds, and the Equity Funds may invest, are unsecured demand
notes that permit the indebtedness thereunder to vary and provide for periodic
adjustments in the interest rate according to the terms of the instrument.
Because master demand notes are direct lending arrangements between a Fund and
the issuer, they are not normally traded. Although there is no secondary market
in the notes, a Fund may demand payment of principal and accrued interest at any
time. While the notes are not typically rated by credit rating agencies, issuers
of variable amount master demand notes (which are normally manufacturing,
retail, financial, and other business concerns) must satisfy the same criteria
as set forth above for commercial paper. Banc One Advisers or the Sub-Advisor
will consider the earning power, cash flow, and other liquidity ratios of the
issuers of such notes and will continuously monitor their financial status and
ability to meet payment on demand. In determining average weighted portfolio
maturity, a variable amount master demand note will be deemed to have a maturity
equal to the period of time remaining until the principal amount can be
recovered from the issuer through demand.
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As described in the Prospectuses of the Bond Funds, the Equity Funds,
the Tax-Free Funds, the Ohio Municipal Money Market, the Municipal Money Market,
the Institutional Prime Money Market and the Government Money Market Funds,
subject to their investment objective policies and restrictions, each such Fund
(other than the Equity Index Fund) may acquire variable and floating rate notes.
A variable rate note is one whose terms provide for the adjustment of its
interest rate on set dates and which, upon such adjustment, can reasonably be
expected to have a market value that approximates its par value. A floating rate
note is one whose terms provide for the adjustment of its interest rate whenever
a specified interest rate changes and which, at any time, can reasonably be
expected to have a market value that approximates its par value. Such notes are
frequently not rated by credit rating agencies; however, unrated variable and
floating rate notes purchased by a Fund will be determined by Banc One Advisors
or the Sub-Advisor under guidelines established by the Trust's Board of Trustees
to be of comparable quality at the time of purchase to rated instruments
eligible for purchase under the Fund's investment policies. In making such
determinations, Banc One Advisors or the Sub-Advisor will consider the earning
power, cash flow and other liquidity ratios of the issuers of such notes (such
issuers include financial, merchandising, bank holding and other companies) and
will continuously monitor their financial condition. Although there may be no
active secondary market with respect to a particular variable or floating rate
note purchased by a Fund, the Fund may re-sell the note at any time to a third
party. The absence of such an active secondary market, however, could make it
difficult for the Fund to dispose of the variable or floating rate note involved
in the event the issuer of the note defaulted on its payment obligations, and
the Fund could, for this or other reasons, suffer a loss to the extent of the
default. Variable or floating rate notes may be secured by bank letters of
credit. A Fund will purchase a variable or floating rate instrument to
facilitate portfolio liquidity or to permit investment of the Fund's assets at a
favorable rate of return.
Variable or floating rate notes with stated maturities of more than 397
days may, under the Securities and Exchange Commission's amortized cost rule,
Rule 2a-7 under the 1940 Act, be deemed to have shorter maturities as follows:
(1) Adjustable Rate Government Securities. A Government Security which
is a Variable Rate Security where the variable rate of interest is readjusted no
less frequently than every 762 days shall be deemed to have a maturity equal to
the period remaining until the next readjustment of the interest rate. A
Government Security which is a Floating Rate Security shall be deemed to have a
remaining maturity of one day.
(2) Short-Term Variable Rate Securities. A Variable Rate Security, the
principal amount of which, in accordance with the terms of the security, must
unconditionally be paid in 397 calendar days or less shall be deemed to have
maturity equal to the earlier of the period remaining until the next
readjustment of the interest rate or the period remaining until the principal
amount can be recovered through demand.
(3) Long-Term Variable Rate Securities. A Variable Rate Security, the
principal amount of which is scheduled to be paid in more than 397 days, that is
subject to a Demand Feature shall be deemed to have a maturity equal to the
longer of the period remaining until the next readjustment of the interest rate
or the period remaining until the principal amount can be recovered through
demand.
(4) Short-Term Floating Rate Securities. A Floating Rate Security, the
principal amount of which, in accordance with the terms of the security, must
unconditionally be paid in 397 calendar days or less shall be deemed to have a
maturity of one day.
(5) Long-Term Floating Rate Securities. A Floating Rate Security, the
principal amount of which is scheduled to be paid in more than 397 days, that is
subject to a demand feature, shall be deemed to have a maturity equal to the
period remaining until the principal amount can be recovered through demand.
As used above, a note is "subject to a demand feature" where the Fund
is entitled to receive the principal amount of the note either at any time on no
more than thirty
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days' notice or at specified intervals not exceeding 397 calendar days and upon
no more than 30 days notice.
Variable and floating rate notes for which no readily available market
exists will be purchased in an amount which, together with securities with legal
or contractual restrictions on resale or for which no readily available market
exists (including repurchase agreements providing for settlement more than seven
days after notice), exceeds 10% (with respect to the Money Market and
Institutional Money Market Funds) or 15% (with respect to all Funds other than
the Money Market and Institutional Money Market Funds) of the Fund's net assets
only if such notes are subject to a demand feature that will permit the Fund to
demand payment of the principal within seven days after demand by the Fund.
There is no limit on the extent to which a Fund may purchase demand notes that
are not illiquid. If not rated, such instruments must be found by Banc One
Advisors or the Sub-Advisor, under guidelines established by the Trust's Board
of Trustees, to be of comparable quality to instruments that are rated high
quality. A rating may be relied upon only if it is provided by a nationally
recognized statistical rating organization that is not affiliated with the
issuer or guarantor of the instruments. For a description of the rating symbols
of S&P, Moody's, and Fitch used in this paragraph, see the Appendix. The above
Funds may also invest in Canadian Commercial Paper which is commercial paper
issued by a Canadian corporation or a Canadian counterpart of a U.S. corporation
and in Europaper which is U.S. dollar denominated commercial paper of a foreign
issuer.
Municipal Securities
As a matter of fundamental policy, under normal market conditions, at
least 80% of the total assets of each of the Municipal Money Market Fund, the
Ohio Municipal Money Market Fund, the Municipal Income Fund, the Intermediate
Tax-Free Bond Fund, the Ohio Municipal Bond Fund, the Texas Tax-Free Bond Fund,
the Kentucky Municipal Bond Fund, the Louisiana Municipal Bond Fund, the West
Virginia Municipal Bond Fund, the Arizona Municipal Bond Fund, and the Tax
Exempt Money Market Fund will be invested in Municipal Securities. Each of the
Prime Money Market, Asset Allocation, Income Bond, Limited Volatility Bond,
Intermediate Bond, Ultra Short-Term Income and Income Funds may also invest in
Municipal Securities if Banc One Advisors determines that such Municipal
Securities offer attractive yields. Municipal Securities are issued to obtain
funds for various public purposes, including the construction of a wide range of
public facilities such as bridges, highways, roads, schools, water and sewer
works, and other utilities. Other public purposes for which Municipal Securities
may be issued include refunding outstanding obligations, obtaining funds for
general operating expenses and obtaining funds to lend to other public
institutions and facilities. In addition, certain debt obligations known as
"private activity bonds" may be issued by or on behalf of municipalities and
public authorities to obtain funds to provide certain water, sewage and solid
waste facilities, qualified residential rental projects, certain local electric,
gas and other heating or cooling facilities, qualified hazardous waste
facilities, high-speed intercity rail facilities, governmentally-owned airports,
docks and wharves and mass commuting facilities, certain qualified mortgages,
student loan and redevelopment bonds and bonds used for certain organizations
exempt from federal income taxation. Certain debt obligations known as
"industrial development bonds" under prior federal tax law may have been issued
by or on behalf of public authorities to obtain funds to provide certain
privately operated housing facilities, sports facilities, industrial parks,
convention or trade show facilities, airport, mass transit, port or parking
facilities, air or water pollution control facilities, sewage or solid waste
disposal facilities, and certain facilities for water supply. Other private
activity bonds and industrial development bonds issued to fund the construction,
improvement, equipment or repair of privately-operated industrial, distribution,
research, or commercial facilities may also be Municipal Securities, but the
size of such issues is limited under current and prior federal tax law. The
aggregate amount of most private activity bonds and industrial development bonds
is limited (except in the case of certain types of facilities) under federal tax
law by an annual "volume cap." The volume cap limits the annual aggregate
principal amount of such obligations issued by or on behalf of all governmental
instrumentalities in the state. The Tax-Free Funds may not be a desirable
investment for "substantial users" of
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facilities financed by private activity bonds or industrial development bonds or
for "related persons" of substantial users.
Private activity bonds that are issued by or on behalf of public
authorities to finance various privately-operated facilities are included within
the term "Municipal Securities" as used in the Prospectuses of the Tax-Free
Funds (other than the Ohio Municipal Money Market, Ohio Municipal Bond and
Municipal Money Market Funds) and in this Statement of Additional Information
with respect to such Funds only if the interest paid thereon is both exempt from
federal income tax and not treated as a preference item for individuals for
purposes of the federal alternative minimum tax. Private activity bonds that are
subject to federal income tax and are treated as a preference item for
individuals for purposes of the federal alternative minimum tax are included
within the term Taxable Obligations as used in the Prospectuses of the Tax-Free
Funds (other than the Ohio Municipal Money Market Fund, the Ohio Municipal Bond
Fund and Municipal Money Market Fund). As used in the Prospectuses of the Ohio
Municipal Money Market Fund, the Ohio Municipal Bond Fund and the Municipal
Money Market Fund and in this Statement of Additional Information with respect
to such Funds, the term Municipal Securities includes private activity bonds
that are issued by or on behalf of public authorities to finance privately
operated facilities only if the interest paid thereon is exempt from federal
income tax (other than the Federal alternative minimum tax). Private activity
bonds that are subject to federal income tax are included within the term
Taxable Obligations as used in the Prospectuses of the Ohio Municipal Money
Market Fund, the Ohio Municipal Bond Fund, and the Municipal Money Market Fund.
The two principal classifications of Municipal Securities consist of
"general obligation" and "limited" (or revenue) issues. General obligation bonds
are obligations involving the credit of an issuer possessing taxing power and
are payable from the issuer's general unrestricted revenues and not from any
particular fund or source. The characteristics and method of enforcement of
general obligation bonds vary according to the law applicable to the particular
issuer, and payment may be dependent upon appropriation by the issuer's
legislative body. Limited obligation bonds are payable only from the revenues
derived from a particular facility or class of facilities or, in some cases,
from the proceeds of a special excise or other specific revenue source. Private
activity bonds and industrial development bonds generally are revenue bonds and
thus not payable from the unrestricted revenues of the issuer. The credit and
quality of such bonds is generally related to the credit of the bank selected to
provide the letter of credit underlying the bond. Payment of principal of and
interest on industrial development revenue bonds is the responsibility of the
corporate user (and any guarantor).
The Funds may also acquire "moral obligation" issues, which are
normally issued by special purpose authorities, and in other tax-exempt
investments including pollution control bonds and tax-exempt commercial paper.
Each Fund may purchase short-term tax-exempt General Obligations Notes, Tax
Anticipation Notes, Bond Anticipation Notes, Revenue Anticipation Notes, Project
Notes, and other forms of short-term tax-exempt loans. Such notes are issued
with a short-term maturity in anticipation of the receipt of tax funds, the
proceeds of bond placements, or other revenues. Project Notes are issued by a
state or local housing agency and are sold by the Department of Housing and
Urban Development. While the issuing agency has the primary obligation with
respect to its Project Notes, they are also secured by the full faith and credit
of the United States through agreements with the issuing authority which provide
that, if required, the federal government will lend the issuer an amount equal
to the principal of and interest on the Project Notes.
There are, of course, variations in the quality of Municipal
Securities, both within a particular classification and between classifications,
and the yields on Municipal Securities depend upon a variety of factors,
including general money market conditions, the financial condition of the
issuer, general conditions of the municipal bond market, the size of a
particular offering, the maturity of the obligations, and the rating of the
issue. The ratings of Moody's and S&P represent their opinions as to the quality
of Municipal Securities. It should be emphasized, however, that ratings are
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general and are not absolute standards of quality, and Municipal Securities with
the same maturity, interest rate and rating may have different yields while
Municipal Securities of the same maturity and interest rate with different
ratings may have the same yield. Subsequent to its purchase by a Fund, an issue
of Municipal Securities may cease to be rated or its rating may be reduced below
the minimum rating required for purchase by the Fund. Banc One Advisors will
consider such an event in determining whether the Fund should continue to hold
the obligations.
Municipal securities may include obligations of municipal housing
authorities and single-family mortgage revenue bonds. Weaknesses in Federal
housing subsidy programs and their administration may result in a decrease of
subsidies available for payment of principal and interest on housing authority
bonds. Economic developments, including fluctuations in interest rates and
increasing construction and operating costs, may also adversely impact revenues
of housing authorities. In the case of some housing authorities, inability to
obtain additional financing could also reduce revenues available to pay existing
obligations. Single-family mortgage revenue bonds are subject to extraordinary
mandatory redemption at par in whole or in part from the proceeds derived from
prepayments of underlying mortgage loans and also from the unused proceeds of
the issue within a stated period which may be within a year from the date of
issue.
Municipal leases are obligations issued by state and local governments
or authorities to finance the acquisition of equipment and facilities and may be
considered to be illiquid. They may take the form of a lease, an installment
purchase contract, a conditional sales contract, or a participation interest in
any of the above. Each Fund will limit its investment in municipal leases to no
more than 5% of its total assets. The Board of Trustees is responsible for
determining the credit quality of unrated municipal leases, on an ongoing basis,
including an assessment of the likelihood that the lease will not be cancelled.
The exclusion from gross income for Federal income tax purposes for
certain housing authority bonds depends on qualification under relevant
provisions of the Code and on other provisions of Federal law. These provisions
of Federal law contain certain ongoing requirements relating to the cost and
location of the residences financed with the proceeds of the single-family
mortgage bonds and the income levels of tenants of the rental projects financed
with the proceeds of the multi-family housing bonds. While the issuers of the
bonds, and other parties, including the originators and servicers of the
single-family mortgages and the owners of the rental projects financed with the
multi-family housing bonds, covenant to meet these ongoing requirements and
generally agree to institute procedures designed to insure that these
requirements will be consistently met, there is no assurance that the
requirements will be consistently met. The failure to meet these requirements
could cause the interest on the bonds to become taxable, possibly retroactively
from the date of issuance, thereby reducing the value of the bonds and
subjecting Shareholders to unanticipated tax liabilities and possibly requiring
a Fund to sell the bonds at the reduced value. Furthermore, any failure to meet
these ongoing requirements might constitute an event of default under the
applicable mortgage or permit the holder to accelerate payment of the bond or
require the issuer to redeem the bond. In any event, where the mortgage is
insured by the Federal Housing Administration ("FHA"), the consent of the FHA
may be required before insurance proceeds would become payable to redeem the
mortgage subsidy bonds.
Information about the financial condition of issuers of Municipal
Securities may be less available than about corporations having a class of
securities registered under the Securities Exchange Act of 1934.
An issuer's obligations under its Municipal Securities are subject to
the provisions of bankruptcy, insolvency, and other laws affecting the rights
and remedies of creditors, such as the federal bankruptcy code, and laws, if
any, which may be enacted by Congress or state legislatures extending the time
for payment of principal or interest, or both, or imposing other constraints
upon the enforcement of such obligations. The power or ability of an issuer to
meet its obligations for the payment of interest on and principal of its
Municipal Securities may be materially adversely affected by litigation or other
conditions.
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Such litigation or conditions may from time to time have the effect of
introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a Fund's Municipal
Securities in the same manner.
From time to time, proposals have been introduced before Congress for
the purpose of restricting or eliminating the federal income tax exemption for
interest on tax exempt bonds, and similar proposals may be introduced in the
future. A recent decision of the United States Supreme Court has held that
Congress has the constitutional authority to enact such legislation. It is not
possible to determine what effect the adoption of such proposals could have on
(i) the availability of Municipal Securities for investment by the Funds, and
(ii) the value of the investment portfolios of the Funds.
The Internal Revenue Code of 1986, as amended (the "Code") imposes
certain continuing requirements on issuers of tax-exempt bonds regarding the
use, expenditure and investment of bond proceeds and the payment of rebates to
the United States of America. Failure by the issuer to comply subsequent to the
issuance of tax-exempt bonds with certain of these requirements could cause
interest on the bonds to become includable in gross income retroactive to the
date of issuance.
The Funds may invest in Municipal Securities either by purchasing them
directly or by purchasing certificates of accrual or similar instruments
evidencing direct ownership of interest payments or principal payments, or both,
on Municipal Securities, provided that, in the opinion of counsel to the initial
seller of each such certificate or instrument, any discount accruing on such
certificate or instrument that is purchased at a yield not greater than the
coupon rate of interest on the related Municipal Securities will to the same
extent as interest on such Municipal Securities be exempt from federal income
tax and state income tax (where applicable) and not treated as a preference item
for individuals for purposes of the federal alternative minimum tax. The Funds
may also invest in Municipal Securities by purchasing from banks participation
interests in all or part of specific holdings of Municipal Securities. Such
participation may be backed in whole or in part by an irrevocable letter of
credit or guarantee of the selling bank. The selling bank may receive a fee from
a Fund in connection with the arrangement. A Fund will not purchase
participation interests unless it receives an opinion of counsel or a ruling of
the Internal Revenue Service that interest earned by it on Municipal Securities
in which it holds such participation interest is exempt from federal income tax
and state income tax (where applicable) and not treated as a preference item for
individuals for purposes of the federal alternative minimum tax.
Demand Features
The Funds (except the Funds of Funds) may acquire securities that are
subject to puts and standby commitments ("demand features") to purchase the
securities at their principal amount (usually with accrued interest) within a
fixed period (usually seven days) following a demand by the Fund. The demand
feature may be issued by the issuer of the underlying securities, a dealer in
the securities or by another third party, and may not be transferred separately
from the underlying security. The underlying securities subject to a put may be
sold at any time at market rates. The Funds expect that they will acquire puts
only where the puts are available without the payment of any direct or indirect
consideration. However, if advisable or necessary, a premium may be paid for put
features. A premium paid will have the effect of reducing the yield otherwise
payable on the underlying security.
Under a "stand-by commitment," a dealer would agree to purchase, at a
Fund's option, specified municipal securities at a specified price. A Fund will
acquire these commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. Stand-by
commitments may also be referred to as put options. A Fund will generally limit
its investments in stand-by commitments to 25% of its total assets.
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Swaps, Caps and Floors
All of the Bond Funds (except the Limited Volatility Bond Fund) and the
fixed income portion of the Asset Allocation Fund may enter into swaps, caps,
and floors on various securities (such as U.S. government securities),
securities indexes, interest rates, prepayment rates, foreign currencies or
other financial instruments or indexes, in order to protect the value of the
Fund from interest rate fluctuations and to hedge against fluctuations in the
floating rate market in which the Fund's investments are traded, for both
hedging and non-hedging purposes. While swaps, caps, and floors (sometimes
hereinafter collectively referred to as "swap contracts") are different from
futures contracts (and options on futures contracts) in that swap contracts are
individually negotiated with specific counterparties, the Funds will use swap
contracts for purposes similar to the purposes for which they use options,
futures, and options on futures. Those uses of swap contracts (i.e., risk
management and hedging) present the Funds with risks and opportunities similar
to those associated with options contracts, futures contracts, and options on
futures. See "Futures Contracts and Related Options;" and "Options."
The Funds may enter into these transactions to manage their exposure to
changing interest rates and other market factors. Some transactions may reduce
each Fund's exposure to market fluctuations while others may tend to increase
market exposure.
Swap contracts typically involve an exchange of obligations by two
sophisticated parties. For example, in an interest rate swap, the Fund may
exchange with another party their respective rights to receive interest, such as
an exchange of fixed rate payments for floating rate payments. Currency swaps
involve the exchange of respective rights to make or receive payments in
specified currencies. Mortgage swaps are similar to interest rate swaps in that
they represent commitments to pay and receive interest. The notional principal
amount, however, is tied to a reference pool or pools of mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles
the purchaser to receive a principal amount from the party selling the cap to
the extent that a specified index exceeds a predetermined interest rate or
amount. The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and floors are similar in many respects to over-the-counter options
transactions, and may involve investment risks that are similar to those
associated with options transactions and options on futures contracts.
Because swap contracts are individually negotiated, they remain the
obligation of the respective counterparties, and there is a risk that a
counterparty will be unable to meet its obligations under a particular swap
contract. If a counterparty defaults on a swap contract with a Fund, the Fund
may suffer a loss. To address this risk, each Fund will usually enter into
interest rate swaps on a net basis, which means that the two payment streams
(one from the Fund to the counterparty, one to the Fund from the counterparty)
are netted out, with the Fund receiving or paying, as the case may be, only the
net amount of the two payments. Interest rate swaps do not involve the delivery
of securities, other underlying assets, or principal, except for the purposes of
collateralization as discussed below. Accordingly, the risk of loss with respect
to interest rate swaps entered into on a net basis would be limited to the net
amount of the interest payments that the Fund is contractually obligated to
make. If the other party to an interest rate swap defaults, the Fund's risk of
loss consists of the net amount of interest payments that a Fund is
contractually entitled to receive. In addition, the Fund may incur a market
value adjustment on securities held upon the early termination of the swap. To
protect against losses related to counterparty default, the Funds may enter into
swaps that require transfers of collateral for changes in market value. In
contrast, currency swaps and other types of swaps may involve the delivery of
the entire principal value of one designated currency or financial instrument in
exchange for the other designated currency or financial
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instrument. Therefore, the entire principal value of such swaps may be subject
to the risk that the other party will default on its contractual delivery
obligations.
In addition, because swap contracts are individually negotiated and
ordinarily non-transferable, there also may be circumstances in which it would
be impossible for a Fund to close out its obligations under the swap contract
prior to its maturity. Under such circumstances, the Fund might be able to
negotiate another swap contract with a different counterparty to offset the risk
associated with the first swap contract. Unless the Fund is able to negotiate
such an offsetting swap contract, however, the Fund could be subject to
continued adverse developments, even after Banc One Advisors has determined that
it would be prudent to close out or offset the first swap contract.
The Funds will not enter into any mortgage swap, interest rate swap,
cap or floor transaction unless the unsecured commercial paper, senior debt, or
the claims paying ability of the other party thereto is rated in one of the top
two rating categories by at least one NRSRO, or if unrated, determined by Banc
One Advisors to be of comparable quality.
The use of swaps involves investment techniques and risks different
from and potentially greater than those associated with ordinary Fund securities
transactions. If Banc One Advisors is incorrect in its expectations of market
values, interest rates, or currency exchange rates, the investment performance
of the Funds would be less favorable than it would have been if this investment
technique were not used.
The Staff of the Securities and Exchange Commission is presently
considering its position with respect to swaps, caps and floors as senior
securities. Pending a determination by the Staff, the Funds will either treat
swaps, caps and floors as being subject to their senior securities restrictions
or will refrain from engaging in swaps, caps and floors. Once the Staff has
expressed a position with respect to swaps, caps and floors, the Funds intend to
engage in swaps, caps and floors, if at all, in a manner consistent with such
position. To the extent the net amount of an interest rate or mortgage swap is
held in a segregated account, consisting of cash or liquid, high grade debt
securities, the Funds and Banc One Advisors believe that swaps do not constitute
senior securities under the Investment Company Act of 1940 and, accordingly,
will not treat them as being subject to each Fund's borrowing restrictions. The
net amount of the excess, if any, of each Fund's obligations over its
entitlements with respect to each interest rate swap will be accrued on a daily
basis and an amount of cash or liquid securities having an aggregate net asset
value at least equal to the accrued excess will be maintained in a segregated
account by the Funds' Custodian.
Structured Instruments
All of the Bond Funds (except the Limited Volatility Bond Fund) and the
fixed income portion of the Asset Allocation Fund may invest, from time to time,
in one or more structured instruments. Structured instruments are debt
securities issued by agencies of the U.S. government (such as Ginnie Mae, Fannie
Mae, and Freddie Mac), banks, corporations, and other business entities whose
interest and/or principal payments are indexed to certain specific foreign
currency exchange rates, interest rates, or one or more other reference indexes.
Structured instruments frequently are assembled in the form of medium-term
notes, but a variety of forms are available and may be used in particular
circumstances.
The terms of such structured instruments provide that their principal
and/or interest payments are adjusted upwards or downwards to reflect changes in
the reference index while the structured instruments are outstanding. In
addition, the reference index may be used in determining when the principal is
redeemed. As a result, the interest and/or principal payments that may be made
on a structured product may vary widely, depending on a variety of factors,
including the volatility of the reference index and the effect of changes in the
reference index on principal and/or interest payment.
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While structured instruments may offer the potential for a favorable
rate of return from time to time, they also entail certain risks. Structured
instruments may be less liquid than other debt securities, and the price of
structured instruments may be more volatile. If the value of the reference index
changes in a manner other than that expected by Banc One Advisors, principal
and/or interest payments on the structured instrument may be substantially less
than expected. The Funds will invest only in structured securities that are
consistent with each Fund's investment objective, policies and restrictions and
Banc One Advisors' outlook on market conditions. In some cases, depending on the
terms of the reference index, a structured instrument may provide that the
principal and/or interest payments may be adjusted below zero; however, the
Funds will not invest in structured instruments if the terms of the structured
instrument provide that the Funds may be obligated to pay more than their
initial investment in the structured instrument, or to repay any interest or
principal that has already been collected or paid back. Structured instruments
that are registered under the federal securities laws may be treated as liquid.
In addition, many structured instruments may not be registered under the federal
securities laws. In that event, a Fund's ability to resell such a structured
instrument may be more limited than its ability to resell other Fund securities.
The Funds will treat such instruments as illiquid, and will limit their
investments in such instruments to no more than 15% of each Fund's net assets,
when combined with all other illiquid investments of each Fund. In addition,
although structured instruments may be sold in the form of a corporate debt
obligation, they may not have some of the protection against counterparty
default that may be available with respect to publicly traded debt securities
(i.e., the existence of a trust indenture). In that respect, the risks of
default associated with structured instruments may be similar to those
associated with swap contracts. See "Swaps, Caps and Floors."
New Financial Products
New options and futures contracts and other financial products, and
various combinations thereof, continue to be developed and all of the Bond Funds
(except the Limited Volatility Bond Fund) and the fixed income portion of the
Asset Allocation Fund may invest in any such options, contracts and products as
may be developed to the extent consistent with each Fund's investment objective,
policies and restrictions and the regulatory requirements applicable to
investment companies.
These various products may be used to adjust the risk and return
characteristics of each Fund's investments. These various products may increase
or decrease exposure to security prices, interest rates, commodity prices, or
other factors that affect security values, regardless of the issuer's credit
risk. If market conditions do not perform consistent with expectations, the
performance of each Fund would be less favorable than it would have been if
these products were not used. In addition, losses may occur if counterparties
involved in transactions do not perform as promised. These products may expose
the Fund to potentially greater return as well as potentially greater risk of
loss than more traditional fixed income investments.
Restricted Securities
Each of the Equity Funds (except the Equity Index Fund and the
International Equity Index Fund), each of the Bond Funds (except the Ohio
Municipal Bond Fund) and each of the Money Market Funds may invest in commercial
paper issued in reliance on the exemption from registration afforded by Section
4(2) of the Securities Act of 1933 and other restricted securities. Section 4(2)
commercial paper is restricted as to disposition under federal securities law
and is generally sold to institutional investors, such as the Funds, who agree
that they are purchasing the paper for investment purposes and not with a view
to public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Funds through or with the assistance of the
issuer or investment dealers who make a market in Section 4(2) commercial paper,
thus providing liquidity. The Funds believe that Section 4(2) commercial paper
and possibly certain other restricted securities which meet the criteria for
liquidity established by the Trustees are quite liquid. The Funds intend,
therefore, to treat the
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restricted securities which meet the criteria for liquidity established by the
Trustees, including Section 4(2) commercial paper, as determined by the Funds'
Advisor, as liquid and not subject to the investment limitation applicable to
illiquid securities.
The ability of the Trustees to determine the liquidity of certain
restricted securities is permitted under a Securities and Exchange Commission
("SEC") Staff position set forth in the adopting release for Rule 144A under the
Securities Act of 1933 (the "Rule"). The Rule is a nonexclusive safe-harbor for
certain secondary market transactions involving securities subject to
restrictions on resale under federal securities laws. The Rule provides an
exemption from registration for resales of otherwise restricted securities to
qualified institutional buyers. The Rule was expected to further enhance the
liquidity of the secondary market for securities eligible for resale under Rule
144A. The Funds believe that the Staff of the SEC has left the question of
determining the liquidity of all restricted securities to the Trustees. The
Trustees have directed Banc One Advisors to consider the following criteria in
determining the liquidity of certain restricted securities:
- the frequency of trades and quotes for the security;
- the number of dealers willing to purchase or sell the security
and the number of other potential buyers;
- dealer undertakings to make a market in the security; and
- the nature of the security and the nature of the marketplace
trades.
Certain Section 4(2) commercial paper programs cannot rely on Rule 144a
because, among other things, they were established before the adoption of the
rule. However, the Trustees may determine for purposes of the Trust's liquidity
requirements that an issue of 4(2) commercial paper is liquid if the following
conditions, which are set forth in a 1994 SEC no-action letter, are met:
- The 4(2) paper must not be traded flat or in default as to
principal or interest;
- The 4(2) paper must be rated in one of the two highest rating
categories by a least two nationally recognized statistical
rating organizations ("NRSROs"), or if only one NRSRO rates
the security, by that NRSRO, or if unrated, is determined by
Banc One Advisors to be of equivalent quality; and
- Banc One Advisors must consider the trading market for the
specific security, taking into account all relevant factors,
including but not limited, to whether the paper is the subject
of a commercial paper program that is administered by an
issuing and paying agent bank and for which there exists a
dealer willing to make a market in that paper, or is
administered by a direct issuer pursuant to a direct placement
program; and
- Banc One Advisors shall monitor the liquidity of the 4(2)
commercial paper purchased and shall report to the Board of
Trustees promptly if any such securities are no longer
determined to be liquid if such determination causes a fund to
hold more than 15% (10% for Money Market Funds) of its total
assets in illiquid securities in order for the Board of
Trustees to consider what action, if any, should be taken on
behalf of The One Group, unless Banc One Advisors is able to
dispose of illiquid assets in an orderly manner in an amount
that reduces the Fund's holdings of illiquid assets to less
than 15% (10% for Money Market Funds) of its total assets; and
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- Banc One Advisors shall report to the Board of Trustees on the
appropriateness of the purchase and retention of liquid
restricted securities under these Guidelines no less
frequently that quarterly.
High Yield Securities
The Income Fund and the Income Bond Fund may invest in high yield
securities. High yield bonds are securities that are rated below investment
grade by the primary rating agencies (BB or lower by S&P and BA or lower by
Moody's). Other terms used to describe such securities include "lower rated
bonds", "non-investment grade bonds" and "junk bonds". Generally, lower rated
debt securities provide a higher yield than higher rated debt securities of
similar maturity, but are subject to a greater degree of risk with respect to
the ability of the issuer to meet its principal and interest obligations.
Issuers of high yield securities may not be as strong financially as those
issuing higher rated securities. These securities are regarded as predominately
speculative. The market value of high yield securities may fluctuate more than
the market value of higher rated securities, since high yield securities tend to
reflect short-term corporate and market developments to a greater extent than
higher rated securities, which fluctuate primarily in response to the general
level of interest rates, assuming that there has been no change in the
fundamental quality of such securities. The market prices of fixed income
securities generally fall when interest rates rise. Conversely, the market
prices of fixed-income securities generally rise when interest rates fall.
Additional risks of high yield securities include limited liquidity and
secondary market support. As a result, the prices of high yield securities may
decline rapidly in the event that a significant number of holders decide to
sell. Changes in expectations regarding an individual issuer, an industry or
high yield securities generally could reduce market liquidity for such
securities and make their sale by the Funds more difficult, at least in the
absence of price concessions. Reduced liquidity also could adversely affect the
Funds' ability to accurately value high yield securities. Issuers of high yield
securities also are more vulnerable to real or perceived economic changes (for
instance, an economic downturn or prolonged period of rising interest rates),
political changes or adverse developments specific to the issuer. Adverse
economic, political or other developments may impair the issuer's ability to
service principal and interest obligations, to meet projected business goals and
to obtain additional financing, particularly if the issuer is highly leveraged.
In the event of a default, the Funds would experience a reduction of their
income and could expect a decline in the market value of the defaulted
securities.
Further, proposed new laws may have a possible negative impact on the
market for high yield bonds. As an example, legislation requires
federally-insured savings and loan associations to divest their investments in
high yield bonds. New legislation, if enacted, could have a material negative
effect on a Fund's net asset value and investment practices.
Finally, the market prices of high-yield securities structured as zero
coupon or pay-in-kind securities are generally affected to a greater extent by
interest rate changes and tend to be more volatile than securities which pay
interest periodically. In addition, zero coupon, pay-in-kind and delayed
interest bonds often do not pay interest until maturity. However, a Fund must
recognize a computed amount of interest income and pay dividends to shareholders
even though it has received no cash. In some instances, the Funds may have to
sell securities to have sufficient cash to pay the dividends.
The high yield securities in which the Funds may invest include the
following:
-- Straight fixed-income debt securities. These include bonds and other
debt obligations which bear a fixed or variable rate of interest
payable at regular intervals and have a fixed or resettable maturity
date. The particular terms of such securities vary and may include
features such as call provisions and sinking funds.
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-- Zero-coupon debt securities. These bear no interest obligation but
are issued at a discount from their value at maturity. When held to
maturity, their entire return equals the difference between their issue
price and their maturity value.
-- Zero-fixed-coupon debt securities. These are zero-coupon debt
securities which convert on a specified date to interest-bearing debt
securities.
Ohio Municipal Securities
As used in the Trust's Prospectuses and this Statement of Additional
Information, the term "Ohio Municipal Securities" refers to debt securities
which (i) are issued by or on behalf of the State of Ohio or its respective
authorities, agencies, instrumentalities, and political subdivisions, and (ii)
produce interest which, in the opinion of issuer's counsel at the time of
issuance, is exempt from both federal income tax, and Ohio personal income tax.
RISK FACTORS REGARDING INVESTMENTS IN OHIO MUNICIPAL SECURITIES
The economy of Ohio, while becoming increasingly diversified and
increasingly reliant on the service sector, continues to rely in significant
part on durable goods manufacturing, which is largely concentrated in motor
vehicles and equipment, steel, rubber products and household appliances. As a
result, general economic activity in Ohio, as in many other industrial states,
tends to be more cyclical than in some other states and in the nation as a
whole. Agriculture also is an important segment of the Ohio economy, and the
state has instituted several programs to provide financial assistance to
farmers. Although revenue obligations of the state or its political subdivisions
may be payable from a specific source or project, and general obligation debt
may be payable from a specific tax, there can be no assurance that future
economic difficulties and the resulting impact on state and local government
finances will not adversely affect the market value of the Ohio Municipal
Securities in the Funds of the Trust or the ability of the respective obligators
to make timely payment of interest and principal on such obligations.
Since the Ohio Municipal Bond Fund and Ohio Municipal Money Market Fund
invest primarily in Ohio Municipal Securities, the value of each Fund's Shares
may be especially affected by factors pertaining to the economy of Ohio and
other factors specifically affecting the ability of issuers of Ohio Municipal
Securities to meet their obligations. As a result, the value of the Shares of
the Ohio Municipal Bond Fund and the Ohio Municipal Money Market Fund may
fluctuate more widely than the value of Shares of a portfolio investing in
securities relating to a number of different states. The ability of Ohio state,
county, or local governments to meet their obligations will depend primarily on
the availability of tax and other revenues to those governments and on their
fiscal conditions generally. The amounts of tax and other revenues available to
issuers of Ohio Municipal Securities may be affected from time to time by
economic, political and demographic conditions within the state. In addition,
constitutional or statutory restrictions may limit a government's power to raise
revenues or increase taxes. The availability of federal, state, and local aid to
issuers of Ohio Municipal Securities may also affect their ability to meet their
obligations. Payments of principal and interest on limited obligation securities
will depend on the economic condition of the facility or specific revenue source
from whose revenues the payments will be made, which in turn could be affected
by economic, political, and demographic conditions in the state. Any reduction
in the actual or perceived ability to meet obligations on the part of either an
issuer of an Ohio Municipal Security or a provider of credit enhancement for
such Ohio Municipal Security (including a reduction in the rating of its
outstanding securities) would likely affect adversely the market value and
marketability of that Ohio Municipal Security and could adversely affect the
values of other Ohio Municipal Securities as well.
West Virginia Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "West Virginia Municipal Securities" refers to debt securities which
are issued by or
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on behalf of West Virginia or its respective authorities, agencies,
instrumentalities and political subdivisions and which produce interest which,
in the opinion of counsel for the issuer, is exempt from federal income tax, and
is exempt from West Virginia personal income tax.
RISK FACTORS REGARDING INVESTMENTS IN WEST VIRGINIA MUNICIPAL SECURITIES
West Virginia's economy is dependent upon the coal mining industry. A
reduction in the demand for certain types of coal and increasing governmental
regulation affecting production and usage of coal has had an adverse impact upon
the industry and upon the economy of the state. Notwithstanding the importance
of the coal mining industry to the West Virginia economy, over the course of the
past few years, West Virginia's economy has benefitted from a developing tourism
industry. Tourism directly and indirectly accounts for a material portion of the
West Virginia economy.
In 1989, state taxes were substantially increased by applying sales,
service and use taxes to a vast number of consumer and industrial products and
services that were previously exempt from such tax. In 1993, the state's
gasoline tax was substantially increased. In 1994, full implementation of a
reappraisal of real property for ad valorem tax purposes took effect.
The increase in taxes in recent years and other measures have helped to
bring governmental expenses in line with income; and, at the end of its three
most recent fiscal years, state government has reported a surplus. However, as
in many other states, the state, local governments and school boards continue to
struggle to produce sufficient revenues to fund operations and support public
education.
West Virginia led the nation in unemployment from July, 1991 through
August, 1993. Since then West Virginia's unemployment rate has dropped
significantly, but the state still has one of the highest unemployment rates in
the nation. Although the seasonally adjusted rate in West Virginia declined
slightly from 7.7% in June, 1995 to 7.3% in June, 1996, West Virginia's
unemployment rate is still well above the 5.3% national rate for June, 1996.
Relatively high unemployment continues to reflect weakness in the West Virginia
economy.
Kentucky Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "Kentucky Municipal Securities" refers to debt securities which are
issued by or on behalf of Kentucky or its respective authorities, agencies,
instrumentalities and political subdivisions and which produce interest which,
in the opinion of counsel for the issuer, is exempt from federal income tax, and
is exempt from Kentucky personal income tax.
RISK FACTORS REGARDING INVESTMENTS IN KENTUCKY MUNICIPAL SECURITIES
As of May 31, 1996, Kentucky had an unemployment rate of 4.9%, which
was below the national average of 5.3%. For calendar year 1995, Kentucky's per
capita income ranked 43rd in the nation and was 82% of the national average. The
most current audited financial statements for Kentucky indicated a surplus of
funds in the General Fund of $389,864,000 as of June 30, 1995, which was
$299,295,000 above the budgeted balance.
Unlike the municipal securities of most states, nearly all Kentucky
Municipal Securities are not general obligations of the issuer; rather, payment
depends on revenues generated by the property financed by the securities.
Texas Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "Texas Municipal Securities" refers to debt securities which are issued
by or on behalf of Texas or its respective authorities, agencies,
instrumentalities and political
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subdivisions and which produce interest which, in the opinion of counsel for the
issuer, is exempt from federal income tax .
RISK FACTORS REGARDING INVESTMENTS IN TEXAS MUNICIPAL SECURITIES
Because the Fund invests primarily in obligations issued by Texas
entities, the Fund's performance is partially dependent upon economic conditions
within the State of Texas generally and upon the economic condition of issuing
governments and their instrumentalities in particular. In the late 1980's,
weakness in the oil and gas related and agricultural sectors of the Texas
economy adversely affected consumer spending, financial institutions, utility
demand, and real estate values within the state. Consequently, the state and
many of its local governments had to increase sales, utilities, and ad valorem
tax rates in order to maintain revenue yields. In the past two years, however,
in contrast to the national economy, business activity in Texas has
strengthened, with employment growth occurring in most sectors. In addition,
Texas' major financial institutions have been recapitalized and bank failures
have generally ceased.
Arizona Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "Arizona Municipal Securities" refers to debt securities which are
issued by or on behalf of Arizona or its respective authorities, agencies,
instrumentalities and political subdivisions and which produce interest which,
in the opinion of counsel for the issuer, is exempt from federal income tax .
RISK FACTORS REGARDING INVESTMENTS IN ARIZONA MUNICIPAL SECURITIES
Arizona's outlook remains uncertain as long as the state does not adopt
a plan regarding long term matching of revenues and expenditures, especially for
education, health care and corrections. Arizona's growth continues to out pace
national averages, for example: (i) the state's 35% population growth during the
1980's was the third fastest rate in the nation, next to Alaska and Nevada; (ii)
Arizona's current population growth is over 2% per year, about twice the
national average; and (iii) the state's unemployment rate currently is 4.5%.
Nonetheless, growth has been expensive for Arizona. During the
high-growth 1980's, combined per capita state and local expenditures climbed to
about 105% of the U.S. average from about 95%, according to data from the
Advisory Commission on Intergovernmental Relations. Between fiscal 1985 and
1990, the state managed five successive years of shortfalls with internal
borrowing, tax accelerations, one-time adjustments, and budget cuts. Since 1991,
the state's budget has been balanced. Although the Arizona State debt limit is
$350,000, and, by its Constitution, Arizona is a "pay as you go" State, the
State finances many capital improvements through revenue bonds, special tax
bonds or lease purchase arrangements, which are not treated as "debts", but
which greatly reduce the pressure on the State's annual budget. For example, the
Arizona Department of Transportation issues bonds supported by excise taxes on
fuel for propulsion of motor vehicles, the State's universities and community
colleges are funded in part through revenue bonds payable solely from tuitions
and student fees, and the State itself, from time to time, finances facilities
through annually renewable lease-purchase agreements. The various political
subdivisions of the state have differing debt limits, and their debts are not
aggregated into the State's debt limit.
In addition, local conditions may materially effect any given issue or
issuer. Such conditions include, without limitation, (1) acts of God (such as
flooding or droughts), (2) mismanagement or bankruptcy of large tax payers or
users of an issuer's services or conduit borrowers who may be the true obligors
of a tax exempt issue, or who may bear a disproportionate share of the taxes,
special assessments or revenues supporting securities issued by an issuer, (3)
environmental enforcement actions instituted by the State or federal government,
(4) mismanagement of the issuer's affairs, (5) damage claims which exceed
insurance coverage or self-insurance reserves
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(neither the State of Arizona nor its political subdivisions enjoy sovereign
immunity from damage claims), or (6) issuer bankruptcy.
In addition, Arizona's continued population growth depends to some
extent on its ability to manage its water resources, as the State is
predominantly arid. Specifically, the great bulk of Arizona's population, and
the area wherein most future growth is expected to occur, is located in three
central Arizona counties, i.e. Maricopa (including the greater Phoenix
metropolitan area), Pima (including the Tucson metropolitan area), and Pinal
Counties.
To a great extent continued growth in these counties will depend on
continued importation of water from the Colorado River. This is accomplished
through the Central Arizona Project, a federal water reclamation project, a
major portion (2 to 2.5 billion dollars) of which must be repaid through water
sales to, and taxes levied on, the water users in such counties. The actual
amount to be repaid is now the subject of litigation, which can be expected to
continue for several years. Construction of the Central Arizona Project was
declared to be substantially complete in October of 1993.
Arizona's share of Colorado River water, although adjudicated by the
U.S. Supreme Court, is, to some extent, sought by the States of California and
Nevada who have expressed interest in gaining access to that portion of
Arizona's share not being put to beneficial use within the State. Arizona demand
for Central Arizona Project water is currently in the range of 35 to 40% of
Project capacity. The long range success of either California or Nevada's
position cannot be determined at this time.
There is litigation pending in Arizona which could have material
effects on the value of school district bonds. In the Roosevelt Elementary
School District case, plaintiffs have alleged a failure on behalf of the State
to ensure that school facilities in districts with lower assessed valuations are
properly capitalized, in line with uniformly applied objective standards. The
Arizona Supreme Court ruled that Arizona's statutory financing scheme for public
education is not in compliance with the Arizona Constitution.
In 1996, the Arizona Legislature adopted legislation appropriating
additional state funding for school districts. It is unclear whether, when or in
what form the Arizona Legislature may further respond to the Court's direction
in Roosevelt to enact appropriate school budget and finance laws, nor can any
assurance be given that the Supreme Court will approve any such legislative
response or that the Supreme Court will not take further action in this matter,
either before or after any legislative response. The effect of any such
legislative or judicial action cannot be determined at this time, but such
action may have future material effects on the financial operations of Arizona
School Districts.
In the Creighton Elementary School District case, taxpayers within
Creighton Elementary School District No. 14 of Maricopa County, Arizona (the
"Creighton District"), brought suit in the Superior Court of Maricopa County
against the Creighton District on the basis that the outstanding principal
amount of bonds previously issued by the Creighton District, together with
premium received in connection with the issuance of such bonds, should be
treated as debt for constitutional and statutory debt limit purposes. The
plaintiffs sought to enjoin the issuance of additional bonds, arguing that
accumulated initial issue premium should be treated as debt for constitutional
debt limit purposes. This premium, associated with the issuance of prior
Creighton District Bonds, if counted as debt, would, plaintiffs contended, cause
the bonds sought to be issued to exceed the Creighton District's debt limit. On
April 18, 1996, the Court entered a judgment in favor of the taxpayers,
enjoining the issuance of additional Creighton District Bonds. In a subsequent
minute entry, the court stated that the premium to be treated as debt is
determined on the amount the underwriter paid to the Creighton District for the
bonds in question and not on the price for which the underwriter resold such
bonds. In addition, the court has also subsequently stated that the premium
treated as debt attributable to each maturity is retired upon the payment of the
principal amount of the applicable maturity. It is not clear if, pursuant to the
judgment against the Creighton District, all or part of any premium received by
the
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Creighton District is subject to constitutional and statutory requirements other
than debt limits, such as the requirement for voter authorization. The judgment
was not appealed by the Creighton District. Many school districts in Arizona
have outstanding obligations (i.e. obligations, wherein large initial issue
premiums were received) similar to that of the Creighton District.
Notwithstanding such litigation, issuer's counsel, representing school
districts has or will issue an unqualified opinion with respect to the validity,
enforceability and tax-exempt status of School District Bonds before such Bonds
are acquired by the fund. The standard of certainty applicable to such opinion
is that it would be unreasonable for a court to hold to the contrary to matters
addressed therein.
The Arizona Legislature has passed legislation with respect to the
treatment of premium and debt (the "Act"). Under the Act, the outstanding
indebtedness of a jurisdiction is equal to the total principal amount of all
bonds outstanding at the time of calculation. Under this legislation, premium is
not counted as debt, but the amount of premium permitted for bonds issued after
the Act's enactment is limited to the greater of 2% of the par value of the bond
issue or $100,000. The Act further validated all then outstanding general
obligation and general obligation refunding Bonds which might have been subject
to challenge after the Creighton ruling.
It is not known whether the Act will be challenged in court or whether,
if challenged, all or any portion of the act would be upheld in a court.
Louisiana Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "Louisiana Municipal Securities" refers to debt securities which are
issued by or on behalf of Louisiana or its respective authorities, agencies,
instrumentalities and political subdivisions and which produce interest which,
in the opinion of counsel for the issuer, is exempt from federal income tax .
RISK FACTORS REGARDING INVESTMENTS IN LOUISIANA MUNICIPAL SECURITIES
Louisiana's general obligation bonds are currently rated Baa1 by
Moody's Investors Service, Inc. ("Moody's") and A minus by Standard and Poor's
Rating Group ("S&P"). Louisiana's ratings reflect an ongoing recovery process
from the severe financial problems which developed after oil prices declined in
the mid-to-late 1980's. Also, both rating agencies have commended the State for
enacting constitutional reforms in the Fall of 1993 that curb borrowing and
require that non-recurring revenues be applied to debt reduction. However,
Louisiana remains one of the weakest states in terms of its credit fundamentals.
While ratings of individual cities, parishes, agencies and special districts
vary, most Louisiana issuers have been affected to some degree by Louisiana's
economy.
Through the oil boom of the late 1970s and early 1980s, Louisiana's
labor force and employment grew steadily, as did its financial position. By June
30, 1981, the General Fund had run several years of operating surpluses,
bringing the ending fund balance to $839.5 million, a sizeable 16% of operating
expenditures. When the oil industry weakened, economic growth slowed and
operating deficits occurred, Louisiana's undesignated General Fund deficit
reached $512 million in fiscal 1988 (ended June 30) and the fund balance was a
negative $377 million.
To address its deficits, Louisiana created the Louisiana Recovery
District in 1988, which sold $979 million revenue bonds secured by (i) the
revenues derived from the Recovery District's 1% statewide sales and use tax,
and (ii) all funds and accounts held under the Recovery District's general bond
resolution and all investment earnings on such funds and accounts. As of
December 31, 1994, the principal amount of all these bonds (including bonds
issued to defease certain portions of the original bond issue) was $486,795
million. Article VI, Section 30.1 of the State Constitution, effective November
3, 1994, prohibits the Recovery District from issuing additional bonds except
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to refund bonds at a lower effective interest rate. All bonds of the Recovery
District have been retired.
During the period from fiscal year 1990-91 through fiscal year 1994-95,
the state experienced operating budget surpluses in four of the five fiscal
years. The table below sets forth in summary fashion the condition of the
State's General Fund from fiscal years 1990-91 through 1994-95.
<TABLE>
<CAPTION>
1994-95(1) 1993-94 1992-93 1991-92(2) 1990-91
---------- ------- ------- ---------- -------
<S> <C> <C> <C> <C> <C>
Total Revenue $ 10,515,148 $10,674,052 $10,655,246 $ 8,743,623 $ 7,603,457
Total Expenditures 10,721,280 10,570,658 10,344,339 9,249,014 7,917,823
Net Other Financing Sources 24,607 25,698 8,501 18,960 0
Excess (Deficiency) of Revenues and
Other Sources Over Expenditures
and Other Uses (181,525) 129,102 319,408 (485,431) (314,366)
Beginning Fund Balance 594,920 457,909 50,013 535,906 841,428
Fund Balance Adjustments 13,764 7,909 88,488 538 8,844
Ending Fund Balance 427,159 594,920 457,909 50,013 535,906
Undesignated Fund Balance 145,689 212,941 101,138 (83,342) 417,983
</TABLE>
Note: For purposes of this comparison, transfers have been reclassified as
revenue/expenditure
(1) Approximately $106 million in beginning undesignated fund balance was
utilized to defease future debt service attributable to fiscal year
1995-96 as described below.
(2) Included in fiscal year 1992-93 are the Office of Risk Management and
State Employees Group Benefits. The fund balance in fiscal year
1991-1992 was not restated to reflect this change.
Fiscal year 1989-90 ended with a small operating surplus of $47
million, which included $13 million of adjustments. This $47 million, when added
to the $655 million balance from the prior fiscal year, brought the accumulated
surplus to $702 million as of June 30, 1990.
Approximately $284 million of the 1989-90 surplus was ultimately used
to fund the fiscal year 1990-91 budget. As a result, the State ended the 1990-91
fiscal year with an accumulated General Fund surplus of $417.98 million.
Upon the actual completion of the fiscal year 1991-1992, it was learned
that the State's General Fund actually ended fiscal year 1991-92 with an
undesignated fund balance deficit of $83 million. This shortfall was eliminated
within the 1992-93 budgetary fiscal cycle by utilizing a set aside against the
total balance available for appropriations, resulting from the official
projections of the Revenue Estimating Conference, prior to any budget adjustment
approval submitted to the Joint Legislative Committee on the Budget.
The State ended the fiscal year 1992-93 with a positive undesignated
fund balance in its General Fund of $101 million. During 1994, $30.6 million of
the surplus funds were utilized to cover known shortfalls in current year
program operations. As noted in the table above, the State ended the fiscal year
1993-94 with an operating surplus of $129 million dollars. This amount together
with the prior year fund balance of $101 million and reserve changes left an all
unreserved-undesignated balance in the General Fund of $212.9 million.
The State began fiscal year 1994-95 with a General Fund balance of $594
million. At the time the projections of the Revenue Estimating Conference for
fiscal year 1993-94 were published, the undesignated fund balance was reflected
at $212 million. Subsequent to publication, it was determinate that $106 million
of the $212 million
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was, in fact, designated for other mandated purposes and was not available for
general operating purposes. The remaining $106 million was subsequently utilized
prior to June 30, 1995, to structure a current portfolio that was utilized to
defease a portion of the State's fiscal year 1994-95 general obligation debt
service requirement, which freed an equivalent amount of projected general fund
revenues for fiscal year 1994-95 to be utilized to cover normal operating costs.
The State's General Fund has an operating loss (on a generally accepted
accounting principles basis) of $181 million in fiscal year 1994-95 (on a
budgetary basis, this balance would be reduced by those fund balances utilized
to structure the aforementioned portfolio). As a result of operations and
inventory valuation changes, the State General Fund balance, as of June 30,
1996, declined to $427 million, of which $145 million was undesignated or
reserved for a future purpose.
The current general fund expenditure authorizations necessary to
continue all existing programs through fiscal year 1995-96 is approximately
$4,912 million, inclusive of currently known supplemental appropriations needs.
The revenue estimating conference has adopted its revised estimate of revenues
for fiscal year 1995-96 in the amount of $4,970.7 million. In addition, General
Fund revenues of $18.6 million were carried forward from fiscal year 1994-95,
making a total of $4,989.3 million available for General Fund expenditures in
fiscal year 1995-96. The $76.8 million balance between available revenues and
projected expenditures is available for unanticipated supplemental needs or
retirement of debt.
The State's budget projections may also be impacted by certain matters
relating to the Medicaid program. In fiscal year 1995-96, the State has dealt
with a Medicaid revenue shortfall by reducing disproportionate share payments to
health care providers, implementing budget cuts of approximately $300 million in
the Medicaid program. Proposed changes in the design of the Medicaid program at
the federal level (i.e. elimination of "Medicaid" and adoption of "Medigrant")
may cause the State to make additional modifications to its Medicaid program in
order to continue to provide necessary medical services to the indigent
population of the State in future years. The State submitted a Section 1115
Waiver to the U.S. Department of Health and Human Services ("DHHS") on December
31, 1994, and subsequently amended the waiver to include public health
maintenance organizations. The proposed funding in the amended waiver was
unacceptable to DHHS. Currently, the waiver application is in a pending status
and the State is working with DHHS to achieve an acceptable funding mechanism.
In 1996, the Louisiana Legislature passed a "local option" bill which
will permit voters in each parish to decide at the general election to be held
November 1996 whether, and in what forms, gaming will be permitted in their
parish. Each form of gaming will be considered separately in each parish. If the
voters decide to prohibit a form of gaming in a parish, those currently holding
licenses for that form of gaming will be permitted to continue operations only
until the license expires; provided, however, video draw poker devices, which
are licensed for one-year time periods, will be permitted to be renewed only two
more times. The Louisiana Lottery and the Powerball Lottery, which are permitted
by the State Constitution, will not be included in the referendum. It cannot be
predicted whether any particular form of gaming will be prohibited in any or all
of the parishes and to what extent the revenues of the State will be affected.
If all forms of gaming are rejected in every parish of the State, however, the
impact on the State budget will be gradual, as the "local option" bill provides
for a "phasing out" of gaming as described above.
Economically, Louisiana will continue to be affected by world energy
markets. Approximately 15% of the nation's crude oil and approximately 28% of
its natural gas are produced in Louisiana. In the past the State has estimated
that up to 25% of its economy is directly or indirectly related to energy. This
is despite the fact that only 5.5% of employment is in oil and gas extraction,
chemicals and allied products and petroleum refining. Oil and oil related jobs
also tend to be at relatively high wages, magnifying their economic effect.
Similarly, although severance taxes and royalties accounted for almost 4.3% of
operating revenues for fiscal year 1993-1994, compared with almost 25% ten years
ago, energy related activity affects individual and corporate
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taxes, which together with sales taxes account for 21.3% of general revenues.
Unemployment declined in Louisiana from 12% in 1987 to 6.2% in 1990. This was
due in part to increased employment but also to out-migration of population and
a decline in labor force. Louisiana's jobless rate has since risen to 7.4% as of
December 31, 1994. The comparable national unemployment rate was 6.8%. In
addition to oil and gas, major contributors to Louisiana's economy include
chemical production, shipping, agriculture and tourism.
Louisiana's debt burden is well above that of other states, while
wealth and income indicators are below the national average. In 1993, for
example, the most recent year for which data is available, Louisiana's per
capita personal income was 80% of the United States average. According to
Moody's, Louisiana's State-level tax supported debt is the sixth highest as a
percentage of personal income and eighth highest on a per-capita basis.
Municipal obligations are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors, such
as the Federal Bankruptcy Code, and laws, if any, which may be enacted by
Congress or State legislatures extending the time for payment of principal or
interest, or both, or imposing other constraints upon enforcement of such
obligations or upon municipalities to levy taxes. There is also the possibility
that as a result of litigation or other conditions the power or ability of any
one or more issuers to pay when due principal or interest on its or their
municipal obligations may be materially affected.
INVESTMENT RESTRICTIONS
Unless otherwise specifically noted, the following investment
restrictions may be changed with respect to a particular Fund only by a vote of
a majority of the outstanding Shares of that Fund. See "ADDITIONAL INFORMATION--
Miscellaneous" in this Statement of Additional Information.
None of the Funds may:
1. Purchase securities on margin, sell securities short, or participate
in a joint or joint and several basis in any securities trading account, except,
in the case of the Municipal Bond Funds, for use of short-term credit necessary
for clearance of purchases of portfolio securities.
2. Underwrite the securities of other issuers except to the extent that
a Fund may be deemed to be an underwriter under certain securities laws in the
disposition of "restricted securities."
3. Purchase or sell commodities or commodity contracts (including
futures contracts), except that for bona fide hedging and other permissible
purposes: (i) the Equity, Bond and International Equity Index Funds may purchase
or sell financial futures contracts and may purchase call or put options on
financial futures contracts, and (ii) the International Equity Index Fund may
purchase or sell foreign currency futures contracts and foreign currency forward
contacts, and may purchase put or call options on foreign currency futures
contracts and on foreign currencies on appropriate U.S. exchanges, and may
purchase or sell foreign currency on a spot basis.
4. Purchase participation or other direct interests in oil, gas or
mineral exploration or development programs (although investments by all Funds
other than the U.S. Treasury Securities Money Market, Treasury Money Market,
Treasury Only Money Market and Government Money Market Funds in marketable
securities of companies engaged in such activities are not hereby precluded).
5. Invest in any issuer for purposes of exercising control or
management.
6. Purchase securities of other investment companies except as
permitted by the 1940 Act and rules, regulations and applicable exemptive relief
thereunder.
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7. Purchase or sell real estate (however, each Fund except the Money
Market Funds may, to the extent appropriate to its investment objective,
purchase securities secured by real estate or interests therein or securities
issued by companies investing in real estate or interests therein).
8. Borrow money or issue senior securities, except that each Fund may
borrow from banks or enter into reverse repurchase agreements for temporary
purposes in amounts up to 10% of the value of its total assets at the time of
such borrowing; or mortgage, pledge, or hypothecate any assets, except in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of the Fund's total assets at
the time of its borrowing. A Fund will not purchase securities while its
borrowings (including reverse repurchase agreements) in excess of 5% of its
total assets are outstanding.
In addition, the U.S. Treasury Securities Money Market, the Prime Money
Market and the Institutional Money Market Funds may not:
1. Buy common stocks or voting securities.
In addition, the U.S. Treasury Securities Money Market, the Prime Money
Market, and the Government Money Market Funds may not:
1. Buy State, municipal, or private activity bonds.
The following investment restrictions are non-fundamental except as
noted otherwise and therefore can be changed by the Board of Trustees without
prior shareholder approval.
No Fund may:
1. Purchase or retain securities of any issuer if the officers or
Trustees of the Trust or the officers or directors of its Advisor owning
beneficially more than one-half of 1% of the securities of such issuer together
own beneficially more than 5% of such securities.
2. Invest more than 5% of a Fund's total assets in the securities of
issuers which together with any predecessors have a record of less than three
years continuous operation. (This restriction shall not apply to investments in
asset-backed securities and other mutual funds authorized for purchase by such
Fund, as described in its Prospectus. For purposes of this restriction, an
"Asset-Backed Security" means a debt obligation issued by a limited-purpose
entity whose primary business activity is acquiring and holding financial
assets.) (This restriction is fundamental with respect to the Ohio Municipal
Money Market Fund.)
3. Invest in illiquid securities in an amount exceeding, in the
aggregate 15% of the Fund's net assets (10% of net assets for a Fund that is a
Money Market Fund). An illiquid security is a security which cannot be disposed
of promptly (within seven days) and in the usual course of business without a
loss, and includes repurchase agreements maturing in excess of seven days, time
deposits with a withdrawal penalty, non-negotiable instruments and instruments
for which no market exists. (This restriction is fundamental with respect to the
Ohio Municipal Money Market Fund.)
The Equity Funds, the Municipal Bond Funds, and the Institutional Money
Market Funds may not:
1. Acquire securities that are subject to restrictions on resale
because they are not registered under the Securities Act of 1933, if
such investment would exceed 5% of the Fund's total assets.
Each of the Asset Allocation and Intermediate Bond Funds may not:
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1. Invest more than 15% of its net assets in securities with legal or
contractual restrictions on resale. However, this restriction shall not
apply to securities eligible for resale to institutional buyers under
Rule 144A of the Securities and Exchange Commission or to securities
that become a part of the Fund's assets through merger, exchange or
recapitalization involving securities already held in a Fund.
None of the Money Market Funds or Institutional Money Market Funds may:
1. Write or purchase call options.
2. Write or purchase put options except that each of the Ohio Municipal
Money Market, Municipal Money Market and Tax-Exempt Money Market Funds
may acquire puts with respect to Municipal Securities in its portfolio
and sell those puts in conjunction with a sale of those Municipal
Securities.
The Municipal Income Fund, Ohio Municipal Money Market Fund, Municipal Money
Market Fund and the Tax-Exempt Money Market Fund may not:
1. Write or sell puts, calls, straddles, spreads or combinations
thereof except that a Fund may acquire puts with respect to Municipal
Securities in its portfolio and sell those puts in conjunction with a
sale of those Municipal Securities.
PORTFOLIO TURNOVER
The portfolio turnover rate for each Fund is calculated by dividing the
lesser of purchases or sales of portfolio securities for the year by the monthly
average value of the portfolio securities. The calculation excludes all
securities whose maturities at the time of acquisition were one year or less.
Thus, for regulatory purposes, the portfolio turnovers with respect to the Money
Market Funds were zero for the period from the commencement of their respective
operations to June 30, 1996 and are expected to remain zero, and the portfolio
turnover rate with respect to the Institutional Money Market Funds is expected
to be zero.
The portfolio turnover rates of the Funds for the fiscal years ended
June 30, 1996 and 1995 were as follows:
THE ONE GROUP PORTFOLIO TURNOVER
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------
FUND 1996 1995
---- ---- ----
<S> <C> <C>
U.S. Treasury Securities Money Market 0%** 0%**
Prime Money Market 0%** 0%**
Municipal Money Market 0%** 0%**
Ohio Municipal Money Market 0%** 0%**
Income Equity 14.92% 4.03%
Disciplined Value 90.55% 176.66%
Growth Opportunities 435.30% 132.63%
Equity Index 9.08% 2.71%
Large Company Value 186.84% 203.13%
Asset Allocation 73.38% 115.36%
International Equity Index 6.28% 4.67%
Large Company Growth 35.51% 14.22%
Income Bond 95.52% 262.25%
Limited Volatility Bond 75.20% 76.43%
Intermediate Tax-Free Bond 111.58% 199.76%
Municipal Income 83.17% 66.02%
Ohio Municipal Bond 24.61% 77.69%
Government Bond 62.70% 106.14%
</TABLE>
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<TABLE>
<S> <C> <C>
Ultra Short-Term Income 67.65% 2.91%
Intermediate Bond 101.06% 99.71%***
Treasury Only Money Market 0%** 0%**
Government Money Market 0%** 0%**
Kentucky Municipal Bond 16.78% 19.75%****
Institutional Prime Money Market NA* NA*
Treasury Money Market NA* NA*
Tax-Exempt Money Market NA* NA*
Arizona Municipal Bond NA* NA*
Texas Tax-Free Bond NA* NA*
W. Virginia Municipal Bond NA* NA*
Louisiana Municipal Bond 16.72%++ 28%+
Value Growth 65.21%++ 77%+
Gulf South Growth 59.57%++ 65%+
Investor Growth NA* NA*
Investor Growth & Income NA* NA*
Investor Aggressive Growth NA* NA*
Investor Conservative Growth NA* NA*
Investor Balanced NA* NA*
Investor Fixed Income NA* NA*
Income NA* NA*
</TABLE>
* As of June 30, 1996, the Fund had not commenced operations.
** Turnover rate is not applicable to money market funds.
*** Portfolio turnover rate for the period from November 1, 1994 to June 30,
1995.
**** Portfolio turnover rate for the period from January 20, 1995 to June 30,
1995 for Class A and Fiduciary Class shares and from March 16, 1995
(commencement of operations) to June 30, 1995 for Class B shares. For the
period from February 1, 1994 to January 19, 1995 the portfolio turnover
rate was 10.00% and for the period from March 12, 1993 to January 31, 1994
the portfolio turnover rate was 5.00%.
+ Portfolio turnover rate for the fiscal year ended November 30, 1995.
++ Portfolio turnover rate for the period December 1, 1995 to June 30, 1996.
The high portfolio turnover rates for the fiscal year ended June 30,
1996 for the Growth Opportunities Fund, Large Company Value Fund, Intermediate
Tax-Free Bond, and Intermediate Bond Fund resulted from various factors,
including some or all of the following: investment strategies, decreasing
interest rates, unusually high market volatility and significant growth of the
Funds. In addition, portfolio turnover in the Growth Opportunities Fund in 1996
also was higher than normal due to the conversion to a new benchmark
representing a mixture of mid-cap and small-cap stocks. This coincides with the
name change of the Fund from the Small Growth Fund to the Growth Opportunities
Fund. Portfolio turnover may vary greatly from year to year as well as within a
particular year, and may also be affected by cash requirements for redemptions
of Shares and by requirements which enable the Trust to receive certain
favorable tax treatments. Portfolio turnover will not be a limiting factor in
making portfolio decisions.
ADDITIONAL TAX INFORMATION CONCERNING ALL FUNDS OF THE TRUST
It is the policy of each Fund of the Trust to meet the requirements
necessary to qualify as a "regulated investment company" under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). By following such
policy, each Fund expects to eliminate or reduce to a nominal amount the federal
income taxes to which it may be subject.
In order to qualify as a regulated investment company, each Fund of the
Trust must, among other things, (1) derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of stock or securities, foreign currencies or
other income (including gains from options, futures or forward contracts)
derived with respect to its business of
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investing in stock, securities or currencies, (2) derive less than 30% of its
gross income from the sale or other disposition of stock, securities, options,
futures, forward contracts, and certain foreign currencies (or certain options,
futures, or forward contracts on foreign currencies) held for less than three
months, and (3) diversify its holdings so that at the end of each quarter of its
taxable year (i) at least 50% of the market value of the Fund's assets is
represented by cash or cash items, United States government securities,
securities of other regulated investment companies, and other securities
limited, in respect of any one issuer, to an amount not greater than 5% of the
value of the Fund's assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is invested in the
securities of any one issuer (other than United States government securities or
the securities of other regulated investment companies) or of two or more
issuers that the Fund controls and that are engaged in the same, similar, or
related trades or businesses. These requirements may restrict the degree to
which the Fund may engage in short-term trading and limit the range of the
Fund's investments. If a Fund of the Trust qualifies as a regulated investment
company, it will not be subject to federal income tax on the part of its income
distributed to Shareholders, provided the Fund distributes during its taxable
year at least (a) 90% of its taxable net investment income (very generally,
dividends, interest, certain other income, and the excess, if any, of net
short-term capital gain over net long-term loss), and (b) 90% of the excess of
(i) its tax-exempt interest income (if any) less (ii) certain deductions
attributable to that income. Each Fund of the Trust intends to make sufficient
distributions to Shareholders to qualify for this special tax treatment.
If a Fund failed to qualify as a regulated investment company receiving
special tax treatment in any taxable year, the Fund would be subject to tax on
its taxable income at corporate rates, and all distributions from earnings and
profits, including any distributions of net tax-exempt income and net long-term
capital gains, would be taxable to Shareholders as ordinary income. In addition,
the Fund could be required to recognize unrealized gains, pay substantial taxes
and interest and make substantial distributions before requalifying as a
regulated investment company and being accorded special tax treatment.
Regulated investment companies that do not distribute in each calendar
year (regardless of whether they otherwise have a non-calendar taxable year) an
amount equal to 98% of their "ordinary income" (as defined) for the calendar
year, plus 98% of their capital gain net income (as defined) for the one-year
period ending on October 31 of such calendar year, plus any undistributed
amounts from the previous year are subject to a non-deductible excise tax equal
to 4% of the undistributed amounts. For purposes of the excise tax, a Fund is
treated as having distributed any amount on which it is subject to income tax
for any taxable year ending in such calendar year. Each Fund of the Trust
intends to make sufficient distributions to avoid liability for the excise tax.
Shareholders of the Funds will generally pay federal income tax on
distributions received from the Funds. Dividends that are attributable to a
Fund's net investment income will be taxed to shareholders as ordinary income.
Distributions of net capital gain that are designated by a Fund as capital gain
dividends will generally be taxable to a Shareholder receiving such
distributions as long-term capital gain regardless of how long the Shareholder
has held its shares. Distributions in excess of a Fund's current and accumulated
"earnings and profits" will be treated by a Shareholder receiving such
distributions as a return of capital to the extent of such Shareholder's basis
in its Shares in the Fund, and thereafter as capital gain. A return of capital
is not taxable, but reduces a Shareholder's basis in its shares. Shareholders
not subject to tax on their income generally will not be required to pay tax on
amounts distributed to them. The sale, exchange or redemption of Fund shares by
a Shareholder may give rise to a taxable gain or loss to that Shareholder. In
general, any gain or loss realized upon a taxable disposition of shares will be
treated as long-term capital gain or loss if the Shareholder has held the shares
for more than 12 months, and otherwise as short-term capital gain or loss.
However, if a Shareholder sells shares at a loss within six months of purchase,
any loss will be disallowed for Federal income tax purposes to the extent of any
exempt-interest dividends received on such shares.
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In addition, any loss (not already disallowed as provided in the preceding
sentence) realized upon a taxable disposition of shares held for six months or
less will be treated as long-term to the extent of any long-term capital gain
distributions received by the Shareholder with respect to the shares. All or a
portion of any loss realized upon a taxable disposition of Fund shares will be
disallowed if other Fund shares are purchased within 30 days before or after the
disposition. In such a case, the basis of the newly purchased shares will be
adjusted to reflect the disallowed loss.
Certain investment and hedging activities of the Funds, including
transactions in options, futures contracts, hedging transactions, forward
contracts, straddles, foreign currencies, and foreign securities will be subject
to special tax rules. In a given case, these rules may accelerate income to the
Fund, defer losses to the Fund, cause adjustments in the holding periods of the
Fund's securities, convert short-term capital losses into long-term capital
losses, or otherwise affect the character of the Fund's income. These rules
could therefore affect the amount, timing and character of distributions to
Shareholders and cause differences between a Fund's book income and taxable
income. Income earned as a result of these transactions would, in general, not
be eligible for the dividends-received deduction or for treatment as
exempt-interest dividends when distributed to Shareholders. The Fund will
endeavor to make any available elections pertaining to such transactions in a
manner believed to be in the best interest of the Fund.
Certain securities purchased by the Funds (such as STRIPS, CUBES, TRS,
TIGRS, and CATS), as defined in the Description of Permitted Investments in the
Funds' Prospectuses, are sold at original issue discount and thus do not make
periodic cash interest payments. Similarly, zero-coupon bonds do not make
periodic interest payments. A Fund will be required to include as part of its
current income for tax purposes the imputed interest on such obligations even
though the Fund has not received any interest payments on such obligations
during that period. Because each Fund distributes substantially all of its net
investment income to its Shareholders (including such imputed interest), the
Fund may have to sell portfolio securities in order to generate the cash
necessary for the required distributions. Such sales may occur at a time when
Banc One Advisors would not have chosen to sell such securities and may result
in a taxable gain or loss.
A Fund will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends or of gross proceeds from
redemptions paid to any individual Shareholder who has provided to the Fund
either an incorrect tax identification number or no number at all, or who is
subject to withholding by the Internal Revenue Service for failure properly to
report payments of interest or dividends. This withholding, known as backup
withholding, is not an additional tax, and any amounts withheld may be credited
against the Shareholder's ultimate U.S. tax liability.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of Shares of a Fund of the Trust.
Further tax information regarding the Tax-Free Funds and the International
Equity Index Fund is included in following sections of this Statement of
Additional Information. No attempt is made to present herein a complete
explanation of the federal income tax treatment of each Fund or its
Shareholders, and this discussion is not intended as a substitute for careful
tax planning. Accordingly, prospective purchasers of Shares of a Fund are urged
to consult their tax advisors with specific reference to their own tax
situation, including the potential application of state, local and (if
applicable) foreign taxes.
The foregoing discussion and the discussion below regarding the
Tax-Free Funds and the International Equity Index Fund are based on tax laws and
regulations which are in effect on the date of this Statement of Additional
Information; such laws and regulations may be changed by legislative, judicial
or administrative action, and such changes may be retroactive.
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<PAGE> 308
ADDITIONAL TAX INFORMATION CONCERNING THE TAX-FREE FUNDS
The Code permits a regulated investment company which has invested, at
the close of each quarter of its taxable year, at least 50% of its assets in
tax-free Municipal Securities and other securities the interest on which is
exempt from the regular federal income tax to pay exempt-interest dividends to
its Shareholders.
The policy of each Tax-Free Fund is to distribute each year as
exempt-interest dividends substantially all the Fund's net exempt interest
income. An exempt-interest dividend is any dividend or part thereof (other than
a capital gain dividend) paid by a Tax-Free Fund and designated as an
exempt-interest dividend in a written notice mailed to Shareholders after the
close of the Fund's taxable year, which does not exceed, in the aggregate, the
net interest income from Municipal Securities and other securities the interest
on which is exempt from the regular federal income tax received by the Fund
during the taxable year. The percentage of the total dividends paid for any
taxable year which qualifies as federal exempt-interest dividends will be the
same for all Shareholders receiving dividends from a Tax-Free Fund during such
year, regardless of the period for which the Shares were held.
Exempt-interest dividends may generally be treated by a Tax-Free Fund's
Shareholders as items of interest excludable from their gross income under
Section 103(a)(1) of the Code. However, each Shareholder of a Tax-Free Fund is
advised to consult his or her tax advisor with respect to whether such
Shareholder may be treated as a "substantial user" or a "related person" to such
user under Section 147(a) with respect to facilities financed through any of the
tax-exempt obligations held by the Fund. "Substantial user" is defined under
U.S. Treasury Regulations to include a non-exempt person who regularly uses a
part of such facilities in his trade or business and (a)(i) whose gross revenues
derived with respect to the facilities financed by the issuance of bonds are
more than 5% of the total revenues derived by all users of such facilities or
(ii) who occupies more than 5% of the usable area of the facility or (b) for
whom such facilities or a part thereof were specifically constructed,
reconstructed or acquired.
"Related persons" includes certain related natural persons, affiliated
corporations, partners and partnerships.
Dividends attributable to interest on certain private activity bonds
issued after August 7, 1986 must be included in alternative minimum taxable
income for purposes of determining liability (if any) for the alternative
minimum tax applicable to individuals and the alternative minimum tax applicable
to corporations. In the case of corporations, all tax-exempt interest dividends
will be taken into account in determining adjusted current earnings for the
purpose of computing the alternative minimum tax imposed on corporations (as
defined for federal income tax purposes).
Each Tax-Free Fund may at times purchase Municipal Securities (or other
securities the interest on which is exempt from the regular federal income tax)
at a discount from the price at which they were originally issued. For federal
income tax purposes, some or all of the market discount will be included in the
Fund's ordinary income and will be taxable to shareholders as such when it is
distributed to them.
Each Tax-Free Fund may acquire rights regarding specified portfolio
securities under puts. See "Puts." The policy of each Tax-Free Fund is to limit
its acquisition of puts to those under which the Fund will be treated for
federal income tax purposes as the owner of the Municipal Securities acquired
subject to the put and the interest on the Municipal Securities will be
tax-exempt to the Fund. Although the Internal Revenue Service has issued a
published ruling that provides some guidance regarding the tax consequences of
the purchase of puts, there is currently no guidance available from the Internal
Revenue Service that definitively establishes the tax consequences of many of
the types of puts that the Funds could acquire under the 1940 Act. Therefore,
although a Tax-Free Fund will only acquire a put after concluding that it will
have the tax consequences described above, the Internal Revenue Service could
reach a different conclusion from that of the Fund.
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The foregoing is only a summary of some of the important tax
considerations generally affecting purchasers of Shares of a Tax-Free Fund.
Additional tax information concerning all Funds of the Trust is contained in the
immediately preceding section of this Statement of Additional Information. No
attempt is made to present a complete explanation of the federal income tax
treatment of each Tax-Free Fund or its Shareholders, and this discussion is not
intended as a substitute for careful tax planning. Accordingly, prospective
purchasers of Shares of a Tax-Free Fund are urged to consult their tax advisors
with specific reference to their own tax situation, including the potential
application of state, local and foreign taxes.
ADDITIONAL TAX INFORMATION CONCERNING THE INTERNATIONAL EQUITY INDEX FUND
Transactions of the International Equity Index Fund in foreign
currencies, foreign currency denominated debt securities and certain foreign
currency options, future contracts and forward contracts (and similar
instruments) may result in ordinary income or loss to the Fund for federal
income tax purposes which will be taxable to the Shareholders as such when it is
distributed to them.
Gains from foreign currencies (including foreign currency options,
foreign currency futures and foreign currency forward contracts) will constitute
qualifying income for purposes of the 90% test only to the extent that they are
directly related to the trust's business of investing in stock or securities.
Investment by the International Equity Index Fund in certain "passive
foreign investment companies" could subject the Fund to a U.S. federal income
tax or other charge on proceeds from the sale of its investment in such a
company or other distributions from such a company, which tax cannot be
eliminated by making distributions to International Equity Index Fund
Shareholders. If the International Equity Index Fund elects to treat a passive
foreign investment company as a "qualified electing fund," different rules would
apply, although the International Equity Index Fund does not expect to make such
an election. Rather, the Fund intends to avoid such tax or other charge by
making an election to mark such investments to market annually.
FOREIGN TAX CREDIT
If more than 50% of the International Equity Index Fund's total assets
at year end consist of the debt and equity securities of foreign corporations,
the Fund intends to elect to permit its Shareholders who are U.S. citizens to
claim a foreign tax credit or deduction on their U.S. income tax returns for
their pro rata share of foreign taxes paid by the Fund. In that case,
Shareholders will be required to include in gross income their pro rata share of
foreign taxes paid by the Fund. Each Shareholder may then claim a foreign tax
credit or a tax deduction that would offset some or all of the increased tax
liability. Generally, a credit for foreign taxes is subject to the limitation
that it may not exceed the Shareholder's U.S. tax attributable to his or her
total foreign source taxable income. For this purpose, the source of the income
to the International Equity Index Fund flows through to the Fund's Shareholders.
Gains to the International Equity Index Fund from the sale of securities
generally will be treated as derived from U.S. sources and certain currency
fluctuation gains, including fluctuation gains from foreign currency denominated
debt securities, receivables and payables, will be treated as ordinary income
derived from U.S. sources. With limited exceptions, the foreign tax credit is
allowed to offset only 90% of the alternative minimum tax imposed on
corporations and individuals. Because of these limitations, Shareholders may be
unable to claim a credit for the full amount of their proportionate share of the
foreign taxes paid by the International Equity Index Fund.
The foregoing is only a general description of the treatment of foreign
source income or foreign taxes under the United States federal income tax laws.
Because the availability of a credit or deduction depends on the particular
circumstances of each Shareholder, Shareholders are advised to consult their own
tax advisors.
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VALUATION
VALUATION OF THE MONEY MARKET AND INSTITUTIONAL MONEY MARKET FUNDS
The Money Market and Institutional Money Market Funds have elected to
use the amortized cost method of valuation pursuant to Rule 2a-7 under the 1940
Act. This involves valuing an instrument at its cost initially and thereafter
assuming a constant amortization to maturity of any discounts or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. This method may result in periods during which value, as
determined by amortized cost, is higher or lower than the price each Fund would
receive if it sold the instrument. The value of securities in the Funds can be
expected to vary inversely with changes in prevailing interest rates.
Pursuant to Rule 2a-7, the Money Market and Institutional Money Market
Funds will maintain a dollar-weighted average portfolio maturity appropriate to
their objective of maintaining a stable net asset value per Share, provided that
no Fund will purchase any security with a remaining maturity of more than 397
days (securities subject to repurchase agreements and certain variable or
floating rate instruments may bear longer maturities) nor maintain a
dollar-weighted, average portfolio maturity which exceeds 90 days. The Trust's
Board of Trustees has also undertaken to establish procedures reasonably
designed, taking into account current market conditions and a Fund's investment
objective, to stabilize the net asset value per Share of the Money Market Funds
for purposes of sales and redemptions at $1.00. These procedures include review
by the Trustees, at such intervals as they deem appropriate, to determine the
extent, if any, to which the net asset value per Share of each Fund calculated
by using available market quotations deviates from $1.00 per Share. In the event
such deviation exceeds one half of one percent, the Rule requires that the Board
promptly consider what action, if any, should be initiated. If the Trustees
believe that the extent of any deviation from a Fund's $1.00 amortized cost
price per Share may result in material dilution or other unfair results to new
or existing investors, they will take such steps as they consider appropriate to
eliminate or reduce to the extent reasonably practicable any such dilution or
unfair results. These steps may include selling portfolio instruments prior to
maturity, shortening the average portfolio maturity, withholding or reducing
dividends, reducing the number of a Fund's outstanding Shares without monetary
consideration, or utilizing a net asset value per Share determined by using
available market quotations.
VALUATION OF THE EQUITY FUNDS, THE BOND FUNDS AND THE MUNICIPAL BOND FUNDS
Except as noted below, investments of the Asset Allocation Fund, Equity
Funds, Bond Funds, and Municipal Bond Funds of the Trust in securities the
principal market for which is a securities exchange are valued at their market
values based upon the latest available sales price or, absent such a price, by
reference to the latest available bid and asked prices in the principal market
in which such securities are normally traded. Except as noted below, investments
of the International Equity Index Fund in securities the principal market for
which is a securities exchange are valued at the closing mid-market price on
that exchange on the day of computation.
With regard to each of the above-mentioned Funds, securities the
principal market for which is not a securities exchange are valued at the mean
of their latest bid and ask quotations in such principal market. Securities and
other assets for which quotations either (1) are not readily available or (2) in
the case of the International Equity Index Fund are determined by that Fund's
Advisor or Sub-Advisor to not accurately reflect their value are valued at their
fair value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Trustees of the Trust.
Short-term securities are valued at either amortized cost or original cost plus
accrued interest, which approximates current value. Mutual fund investments of
the Funds of Funds will be valued at the most recently calculated net asset
value.
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<PAGE> 311
The value of a foreign security is determined in its national currency
as of the close of trading on the foreign exchange or other principal market on
which it is traded, which value is then converted into its U.S. dollar
equivalent at the foreign exchange closing mid-market rate reported in the
FINANCIAL TIMES as the closing rate for that date. When an occurrence subsequent
to the time a value of a foreign security was so established is likely to have
changed the value, then the fair value of those securities will be determined by
consideration of other factors by or under the direction of the Trustees of the
Trust or their delegates.
Securities for which market quotations are readily available will be
valued on the basis of quotations provided by dealers in such securities or
furnished by a pricing service. Securities for which market quotations are not
readily available and other assets will be valued at fair value using methods
determined in good faith by the Investment Advisor under the supervision of the
Trustees and may include yield equivalents or a pricing matrix.
ADDITIONAL INFORMATION REGARDING THE CALCULATION OF PER SHARE NET ASSET
VALUE
The net asset value of each Fund is determined and its Fiduciary Class,
Class A, Class B, Class C and Service Class Shares are priced as of the times
specified in each Fund's Prospectus. The net asset value per Share of each
Fund's Fiduciary Class, Class A, Class B, Class C and Service Class Shares is
calculated by determining the value of the respective Class's proportional
interest in the securities and other assets of the Fund, less (i) such Class's
proportional share of general liabilities and (ii) the liabilities allocable
only to such Class, and dividing such amount by the number of Shares of the
Class outstanding. The net asset value of a Fund's Fiduciary Class, Class A,
Class B, Class C and Service Class Shares may differ from each other due to the
expense of the Distribution and Shareholders Services Plan fee applicable to a
Fund's Class A, Class B, Class C and Service Class Shares.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
All of the classes of Shares in each Fund (other than Class A shares of
the Income Fund) are sold on a continuous basis by The One Group Services
Company (the "Distributor"), and the Distributor has agreed to use appropriate
efforts to solicit all purchase orders.
Fiduciary Class Shares in a Fund may be purchased, through procedures
established by the Distributor, by institutional investors, including affiliates
of BANC ONE CORPORATION and any bank, depository institution, insurance company,
pension plan or other organization authorized to act in fiduciary, advisory,
agency, custodial or similar capacities.
Class A, Class B and Class C Shares (except Class A shares of the
Income Fund) may be purchased by any investor that does not meet the purchase
eligibility criteria, described above, with respect to Fiduciary Shares. Class A
shares of the Income Fund may only be purchased in connection with investment
company consolidations and reorganizations. Class C Shares are available only to
investors in the Funds of Funds. In addition to purchasing Class A, Class B and
Class C Shares directly from the Distributor, an investor may purchase Class A,
Class B and Class C Shares through a financial institution, such as a bank,
savings and loan association, insurance company (each a "Shareholder Servicing
Agent") that has established a Shareholder servicing agreement with the
Distributor, or through a broker-dealer that has established a dealer agreement
with the Distributor. Questions concerning the eligibility requirements for each
class of the Trust's Shares may be directed to the Distributor at
1-800-480-4111.
Service Class Shares are available only in the Prime Money Market and
U.S. Treasury Securities Money Market Funds. This class of shares is available
to broker-dealers, other financial intermediaries, banks and other depository
institutions requiring special administrative and accounting services (E.G.,
sweep processing).
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<PAGE> 312
As described in each Prospectus for each of the Equity and Bond Funds
and the Funds of Funds, and in the Multiple Class Plan, under certain
circumstances, Class A Shares of a Fund may be purchased free of the sales
charge applicable to such Class A Shares. No sales charge is imposed on Class A
Shares of the Funds: (i) issued through reinvestment of dividends and capital
gains distributions; (ii) acquired through the exercise of exchange privileges
where a comparable sales charge has been paid for exchanged Shares; (iii)
purchased by officers, directors or trustees, retirees and employees (and their
spouses and immediate family members) of the Trust, of BANC ONE CORPORATION and
its subsidiaries and affiliates, of the Distributor and its subsidiaries and
affiliates, of broker-dealers who have entered into a dealer agreement with the
Trust and their subsidiaries and affiliates, or of an investment sub-Advisor of
a Fund of the Trust and such sub-Advisor's subsidiaries and affiliates; (iv)
sold to affiliates of BANC ONE CORPORATION and certain accounts (other than
Individual Retirement Accounts) for which financial organizations, including any
bank, depository institution, insurance company, pension plan or other
organization are authorized to act in fiduciary, advisory, agency, custodial or
similar capacities, or purchased by investment Advisors, financial planners or
other intermediaries who have a dealer arrangement with the Distributor, who
place trades for their own accounts or for the accounts of their clients and who
charge a management, consulting or other fee for their services, as well as
clients of such investment Advisors, financial planners or other intermediaries
who place trades for their own accounts if the accounts are linked to the master
account of such investment Advisor, financial planner or other intermediary; (v)
purchased with proceeds from the recent redemption of Fiduciary Class Shares of
a Fund of the Trust or acquired in an exchange of Fiduciary Class Shares of a
Fund for Class A Shares of the same Fund; (vi) purchased with proceeds from the
recent redemption of Shares of a mutual fund (other than a Fund of the Trust)
for which a sales charge was paid; (vii) purchased in an Individual Retirement
Account with the proceeds of a distribution from an employee benefit plan,
provided that, at the time of distribution, the employee benefit plan had plan
assets invested in a Fund of the Trust; (viii) purchased with Trust assets; (ix)
purchased in accounts as to which a bank or broker-dealer charges an asset
allocation fee, provided the bank or broker-dealer has an agreement with the
Distributor; (x) directly purchased with the proceeds of a distribution on a
bond for which a BANC ONE CORPORATION affiliate bank or trust company is the
Trustee or Paying Agent; or (xi) purchased in connection with plans of
reorganization of a Fund, such as mergers, asset acquisitions and exchange
offers to which a Fund is a party.
An investor relying upon any of the categories of waivers of the sales
charge must qualify for such waiver in advance of the purchase with the
Distributor or the financial institution or intermediary through which Shares
are purchased by the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii)
above applies only if the purchase is made within 60 days of the redemption and
if conditions imposed by the Distributor are met. The waiver policy with respect
to the purchase of Shares through the use of proceeds from a recent redemption
or distribution as described in clauses (v), (vi), and (vii) above will not be
continued indefinitely and may be discontinued at any time without notice.
Investors should call the Distributor at 1-800-480-4111 to determine whether
they are eligible to purchase Shares without paying a sales charge through the
use of proceeds from a recent redemption or distribution as described above, and
to confirm continued availability of these waiver policies prior to initiating
the procedures described in clauses (v), (vi), and (vii).
Fiduciary Class Shareholders of a Fund may exchange their Shares for
Class A Shares of the same Fund or for Class A Shares or Fiduciary Class Shares
of another Fund of the Trust. Class A Shareholders may exchange their Shares for
Fiduciary Class Shares of a Fund or for Fiduciary Class or Class A Shares of
another Fund or the Trust, if the Shareholder is eligible to purchase such
Shares. If a Class A Shareholder of the Income Fund exchanges his or her Shares
within one year of receipt of the Shares, the Shareholder will be assessed a 2%
redemption fee. The exchange privilege may be exercised only in those states
where the Shares of the Fund or such other Fund may be legally sold. All
exchanges discussed herein are made at the net asset value of the
56
<PAGE> 313
exchanged Shares, except as provided below. The Trust does not impose a charge
for processing exchanges of Shares. If a Shareholder seeks to exchange Class A
Shares of a Fund that does not impose a sales charge for Class A Shares of a
Fund that does, or the Fund being exchanged into has a higher sales charge, the
Shareholder will be required to pay a sales charge in the amount equal to the
difference between the sales charge applicable to the Fund into which the Shares
are being exchanged and any sales charge previously paid for the exchanged
Shares, including any sales charges incurred on any earlier exchanges of the
Shares (unless such sales charge is otherwise waived as provided above). The
exchange of Fiduciary Class Shares for Class A Shares also will require payment
of the sales charge unless the sales charge is waived, as provided above. If a
Shareholder (no longer eligible to purchase Fiduciary Shares) purchases Class A
Shares of a Fund, the Shareholder will be subject to Distribution and
Shareholder Services Plan Fees.
Class B Shareholders of a Fund may exchange their Shares for Class B
Shares of any other Fund of the Trust on the basis of the net asset value of the
exchanged Class B Shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
Shares. The newly acquired Class B Shares will be subject to the higher
Contingent Deferred Sales Charge of either the Fund from which the Shares were
exchanged or the Fund into which the Shares were exchanged. With respect to
outstanding Class B Shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the Fund the Shares are
exchanging into or any other Fund from which the Shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B Shares, the
holding period for outstanding Class B Shares of the Fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B Shares. For purposes of calculating the holding period applicable to the newly
acquired Class B Shares, the newly acquired Class B Shares shall be deemed to
have been issued on the date of receipt of the Shareholder's order to purchase
the outstanding Class B Shares of the Fund from which the initial exchange was
made.
Class C Shareholders may not exchange their Class C Shares for shares
of any other class nor may shares of any other class be exchanged for Class C
Shares.
Service Class Shareholders may not exchange their Service Class Shares
for Shares of any other class, nor may Shares of any other class be exchanged
for Service Class Shares.
Shares of the Institutional Money Market Funds may be purchased by
commercial and retail institutional investors, including affiliates of BANC ONE
CORPORATION, that have opened an account with the Transfer Agent either directly
or through a Shareholder Servicing Agent, by persons whose individual net worth,
or joint net worth with that person's spouse, at the time of his or her purchase
exceeds $1,000,000, or by persons whose individual annual income, or joint
annual income with that person's spouse, at the time of his or her purchase
exceeds $200,000.
The Trust may suspend the right of redemption or postpone the date of
payment for Shares during any period when (a) trading on the New York Stock
Exchange (the "Exchange") is restricted by applicable rules and regulations of
the Securities and Exchange Commission, (b) the Exchange is closed for other
than customary weekend and holiday closings, (c) the Securities and Exchange
Commission has by order permitted such suspension, or (d) an emergency exists as
determined by the Securities and Exchange Commission.
The Trust may redeem Shares involuntarily if redemption appears
appropriate in light of the Trust's responsibilities under the 1940 Act. (See
"Valuation of the Money Market and Institutional Money Market Funds and the
Municipal Money Market Fund" above.)
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<PAGE> 314
MANAGEMENT OF THE TRUST
TRUSTEES & OFFICERS
Overall responsibility for management of the Trust rests with the Board
of Trustees of the Trust, who are elected by the Shareholders of the Trust.
There are currently four Trustees, all of whom are not "interested persons" of
the Trust within the meaning of that term under the 1940 Act. The Trustees, in
turn, elect the officers of the Trust to supervise actively its day-to-day
operations.
The Trustees of the Trust, their addresses, and principal occupations
during the past five years are set forth below.
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE TRUST DURING PAST 5 YEARS
- ---------------- -------------- -------------------
<S> <C> <C>
Peter C. Marshall Trustee From November, 1993 to present,
DCI Marketing, Inc. President, DCI Marketing, Inc.;
2727 W. Good Hope Road from 1992 to November, 1993, Vice
Milwaukee, WI 53209 President-Finance and Treasurer,
DCI Marketing, Inc.; from 1987
to August, 1992, has served as
an officer in the corporate
finance group of Blunt, Ellis &
Loewi and its successor
corporation, Kemper Securities,
Inc.
Charles I. Post Trustee From July, 1986 to present, has
7615 4th Avenue West been self-employed as a
Bradenton, FL 34209 consultant.
John S. Randall Trustee Since 1972, has been
1840 North Prospect Ave. self-employed as
Apt. 419 a management consultant.
Milwaukee, WI 53202
Frederick W. Ruebeck Trustee From June, 1988 to present, has
Eli Lilly & Company been Director of Investments, Eli
Lilly Corporate Center Lilly and Company.
307 East McCarty
Indianapolis, IN 46285
</TABLE>
The Trustees of the Trust receive fees and expenses for each meeting of
the Board of Trustees attended. No officer or employee of the Distributor
currently acts as a Trustee of the Trust.
The Compensation Table below sets forth the estimated total
compensation to the Trustees from the Trust and the operational funds of The One
Group for the Trust's fiscal year ended June 30, 1996.
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<PAGE> 315
COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS ESTIMATED TOTAL
AGGREGATE ACCRUED ANNUAL COMPENSATION
COMPENSATION AS PART BENEFITS FROM
NAME OF FROM THE OF FUND UPON THE FUND
PERSON, POSITION TRUST EXPENSES RETIREMENT COMPLEX(2)
---------------- ----- -------- ---------- ----------
<S> <C> <C> <C> <C>
Peter C. Marshall, $36,000 N/A N/A $39,000
Chairman
Charles I. Post, $33,500 N/A N/A $36,500
Trustee
John S. Randall, $33,500 N/A N/A $36,500
Trustee
Frederick W. Ruebeck, $33,500 N/A N/A $36,500
Trustee
</TABLE>
1 Figures are for the Trust's fiscal year ended June 30, 1996.
2 "Fund Complex" comprises the 26 operational funds of The One Group as
well as the 4 funds of The One Group(R) Investment Trust at June 30,
1996.
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<PAGE> 316
The officers of the Trust receive no compensation directly from the
Trust for performing the duties of their offices. The officers of the Trust,
their addresses, and principal occupations during the past five years are shown
below.
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE TRUST DURING PAST 5 YEARS
- ---------------- -------------- -------------------
<S> <C> <C>
Mark Dillon President From 1993 to present, Vice-
The One Group Services President of BISYS Fund
Company Services, Inc. and President of
3435 Stelzer Road The One Group Services
Columbus, Ohio 43219 Company; from 1986 to 1993,
Vice-President of the Winsbury
Company
Mark Redman Vice President From June, 1995 to present,
BISYS Fund Services & Treasurer Vice President, The One Group
3435 Stelzer Road Services Company; from
Columbus, Ohio 43219 February 1989 to present,
employee of the Winsbury
Company
George O. Martinez Secretary From March 1995 to present,
BISYS Fund Services, Inc. Senior Vice President and
3435 Stelzer Road Director of Legal and
Columbus, OH 43219 Compliance Services, BISYS
Fund Services, Inc.; from June
1989 - March 1995, Vice
President and Associate
General Counsel, Alliance
Capital Management
Alaina J. Metz Assistant Secretary From June 1995 to present,
BISYS Fund Services, Inc. Chief Administrator,
3435 Stelzer Road Administration and Regulatory
Columbus, Ohio 43219 Services, BISYS Fund Services,
Inc.; from May 1989 - June 1995,
Supervisor, Mutual Fund Legal
Department, Alliance Capital
Management.
</TABLE>
60
<PAGE> 317
INVESTMENT ADVISOR
Banc One Investment Advisors Corporation
Investment advisory services to each of the Trust's Funds are provided
by Banc One Advisors. Banc One Advisors makes the investment decisions for the
assets of the Fund and continuously reviews, supervises and administers the
Fund's investment program, subject to the supervision of, and policies
established by, the Trustees of the Trust. The Trust's Shares are not sponsored,
endorsed or guaranteed by, and do not constitute obligations or deposits of any
bank affiliate of Banc One Advisors and are not insured by the FDIC or issued or
guaranteed by the U.S. government or any of its agencies.
Banc One Advisors is an indirect, wholly-owned subsidiary of BANC ONE
CORPORATION, a bank holding company incorporated in the state of Ohio. BANC ONE
CORPORATION has affiliate banking organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West Virginia and
Wisconsin. In addition, BANC ONE CORPORATION has several affiliates that engage
in data processing, venture capital, investment and merchant banking, and other
diversified services including trust management, investment management,
brokerage, equipment leasing, mortgage banking, consumer finance, and insurance.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
Banc One Advisors represents a consolidation of the investment advisory
staffs of a number of bank affiliates of BANC ONE CORPORATION, which have
considerable experience in the management of open-end management investment
company portfolios, including The One Group (formerly, the Helmsman Fund) since
1985.
Prior to January 11, 1993, investment advisory services were provided
to the Income Equity, Disciplined Value, Growth Opportunities, and Large Company
Value Funds by Bank One, Milwaukee, NA ("Bank One, Milwaukee"). Prior to January
11, 1993, investment advisory services were provided to the Money Market Funds,
the Institutional Money Market Funds, the Bond Funds, and the Intermediate
Tax-Free Bond Fund by Bank One, Indianapolis, NA ("Bank One, Indianapolis").
Prior to January 11, 1993, investment advisory services were provided to the
International Equity Index, Equity Index, and the Ohio Municipal Bond Funds by
Bank One, Columbus, NA ("Bank One, Columbus"). Prior to January 11, 1993,
investment sub-advisory services were also provided to the Large Company Value
Fund by Bank One, Columbus. Prior to January, 1994, investment advisory services
were provided to the predecessor funds of Intermediate Bond Fund and Large
Company Growth Fund, Sun Eagle Intermediate Fixed Income Fund and Sun Eagle
Equity Growth Fund, respectively, by Bank One, Arizona, NA. Prior to January 20,
1995, investment advisory services were provided to the predecessor Fund of the
Kentucky Municipal Bond Fund, the Trademark Kentucky Municipal Bond Fund, by
Liberty National Bank and Trust Company of Kentucky. Prior to January 2, 1996,
investment advisory services were provided to the predecessor Funds of the
Louisiana Municipal Bond Fund, the Value Growth Fund, and the Gulf South Growth
Fund, formerly Paragon Louisiana Tax-Free Fund, Paragon Value Growth Fund and
Paragon Gulf South Growth Fund, by Premier Investment Advisors, LLP.
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<PAGE> 318
During the fiscal years ended June 30, 1996, 1995 and 1994, the Funds
of the Trust paid the following investment advisory fees to Banc One Advisors
(except as noted above) and Banc One Advisors voluntarily waived investment
advisory fees as follows:
THE ONE GROUP ADVISORY--NET
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------
1996 1995 1994
---- ---- ----
FUND NET WAIVED NET WAIVED NET WAIVED
- ---- --- ------ --- ------ --- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities
Money Market $3,335,123 $2,120,534 $2,258,214 $1,956,704 $1,605,856 $1,134,557
Prime Money Market $5,939,373 $2,662,726 $3,991,856 $2,887,240 $2,660,254 $2,092,557
Municipal Money Market $1,111,463 $ 930,328 $ 964,943 $ 834,690 $ 618,798 $ 489,886
Ohio Municipal Money Market $ 171,609 $ 114,565 $ 163,752 $ 112,517 $ 52,130 $ 103,823
Income Equity $1,809,128 $ 70,594 $1,466,342 $ 7,338 $1,467,442 $ 107,348
Disciplined Value $3,934,183 $ 61,237 $3,306,317 $ 0 $2,365,739 $ 151,852
Growth Opportunities $3,688,445 $ 54,262 $3,024,214 $ 6,973 $2,338,599 $ 141,253
Equity Index $ 238,008 $ 638,315 $ 167,195 $ 396,281 $ 281,951 $ 123,050
Large Company Value $3,763,553 $ 0 $1,730,555 $ 0 $ 993,450 $ 85,726
Asset Allocation $ 306,083 $ 92,023 $ 214,418 $ 68,226 $ 178,798 $ 84,284
International Equity Index $1,279,277 $ 91,958 $1,036,935 $ 0 $ 507,696 $ 0
Large Company Growth $5,235,736 $ 245,284 $2,515,585 $ 0 $ 318,079 $ 226,900
Income Bond $1,918,010 $1,135,461 $1,662,030 $1,317,284 $1,774,670 $1,543,297
Limited Volatility Bond $1,330,873 $1,450,516 $1,155,274 $1,393,194 $1,275,561 $1,428,366
Intermediate Tax-Free Bond $ 629,789 $ 769,809 $ 499,312 $ 699,036 $ 523,644 $ 599,746
Municipal Income $ 714,573 $ 387,167 $ 572,498 $ 246,244 $ 365,946 $ 166,864
Ohio Municipal Bond $ 257,158 $ 328,794 $ 299,400 $ 302,235 $ 328,834 $ 314,126
Government Bond $2,182,543 $ 70,159 $1,251,932 $ 38,861 $ 611,976 $ 21,496
Ultra Short-Term Income $ 29,293 $ 227,497 $ 277,435 $ 208,134 $ 848,254 $ 299,477
Intermediate Bond $ 612,348 $ 747,012 $ 239,603 $ 597,220 $ 0 $ 353,976
Treasury Only Money Market $ 287,729 $ 0 $ 181,522 $ 16,794 $ 82,477 $ 53,130
Government Money Market $ 612,362 $ 5,166 $ 478,342 $ 101,302 $ 129,862 $ 290,296
Kentucky Municipal Bond
(Trademark Kentucky Municipal Bond)** $ 108,684 $ 132,964 $ 53,481 $ 59,433 $ 263,106*** $ 8,528***
Institutional Prime Money Market NA* NA* NA* NA* NA* NA*
Treasury Money Market NA* NA* NA* NA* NA* NA*
Tax-Exempt Money Market NA* NA* NA* NA* NA* NA*
Arizona Municipal Bond NA* NA* NA* NA* NA* NA*
Texas Tax-Free Bond NA* NA* NA* NA* NA* NA*
W. Virginia Municipal Bond NA* NA* NA* NA* NA* NA*
Louisiana Municipal Bond $ 207,766++ $ 103,883++ $ 992,485+ $ 198,495+ $ 808,335+ $ 202,083+
Value Growth $ 400,112++ $ 51,948++ $1,281,345+ NA+ $1,154,672+ NA+
Gulf South Growth $ 184,391++ $ 25,531++ $ 582,482+ NA+ $ 523,002+ NA+
Income Fund NA* NA* NA* NA* NA* NA*
Investor Growth NA* NA* NA* NA* NA* NA*
Investor Growth & Income NA* NA* NA* NA* NA* NA*
Investor Aggressive Growth NA* NA* NA* NA* NA* NA*
Investor Conservative Growth NA* NA* NA* NA* NA* NA*
Investor Balanced NA* NA* NA* NA* NA* NA*
Investor Fixed Income NA* NA* NA* NA* NA* NA*
</TABLE>
62
<PAGE> 319
* As of June 30, 1996, the Fund had not commenced operations.
** In the fiscal year ended June 30, 1994, and from July 1, 1994 through
January 19, 1995, the Advisor was Liberty National Bank and Trust Company
of Kentucky.
*** Fees for the period from February 1, 1994 through January 19, 1995.
+ For fiscal years ended November 30, 1994 and 1995, the Advisor was Premier
Investment Advisors, LLC.
++ Fees for the period from December 31, 1995 to June 30, 1996.
All investment advisory services are provided to the Funds by Banc One
Advisors pursuant to an investment advisory agreement dated January 11, 1993
(the "Investment Advisory Agreement"). The Investment Advisory Agreement (and
the Sub-Investment Advisory Agreement described immediately following,
collectively, the "Advisory and Sub-Advisory Agreements") will continue in
effect as to a particular Fund from year to year, if such continuance is
approved at least annually by the Trust's Board of Trustees or by vote of a
majority of the outstanding Shares of such Fund (as defined under "ADDITIONAL
INFORMATION--Miscellaneous" in this Statement of Additional Information), and a
majority of the Trustees who are not parties to the respective investment
advisory agreements or interested persons (as defined in the Investment Company
Act of 1940) of any party to the respective investment advisory agreements by
votes cast in person at a meeting called for such purpose. The Advisory and
Sub-Advisory Agreements were renewed by the Trust's Board of Trustees at their
quarterly meeting on August 17, 1995. The Advisory and Sub-Advisory Agreements
are terminable as to a particular Fund at any time on 60 days' written notice
without penalty by the Trustees, by vote of a majority of the outstanding Shares
of that Fund, or by the Fund's Advisor or Sub-Advisor as the case may be. The
Advisory and Sub-Advisory Agreements also terminate automatically in the event
of any assignment, as defined in the 1940 Act.
The Advisory and Sub-Advisory Agreements each provide that the respective
Advisor or Sub-Advisor shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the performance
of the respective investment advisory agreements, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith, or gross
negligence on the part of Banc One Advisors or Sub-Advisor in the performance of
its duties, or from reckless disregard by it of its duties and obligations
thereunder.
Goldman Sachs Asset Management, formerly the investment Sub-Advisor to the
Ultra Short-Term Income Fund, received $417,950 in sub-advisory fees from Banc
One Advisors for the fiscal year ended June 30, 1994, $176,570 in sub-advisory
fees from Banc One Advisors for the fiscal year ended June 30, 1995 and $26,251
in sub-advisory fees from Banc One Advisors for the fiscal year ended June 30,
1996.
Independence International Associates, Inc.
Independence International Associates, Inc. ("Independence International")
serves as investment Sub-Advisor to the International Equity Index Fund pursuant
to an agreement with Banc One Advisors dated January 11, 1993. Independence
International is a wholly-owned subsidiary of John Hancock Asset Management,
Inc. and an indirect, wholly-owned subsidiary of John Hancock Mutual Life
Insurance Company. Boston International Advisors, Inc., the predecessor of
Independence International, received $113,644 in sub-advisory fees from Banc One
Advisors for the fiscal year ended June 30, 1994, $161,906 in sub-advisory fees
from Banc One Advisors for the fiscal year ended June 30, 1995 and $212,352 in
sub-advisory fees from Banc One Advisors for the fiscal year ended June 30,
1996.
63
<PAGE> 320
GLASS-STEAGALL ACT
In 1971 the United States Supreme Court held in INVESTMENT COMPANY
INSTITUTE V. CAMP that the federal statute commonly referred to as the
Glass-Steagall Act prohibits a national bank from operating a Fund for the
collective investment of managing agency accounts. Subsequently, the Board of
Governors of the Federal Reserve System (the "Board") issued a regulation and
interpretation to the effect that the Glass-Steagall Act and such decision: (a)
forbid a bank holding company registered under the Federal Bank Holding Company
Act of 1956 (the "Holding Company Act") or any non-bank affiliate thereof from
sponsoring, organizing, or controlling a registered, open-end investment company
continuously engaged in the issuance of its Shares, but (b) do not prohibit such
a holding company or affiliate from acting as investment Advisor, transfer
agent, and custodian to such an investment company. In 1981, the United States
Supreme Court held in BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM V.
INVESTMENT COMPANY INSTITUTE that the Board did not exceed its authority under
the Holding Company Act when it adopted its regulation and interpretation
authorizing bank holding companies and their non-bank affiliates to act as
investment Advisors to registered closed-end investment companies. In the BOARD
OF GOVERNORS case, the Supreme Court also stated that if a national bank
complied with the restrictions imposed by the Board in its regulation and
interpretation authorizing bank holding companies and their non-bank affiliates
to act as investment Advisors to investment companies, a national bank
performing investment advisory services for an investment company would not
violate the Glass-Steagall Act. In addition, state securities laws on this issue
may differ from the interpretations of federal law expressed herein and banks
and financial institutions may be required to register as dealers pursuant to
state law.
In the Investment Advisory Agreement with the Trust, Banc One Advisors has
represented to the Trust that it possesses the legal authority to perform the
investment advisory services contemplated by the agreement and described in the
Prospectuses and this Statement of Additional Information without violation of
applicable statutes and regulations. Future changes in either federal or state
statutes and regulations relating to the permissible activities of banks or bank
holding companies and the subsidiaries or affiliates of those entities, as well
as further judicial or administrative decisions or interpretations of present
and future statutes and regulations, could prevent or restrict Banc One Advisors
from continuing to perform such services for the Trust. Depending upon the
nature of any changes in the services which could be provided by Banc One
Advisors, the Board of Trustees of the Trust would review the Trust's
relationship with Banc One Advisors and consider taking all action necessary in
the circumstances.
Should future legislative, judicial, or administrative action prohibit or
restrict the proposed activities of BANC ONE CORPORATION subsidiary banks or
their correspondent banks in connection with customer purchases of Shares of the
Trust, these banks might be required to alter materially or discontinue the
services offered by them to customers. It is not anticipated, however, that any
change in the Trust's method of operations would affect its net asset value per
Share or result in financial losses to any customer.
PORTFOLIO TRANSACTIONS
Pursuant to the Advisory and Sub-Advisory Agreements, Banc One Advisors
and the Sub-Advisor determine, subject to the general supervision of the Board
of Trustees of the Trust and in accordance with each Fund's investment objective
and restrictions, which securities are to be purchased and sold by each such
Fund and which brokers are to be eligible to execute its portfolio transactions.
Purchases and sales of portfolio securities with respect to the Money Market
Funds, the Bond Funds, the Funds of Funds and (to a varying degree) the Asset
Allocation Fund usually are principal transactions in which portfolio securities
are purchased directly from the issuer or from an underwriter or market maker
for the securities. Purchases from underwriters of portfolio securities
generally include (but not in the case of mutual fund shares purchased by the
Funds of Funds) a commission or concession paid by the issuer to the
64
<PAGE> 321
underwriter and purchases from dealers serving as market makers may include the
spread between the bid and asked price. Transactions on stock exchanges (other
than certain foreign stock exchanges) involve the payment of negotiated
brokerage commissions. Transactions in the over-the-counter market are generally
principal transactions with dealers. With respect to the over-the-counter
market, the Trust, where possible, will deal directly with the dealers who make
a market in the securities involved except in those circumstances where better
price and execution are available elsewhere. While the Banc One Advisors
generally seeks competitive spreads or commissions, the Trust may not
necessarily pay the lowest spread or commission available on each transaction,
for reasons discussed below.
Allocation of transactions, including their frequency, to various dealers
is determined by Banc One Advisors and the Sub-Advisor with respect to the Funds
each serves based on their best judgment and in a manner deemed fair and
reasonable to Shareholders. The primary consideration is prompt execution of
orders in an effective manner at the most favorable price. Subject to this
consideration, dealers who provide supplemental investment research to Banc One
Advisors or the Sub-Advisor may receive orders for transactions by the Trust,
even if such dealers charge commissions in excess of the lowest rates available,
provided such commissions are reasonable in light of the value of brokerage and
research services received. Such research services may include, but are not be
limited to, analysis and reports concerning economic factors and trends,
industries, specific securities, and portfolio strategies. Information so
received is in addition to and not in lieu of services required to be performed
by Banc One Advisors or the Sub-Advisor and does not reduce the advisory fees
payable to Banc One Advisors or the Sub-Advisor. Such information may be useful
to Banc One Advisors or the Sub-Advisor in serving both the Trust and other
clients and, conversely, supplemental information obtained by the placement of
business of other clients may be useful to Banc One Advisors or the Sub-Advisor
in carrying out their obligations to the Trust. In the last fiscal year, Banc
One Advisors directed brokerage commissions to brokers who provided research
services to Banc One Advisors. Total compensation paid to such brokers amounted
to $2,845,760.00.
The Trust will not execute portfolio transactions through, acquire
portfolio securities issued by, make savings deposits in, or enter into
repurchase or reverse repurchase agreements with its Advisors or their
affiliates except as may be permitted under the 1940 Act, and will not give
preference to correspondents of BANC ONE CORPORATION subsidiary banks with
respect to such transactions, securities, savings deposits, repurchase
agreements, and reverse repurchase agreements.
During the Trust's fiscal year ended June 30, 1994, the Trust paid
brokerage commissions to Goldman Sachs Asset Management ("Goldman") for
brokerage services provided. The Asset Allocation Fund, Disciplined Value Fund,
Growth Opportunities Fund and Large Company Value Fund paid $419, $11,504,
$17,688 and $9,208 respectively, to Goldman in brokerage commissions.
During the Trust's fiscal year ended June 30, 1995, the Trust paid brokerage
commissions to Goldman for brokerage services provided.
<TABLE>
<CAPTION>
FUND COMMISSIONS PAID
---- ----------------
<S> <C>
Income Equity $ 700
Disciplined Value $81,124
Growth Opportunities $47,160
Large Company Value $47,640
Equity Index $ 6,741
Asset Allocation $ 6,677
Ultra Short-Term Income $ 531
Large Company Growth $ 3,381
</TABLE>
During the Trust's fiscal year ended June 30, 1996, the Trust paid
brokerage commissions to Goldman for brokerage services provided as follows:
65
<PAGE> 322
<TABLE>
<CAPTION>
FUND COMMISSIONS PAID
---- ----------------
<S> <C>
Income Equity $ 5,750
Disciplined Value $ 1,810
Growth Opportunities $11,714
Equity Index $42,243
Large Company Value $10,650
Asset Allocation $ 9,602
Gulf South Growth $ 2,265
Value Growth $ 1,647
</TABLE>
During the Trust's fiscal year ended June 30, 1996, the percentage of the
Trust's aggregate brokerage commissions paid to Goldman was 1.26% and the
percentage of the Trust's aggregate dollar amount of transactions involving the
payment of commissions effected through Goldman was 1.47%.
In the fiscal years ended June 30, 1996, 1995 and 1994, each of the Funds
of the Trust that paid brokerage commissions and the amounts paid for each year
were as follows:
THE ONE GROUP BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------
FUND 1996 1995 1994
- ---- ---- ---- ----
<S> <C> <C> <C>
Income Equity $ 96,204 $ 102,275 $129,736
Disciplined Value $ 613,774 $2,572,895 $615,999
Growth Opportunities $2,798,442 $1,242,481 $810,546
Equity Index $ 56,155 $ 21,858 $ 79,617
Large Company Value $2,126,632 $1,783,768 $539,937
Asset Allocation $ 61,678 $ 42,796 $ 34,662
International Equity Index $ 176,140 $ 223,386 $120,976
Large Company Growth $ 596,397 $ 442,672 $169,455
Ultra Short-Term Income $ 0 $ 531 $ 0
Gulf South Growth $ 43,039
Value Growth $ 224,373
</TABLE>
Investment decisions for each Fund of the Trust are made independently
from those for the other Funds or any other investment company or account
managed by Banc One Advisors or the Sub-Advisor. Any such other investment
company or account may also invest in the same securities as the Trust. When a
purchase or sale of the same security is made at substantially the same time on
behalf of a given Fund and another Fund, investment company or account (or, in
the case of the International Equity Index Fund, another account), the
transaction will be averaged as to price, and available investments allocated as
to amount, in a manner which Banc One Advisors or the Sub-Advisor of the given
Fund believes to be equitable to the Fund(s) and such other investment company
or account. In some instances, this investment procedure may adversely affect
the price paid or received by a Fund or the size of the position obtained by a
Fund. To the extent permitted by law, Banc One Advisors and the Sub-Advisor may
aggregate the securities to be sold or purchased by it for a Fund with those to
be sold or purchased by it for other Funds or for other investment companies or
accounts in order to obtain best execution. As provided by the Investment
Advisory and Sub-Advisory Agreements, in making investment recommendations for
the Trust, Banc One Advisors and the Sub-Advisor will not inquire or take into
consideration whether an issuer of securities proposed for purchase or sale by
the Trust is a customer of Banc One Advisors or the Sub-Advisor or their parents
or subsidiaries or affiliates and, in dealing with its commercial customers,
Banc One Advisors and the Sub-Advisor and their respective parent, subsidiaries,
and affiliates will not inquire or take into consideration whether securities of
such customers are held by the Trust.
66
<PAGE> 323
ADMINISTRATOR
The One Group Services Company serves as Administrator (the
"Administrator") to each Fund of the Trust pursuant to a Management and
Administration Agreement with the Trust (the "Administration Agreement"). The
Board of Trustees of the Trust approved The One Group Services Company as the
sole Administrator for each Fund beginning December 1, 1995. The Administrator
assists in supervising all operations of each Fund to which it serves as
Administrator (other than those performed under the respective investment
advisory agreements and Custodian and Transfer Agency Agreements for that Fund).
Under the Administration Agreement, the Administrator has agreed to price
the portfolio securities of each Fund it serves and to compute the net asset
value and net income of such Funds on a daily basis, to maintain office
facilities for the Trust, to maintain each such Fund's financial accounts and
records, and to furnish the Trust statistical and research data, data
processing, clerical, accounting, and bookkeeping services, and certain other
services required by the Trust with respect to each such Fund. The Administrator
prepares annual and semi-annual reports to the Securities and Exchange
Commission, prepares federal and State tax returns, prepares filings with State
securities commissions, and generally assists in all aspects of the Trust's
operations other than those performed under the investment advisory agreements,
and Custodian and Transfer Agency Agreements. Under the Administration
Agreement, the Administrator may delegate all or any part of its
responsibilities thereunder.
Banc One Advisors also serves as Sub-Administrator to each Fund of the
Trust, pursuant to an agreement between the Administrator and Banc One Advisors.
Pursuant to this agreement, Banc One Advisors performs many of the
Administrator's duties, for which Banc One Advisors receives a fee paid by the
Administrator.
The Trust paid fees for administrative services to 440 Financial and to
SEI Financial Management, previous Administrators of the Trust, to The Winsbury
Company, the prior Administrator to the predecessor funds of the Large Company
Growth and Intermediate Bond Funds, and to Federated Administrative Services,
the prior Administrator to the predecessor Fund of the Kentucky Municipal Bond
Fund, for the fiscal years ended June 30, 1996, 1995, and 1994 as follows:
67
<PAGE> 324
THE ONE GROUP ADMINISTRATOR--NET
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1996
-------------------------------
THE ONE GROUP
SERVICES BANC ONE ADVISORS** 440***
FUND COMPANY NET WAIVED NET WAIVED NET WAIVED
- ---- ----------- ------ --- ------ --- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities Money Market $1,675,933 $23,824 $ 928,127 0 $ 881,386 $ 19,060
Prime Money Market $2,490,499 $ 0 $1,463,271 0 $1,611,838 $ 0
Municipal Money Market $ 504,611 $58,625 $ 340,160 0 $ 328,817 $ 82,052
Ohio Municipal Money Market $ 9,933 $87,195 $ 53,819 0 $ 22,276 $ 39,800
Income Equity $ 286,663 $ 0 $ 151,456 0 $ 136,804 $ 0
Disciplined Value $ 543,544 $ 0 $ 321,420 0 $ 357,658 $ 0
Growth Opportunities $ 511,634 $ 0 $ 301,050 0 $ 332,353 $ 0
Equity Index $ 219,301 $96,276 $ 165,797 0 $ 52,623 $119,116
Large Company Value $ 532,314 $ 0 $ 300,440 0 $ 283,851 $ 32,509
Asset Allocation $ 19,184 $48,482 $ 33,779 0 $ 22,718 $ 11,794
International Equity Index $ 307,633 $ 0 $ 171,529 0 $ 172,763 $ 0
Large Company Growth $ 778,543 $ 0 $ 441,303 0 $ 457,430 $ 0
(Sun Eagle: Equity Growth)
Income Bond $ 505,703 $ 0 $ 302,920 0 $ 343,646 $ 186
Limited Volatility Bond $ 471,594 $ 0 $ 275,961 0 $ 301,887 $ 0
Intermediate Tax-Free Bond $ 222,203 $ 0 $ 138,734 0 $ 167,244 $ 0
Municipal Income $ 210,905 $43,781 $ 142,512 0 $ 110,442 $ 43,233
Ohio Municipal Bond $ 81,876 $15,630 $ 57,825 0 $ 55,179 $ 11,740
Government Bond $ 544,937 $ 6,947 $ 297,480 0 $ 270,620 $ 12,171
Ultra Short-Term Income $ 0 $50,706 $ 28,274 $ 0 $ 35,162
Intermediate Bond (Sun Eagle:
Intermediate Fixed Income) $ 229,988 $ 0 $ 134,912 0 $ 148,161 $ 0
Treasury Only Money Market $ 113,945 $ 0 $ 179,830 0 $ 65,888 $ 0
Government Money Market $ 232,688 $ 0 $ 385,955 0 $ 153,141 $ 131
Institutional Prime Money Market NA* NA* NA NA* NA*
Treasury Money Market NA* NA* NA NA* NA*
Tax-Exempt Money Market NA* NA* NA NA* NA*
Arizona Municipal Bond NA* NA* NA NA* NA*
Kentucky Municipal Bond 38,104 $ 1,196 $ 23,883 0 $ 26,310 $ 2,256
Texas Tax-Free Bond NA* NA* NA NA* NA*
W. Virginia Municipal Bond NA* NA* NA NA* NA*
Louisiana Municipal Bond $ 86,078+ $ 0 $ 31,165+ 0 $ 0 $ 0
Value Growth $ 101,245+ $ 0 $ 36,656+ 0 $ 0 $ 0
Gulf South Growth $ 47,011+ $ 0 $ 17,021+ 0 $ 0 $ 0
Income NA* NA* NA* NA* NA* NA*
Investor Growth NA* NA* NA* NA* NA* NA*
Investor Growth & Income NA* NA* NA* NA* NA* NA*
Investor Aggressive Growth NA* NA* NA* NA* NA* NA*
Investor Conservative Growth NA* NA* NA* NA* NA* NA*
Investor Balanced NA* NA* NA* NA* NA* NA*
Investor Fixed Income NA* NA*
</TABLE>
* As of June 30, 1996, the Fund had not commenced operations.
** These are fees paid by The One Group Services Company to Banc One Advisors
pursuant to the Sub-Administration Agreement for the period from December
1, 1995 through June 30, 1996, and by 440 for the period June 30, 1995 to
December 1, 1995.
*** These are fees paid from July 1, 1995 through early November 30, 1995.
+ These fees are paid from March 26, 1996 through June 30, 1996.
68
<PAGE> 325
THE ONE GROUP ADMINISTRATOR--NET
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1995
-------------------------------
440 ADVISOR** FEDERATED
FUND NET WAIVED NET WAIVED NET WAIVED
- ---- --- ------ --- ------ --- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities Money
Market $1,731,370 $ 122,233 $176,604 $ 0 NA NA
Prime Money Market $2,897,503 $111,313 $304,170 $0 NA NA
Municipal Money Market $ 699,142 $ 92,641 $ 75,012 $0 NA NA
Ohio Municipal Money Market $ 82,050 $ 61,415 $ 11,806 $0 NA NA
Income Equity $ 308,619 $ 0 $ 27,163 $0 NA NA
Disciplined Value $ 687,537 $ 0 $ 65,713 $0 NA NA
Growth Opportunities $ 631,524 $ 0 $ 59,053 $0 NA NA
Equity Index $ 90,704 $195,567 $ 30,329 $0 NA NA
Large Company Value $ 317,839 $ 27,527 $ 48,604 $0 NA NA
Asset Allocation $ 62,570 $ 4,439 $ 6,304 $0 NA NA
International Equity Index $ 285,929 $ 0 $ 31,831 $0 NA NA
Large Company Growth $ 495,980 $ 0 $ 76,459 $0 NA NA
Income Bond $ 763,202 $ 6,504 $ 67,577 $0 NA NA
Limited Volatility Bond $ 653,915 $ 2,136 $ 60,084 $0 NA NA
Intermediate Tax-Free Bond $ 305,651 $ 0 $ 31,017 $0 NA NA
Municipal Income $ 198,808 $ 79,249 $ 28,635 $0 NA NA
Ohio Municipal Bond $ 124,734 $ 32,085 $ 13,946 $0 NA NA
Government Bond $ 414,276 $ 14,952 $ 53,984 $0 NA NA
Ultra Short-Term Income $ 68,313 $ 72,059 $ 8,546 $0 NA NA
Intermediate Bond $ 208,925 $ 0 $ 26,063 $0 NA NA
Treasury Only Money Market $ 86,438 $ 0 $ 33,470 $0 NA NA
Government Money Market $ 273,911 $ 23,414 $ 88,367 $0 NA NA
Kentucky Municipal Bond $ 24,352*** $ 1,554*** $ 6,155*** $0*** $77,852**** $0****
Institutional Prime Money Market NA* NA* NA* NA* NA NA
Treasury Money Market NA* NA* NA* NA* NA NA
Tax-Exempt Money Market NA* NA* NA* NA* NA NA
Arizona Municipal Bond NA* NA* NA* NA* NA NA
Texas Tax-Free Bond NA* NA* NA* NA* NA NA
W. Virginia Municipal Bond NA* NA* NA* NA* NA NA
Louisiana Municipal Bond $ 297,746+ $ 99,248+ NA NA NA NA
Value Growth $ 295,695+ NA+ NA NA NA NA
Gulf South Growth $ 134,419+ NA+ NA NA NA NA
Income NA* NA* NA* NA* NA NA
Investor Growth NA* NA* NA* NA* NA NA
Investor Growth & Income NA* NA* NA* NA* NA NA
Investor Aggressive Growth NA* NA* NA* NA* NA NA
Investor Conservative Growth NA* NA* NA* NA* NA NA
Investor Balanced NA* NA* NA* NA* NA NA
Investor Fixed Income NA* NA* NA* NA* NA NA
</TABLE>
* As of June 30, 1995, the Fund had not commenced operations.
** These are fees paid by 440 to Banc One Advisors pursuant to the
Sub-Administration Agreement for the period from April 1, 1995 through
June 30, 1995.
*** These fees are paid from January 20, 1995 through June 30, 1995.
**** These fees are paid from February 1, 1994 through January 19, 1995.
+ These fees were paid for fiscal year ended November 30, 1995 to Goldman
Sachs Asset Management, the Funds' prior administrator.
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<PAGE> 326
THE ONE GROUP(R) ADMINISTRATOR--NET
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1994
-------------------------------
440 SEI WINSBURY FEDERATED
--- --- -------- ---------
FUND NET WAIVED NET WAIVED *NET WAIVED NET WAIVED
- ---- --- ------ --- ------ ---- ------ --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities Money $ 784,527 $145,627 $291,772 $120,358 NA NA NA NA
Market
Prime Money Market $1,198,953 $259,937 $586,109 $267,864 NA NA NA NA
Municipal Money Market $ 297,555 $ 62,779 $114,253 $ 61,144 NA NA NA NA
Ohio Municipal Money Market $ 41,436 $ 21,037 $ 6,987 $ 19,013 NA NA NA NA
Income Equity $ 218,261 $ 8,246 $115,876 $ 21,790 NA NA NA NA
Disciplined Value $ 389,399 $ 5,841 $157,726 $ 30,050 NA NA NA NA
Growth Opportunities $ 363,523 $ 8,369 $168,296 $ 30,159 NA NA NA NA
Equity Index $ 139,191 $ 13,656 $ 40,299 $ 36,379 NA NA NA NA
Large Company Value $ 150,681 $ 1,293 $ 79,477 $ 16,782 NA NA NA NA
Asset Allocation $ 35,653 $ 8,115 $ 9,104 $ 16,053 NA NA NA NA
International Equity Index $ 116,426 $ 476 $ 39,564 $ 0 NA NA NA NA
Large Company Growth $ 73,974 $ 901 NA NA $44,593 $0 NA NA
Income Bond $ 497,328 $ 65,405 $234,878 $143,075 NA NA NA NA
Limited Volatility Bond $ 403,410 $ 59,568 $199,661 $107,428 NA NA NA NA
Intermediate Tax-Free Bond $ 169,440 $ 19,827 $ 73,417 $ 55,558 NA NA NA NA
Municipal Income $ 129,864 $ 14,224 $ 39,346 $ 18,232 NA NA NA NA
Ohio Municipal Bond $ 97,895 $ 14,926 $ 43,502 $ 26,271 NA NA NA NA
Government Bond $ 168,602 $ 6,771 $ 59,555 $ 6,230 NA NA NA NA
Ultra Short-Term Income $ 195,828 $ 15,187 $115,709 $ 29,093 NA NA NA NA
Intermediate Bond $ 55,677 $ 19,323 NA NA $48,000 $0 NA NA
Treasury Only Money Market $ 33,500 $ 35,403 $ 0 $ 18,868 NA NA NA NA
Government Money Market $ 164,560 $ 92,943 $ 2,467 $ 78,512 NA NA NA NA
Institutional Prime Money Market NA* NA* NA* NA* NA NA NA NA
Treasury Money Market NA* NA* NA NA* NA NA NA NA
Tax-Exempt Money Market NA* NA* NA* NA* NA NA NA NA
Arizona Municipal Bond NA* NA* NA* NA* NA NA NA NA
Kentucky Municipal Bond NA* NA* NA* NA* NA NA $62,930** $0**
Texas Tax-Free Bond NA* NA* NA* NA* NA NA NA NA
W. Virginia Municipal Bond NA* NA* NA* NA* NA NA NA NA
Louisiana Municipal Bond $202,083+ $10,042+ NA NA NA NA NA NA
Value Growth $ 266,463+ NA+ NA NA NA NA NA NA
Gulf South Growth $ 120,693+ NA+ NA NA NA NA NA NA
Income NA* NA* NA* NA* NA NA NA NA
Investor Growth NA* NA* NA* NA* NA NA NA NA
Investor Growth & Income NA* NA* NA* NA* NA NA NA NA
Investor Aggressive Growth NA* NA* NA* NA* NA NA NA NA
Investor Conservative Growth NA* NA* NA* NA* NA NA NA NA
Investor Balanced NA* NA* NA* NA* NA NA NA NA
Investor Fixed Income NA* NA* NA* NA* NA NA NA NA
</TABLE>
70
<PAGE> 327
* As of June 30, 1994, the Fund had not commenced operations.
** For the fiscal year ended January 31, 1994.
+ These fees were paid for fiscal year ended November 30, 1994 to Goldman
Sachs Asset Management, the Funds' prior administrator.
Unless sooner terminated, the Administration Agreement between the Trust
and The One Group Services Company will continue in effect through November 30,
1996. The Administration Agreement thereafter shall be renewed automatically for
successive one year terms, unless written notice not to renew is given by the
non-renewing party to the other party at least sixty days prior to the
expiration of the then-current term. The Administration Agreement will be
reviewed and ratified at least annually by the Trust's Board of Trustees,
provided that the Administration Agreement is also reviewed and ratified by the
majority of the Trust's Trustees who are not parties to the Administration
Agreement or interested persons (as defined in the 1940 Act) of any party to the
Administration Agreement, by vote cast in person at a meeting called for the
purpose of reviewing and ratifying the Administration Agreement. The
Administration Agreement is terminable with respect to a particular Trust only
upon mutual agreement of the parties to the Administration Agreement and for
cause (as defined in the Administration Agreement) by the party alleging cause,
on not less than sixty days' notice by the Trust's Board of Trustees or by The
One Group Services Company.
The Administration Agreement provides that the Administrator shall not be
liable for any error of judgment or mistake of law or any loss suffered by the
Trust in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith, or
negligence in the performance of its duties, or from the reckless disregard by
it of its obligations and duties thereunder.
EXPENSES
If total expenses borne by any one of the Funds in any fiscal year exceed
expense limitations imposed by applicable State securities regulations, Banc One
Advisors and the Administrator will reimburse that Fund by the amount of such
excess in proportion to their respective fees. As of the date of this
Prospectus, under the most restrictive State expense limitation applicable to
the Trust, the annual expenses of the Trust may not exceed the total of two and
one-half percent (2.5%) of the first thirty million dollars ($30,000,000) of the
Trust's average net assets, plus two percent (2.0%) of the next seventy million
dollars ($70,000,000) of the Trust's average net assets, plus one and one-half
percent (1.5%) of the remaining amount of the Trust's average net assets. Any
expense reimbursements will be estimated daily and reconciled and paid on a
monthly basis. Fees charged to customers by certain entities in connection with
investments in a Fund on a customer's behalf are not included within Fund
expenses for purposes of any such expense limitation.
DISTRIBUTOR
The One Group Services Company serves as Distributor to each Fund of the
Trust pursuant to its Distribution Agreement with the Trust (the "Distribution
Agreement"). The Board of Trustees of the Trust approved The One Group Services
Company as the sole Distributor beginning November 1, 1995. Unless otherwise
terminated, the Distribution Agreement will continue in effect until November
30, 1996 and will continue from year to year if approved at least annually (i)
by the Trust's Board of Trustees or by the vote of a majority of the outstanding
Shares of the Funds (see "ADDITIONAL INFORMATION-- Miscellaneous," in this
Statement of Additional Information) that are parties to the Distribution
Agreement, and (ii) by the vote of a majority of the Trustees of the Trust who
are not parties to the Distribution Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The agreement may be terminated in the event of its assignment, as
defined in the 1940 Act. The One Group Services Company is a broker-dealer
registered
71
<PAGE> 328
with the Securities and Exchange Commission, and is a member of the National
Association of Securities Dealers, Inc.
DISTRIBUTION PLAN
The operation and fees with respect to Class A Shares, Class B Shares,
Class C Shares, and Service Class Shares of the Trust payable under the Trust's
Distribution and Shareholder Services Plans, to which Class A Shares, Class B
Shares, Class C Shares, and Service Class Shares of each Fund of the Trust are
subject, are described in each such Fund's Prospectuses and in the Multiple
Class Plan.
The Distribution and Shareholder Services Plan with respect to Class A
Shares (the "Distribution Plan") was initially approved on July 28, 1989 by the
Trust's Board of Trustees, including a majority of the Trustees who are not
interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the Distribution Plan (the "Independent
Trustees"). The Distribution Plan originally applied to the single class of
Shares of each Fund of the Trust that existed prior to the offering of the
Funds' Shares as five separate classes. An amendment to the Distribution Plan
was approved by the Independent Trustees on October 21, 1991, and became
effective on February 7, 1992. Such amendment limited fees under the
Distribution Plan only to the Class A Shares of each Fund. The Distribution Plan
was amended again on February 11, 1993 in order to make Retirement Class Shares
(now the Service Class Shares) subject to distribution fees. The Distribution
Plan was further amended on February 29, 1996, to eliminate certain "defensive"
provisions of the Distribution Plan. A Distribution and Shareholder Services
Plan (the "CDSC Plan") for Class B and Class C Shares was initially approved on
August 12, 1993 by the Independent Trustees. The CDSC Distribution Plan was
re-executed on December 13, 1995 and amended on February 20, 1997. Prior to
February 7, 1992, distribution fees were waived with respect to every Fund of
the Trust except the U.S. Treasury Securities Money Market Fund and the Prime
Money Market Fund.
During the fiscal year ending June 30, 1996, the distribution fees paid by
the Class A, Class B and Service Class Shares (formerly Retirement Class Shares)
of the Trust to 440 Financial Distributors, the previous Distributor to the
Trust and to Federated Administrative Services, the distributor to the
predecessor Fund of the Kentucky Municipal Bond Fund, the Trademark Kentucky
Municipal Bond Fund, were as follows:
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<PAGE> 329
THE ONE GROUP DISTRIBUTION FEES PAID FOR THE FISCAL YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
SERVICE
FUND DISTRIBUTOR CLASS A CLASS B CLASS
- ---- ----------- ------- ------- -----
<S> <C> <C> <C> <C>
U.S. Treasury Securities Money Market 440 Finl: $ 95,887 NA 0
One Group Ser. $158,356 NA 0
Prime Money Market 440 Finl: $252,965 NA 0
One Group Ser. $436,739 NA 0
Municipal Money Market 440 Finl: $ 67,967 NA NA
One Group Ser. $ 92,604 NA 0
Ohio Municipal Money Market 440 Finl: $ 43,895 NA NA
One Group Ser. $ 70,604 NA 0
Income Equity 440 Finl: $ 17,079 $ 23,062 NA
One Group Ser. $ 45,011 $ 99,172
Disciplined Value 440 Finl: $ 15,357 $ 50,493 NA
One Group Ser. $ 27,687 $ 85,251
Growth Opportunities 440 Finl: $ 15,247 $ 15,986 NA
One Group Ser. $ 30,939 $ 49,433
Equity Index 440 Finl: $ 6,395 $ 14,481 NA
One Group Ser. $ 28,845 $114,425
Large Company Value 440 Finl: $ 4,772 $ 5,565 NA
One Group Ser. $ 12,163 $ 17,024
Asset Allocation 440 Finl: $ 6,741 $ 17,781 NA
One Group Ser. $ 19,297 $ 67,442
International Equity Index 440 Finl: $ 5,867 $ 15,916 NA
One Group Ser. $ 12,143 $ 28,121
Large Company Growth 440 Finl: $ 39,251 $ 55,576 NA
One Group Ser. $ 89,017 $214,351
Income Bond 440 Finl: $ 7,647 $ 9,108 NA
One Group Ser. $ 13,300 $ 23,100
Limited Volatility Bond 440 Finl: $ 13,223 $ 9,149 NA
One Group Ser. $ 24,663 $ 19,443
Intermediate Tax-Free Bond 440 Finl: $ 7,548 $ 5,052 NA
One Group Ser. $ 10,539 $ 9,597
Municipal Income 440 Finl: $ 15,155 $ 36,106 NA
One Group Ser. $ 30,695 $ 89,152
Ohio Municipal Bond 440 Finl: $ 13,084 $ 14,525 NA
One Group Ser. $ 20,939 $ 35,444
Government Bond 440 Finl: $ 9,612 $ 12,977 NA
One Group Ser. $ 35,311 $ 40,586
</TABLE>
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<PAGE> 330
<TABLE>
<CAPTION>
SERVICE
FUND DISTRIBUTOR CLASS A CLASS B CLASS
- ---- ----------- ------- ------- -----
<S> <C> <C> <C> <C>
Ultra Short-Term Income 440 Finl: $ 2,308 $ 521
One Group Ser. $ 3,316 $ 3,369
Intermediate Bond 440 Finl: $ 6,802 $ 3,548 NA
One Group Ser. $ 17,159 $ 19,147
Treasury Only Money Market 440 Finl: $ 0 $ 0 NA
One Group Ser. $ 0 $ 0
Government Money Market 440 Finl: $ 0 $ 0 NA
One Group Ser. $ 0 $ 0
Kentucky Municipal Bond Federated:**** $ 0 $ 0
440 Finl:** $ 9,180 $ 642 NA
One Group Ser. $ 12,332 $ 4,154
Treasury Money Market 440 Finl: NA* NA* NA*
One Group Ser.
Tax-Exempt Money Market 440 Finl: NA* NA* NA*
One Group Ser.
Arizona Municipal Bond 440 Finl: NA* NA* NA*
One Group Ser.
Texas Tax-Free Bond 440 Finl: NA*** NA*** NA***
One Group Ser.
W. Virginia Municipal Bond 440 Finl: NA*** NA*** NA***
One Group Ser.
Louisiana Municipal Bond One Group Ser. 37,113++ $ 7,304++ NA++
Goldman 52,494++ 8,200++ NA++
Value Growth One Group Ser. 23,749++ $ 11,216++ NA++
Goldman 33,592++ 11,332++ NA++
Gulf South Growth One Group Ser. 12,222++ $ 6,378++ NA++
Goldman 17,228++ 6,444++ NA++
Income One Group Ser. NA*** NA*** NA***
Investor Growth One Group Ser. NA* NA* NA*
Investor Growth & Income One Group Ser. NA* NA* NA*
Investor Aggressive Growth One Group Ser. NA* NA* NA*
Investor Conservative Growth One Group Ser. NA* NA* NA*
Investor Balanced One Group Ser. NA* NA* NA*
Investor Fixed Income One Group Ser. NA* NA* NA*
</TABLE>
* These fees had not commenced operations as of June 30, 1996.
** These are fees paid from January 20, 1995 through June 30, 1995.
**** These are fees paid from February 1, 1994 through January 19, 1995.
++ These fees were paid from March 26, 1996 to June 30, 1996.
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<PAGE> 331
In accordance with Rule 12b-1 under the 1940 Act, the Distribution Plan
and CDSC Plan may be terminated with respect to the Class A Shares, Class B
Shares, Class C Shares or Service Class Shares of any Fund by a vote of a
majority of the Independent Trustees, or by a vote of a majority of the
outstanding Class A Shares, Class B Shares, Class C Shares or Service Class
Shares, respectively, of that Fund. The Distribution Plan and CDSC Plan may be
amended by vote of the Trust's Board of Trustees, including a majority of the
Independent Trustees, cast in person at a meeting called for such purpose,
except that any change in the Distribution Plan or Class B Distribution Plan
that would materially increase the distribution fee with respect to the Class A
Shares, Class B Shares, Class C Shares or Service Class Shares of a Fund
requires the approval of that Fund's Class A, Class B, Class C or Service Class
Shareholders, respectively. The Trust's Board of Trustees will review on a
quarterly and annual basis written reports of the amounts received and expended
under the Distribution Plan (including amounts expended by the Distributor to
Participating Organizations pursuant to the Servicing Agreements entered into
under the Distribution Plan) indicating the purposes for which such expenditures
were made.
CUSTODIAN AND TRANSFER AGENT
Cash and securities owned by the Funds of the Trust are held by State
Street Bank and Trust Company ("State Street") as Custodian. State Street serves
the respective Funds as Custodian pursuant to a Custodian Agreement with the
Trust (the "Custodian Agreement"). Under the Custodian Agreement, State Street
(i) maintains a separate account or accounts in the name of each Fund; (ii)
makes receipts and disbursements of money on behalf of each Fund; (iii) collects
and receives all income and other payments and distributions on account of the
Funds' portfolio securities; (iv) responds to correspondence from security
brokers and others relating to its duties; and (v) makes periodic reports to the
Trust's Board of Trustees concerning the Trust's operations. State Street may,
at its own expense, open and maintain a sub-custody account or accounts on
behalf of the Trust, provided that State Street shall remain liable for the
performance of all of its duties under the Custodian Agreement.
Bank One Trust Company, N.A. serves as Sub-Custodian in connection
with the Trust's securities lending activities, pursuant to an agreement between
State Street and Bank One Trust Company. Bank One Trust Company receives a fee
paid by the Trust.
Rules adopted under the 1940 Act permit the Trust to maintain its
securities and cash in the custody of certain eligible banks and securities
depositories. The Trust intends to select foreign custodians or sub-custodians
to maintain foreign securities of the International Equity Index Fund pursuant
to such rules, following a consideration of a number of factors, including, but
not limited to, the reliability and financial stability of the institution; the
ability of the institution to perform custodial services for the Trust; the
reputation of the institution in its national market; the political and economic
stability of the country in which the institution is located; and the risks of
potential nationalization or expropriation of Trust assets. In addition, the
1940 Act requires that foreign bank sub-custodians, among other things have
Shareholder equity in excess of $200 million, have no lien on the Trust's assets
and maintain adequate and accessible records.
State Street Bank & Trust ("State Street") serves as Transfer Agent and
Dividend Disbursing Agent for each Fund pursuant to Transfer Agency Agreements
with the Trust (the "Transfer Agency Agreement"). Under the Transfer Agency
Agreements, State Street has agreed (i) to issue and redeem Shares of the Trust;
(ii) to address and mail all communications by the Trust to its Shareholders,
including reports to Shareholders, dividend and distribution notices, and proxy
material for its meetings of Shareholders; (iii) to respond to correspondence or
inquiries by Shareholders and others relating to its duties; (iv) to maintain
Shareholder accounts and certain sub-accounts; and (v) to make periodic reports
to the Trust's Board of Trustees concerning the Trust's operations.
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<PAGE> 332
EXPERTS
The financial statements of the Trust for the fiscal year ended June 30,
1996 appearing in this Statement of Additional Information have been audited by
Coopers & Lybrand L.L.P., independent accountants, as set forth in their reports
appearing elsewhere herein, and are included in reliance upon such reports and
on the authority of such firm as experts in auditing and accounting.
The financial statements for the predecessor funds of the Intermediate
Bond Fund and Large Company Growth Fund, Sun Eagle Intermediate Fixed Income
Fund and Sun Eagle Equity Growth Fund, respectively, for the fiscal year ended
June 30, 1993 and for the period from February 28, 1992 (commencement of
operations of each Fund) to June 30, 1992 appearing in this Statement of
Additional Information have been audited by KPMG Peat Marwick LLP, independent
accountants, and are included in reliance upon the authority of such firm as
experts in auditing and accounting.
The financial statements for the predecessor Fund of the Kentucky
Municipal Bond Fund, the Trademark Kentucky Municipal Bond Fund, for the period
from February 1, 1994 to January 19, 1995, and for the period from March 12,
1993 (commencement of operations) to January 31, 1994 appearing in this
Statement of Additional Information have been audited by KPMG Peat Marwick LLP,
independent accountants, and are included in reliance upon the authority of such
firm as experts in auditing and accounting.
The financial statements for the predecessor funds of the Louisiana
Municipal Bond Fund, the Value Growth Fund, and the Gulf South Growth Fund, the
Paragon Louisiana Tax-Free Fund, the Paragon Value Growth Fund and the Paragon
Gulf South Growth Fund, for the fiscal year ended November 30, 1995 appearing in
this Statement of Additional Information have been audited by Price Waterhouse
LLP, independent accountants, and are included in reliance upon such reports and
on the authority of such firm as experts in auditing and accounting.
The law firm of Ropes & Gray, One Franklin Square, 1301 K Street, N.W.,
Suite 800 East, Washington, D.C. 20005 is counsel to the Trust. From time to
time, Ropes & Gray have rendered legal services to Bank One, Milwaukee and Bank
One, Wisconsin Trust Company, NA.
ADDITIONAL INFORMATION
DESCRIPTION OF SHARES
The Trust is a Massachusetts Business Trust. The Trust's Declaration of
Trust was filed with the Secretary of State of the Commonwealth of Massachusetts
on May 23, 1985 and authorizes the Board of Trustees to issue an unlimited
number of Shares, which are units of beneficial interest, without par value. The
Trust's Declaration of Trust authorizes the Board of Trustees to establish one
or more series of Shares of the Trust, and to classify or reclassify any series
into one or more classes by setting or changing in any one or more respects the
preferences, designations, conversion, or other rights, restrictions, or
limitations as to dividends, conditions of redemption, qualifications, or other
terms applicable to the Shares of such class, subject to those matters expressly
provided for in the Declaration of Trust, as amended, with respect to the Shares
of each series of the Trust. The Trust presently includes 40 series of Shares,
which represent interests in the Prime Money Market Fund, the U.S. Treasury
Securities Money Market Fund, the Municipal Money Market Fund, the Ohio
Municipal Money Market Fund, the Income Equity Fund, the Disciplined Value Fund,
the Growth Opportunities Fund, the Value Growth Fund, the Gulf South Growth
Fund, the Large Company Value Fund, the Large Company Growth Fund, the
International Equity Index Fund, the Equity Index Fund, the Asset Allocation
Fund, the Income Bond Fund, the Limited Volatility Bond Fund, the Intermediate
Bond Fund, the Government Bond Fund, the Ultra Short-Term Income Fund, the
Income Fund, the Investor Growth Fund, the Investor Growth & Income Fund, the
Investor Aggressive Growth Fund, the Investor Fixed Income Fund, the Investor
Conservative Growth Fund, the Investor Balanced Fund, the Municipal Income Fund,
the Intermediate Tax-Free Bond Fund, the Ohio Municipal Bond Fund, the Texas
76
<PAGE> 333
Tax-Free Bond Fund, the West Virginia Municipal Bond Fund, the Kentucky
Municipal Bond Fund, the Louisiana Municipal Bond Fund, the Arizona Municipal
Bond Fund, the Treasury Money Market Fund, the Treasury Only Money Market Fund,
the Government Money Market Fund, the Tax Exempt Money Market Fund, the
Institutional Prime Money Market Fund and the Treasury and Agency Fund. The
Funds of the Trust (other than the Institutional Money Market Funds, the U.S.
Treasury Securities Money Market Fund, the Prime Money Market Fund and the Funds
of Funds) offer Shares in three separate classes: Fiduciary Shares, Class A
Shares and Class B Shares. The U.S. Treasury Securities Money Market Fund and
the Prime Money Market Fund offer Fiduciary Shares, Class A Shares and Service
Class Shares. The Funds of Funds offer Fiduciary Class Shares, Class A Shares,
Class B Shares, and Class C Shares. See the relevant Prospectus for those Funds
for more details.
Shares have no subscription or preemptive rights and only such conversion
or exchange rights as the Board may grant in its discretion. When issued for
payment as described in the Prospectus and this Statement of Additional
Information, the Trust's Shares will be fully paid and non-assessable. In the
event of a liquidation or dissolution of the Trust, Shares of a Fund are
entitled to receive the assets available for distribution belonging to the Fund,
and a proportionate distribution, based upon the relative asset values of the
respective Funds, of any general assets not belonging to any particular Fund
which are available for distribution.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Trust shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding Shares of
each Fund affected by the matter. For purposes of determining whether the
approval of a majority of the outstanding Shares of a Fund will be required in
connection with a matter, a Fund will be deemed to be affected by a matter
unless it is clear that the interests of each Fund in the matter are identical,
or that the matter does not affect any interest of the Fund. Under Rule 18f-2,
the approval of an investment advisory agreement or any change in investment
policy would be effectively acted upon with respect to a Fund only if approved
by a majority of the outstanding Shares of such Fund. However, Rule 18f-2 also
provides that the ratification of independent public accountants, the approval
of principal underwriting contracts, and the election of Trustees may be
effectively acted upon by Shareholders of the Trust voting without regard to
series.
Class A Shares, Class B Shares, Class C Shares and Service Class Shares of
a Fund have exclusive voting rights with respect to matters pertaining to the
Fund's Distribution Plan.
SHAREHOLDER AND TRUSTEE LIABILITY
Under Massachusetts law, holders of units of beneficial interest in a
business trust may, under certain circumstances, be held personally liable as
partners for the obligations of the trust. However, the Trust's Declaration of
Trust provides that Shareholders shall not be subject to any personal liability
for the obligations of the Trust, and that every written agreement, obligation,
instrument, or undertaking made by the Trust shall contain a provision to the
effect that the Shareholders are not personally liable thereunder. The
Declaration of Trust provides for indemnification out of the trust property of
any Shareholder held personally liable solely by reason of his being or having
been a Shareholder. The Declaration of Trust also provides that the Trust shall,
upon request, assume the defense of any claim made against any Shareholder for
any act or obligation of the Trust, and shall satisfy any judgment thereon.
Thus, the risk of a Shareholder incurring financial loss on account of
Shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
The Declaration of Trust states further that no Trustee, officer, or agent
of the Trust shall be personally liable in connection with the administration or
preservation of the assets of the trust or the conduct of the Trust's business;
nor shall any Trustee, officer, or agent be personally liable to any person for
any action or failure
77
<PAGE> 334
to act except for his own bad faith, willful misfeasance, gross negligence, or
reckless disregard of his duties. The Declaration of Trust also provides that
all persons having any claim against the Trustees or the Trust shall look solely
to the assets of the trust for payment.
CALCULATION OF PERFORMANCE DATA
Each Money Market Fund and the Treasury Only and Government Money Market
Funds' yield was computed with respect to each class of Shares by determining
the percentage net change, excluding capital changes, in the value of an
investment in one Share of the particular class of the Fund over the base
period, and multiplying the net change by 365/7 (or approximately 52 weeks). The
effective yield of each class of each Fund represents a compounding of the yield
by adding 1 to the number representing the percentage change in value of the
investment during the base period, raising that sum to a power equal to 365/7,
and subtracting 1 from the result. No performance data is available with respect
to the Tax Exempt Money Market, Treasury Money Market and Institutional Prime
Money Market Funds because those Funds had not commenced operations as of June
30, 1995.
The tax equivalent yields for the classes of the Municipal Money Market,
Ohio Municipal Money Market, and Tax Exempt Money Market Funds are computed by
dividing that portion of the Fund's yield (with respect to a particular class)
which is tax-exempt by 1 minus a stated income tax rate and adding the product
to that portion, if any, of the yield of the Fund (with respect to a particular
class) that is not tax-exempt. The tax equivalent yields for the classes of the
Municipal Money Market Fund contained in the preceding paragraph were computed
based on an assumed effective federal income tax rate of 39.6%. No such data was
provided for the Tax Exempt Money Market Fund because it had not commenced
operations as of June 30, 1996. The tax equivalent effective yield for the
classes of the Municipal Money Market Fund, Ohio Municipal Money Market Fund,
and Tax Exempt Money Market Funds are computed by dividing that portion of the
effective yield of the Fund (with respect to a particular class) which is
tax-exempt by 1 minus a stated income tax rate and adding the product to that
portion, if any, of the effective yield of the Fund (with respect to a
particular class) that is not tax-exempt.
Performance information showing a Fund's total return and/or 30-day yield
with respect to a particular class may be presented from time to time in
advertising and sales literature regarding the Equity Funds, the Bond Funds, the
Funds of Funds, and the Municipal Bond Funds. A 30-day yield is calculated by
dividing the net investment income per-share earned during the 30-day base
period by the maximum offering price per share on the last day of the period,
according to the following formula:
a-b
---
30-Day Yield = 2[( cd +1)6-1]
In the above formula, "a" represents dividends and interest earned by a
particular class during the 30-day base period; "b" represents expenses accrued
to a particular class for the 30-day base period (net of reimbursements); "c"
represents the average daily number of Shares of a particular class outstanding
during the 30-day base period that were entitled to receive dividends; and "d"
represents the maximum offering price per share of a particular class on the
last day of the 30-day base period.
From time to time the tax equivalent 30-day yield of a particular class of
a Municipal Bond Fund may be presented in advertising and sales literature. The
tax equivalent 30-day yield will be computed by dividing that portion of a
Fund's yield (respecting a particular class) which is tax-exempt by 1 minus a
stated income tax rate and adding the product to that portion, if any, of the
yield of the Fund (respecting a particular class) that is not tax-exempt. The
tax equivalent 30-day yields for a Municipal Bond Fund (respecting a particular
class) will, unless otherwise noted, be computed based on an assumed effective
federal income tax rate of 31%. No tax
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<PAGE> 335
equivalent 30-day yield information is available for the West Virginia Municipal
Bond, Texas Tax-Free Bond and Arizona Municipal Bond Funds.
A Fund's respective cumulative total return and average annual total
return was determined by calculating the change in the value of a hypothetical
$1,000 investment in a particular class of the Fund for each of the periods
shown. Cumulative total return for a particular class of a Fund is computed by
determining the rate of return over the applicable period that would equate the
initial amount invested to the ending redeemable value of the investment. The
cumulative return is calculated as the total dollar increase or decrease in the
value of an account assuming reinvestment of all distributions divided by the
original initial investment. The average annual return for a particular class of
a Fund is computed by determining the average annual compounded rate of return
over the applicable period that would equate the initial amount invested to the
ending redeemable value of the investment. The ending redeemable value includes
dividends and capital gain distributions reinvested at net asset value. The
resulting percentages indicated the positive or negative investment results that
an investor would have experienced from changes in share price and reinvestment
of dividends and capital gains distributions.
Performance information showing a Fund's and/or particular Class's
distribution rate may be presented from time to time in advertising and sales
literature regarding the Bond Funds and Equity Funds. The distribution rate is
calculated as follows:
distribution yield = a/(b) x 365
-----------
c
In the formula, "a" represents dividends distributed by a particular class
during that period; "b" represents month end offer price or net asset value for
a particular class; "c" represents the number of days in the period being
calculated. "365" is the number of days in a year, used to annualize the
distribution yield.
Performance will fluctuate from time to time and is not necessarily
representative of future results. Accordingly, a Fund's performance may not
provide for comparison with bank deposits or other investments that pay a fixed
return for a stated period of time. Performance is a function of a Fund's
quality, composition, and maturity, as well as expenses allocated to the Fund.
Fees imposed upon customer accounts at a bank, with regard to Fiduciary Class
Shares and Service Class Shares, or a Participating Organization, with regard to
Class A and Class B Shares, will reduce a Fund's effective yield to customers.
Performance data for the Funds through June 30, 1996 (calculated as described
above) is as follows:
TAX-EQUIVALENT YIELD
<TABLE>
<CAPTION>
FIDUCIARY CLASS A
--------- -------
7 DAY 7 DAY
YIELD 28% TAX 39.6% TAX YIELD 28% TAX 39.6% TAX
----- ------- --------- ----- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Municipal Money 3.00% 4.17% 4.97% 2.75% 3.82% 4.55%
Market
Ohio Municipal
Money Market 3.00% 4.19% 5.00% 2.77% 3.85% 4.59%
</TABLE>
THE MONEY MARKET AND INSTITUTIONAL MONEY MARKET FUNDS may quote actual total
return performance in advertising and other types of literature compared to
indices or averages of alternative financial products available to prospective
investors. The performance comparisons may include the average return of various
bank instruments, some of which may carry certain return guarantees offered by
leading banks and thrifts, as monitored by the BANK RATE MONITOR, and those of
corporate and government security price indices of various durations prepared by
Shearson Lehman Brothers, Salomon Brothers, Inc. and the IBC/Donoghue
organization. These indices are not managed for any investment goals.
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<PAGE> 336
The Money Market and Institutional Money Market Funds may also use
comparative performance information computed by and available from certain
industry and general market research and publications, such as Lipper Analytical
Services, Inc.
Statistical and performance information compiled and maintained by CDA
Technologies, Inc. and Interactive Data Corporation may also be used. CDA is a
performance evaluation service that maintains a statistical data base of
performance, as reported by a diverse universe of independently-managed mutual
funds. Interactive Data Corporation is a statistical access service that
maintains a data base of various industry indicators, such as historical and
current price/earning information and individual stock and fixed income price
and return information.
Current interest rate and yield information on government debt obligations
of various durations, as reported weekly by the Federal Reserve (Bulletin H.
15), may also be used. Also current rate information on municipal debt
obligations of various durations, as reported daily by the Bond Buyer, may also
be used. The BOND BUYER is published daily and is an industry-accepted source
for current municipal bond market information.
Comparative information on the Consumer Price Index may also be included.
This Index, as prepared by the U.S. Bureau of Labor Statistics, is the most
commonly used measure of inflation. It indicates the cost fluctuations of a
representative group of consumer goods. It does not represent a return on
investment.
THE EQUITY, BOND AND MUNICIPAL BOND FUNDS AND THE FUNDS OF FUNDS may quote
actual total return performance from time to time in advertising and other types
of literature compared to results reported by the Dow Jones Industrial Average.
The Dow Jones Industrial Average is an industry-accepted unmanaged index
of generally conservative securities used for measuring general market
performance. The performance reported will reflect the reinvestment of all
distributions on a quarterly basis and market price fluctuations. The index does
not take into account any brokerage commissions or other fees. Comparative
information on the Consumer Price Index may also be included.
The Equity Funds, the Bond Funds, the Municipal Bond Funds and the Funds
of Funds may also promote the yield and/or total return performance and use
comparative performance information computed by and available from certain
industry and general market research and publications, such as Lipper Analytical
Services, Inc.; they may also use indices such as the Standard & Poor's 400
Composite Stock Index, the Standard & Poor's 500 Composite Stock Index, the
Standard & Poor's 600 Composite Stock Index, the Russell 2000, or the Morgan
Stanley International European, Asian and Far East Gross Domestic Product Index
for performance comparison. Statistical and performance information compiled and
maintained by CDA Technologies, Inc. and Interactive Data Corporation may also
be used.
THE BOND FUNDS, THE FUNDS OF FUNDS AND THE ASSET ALLOCATION FUND may quote
actual yield and/or total return performance in advertising and other types of
literature compared to indices or averages of alternative financial products
available to prospective investors. The performance comparisons may include the
average return of various bank instruments, some of which may carry certain
return guarantees offered by leading banks and thrifts as monitored by BANK RATE
MONITOR, and those of corporate bond and government security price indices of
various durations. Comparative information on the Consumer Price Index may also
be included.
The Bond Funds, the Funds of Funds and the Asset Allocation Fund may also
use comparative performance information computed by and available from certain
industry and general market research and publications, as well as statistical
and performance information, compiled and maintained by CDA Technologies, Inc.
and Interactive Data Corporation.
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<PAGE> 337
The Bond Funds, the Funds of Funds and the Asset Allocation Fund may also
use current interest rate and yield information on government debt obligations
of various durations, as reported weekly by the Federal Reserve (Bulletin H.
15). In addition, current rate information on municipal debt obligations of
various durations, as reported daily by the Bond Buyer, may also be used.
MISCELLANEOUS
The Trust is not required to hold a meeting of Shareholders for the
purpose of electing Trustees except that (i) the Trust is required to hold a
Shareholders' meeting for the election of Trustees at such time as less than a
majority of the Trustees holding office have been elected by Shareholders and
(ii) if, as a result of a vacancy on the Board of Trustees, less than two-thirds
of the Trustees holding office have been elected by the Shareholders, that
vacancy may only be filled by a vote of the Shareholders. In addition, Trustees
may be removed from office by a written consent signed by the holders of Shares
representing two-thirds of the outstanding Shares of the Trust at a meeting duly
called for the purpose, which meeting shall be held upon the written request of
the holders of Shares representing not less than 20% of the outstanding Shares
of the Trust. Except as set forth above, the Trustees may continue to hold
office and may appoint successor Trustees.
As used in the Trust's Prospectuses and in this Statement of Additional
Information, "assets belonging to a Fund" means the consideration received by
the Trust upon the issuance or sale of Shares in that Fund, together with all
income, earnings, profits, and proceeds derived from the investment thereof,
including any proceeds from the sale, exchange, or liquidation of such
investments, and any funds or payments derived from any reinvestment of such
proceeds, and any general assets of the Trust not readily identified as
belonging to a particular Fund that are allocated to that Fund by the Trust's
Board of Trustees. The Board of Trustees may allocate such general assets in any
manner it deems fair and equitable. It is anticipated that the factor that will
be used by the Board of Trustees in making allocations of general assets to
particular Funds will be the relative net asset values of the respective Funds
at the time of allocation. Assets belonging to a particular Fund are charged
with the direct liabilities and expenses in respect of that Fund, and with a
share of the general liabilities and expenses of the Trust not readily
identified as belonging to a particular Fund that are allocated to that Fund in
proportion to the relative net asset values of the respective Funds at the time
of allocation. The timing of allocations of general assets and general
liabilities and expenses of the Trust to particular Funds will be determined by
the Board of Trustees of the Trust and will be in accordance with generally
accepted accounting principles. Determinations by the Board of Trustees of the
Trust as to the timing of the allocation of general liabilities and expenses and
as to the timing and allocable portion of any general assets with respect to a
particular Fund are conclusive. For information regarding the allocations of
Class Expenses to particular classes of a Fund, see the respective Prospectus of
the Fund under "MANAGEMENT-Expenses."
As used in the Trust's Prospectuses and in this Statement of Additional
Information, a "vote of a majority of the outstanding Shares" of the Trust, a
particular Fund, or a particular class of Shares of a Fund, means the
affirmative vote of the lesser of (a) more than 50% of the outstanding Shares of
the Trust, such Fund, or such class of Shares of such Fund, or (b) 67% or more
of the Shares of the Trust, such Fund, or such class of Shares of such Fund
present at a meeting at which the holders of more than 50% of the outstanding
Shares of the Trust, such Fund, or such class of Shares of such Fund are
represented in person or by proxy.
The Trust is registered with the Securities and Exchange Commission as a
management investment company. Such registration does not involve supervision by
the Commission of the management or policies of the Trust.
The Prospectus and this Statement of Additional Information omit certain
of the information contained in the Registration Statement filed with the
Securities and
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<PAGE> 338
Exchange Commission. Copies of such information may be obtained from the
Commission upon payment of the prescribed fee.
The Prospectus and this Statement of Additional Information are not an
offering of the securities herein described in any State in which such offering
may not lawfully be made. No salesman, dealer, or other person is authorized to
give any information or make any representation other than those contained in
the Prospectus and Statement of Additional Information.
As of April 9, 1997, BANC ONE CORPORATION, 100 East Broad Street,
Columbus, Ohio 43271-0152 (an Ohio Corporation) through Bank Subsidiaries,
acting on behalf of their underlying accounts, held of record substantially all
of the Fiduciary Class Shares of the Trust, and possessed voting or investment
power as follows:
PERCENT OF
BENEFICIAL
FUND OWNERSHIP
Large Company Growth Fund 97.64%
Disciplined Value Fund 97.13%
Growth Opportunities Fund 96.96%
Income Bond Fund 97.15%
Intermediate Tax-Free Bond Fund 96.83%
Prime Money Market Fund 58.50%
U.S. Treasury Securities Money Market Fund 20.46%
Municipal Money Market Fund 81.42%
Income Equity Fund 97.60%
Equity Index Fund 95.84%
Large Company Value Fund 97.19%
Ohio Municipal Bond Fund 92.25%
Limited Volatility Bond Fund 95.42%
International Equity Fund 97.33%
Asset Allocation Fund 97.37%
Ohio Municipal Money Market Fund 79.97%
Municipal Income 97.41%
Kentucky Municipal Bond Fund 98.45%
Government Bond Fund 96.30%
Ultra Short-Term Income Fund 95.59%
Louisiana Municipal Bond Fund 95.58%
Value Growth Fund 95.77%
Gulf South Growth Fund 97.32%
Intermediate Bond Fund 97.00%
Arizona Municipal Bond Fund 91.86%
West Virginia Municipal Bond Fund 99.44%
Investor Growth Fund 90.26%
Investor Growth & Income Fund 93.28%
Investor Balanced Fund 96.94%
Investor Conservative Growth Fund 98.31%
Treasury Only Money Market Fund 33.47%
Government Money Market Fund 25.97%
As a result, BANC ONE CORPORATION may be deemed to be a "controlling person" of
the Fiduciary Class Shares of each of the aforementioned Funds under the
Investment Company Act of 1940.
In addition, as of April 9, 1997, the following persons were the beneficial
owners of more than 25% of the outstanding Shares of the following class of
Shares of the following Funds:
82
<PAGE> 339
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
State Street Bank & Trust Co. Arizona Municipal Bond Fund 49.87% Record
Cust for the IRA of Class A
Daniel Demoret
RR 1 Box 37
Williams, AZ 86046
State Street Bank & Trust Co. Arizona Municipal 49.87% Record
Cust for the IRA of Bond Fund
Cynthia L. Demoret Class A
RR 1 Box 37
Williams, AZ 86046
The One Group Services Company Arizona Municipal 100.00% Record
Fund Administration Bond Fund
3435 Stelzer Rd. Class B
Columbus, Ohio 43219-6004
Clark & Co. Arizona Municipal Bond Fund 98.93% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Clark & Co. Asset Allocation Fund 53.11% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Asset Allocation Fund 33.16% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Strafe & Co. Disciplined Value 54.71% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Disciplined Value 39.15% Record
Database 2-Attn: One Group/Cash Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Equity Index Fund 70.74% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Banc One Securities Savings Plan Equity Index Fund 31.15% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Government Bond Fund 68.10% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Government Bond Fund 26.34% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Clark & Co. Government Money Market Fund 27.89% Record
Database 2 - Attn: One Group/Cash Mgmt
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
</TABLE>
83
<PAGE> 340
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Government Money Market Fund 41.69% Record
Bank One Trust Co.
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Strafe & Co./Cash Div. Growth Opportunities Fund 51.15% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds 0393
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Growth Opportunities Fund 37.56% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Gulf South Growth Fund 90.91% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Strafe & Co. Income Bond Fund 64.24% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Income Bond Fund 29.30% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Income Equity Fund 58.99% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Income Equity Fund 36.04% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Clark & Co. Intermediate Bond Fund 50.66% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Intermediate Bond Fund 45.77% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, OH 43215-3607
Clark & Co. Intermediate Tax-Free Bond Fund 52.51% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
</TABLE>
84
<PAGE> 341
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Intermediate Tax-Free Bond Fund 47.10% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Strafe & Co. International Equity Index Fund 58.27% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. International Equity Index Fund 36.65% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Investor Balanced Fund 44.34% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, OH 43215-3607
Clark & Co. Investor Balanced Fund 32.73% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, OH 43081-2874
Dean Witter for the Benefit of Investor Conservative Growth Fund 20.82% Record
James W. Blair Class A
95 Elizabeth Street
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. Investor Conservative Growth Fund 70.87% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, OH 43215-3607
Young J. Lee, M.D., SERP Investor Conservative 59.85% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, OH 43215-3607
Strafe & Co. Investor Growth Fund 53.38% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, OH 43215-3607
Virginia R. Corrin Investor Growth Fund 25.83% Beneficial
Strafe & Co. Fiduciary
100 E. Broad Street
Columbus, OH 43215-3607
Clark & Co. Investor Growth Fund 36.47% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Dean Witter for the Benefit of Investor Growth & Income Fund 30.80% Record
Superior Carpet Installers Inc. Class A
1027 E. Georgia
Indianapolis, IN 46202-3925
</TABLE>
85
<PAGE> 342
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Investor Growth & Income Fund 73.52% Record
Bank One Trust Co. Fiduciary
Attn: Mutual funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Strafe & Co. Kentucky Municipal 99.72% Record
Attn: Mutual Funds 0393 Bond Fund
100 E. Broad Street Fiduciary
Westerville, Ohio 43215-3607
Strafe & Co. Large Company Growth Fund 59.54% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Large Company Growth Fund 34.71% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Large Company 66.68% Record
Attn: Mutual Funds 0393 Value Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Large Company 26.90% Record
Database 2 - Attn: One Group/Cash Mgmt Value Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Limited Volatility Bond Fund 57.97% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Limited Volatility Bond Fund 36.09% Record
Database 2 - Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Louisiana Municipal Bond Fund 100.00% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Municipal Income Fund 50.37% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Municipal Income Fund 48.56% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Strafe & Co. (D) Municipal Money Market Fund 60.94% Record
Bank One Ohio Trust Co., NA Fiduciary
Department 0393 S.T.I.F
Columbus, Ohio 43271
</TABLE>
86
<PAGE> 343
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Municipal Money Market Fund 36.14% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Ohio Municipal Bond 98.90% Record
Attn: Mutual Funds 0393 Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Strafe & Co. Ohio Municipal Money 97.94% Record
Bank One Trust Co. Market Fund
Attn: Mutual Funds Fiduciary
100 E. Broad St.
Columbus, Ohio 43215-3607
Strafe & Co. Prime Money Market Fund 53.04% Record
Bank One Ohio Trust Co., NA Fiduciary
Department 0393 S.T.I.F.
Columbus, Ohio 43271
Clark & Co. Prime Money Market Fund 37.85% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
State Street Bank & Trust Co. Treasury & Agency 31.13% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class A
North Quincy, MA 02171-2119
Boston Financial Data Services Treasury & Agency Fund 31.13% Record
The One Group Family of Funds Class A
2 Heritage Drive, 8th Floor
North Quincy, MA 02171-2144
Boston Financial Data Services Treasury & Agency 30.92% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class A
North Quincy, MA 02171-2144
</TABLE>
87
<PAGE> 344
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Treasury & Agency 95.16% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Strafe & Co. Treasury Only Money Market Fund 59.98% Record
Bank One Trust Co.
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Dean Witter for the Benefit of Ultra Short-Term Income Fund 30.16% Record
St. Joseph Hospital Class A
Attn: Rick West
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. Ultra Short-Term Income Fund 59.51% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Ultra Short-Term Income Fund 35.96% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
State Street Bank & Trust Co. U.S. Treasury Securities 37.75% Record
Cust for the IRA of Money Market
Edward Hillman III Class B
121 S. Walnut St.
Troy, OH 45373-3530
Dean Witter for the Benefit of U.S. Treasury Securities 31.25% Record
Richard J. Park Jr. & Money Market
Christine L. Park JTTEN Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. (N) U.S. Treasury Securities 60.95% Record
Bank One Ohio Trust Co., NA Money Market
Department 0393 S.T.I.F. Fiduciary
Columbus, Ohio 43271
Strafe & Co. Value Growth Fund 75.59% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Dean Witter for the Benefit of West Virginia Municipal Bond Fund 61.59% Record
Stephen A. Lewis Class A
3720 Noyes Ave.
5 World Trade Center 6th Floor
New York, NY 10048-0205
</TABLE>
88
<PAGE> 345
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. West Virginia 99.11% Record
Attn: Mutual Funds 0393 Municipal Bond Fund
100 E. Broad Street Fiduciary 12
Columbus, OH 43215-3607
</TABLE>
As a result, the aforementioned persons may be deemed to be "controlling
persons" of the class of Shares of the Fund in which they own such Shares
under the Investment Company Act of 1940.
The table below indicates record and beneficial owners of over 5% of any
class of Shares of any Fund of the Trust.
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Middle KY Construction Co. Kentucky Municipal 13.13% Record
J. Edwin Ruby Jr., Secretary Bond Fund
135 Tilford Dr. Class A
Beaver Dam, KY 42320-9717
Dean Witter for the Benefit of Kentucky Municipal 9.96% Record
Roger J. Shott and Bond Fund
Diane J. Shott JT TEN Class A
P.O. Box 23403
Anchorage, KY 40223-0403
Yong K. Liu Kentucky Municipal 5.02% Record
Rui Bo Liu JTWROS Bond Fund
6304 Shadow Wood Drive Class A
Prospect, KY 40059-9626
Dean Witter for the Benefit of Kentucky Municipal 9.54% Record
Floyd Logan Bond Fund
201 Country Ln. Class B
Frankfort, KY 40601-3841
Dean Witter for the Benefit of Kentucky Municipal 5.08% Record
Jesse Kennedy Bond Fund
165 Bratcher Lane Class B
Berea, KY 40403-1864
Strafe & Co. Kentucky Municipal 99.72% Record
Attn: Mutual Funds 0393 Bond Fund
100 E. Broad Street Fiduciary
Westerville, Ohio 43215-3607
Strafe & Co. Large Company Growth Fund 59.54% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
</TABLE>
89
<PAGE> 346
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Large Company Growth Fund 34.71% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Banc One Corporation Large Company 10.69% Beneficial
235 West Schrock Road Growth Fund
Westerville, Ohio 43081-2874 Fiduciary
Banc One Securities Savings Plan Large Company 8.83% Beneficial
235 West Schrock Road Growth Fund
Westerville, Ohio 43081-2874 Fiduciary
Strafe & Co. Disciplined Value 54.71% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Disciplined Value 39.15% Record
Database 2-Attn: One Group/Cash Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Banc One Corporation Disciplined Value 13.43% Beneficial
235 West Schrock Road Fund
Westerville, Ohio 43081-2874 Fiduciary
Strafe & Co. Gulf South Growth Fund 90.91% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Premier Bancorp Retirement Plan Gulf South Growth 6.39% Beneficial
P.O. Box 91210 Fund
Baton Rouge, LA 70821 Fiduciary
Strafe & Co./Cash Div. Cash Growth Opportunities Fund 51.15% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds 0393
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Growth Opportunities Fund 37.56% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Banc One Corporation Growth Opportunities 10.39% Beneficial
235 West Schrock Road Fund
Westerville, Ohio 43081-2874 Fiduciary
Strafe & Co. Value Growth Fund 73.59% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Value Growth Fund 19.56% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Dean Witter for the Benefit of Income Bond Fund 9.27% Record
Alpert Corp. Money Purchase Plan Class A
Steven Kurtz TTEE
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Income Bond Fund 6.97% Record
Signal Soft Corp. Class A
1655 Walnut Street #120
Boulder, CO 80302-5436
Strafe & Co. Income Bond Fund 64.24% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Income Bond Fund 29.30% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Banc One Securities Savings Plan Income Bond Fund 5.98% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
</TABLE>
90
<PAGE> 347
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Louisiana Municipal Bond 100.00% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Strafe & Co. International Equity Index 58.27% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. International Equity Index 36.65% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Banc One Corporation International Equity 17.66% Beneficial
235 West Schrock Road Index Fund
Westerville, Ohio 43081-2874 Fiduciary
J. Noland Singletary Intermediate Tax-Free Bond 13.31% Record
7350 Bocage Blvd. Fund
Baton Rouge, LA 70809-1138 Class A
Dean Witter for the Benefit of Intermediate Tax-Free Bond 6.48% Record
Katherine Poe Fund
606 River Lane Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Intermediate Tax-Free Bond 5.58% Record
James Tolar Jr. Irrevocable Trust Fund
Shirley A. Sochor TTEE Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Intermediate Tax-Free Bond 5.24% Record
Phyllis Robertson Young Fund
P.O. Box 467 Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Intermediate Tax-Free 5.16% Record
Beulah Hathaway & Bond Fund
Theresa Zoe Young & Winifred Scott Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Clark & Co. Intermediate Tax-Free Bond 52.51% Record
Database 2-Attn: One Group/Cash Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Intermediate Tax-Free Bond 47.10% Record
Attn: Mutual Funds 0393 Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Wallace & Co. Limited Volatility Bond 5.33% Record
P.O. Box 21119 Fund Class A
Shreveport, LA 71152-0001
Strafe & Co. Limited Volatility Bond 57.97% Record
Attn: Mutual Funds 0393 Fund Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
</TABLE>
91
<PAGE> 348
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Limited Volatility Bond 36.69% Record
Database 2 - Attn: One Group/Cash Fund Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
James H. Nixon Jr. Prime Money Market Fund 17.64% Record
P.O. Box 17611 Class B
Dayton, OH 45417-0611
State Street Bank & Trust Co. Prime Money Market 9.26% Record
Cust for the IRA of Fund
Edward Hillman III Class B
121 S. Walnut St.
Troy, OH 45373-3530
State Street Bank & Trust Co. Prime Money Market Fund 5.64% Record
Custodian for the Rollover IRA of Class B
Sharon S. Phee
2716 W. Mercer Ln
Phoenix, AZ 85029-4414
State Street Bank & Trust Co. Prime Money Market Fund 5.03% Record
Cust for the IRA of Class B
Mary Rita Pike
9301 Watterson Trail
Louisville, KY 40299-3409
Strafe & Co. Prime Money Market Fund 53.04% Record
Bank One Ohio Trust Co., NA Fiduciary
Department 0393 S.T.I.F.
Columbus, Ohio 43271
Clark & Co. Prime Money Market Fund 37.85% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Bank One Trust Company NA Prime Money Market Fund 7.22% Record
Omnibus - Corporate Cash Sweep Acct. Fiduciary
Attn: Cash Management DB3
235 W Schrock Rd.
Westerville, Ohio 43081-2874
Dean Witter for the Benefit of Ohio Municipal Bond Fund 7.06% Record
James E. Sauls and Class A
Vivian R. Sauls JT TN
519 Chapel Rd.
Amelia, Ohio 45102-9738
Dean Witter for the Benefit of Ohio Municipal Bond 6.24% Record
Kerry K. Mott Fund
6361 Riverside Drive Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
92
<PAGE> 349
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Ohio Municipal Bond 98.90% Record
Attn: Mutual Funds 0393 Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
BISYS Fund Services, Inc. U.S. Treasury Securities 19.41% Record
FBO Bank One Corporate Sweep Money Market
Attn: Linda Zerbe Class A
First and Market Bldg., Ste. 300
Pittsburgh, PA 15222
BISYS Fund Services Pittsburgh U.S. Treasury Securities 14.20% Record
FBO Bank One TX Sweep Customers Money Market
Attn: Linda Zerbe Class A
First and Market Bldg., Ste. 300
Pittsburgh, PA 15222
State Street Bank & Trust Co. U.S. Treasury Securities 37.75% Record
Cust for the IRA of Money Market
Edward Hillman III Class B
121 S. Walnut St.
Troy, OH 45373-3530
Dean Witter for the Benefit of U.S. Treasury Securities 31.25% Record
Richard J. Park Jr. & Money Market
Christine L. Park JT TEN Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. (N) U.S. Treasury Securities 60.95% Record
Bank One Ohio Trust Co., NA Money Market
Department 0393 S.T.I.F. Fiduciary
Columbus, Ohio 43271
Bank One Trust Company NA U.S. Treasury Securities 23.02% Record
Omnibus-Corporate Cash Sweep Acct. Money Market
Attn: Cash Management DB3 Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Clark & Co. U.S. Treasury Securities 15.60% Record
Database 2 - Attn: One Group/Cash Mgmt Money Market
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Bank One TTEE Large Company 6.04% Record
Harrison Holding Corp. 401K Value Fund
BISYS Qualified Plan Services Class A
Springhouse Corp. Center II-Invest A/C
323 Norristown Rd. Attn: S. Loch
Amber, PA 19002-2756
Bank One TTEE Large Company 5.35% Record
The K Company, Inc. Value Fund
BISYS Qualified Plan Services Class A
Springhouse Corp. Center II-Invest A/C
323 Norristown Rd. Attn: S. Loch
Amber, PA 19002-2756
Strafe & Co. Large Company 66.68% Record
Attn: Mutual Funds 0393 Value Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Large Company 26.90% Record
Database 2 - Attn: One Group/Cash Mgmt Value Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
</TABLE>
93
<PAGE> 350
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Bank One Corporation Large Company 21.18% Beneficial
235 West Schrock Road Value Fund
Westerville, Ohio 43081-2874 Fiduciary
Kitty Hawk Group, Inc. Municipal Money Market 13.36% Record
Attn: Rick Wadsworth Fund Class A
P.O. Box 612787
DFW Airport, TX 75261-2787
Strafe & Co. (D) Municipal Money Market 60.94% Record
Bank One Ohio Trust Co., NA Fund Fiduciary
Department 0393 S.T.I.F
Columbus, Ohio 43271
Clark & Co. Municipal Money Market 35.14% Record
Database 2 - Attn: One Group/Cash Mgmt Fund Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Equity Index Fund 72.74% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Bank One Securities Savings Plan Equity Index Fund 31.15% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Clark & Co. Equity Index Fund 13.90% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
NCR Benefit Acct - Trust #1 Equity Index Fund 5.92% Beneficial
Strafe & Co. Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Strafe & Co. Income Equity Fund 58.99% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Income Equity Fund 36.04% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Government Bond Fund 68.10% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Government Bond Fund 26.42% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Clark & Co. Asset Allocation Fund 53.11% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Asset Allocation Fund 33.16% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
</TABLE>
94
<PAGE> 351
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Intermediate Bond Fund 50.66% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Intermediate Bond Fund 45.77% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, OH 43215-3607
Dean Witter for the Benefit of Ultra Short-Term Income 30.16% Record
St. Joseph Hospital Fund Class A
Attn: Rick West
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Ultra Short-Term Income 24.60% Record
Thermex Energy Corporation Fund Class A
P.O. Box 701746
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Ultra Short-Term Income 7.53% Record
Daniel M. Galbreath Revoc Trust Fund Class A
Lizanne Galbreath Megrue TTEE
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Ultra Short-Term Income 10.51% Record
Jeanette P. Reilly Fund Class B
3777 Bay Road North Drive
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter Reynolds Cust for Ultra Short-Term 7.53% Record
Donald W. Journey Income Fund
IRA Rollover Dated 9/23/96 Class B
1967 Dry Run Rd.
West Portsmouth, OH 45663-9030
Strafe & Co. Ultra Short-Term Income 59.51% Record
Attn: Mutual Funds 0393 Fund Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Ultra Short-Term Income 35.96% Record
Database 2 - Attn: One Group/Cash Mgmt Fund Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
</TABLE>
95
<PAGE> 352
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Mag-Nif Inc. Ohio Municipal Money Market 19.93% Record
P.O. Box 720 Fund
Mentor, OH 44061-0720 Class A
Strafe & Co.
Bank One Trust Co. Ohio Municipal Money 96.94% Record
Attn: Mutual Funds Market Fund
100 E. Broad St. Fiduciary
Columbus, Ohio
Henny Penny Corp. Money Market Ohio Municipal Money 12.21% Beneficial
Account Market Fund
Strafe & Co. Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Dean Witter for the Benefit of Municipal Income Fund 5.45% Record
Brian Deevy Class A
Daniels & Associates
3200 Cherry Creek Drive South
Denver, CO 80222
Dean Witter for the Benefit of Municipal Income Fund 5.36% Record
Karl A. Fettig Class A
4455 Chippewa Dr.
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Clark & Co. Municipal Income Fund 50.37% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Municipal Income Fund 48.56% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Strafe & Co. Treasury Only Money Market 59.68% Record
Bank One Trust Co. Fund
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Clark & Co. Treasury Only Money Market 23.21% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Bank One Texas NA Treasury Only Money Market 10.91% Record
1717 Main St. Fund
Dallas, TX 75201-4605
Clark & Co. Government Money Market 27.89% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Government 41.69% Record
Bank One Trust Co. Money Market Fund
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Bank One Texas NA Government Money 15.57% Record
1717 Main St. Market Fund
Dallas, TX 75201-4605
Police & Firefighters Disability Government Money 14.55% Beneficial
Strafe & Co. Market Fund
100 E. Broad Street
Columbus, Ohio 43215-3607
</TABLE>
96
<PAGE> 353
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Bank One Trust Company NA Government Money 13.37% Record
Omnibus-Corporate Cash Sweep Acct. Market Fund
Attn: Cash Management DB3
235 West Schrock Rd.
Westerville, Ohio 43081-2874
Police & Firefighters Pension Relief Government Money 6.30% Beneficial
Strafe & Co. Market Fund
100 E. Broad Street
Columbus, Ohio 43215-3607
Boston Financial Data Services Treasury & Agency Fund 31.13% Record
The One Group Family of Funds Class A
2 Heritage Drive, 8th Floor
North Quincy, MA 02171-2144
State Street Bank & Trust Co. Treasury & Agency 31.13% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class A
North Quincy, MA 02171-2119
Boston Financial Data Services Treasury & Agency 30.92% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class A
North Quincy, MA 02171-2144
The One Group Services Company Treasury & Agency Fund 6.40% Record
Fund Administration Class A
3435 Stelzer Road
Columbus, Ohio 43219-6004
Boston Financial Data Services Treasury & Agency 16.16% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class B
North Quincy, MA 02171-2144
State Street Bank & Trust Co. Treasury & Agency 16.16% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class B
North Quincy, MA 02171-2144
Boston Financial Data Services Treasury & Agency 16.05% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class B
North Quincy, MA 02171-2144
The One Group Services Company Treasury & Agency 6.45% Record
Fund Administration Fund
3435 Stelzer Road Class B
Columbus, Ohio 43219-6004
Strafe & Co. Treasury & Agency 95.16% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
State Street Bank & Trust Co. Arizona Municipal Bond 49.87% Record
Cust for the IRA of Fund Class A
Daniel Demoret
RR 1 Box 37
Williams, AZ 86046
State Street Bank & Trust Co. Arizona Municipal 49.87% Record
Cust for the IRA of Bond Fund
Cynthia L. Demoret Class A
RR 1 Box 37
Williams, AZ 86046
</TABLE>
97
<PAGE> 354
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
The One Group Services Company Arizona Municipal 100.00% Record
Fund Administration Bond Fund
3435 Stelzer Rd. Class B
Columbus, Ohio 43219-6004
Clark & Co. Arizona Municipal Bond 98.93% Record
Database 2-Attn: One Group/Cash Fund Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Dean Witter for the Benefit of West Virginia 61.59% Record
Stephen A. Lewis Municipal Bond Fund
3720 Noves Ave. Class A
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia 23.37% Record
C. Car Tully Muncipal Bond Fund
4530 Spring Hill Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 15.04% Record
Ruth A. Harper Bond Fund
P.O. Box 196 Class A
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 18.56% Record
Billie J. Zegger Bond Fund
P.O. Box 2 Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia 5.03% Record
Deborah L. Crow & Municipal Bond Fund
Thomas I. Crow Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 5.03% Record
Deborah L. Crow & Bond Fund
Thomas I. Crow Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. West Virginia 99.12% Record
Attn: Mutual Funds 0393 Municipal Bond Fund
100 E. Broad Street Fiduciary
Columbus, OH 43215-3607
</TABLE>
98
<PAGE> 355
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter for the Benefit of Investor Growth Fund 5.57% Record
James Larry Swisher Class B
10 Norvell Drive
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. Investor Growth Fund 53.38% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Virginia R. Corrin Investor Growth Fund 25.83% Beneficial
Strafe & Co. Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Investor Growth Fund 36.47% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Bank One TTEE Investor Growth Fund 6.37% Record
Therm-O-Disc Inc. 401K Fiduciary
BISYS Qualified Plan Services
Springhouse Corp. Ctr. II-Invest A/C
323 Norristown Rd. Attn: S. Loch
Ambler, PA 19002-2756
Dean Witter for the Benefit of Investor Growth & Income 30.80% Record
Superior Carpet Installers Inc. Fund
1027 E. Georgia Class A
Indianapolis, IN 46202-3925
Dean Witter for the Benefit of Investor Growth & Income 5.43% Record
Corum Enterprises Inc. Fund
Bill Corum Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
99
<PAGE> 356
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter Reynolds Cust for Investor Growth & Income 5.44% Record
Chester L. Beard Fund
IRA Rollover Dated 12/09/96 Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. Investor Growth & Income 73.52% Record
Bank One Trust Co. Fund
Attn: Mutual funds Fiduciary
100 E. Broad St.
Columbus, Ohio 43215-3607
Clark & Co. Investor Growth & 19.94% Record
Database 2-Attn: One Group/Cash Income Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Revco D.S., Inc. SERP - Trust B Investor Growth & 18.66% Beneficial
Strafe & Co. Income Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Revco D.S., Inc. SERP - Trust A Investor Growth & 14.67% Beneficial
Strafe & Co. Income Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
State Street Bank & Trust Co. Investor Balanced Fund 21.96% Record
Cust for the Rollover IRA of Class A
Pablo Villarreal
219 Alliance Ave
Rockford, IL 61103
Dean Witter for the Benefit of Investor Balanced 7.22% Record
M. Maxine Neece Fund
2107-14 Street Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Investor Balanced 5.29% Record
Bill Booth and Fund
Loretta Booth JT TEN Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
100
<PAGE> 357
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter for the Benefit of Investor Balanced Fund 5.71% Record
Doug E. Wilson and Class B
Carol M. Wilson JT TEN
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Investor Balanced 5.28% Record
Betty Ann Caetta Trust Fund
Betty A. Caetta TTEE Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. Investor Balanced Fund 44.34% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, OH 43215-3607
Clark & Co. Investor Balanced Fund 32.73% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, OH 43081-2874
Black Clawson Co. Investor Balanced Fund 17.99% Beneficial
Member Pension Plan Fiduciary
Strafe & Co.
100 E. Broad Street
Columbus, Ohio 43215-3607
Centennial Liquor Retirement Plan Investor Balanced Fund 7.95% Beneficial
Strafe & Co. Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
North Texas Steel Co. Investor Balanced Fund 5.55% Beneficial
Retirement Plan Fiduciary
Strafe & Co.
100 E. Broad Street
Columbus, Ohio 43215-3607
Dean Witter for the Benefit of Investor Conservative 20.82% Record
James W. Blair Growth Fund
95 Elizabeth Street Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Mabel Haven & Investor Conservative 16.34% Record
Martha Jane Hauser Ten Com Growth Fund
2416 Northside Dr. Class A
Bossier City, LA 7111-3408
Dean Witter for the Benefit of Investor Conservative 6.23% Record
Ronald R. Rhodes & Growth Fund
Margaret L. Rhodes JT TEN Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
101
<PAGE> 358
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter for the Benefit of Investor Conservative 6.21% Record
Lorretta Booth & Growth Fund
Bill Booth JT TEN Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
State Street Bank & Trust Co. Investor Conservative 8.01% Record
Cust for the IRA of Growth Fund
Donald E. Minor Class B
2414 Venetian Way
Owensboro, KY 42301-4235
Dean Witter for the Benefit of Investor Conservative 5.23% Record
The Hall Revocable Trust Growth Fund
Arthur & Beatrice S. Hall TTEE Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Investor Conservative 5.18% Record
Russell P. Allman & Growth Fund
Nellie M. Allman JT TEN Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. Investor Conservative 70.87% Record
Bank One Trust Co. Growth Fund
Attn: Mutual Funds Fiduciary
100 E. Broad St.
Columbus, OH 43215-3607
Young J. Lee, M.D., SERP Investor Conservative 59.85% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Investor Conservative 14.77% Record
Database 2-Attn: One Group/Cash Growth Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Ernco, Inc. Pension Plan Investor Conservative 10.20% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Bank One TTEE Investor Conservative 9.32% Record
Therm-O-Disk Inc. 401K Growth Fund
BISYS Qualified Plan Services Fiduciary
Springhouse Corp. Ctr. II-Invest A/C
323 Norristown Rd., Attn: S. Loch
Ambler, PA 19002-2756
Texas Contractors Supply 401(k) PSP Investor Conservative 8.72% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Bank One Bloomington, N.A. Investor Conservative 6.18% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Robert H. Meyn R/O IRA Investor Conservative 5.52% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
IHSAA Pension Plan Investor Conservative 5.22% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
</TABLE>
As a group, the Trustees and Officers of the Trust owned less than 1% of the
Shares of each class of the Trust.
102
<PAGE> 359
APPENDIX
--------
The nationally recognized statistical rating organizations (individually, an
"NRSRO") that may be utilized by the Advisers or the Sub-Advisers with regard to
portfolio investments for the Funds include Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Corporation ("S&P"), Duff & Phelps, Inc.
("Duff"), Fitch Investors Service, Inc. ("Fitch"), IBCA Limited and its
affiliate, IBCA Inc. (collectively, "IBCA"), and Thomson BankWatch, Inc.
("Thomson"). Set forth below is a description of the relevant ratings of each
such NRSRO. The NRSROs that may be utilized by the Advisers or the Sub-Advisers
and the description of each NRSRO's ratings is as of the date of this Statement
of Additional Information, and may subsequently change.
LONG-TERM DEBT RATINGS (may be assigned, for example, to corporate and municipal
bonds)
Description of the debt ratings by Moody's (Moody's applies numerical modifiers
(1, 2, and 3) in each rating category to indicate the security's ranking within
the category):
Aaa Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edged." Interest payments
are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of
such issues.
Aa Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be
as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat
larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment some time in the
future.
Baa Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.
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<PAGE> 360
Ba Bonds rated Ba are more uncertain and have speculative
elements. The protection of interest and principal payments is
not well safeguarded during good and bad times.
B Bonds rated B lack the characteristics of a desirable
investment; i.e., potentially low assurance of timely interest
and principal payments or maintenance of other contract terms
over time.
Caa Bonds rated Caa have poor standing and may be in default.
These bonds carry an element of danger with respect to
principal and interest payments.
C Bonds rated Ca are speculative to a high degree and could be
in default or have other marked shortcomings. C is the lowest
rating. Bonds in this category have extremely poor prospects
of ever attaining investment standing.
Description of the debt ratings by S&P (S&P may apply a plus (+) or minus (-) to
a particular rating classification to show relative standing within that
classification):
AAA Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only
in small degree.
A Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
BB Bonds rated BB have less near-term vulnerability to default
than other speculative issues. However, they face major
ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal
payments. The BB rating category is also used for debt
subordinated to senior debt that is assigned an actual or
implied BBB rating.
B Bonds rated B have a greater vulnerability to default but
currently have the capacity to meet interest payments and
principal repayments. Adverse business, financial, or economic
conditions will likely impair capacity or
104
<PAGE> 361
willingness to pay interest and repay principal. The B rating
category is also used for debt subordinated to senior debt
that is assigned an actual or implied BB or BB- rating.
CCC Bonds rated CCC have currently identifiable vulnerability to
default, and are dependent upon favorable business, financial,
and economic conditions to meet timely payment of interest and
repayment of principal. In the event of adverse business,
financial, or economic conditions, they are not likely to have
the capacity to pay interest and repay principal. The CCC
rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied B or B- rating.
CC The rating CC typically is applied to debt subordinated to
senior debt that is assigned an actual or implied CCC rating.
C The rating C typically is applied to debt subordinated to
senior debt that is assigned an actual or implied CCC rating.
The C ratings may be used to cover a situation where a
bankruptcy petition has been filed, but debt service payments
are continued.
CI The rating CI is reserved for income bonds on which no income
is being paid.
D Bonds rated D are in payment default. The D rating category is
used when interest payments or principal payments are not made
on the date due, even if the applicable grace period has not
expired, unless Standard & Poor believes that such payments
will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt
service payments are jeopardized.
+/- Plus (+) or minus (-). Ratings from AA to CCC may be modified
by the addition of a plus or minus sign to show relative
standing within the major rating categories.
Description of the three highest long-term debt ratings by Duff:
AAA Highest credit quality. The risk factors are negligible being
only slightly more than for risk-free U.S. Treasury debt.
AA+ High credit quality. Protection factors are strong.
AA Risk is modest but may vary slightly from time to time because
of economic conditions.
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<PAGE> 362
A+ Protection factors are average but adequate. However, risk
factors are more variable and greater in periods of economic
stress.
Description of the three highest long-term debt ratings by Fitch (plus or minus
signs are used with a rating symbol to indicate the relative position of the
credit within the rating category):
AAA Bonds considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely
to be affected by reasonably foreseeable events.
AA Bonds considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and
repay principal is very strong, although not quite as strong
as bonds rated "AAA." Because bonds rated in the "AAA" and
"AA" categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issues is generally rated "[-]+."
A Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
IBCA's description of its three highest long-term debt ratings:
AAA Obligations for which there is the lowest expectation of
investment risk. Capacity for timely repayment of principal
and interest is substantial such that adverse changes in
business, economic or financial conditions are unlikely to
increase investment risk significantly.
AA Obligations for which there is a very low expectation of
investment risk. Capacity for timely repayment of principal
and interest is substantial. Adverse changes in business,
economic, or financial conditions may increase investment risk
albeit not very significantly.
A Obligations for which there is a low expectation of investment
risk. Capacity for timely repayment of principal and interest
is strong, although adverse changes in business, economic or
financial conditions may lead to increased investment risk.
SHORT-TERM DEBT RATINGS (may be assigned, for example, to commercial paper,
master demand notes, bank instruments, and letters of credit)
Moody's description of its three highest short-term debt ratings:
106
<PAGE> 363
Prime-1 Issuers rated Prime-1 (or supporting institutions) have
a superior capacity for repayment of senior short-term
promissory obligations. Prime-1 repayment capacity will
normally be evidenced by many of the following
characteristics:
-Leading market positions in well-established
industries.
-High rates of return on funds employed.
-Conservative capitalization structures with
moderate reliance on debt and ample asset
protection.
-Broad margins in earnings coverage of fixed
financial charges and high internal cash
generation.
-Well-established access to a range of
financial markets and assured sources of
alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have
a strong capacity for repayment of senior short-term
debt obligations. This will normally be evidenced by
many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while
sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate
liquidity is maintained.
Prime-3 Issuers rated Prime-3 (or supporting institutions) have
an acceptable ability for repayment of senior
short-term obligations. The effect of industry
characteristics and market compositions may be more
pronounced. Variability in earnings and profitability
may result in changes in the level of debt protection
measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.
S&P's description of its three highest short-term debt ratings:
A-1 This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to have
extremely strong safety characteristics are denoted with a
plus sign (+).
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as
high as for issues designated "A-1."
107
<PAGE> 364
A-3 Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the
adverse effects of changes in circumstances than obligations
carrying the higher designations.
Duff's description of its three highest short-term debt ratings (Duff
incorporates gradations of "1+" (one plus) and "1-" (one minus) to assist
investors in recognizing quality differences within the highest rating
category):
Duff 1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
Duff 2 Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs
may enlarge total financing requirements, access to capital
markets is good. Risk factors are small.
Duff 3 Satisfactory liquidity and other protection factors qualify
issue as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.
Fitch's description of its three highest short-term debt ratings:
F-1+ Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of
assurance for timely payment.
F-1 Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
F-2 Good Credit Quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as for issues assigned F-1+
or F-1 ratings.
108
<PAGE> 365
F-3 Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for
timely payment is adequate, however, near-term adverse changes
could cause these securities to be rated below investment
grade.
IBCA's description of its three highest short-term debt ratings:
A+ Obligations supported by the highest capacity for timely
repayment.
A1 Obligations supported by a very strong capacity for timely
repayment.
A2 Obligations supported by a strong capacity for timely
repayment, although such capacity may be susceptible to
adverse changes in business, economic or financial conditions.
Short-Term Loan/Municipal Note Ratings
- --------------------------------------
Moody's description of its two highest short-term loan/municipal note ratings:
MIG-1/VMIG-1 This designation denotes best quality. There is present
strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to
the market for refinancing.
MIG-2/VMIG-2 This designation denotes high quality. Margins of
protection are ample although not so large as in the
preceding group.
S&P's description of its two highest municipal note ratings:
SP-1 Very strong or strong capacity to pay principal and
interest. Those issues determined to possess overwhelming
safety characteristics will be given a plus (+)
designation.
SP-2 Satisfactory capacity to pay principal and interest.
Short-Term Debt Ratings
Thomson BankWatch, Inc. ("TBW") ratings are based upon a qualitative and
quantitative analysis of all segments of the organization including, where
applicable, holding company and operating subsidiaries.
BankWatch(TM) Ratings do not constitute a recommendation to buy or sell
securities of any of these companies. Further, BankWatch does not suggest
specific investment criteria for individual clients.
109
<PAGE> 366
The TBW Short-Term Ratings apply to commercial paper, other senior short-term
obligations and deposit obligations of the entities to which the rating has been
assigned.
The TBW Short-Term Ratings apply only to unsecured instruments that have a
maturity of one year or less.
The TBW Short-Term Ratings specifically assess the likelihood of an untimely
payment of principal or interest.
TBW-1 The highest category; indicates a very high degree of
likelihood that principal and interest will be paid on a
timely basis.
TBW-2 The second highest category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as
for issues rated "TBW-1."
TBW-3 The lowest investment grade category; indicates that while
more susceptible to adverse developments (both internal
and external) than obligations with higher ratings,
capacity to service principal and interest in a timely
fashion is considered adequate.
TBW-4 The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.
110
<PAGE> 367
DESCRIPTION OF BANK RATINGS
Moody's Bank Financial Strength Ratings represent Moody's opinion of a bank's
intrinsic safety and soundness. The definitions for Moody's Bank Financial
Strength Ratings are as follows:
"A" Banks rated A possess exceptional intrinsic financial strength.
Typically they will be major financial institutions with highly
valuable and defensible business franchises, strong financial
fundamentals, and a very attractive and stable operating
environment.
"B" Banks rated B possess strong intrinsic financial strength.
Typically, they will be important institutions with valuable
and defensible business franchises, good financial
fundamentals, and an attractive and stable operating
environment.
"C" Banks rated C possess good intrinsic financial strength.
Typically, they will be institutions with valuable and
defensible business franchises. These banks will demonstrate
either acceptable financial fundamentals within a stable
operating environment, or better than average financial
fundamentals within an unstable operating environment.
S&P's issue credit rating is a current opinion of the creditworthiness of an
obligor with respect to a specific financial obligation, a specific class of
financial obligations, or a specific financial program. S&P's ratings are as
follows:
"AAA" An obligation rated AAA has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
"AA" An obligation rated AA differs from the highest rated
obligations only in small degree. The obligor's capacity to
meet its financial commitments on the obligation is very
strong.
"A" An obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
DESCRIPTION OF INSURANCE RATINGS
Moody's Insurance Financial Strength Ratings are Moody's opinions of the
ability of insurance companies to pay punctually senior policyholder claims and
obligations.
"Aaa" Insurance companies rated Aaa offer exceptional financial
security. While the financial strength of these companies is
likely to change, such changes as can be visualized are most
unlikely to impair their fundamentally strong position.
"Aa" Insurance companies rated Aa offer excellent financial
security. Together with the Aaa group, they constitute what
are generally known as high grade companies. They are rated
lower than Aaa companies because long-term risks appear
somewhat larger.
"A" Insurance companies rated A offer good financial security.
However, elements may be present which suggest a susceptibility
to impairment sometime in the future.
S&P's issue credit rating is a current opinion of the creditworthiness of an
obligor with respect to a specific financial obligation, a specific class of
financial obligations, or a specific financial program. S&P's ratings are as
follows:
111
<PAGE> 368
"AAA" An obligation rated AAA has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
"AA" An obligation rated AA differs from the highest rated
obligations only in small degree. The obligor's capacity to
meet its financial commitments on the obligation is very
strong.
"A" An obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
112
<PAGE> 369
DESCRIPTION OF PREFERRED STOCK RATINGS
The following descriptions of S&P's and Moody's preferred stock ratings have
been published by S&P and Moody's respectively.
Moody's Investor Services, Inc.
"aaa" An issue which is rated "aaa" is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.
"aa" An issue which is rated "aa" is considered a high-grade preferred stock.
This rating indicates that there is a reasonable assurance the earnings and
asset protection will remain relatively well maintained in the foreseeable
future.
"a" An issue which is rated "a" is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the
"aaa" and "aa" classification, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
"baa" An issue which is rated "baa" is considered to be a medium-grade
preferred stock, neither highly protected nor poorly secured. Earnings and
asset protection appear adequate at present but may be questionable over any
great length of time.
Standard & Poor's Rating Services
A S&P's preferred stock rating is an assessment of the capacity and willingness
of an issuer to pay preferred stock dividends and any applicable sinking fund
obligations. A preferred stock rating differs from a bond rating inasmuch as it
is assigned to an equity issue, which is intrinsically different from, and
subordinated to, a debt issue. Therefore, to reflect this difference, the
preferred stock rating symbol will normally not be higher than the debt rating
symbol assigned to, or that would be assigned to, the senior debt of the same
issuer.
AAA This is the highest rating that may be assigned by S&P to a preferred stock
issue and indicates an extremely strong capacity to pay the preferred stock
obligations.
AA A preferred stock issue rated "AA" also qualifies as a high-quality,
fixed-income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated "AAA."
A An issue rated "A" is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
113
<PAGE> 370
BBB An issue rated "BBB" is regarded as backed by an adequate capacity to pay
the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the "A" category.
114
<PAGE> 371
================================================================================
The One Group Family of Mutual Funds
U.S. Treasury Securities Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------------- --------------------------------------------------------------------------------------------------- --------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS (20.7%):
U.S. Treasury Bills
$5,000 2/6/97............................................................................................. $4,975
5,000 3/6/97 (b)......................................................................................... 4,956
35,000 4/3/97 (b)......................................................................................... 34,539
35,000 5/1/97 (b)......................................................................................... 34,388
10,000 5/29/97............................................................................................ 9,778
U.S. Treasury Notes
150,000 6.88%, 2/28/97 (b)................................................................................. 150,366
35,000 6.63%, 3/31/97 (b)................................................................................. 35,083
25,000 6.88%, 3/31/97 (b)................................................................................. 25,072
110,000 6.50%, 4/30/97 (b)................................................................................. 110,306
20,000 6.50%, 5/15/97 (b)................................................................................. 20,047
10,000 6.13%, 5/31/97 (b)................................................................................. 10,010
25,000 6.00%, 8/31/97..................................................................................... 25,083
25,000 8.75%, 10/15/97.................................................................................... 25,622
25,000 5.63%, 10/31/97.................................................................................... 25,033
15,000 7.37%, 11/15/97.................................................................................... 15,237
25,000 6.00%, 11/30/97.................................................................................... 25,123
----------
Total U.S. Treasury Obligations 555,618
----------
Total Investments, at amortized cost 555,618
----------
REPURCHASE AGREEMENTS (79.4%):
110,000 Aubrey G. Lanston & Co., 6.80%, 1/2/97, (collateralized by $104,180 U.S. Treasury
Securities, 5.00%-7.00%, 1/31/99-7/15/06, market value - $111,409)................................. 110,000
50,000 Barclays De Zoette Wedd, 6.75%, 1/2/97, (collateralized by $46,662 various U.S. Treasury
Securities, 7.00%-7.50%, 7/15/06-7/15/16, market value - $51,001).................................. 50,000
110,000 CIBC, 6.75%, 1/2/97, (collateralized by $110,000 U.S. Treasury Securities, 8.00%-10.37%,
11/15/09-11/15/21, market value - $112,179)........................................................ 110,000
115,000 Donaldson, Lufkin & Jenrette, 6.75%, 1/2/97, (collateralized by $347,651 various U.S.
Treasury Securities, 0.00%-12.00%, 2/15/98-2/15/25, market value - $117,116)....................... 115,000
REPURCHASE AGREEMENTS, CONTINUED:
$110,000 Dresdner Securities, 6.25%, 1/2/97, (collateralized by $110,000 U.S. Treasury Securities,
8.12%, 5/15/21, market value - $111,217)........................................................... $110,000
26,379 Goldman Sachs, 5.75%, 1/2/97, (collateralized by $26,896 various U.S. Treasury Securities,
0.00%-10.63%, 3/06/97-8/15/25, market value - $26,906)............................................. 26,379
625,000 Goldman Sachs, 6.70%, 1/2/97, (collateralized by $610,345 various U.S. Treasury
Securities, 0.00%-10.63%, 3/06/97-8/15/25, market value - $637,501)................................ 625,000
115,000 HSBC, 6.75%, 1/2/97, (collateralized by $191,561 various U.S. Treasury Securities,
0.00%-11.25%, 7/15/97-8/15/25, market value - $117,304)............................................ 115,000
115,000 J.P. Morgan, 6.75%, 1/2/97, (collateralized by $332,105 U.S. Treasury Securities, 0.00%,
5/15/97-8/15/14, market value - $117,300).......................................................... 115,000
645,000 Lehman Brothers, 7.00%, 1/2/97, (collateralized by $1,525,448 U.S. Treasury Securities,
0.00%, 2/15/04-5/15/20, market value - $657,901)................................................... 645,000
110,000 Merrill Lynch, 5.75%, 1/2/97, (collateralized by $93,107 U.S. Treasury Securities,
8.13%-8.88%, 2/15/19-8/15/19, market value - $112,204)............................................. 110,000
----------
Total Repurchase Agreements 2,131,379
----------
Total (Cost-$2,686,997)(a) $2,686,997
==========
- -----
<FN>
Percentages indicated are based on net assets of $2,683,569.
(a) Cost for Federal income tax and financial reporting purposes is the same.
(b) A portion of this security was loaned as of December 31, 1996.
</TABLE>
See notes to financial staements.
<PAGE> 372
================================================================================
The One Group Family of Mutual Funds
Prime Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT SECURITY DESCRIPTION AMORTIZED COST
- ------------- -------------------------------------------------------------------------------------------------- ------------------
<S> <C> <C>
Funding Agreements (11.2%):
$50,000 Allstate Life Insurance Company, 5.58%, 1/1/97*................................................... $50,000
125,000 General American Life Insurance Company, 5.58%, 3/19/97*.......................................... 125,000
60,000 Peoples Security Life Insurance Company, 5.60%, 4/22/97*.......................................... 60,000
60,000 Providian Life & Health Insurance Company, 5.65%, 3/1/97*......................................... 60,000
----------
Total Funding Agreements 295,000
----------
YANKEE CERTIFICATE OF DEPOSITS (1.9%):
50,000 Sumitomo Bank-L.A. Branch, 5.58%, 2/10/97......................................................... 50,001
----------
Total Yankee Certificate of Deposits 50,001
----------
COMMERCIAL PAPER (71.4%):
Automotive (4.3%):
Mitsubishi Motor Credit of America, Inc.:
41,000 5.37%, 1/7/97..................................................................................... 40,963
22,300 5.40%, 1/7/97..................................................................................... 22,280
50,000 5.40%, 1/17/97.................................................................................... 49,880
----------
113,123
----------
Banking (4.6%):
50,000 Bankers Trust New York Corp., 5.33%, 6/11/97...................................................... 48,808
50,000 HSBC Americas, Inc., 5.39%, 2/5/97................................................................ 49,738
22,000 Monte Dei Paschi Di Siena, 5.41%, 2/19/97......................................................... 21,838
----------
120,384
----------
Brokerage & Financial Services (1.9%):
50,000 Lehman Brothers Holdings, Inc., 5.41%, 5/21/97.................................................... 48,948
----------
Chemicals (3.2%):
Akzo Nobel, Inc.:
29,105 5.32%, 1/23/97.................................................................................... 29,011
19,000 5.34%, 2/18/97.................................................................................... 18,865
14,000 5.36%, 3/11/97.................................................................................... 13,856
23,000 5.29%, 4/21/97.................................................................................... 22,628
----------
84,360
----------
Computer Hardware (3.3%):
Texas Instruments, Inc.:
25,000 5.36%, 1/27/97.................................................................................... 24,903
29,019 5.35%, 1/30/97.................................................................................... 28,894
32,781 5.36%, 2/14/97.................................................................................... 32,566
----------
86,363
----------
Computer Software (3.3%):
CSC Enterprises:
23,000 5.35%, 1/8/97..................................................................................... 22,976
COMMERCIAL PAPER, CONTINUED:
Computer Software, continued:
$30,000 5.55%, 2/25/97.................................................................................... $29,746
35,000 5.37%, 3/3/97..................................................................................... 34,682
----------
87,404
----------
Construction (1.9%):
50,000 Caterpillar Financial Services Corp., 5.40%, 2/12/97.............................................. 49,685
----------
Consumer Goods & Services (0.2%):
5,000 Tambrands Corp., 5.38%, 2/4/97.................................................................... 4,975
----------
Finance (22.5%):
Banner Receivables Corp.:
10,428 5.35%, 2/4/97..................................................................................... 10,375
25,000 5.38%, 2/12/97.................................................................................... 24,843
14,680 5.40%, 2/24/97.................................................................................... 14,561
22,514 5.38%, 2/25/97.................................................................................... 22,329
21,246 5.43%, 2/26/97.................................................................................... 21,067
20,000 5.57%, 3/21/97.................................................................................... 19,756
25,000 5.35%, 5/9/97..................................................................................... 24,524
Broadway Capital:
30,000 5.39%, 1/10/97.................................................................................... 29,960
13,000 5.38%, 2/21/97.................................................................................... 12,901
37,000 5.39%, 3/3/97..................................................................................... 36,662
11,913 5.38%, 3/21/97.................................................................................... 11,772
50,000 CXC, Inc.,
5.35%, 1/29/97.................................................................................... 49,792
Finova Capital Corp.,
20,000 5.40%, 1/10/97.................................................................................... 19,973
21,600 5.40%, 1/17/97.................................................................................... 21,548
10,000 5.37%, 2/3/97..................................................................................... 9,951
25,800 5.38%, 2/19/97.................................................................................... 25,611
45,000 5.37%, 2/20/97.................................................................................... 44,664
Gotham Funding Corp.:
9,910 5.41%, 1/9/97..................................................................................... 9,898
35,428 5.39%, 1/16/97.................................................................................... 35,348
24,549 5.41%, 1/16/97.................................................................................... 24,494
45,423 5.41%, 1/22/97.................................................................................... 45,279
17,178 5.39%, 2/19/97.................................................................................... 17,052
30,350 Madison Funding Corp.,
5.38%, 1/14/97.................................................................................... 30,291
Old Line Funding Corp.:
21,170 5.45%, 1/6/97..................................................................................... 21,154
13,157 5.50%, 1/9/97..................................................................................... 13,141
----------
596,946
----------
Gas & Electric Utility (9.7%):
AES Shady Point, Inc.:
21,983 5.45%, 1/7/97..................................................................................... 21,963
25,000 5.38%, 1/14/97.................................................................................... 24,951
24,382 5.42%, 1/17/97.................................................................................... 24,324
37,300 5.37%, 1/24/97.................................................................................... 37,172
20,000 5.37%, 1/28/97.................................................................................... 19,919
</TABLE>
See notes to financial statements.
<PAGE> 373
================================================================================
The One Group Family of Mutual Funds
Prime Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT SECURITY DESCRIPTION AMORTIZED COST
- ------------- -------------------------------------------------------------------------------------------------- ------------------
<S> <C> <C>
COMMERCIAL PAPER, CONTINUED:
Gas & Electric Utility, continued:
CSW Credit, Inc.,
$44,700 5.32%, 1/13/97.................................................................................... $44,621
32,800 5.40%, 2/18/97.................................................................................... 32,564
50,000 Southwest Gas Corp.,
5.30%, 1/23/97.................................................................................... 49,838
----------
255,352
----------
Governments (Foreign) (0.9%):
25,000 Swedish Export Credit Corp., 5.42%, 3/26/97....................................................... 24,684
----------
Manufactured Housing (2.3%):
60,000 Green Tree Financial Corp., 5.70%, 1/30/97........................................................ 59,725
----------
Office Equipment & Services (0.9%):
25,000 Xerox Mexicana SA De CV, 5.51%, 1/15/97........................................................... 24,947
----------
Oil & Gas Exploration Products & Services (3.0%):
Petroleo Brasileiro S.A.-Petrobras:
30,000 5.36%, 4/1/97..................................................................................... 29,598
10,000 5.35%, 4/2/97..................................................................................... 9,865
10,000 5.35%, 4/3/97..................................................................................... 9,863
20,000 5.32%, 4/2/97..................................................................................... 19,731
10,000 5.32%, 4/3/97..................................................................................... 9,864
----------
78,921
----------
Real Estate (5.0%):
Countrywide Home Loans:
25,000 5.35%, 1/9/97..................................................................................... 24,970
37,000 5.34%, 1/15/97.................................................................................... 36,923
40,000 5.34%, 1/21/97.................................................................................... 39,881
30,000 SRD Finance, Inc., 5.59%, 1/16/97................................................................. 29,930
----------
131,704
----------
Telecommunications (4.4%):
NYNEX Corp.:
30,000 5.41%, 1/6/97..................................................................................... 29,977
30,000 5.34%, 1/22/97.................................................................................... 29,907
26,000 5.34%, 1/31/97.................................................................................... 25,884
30,000 5.34%, 2/7/97..................................................................................... 29,835
----------
115,603
----------
Total Commercial Paper 1,883,124
----------
MEDIUM TERM/SENIOR NOTES (7.9%):
Banking (4.7%):
Abbey National Treasury Services, PLC:
$75,000 5.08%, 2/27/97.................................................................................... $74,998
50,000 5.11%, 3/17/97.................................................................................... 49,991
----------
124,989
----------
Brokerage & Financial Services (3.2%):
50,000 Bear Stearns Companies, Inc., 5.60%, 3/14/97...................................................... 50,000
10,000 Finova Capital Corp., 8.00%, 1/15/97.............................................................. 10,008
25,000 Merrill Lynch & Co., Inc., 5.58%, 3/14/97......................................................... 25,000
----------
85,008
----------
Total Medium Term/Senior Notes 209,997
----------
U.S. GOVERNMENT AGENCIES (1.9%):
50,000 Student Loan Marketing Association, 5.41%, 9/28/98*............................................... 50,000
----------
Total U.S. Government Agencies 50,000
----------
Total Investments, at amortized cost 2,488,122
----------
REPURCHASE AGREEMENTS (5.9%):
50,000 Prudential Securities, 6.70%, 1/2/97, (collateralized by $54,665 various U.S. Government
Securities, 0.00%-6.63%, 1/2/97-5/1/19, market value - $51,049)................................... 50,000
106,342 Prudential Securities, 7.02%, 1/2/97, (collateralized by $126,696 various U.S.
Government Securities, 0.00%-10.75%, 1/2/97-2/15/21, market value - $108,470)..................... 106,342
----------
Total Repurchase Agreements 156,342
----------
Total (Cost-$2,644,464)(a) $2,644,464
==========
- -----
<FN>
Percentages indicated are based on net assets of $2,638,148.
(a) Cost for Federal income tax and financial reporting purposes is the same.
* Variable rate securities. The interest rate, which will change
periodically, is based upon an index of market interest rates. The rate
reflected on the Schedule of Portfolio Investments is the rate in effect at
December 31, 1996.
</TABLE>
See notes to financial statements.
<PAGE> 374
================================================================================
The One Group Family of Mutual Funds
Municipal Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------------------------------------------------------------------- ----------------
<S> <C> <C>
DAILY DEMAND NOTES (11.4%):
Alabama (2.1%):
$7,200 Phenix City, 93-A, IDR for Mead, 5.00%, 6/1/28, AMT, LOC: Toronto Dominion*........................... $7,200
3,200 Phenix City, IDR for Mead, 5.00%, 3/1/31, AMT, LOC: Bayerische Vereinsbank*........................... 3,200
--------
10,400
--------
Idaho (0.8%):
4,000 Health Facility Authority Revenue, St. Lukes Regional Medical Center Project, 5.25%,
5/1/22, LOC: Credit Suisse*........................................................................... 4,000
--------
Illinois (0.2%):
1,020 Health Facilities Authority Revenue, Central Dupage Healthcorp Project, 5.25%, 11/1/20,
LOC: Rabobank*........................................................................................ 1,020
--------
Kentucky (1.4%):
7,000 Economic Development. Finance Authority, Sisters of Charity Hospital, 5.25%, 11/1/20,
LOC: PNC Bank*........................................................................................ 7,000
--------
Michigan (0.4%):
2,000 University of Michigan Hospital, Series A, 5.10%, 12/1/27*............................................ 2,000
--------
North Dakota (0.7%):
3,800 Grand Forks Health Care Facilities Revenue, United Hospital Obligation Group, 96A 5.25%,
12/1/25, LOC: Lasalle National Bank*.................................................................. 3,800
--------
Ohio (0.4%):
2,000 State Air Quality Development Authority, Cincinnati Gas & Electric, 4.70%, 12/1/15, LOC:
J.P. Morgan*.......................................................................................... 2,000
--------
Texas (2.8%):
5,000 Brazos River Authority, PCR, Texas Utilities Electric Co. Project, Series B, 4.75%, 6/1/30,
AMT, LOC: Union Bank of Switzerland*.................................................................. 5,000
8,600 Brazos River Authority, PCR, Texas Utilities Electric Co. Project, 4.75%, 6/1/30, AMT,
Insured by AMBAC*..................................................................................... 8,600
600 North Central Health Facility Development Corp. Revenue, Presbyterian Medical Center,
Series D, 4.95%, 12/1/15, Insured by MBIA*............................................................ 600
--------
14,200
--------
DAILY DEMAND NOTES, CONTINUED:
Washington (2.0%):
$10,000 Health Care Facilities Authority, Fred Hutchinson Cancer Research Center, Series A, 5.25%,
1/1/18, LOC: Morgan Guaranty*......................................................................... $10,000
Wyoming (0.6%):
Sublette County, PCR, Exxon Corp. Project,
2,500 5.10%, 7/1/17, Series A*.............................................................................. 2,500
500 5.10%, 7/1/17*........................................................................................ 500
--------
3,000
--------
Total Daily Demand Notes 57,420
--------
WEEKLY DEMAND NOTES (60.7%):
Arkansas (1.6%):
8,100 Clark County Solid Waste Disposal Revenue, Reynolds Metals Co. Project, 4.20%, 8/1/22,
AMT, LOC: Trust Co. Bank*............................................................................. 8,100
--------
Colorado (3.8%):
3,000 Housing Finance Authority, Pool I, Series B, Coventry Village,
4.30%, 10/15/16, LOC: FNMA*........................................................................... 3,000
2,500 Student Obligation Bond Authority 90-A, 4.10%, 9/1/24, AMT, LOC: Sallie Mae*.......................... 2,500
4,400 Student Obligation Bond Authority, Student Loan Revenue, 4.10%, 07/01/20, AMT, LOC:
Sallie Mae*........................................................................................... 4,400
9,100 Regents University of Colorado Student Housing Bonds, 4.00%, 6/1/20, LOC: Morgan
Guaranty*............................................................................................. 9,100
--------
19,000
--------
Florida (2.0%):
10,000 Housing Finance Authority, Multi-family Housing Revenue, Woodlands Apts. Project 85S,
4.25%, 12/1/17, LOC: Citibank*........................................................................ 10,000
--------
Georgia (2.1%):
7,000 De Kalb Private Hospital Authority Revenue, Egleston Children's Hospital, Series A, 4.05%,
3/1/24, LOC: SunTrust Bank*........................................................................... 7,000
3,735 Gwinnett County Housing Authority, Herrington Woods Apts. Project, 96A, 4.25%, 9/15/26,
AMT, LOC: KeyBank*.................................................................................... 3,735
--------
10,735
--------
</TABLE>
Continued
<PAGE> 375
================================================================================
The One Group Family of Mutual Funds
Municipal Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------------------------------------------------------------------- ----------------
<S> <C> <C>
WEEKLY DEMAND NOTES, CONTINUED:
Illinois (11.6%):
$11,400 Chicago O'Hare International Airport Revenue, Second Lien, Series B, 4.25%, 1/1/18, AMT,
LOC: Societe Generale*................................................................................ $11,400
3,700 Development Authority, Presbyterian Home Lake Forest Place Project, 4.20%, 9/1/31 LOC:
Lasalle National Bank*................................................................................ 3,700
5,900 Development Finance Authority Revenue, Special Facility, Little City Foundation, 4.20%,
2/1/19, LOC: Lasalle National Bank*................................................................... 5,900
4,700 Development Finance Authority Revenue, Aurora Central Catholic High School, 4.20%,
4/1/24, LOC: Northern Trust*.......................................................................... 4,700
4,500 Development Finance Authority Revenue, Roosevelt University Project, 4.20%, 4/1/25,
LOC: American National Bank*.......................................................................... 4,500
1,625 Development Finance Authority Revenue, St. Paul's House Project, 4.20%, 2/1/25, LOC:
Lasalle National Bank*................................................................................ 1,625
2,500 Educational Facility Authority Revenue, Northwestern University, 4.25%, 3/1/28, LOC:
Northern Trust*....................................................................................... 2,500
7,000 Health Facilities Authority Revenue, Revolving Fund Pooled, Series C, 4.15%, 8/1/15, LOC:
First National Bank of Chicago*....................................................................... 7,000
1,900 Health Facilities Authority Revenue, Hospital Sisters Service, Series E, 4.15%, 12/1/14,
LOC: Morgan Guaranty*................................................................................. 1,900
3,000 Health Facilities Authority Revenue, Washington & Jane Smith Home, 4.25%, 7/1/26, LOC:
First Chicago Bank*................................................................................... 3,000
7,640 Jacksonville Industrial Project Revenue, AGI Inc. Project, AMT, 4.45%, 2/1/26, LOC: Bank
of America*........................................................................................... 7,640
2,000 Orland Hills Multi-Family Mortgage Revenue, 88Th Avenue Project, 4.20%, 12/1/04, LOC:
Lasalle National Bank*................................................................................ 2,000
2,500 Regional Trans. Authority Trust Receipts, 4.15%, 6/1/25, LOC: Societe Generale*....................... 2,500
--------
58,365
--------
WEEKLY DEMAND NOTES, CONTINUED:
Indiana (9.0%):
$3,500 Development Finance Authority, MidAmerica Energy, 4.35%, 9/1/30, AMT, LOC: UBS*....................... $3,500
14,800 Health Facility Financing Authority, Rehabilitation Hospital, Inc., 4.10%, 11/1/20, LOC:
Toronto Dominion Bank*................................................................................ 14,800
3,520 Health Facility Financing Authority Revenue, Capital Access Designated Pool, 4.20%,
12/1/02, LOC: Comerica Bank*.......................................................................... 3,520
5,600 Indianapolis Economic Development Revenue, Children's Museum Project, 4.25%, 10/1/25,
LOC: National Bank of Detroit*........................................................................ 5,600
3,750 Jasper Economic Development Revenue, Best Chairs Inc. Project, 4.25%, 3/1/19, AMT,
LOC: PNC Bank*........................................................................................ 3,750
14,035 Rockport, PCR, Indiana & Michigan Electric Co. Series A, 4.15%, 8/1/14, LOC: Swiss
Bank*................................................................................................. 14,035
--------
45,205
--------
Kentucky (0.5%):
2,500 City of Mayfield, League of Cities Lease Finance Program 96, 4.30%, 7/1/26, LOC: PNC
Bank*................................................................................................. 2,500
--------
Michigan (4.4%):
16,800 Higher Education Student Loan, Series B, 4.10%, 10/1/13, AMT, Insured by AMBAC*....................... 16,800
1,655 State Strategic Fund, Limited Obligation, Wayne Disposal Oakland Project, 4.35%, 3/1/05,
AMT, LOC: Comerica Bank*.............................................................................. 1,655
900 State Strategic Fund Limited Obligation Revenue Environmental Quality, 4.35%, 5/1/05,
AMT, LOC: Comerica Bank*.............................................................................. 900
3,000 Wayne County Airport Revenue (Detroit Airport), Series B, 4.10%, 12/1/16, AMT, LOC:
Bayerische Landesbank*................................................................................ 3,000
--------
22,355
--------
Nevada (3.7%):
3,400 Clark County Airport Improvement Revenue, Sub Lien Series A-1, 4.00%, 7/1/25, LOC:
Toronto Dominion Bank*................................................................................ 3,400
</TABLE>
Continued
<PAGE> 376
================================================================================
The One Group Family of Mutual Funds
Municipal Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------------------------------------------------------------------- ----------------
<S> <C> <C>
WEEKLY DEMAND NOTES, CONTINUED:
Nevada, continued:
$10,000 Clark County Industrial Development Revenue, Power Co. Project, Series A, 4.25%,
10/1/30, AMT, LOC: Barclays Bank*..................................................................... $10,000
5,000 Clark County, Limited Tax, GO, 1996 Las Vegas Convention Trust Receipts, 4.15%, 7/1/26,
LOC: Societe Generale*................................................................................ 5,000
--------
18,400
--------
Ohio (2.9%):
6,300 Air Quality Development Authority, JMG Funding Corp., 4.15%, 4/1/29, AMT, LOC:
Societe Generale*..................................................................................... 6,300
5,500 State Water Development Authority Revenue, Timken Company Project, 4.10%, 5/1/07,
LOC: Wachovia Bank*................................................................................... 5,500
2,800 Student Loan Funding Corp., Cincinnati Student Loan Revenue, Series A-3, 4.10%, 1/1/07,
AMT, LOC: National Westminster*....................................................................... 2,800
--------
14,600
--------
Rhode Island (1.0%):
5,000 State Student Loan Revenue Bond #3, 4.15%, 6/1/26, AMT, LOC: National Westminster*.................... 5,000
--------
South Carolina (0.3%):
1,700 Cherokee County Industrial Revenue, Oshkosh Truck Corp. Project, 4.50%, 8/1/19, AMT,
LOC: Bank of Nova Scotia*............................................................................. 1,700
--------
Tennessee (0.8%):
3,800 Oak Ridge Industrial Development Board, Economic Development Revenue, Limited
Obligation, 4.25%, 5/1/09, AMT, LOC: Algemene Bank Nederland*......................................... 3,800
--------
Texas (11.6%):
14,100 Capital Health Facilities Development Corp., Island on Lake Travis Ltd. Project, 4.10%,
12/1/16, AMT, LOC: Credit Suisse*..................................................................... 14,100
10,000 Lower Colorado River Authority, Texas Elect Revenue, 4.00%, 1/1/13, LOC: MBIA*........................ 10,000
10,000 Panhandle Plains Higher Education Inc., Student Loan Revenue, Series A, 4.10%, 6/1/21,
LOC: Sallie Mae*...................................................................................... 10,000
WEEKLY DEMAND NOTES, CONTINUED:
Texas, continued:
$8,400 Panhandle Plains Higher Education Authority, Student Loan Revenue, Series A, 4.10%,
6/1/23, AMT, LOC: Sallie Mae*......................................................................... $8,400
15,900 San Antonio Health Facilities Development Corp. Hospital Revenue, Warm Springs
Rehabilitation Foundation, Series A, 4.30%, 6/1/08, LOC: NationsBank*................................. 15,900
--------
58,400
--------
Utah (2.0%):
10,200 Salt Lake City Airport Revenue, Sub Series A, 4.10%, 6/1/98, AMT, LOC: Credit Suisse*................. 10,200
--------
Washington (2.0%):
4,425 Pierce County, NN Baking Co., 4.15%, 7/1/03, AMT, LOC: U.S. Bank of Washington*....................... 4,425
3,525 Pierce County Economic Development Corp., Industrial Revenue, McFarland Cascade
Project, 3.95%, 10/1/07, AMT, LOC: First National Bank of Seattle*.................................... 3,525
2,500 Washington, GO Municipal Securities, Trust Receipts, 4.15%, 7/1/16, LOC: Societe
Generale*............................................................................................. 2,500
--------
10,450
--------
West Virginia (1.4%):
6,900 Marion County Community Solid Waste Disposal Facility Revenue, Grant Town, 4.25%,
10/1/17, AMT, LOC: National Westminster*.............................................................. 6,900
--------
Total Weekly Demand Notes 305,710
--------
MONTHLY DEMAND NOTES (3.1%):
Arizona (0.4%):
2,000 Chandler Industrial Development Authority, Parsons Municipal Project, 3.70%, 12/15/09,
LOC: National Westminster*............................................................................ 2,000
--------
Indiana (2.7%):
13,700 Gary Environmental Improvement Revenue, U.S. Steel Corp. Project, 3.70%, 7/15/02, LOC:
Bank of Nova Scotia*.................................................................................. 13,700
--------
Total Monthly Demand Notes 15,700
--------
</TABLE>
Continued
<PAGE> 377
================================================================================
The One Group Family of Mutual Funds
Municipal Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------------------------------------------------------------------- ----------------
<S> <C> <C>
MUNICIPAL NOTES (1.3%):
Ohio (1.3%):
$3,500 Dublin City School District, GO Notes, Ohio School Improvement, 4.00%, 6/10/97........................ $3,507
3,000 School District Cash Flow, COPS, 4.53%, 6/30/97....................................................... 3,008
--------
Total Municipal Notes 6,515
--------
PUT BONDS** (3.0%):
Connecticut (0.9%):
4,500 Special Assessment Unemployment, Compensation Advance Fund Revenue, Series C,
3.90%, 11/15/01....................................................................................... 4,500
--------
Kentucky (0.7%):
3,500 Pulaski County Solid Waste Disposal, Eastern Kentucky Power Cooperative, Inc. Project,
3.70%, 8/15/23, Guaranteed by National Rural Utilities................................................ 3,500
--------
Oregon (0.9%):
4,500 Housing & Community Series 96-K, AMT, 3.65%, 12/11/97................................................. 4,500
--------
Wyoming (0.5%):
2,500 Uinta County, PCR, Amoco Standard Oil Co. Ind., 3.90%, 12/1/12*....................................... 2,506
--------
Total Put Bonds 15,006
--------
SHORT TERM PUTS** (2.1%):
Arizona (1.5%):
7,500 Cochise County, PCR, Solid Waste Disposal Revenue, Electric Power Corp., 3.70%, 9/1/24,
AMT................................................................................................... 7,500
--------
Missouri (0.6%):
3,000 State Environmental Improvement & Energy, Union Electric Co., Series B, 3.65%, 6/1/14,
LOC: Union Bank of Switzerland........................................................................ 3,000
--------
Total Short Term Puts 10,500
--------
TAX FREE COMMERCIAL PAPER (7.4%):
Georgia (2.4%):
5,000 Municipal Electric Authority, 85A, Series B, 3.75%, 1/15/97........................................... 5,000
5,500 Municipal Electric Authority, 85A, Series B, 3.50%, 3/6/97, LOC: Bayerische Landesbank................ 5,500
1,650 Municipal Electric Authority, 94-D, 3.55%, 3/6/97..................................................... 1,650
--------
12,150
--------
TAX FREE COMMERCIAL PAPER, CONTINUED:
Michigan (1.0%):
$5,080 State Building Authority, 3.50%, 5/1/97, LOC: CIBC.................................................... $5,080
--------
North Carolina (1.0%):
5,000 Eastern Municipal Power Authority, 3.50%, 2/5/97, LOC: CIBC........................................... 5,000
--------
Ohio (1.3%):
6,700 Water Development Authority, Cleveland Electric, 3.55%, 6/14/96, Insured by FGIC...................... 6,700
--------
Texas (1.0%):
5,000 Brazos River Authority Utilities, PCR, 3.65%, 5/1/97, LOC: CIBC....................................... 5,000
--------
West Virginia (0.7%):
3,500 Public Energy Authority Energy Revenue, Morgantown Assoc. Project, 3.70%, 2/14/97,
AMT, LOC: Swiss Bank.................................................................................. 3,500
--------
Total Tax Free Commercial Paper 37,430
--------
ANTICIPATION NOTES (11.4%):
California (5.0%):
15,000 Los Angeles County Tax & Revenue Anticipation Notes, Series A, 4.50%, 6/30/97, LOC:
Credit Suisse, Morgan Guaranty, Union Bank of Switzerland, West Deutsche Landesbank,
Bank of America....................................................................................... 15,050
10,050 California State, Revenue Anticipation Notes, Series A, 4.50%, 6/30/97................................ 10,092
--------
25,142
--------
Colorado (2.1%):
10,000 Tax & Revenue Anticipation Notes, Series A, 4.50%, 6/27/97............................................ 10,034
--------
Idaho (1.8%):
9,000 State Tax Anticipation Note, 4.50%, 6/30/97........................................................... 9,025
--------
Michigan (1.9%):
10,000 Municipal Bond Authority, Series A, 4.50%, 7/03/97.................................................... 10,029
--------
Puerto Rico (0.6%):
3,000 Commonwealth of Puerto Rico, Trans-97A, 4.00%, 07/30/97............................................... 3,010
--------
Total Anticipation Notes 57,240
--------
Total (Cost-$505,521) (a) $505,521
--------
</TABLE>
- -----
Percentages indicated are based on net assets of $503,629.
Continued
<PAGE> 378
================================================================================
The One Group Family of Mutual Funds
Municipal Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
(a) Cost for Federal income tax and financial reporting purposes is the same.
* Variable rate securities. The interest rate, which will change
periodically, is based upon an index of market interest rates. The rate
reflected on the Schedule of Portfolio Investments is the rate in effect at
December 31, 1996. **Put and demand features exist.
AMBAC AMBAC Indemnity Corporation
AMT Alternative Minimum Tax Paper
COPS Certificates of Participation
GO General Obligation
IDR Industrial Development Revenue
FGIC Insured by Financial Guaranty Insurance Corp.
FNMA Insured by Federal National Mortgage Association
LOC Letter of Credit
MBIA Insured by Municipal Bond Insurance Association
PCR Pollution Control Revenue
See notes to financial statements.
<PAGE> 379
================================================================================
The One Group Family of Mutual Funds
Ohio Municipal Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------------------------------------------------------------------- ----------------
<S> <C> <C>
MUNICIPAL BONDS (1.1%):
Ohio (1.1%):
$1,000 Columbus, General Obligation Bond, 6.75%, 7/1/97, ETM: U.S. Govt.'s................................... $1,014
-------
Total Municipal Bonds 1,014
-------
DAILY DEMAND NOTES (2.6%):
Ohio (2.6%):
2,300 Twinsburg, Industrial Development Revenue, United Stationers Project, 5.15%, 12/1/11,
LOC: PNC Bank*........................................................................................ 2,300
-------
Total Daily Demand Notes 2,300
-------
WEEKLY DEMAND NOTES (51.5%):
Ohio (51.5%):
1,000 Air Quality Development Authority, JMG Funding Corp., 4.15%, 4/1/29, LOC: Societe
Generale*............................................................................................. 1,000
1,000 Butler County, Meadow Ridge Housing Project, AMT, 4.20%, 11/15/30, LOC: FNMA*......................... 1,000
2,990 Clermont County, Hospital Facilities Mercy Health Care of Cincinnati, Series B, 4.50%,
12/1/15, Insured by MBIA*............................................................................. 2,990
300 Cuyahoga County, Allen Group Inc., AMT, 4.25%, 4/1/12, LOC: Dresdner Bank*............................ 300
4,000 Cuyahoga County, Cleveland Clinic Foundation, 4.10%, 1/1/26, LOC: Morgan Guaranty
Bank*................................................................................................. 4,000
1,600 Cuyahoga County, Allen Group, Inc., 4.10%, 12/1/15, LOC: Union Bank of Switzerland*................... 1,600
1,500 Franklin County Hospital Authority, 4.25%, 5/1/15, LOC: National Bank of Detroit*..................... 1,500
1,800 Franklin County Hospital Revenue, Holy Cross Health Systems, 4.10%, 6/16/16, LOC:
Morgan Guaranty Bank*................................................................................. 1,800
1,500 Franklin County Inland Products, Inc., 4.25%, 6/1/04, LOC: PNC Bank*.................................. 1,500
2,000 Geauga County Industrial Development, General Signal Corp., 4.30%, 4/1/04, LOC:
Wachovia Bank*........................................................................................ 2,000
500 Hamilton County Economic Development Revenue, Cincinnati Performing Arts Center,
4.20%, 6/15/05, LOC: Fifth Third Bank*................................................................ 500
2,000 Hamilton County Hospital Revenue, Bethesda Hospital, 4.05%, 2/15/24, LOC: Rabobank
Nederland*............................................................................................ 2,000
WEEKLY DEMAND NOTES, CONTINUED:
Ohio, continued:
$950 Higher Education Facility, Mount Union College Project, 4.25%, 9/1/20, LOC: National
Bank of Detroit*...................................................................................... $950
3,000 Housing Finance Authority, Spring Valley Apts. 96A, 4.25%, 12/15/29, AMT, LOC:
Keybank*.............................................................................................. 3,000
500 Montgomery County, Sisters of Charity Healthcare, 4.15%, 5/15/25, LOC: Toronto
Dominion*............................................................................................. 500
1,000 Ross County, Ohio Hospital Facilities, Medical Center Project, 4.25%, 12/1/20, LOC: Fifth
Third Bank*........................................................................................... 1,000
1,800 State Air Quality Development Authority Revenue, JMG Funding Limited Partnership,
Series A, 4.15%, 4/1/28, LOC: Societe Generale*....................................................... 1,800
3,000 State Air Quality Development Revenue Bonds, Timken Co. Project, 4.10%, 6/1/01, AMT,
LOC: Union Bank of Switzerland*....................................................................... 3,000
1,000 State Court Street Center, 4.10%, 10/1/98, LOC: Provident Bank*....................................... 1,000
2,850 State Higher Education Facilities, Oberlin College Project, 2.80%, 10/1/15, SBPA: Morgan
Guaranty*............................................................................................. 2,850
Student Loan Funding Corp.,
1,375 4.05%, 12/29/98, LOC: National Westminster Bank*...................................................... 1,375
2,000 4.20%, 1/1/07, LOC: Bank of America*.................................................................. 2,000
3,000 State Water Development Authority, Timken Co. Project, 4.10%, 6/1/01, LOC: Credit
Suisse*............................................................................................... 3,000
The Ohio State University General Receipts, Series B,
400 4.05%, 12/1/06, SBPA: Westminster Bank*............................................................... 400
2,750 4.00%, 12/1/12*....................................................................................... 2,750
2,100 Wooster Industrial Development Revenue, Allen Group Inc., 4.40%, 12/1/10, LOC: Union
Bank of Switzerland*.................................................................................. 2,100
-------
Total Weekly Demand Notes 45,915
-------
MONTHLY DEMAND NOTES (3.7%):
Ohio (3.7%):
3,300 Housing Financial Agency, 3.50%, 12/1/15, LOC: Morgan Guaranty Bank*.................................. 3,300
-------
Total Monthly Demand Notes 3,300
-------
</TABLE>
Continued
<PAGE> 380
================================================================================
The One Group Family of Mutual Funds
Ohio Municipal Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------------------------------------------------------------------- ----------------
<S> <C> <C>
MUNICIPAL NOTES (6.2%):
Ohio (6.2%):
$2,500 Dublin, City School District Notes, 4.00%, 6/10/97.................................................... $2,505
3,000 School District Cash Flow, COPS, 4.53%, 6/30/97....................................................... 3,008
-------
Total Municipal Notes 5,513
-------
SHORT TERM PUTS** (2.8%):
Ohio (2.8%):
2,500 Air Quality Development Authority Revenue, Ohio Edison, Series B, 3.80%, 5/1/97,
AMT, LOC: Union Bank of Switzerland................................................................... 2,500
-------
Total Short-Term Puts 2,500
-------
TAX FREE COMMERCIAL PAPER (14.6%):
Ohio (14.6%):
1,000 State Air Quality Development Authority, Cleveland Electric Illuminating Co., FGIC,
3.45%, 3/6/97......................................................................................... 1,000
3,000 State Air Quality Development Authority, Cleveland Electric Illuminating Co., FGIC,
3.70%, 1/16/97........................................................................................ 3,000
1,300 Toledo (Lucas County), CSX Transportation, 3.50%, 3/21/97, LOC: Bank of Nova Scotia................... 1,300
3,700 Toledo (Lucas County) Ohio Port Authority, 3.50%, 3/3/97, LOC: Bank of Nova Scotia.................... 3,700
TAX FREE COMMERCIAL PAPER (14.6%):
Ohio, continued
$1,000 State Water Development Authority, Cleveland Electric Illuminating Co., FGIC, 3.55%,
2/6/97................................................................................................ $1,000
3,000 State Water Development Authority, Cleveland Electric Illuminating Co., FGIC, 3.50%,
2/5/97................................................................................................ 3,000
-------
Total Tax-Free Commercial Paper 13,000
-------
ANTICIPATION NOTES (17.1%):
Ohio (14.9%):
5,000 Brecksville, Broadview Heights, City School District, BAN, 3.90%, 1/17/97............................. 5,001
1,000 City of Cleveland, 1996-A Cleveland Stadium Project, BAN, 4.50%, 10/15/97............................. 1,004
1,400 Solon City School District, BAN 96-2, 4.00%, 4/15/97.................................................. 1,402
1,670 Summit County, BAN, Series B, 4.00%, 6/5/97........................................................... 1,672
1,500 University of Cincinnati, BAN, 4.25%, 8/28/97......................................................... 1,503
1,000 University of Cincinnati, General Receipts, BAN, Series Aa, 3.89%, 3/20/97............................ 1,001
1,700 University of Cincinnati, General Receipts, BAN, Series K1, 3.75%, 3/20/97............................ 1,702
-------
13,285
-------
Puerto Rico (2.2%):
2,000 Commonwealth of Puerto Rico,
TRANS - 97A, 4.00%, 7/30/97........................................................................... 2,006
-------
Total Anticipation Notes 15,291
-------
Total (Cost-$88,833)(a) $88,833
=======
<FN>
- -----
Percentages indicated are based on net assets of $89,189.
(a) Cost for Federal income tax and financial reporting purposes is the same.
* Variable rate securities. The interest rate, which will change
periodically, is based upon an index of market interest rates. The rate
reflected on the Schedule of Portfolio Investments is the rate in effect at
December 31, 1996.
** Put features exist.
AMT Alternative Minimum Tax Paper
BAN Bond Anticipation Note
COPS Certificate of Participation
ETM Escrow to Maturity
FGIC Insured by Financial Guaranty Insurance Corp.
FNMA Insured by Federal National Mortgage Association
LOC Letter of Credit
MBIA Insured by Municipal Bond Insurance Association
SBPA Stand By Purchase Agreement
TRANS Tax & Revenue Anticipation Notes
</TABLE>
See notes to financial statements.
<PAGE> 381
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands,
except per share amounts)
U.S. TREASURY OHIO
SECURITIES MUNICIPAL MUNICIPAL
MONEY MARKET PRIME MONEY MONEY MARKET MONEY MARKET
FUND MARKET FUND FUND FUND
------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at amortized cost.......................... $555,618 $2,488,122 $505,521 $88,833
Repurchase agreements, at cost.......................... 2,131,379 156,342 - -
---------- ---------- -------- -------
Total................................................... 2,686,997 2,644,464 505,521 88,833
Interest receivable..................................... 7,905 6,203 3,065 696
Receivable for shares issued............................ - 148 - -
Deferred organization costs............................. - - - 1
Prepaid expenses and other assets....................... 421 240 17 3
---------- ---------- -------- -------
TOTAL ASSETS............................................ 2,695,323 2,651,055 508,603 89,533
---------- ---------- -------- -------
LIABILITIES:
Cash overdraft.......................................... - - 3,176 7
Dividends payable....................................... 10,695 11,574 1,460 258
Accrued expenses and other payables:
Investment advisory fees.......................... 541 680 114 21
Administration fees............................... 358 360 73 9
12b-1 fees (Class A).............................. 79 74 9 8
Accounting and transfer agent fees................ 16 40 22 15
Other............................................. 65 179 120 26
---------- ---------- -------- -------
TOTAL LIABILITIES....................................... 11,754 12,907 4,974 344
---------- ---------- -------- -------
NET ASSETS:
Capital................................................. 2,683,527 2,638,165 503,774 89,248
Undistributed (distributions in excess of) net
investment income.................................... 43 7 (127) (51)
Accumulated undistributed net realized losses
from investment transactions......................... (1) (24) (18) (8)
---------- ---------- -------- -------
NET ASSETS.............................................. $2,683,569 $2,638,148 $503,629 $89,189
========== ========== ======== =======
Net Assets
Fiduciary......................................... $2,344,946 $2,322,235 $461,544 $52,910
Class A........................................... 338,587 315,790 42,085 36,279
Class B........................................... 36 123 - -
---------- ---------- -------- -------
Total................................................... $2,683,569 $2,638,148 $503,629 $89,189
========== ========== ======== =======
Outstanding units of beneficial interest
Fiduciary......................................... 2,344,903 2,322,253 461,674 52,946
Class A........................................... 338,586 315,789 42,100 36,302
Class B........................................... 36 123 - -
---------- ---------- -------- -------
Total................................................... 2,683,525 2,638,165 503,774 89,248
========== ========== ======== =======
Net asset value-offering and redemption price per
share (Fiduciary, Class A and Class B shares)........ $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
</TABLE>
See notes to financial statements.
<PAGE> 382
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
U.S. TREASURY OHIO
SECURITIES MUNICIPAL MUNICIPAL
MONEY MARKET PRIME MONEY MONEY MARKET MONEY MARKET
FUND MARKET FUND FUND FUND
---------------- ------------------ ------------------ --------------
<S> <C> <C> <C> <C>
Investment Income:
Interest income......................................... $60,584 $73,594 $9,117 $1,627
Dividend income......................................... - - 111 38
Income from securities lending.......................... 127 9 - -
------- ------- ------ ------
TOTAL INCOME............................................ 60,711 73,603 9,228 1,665
------- ------- ------ ------
EXPENSES:
Investment advisory fees................................ 3,955 4,681 915 143
Administration fees..................................... 1,869 2,212 432 79
12b-1 fees (Class A).................................... 417 571 73 73
Custodian and accounting fees........................... 77 60 27 8
Legal and audit fees.................................... 71 83 30 6
Trustees' fees and expenses............................. 15 15 4 1
Transfer agent fees..................................... 31 62 17 14
Registration and filing fees............................ 133 55 8 5
Printing costs.......................................... 74 81 44 7
Other................................................... 9 8 2 1
------- ------- ------ ------
Total expense before waivers............................ 6,651 7,828 1,552 337
Less waivers............................................ (1,465) (1,195) (384) (93)
------- ------- ------ ------
NET EXPENSES............................................ 5,186 6,633 1,168 244
------- ------- ------ ------
Net Investment Income................................... 55,525 66,970 8,060 1,421
------- ------- ------ ------
REALIZED GAINS (LOSSES) FROM INVESTMENT
TRANSACTIONS:
Net realized gains (losses) from investment
transactions......................................... 39 3 (14) (8)
------- ------- ------ ------
Net increase in net assets resulting
from operations......................................... $55,564 $66,973 $8,046 $1,413
======= ======= ====== ======
</TABLE>
See notes to financial statements.
<PAGE> 383
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
U.S. TREASURY SECURITIES MONEY
MARKET FUND PRIME MONEY MARKET FUND
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1996 1996 1996 1996
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ... $ 55,525 $ 80,358 $ 66,970 $ 130,413
Net realized gains
(losses) from
investment
transactions .......... 39 (9) 3 9
------------ ------------ ------------ ------------
Change in net assets resulting
from operations ............ 55,564 80,349 66,973 130,422
------------ ------------ ------------ ------------
DISTRIBUTIONS TO FIDUCIARY
SHAREHOLDERS:
From net investment
income ................ (49,929) (75,330) (59,167) (116,410)
In excess of net
investment income ..... -- -- -- --
From net realized gains
from investment
transactions .......... (6) -- -- --
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income ................ (5,596) (5,012) (7,802) (13,976)
In excess of net
investment income ..... -- -- -- --
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income ................ -- -- (1) --
------------ ------------ ------------ ------------
Change in net assets from
shareholder distributions .. (55,531) (80,342) (66,970) (130,386)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued ................ 3,504,557 4,000,794 3,232,160 5,382,651
Proceeds from shares
issued in connection
with acquisition ...... -- 356,742 -- --
Dividends reinvested .... 3,403 4,792 7,515 14,099
Cost of shares redeemed . (2,779,878) (3,683,695) (3,103,466) (5,062,234)
Change in net assets from
share transactions ......... 728,082 678,633 136,209 334,516
------------ ------------ ------------ ------------
Change in Net Assets .......... 728,115 678,640 136,212 334,552
NET ASSETS:
Beginning of period ..... 1,955,454 1,276,814 2,501,936 2,167,384
------------ ------------ ------------ ------------
End of period ........... $ 2,683,569 $ 1,955,454 $ 2,638,148 $ 2,501,936
============ ============ ============ ============
SHARE TRANSACTIONS:
Issued .................. 3,504,557 4,000,794 3,232,160 5,382,651
Issued in connection
with acquisition ...... -- 356,742 -- --
Reinvested .............. 3,403 4,792 7,515 14,099
Redeemed ................ (2,779,878) (3,683,695) (3,103,466) (5,062,234)
------------ ------------ ------------ ------------
Change in shares .............. 728,082 678,633 136,209 334,516
============ ============ ============ ============
Undistributed (distributions in
excess of) net investment
income included in net
assets:
End of Period ........... $ 43 $ 43 $ 7 $ 7
============ ============ ============ ============
<CAPTION>
Ohio Municipal Money Market
Municipal Money Market Fund Fund
---------------------------- ----------------------------
Six months Six months
ended Year ended ended Year ended
December 31, June 30, December 31, June 30,
1996 1996 1996 1996
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ... $ 8,060 $ 19,034 $ 1,421 $ 2,941
Net realized gains
(losses) from
investment
transactions .......... (14) (4) (8) --
------------ ------------ ------------ ------------
Change in net assets resulting
from operations ............ 8,046 19,030 1,413 2,941
------------ ------------ ------------ ------------
DISTRIBUTIONS TO FIDUCIARY
SHAREHOLDERS:
From net investment
income ................ (7,469) (17,075) (827) (1,588)
In excess of net
investment income ..... -- -- -- (22)
From net realized gains
from investment
transactions .......... -- (4) -- --
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income ................ (591) (1,947) (594) (1,353)
In excess of net
investment income ..... -- -- -- (19)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income ................ -- -- -- --
------------ ------------ ------------ ------------
Change in net assets from
shareholder distributions .. (8,060) (19,026) (1,421) (2,982)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued ................ 662,162 1,409,174 208,761 337,815
Proceeds from shares
issued in connection
with acquisition ...... -- -- -- --
Dividends reinvested .... 588 1,889 550 1,337
Cost of shares redeemed . (669,634) (1,394,801) (217,161) (329,660)
Change in net assets from
share transactions ......... (6,884) 16,262 (7,850) 9,492
------------ ------------ ------------ ------------
Change in Net Assets .......... (6,898) 16,266 (7,858) 9,451
NET ASSETS:
Beginning of period ..... 510,527 494,261 97,047 87,596
------------ ------------ ------------ ------------
End of period ........... $ 503,629 $ 510,527 $ 89,189 $ 97,047
============ ============ ============ ============
SHARE TRANSACTIONS:
Issued .................. 662,162 1,409,174 208,761 337,815
Issued in connection
with acquisition ...... -- -- -- --
Reinvested .............. 588 1,889 550 1,337
Redeemed ................ (669,634) (1,394,801) (217,161) (329,660)
------------ ------------ ------------ ------------
Change in shares .............. (6,884) 16,262 (7,850) 9,492
============ ============ ============ ============
Undistributed (distributions in
excess of) net investment
income included in net
assets:
End of Period ........... $ (127) $ (127) $ (51) $ (51)
============ ============ ============ ============
</TABLE>
See notes to financial statements.
<PAGE> 384
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
1. ORGANIZATION:
The One Group (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as a diversified, 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 thirty active funds. The
accompanying financial statements and financial highlights are those of the
U.S. Treasury Securities Money Market Fund, the Prime Money Market Fund,
the Municipal Money Market Fund, and the Ohio Municipal Money Market Fund
(individually, a "Fund"; collectively, the "Funds") only. Each Fund is a
diversified mutual fund, except the Ohio Municipal Money Market Fund which
is non-diversified.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with the Paragon Portfolio ("Paragon"), a Massachusetts
business trust. Pursuant to the Agreement all of the assets and liabilities
of each Paragon Fund transferred to a fund of The One Group in exchange for
shares of the corresponding fund of The One Group. Changes in net assets
and financial highlights for periods prior to the reorganization, March 25,
1996, are presented for the funds of The One Group only.
The Funds' investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
---- ---------
<S> <C>
U.S. Treasury Securities Money Market Fund Current income with liquidity
and stability of principal.
Prime Money Market Fund Current income with liquidity
and stability of principal.
Municipal Money Market Fund As high a level of current
interest income exempt from
Federal income taxes as is
consistent with the
preservation of capital and
stability of principal.
Ohio Municipal Money Market Fund As high a level of current
interest income exempt from
Federal income taxes and Ohio
personal income tax as is
consistent with the
preservation of capital and
stability of principal.
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. 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.
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.
Continued
<PAGE> 385
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
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. Repurchase
agreements are considered to be loans by a fund in the 1940 Act.
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 collateral at 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
creditworthy under guidelines established by the Board of Trustees and
when, in the judgement 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, 1996, the following Fund had securities with the following
market values on loan (amount in thousands):
<TABLE>
MARKET VALUE
OF LOANED
SECURITIES
----------
<S> <C>
U.S. Treasury Securities Money Market Fund......................................... $162,686
</TABLE>
The loaned securities were fully collateralized by cash and U.S. Government
securities as of December 31, 1996.
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. Each class of shares bears
its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class,
such as distribution fees.
Continued
<PAGE> 386
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
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. Dividends are
declared separately for each class. No class has preferential dividend
rights; differences in per share dividend rates are generally due to
differences in separate class expenses.
Net investment income and net capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments of expiring capital loss carryforwards and deferrals
of certain losses. Permanent book and tax differences, if any, have been
reclassified among the components of net assets.
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 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 of net investment income and net realized capital gains
sufficient to relieve it from all, or substantially all, federal income
taxes.
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 forty series and four classes:
Fiduciary, Class A, Class B, and Service. During the year ended June 30,
1995, Service Shares transferred to Class A Shares. As of December 31, 1996
there were no shareholders in the Service Class. 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. The
following is a summary of transactions in Fund shares for the six months
ended December 31, 1996 and the year ended June 30, 1996:
Continued
<PAGE> 387
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
U.S. TREASURY SECURITIES PRIME MONEY
MONEY MARKET FUND MARKET FUND
-------------------------------- --------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30,
1996 1996 1996 1996
------------ -------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued....................... $2,798,900 $3,573,870 $2,195,927 $4,119,886
Proceeds from shares issued in connection
with acquisition................................ - 333,798 - -
Dividends reinvested.............................. 263 345 884 1,683
Cost of shares redeemed........................... (2,298,838) (3,241,505) (2,061,141) (3,900,430)
---------- ---------- ---------- ----------
Change in net assets from Fiduciary share
transactions.................................... $500,325 $666,508 $135,670 $221,139
========== ========== ========== ==========
CLASS A SHARES:
Proceeds from shares issued....................... $705,621 $426,924 $1,036,000 $1,262,765
Proceeds from shares issued in connection
with acquisition................................ - 22,944 - -
Dividends reinvested.............................. 3,140 4,447 6,631 12,416
Cost of shares redeemed........................... (481,040) (442,190) (1,042,215) (1,161,804)
---------- ---------- ---------- ----------
Change in net assets from Class A share
transactions.................................... $227,721 $12,125 $416 $113,377
========== ========== ========== ==========
CLASS B SHARES:
Proceeds from shares issued....................... $36 $233
Dividends reinvested.............................. - -
Cost of shares redeemed........................... - (110)
---------- ----------
Change in net assets from Class B share
transactions.................................... $36 $123
========== ==========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued............................................ 2,798,900 3,573,870 2,195,927 4,119,886
Issued in connection with acquisition............. - 333,798 - -
Reinvested........................................ 263 345 884 1,683
Redeemed.......................................... (2,298,838) (3,241,505) (2,061,141) (3,900,430)
---------- ---------- ---------- ----------
Change in Fiduciary Shares........................ 500,325 666,508 135,670 221,139
========== ========== ========== ==========
CLASS A SHARES:
Issued............................................ 705,621 426,924 1,036,000 1,262,765
Issued in connection with acquisition............. - 22,944 - -
Reinvested........................................ 3,140 4,447 6,631 12,416
Redeemed.......................................... (481,040) (442,190) (1,042,215) (1,161,804)
---------- ---------- ---------- ----------
Change in Class A Shares.......................... 227,721 12,125 416 113,377
========== ========== ========== ==========
CLASS B SHARES:
Issued............................................ 36 233
Reinvested........................................ - -
Redeemed.......................................... - (110)
---------- ----------
Change in Class B Shares.......................... 36 123
========== ==========
</TABLE>
Continued
<PAGE> 388
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
MUNICIPAL MONEY MARKET FUND OHIO MUNICIPAL MONEY MARKET FUND
--------------------------------- ----------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30,
1996 1996 1996 1996
------------ -------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued.................... $547,786 $1,109,221 $83,375 $165,403
Dividends reinvested........................... 44 114 46 62
Cost of shares redeemed........................ (546,080) (1,087,267) (86,421) (161,325)
-------- ---------- ------- --------
Change in net assets from Fiduciary share
transactions................................. $1,750 $22,068 $(3,000) $4,140
======== ========== ======= ========
CLASS A SHARES:
Proceeds from shares issued.................... $114,376 $299,953 $125,386 $172,412
Dividends reinvested........................... 544 1,775 504 1,275
Cost of shares redeemed........................ (123,554) (307,534) (130,740) (168,335)
-------- ---------- ------- --------
Change in net assets from Class A share
transactions................................. $(8,634) $(5,806) $(4,850) $5,352
======== ========== ======= ========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued......................................... 547,786 1,109,221 83,375 165,403
Reinvested..................................... 44 114 46 62
Redeemed....................................... (546,080) (1,087,267) (86,421) (161,325)
-------- ---------- ------- --------
Change in Fiduciary Shares..................... 1,750 22,068 (3,000) 4,140
======== ========== ======= ========
CLASS A SHARES:
Issued......................................... 114,376 299,953 125,386 172,412
Reinvested..................................... 544 1,775 504 1,275
Redeemed....................................... (123,554) (307,534) (130,740) (168,335)
-------- ---------- ------- --------
Change in Class A Shares....................... (8,634) (5,806) (4,850) 5,352
======== ========== ======= ========
</TABLE>
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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 0.35% of the average daily net assets of the U.S. Treasury Securities
Money Market Fund, the Prime Money Market Fund and the Municipal Money
Market Fund and 0.30% of the average daily net assets of the Ohio Municipal
Money Market Fund.
The Trust and The 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 paid monthly, at an annual rate of
0.20% on each Fund's average daily net assets on the first $1.5 billion of
Trust net assets (excluding the Investor Growth Fund, the Investor Growth &
Income Fund, the Investor Conservative Growth Fund and the Investor
Balanced Fund (the "Investor Funds") and the Treasury Only Money Market
Fund and the Government Money Market Fund - the "Institutional Money Market
Funds"); 0.18% on the next $0.5 billion of Trust net assets (excluding the
Investor Funds and the Institutional Money Market Funds); and 0.16% on
Trust net assets (excluding the Investor Funds and the Institutional Money
Market Funds) over $2 billion. The Adviser also serves as Sub-Administrator
to each fund of
Continued
<PAGE> 389
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
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 March 26, 1996, Goldman Sachs Asset Management
served as administrator of Paragon under essentially the same terms as the
current administration agreement.
The Trust and The One Group Services Company (the "Distributor") are
parties to a distribution agreement under which shares of the Funds are
sold on a continuous basis. Class A Shares, Class B Shares and Service
Class Shares are subject to distribution and shareholder services plans
(the "Plans") pursuant to Rule 12b-1 under the 1940 Act. As provided in the
Plans, the Trust will pay the Distributor a fee of 0.35% of the average
daily net assets of Class A shares of each of the Funds, 1.00% of the
average daily net assets of Class B and 0.75% of the average daily net
assets of the Service Class Shares of each of the Funds. The Distributor
has voluntarily agreed to limit payments under the Plans to 0.25% of
average daily net assets of the Class A Shares of each Fund and 0.55% of
average daily net assets of the Service Class Shares of each Fund. Up to
0.25% of the fees payable under the Plans may be used as compensation of
shareholder services by the Distributor and/or financial institutions and
intermediaries. Fees paid under the Plans may be applied by the Distributor
toward (i) compensation for its services in connection with distribution
assistance or provision of shareholder services; or (ii) payments to
financial institutions and intermediaries such as banks (including
affiliates of the Adviser), brokers, dealers and other institutions,
including the Distributor's affiliates and subsidiaries as compensation for
services or reimbursement of expenses incurred in connection with
distribution assistance or provision of shareholder services. Fiduciary
Class Shares of each Fund are offered without distribution fees.
Prior to January 2, 1996, Premier Investment Advisors, L.L.C. ("Premier")
served as investment adviser and Goldman Sachs & Company served as
distributor to Paragon. Pursuant to the approval of the Board of Trustees
of Paragon on October 31, 1995 and its Shareholders on December 20, 1995,
Paragon entered into an investment advisory agreement with the Adviser and
a distribution agreement with the Distributor effective January 2, 1996.
The Terms of the investment advisory agreements with Premier and with the
Adviser and the distribution agreements with Goldman Sachs & Company and
the Distributor were substantially the same. Certain officers of the Trust
are affiliated with the Administrator. Such officers receive no
compensation from the Funds for serving in their respective roles.
The Adviser, Administrator and the Distributor voluntarily agreed to waive
a portion of their fees and to reimburse the Funds for certain expenses.
For the six months ended December 31, 1996, fees in the following amounts
were waived from the Funds (amounts in thousands):
<TABLE>
<CAPTION>
INVESTMENT 12B-1 FEES
ADVISORY FEES ADMINISTRATION FEES WAIVED
WAIVED WAIVED CLASS A
------------- ------------------- ----------
<S> <C> <C> <C>
U.S. Treasury Securities Money Market Fund................. $1,346 - $119
Prime Money Market Fund.................................... 979 $53 163
Municipal Money Market Fund................................ 331 32 21
Ohio Municipal Money Market Fund........................... 15 57 21
</TABLE>
5. CONCENTRATION OF CREDIT RISK:
The Ohio Municipal Money Market Fund invests primarily in debt obligations
issued by the State of Ohio and its political subdivisions, agencies and
public authorities to obtain funds for various public purposes. The Fund is
more susceptible to economic and political factors adversely affecting
issuers of Ohio's specific municipal securities than are municipal bond
funds that are not concentrated in these issuers to the same extent.
Continued
<PAGE> 390
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
6. REORGANIZATION:
The Trust entered an Agreement and Plan of Reorganization with Paragon
pursuant to which all of the assets and liabilities of each Paragon Fund
transferred to a fund of The One Group in exchange for shares of the
corresponding fund of The One Group. The Paragon Treasury Money Market Fund
transferred its assets and liabilities to the U.S. Treasury Securities
Money Market Fund. The reorganization, which qualified as a tax-free
exchange for federal income tax purposes, was completed on March 25, 1996
following approval by shareholders of the Paragon Portfolio at a special
shareholder meeting. The following is a summary of shares outstanding, net
assets and net asset value per share immediately before and after the
reorganization:
<TABLE>
<CAPTION>
BEFORE REORGANIZATION REORGANIZATION
----------------------------------- ---------------
PARAGON TREASURY U.S. TREASURY U.S. TREASURY
MONEY MARKET SECURITIES MONEY SECURITIES MONEY
FUND MARKET FUND MARKET FUND
------------ ---------------- ----------------
<S> <C> <C> <C>
Shares (000)............................................ 356,742 1,735,489 2,092,231
Net Assets (000)........................................ $356,742 $1,735,505 $2,092,247
Net Asset Value:
Fiduciary......................................... $1.00 $1.00
Class A........................................... $1.00 $1.00 $1.00
</TABLE>
<PAGE> 391
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. TREASURY SECURITIES MONEY MARKET FUND
------------------------------------------------------------------------------
FIDUCIARY
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------------------
1996 1996 1995 1994 1993 1992
---------- ---------- ---------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- -------- -------- --------
Investment Activities
Net investment income ........... 0.025 0.052 0.050 0.030 0.029 0.043
---------- ---------- ---------- -------- -------- --------
Less: Distributions
Net investment income ........... (0.025)(a) (0.052) (0.050) (0.030) (0.029) (0.043)
---------- ---------- ---------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ======== ======== ========
Total Return ....................... 2.51%(b) 5.34% 5.07% 3.01% 2.89% 4.40%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $2,344,946 $1,844,590 $1,178,091 $969,326 $492,862 $410,146
Ratio of expenses to average net
assets ....................... 0.43%(c) 0.42% 0.41% 0.40% 0.45% 0.55%
Ratio of net investment income
to average net assets ........ 4.94%(c) 5.17% 4.96% 3.02% 2.85% 4.25%
Ratio of expenses to average net
assets* ...................... 0.55%(c) 0.56% 0.59% 0.58% 0.67% 0.77%
Ratio of net investment income ..
to average net assets* 4.82%(c) 5.03% 4.78% 2.84% 2.63% 4.04%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Includes $.000002 short term capital gain.
(b) Not annualized.
(c) Annualized.
</TABLE>
See notes to financial statements.
<PAGE> 392
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. TREASURY SECURITIES MONEY MARKET FUND
---------------------------------------------------------------------------------
CLASS A
---------------------------------------------------------------------------------
SIX MONTHS FEBRUARY 18,
ENDED YEARS ENDED JUNE 30, 1992 TO
DECEMBER 31, ----------------------------------------------- DECEMBER 31,
1996 1996 1995 1994 1993 1992(a)
---------- -------- -------- -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- -------- -------- -------- -------- --------
Investment Activities
Net investment income ........... 0.024 0.050 0.047 0.027 0.026 0.012
---------- -------- -------- -------- -------- --------
Less: Distributions
Net investment income ........... (0.024)(d) (0.050) (0.047) (0.027) (0.026) (0.012)
---------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ..... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ======== ======== ======== ======== ========
Total Return ....................... 2.39%(c) 5.08% 4.81% 2.76% 2.63% 3.38%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 338,587 $110,864 $ 98,723 $ 53,423 $ 30,759 $ 6
Ratio of expenses to average net
assets ....................... 0.69%(b) 0.67% 0.66% 0.63% 0.65% 0.59%(b)
Ratio of net investment income to
average net assets ........... 4.70%(b) 4.92% 4.71% 2.81% 2.52% 2.51%(b)
Ratio of expenses to average net
assets* ...................... 0.91%(b) 0.91% 0.94% 0.87% 1.02% 0.71%(b)
Ratio of net investment income to
average net assets* 4.48%(b) 4.68% 4.43% 2.57% 2.15% 2.39%(b)
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Not annualized.
(d) Includes $.000002 short term capital gain.
</TABLE>
See notes to financial statements.
<PAGE> 393
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. TREASURY
SECURITIES
MONEY
MARKET FUND
--------------
CLASS B
--------------
NOVEMBER 21,
1996 TO
DECEMBER 31,
1996(a)
--------------
(UNAUDITED)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ......................................... $ 1.000
---------
Investment Activities
Net investment income ..................................... 0.004
---------
Less: Distributions
Net investment income ..................................... (0.004)(d)
---------
NET ASSET VALUE, END OF PERIOD ............................... $ 1.000
=========
Total Return ................................................. 0.45%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ 36
Ratio of expenses to average net assets ................... 1.45%(b)
Ratio of net investment income to average net assets ...... 3.92%(b)
Ratio of expenses to average net assets* .................. 1.57%(b)
Ratio of net investment income to average net assets* ..... 3.80%(b)
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Not annualized.
(d) Includes $.000002 short term capital gain.
</TABLE>
See notes to financial statements.
<PAGE> 394
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PRIME MONEY MARKET FUND
--------------------------------------------------------------------------------------
FIDUCIARY
--------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------------------
1996 1996 1995 1994 1993 1992
------------ ---------- ---------- ---------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ---------- ---------- ---------- -------- --------
Investment Activities
Net investment
income ............ 0.025 0.054 0.052 0.031 0.030 0.045
------------ ---------- ---------- ---------- -------- --------
Less: Distributions
Net investment
income ............ (0.025) (0.054) (0.052) (0.031) (0.030) (0.045)
------------ ---------- ---------- ---------- -------- --------
NET ASSET VALUE, END OF
PERIOD ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ========== ========== ========== ======== ========
Total Return ............ 2.57%(b) 5.49% 5.34% 3.19% 3.09% 4.64%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000) ...... $ 2,322,235 $2,186,562 $1,965,416 $1,600,876 $979,275 $946,504
Ratio of expenses to
average net assets 0.47%(a) 0.44% 0.41% 0.40% 0.44% 0.59%
Ratio of net
investment income
to average net
assets ............ 5.04%(a) 5.34% 5.27% 3.18% 3.05% 4.49%
Ratio of expenses to
average net assets* 0.54%(a) 0.55% 0.57% 0.59% 0.62% 0.76%
Ratio of net
investment income
to average net
assets* ........... 4.97%(a) 5.23% 5.12% 2.99% 2.87% 4.32%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE> 395
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PRIME MONEY MARKET FUND
---------------------------------------------------------------------------------
CLASS A
---------------------------------------------------------------------------------
SIX MONTHS FEBRUARY 18,
ENDED YEARS ENDED JUNE 30, 1992 TO
DECEMBER 31, --------------------------------------------- DECEMBER 31,
1996 1996 1995 1994 1993 1992(a)
---------- -------- -------- ------- ------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- -------- -------- ------- ------- -------
Investment Activities
Net investment income ........... 0.024 0.051 0.050 0.027 0.030 0.013
---------- -------- -------- ------- ------- -------
Less: Distributions
Net investment income ........... (0.024) (0.051) (0.050) (0.027) (0.030) (0.013)
---------- -------- -------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD .......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ======== ======== ======= ======= =======
Total Return ....................... 2.44%(c) 5.22% 5.08% 2.93% 2.83% 3.51%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 315,790 $315,374 $201,968 $74,759 $61,106 $ 511
Ratio of expenses to
average net assets ........... 0.72%(b) 0.69% 0.67% 0.65% 0.65% 0.79%(b)
Ratio of net investment
income to average net
assets ....................... 4.79%(b) 5.09% 5.02% 2.92% 2.67% 3.40%(b)
Ratio of expenses to
average net assets* .......... 0.89%(b) 0.90% 0.92% 0.90% 0.99% 0.94%(b)
Ratio of net investment
income to average net
assets* ...................... 4.62%(b) 4.88% 4.77% 2.67% 2.33% 3.25%(b)
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE> 396
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PRIME MONEY
MARKET FUND
-----------
CLASS B
-----------
NOVEMBER 21,
1996 TO
DECEMBER 31,
1996(a)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ......................................... $ 1.000
---------
Investment Activities
Net investment income ..................................... 0.006
---------
Less: Distributions
Net investment income ..................................... (0.006)
---------
NET ASSET VALUE,
END OF PERIOD ............................................... $ 1.000
=========
Total Return ................................................. 0.56%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ 123
Ratio of expenses to average net assets ................... 1.47%(b)
Ratio of net investment income to average net assets ...... 4.04%(b)
Ratio of expenses to average net assets* .................. 1.54%(b)
Ratio of net investment income to average net assets* ..... 3.97%(b)
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE> 397
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PRIME MONEY
MARKET FUND
---------------------------
SERVICE/
RETIREMENT(a)
--------------------------
YEARS ENDED
JUNE 30,
--------------------------
1995 1994
--------- ---------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................... $ 1.000 $ 1.000
--------- ---------
Investment Activities
Net investment income ............................... 0.041 0.008
--------- ---------
Less: Distributions
Net investment income ............................... (0.041) (0.008)
--------- ---------
NET ASSET VALUE, END OF PERIOD ......................... $ 1.000 $ 1.000
========= =========
Total Return ........................................... (a) 0.79%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ - $ 40
Ratio of expenses to average net assets ............. 1.42%(b) 1.18%(b)
Ratio of net investment income to average net assets 4.52%(b) 3.03%(b)
Ratio of expenses to average net assets* ............ 1.60%(b) 1.36%(b)
Ratio of net investment income to average net assets* 5.23%(b) 2.85%(b)
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they
designated as "Retirement" Shares. On April 4, 1995 the name of the
Retirement Shares was changed to "Service" Shares. As of June 1, 1995,
Service Shares transferred to Class A Shares. As on June 30, 1995 there
were no shareholders in the Service Class. Total return for the period from
July 1, 1994 to June 1, 1995 for the Service Shares was 4.11%.
(b) Annualized.
(c) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE> 398
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET FUND
------------------------------------------------------------------------------
FIDUCIARY
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------------
1996 1996 1995 1994 1993 1992
---------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- -------- -------- -------- -------- --------
Investment Activities
Net investment income ........... 0.015 0.033 0.032 0.021 0.021 0.034
---------- -------- -------- -------- -------- --------
Less: Distributions
Net investment income ........... (0.015) (0.033) (0.032) (0.021) (0.021) (0.034)
---------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ..... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ======== ======== ======== ======== ========
Total Return ....................... 1.55%(b) 3.34% 3.28% 2.16% 2.15% 3.47%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 461,544 $459,807 $437,743 $352,702 $175,277 $170,961
Ratio of expenses to average
net assets ................... 0.43%(a) 0.41% 0.41% 0.40% 0.46% 0.43%
Ratio of net investment
income to average net
assets ....................... 3.10%(a) 3.29% 3.26% 2.13% 2.12% 3.41%
Ratio of expenses to average
net assets* .................. 0.57%(a) 0.59% 0.59% 0.60% 0.66% 0.80%
Ratio of net investment
income to average net
assets* ...................... 2.96%(a) 3.11% 3.08% 1.93% 1.92% 3.04%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE> 399
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET FUND
-------------------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------------------
SIX MONTHS FEBRUARY 18,
ENDED YEARS ENDED JUNE 30, 1992 TO
DECEMBER 31, ------------------------------------------- DECEMBER 31,
1996 1996 1995 1994 1993 1992(a)
----------- ------- ------- ------- ------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ------- ------- ------- ------- -------
Investment Activities
Net investment income ........... 0.015 0.030 0.030 0.021 0.019 0.009
----------- ------- ------- ------- ------- -------
Less: Distributions
Net investment income ........... (0.015) (0.030) (0.030) (0.021) (0.019) (0.009)
----------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD ..... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== ======= ======= ======= ======= =======
Total Return ....................... 1.47%(c) 3.08% 3.02% 1.96% 1.89% 2.48%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 42,085 $50,720 $56,518 $41,595 $18,932 $ 122
Ratio of expenses to average
net assets ................... 0.68%(b) 0.66% 0.66% 0.65% 0.66% 0.84%(b)
Ratio of net investment
income to average net
assets ....................... 2.85%(b) 3.04% 3.01% 1.92% 1.82% 2.44%(b)
Ratio of expenses to average
net assets* .................. 0.92%(b) 0.94% 0.94% 0.91% 1.01% 0.99%(b)
Ratio of net investment
income to average net
assets*....................... 2.61%(b) 2.76% 2.73% 1.66% 1.47% 2.29%(b)
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE> 400
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL MONEY MARKET FUND
--------------------------------------------------------------
FIDUCIARY
--------------------------------------------------------------
SIX MONTHS JUNE 9,
ENDED YEARS ENDED JUNE 30, 1993 TO
DECEMBER 31, ------------------------------- JUNE 30,
1996 1996 1995 1994 1993(a)
----------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ------- ------- ------- -------
Investment Activities
Net investment income ....................... 0.016 0.033 0.032 0.022 0.013
----------- ------- ------- ------- -------
Less: Distributions
Net investment income ....................... (0.016) (0.032) (0.032) (0.022) (0.013)
In excess of net investment income .......... -- (0.001) -- -- --
----------- ------- ------- ------- -------
Total Distributions ............................ (0.016) (0.033) (0.032) (0.022) (0.013)
----------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD ................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== ======= ======= ======= =======
Total Return ................................... 1.57%(c) 3.34% 3.20% 2.25% 2.14%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........... $ 52,910 $55,915 $51,806 $55,375 $ 3,500
Ratio of expenses to average net assets ..... 0.40%(b) 0.41% 0.41% 0.34% 0.08%(b)
Ratio of net investment income to average net
assets ................................... 3.09%(b) 3.19% 3.13% 2.29% 2.07%(b)
Ratio of expenses to average net assets* .... 0.55%(b) 0.71% 0.60% 0.57% 0.51%(b)
Ratio of net investment income to average net
assets* .................................. 2.94%(b) 2.89% 2.94% 2.06% 1.64%(b)
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE> 401
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- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL MONEY MARKET FUND
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
SIX MONTHS JANUARY 26,
ENDED YEARS ENDED JUNE 30, 1993 TO
DECEMBER 31, ------------------------------- JUNE 30,
1996 1996 1995 1994 1993(a)
----------- ------- ------- ------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ....................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ------- ------- ------- ----------
Investment Activities
Net investment income ................... 0.014 0.030 0.029 0.021 0.009
----------- ------- ------- ------- ----------
Less: Distributions
Net investment income ................... (0.014) (0.029) (0.029) (0.021) (0.009)
In excess of net investment income ...... -- (0.001) -- -- --
----------- ------- ------- ------- ----------
Total Distributions ........................ (0.014) (0.030) (0.029) (0.021) (0.009)
----------- ------- ------- ------- ----------
NET ASSET VALUE, END OF PERIOD ............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== ======= ======= ======= ==========
Total Return ............................... 1.44%(c) 3.08% 2.98% 2.09% 2.34%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ....... $ 36,279 $41,132 $35,790 $37,356 $ 25,125
Ratio of expenses to average net assets . 0.65%(b) 0.66% 0.63% 0.44% 0.26%(b)
Ratio of net investment income to average
net assets ........................... 2.84%(b) 2.94% 2.91% 2.05% 2.03%(b)
Ratio of expenses to average net assets* 0.90%(b) 1.06% 0.95% 0.94% 0.92%(b)
Ratio of net investment income to average
net assets*........................... 2.59%(b) 2.54% 2.59% 1.55% 1.37%(b)
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE> 402
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- --------------------------------------------------------- ----------
<S> <C> <C>
ASSET BACKED SECURITIES (2.9%):
$ 762 Advanta Mortgage Loan Trust 1994-3 A2
7.60%, 7/25/10............................................... $ 772
250 Case Equipment Loan Trust 1996-B A3
6.65%, 9/15/03............................................... 253
480 Green Tree Financial Corp. 1996-3 A3
6.70%, 5/15/27............................................... 483
170 Honda Auto Receivables Grantor Trust
1994-A A 4.80%, 8/15/99...................................... 170
160 KeyCorp Auto Grantor Trust 1995-A A
5.80%, 7/15/00............................................... 160
1,025 Olympic Automobile Receivables Trust
1996-B A4 6.70%, 3/15/02..................................... 1,036
298 The Money Store Home Equity Trust
1994-B A2 6.80%, 2/15/13..................................... 296
147 Union Federal Savings Bank Trust
1994-A A 5.08%, 5/15/00...................................... 145
151 World Omni Automobile Lease Securitization Trust
1994-A A 6.45%, 9/25/00...................................... 151
------
Total Asset Backed Securities 3,466
------
COMMON STOCKS (50.5%):
Capital Goods (3.9%):
13 BW/IP Holdings, Inc. ........................................ 211
18 Crane Co. ................................................... 526
6 Fluor ....................................................... 395
13 General Electric Co. ........................................ 1,325
5 Hubbell, Inc. Class B ....................................... 216
8 Ingersoll Rand Co. .......................................... 369
15 Mark IV Industries, Inc. .................................... 333
7 Teleflex, Inc. .............................................. 360
9 Tyco Labs ................................................... 449
8 York International Corp. .................................... 419
------
4,603
------
Consumer Durable (1.4%):
6 Briggs & Stratton Corp. ..................................... 268
21 Ford Motor Co. .............................................. 682
11 Harley-Davidson, Inc. ....................................... 494
4 Harman International Industries, Inc. ....................... 239
------
1,683
------
Consumer Non-Durable (6.1%):
19 Archer-Daniels-Midland Co. .................................. 418
6 Colgate Palmolive Co. ....................................... 581
7 CPC International ........................................... 543
6 Dole Food Co. (b) ........................................... 217
8 First Brands Corp. .......................................... 238
14 Newell Companies, Inc. ...................................... 428
7 Nine West Group, Inc. (b)(c) ................................ 329
10 PepsiCo, Inc. ............................................... 298
11 Phillip Morris Companies, Inc. .............................. 1,194
COMMON STOCKS, CONTINUED:
Consumer Non-Durable Continued:
5 Proctor & Gamble Co. ........................................ $ 538
8 Revlon, Inc. (c) ............................................ 251
8 RJR Nabisco Holdings Corp. .................................. 262
8 Smithfield Foods, Inc. (c) .................................. 315
11 Sysco Corp. ................................................. 362
13 The Coca Cola Co. ........................................... 668
6 Tupperware Corp. ............................................ 338
7 Universal Corp. ............................................. 231
------
7,211
------
Consumer Services (2.4%):
6 Belo (A.H.) Corp., Series A (b) ............................. 223
14 Callaway Golf Co. ........................................... 408
9 Carnival Cruise Lines ....................................... 310
10 Hasbro, Inc. (b) ............................................ 400
15 Hilton Hotels (b) ........................................... 387
7 MGM Grand, Inc. (c) ......................................... 234
15 Time Warner, Inc. ........................................... 555
4 Walt Disney Co. ............................................. 299
------
2,816
------
Energy (4.2%):
3 Atlantic Richfield Co. ...................................... 450
4 BJ Services Co. (b)(c) ...................................... 214
9 Devon Energy Corp. (b) ...................................... 306
14 Exxon Corp. ................................................. 1,372
6 Halliburton Co. ............................................. 380
4 Helmerich & Payne, Inc. ..................................... 229
10 Mapco, Inc. ................................................. 326
6 Mobil Corp. ................................................. 770
4 Tosco Corp. ................................................. 340
14 USX-Marathon Group .......................................... 327
8 Weatherford Enterra, Inc. (c) ............................... 243
------
4,957
------
Financial Services (7.4%):
3 Aames Financial Corp. (b) .................................... 108
10 Aflac, Inc. .................................................. 432
4 AmSouth Bancorporation ....................................... 213
8 Bancorp Hawaii, Inc. ......................................... 328
9 BankAmerica Corp. ............................................ 858
8 Charter One Financial, Inc. .................................. 332
8 Chase Manhattan Corp. ........................................ 723
4 CIGNA Corp. .................................................. 587
14 Equitable Cos., Inc. (b) ..................................... 335
21 Federal National Mortgage Assoc. ............................. 767
8 First American Bank Corp. (b) ................................ 475
9 Imperial Credit Industries, Inc. (c) ......................... 193
8 ITT Hartford Group, Inc. ..................................... 533
5 J.P. Morgan & Co., Inc. (b) .................................. 517
9 KeyCorp ...................................................... 460
</TABLE>
CONTINUED
<PAGE> 403
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- --------------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Financial Services, Continued:
5 Provident Cos., Inc. (b) ..................................... $261
10 Southtrust Corp. ............................................. 363
7 SunAmerica, Inc. ............................................. 320
17 Travelers Group, Inc. ........................................ 756
4 Washington Mutual, Inc. ...................................... 178
------
8,739
------
Health Care(5.7%):
15 Abbott Labs ................................................... 771
1 Allegiance Corp. .............................................. 41
9 Amgen, Inc. (c) ............................................... 462
11 Baxter International, Inc. .................................... 431
4 Cardinal Health, Inc. ......................................... 259
11 Columbia/HCA Healthcare Corp. ................................. 452
11 Eli Lilly & Co. ............................................... 825
3 HBO & Co. (b) ................................................. 154
9 Medtronic, Inc. ............................................... 619
17 Merck & Co., Inc. ............................................. 1,331
6 Phycor, Inc. (b)(c) ........................................... 165
9 Schering Plough ............................................... 609
7 Vencor, Inc. .................................................. 212
8 Watson Pharmaceutical, Inc. (c) ............................... 377
------
6,708
------
Raw Materials (2.9%):
6 Aluminum Co. of America ....................................... 408
6 Betz Laboratories, Inc. ....................................... 363
18 Crompton & Knowles Corp. ...................................... 354
5 Du Pont (EI) De Nemours ....................................... 425
6 Ferro Corp. ................................................... 162
4 IMC Global, Inc. (b) .......................................... 172
10 Monsanto Co., Inc. ............................................ 397
8 Nalco Chemical Co. ............................................ 303
8 Praxair, Inc. ................................................. 387
5 Sigma-Aldrich Corp. ........................................... 306
9 Wellman, Inc. ................................................. 158
------
3,435
------
Retail (2.7%):
11 Carson Pirie Scott & Co. (c) .................................. 285
9 Dollar General ................................................ 288
12 Gap, Inc. ..................................................... 374
11 Just For Feet, Inc. (b)(c) .................................... 276
12 McDonald's Corp. .............................................. 557
17 Officemax, Inc. (c) ........................................... 184
8 TJX Companies, Inc. ........................................... 388
34 Wal-Mart Stores, Inc. ......................................... 775
------
3,127
------
Shelter (0.2%):
16 Kaufman & Broad Home Corp. .................................... 211
COMMON STOCKS, CONTINUED:
Technology (8.0%):
10 Analog Devices, Inc. (c) ...................................... $349
5 Boeing Co. .................................................... 543
13 Cisco Systems, Inc. (c) ....................................... 795
7 Compaq Computer Corp. (c) ..................................... 520
4 Gateway 2000, Inc. (b)(c) ..................................... 225
15 Intel Corp. ................................................... 1,899
7 International Business Machines ............................... 1,057
4 Litton Industries, Inc. (c) ................................... 205
4 Lockheed Martin Corp. ......................................... 357
7 Lucent Technologies, Inc. (b) ................................. 316
19 Microsoft (c) ................................................. 1,537
12 National Semiconductor Corp. (c) .............................. 300
11 Oracle Corp. (c) .............................................. 463
10 Orbital Sciences Corp. (c) .................................... 174
8 Rohr Industries, Inc. (c) ..................................... 183
20 Sun Microsystems, Inc. (c) .................................... 501
------
9,424
------
Utilities (5.6%):
15 Central & South West Corp. .................................... 382
6 Century Telephone Enterprises ................................. 198
15 Consolidated Edison Co. of New York, Inc. (b) ................. 442
27 Edison International .......................................... 533
9 Enron Corp. ................................................... 388
12 General Public Utilities Corp. ................................ 403
20 GTE Corp. ..................................................... 901
15 Illinova Corp. ................................................ 399
14 MCN Corp. ..................................................... 390
17 New York State Electric & Gas ................................. 368
1 Panenergy Corp. ............................................... 27
7 National Fuel Gas Co. ......................................... 276
15 SBC Communications, Inc. (b) .................................. 756
12 Sprint Corp. .................................................. 479
7 Telephone & Data Systems, Inc. ................................ 254
11 Texas Utilities ............................................... 428
------
6,624
------
Total Common Stocks 59,538
-------
Corporate Bonds(7.2%):
Bank & Finance(3.8%):
$750 First Hawaiian, Inc., 6.25%, 8/15/00 ......................... 741
500 Chrysler Financial Corp., 5.88%, 2/7/01 ...................... 487
500 Midland Bank PLC, 6.95%, 3/15/11 ............................. 489
500 Ford Motor Credit, 8.38%, 1/15/00 ............................ 526
250 Lehman Brothers Holdings, 6.38, 6/1/98........................ 250
500 Lehman Brothers, Inc.,9.88%, 10/15/00 ........................ 549
800 McDonnell Douglas, 9.30%, 9/11/02 (c) ........................ 853
500 Suntrust Banks, 7.38%, 7/1/02 ................................ 516
------
4,411
------
</TABLE>
CONTINUED
<PAGE> 404
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- --------------------------------------------------------- ----------
<S> <C> <C>
CORPORATE BONDS, CONTINUED:
Industrials (1.7%):
$500 Campbell Soup Co., 5.63%, 9/15/03 ............................ $ 473
500 Dayton Hudson Co., 7.25%, 9/1/04 ............................. 504
500 Occidental Petroleum, 9.25%, 8/1/19 .......................... 592
500 J C Penney & Co., 5.38%, 11/15/98 ............................ 492
------
2,061
------
Transportation (0.4%):
500 Union Pacific Co., 7.60%, 5/1/05 ............................. 515
------
Utilities (1.3%):
500 AT&T Corp., 6.00%, 8/1/00 .................................... 489
500 AT&T Corp., 7.50%, 6/1/06 .................................... 520
500 Virginia Electric & Power, 6.63%, 4/1/03...................... 494
------
1,503
------
Total Corporate Bonds 8,490
------
FEDERAL AGENCY DEBENTURES (1.7%):
Federal National Mortgage Assoc.
1,000 5.55%, 9/8/98................................................ 992
1,000 5.53%, 2/10/99............................................... 987
------
1,979
------
U.S. GOVERNMENT AGENCY MORTGAGES (17.1%):
Federal Home Loan Mortgage Corp.
202 10.00%, 9/1/03, Pool #E30407................................. 213
322 8.00%, 3/1/08, Pool # E45796................................. 331
1,000 7.00%, 1/15/12 TBA........................................... 1,000
334 10.50%, 10/1/20, Pool #D24679................................ 366
932 8.00%, 5/1/25, Pool #D60455.................................. 949
992 6.50%, 2/1/26, Pool #D68124.................................. 949
495 7.00%, 3/1/26, Pool #D69430.................................. 486
980 7.50%, 5/1/26, Pool #C00460.................................. 981
960 8.50%, 7/1/26, Pool #C00472.................................. 994
999 7.00%, 10/1/26, Pool #D75494................................. 980
Federal National Conventional Loan
441 8.00%, 6/1/24, Pool #250085.................................. 449
698 8.00%, 6/1/24, Pool #270402.................................. 710
Federal National Mortgage Assoc.
968 6.50%, 5/1/11, Pool #337195.................................. 950
949 6.50%, 2/1/26, Pool #337115.................................. 907
955 7.50%, 5/1/26, Pool #344916.................................. 955
993 7.00%, 5/1/26, Pool #346269.................................. 972
495 7.50%, 11/1/26............................................... 494
- ----------
Percentages indicated are based on net assets of $117,862
U.S. GOVERNMENT AGENCY MORTGAGES CONTINUED:
Government National Mortgage Assoc.
$806 5.50%, 4/20/11, Pool #2222................................... $ 752
1,259 8.00%, 8/15/24, Pool #394024................................. 1,285
738 7.00%, 8/15/25, Pool #413007................................. 722
994 7.00%, 5/15/26, Pool #375344................................. 972
995 7.50%, 5/15/26, Pool #375345................................. 995
1,000 6.50%, 4/15/26, Pool #416192................................. 954
800 6.50%, 4/15/26, Pool #424185................................. 763
1,000 8.50%, 1/15/27 TBA........................................... 1,034
------
Total U.S. Government Agencies 20,163
------
U.S. TREASURY OBLIGATIONS (16.2%):
U.S.Treasury Bills
55 1/9/97 (d)..................................................... 55
10 1/16/97 (d).................................................... 10
110 3/20/97 (d).................................................... 109
40 3/27/97 (d).................................................... 39
U.S. Treasury Bonds
4,700 8.13%, 8/15/19 (b)........................................... 5,434
750 11.25%, 2/15/15.............................................. 1,108
U.S. Treasury Notes
2,500 5.38%, 11/30/97 (b)......................................... 2,494
3,500 7.25%, 2/15/98 (b).......................................... 3,557
2,250 7.00%, 4/15/99.............................................. 2,300
1,000 6.38%, 1/15/00.............................................. 1,009
3,000 6.50%, 5/31/01.............................................. 3,033
------
Total U.S. Treasury Obligations 19,148
------
Total Investments, at value 112,784
-------
REPURCHASE AGREEMENTS (6.5%):
5,654 Aubrey G. Lanston & Co., 6.80%, 1/2/97
(collateralized by $5,559 U.S. Treasury
Securities, 8.875%, 11/15/97, market
value-$5,717)............................................. 5,654
1,970 Lehman Brothers, 7.02%, 1/2/97
(collateralized by $1,885
U.S. Government Agencies, 8.06%-8.57%,
10/26/09-3/24/10, market value-
$2,010)................................................... 1,970
-------
Total Repurchase Agreements 7,624
-------
Total (Cost-$113,209) $120,408
========
- -----
</TABLE>
CONTINUED
<PAGE> 405
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting of
approximately $145. Cost for federal income tax purposes differs from value
by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................ $8,138
Unrealized depreciation............................ (1,084)
------
Net unrealized appreciation........................ $7,054
======
</TABLE>
(b) A portion of this security was loaned as of December 31, 1996.
(c) Non-income producing securities.
(d) Serves as collateral for futures contracts.
At December 31, 1996, the portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
# OF OPEN MARKET
CONTRACTS CONTRACT TYPE POSITIONS VALUE
--------- ------------- --------- -------
<S> <C> <C>
LONG CONTRACTS:
15 S & P 500, March 1997...................... $5,521 $5,584
</TABLE>
See notes to financial statements.
<PAGE> 406
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INCOME EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- --------------------------------------------------------- ----------
<S> <C>
COMMON STOCKS (85.2%):
Business Equipment & Services(4.7%):
60 Automatic Data Processing...................................... $ 2,572
180 Browning-Ferris Industries, Inc. .............................. 4,725
115 Dun & Bradstreet Corp. ........................................ 2,731
140 Electronic Data Systems Corp. ................................. 6,055
100 National Service Industries, Inc. ............................. 3,737
------
19,820
------
Capital Goods (3.9%):
145 Cooper Industries, Inc. ....................................... 6,108
70 Deere & Co. ................................................... 2,844
50 General Electric Co. .......................................... 4,944
30 Johnson Controls, Inc. ........................................ 2,486
------
16,382
------
Consumer Durable (2.2%):
90 Briggs & Stratton Corp. (b).................................... 3,960
170 Ford Motor Co. ................................................ 5,419
------
9,379
------
Consumer Non-Durable (13.9%):
75 American Greetings Corp., Class A.............................. 2,128
80 Campbell Soup Co. ............................................. 6,420
120 Coca Cola Co. ................................................. 6,315
150 ConAgra, Inc. ................................................. 7,463
80 Eastman Kodak Co. ............................................. 6,420
120 International Flavors & Fragrance.............................. 5,400
85 Philip Morris Companies, Inc. ................................. 9,573
45 Proctor & Gamble Co. .......................................... 4,837
100 Tupperware Corp. .............................................. 5,363
65 V.F. Corp. .................................................... 4,387
------
58,306
------
Consumer Services (1.4%):
130 McGraw Hill, Inc. .............................................. 5,996
------
Energy (10.4%):
70 Amoco Corp. .................................................... 5,635
30 Atlantic Richfield Co. ......................................... 3,975
90 Exxon Corp. .................................................... 8,820
85 Halliburton Co. ................................................ 5,121
70 Mobil Corp. .................................................... 8,558
90 Phillips Petroleum Co. ......................................... 3,982
45 Royal Dutch Petroleum Co. (b)................................... 7,684
------
43,775
------
Financial Services (13.3%):
102 Allstate Corp. ................................................ 5,902
125 American Express Co. .......................................... 7,063
70 BankAmerica Corp. ............................................. 6,982
60 Citicorp....................................................... 6,180
130 Federal National Mortgage Assoc. .............................. 4,843
130 First Tennessee National Corp. (b)............................. 4,875
70 J.P. Morgan & Co. ............................................. 6,834
COMMON STOCKS, CONTINUED:
Financial Services, continued:
100 Lincoln National Corp. ........................................ $ 5,250
90 Reliastar Financial Corp. ..................................... 5,197
35 TransAmerica Corp. ............................................ 2,765
------
55,891
------
Health Care (9.6%):
110 American Home Products......................................... 6,449
185 Baxter International, Inc. .................................... 7,585
80 Bristol Myers Squibb Co. ...................................... 8,700
120 Columbia/HCA Healthcare Corp. ................................. 4,890
80 Schering Plough................................................ 5,180
100 Warner Lambert Co. ............................................ 7,500
------
40,304
------
Multi-Industry (0.9%):
80 Corning, Inc. .................................................. 3,700
------
Raw Materials (4.7%):
90 Dow Chemical Co. .............................................. 7,054
70 Du Pont (EI) de Nemours & Co. ................................. 6,606
165 Nalco Chemical Co. ............................................ 5,960
------
19,620
------
Retail (0.5%):
45 May Department Stores........................................... 2,104
------
Technology (9.1%):
75 AMP, Inc. ..................................................... 2,878
60 Boeing Co. .................................................... 6,383
55 Hewlett-Packard Co. ........................................... 2,764
45 Intel Corp. ................................................... 5,892
60 Lockheed Martin Corp. ......................................... 5,490
65 Lucent Technologies, Inc. ..................................... 3,023
80 Raytheon Co. .................................................. 3,850
150 Xerox Corp. ................................................... 7,894
------
38,174
------
Transportation (0.9%):
60 Union Pacific Corp. ............................................ 3,608
------
Utilities (9.7%):
160 AT&T Corp. .................................................... 6,960
140 Bell South Corp. .............................................. 5,652
170 Central & South West Corp. .................................... 4,356
100 Duke Power Co. (b)............................................. 4,625
160 Entergy Corp. ................................................. 4,440
125 GTE Corp. ..................................................... 5,687
125 SBC Communications, Inc. (b)................................... 6,469
60 Sprint Corp. .................................................. 2,393
------
40,582
------
Total Common Stocks 357,641
-------
Convertible Bonds (7.3%):
$4,000 Alza Corp., 5.00%, 5/1/06..................................... 3,855
</TABLE>
CONTINUED
<PAGE> 407
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INCOME EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- --------------------------------------------------------- ----------
CONVERTIBLE BONDS, CONTINUED:
<S> <C>
$1,000 Healthsouth Rehabilitation Corp., 5.00%,
4/1/01.......................................................... $ 1,989
2,000 Hilton Hotels, 5.00%, 5/15/06............................... 2,088
4,000 Home Depot,
3.25%, 10/1/01
Callable 10/1/99 @ 100.81, 10/1/00 @ 100.................... 3,920
4,000 Masco Corp., 5.25%, 2/15/12................................. 4,055
3,750 Medical Care International, 6.75%,
10/1/06................................................... 3,806
2,250 Pennzoil Co., 6.50%, 1/15/03 (b)............................ 3,465
3,500 Pep Boys-Manny, Moe, & Jack, 4.00%,
9/1/99.................................................... 3,535
3,750 Price Co., 5.50%, 2/28/12................................... 3,863
-------
Total Convertible Bonds 30,576
-------
PREFERRED STOCKS (6.6%):
90 Corning Delaware............................................ 5,726
65 Crown Cork & Seal........................................... 3,380
PREFERRED STOCKS, CONTINUED:
75 Cyprus Amax Minerals Co. ................................... $ 4,059
40 Microsoft Corp. ............................................ 3,205
25 Salomon, Inc. .............................................. 2,672
100 Sonoco Products............................................. 5,488
175 Westinghouse Electric....................................... 3,128
-------
Total Preferred Stocks 27,658
-------
Total Investments, at value 415,875
-------
REPURCHASE AGREEMENTS (0.8%):
$3,482 Lehman Brothers, 7.02%, 1/2/97,
(collaterized by $3,665 Federal Home
Loan Mortgage Corps., 5.78%-6.18%,
10/22/03-11/26/03, market value-
$3,555)..................................................... 3,482
-------
Total Repurchase Agreements 3,482
-------
Total (Cost-$293,385) (a) $419,357
</TABLE> ========
- -----
Percentages indicated are based on net assets of $419,934.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................... $127,983
Unrealized depreciation........................... (2,011)
--------
Net unrealized appreciation....................... $125,972
========
</TABLE>
(b) A portion of this security was loaned as of December 31, 1996.
See notes to financial statements.
<PAGE> 408
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------- -------------------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS (94.3%):
Business Equipment & Services (1.9%):
27 Automatic Data Processing..................................... $ 1,137
19 Browning-Ferris Industries, Inc. ............................. 498
9 Canadian Moore Corp. Ltd. .................................... 183
7 Ceridian Corp. (c) ........................................... 274
15 Cognizant Corp. .............................................. 505
7 Computer Science Corp. (c) ................................... 542
8 Deluxe Corp. ................................................. 248
15 Dun & Bradstreet Corp. ....................................... 363
6 Ecolab, Inc. ................................................. 216
40 First Data Corp. ............................................. 1,475
9 H & R Block................................................... 266
7 Interpublic Group Cos., Inc. ................................. 337
3 John H. Harland Co. .......................................... 87
27 Laidlaw Inc., Class B, Non-Voting (b) ........................ 306
5 National Service Industries, Inc. ............................ 173
13 Pitney Bowes, Inc. ........................................... 734
7 Ryder Systems, Inc. .......................................... 203
14 R.R. Donnelley & Sons Co. .................................... 442
5 Safety-Kleen Corp. ........................................... 88
20 Service Corp. International................................... 569
44 WMX Technologies, Inc. (b) ................................... 1,420
------
10,066
------
Capital Goods (5.4%):
8 Black & Decker Corp. ......................................... 229
6 Case Corp. ................................................... 343
17 Caterpillar, Inc. (b) ........................................ 1,303
4 Cincinnati Milacron, Inc. .................................... 78
10 Cooper Industries, Inc. ...................................... 410
4 Crane Co. .................................................... 112
4 Cummins Engine, Inc. ......................................... 174
23 Deere & Co. .................................................. 934
10 Dover Corp. (b) .............................................. 504
20 Emerson Electric Co. ......................................... 1,934
8 Fluor Corp. .................................................. 476
3 Foster Wheeler Corp. ......................................... 128
148 General Electric Co. ......................................... 14,660
5 General Signal Corp. ......................................... 194
3 Giddings & Lewis, Inc. ....................................... 38
5 Grainger W.W., Inc. .......................................... 395
4 Harnischfeger Industries, Inc. ............................... 208
11 Honeywell, Inc. .............................................. 750
11 Illinois Tool Works........................................... 851
9 Ingersoll Rand Co. ........................................... 411
4 Johnson Controls, Inc. ....................................... 310
0 Nacco Industries, Inc. ....................................... 21
7 Navistar International Corp. (c) ............................. 64
3 Newport News Shipbuilding (c) ................................ 48
4 Owens-Corning Fiberglass Corp. ............................... 189
3 Paccar, Inc. ................................................. 234
COMMON STOCKS, CONTINUED:
Capital Goods, Continued:
17 PPG Industries, Inc. ......................................... $ 977
8 Sherwin-Williams Co. ......................................... 442
6 Snap-On, Inc. ................................................ 205
8 Stanley Works................................................. 210
3 Timken Co. ................................................... 123
2 Trinova Corp. ................................................ 89
14 Tyco Labs..................................................... 722
49 Westinghouse Electric Corp. (b) .............................. 973
------
29,000
------
Consumer Durable (2.3%):
2 Briggs & Stratton Corp. (b) .................................. 104
65 Chrysler Corp. ............................................... 2,155
8 Cooper Tire & Rubber Co. ..................................... 152
9 Dana Corp. ................................................... 290
7 Eaton Corp. .................................................. 489
6 Echlin, Inc. ................................................. 175
107 Ford Motor Co. ............................................... 3,397
68 General Motors Corp. ......................................... 3,800
11 Genuine Parts Co. ............................................ 488
14 Goodyear Tire & Rubber Co. ................................... 695
10 ITT Industries, Inc. ......................................... 251
9 Maytag Corp. ................................................. 183
7 Whirlpool Corp. (b) .......................................... 322
------
12,501
------
Consumer Non-Durable (12.2%):
2 Alberto Culver Co., Class B................................... 109
16 American Brands, Inc. ........................................ 786
7 American Greetings Corp., Class A............................. 196
45 Anheuser Busch Co., Inc. ..................................... 1,785
50 Archer-Daniels Midland Co. ................................... 1,106
13 Avon Products, Inc. .......................................... 714
2 Ball Corp. ................................................... 64
5 Bemis Co. .................................................... 185
6 Brown-Forman Corp., Class B................................... 288
21 Campbell Soup Co. ............................................ 1,698
5 Clorox Co. ................................................... 475
13 Colgate Palmolive Co. ........................................ 1,210
22 ConAgra, Inc. ................................................ 1,071
3 Coors Adolph Co., Class B..................................... 65
13 CPC International............................................. 1,023
11 Crown Cork & Seal Co. ........................................ 607
30 Eastman Kodak Co. ............................................ 2,448
3 Fleming Co., Inc. ............................................ 58
7 Fruit of The Loom, Inc., Class A (c) ......................... 265
14 General Mills, Inc. .......................................... 911
40 Gillette Co. (b) ............................................. 3,071
14 Hershey Foods Corp. .......................................... 606
33 H.J. Heinz Co. ............................................... 1,177
10 International Flavors & Fragrance (b) ........................ 447
4 Jostens, Inc. ................................................ 79
</TABLE>
CONTINUED
<PAGE> 409
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------- -------------------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Consumer Non-Durable, continued:
19 Kellogg Co. (b) .............................................. $ 1,277
7 Liz Claiborne, Inc. .......................................... 270
14 Newell Companies, Inc. ....................................... 451
26 Nike, Inc., Class B........................................... 1,548
141 PepsiCo, Inc. ................................................ 4,118
74 Phillip Morris Companies, Inc. ............................... 8,279
8 Pioneer Hi Bred International, Inc. .......................... 553
4 Polaroid Corp. ............................................... 191
61 Proctor & Gamble Co. (b) ..................................... 6,605
12 Quaker Oats Co. .............................................. 458
9 Ralston Purina Group.......................................... 693
5 Reebok International Ltd. (b) ................................ 221
14 Rubbermaid, Inc. ............................................. 322
4 Russell Corp. ................................................ 106
43 Sara Lee, Corp. .............................................. 1,608
33 Seagram Co., Ltd. ............................................ 1,298
1 Springs Industries, Inc. Class A.............................. 45
5 Stride Rite Corp. ............................................ 48
7 Supervalu, Inc. .............................................. 184
16 Sysco Corp. .................................................. 536
224 The Coca Cola Co. ............................................ 11,771
6 Tupperware Corp. ............................................. 306
14 Unilever NV, NY Shares (b) ................................... 2,483
18 UST, Inc. .................................................... 583
6 V.F. Corp. ................................................... 392
10 Wrigley (Wm.) Jr. Co. ........................................ 575
------
65,365
------
Consumer Services (3.4%):
9 Brunswick Corp. .............................................. 206
30 Comcast Corp., Special........................................ 528
35 CUC International, Inc. (c) .................................. 838
9 Dow Jones & Co., Inc. ........................................ 295
13 Gannett, Inc. ................................................ 956
9 Harrah's Entertainment, Inc. (c) ............................. 179
8 Hasbro, Inc. (b) ............................................. 307
22 Hilton Hotels (b) ............................................ 588
11 Hospitality Franchise Systems, Inc. (b) ...................... 645
10 ITT Corp. (c) ................................................ 440
3 King World Productions, Inc. (c) ............................. 124
9 Knight-Ridder, Inc. (b) ...................................... 346
11 Marriott Intl., Inc. ......................................... 627
25 Mattel, Inc. (b) ............................................. 684
9 McGraw Hill, Inc. ............................................ 422
2 Meredith Corp. ............................................... 127
9 New York Times Co., Class A................................... 338
58 Tele-Communications, Inc., Class A (b)(c)..................... 762
51 Time Warner, Inc. ............................................ 1,911
10 Times Mirror Co., Class A (b) ................................ 479
6 Tribune Co. .................................................. 474
COMMON STOCKS, CONTINUED:
Consumer Services, Continued:
42 U.S. West, Inc. .............................................. $ 1,353
32 Viacom, Inc., Class B (c) .................................... 1,130
61 Walt Disney Co. .............................................. 4,236
------
17,995
------
Energy (8.7%):
8 Amerada Hess Corp. ........................................... 480
44 Amoco Corp. .................................................. 3,574
6 Ashland, Inc. (b) ............................................ 246
14 Atlantic Richfield Co. ....................................... 1,917
13 Baker Hughes, Inc. ........................................... 443
11 Burlington Northern........................................... 574
58 Chevron Corp. (b) ............................................ 3,778
16 Dresser Industries, Inc. ..................................... 493
112 Exxon Corp. .................................................. 10,953
11 Halliburton Co. .............................................. 684
2 Helmerich & Payne, Inc. ...................................... 98
5 Kerr McGee Corp. ............................................. 355
3 Louisiana Land & Exploration Co. ............................. 159
5 McDermott International, Inc. ................................ 87
35 Mobil Corp. .................................................. 4,308
29 Occidental Petroleums Corp. .................................. 668
9 Oryx Energy Co. (c) .......................................... 217
4 Pennzoil Co. ................................................. 245
23 Phillips Petroleum Co. ....................................... 1,037
8 Rowan Cos., Inc. (c) ......................................... 172
48 Royal Dutch Petroleum Co. (b) ................................ 8,206
8 Santa Fe Energy Resources, Inc. (c) .......................... 110
22 Schlumberger Ltd. ............................................ 2,174
7 Sun, Inc. .................................................... 162
16 Tenneco, Inc. ................................................ 719
23 Texaco, Inc. ................................................. 2,300
22 Union Pacific Resources Group................................. 653
22 Unocal Corp. (b) ............................................. 897
26 USX-Marathon Group............................................ 619
5 Western Atlas, Inc. (c) ...................................... 376
------
46,704
------
Financial Services (13.8%):
4 Alexander & Alexander Services, Inc. ......................... 70
40 Allstate Corp. ............................................... 2,316
43 American Express Co. ......................................... 2,407
19 American General Corp. (b) ................................... 758
42 American International Group.................................. 4,595
10 Aon Corp. .................................................... 590
39 Banc One Corp. ............................................... 1,684
13 Bank of Boston Corp. ......................................... 846
36 Bank of New York Co., Inc. (b) ............................... 1,201
32 Bankamerica Corp. ............................................ 3,214
7 Bankers Trust New York Corp. ................................. 637
17 Barnett Banks, Inc. .......................................... 709
5 Beneficial Corp. ............................................. 318
</TABLE>
CONTINUED
<PAGE> 410
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------- -------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Financial Services, continued:
14 Boatmen's Bancshares, Inc. .................... $ 909
39 Chase Manhattan Corp. ......................... 3,487
16 Chubb Corp. ................................... 848
7 CIGNA Corp. ................................... 943
43 Citicorp ...................................... 4,475
10 Comerica, Inc. ................................ 529
20 Corestates Financial Corp. (b) ................ 1,030
15 Dean Witter, Discover & Co. ................... 1,013
16 Federal Home Loan Mortgage Corp. .............. 1,751
98 Federal National Mortgage Assoc. .............. 3,641
9 Fifth Third Bancorp ........................... 559
13 First Bank System, Inc. ....................... 894
28 First Chicago NBD Corp. (b) ................... 1,526
25 First Union Corp. ............................. 1,844
23 Fleet Financial Group, Inc. ................... 1,151
7 General Re Corp. .............................. 1,181
6 Golden West Financial Corp. ................... 361
12 Great Western Financial Corp. ................. 352
12 Green Tree Financial Corp. .................... 479
8 Household International, Inc. ................. 783
10 H.F. Ahmanson & Co. (b) ....................... 336
10 ITT Hartford Group, Inc. ...................... 685
7 Jefferson Pilot Corp. ......................... 378
17 J.P. Morgan & Co., Inc. ....................... 1,674
21 KeyCorp ....................................... 1,040
9 Lincoln National Corp. ........................ 488
7 Marsh & McLennan Co., Inc. .................... 707
4 MBIA, Inc. .................................... 385
20 MBNA Corp. .................................... 829
12 Mellon Bank Corp. ............................. 859
16 Merrill Lynch & Co. ........................... 1,273
5 MGIC Investment Corp. ......................... 403
14 Morgan Stanley Group, Inc. .................... 788
20 National City Corp. ........................... 889
26 NationsBank Corp. ............................. 2,559
33 Norwest Corp. ................................. 1,434
31 PNC Bank Corp. (b) ............................ 1,149
9 Providian Corp. ............................... 446
5 Republic N Y Corp. ............................ 408
11 SAFECO Corp. .................................. 435
9 Salomon, Inc. ................................. 445
8 St. Paul Co. (b) .............................. 453
21 SunTrust Banks, Inc. .......................... 1,017
7 Torchmark Corp. ............................... 335
7 TransAmerica Corp. ............................ 514
57 Travelers Group, Inc. ......................... 2,603
7 UNUM Corp. .................................... 499
3 US Life Corp. ................................. 100
10 USF & G Corp. ................................. 209
14 U.S. Bancorp (b) .............................. 635
15 Wachovia Corp. ................................ 870
COMMON STOCKS, CONTINUED
Financial Services, continued:
8 Wells Fargo & Co. (b) .......................... $ 2,253
-------
74,199
-------
Health Care (9.9%):
70 Abbott Laboratories ............................ 3,562
13 Aetna (c) ...................................... 1,049
6 Allergan, Inc. ................................. 207
8 Alza Corp. (b)(c) .............................. 194
57 American Home Products ......................... 3,321
24 Amgen, Inc. (c) ................................ 1,300
5 Bausch & Lomb, Inc. ............................ 189
25 Baxter International, Inc. ..................... 1,009
12 Becton Dickinson & Co. ......................... 519
8 Beverly Enterprises, Inc. (c) .................. 100
10 Biomet, Inc. (b)(c) ............................ 155
16 Boston Scientific Corp. (c) .................... 930
45 Bristol Myers Squibb Co. ....................... 4,938
59 Columbia/HCA Healthcare Corp. (b) .............. 2,419
5 C.R. Bard, Inc. ................................ 144
49 Eli Lilly & Co. ................................ 3,611
6 Guidant Corp. .................................. 365
15 Humana, Inc. (c) ............................... 277
119 Johnson & Johnson .............................. 5,934
7 Mallinckrodt Group, Inc. (b) ................... 309
6 Manor Care, Inc. ............................... 154
22 Medtronic, Inc. ................................ 1,473
109 Merck & Co., Inc. (b) .......................... 8,659
4 Millipore Corp. ................................ 182
58 Pfizer, Inc. ................................... 4,781
45 Pharmacia & Upjohn, Inc. ....................... 1,790
33 Schering-Plough Corp. .......................... 2,122
2 Shared Medical Systems Corp. (b) ............... 76
7 St. Jude Medical Center, Inc. (b) .............. 315
18 Tenet Healthcare Corp. (b)(c) .................. 398
16 United Healthcare Corp. (b) .................... 728
5 U.S. Surgical, Corp. ........................... 213
24 Warner Lambert Co. ............................. 1,817
-------
53,240
-------
Multi-Industry (1.7%):
12 Alco Standard Corp. ............................ 598
25 Allied Signal, Inc. ............................ 1,677
21 Corning, Inc. .................................. 955
3 FMC Corp. (c) .................................. 221
7 Harcourt General, Inc. ......................... 320
10 Loews Corp. .................................... 980
38 Minnesota Mining & Manufacturing Co. ........... 3,124
7 Textron, Inc. .................................. 687
12 TRW, Inc. ...................................... 576
9 Whittman Corp. ................................. 212
-------
9,350
-------
</TABLE>
CONTINUED
<PAGE> 411
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------- -------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Raw Materials (4.1%):
10 Air Products & Chemical, Inc. ................... $ 695
20 Alcan Aluminum Ltd. ............................. 674
16 Allegheny Teledyne, Inc. ........................ 358
16 Aluminum Co. of America ......................... 1,005
9 Armco, Inc. (c) ................................. 37
4 ASARCO, Inc. .................................... 98
10 Avery Dennison Corp. ............................ 369
32 Barrick Gold Corp. (b) .......................... 911
20 Battle Mountain Gold Co. ........................ 139
10 Bethlehem Steel Corp. (c) ....................... 86
5 B. F. Goodrich Co. .............................. 188
9 Cyprus Amax Minerals Co. (b) .................... 208
22 Dow Chemical Co. ................................ 1,745
50 Du Pont (EI) de Nemours & Co. ................... 4,735
7 Eastman Chemical Co. ............................ 412
11 Echo Bay Mines Ltd. ............................. 71
13 Engelhard Corp. ................................. 250
18 Freeport-McMoran Copper & Gold, Class B ......... 547
6 Great Lakes Chemical Corp. ...................... 276
10 Hercules, Inc. .................................. 419
13 Homestake Mining Co. ............................ 179
15 Inco Ltd. (b) ................................... 477
4 Inland Steel Industries, Inc. ................... 85
53 Monsanto Co. .................................... 2,042
13 Morton International, Inc. ...................... 541
6 Nalco Chemical Co. .............................. 228
9 Newmont Mining Corp. ............................ 397
8 Nucor Corp. ..................................... 401
10 Pall Corp. ...................................... 260
6 Phelps Dodge Corp. .............................. 433
21 Placer Dome, Inc. ............................... 464
13 Praxair, Inc. ................................... 615
6 Reynolds Metals Co. ............................. 316
6 Rohm & Haas Co. (b) ............................. 514
11 Santa Fe Pacific Gold Corp. ..................... 177
5 Sigma-Aldrich Corp. ............................. 287
12 Union Carbide Corp. ............................. 508
7 USX-U.S. Steel Group, Inc. ...................... 229
8 Worthington Industries, Inc. .................... 146
8 W.R. Grace & Co. ................................ 434
------
21,956
------
Retail (4.6%):
23 Albertsons, Inc. ................................ 810
13 American Stores Co. ............................. 533
9 Charming Shoppes (c) ............................ 46
9 Circuit City Stores, Inc. (b) ................... 259
9 CVS Corp. ....................................... 379
14 Darden Restaurants, Inc. ........................ 126
19 Dayton Hudson Corp. ............................. 758
10 Dillard Department Stores, Inc., Class A ........ 307
COMMON STOCKS, CONTINUED:
Retail, continued:
18 Federated Department Stores,
Inc. (b)(c) ................................... $ 621
26 Gap, Inc. ..................................... 789
5 Giant Food Inc., Class A ...................... 187
3 Great Atlantic & Pacific Tea, Inc. ............ 110
43 Home Depot, Inc. .............................. 2,143
20 J.C. Penney, Inc. (b) ......................... 984
41 K Mart, Inc. (b)(c) ........................... 425
11 Kroger Co. (c) ................................ 511
24 Limited, Inc. ................................. 446
1 Longs Drug Stores, Inc. ....................... 58
15 Lowe's Co. (b) ................................ 542
2 Luby's Cafeteria, Inc. ........................ 34
22 May Department Stores ......................... 1,050
63 McDonald's Corp. .............................. 2,833
3 Mercantile Stores Co., Inc. ................... 160
8 Nordstrom, Inc. ............................... 269
6 Pep Boys-Manny, Moe & Jack .................... 173
17 Price/Costco Co. (c) .......................... 438
10 Rite Aid Corp. ................................ 405
5 Ryan Family Steak Houses, Inc. (c) ............ 35
35 Sears Roebuck & Co. ........................... 1,606
5 Shoney's, Inc. (c) ............................ 34
6 Tandy Corp. ................................... 255
7 TJX Cos., Inc. ................................ 317
25 Toys R Us, Inc. (b)(c) ........................ 752
22 Walgreen Co. .................................. 894
205 Wal-Mart Stores, Inc. ......................... 4,697
11 Wendy's International, Inc. ................... 233
13 Winn Dixie Stores, Inc. ....................... 426
12 Woolworth Corp. ............................... 258
------
24,903
------
Shelter (1.6%):
3 Armstrong World Industries, Inc. .............. 226
5 Boise Cascade Corp. ........................... 146
3 Centex Corp. .................................. 98
8 Champion International Co. .................... 358
3 Fleetwood Enterprises, Inc. ................... 86
8 Georgia Pacific Corp. ......................... 582
27 International Paper Co. ....................... 1,086
8 James River Corp. of Virginia ................. 251
3 Kaufman & Broad Home Corp. .................... 45
25 Kimberly Clark Corp. .......................... 2,384
10 Louisiana Pacific Corp. ....................... 203
14 Masco Corp. ................................... 508
5 Mead Corp. .................................... 309
2 Potlatch Corp. ................................ 106
2 Pulte Corp. ................................... 67
8 Stone Container Corp. ......................... 122
5 Temple Inland, Inc. ........................... 291
</TABLE>
CONTINUED
<PAGE> 412
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------- -------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Shelter, continued:
6 Union Camp Corp. ................................ $ 304
9 Westvaco Corp. .................................. 260
18 Weyerhaeuser Co. ................................ 868
5 Williamette Industries, Inc. .................... 369
-------
8,669
-------
Technology (13.6%):
10 Advanced Micro Devices, Inc. (b)(c) ............. 267
10 Amdahl Corp. (c) ................................ 125
19 AMP, Inc. ....................................... 730
5 Andrew Corp. (c) ................................ 277
11 Apple Computer, Inc. (b)(c) ..................... 226
16 Applied Materials, Inc. (c) ..................... 564
5 Auto Desk, Inc. (b) ............................. 127
17 Bay Networks, Inc. (c) .......................... 347
32 Boeing Co. ...................................... 3,400
13 Cabletron Systems (c) ........................... 446
58 Cisco Systems, Inc. (c) ......................... 3,703
24 Compaq Computer Corp. (b)(c) .................... 1,764
33 Computer Associates International, Inc. ......... 1,626
3 Data General Corp. (c) .......................... 43
16 Dell Computer Corp. (b)(c) ...................... 850
13 Digital Equipment Corp. (c) ..................... 483
10 DSC Communications Corp. (c) .................... 177
5 EG&G, Inc. ...................................... 101
20 EMC Corp. (b)(c) ................................ 669
6 General Dynamics Corp. .......................... 401
11 General Instrument Corp. (c) .................... 231
3 Harris Corp. .................................... 237
91 Hewlett Packard Co. ............................. 4,584
74 Intel Corp. ..................................... 9,700
4 Intergraph Corp. (c) ............................ 44
47 International Business Machines ................. 7,166
18 Lockheed Martin Corp. ........................... 1,647
11 LSI Logic Corp. (c) ............................. 305
57 Lucent Technologies, Inc. ....................... 2,629
20 McDonnell Douglas Corp. ......................... 1,265
18 Micron Technology, Inc. (b) ..................... 536
107 Microsoft Corp. (c) ............................. 8,874
53 Motorola, Inc. .................................. 3,238
11 National Semiconductor Corp. (c) ................ 277
23 Northern Telecom, Ltd. (b) ...................... 1,408
5 Northrop Grumman Corp. .......................... 428
33 Novell, Inc. (b)(c) ............................. 312
59 Oracle Corp. (c) ................................ 2,444
4 Perkin-Elmer Corp. .............................. 239
4 Raychem Corp. ................................... 325
22 Raytheon Co. .................................... 1,061
19 Rockwell International Corp. .................... 1,185
7 Scientific-Atlanta, Inc. ........................ 105
18 Seagate Technology, Inc. (c) .................... 727
COMMON STOCKS, CONTINUED:
Technology, continued:
15 Silicon Graphics, Inc. (c) ...................... $ 377
33 Sun Microsystems, Inc. (c) ...................... 858
10 Tandem Computers (c) ............................ 141
6 TCI Satellite Entertainment,
Class A, (c) .................................... 58
3 Tektronix, Inc. ................................. 150
16 Tellabs, Inc. (c) ............................... 594
17 Texas Instruments, Inc. ......................... 1,077
4 Thomas & Betts Corp. ............................ 188
15 3Com Corp. (c) .................................. 1,071
15 Unisys, Corp. (c) ............................... 103
22 United Technologies Corp. ....................... 1,442
29 Xerox Corp. (b) ................................. 1,543
-------
72,895
-------
Transportation (1.3%):
8 AMR Corp. (c) ................................... 705
14 Burlington Northern Santa Fe Corp. .............. 1,166
4 Caliber Systems, Inc. ........................... 68
6 Conrail, Inc. ................................... 556
2 Consolidated Freightways Corp. (c) .............. 16
0 Consolidated Transportation, Inc. ............... 2
19 CSX Corp. ....................................... 782
7 Delta Air Lines, Inc. ........................... 505
11 Federal Express Corp. (b)(c) .................... 474
12 Norfolk Southern Corp. .......................... 1,022
13 Southwest Airlines Co. .......................... 290
22 Union Pacific Corp. ............................. 1,318
5 US Air Group (c) ................................ 118
-------
7,022
-------
Utilities (9.7%):
44 Airtouch Communications, Inc. (c) ............... 1,120
17 Alltel Corp. .................................... 540
17 American Electric Power, Inc. ................... 689
50 Ameritech Corp. ................................. 3,023
145 AT&T Corp. ...................................... 6,296
13 Baltimore Gas & Electric Co. .................... 354
39 Bell Atlantic Corp. (b) ......................... 2,548
89 BellSouth Corp. ................................. 3,584
14 Carolina Power & Light Co. ...................... 517
19 Central & South West Corp. ...................... 480
14 Cinergy Corp. ................................... 457
9 Coastal Corp. ................................... 443
5 Columbia Gas System, Inc. ....................... 326
21 Consolidated Edison Co. of New York, Inc. ....... 617
8 Consolidated Natural Gas Co. .................... 452
13 Detroit Edison Co. .............................. 427
15 Dominion Resources Inc. of Virginia ............. 592
18 Duke Power Co., Inc. ............................ 847
1 Eastern Enterprises ............................. 38
</TABLE>
CONTINUED
<PAGE> 413
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------- -------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Utilities, continued:
40 Edison International .......................... $ 795
1 El Paso Natural Gas ........................... 75
23 Enron Corp. ................................... 971
6 Enserch Corp. ................................. 143
21 Entergy Corp. ................................. 570
17 Florida Power & Light, Inc. ................... 772
10 General Public Utilities Corp. ................ 343
87 GTE Corp. ..................................... 3,940
23 Houston Industries (b) ........................ 524
62 MCI Communications ............................ 2,023
13 Niagara Mohawk Power Corp. (c) ................ 128
5 NICOR, Inc. ................................... 183
11 Noram Energy Corp. ............................ 173
6 Northern States Power Co. ..................... 285
39 NYNEX Corp. ................................... 1,856
14 Ohio Edison Co. ............................... 311
2 Oneok, Inc. ................................... 69
8 Pacific Enterprises ........................... 233
38 Pacific Gas & Electric Co. .................... 802
26 Pacificorp .................................... 524
38 Pacific Telesis Group ......................... 1,405
13 Panenergy Corp. ............................... 589
20 Peco Energy Corp. ............................. 500
3 Peoples Energy Corp. .......................... 104
2 Peoples Energy Rights ......................... 0
14 PP&L Resources, Inc. .......................... 324
22 Public Service Enterprise Group (b) ........... 600
55 SBC Communications, Inc. (b) .................. 2,824
8 Sonat, Inc. ................................... 401
60 Southern Co. .................................. 1,349
39 Sprint Corp. .................................. 1,547
20 Texas Utilities ............................... 816
19 Unicom Corp. .................................. 515
COMMON STOCKS, CONTINUED:
Utilities, continued:
9 Union Electric Co. ............................ $ 346
56 U.S. West Media Group (c) ..................... 1,037
14 Williams Cos., Inc. ........................... 528
34 WorldCom, Inc. (b) ............................ 881
--------
51,836
--------
Total Common Stocks ......................................... 505,701
--------
U.S. TREASURY OBLIGATIONS (0.3%):
U.S. Treasury Bills
$ 245 1/2/97 (d) .................................... 245
60 1/9/97 (d) .................................... 60
40 1/16/97 (d) ................................... 40
380 1/23/97 (d) ................................... 379
105 1/30/97 (d) ................................... 104
30 3/13/97 (d) ................................... 30
610 3/20/97 (d) ................................... 604
--------
Total U.S. Treasury Obligations 1,462
--------
Total Investments, at value 507,163
--------
REPURCHASE AGREEMENTS (5.4%):
27,892 Aubrey G. Lanston & Co., 6.80%,
1/2/97, (Collateralized by $27,927
U.S. Treasury Securities, 6.00%,
9/30/98, market value-$28,314) ............... 27,892
1,248 Lehman Brothers, 7.02%, 1/2/97
(Collateralized by $1,225 various
U.S. Government Securities
7.83%-7.99%, 3/23/05-4/13/05,
market value $1,277).......................... 1,248
--------
Total Repurchase Agreements 29,140
--------
Total (Cost-$405,033)(a) $536,303
========
</TABLE>
- ----------
Percentages indicated are based on net assets of $536,203.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $413. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......................$139,577
Unrealized depreciation....................... (8,720)
--------
Net unrealized appreciation...................$130,857
========
</TABLE>
(b) A portion of this security was loaned as of December 31, 1996.
(c) Non-income producing securities.
(d) Serves as collateral for futures contracts.
At December 31, 1996, the portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
# OF OPEN MARKET
CONTRACTS LONG CONTRACTS: CONTRACT TYPE POSITIONS VALUE
- ----------- --------------- ------------- ---------- ------
<S> <C> <C> <C>
74 S & P 500, March 1997..................$28,088 $27,546
</TABLE>
See notes to financial statements.
<PAGE> 414
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
VALUE GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ----------------------------------------------------- -------
<S> <C> <C>
COMMON STOCKS (97.3%):
Capital Goods (7.5%):
59 BW/IP Holdings, Inc. ............................. $ 978
84 Crane Co. ........................................ 2,449
30 Fluor Corp. ...................................... 1,851
62 General Electric Co. ............................. 6,120
23 Hubbell, Inc., Class B ........................... 1,012
39 Ingersoll Rand Co. ............................... 1,713
69 Mark IV Industries, Inc. ......................... 1,550
32 Teleflex Inc. .................................... 1,658
40 Tyco Labs ........................................ 2,094
35 York International Corp. ......................... 1,967
------
21,392
------
Consumer Durable (2.7%):
28 Briggs & Stratton Corp. .......................... 1,236
99 Ford Motor Co. ................................... 3,156
49 Harley-Davidson, Inc. ............................ 2,303
20 Harman International Industries, Inc. ............ 1,090
------
7,785
------
Consumer Non-Durable (11.8%):
88 Archer-Daniels-Midland Co. ....................... 1,940
29 Colgate Palmolive Co. ............................ 2,684
33 CPC International ................................ 2,527
30 Dole Food Co. .................................... 1,013
39 First Brands Corp. ............................... 1,101
64 Newell Companies, Inc. ........................... 2,003
33 Nine West Group, Inc. (c) ........................ 1,526
48 PepsiCo, Inc. .................................... 1,389
49 Philip Morris Co., Inc. .......................... 5,541
23 Proctor & Gamble Co. ............................. 2,505
39 Revlon Inc. (c) .................................. 1,165
36 RJR Nabisco Holdings Corp. ....................... 1,207
39 Smithfield Foods, Inc. (c) ....................... 1,463
52 Sysco Corp. ...................................... 1,680
59 The Coca Cola Co. ................................ 3,094
29 Tupperware Corp. ................................. 1,566
33 Universal Corp. .................................. 1,073
------
33,477
------
Consumer Services (4.6%):
30 Belo (A.H.) Corp., Series A (b) .................. 1,039
66 Callaway Golf Co. ................................ 1,903
44 Carnival Cruise Lines ............................ 1,436
48 Hasbro, Inc. (b) ................................. 1,858
69 Hilton Hotels (b) ................................ 1,805
31 MGM Grand, Inc. (c) .............................. 1,074
69 Time Warner, Inc. ................................ 2,580
20 Walt Disney Co. .................................. 1,372
------
13,067
------
Energy (8.1%):
16 Atlantic Richfield Co. ........................... 2,147
COMMON STOCKS, CONTINUED:
Energy, continued:
20 BJ Services Co. (b)(c) ........................... $ 1,005
41 Devon Energy Corp. ............................... 1,421
65 Exxon Corp. ...................................... 6,360
29 Halliburton Co. .................................. 1,765
21 Helmerich & Payne, Inc. .......................... 1,074
45 Mapco, Inc. ...................................... 1,520
29 Mobil Corp. ...................................... 3,557
20 Tosco Corp. ...................................... 1,598
64 USX-Marathon Group ............................... 1,523
38 Weatherford Enterra, Inc. (c) .................... 1,131
------
23,101
------
Financial Services (14.5%):
15 Aames Financial Corp. (b) ........................ 524
47 AFLAC, Inc. ...................................... 2,005
20 AmSouth Bancorporation ........................... 987
36 Bancorp Hawaii, Inc. ............................. 1,499
40 BankAmerica Corp. ................................ 4,000
36 Charter One Financial, Inc. ...................... 1,521
38 Chase Manhattan Corp. ............................ 3,347
21 Cigna Corp. ...................................... 2,842
81 Equitable Co., Inc. (b) .......................... 1,995
95 Federal National Mortgage Assoc .................. 3,554
36 First American Bank Corp. ........................ 2,171
44 Imperial Credit Industries, Inc. (c) ............. 920
38 ITT Hartford Group, Inc. ......................... 2,545
25 J.P. Morgan & Co., Inc. .......................... 2,402
42 KeyCorp .......................................... 2,121
26 Provident Co., Inc. (b) .......................... 1,238
48 Southtrust Corp. ................................. 1,670
35 SunAmerica, Inc. ................................. 1,535
77 Travelers Group, Inc. ............................ 3,492
19 Washington Mutual, Inc. .......................... 823
------
41,191
------
Health Care (10.9%):
70 Abbott Labs ...................................... 3,568
8 Allegiance Corp. ................................. 222
39 Amgen, Inc. (c) .................................. 2,142
49 Baxter International, Inc. ....................... 2,001
21 Cardinal Health, Inc. ............................ 1,203
51 Columbia/HCA Healthcare Corp. (b) ................ 2,095
52 Eli Lilly & Co. .................................. 3,796
12 HBO & Co. ........................................ 724
42 Medtronic, Inc. .................................. 2,876
78 Merck & Co., Inc. ................................ 6,182
27 Phycor Inc. (b)(c) ............................... 760
44 Schering-Plough Corp. ............................ 2,823
31 Vencor, Inc. (c) ................................. 984
39 Watson Pharmaceutical, Inc. (c) .................. 1,757
------
31,133
------
</TABLE>
CONTINUED
<PAGE> 415
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
VALUE GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ----------------------------------------------------- -------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Raw Materials (5.6%):
29 Aluminum Co. of America .......................... $ 1,874
29 Betz Laboratories Inc. ........................... 1,685
85 Crompton & Knowles Corp. ......................... 1,638
21 Du Pont (EI) De Nemours & Co. .................... 1,991
27 Ferro Corp. ...................................... 755
21 IMC Global Inc. (b) .............................. 806
48 Monsanto Co. ..................................... 1,847
39 Nalco Chemical Co. ............................... 1,398
39 Praxair, Inc. .................................... 1,808
23 Sigma-Aldrich Corp. .............................. 1,411
43 Wellman, Inc. .................................... 733
---------
15,946
---------
Retail (5.1%):
52 Carson Pirie Scott & Co. (c) ..................... 1,316
41 Dollar General ................................... 1,322
58 Gap, Inc. ........................................ 1,735
49 Just for Feet, Inc. (b)(c) ....................... 1,281
57 McDonald's Corp. ................................. 2,584
80 Officemax, Inc. (c) .............................. 852
38 TJX Companies, Inc. (b) .......................... 1,796
158 Wal-Mart Stores, Inc. ............................ 3,605
---------
14,491
---------
Shelter (0.3%):
76 Kaufman & Broad Home Corp. ....................... 979
---------
Technology (15.3%):
48 Analog Devices, Inc. (c) ......................... 1,619
24 Boeing Co. ....................................... 2,564
58 Cisco Systems, Inc. (c) .......................... 3,671
33 Compaq Computer Corp. (c) ........................ 2,413
19 Gateway 2000, Inc. (b)(c) ........................ 1,039
68 Intel Corp. ...................................... 8,838
32 International Business Machines .................. 4,757
20 Litton Industries, Inc. (b)(c) ................... 943
18 Lockheed Martin Corp. ............................ 1,656
31 Lucent Technologies, Inc. (b) .................... 1,449
87 Microsoft (c) .................................... 7,197
57 National Semiconductor Corp. (c) ................. 1,392
52 Oracle Corp. (c) ................................. 2,154
47 Orbital Sciences Corp. (c) ....................... 806
38 Rohr Industries, Inc. (c) ........................ 860
COMMON STOCKS, CONTINUED:
Technology, continued:
90 Sun Microsystems, Inc. (c) ....................... $ 2,314
---------
43,672
---------
Utilities (10.8%):
70 Central & South West Corp. ....................... 1,781
30 Century Telephone Enterprises .................... 923
70 Consolidated Edison Co. of New York, Inc. ........ 2,048
124 Edison International ............................. 2,466
42 Enron Corp. ...................................... 1,807
56 General Public Utilities Corp. ................... 1,866
92 GTE Corp. ........................................ 4,168
67 Illinova Corp. (b) ............................... 1,845
63 MCN Corp. ........................................ 1,813
31 National Fuel Gas Co. ............................ 1,283
78 New York State Electric & Gas .................... 1,693
2 Panenergy Corp. .................................. 77
68 SBC Communications, Inc. (b) ..................... 3,509
55 Sprint Corp. ..................................... 2,201
32 Telephone & Data Systems, Inc. ................... 1,171
49 Texas Utilities .................................. 1,980
---------
30,631
---------
Total Common Stocks ......................................... 276,865
---------
U.S. TREASURY OBLIGATIONS (0.3%):
U.S. Treasury Bills
$385 1/2/97 (d)........................................ 385
515 1/9/97 (d)........................................ 514
65 1/16/97 (d)....................................... 65
---------
Total U.S. Treasury Obligations 964
---------
Total Investments, at value 277,829
---------
REPURCHASE AGREEMENTS (2.5%):
7,155 Aubrey G. Lanston & Co., 6.80%, 1/2/97
(Collaterized by $7,505 U.S Treasury
Securities, 6.25%, 8/15/23, market
value-$7,332)...................................... 7,155
---------
Total Repurchase Agreements 7,155
---------
Total (Cost-$250,906) $ 284,984
=========
</TABLE>
- ----------
Percentages indicated are based on net assets of $284,685.
CONTINUED
<PAGE> 416
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
VALUE GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $100. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................ $38,195
Unrealized depreciation................................ (4,217)
-------
Net unrealized appreciation............................ $33,978
=======
</TABLE>
(b) A portion of this security was loaned as of December 31, 1996.
(c) Non-income producing securities.
(d) Serves as collateral for futures contracts.
<TABLE>
<CAPTION>
# OF OPEN MARKET
CONTRACTS CONTRACT TYPE POSITIONS VALUE
- -------------- -------------------------------------- --------- ------
LONG CONTRACTS:
<S> <C> <C> <C>
39 S & P 500, March, 1997 $14,799 $14,518
</TABLE>
See notes to financial statements.
<PAGE> 417
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
LARGE COMPANY VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS (97.1%):
Business Equipment & Services (1.2%):
300 Browning-Ferris Industries, Inc. ............... $ 7,875
--------
Capital Goods (1.8%):
60 Newport News Shipbuilding (c) .................. 900
400 Westinghouse Electric Corp. (b) ................ 7,950
50 Ingersoll Rand Co. ............................. 2,225
--------
11,075
--------
Consumer Durable (4.1%):
325 Cooper Tire & Rubber Co. ....................... 6,419
350 General Motors Corp. ........................... 19,512
--------
25,931
--------
Consumer Non-Durable (5.0%):
300 American Greetings Corp., Class A .............. 8,513
133 Ball Corp. ..................................... 3,458
250 IBP, Inc. ...................................... 6,062
100 RJR Nabisco Holdings Corp. ..................... 3,400
350 Supervalu, Inc. ................................ 9,931
--------
31,364
--------
Consumer Services (1.5%):
150 Brunswick Corp. ................................ 3,600
175 Viacom, Inc., Class A (c) ...................... 6,037
--------
9,637
--------
Energy (20.7%):
120 Amoco Corp. .................................... 9,660
150 Atlantic Richfield Co. ......................... 19,875
131 Baker Hughes, Inc. ............................. 4,520
50 Burlington Resources, Inc. ..................... 2,519
100 Chevron Corp. (b) .............................. 6,500
50 Dresser Industries, Inc. ....................... 1,550
200 Exxon Corp. .................................... 19,600
100 Halliburton Co. ................................ 6,025
102 Mobil Corp. .................................... 12,470
189 Rowan Companies, Inc. (c) ...................... 4,276
110 Royal Dutch Petroleum Co. (b) .................. 18,782
57 Sun, Inc. ...................................... 1,389
300 Tenneco, Inc. .................................. 13,537
400 USX-Marathon Group ............................. 9,550
--------
130,253
--------
Financial Services (20.4%):
150 Allstate Corp. ................................. 8,681
155 BankAmerica Corp. .............................. 15,461
53 BayBanks of Boston Corp. ....................... 3,405
175 Chase Manhattan Corp. .......................... 15,619
20 Cigna Corp. .................................... 2,732
300 Federal National Mortgage Assoc ................ 11,175
80 First American Bank Corp. ...................... 4,810
150 Great Western Financial Corp. .................. 4,350
COMMON STOCKS, CONTINUED:
Financial Services, continued:
240 H.F. Ahmanson & Co. (b) ......................... $ 7,797
110 ITT Hartford Group, Inc. ........................ 7,425
118 J.P. Morgan & Co., Inc. ......................... 11,520
100 KeyCorp (b) ..................................... 5,050
100 Lincoln National Corp. .......................... 5,250
70 Morgan Stanley Group, Inc. ...................... 3,999
76 NationsBank Corp. ............................... 7,429
293 Travelers Group, Inc. ........................... 13,310
--------
128,013
--------
Health Care (2.3%):
60 Aetna (b) ....................................... 4,800
50 Baxter International, Inc. ...................... 2,050
200 Healthsource, Inc. (b)(c) ....................... 2,625
100 Pharmacia & Upjohn, Inc. ........................ 3,963
25 United Healthcare Corp. (b) ..................... 1,125
--------
14,563
--------
Multi-Industry (0.6%):
40 Loews Corp. ..................................... 3,770
--------
Raw Materials (5.4%):
71 Alumax, Inc. (c) ................................ 2,370
40 Aluminum Company of America ..................... 2,550
360 Cyprus AMAX Minerals Co. (b) .................... 8,408
201 USX-U.S. Steel Group, Inc. ...................... 6,294
26 Dow Chemical Co. ................................ 2,038
258 Nalco Chemical Co. .............................. 9,335
66 Union Carbide Corp. ............................. 2,698
--------
33,693
--------
Retail (3.9%):
200 Dillard Department Stores, Inc., Class A ........ 6,175
215 May Department Stores Co. ....................... 10,051
200 Rite Aid Corp. (b) .............................. 7,950
--------
24,176
--------
Shelter (1.6%):
110 International Paper Co. ......................... 4,441
117 Weyerhaeuser Co. ................................ 5,543
--------
9,984
--------
Technology (11.9%):
60 AMP, Inc. (b) ................................... 2,302
8 Boeing Co. ...................................... 894
157 International Business Machines ................. 23,767
247 Litton Industries, Inc. (c) ..................... 11,763
40 Lockheed Martin Corp. ........................... 3,660
135 Motorola, Inc. .................................. 8,286
200 National Semiconductor Corp. (c) ................ 4,875
175 Novell, Inc. (c) ................................ 1,657
200 Rockwell International Corp. .................... 12,175
</TABLE>
CONTINUED
<PAGE> 418
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
LARGE COMPANY VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Technology, continued:
200 Silicon Graphics, Inc. (b)(c) ..................... $ 5,100
--------
74,479
--------
Transportation (1.8%):
77 Conrail, Inc. ..................................... 7,626
--------
50 Delta Air Lines, Inc. ............................. 3,544
--------
11,170
--------
Utilities (14.9%):
125 American Electric Power, Inc. ..................... 5,141
103 Bell Atlantic Corp. (b) ........................... 6,669
275 BellSouth Corp. ................................... 11,103
71 Carolina Power & Light Co. ........................ 2,591
200 Central & South West Corp. ........................ 5,125
250 Consolidated Edison Co. of New York, Inc. (b) ..... 7,313
73 Consolidated Natural Gas Co. ...................... 4,033
47 Dominion Resources, Inc. of Virginia .............. 1,809
350 Edison International .............................. 6,956
28 El Paso Natural Gas ............................... 1,409
119 Enron Corp. (b) ................................... 5,132
200 Entergy Corp. (b) ................................. 5,550
75 GTE Corp. ......................................... 3,413
150 MCI Communications Corp. .......................... 4,903
107 Pacific Gas & Electric Co. ........................ 2,247
COMMON STOCKS, CONTINUED:
Utilities, continued:
119 Panenergy Corp. ................................... $ 5,355
102 SBC Communications, Inc. (b) ...................... 5,279
262 Southern Co. ...................................... 5,928
128 Unicom Corp. ...................................... 3,458
--------
93,414
--------
Total Common Stocks 609,397
--------
PREFERRED STOCKS (1.9%):
Consumer Non-Durable
1,750 RJR Nabisco Corp., Series C...................... 11,813
--------
Total Preferred Stocks 11,813
--------
Total Investments, at value 621,210
========
REPURCHASE AGREEMENTS (1.0%):
$6,011 Lehman Brothers, 7.02%, 1/2/97,
(collateralized by $5,930, various U.S.
Government Agencies, 7.54%-8.35%,
4/28/04-3/23/05, market value-
$6,130) 6,011
--------
Total Repurchase Agreements 6,011
--------
Total (Cost $570,741) $627,221
========
</TABLE>
- ----------
Percentages indicated are based on net assets of $627,931.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $3,250. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation...................... $64,937
Unrealized depreciation...................... (11,707)
-------
Net unrealized appreciation.................. $53,230
=======
</TABLE>
(b) A portion of this security was loaned as of December 31, 1996.
(c) Non-income producing securities.
See notes to financial statements.
<PAGE> 419
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
DISCIPLINED VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS (99.3%):
Business Equipment & Services (1.0%):
82 Comdisco, Inc. .................................. $ 2,616
97 Kelly Services, Class A ......................... 2,605
--------
5,221
--------
Capital Goods (6.7%):
30 Belden, Inc. .................................... 1,110
60 Crane Co. ....................................... 1,740
54 Federal Signal Corp. ............................ 1,397
47 Goulds Pumps, Inc. .............................. 1,083
40 Harsco Corp. .................................... 2,740
113 Hubbell, Inc., Class B .......................... 4,879
22 Johnson Controls, Inc. .......................... 1,823
80 Keystone International, Inc. (b) ................ 1,610
140 Mark IV Industries, Inc. ........................ 3,168
80 Medusa Corp. .................................... 2,750
194 Molex, Inc. (b) ................................. 7,590
40 Tecumseh Products Co. ........................... 2,295
40 Teleflex, Inc. .................................. 2,085
30 York International Corp. ........................ 1,676
--------
35,946
--------
Consumer Durable (1.0%):
46 Arvin Industries, Inc. .......................... 1,146
60 Federal Mogul Corp. (b) ......................... 1,320
32 Harley-Davidson, Inc. ........................... 1,504
36 Lear Corp. (c) .................................. 1,228
--------
5,198
--------
Consumer Non-Durable (6.6%):
62 American Greetings Corp., Class A ............... 1,759
200 Coca Cola Enterprises (b) ....................... 9,700
63 Dean Foods Co. .................................. 2,032
110 First Brands Corp. .............................. 3,121
80 General Nutrition Cos. (c) ...................... 1,357
170 IBP, Inc. ....................................... 4,123
26 Nine West Group, Inc. (b)(c) .................... 1,206
200 Tyson Foods, Inc., Class A ...................... 6,850
81 Universal Corp. ................................. 2,602
62 Universal Foods Corp. ........................... 2,186
--------
34,936
--------
Consumer Services (3.3%):
32 Belo (A.H.) Corp., Series A (b) ................. 1,116
40 Callaway Golf Co. ............................... 1,150
65 Circus Circus Entertainment (c) ................. 2,234
34 Houghton Mifflin Co. ............................ 1,925
113 King World Productions, Inc. (c) ................ 4,167
149 Station Casinos, Inc. (c) ....................... 1,509
16 Washington Post Co. ............................. 5,362
--------
17,463
--------
COMMON STOCKS, CONTINUED:
Energy (6.8%):
159 Apache Corp. .................................... $ 5,607
71 BJ Services Co. (b)(c) .......................... 3,621
120 Mapco, Inc. ..................................... 4,080
120 Murphy Oil Corp. ................................ 6,675
84 Nabors Industries, Inc. (c) ..................... 1,617
60 Parker & Parsley Petro Co. ...................... 2,205
120 Pride Petroleum Services, Inc. (b)(c) ........... 2,790
75 Quaker State Corp. .............................. 1,052
80 Tosco Corp. ..................................... 6,330
76 Valero Energy Corp. ............................. 2,175
--------
36,152
--------
Financial Services (22.1%):
45 Aflac, Inc. ..................................... 1,924
98 American Financial Group ........................ 3,700
71 AmSouth Bancorporation .......................... 3,415
122 A.G. Edwards, Inc. (b) .......................... 4,102
143 Bancorp Hawaii, Inc. ............................ 6,014
250 Bear Stearns Companies, Inc. .................... 6,979
97 Central Fidelity Banks, Inc. .................... 2,495
105 Charter One Financial, Inc. ..................... 4,410
90 First American Bank Corp. (b) ................... 5,411
128 First Security Corp. ............................ 4,320
50 First Virginia Banks, Inc. ...................... 2,394
89 Firstar Corp. ................................... 4,646
35 Gatx Corp. (b) .................................. 1,698
55 Mercantile Bancorporation (b) ................... 2,841
97 Mercantile Bankshares Corp. ..................... 3,104
40 Mid Ocean Ltd. .................................. 2,100
192 Northern Trust Corp. ............................ 6,960
62 Onbancorp, Inc. (b) ............................. 2,302
122 Paine Webber Group, Inc. ........................ 3,426
122 Progressive Corp.-Ohio .......................... 8,220
57 Provident Companies, Inc. (b) ................... 2,733
132 Regions Financial Corp. ......................... 6,823
250 Southtrust Corp. ................................ 8,719
130 State Street Boston Corp. ....................... 8,385
43 Transatlantic Holdings, Inc. (b) ................ 3,462
100 Washington Mutual, Inc. ......................... 4,331
71 Wilmington Trust Corp. .......................... 2,805
--------
117,719
--------
Health Care (5.3%):
60 Bard C.R., Inc. ................................. 1,680
40 Bausch & Lomb, Inc. ............................. 1,400
38 Becton Dickinson & Co. (b) ...................... 1,648
74 Bergen Brunswig Corp. ........................... 2,109
50 Biomet (b)(c) ................................... 756
74 Forest Laboratories, Class A (c) ................ 2,424
85 Foundation Health Corp. (b) ..................... 2,699
50 Hillenbrand Industry, Inc. ...................... 1,812
</TABLE>
CONTINUED
<PAGE> 420
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
DISCIPLINED VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Health Care, continued:
107 McKesson Corp. ................................. $ 5,992
40 Pacificare Health (b)(c) ....................... 3,410
130 Vencor, Inc. (c) ............................... 4,111
-------
28,041
-------
Multi-Industry (0.0%):
13 Echelon International (c) ...................... 208
-------
Raw Materials (6.3%):
100 Albemarle Corp. (b) ............................ 1,813
110 Allegheny Teledyne, Inc. ....................... 2,530
165 Alumax, Inc. (c) ............................... 5,490
28 Brush Wellman, Inc. ............................ 459
94 Cabot Corp. .................................... 2,362
96 Crompton & Knowles Corp. ....................... 1,848
80 Ferro Corp. .................................... 2,270
90 Hanna (M.A.) Co. ............................... 1,969
70 IMC Global, Inc. (b) ........................... 2,750
46 Nalco Chemical Co. ............................. 1,662
64 Pall Corp. (b) ................................. 1,632
35 Phelps Dodge Corp. ............................. 2,363
30 Quanex Corp. ................................... 821
130 Schulman, Inc. ................................. 3,185
27 Sigma-Aldrich Corp. ............................ 1,686
55 Wellman, Inc. .................................. 942
-------
33,782
-------
Retail (5.0%):
128 Best Buy (c) ................................... 1,357
64 Carson Pirie Scott & Co. (c) ................... 1,616
88 Cracker Barrel ................................. 2,233
115 Family Dollar Stores ........................... 2,343
60 Fred Meyer, Inc. (c) ........................... 2,144
90 Hannaford Brothers Co. ......................... 3,060
64 Lands End (c) .................................. 1,696
274 Officemax, Inc. (c) ............................ 2,911
112 Revco Drug Stores, Inc. (c) .................... 4,144
74 Sbarro, Inc. ................................... 1,887
41 Smith's Food & Drug (c) ........................ 1,263
80 Waban, Inc. (b)(c) ............................. 2,080
-------
26,734
-------
Shelter (1.7%):
74 Consolidated Papers, Inc. ...................... 3,635
103 Kaufman & Broad Home Corp. ..................... 1,326
59 Pentair ........................................ 1,903
52 Rayonier, Inc. ................................. 1,996
-------
8,860
-------
Technology (6.3%):
68 Analog Devices, Inc. (b)(c) .................... 2,304
94 Arrow Electronics, Inc. (c) .................... 5,029
COMMON STOCKS, CONTINUED:
Technology, continued:
110 Avnet, Inc. ....................................... $ 6,408
40 Harris Corp. ...................................... 2,745
77 Litton Industries, Inc. (b)(c) .................... 3,667
92 Orbital Sciences Corp. (c) ........................ 1,587
42 Rohr Industries, Inc. (c) ......................... 950
90 Seagate Technology, Inc. (c) ...................... 3,555
93 Storage Technology Corp. (b)(c) ................... 4,443
40 Stratus Computer (c) .............................. 1,090
70 Teradyne, Inc. (c) ................................ 1,706
-------
33,484
-------
Transportation (0.8%):
50 Airnet Systems, Inc. (c) .......................... 737
80 APL Limited ....................................... 1,890
105 Yellow Corp. (c) .................................. 1,509
-------
4,136
-------
Utilities (26.5%):
106 AGL Resources ..................................... 2,239
250 Allegheny Power Systems, Inc. ..................... 7,585
104 American Water Works, Inc. ........................ 2,145
83 Brooklyn Union Gas ................................ 2,500
55 Calenergy, Inc. (c) ............................... 1,849
220 Central & South West Corp. ........................ 5,637
101 Century Telephone Enterprises ..................... 3,131
102 Cinergy Corp. ..................................... 3,404
190 CMS Energy Corp. (b) .............................. 6,389
112 Delmarva Power & Light ............................ 2,286
270 Edison International .............................. 5,366
62 El Paso Natural Gas ............................... 3,136
200 Florida Progress Corp. ............................ 6,450
100 General Public Utilities Corp. (b) ................ 3,362
62 Idaho Power Co. ................................... 1,930
130 Illinova Corp. (b) ................................ 3,575
42 Indiana Energy, Inc. .............................. 1,024
110 Kansas City Power & Light ......................... 3,135
242 L G & E Energy Corp. .............................. 5,929
135 MCN Corp. ......................................... 3,898
198 Midamerican Energy Holdings Co. ................... 3,143
50 Montana Power Co. ................................. 1,069
71 National Fuel Gas Co. ............................. 2,929
150 New York State Electric & Gas ..................... 3,244
180 Nextel Communications, Inc., Class A (c) .......... 2,351
103 Nipsco Industries, Inc. ........................... 4,081
66 Oklahoma Gas & Electric Co. ....................... 2,743
130 Pinnacle West Capital ............................. 4,128
85 Portland General Corp. ............................ 3,570
110 Potomac Electric Power Co. ........................ 2,833
110 Public Service Co. of Colorado .................... 4,276
72 Public Service New Mexico ......................... 1,413
78 Questar Corp. ..................................... 2,866
</TABLE>
CONTINUED
<PAGE> 421
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
DISCIPLINED VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Utilities, continued:
106 Southern New England Telecommunications, Inc. ..... $ 4,121
66 Southwestern Public Service Co. ................... 2,335
200 Teco Energy, Inc. ................................. 4,825
104 Telephone & Data Systems, Inc. .................... 3,770
71 Union Electric Co. (b) ............................ 2,734
201 Wisconsin Energy Corp. ............................ 5,402
100 Worldcom, Inc. (b) ................................ 2,606
56 WPL Holdings, Inc. ................................ 1,572
--------
140,981
--------
Total Common Stocks ............................................ 528,861
--------
REPURCHASE AGREEMENTS (0.7%):
$3,790 Lehman Brothers, 7.02%, 1/2/97
(Collateralized by $3,800, various U.S.
Government Agencies, 7.88%, 4/28/04,
market value-$3,865).................................... $ 3,790
--------
Total Repurchase Agreements 3,790
--------
Total (Cost-$463,484) $532,651
========
</TABLE>
- ----------
Percentages indicated are based on net assets of $532,762.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $506. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation $78,670
Unrealized depreciation................ (10,009)
-------
Net unrealized appreciation............ $68,661
=======
</TABLE>
(b) A portion of this security was loaned as of December 31, 1996.
(c) Non-income producing securities.
See notes to financial statements.
<PAGE> 422
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS (97.3%):
Business Equipment & Services (4.7%):
350 Automatic Data Processing, Inc. (b) .............. $ 15,006
45 Computer Science Corp. (c) ....................... 3,696
175 Electronic Data Systems Corp. .................... 7,569
200 Interpublic Group Cos., Inc. ..................... 9,500
265 WMX Technologies, Inc. ........................... 8,646
--------
44,417
--------
Capital Goods (9.4%):
150 Emerson Electric Co. ............................. 14,512
120 Fluor Corp. ...................................... 7,530
410 General Electric Co. ............................. 40,539
100 Illinois Tool Works (b) .......................... 7,988
140 Ingersoll Rand Co. ............................... 6,230
185 Molex, Inc. (b) .................................. 7,238
75 Tyco International Ltd. .......................... 3,966
--------
88,003
--------
Consumer Non-Durable (20.4%):
235 Anheuser Busch Cos., Inc. ........................ 9,400
160 Colgate-Palmolive Co. ............................ 14,760
140 CPC International ................................ 10,850
100 Duracell ......................................... 6,987
170 Eastman Kodak Co. ................................ 13,642
165 Hershey Foods Corp. .............................. 7,219
300 H.J. Heinz Co. ................................... 10,725
150 International Flavors & Fragrances, Inc. ......... 6,750
450 PepsiCo, Inc. .................................... 13,162
245 Philip Morris Cos., Inc. ......................... 27,593
120 Pioneer Hi Bred Intl ............................. 8,400
220 Proctor & Gamble Co. ............................. 23,650
120 Sara Lee Corp. ................................... 4,470
395 The Coca-Cola Co. ................................ 20,787
75 Unilever N V NY Shares (b) ....................... 13,144
--------
191,539
--------
Consumer Services (5.1%):
180 Gannett, Inc. .................................... 13,477
30 Hilton Hotels Corp. .............................. 784
240 McGraw-Hill, Inc. ................................ 11,070
225 Time Warner, Inc. ................................ 8,437
210 Walt Disney Co. .................................. 14,621
--------
48,389
--------
Energy (3.3%):
120 Halliburton Co. .................................. 7,230
40 Mobil Corp. ...................................... 4,890
95 Schlumberger Ltd. ................................ 9,488
127 Union Pacific Resources Group, Inc. (b) .......... 3,716
150 Unocal Corp. (b) ................................. 6,094
--------
31,418
--------
COMMON STOCKS, CONTINUED:
Financial Services (4.9%):
175 American International Group .................... $ 18,944
90 Federal National Mortgage Assoc ................. 3,352
80 J.P. Morgan & Co., Inc. ......................... 7,810
80 Marsh & McLennan Co. ............................ 8,320
165 USBancorp (b) ................................... 7,415
--------
45,841
--------
Health Care (16.3%):
375 Abbott Labs ..................................... 19,031
300 Alza (b)(c) ..................................... 7,763
80 Amgen, Inc. (c) ................................. 4,350
50 Bard C.R., Inc. ................................. 1,400
100 Biomet (b) ...................................... 1,513
188 Cardinal Health, Inc. ........................... 10,922
165 Columbia/HCA Healthcare Corp. ................... 6,724
260 Elan Corp. PLC (b)(c) ........................... 8,645
120 Eli Lilly & Co. ................................. 8,760
365 Johnson & Johnson ............................... 18,159
225 Medtronic, Inc. ................................. 15,300
380 Merck & Co., Inc. ............................... 30,115
175 Pfizer, Inc. .................................... 14,503
100 Schering-Plough Corp. ........................... 6,475
--------
153,660
--------
Multi-Industry (1.4%):
160 Minnesota Mining & Manufacturing Co. ............ 13,260
--------
Raw Materials (3.4%):
145 Air Products & Chemical, Inc. ................... 10,023
90 Dow Chemical Co. ................................ 7,054
150 Nalco Chemical Co. .............................. 5,419
375 Pall Corp. ...................................... 9,563
--------
32,059
--------
Retail (6.4%):
100 Gap, Inc. ....................................... 3,013
250 Home Depot, Inc. (b) ............................ 12,531
125 May Department Stores Co. ....................... 5,844
280 McDonald's Corp. ................................ 12,670
250 Walgreen Co. .................................... 10,000
700 Wal-mart Stores, Inc. ........................... 16,012
--------
60,070
--------
Shelter (1.6%):
40 Consolidated Papers, Inc. ....................... 1,965
140 Kimberly Clark Corp. ............................ 13,335
--------
15,300
--------
Technology (13.7%):
90 Cabletron Systems (c) ........................... 2,992
210 Cisco Systems, Inc. (c) ......................... 13,361
50 Computer Assoc. International, Inc. ............. 2,488
</TABLE>
CONTINUED
<PAGE> 423
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Technology, continued:
270 Hewlett-Packard Co. ............................ $ 13,567
260 Intel Corp. .................................... 34,044
40 International Business Machines ................ 6,040
180 Lucent Technologies, Inc. ...................... 8,325
350 Microsoft Corp. (c) ............................ 28,918
45 Northern Telecom, Ltd (b) ...................... 2,784
220 Oracle Corp. (b)(c) ............................ 9,185
115 Texas Instruments, Inc. (b) .................... 7,331
---------
129,035
---------
Transportation (0.8%):
130 Union Pacific Corp. ............................ 7,816
---------
Utilities (5.7%):
280 Alltel Corp. ................................... 8,785
250 AT&T Corp. ..................................... 10,875
70 Consolidated Natural Gas Co. ................... 3,867
30 Enron Corp. .................................... 1,294
COMMON STOCKS, CONTINUED:
Utilities, continued:
300 GTE Corp. ...................................... $ 13,650
200 SBC Communications, Inc. (b) ................... 10,350
200 Worldcom, Inc. (c) ............................. 5,213
---------
54,034
---------
Total Common Stocks 914,841
---------
REPURCHASE AGREEMENTS (2.7%):
$24,936 Lehman Brothers, 7.02%, 1/2/97
(collaterized by $24,760 various U.S.
Government Securities 4.35%-8.06%,
1/15/97-3/24/10, market value-
$25,426)......................................... 24,936
---------
Total Repurchase Agreements 24,936
---------
Total (Cost-$737,976) $ 939,777
=========
</TABLE>
- ----------
Percentages indicated are based on net assets of $940,485.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $238. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................... $209,003
Unrealized depreciation........................... (7,440)
--------
Net unrealized appreciation....................... $201,563
========
</TABLE>
(b) A portion of this security was loaned as of December 31, 1996.
(c) Non-income producing securities.
See notes to financial statements.
<PAGE> 424
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS (89.8%):
Business Equipment & Services (15.1%):
146 AES Corp. (c)(b) ................................. $ 6,798
139 America Online, Inc. (b)(c) ...................... 4,622
11 Aurum Software, Inc. (b) ......................... 243
93 Cintas Corp. ..................................... 5,481
297 Equifax, Inc. .................................... 9,090
104 Fiserv, Inc. (b) ................................. 3,807
50 HNC Software, Inc. (b)(c) ........................ 1,581
8 Imnet Systems, Inc. (b)(c) ....................... 194
86 Manpower, Inc. ................................... 2,805
117 Office Depot, Inc. (b) ........................... 2,068
91 Olsten Corp. (c) ................................. 1,376
145 Omnicom Group .................................... 6,643
176 Paychex, Inc. .................................... 9,027
195 Reynolds & Reynolds Co. .......................... 5,060
488 Staples, Inc. (b)(c) ............................. 8,822
146 Sterling Commerce, Inc. (b)(c) ................... 5,162
29 Telespectrum Worldwide, Inc. (b)(c) .............. 456
108 Trusted Information Systems (b) .................. 1,156
30 United Waste Systems, Inc. (b) ................... 1,031
169 U.S.A. Waste Services, Inc. (b)(c) ............... 5,377
40 Verifone, Inc. (b)(c) ............................ 1,180
151 Viking Office Products (b) ....................... 4,032
72 Wallace Computer Services ........................ 2,470
-------
88,481
-------
Capital Goods (4.4%):
47 Crane Co. ........................................ 1,366
94 Diebold, Inc. .................................... 5,888
30 Fastenal (c) ..................................... 1,350
43 Federal Signal Corp. ............................. 1,120
45 Precision Castparts Co. .......................... 2,218
100 Sundstrand Corp. (c) ............................. 4,250
153 Thermo Electron Corp. (b)(c) ..................... 6,324
56 York International Corp. ......................... 3,129
-------
25,645
-------
Consumer Durable (2.2%):
111 Danaher Corp. .................................... 5,157
160 Harley-Davidson, Inc. ............................ 7,515
-------
12,672
-------
Consumer Non-Durable (2.9%):
65 Dole Food Co. .................................... 2,185
73 Imation Corp. (b) ................................ 2,045
96 Jones Apparel Group, Inc. (b) .................... 3,595
41 Lancaster Colony Corp. ........................... 1,900
73 Nine West Group, Inc. (b)(c) ..................... 3,362
40 Payless Shoesource, Inc. (b) ..................... 1,500
61 Tambrands, Inc. (c) .............................. 2,477
-------
17,064
-------
COMMON STOCKS, CONTINUED:
Consumer Services (4.2%):
76 Belo (A.H.) Corp., Series A ...................... $ 2,657
165 Callaway Golf Co. ................................ 4,735
134 Circus Circus Entertainment (b) .................. 4,613
236 International Game Technologies .................. 4,311
312 Mirage Resorts (b) ............................... 6,747
25 Scholastic Corp. (b) ............................. 1,681
-------
24,744
-------
Energy (7.0%):
108 Anadarko Petroleum Corp. ......................... 7,012
30 BJ Services Co. (b)(c) ........................... 1,530
130 Ensco International, Inc. (b) .................... 6,320
327 Global Marine, Inc. .............................. 6,736
134 Nabors Industries, Inc. (b) ...................... 2,585
104 Noble Affiliates, Inc. ........................... 4,989
69 Smith International, Inc. (b) .................... 3,096
110 Tidewater, Inc. (c) .............................. 4,955
47 Transocean Offshore, Inc. ........................ 2,943
30 Varco International, Inc. (b) .................... 694
-------
40,860
-------
Financial Services (10.0%):
224 Aflac, Inc. ...................................... 9,567
50 Amresco, Inc. .................................... 1,338
169 Franklin Resources, Inc. ......................... 11,528
70 Imperial Credit Industries, Inc. (b) ............. 1,462
138 Price (T. Rowe) Associates ....................... 6,020
341 Schwab (Charles) Corp. (b)(c) .................... 10,912
149 Summit Bancorp ................................... 6,519
249 SunAmerica, Inc. (c) ............................. 11,067
-------
58,413
-------
Health Care (11.5%):
71 Apria Healthcare Group, Inc. (b) ................. 1,337
20 Biochem Pharma, Inc. (b) ......................... 1,005
181 Biogen, Inc. (b) ................................. 7,029
192 Cardinal Health, Inc. (c) ........................ 11,201
137 Centocor (b) ..................................... 4,894
65 Cephalon, Inc. (b) ............................... 1,333
362 Chiron Corp. (b)(c) .............................. 6,746
50 Dynamic Healthcare Tech, Inc. .................... 238
25 Genzyme Corp., General Division (b) .............. 544
88 Health Care & Retirement Corp. (b) ............... 2,516
61 Healthcare Compare Corp. ......................... 2,572
97 Healthsource, Inc. (b)(c) ........................ 1,271
329 Healthsouth Corp. (b)(c) ......................... 12,715
205 Mylan Laboratories (b) ........................... 3,429
108 Nellcor Puritan Bennett, Inc. (b)(c) ............. 2,363
40 R.P. Scherer Corp. (b) ........................... 2,010
</TABLE>
CONTINUED
<PAGE> 425
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------------------- ---------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Health Care, continued:
79 Stryker Corp. (c) ............................... $ 2,357
80 Watson Pharmaceutical, Inc. (b) ................. 3,595
--------
67,155
--------
Multi-Industry (0.5%):
14 Advanced Fibre Communication (b) ................ 779
48 Dominick's Supermarkets, Inc. (b) ............... 1,044
21 Saville Systems Ireland - ADR (b) ............... 833
--------
2,656
--------
Raw Materials (2.6%):
126 Airgas, Inc. (b) ................................ 2,763
55 Crompton & Knowles Corp. ........................ 1,059
40 Georgia Gulf Corp. .............................. 1,083
159 IMC Global, Inc. (b)(c) ......................... 6,229
118 Lyondell Petrochemical (c) ...................... 2,587
80 RPM, Inc. (c) ................................... 1,360
--------
15,081
--------
Retail (5.3%):
130 Bed Bath & Beyond, Inc. (b) ..................... 3,140
115 Claire's Stores, Inc. ........................... 1,492
154 Consolidated Stores (b) ......................... 4,959
211 Dollar General .................................. 6,764
112 Kohl's Corp. (b) ................................ 4,388
60 Lands End ....................................... 1,590
80 Lone Star Steakhouse & Saloon (b)(c) ............ 2,127
69 Outback Steakhouse (b) .......................... 1,840
234 Sunglass Hut International, Inc. (b) ............ 1,693
76 Tiffany & Co. ................................... 2,776
--------
30,769
--------
Shelter (2.8%):
161 Clayton Homes, Inc. ............................. 2,175
45 Hon Industries .................................. 1,485
152 Leggett & Platt, Inc. ........................... 5,246
80 Redwood Trust, Inc. ............................. 2,976
81 Sealed Air Corp. (b)(c) ......................... 3,355
37 Sonoco Products Co. ............................. 957
--------
16,194
--------
Technology (18.2%):
10 3Com Corp. (b) .................................. 734
221 ADC Telecommunications, Inc. (b) ................ 6,876
80 Adobe Systems, Inc. ............................. 2,971
30 Altera Corp. (c)(b) ............................. 2,166
143 American Power Conversion (b) ................... 3,897
220 Analog Devices, Inc. (b) ........................ 7,442
180 BMC Software (b) ................................ 7,464
207 Cadence Design Systems, Inc. (b) ................ 8,228
COMMON STOCKS, CONTINUED:
Tehnology, continued:
27 Cisco Systems, Inc. (b) ......................... $ 1,737
71 Compuware Corp. (b) ............................. 3,549
96 Electronic Arts (b)(c) .......................... 2,880
91 Informix Corp. (b) .............................. 1,844
100 Ingram Micro, Inc. (b) .......................... 2,300
119 Intel Corp. ..................................... 15,608
2 International Business Machines ................. 332
76 Linear Technology Corp. ......................... 3,335
20 Lucent Technologies, Inc. ....................... 925
74 Maxim Integrated Products, Inc. (b) ............. 3,188
61 Micro Warehouse, Inc. (b) ....................... 717
85 Octel Communications Corp. (b) .................. 1,489
241 Parametric Technology Corp. (b) ................. 12,371
20 Peoplesoft, Inc. (b) ............................ 959
15 Puma Technology, Inc. (b) ....................... 259
85 Solectron Corp. (b)(c) .......................... 4,526
75 Structural Dynamics (b) ......................... 1,500
108 U.S. Robotics Corp. ............................. 7,769
36 Xilinx, Inc. (b)(c) ............................. 1,340
--------
106,406
--------
Transportation (0.7%):
127 Illinois Central Corp. ............................. 4,054
--------
Utilities (2.7%):
147 360 Communications Co. (b) ......................... 3,409
289 Frontier Corp. ..................................... 6,545
421 Nextel Communications, Inc., Class A (b) ........... 5,499
20 Seagull Energy Corp. (b) ........................... 440
--------
15,893
--------
Total Common Stocks 526,087
--------
CALL OPTIONS (1.4%):
80 International Business Machines, Strike
Price $110, Expiring 1/19/98 .................. 3,760
60 Intel, Strike Price $95, Expiring 1/20/97 ......... 2,190
60 Intel, Strike Price $95, Expiring 4/21/97 ......... 2,265
--------
Total Options .................................................. 8,215
--------
Total Investments, at value .................................... 534,302
--------
REPURCHASE AGREEMENTS (9.4%):
$55,267 Lehman Brothers, 7.02%, 1/2/97,
(collateralized by $56,195 Federal
Home Loan Bank Notes, 6.54%-6.57%,
12/4/00, market value $56,369)...................... 55,267
--------
Total Repurchase Agreements 55,267
--------
Total (Cost-$550,336)(a) $589,569
========
</TABLE>
- ----------
Percentages indicated are based on net assets of $585,798.
CONTINUED
<PAGE> 426
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $12,662. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................... $51,242
Unrealized depreciation..................... (24,671)
-------
Net unrealized appreciation................. $26,571
=======
</TABLE>
(b) Non-income producing securities.
(c) A portion of this security was loaned as of December 31, 1996.
See notes to financial statements.
<PAGE> 427
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
GULF SOUTH GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- -------------------------------------------------------- --------
<S> <C> <C>
COMMON STOCKS (95.8%):
Business Equipment & Services (12.1%):
70 Accustaff, Inc. (c)................................... $ 1,479
70 Acxiom Corp. (c)...................................... 1,680
50 Affinity Technology Group (c)......................... 325
25 Billing Information Concepts (c)...................... 719
100 Communications Central, Inc. (c)...................... 775
40 Computational Systems, Inc. (c)....................... 770
60 Concord EFS, Inc. (c)................................. 1,695
26 Envoy Corp. (c)....................................... 975
45 Imnet Systems, Inc. (b)(c)............................ 1,091
20 Norrell Corp. ........................................ 545
30 Nova Corp. (c)........................................ 664
60 Zebra Technologies, Class A (c)....................... 1,402
--------
12,120
--------
Capital Goods (3.2%):
20 Blount International, Inc. ........................... 768
15 Ionics, Inc. (c)...................................... 720
40 Kuhlman Corp. (c)..................................... 775
28 Wolverine Tube, Inc. ................................. 973
--------
3,236
--------
Consumer Durable (1.8%):
90 Miller Industries, Inc. (c)........................... 1,800
--------
Consumer Non-Durable (8.7%):
15 Coca-Cola Bottling Co. ............................... 731
60 Conso Products Co. (c)................................ 773
20 Dekalb Genetics Corp. ................................ 1,020
50 Finish Line, Class A (b)(c)........................... 1,056
30 Foodbrands America, Inc. (c).......................... 412
25 Gadzooks, Inc. (c).................................... 456
25 K & G Men's Center, Inc. (c).......................... 650
35 Mohawk Industries Co. (c)............................. 770
15 Nautica Enterprises, Inc. (c)......................... 379
12 Richfood Holdings..................................... 291
18 Smithfield Foods, Inc. (c)............................ 684
30 Westpoint Stevens, Inc. .............................. 896
20 Wolverine World Wide, Inc. ........................... 580
--------
8,698
--------
Consumer Services (6.7%):
50 Action Performance Co., Inc. (c)...................... 900
15 Central Parking Corp. ................................ 502
35 International Family Entertainment, Class B (c)....... 543
25 International Speedway Corp. (c)...................... 513
23 Regal Cinemas, Inc. (b)............................... 692
20 Speedway Motorsports, Inc. (c)........................ 420
75 Stewart Enterprises, Inc., Class A.................... 2,550
30 Sturm, Ruger & Co. ................................... 581
--------
6,701
--------
COMMON STOCKS, CONTINUED:
Energy (14.2%):
29 Benton Oil & Gas Co. (c).............................. $647
20 Falcon Drilling Co., Inc. (c)......................... 785
40 Halter Marine Group, Inc. (c)......................... 550
35 Input/Output, Inc. (c)................................ 648
63 Maverick Tube Corp. (c)............................... 797
25 Newpark Resources, Inc. (c)........................... 931
20 Nuevo Energy Co. (b)(c)............................... 1,040
70 Offshore Energy Development (c)....................... 1,068
75 Pride Petroleum Services, Inc. (b)(c)................. 1,744
20 Seacor Holdings, Inc. (c)............................. 1,260
15 Seitel, Inc. (c)...................................... 600
32 Stone Energy Corp. (c)................................ 956
45 Trico Marine Services, Inc. (c)....................... 2,160
20 United Meridian Corp. (c)............................. 1,035
--------
14,221
--------
Financial Services (17.1%):
50 Alabama National Bankcorp............................. 888
50 Amresco, Inc. (c)..................................... 1,337
50 Bankunited Financial Corp. ........................... 500
20 CCB Financial Corp. .................................. 1,365
1 Colonial BancGroup, Inc. ............................. 28
13 Cooperative Bankshares, Inc. (c)...................... 263
23 Cullen/Frost Bankers, Inc. ........................... 765
22 Deposit Guaranty Corp. ............................... 682
50 Eagle Bancshares, Inc. ............................... 775
40 Emergent Group, Inc. (c).............................. 420
15 First American Corp. ................................. 864
40 First Financial Holdings, Inc. ....................... 900
20 HFNC Financial Corp. (b).............................. 357
50 Olympic Financial Ltd. (c)............................ 719
25 Protective Life Corp. ................................ 997
5 Seacoast Banking Corp., Inc. ......................... 128
35 Sirrom Capital Corp. ................................. 1,286
38 Triad Guaranty, Inc. (c).............................. 1,078
40 Union Planters Corp. (b).............................. 1,560
60 United Cos. Financial Corp. .......................... 1,597
18 Whitney Holding Corp. ................................ 637
--------
17,146
--------
Health Care (7.6%):
50 Cryolife, Inc. (c).................................... 625
25 Gulf South Medical Supply (c)......................... 641
23 IDEXX Laboratories, Inc. (c).......................... 828
50 Immucor, Inc. (c)..................................... 488
24 Intercardia, Inc. (c)................................. 516
15 Invacare Corp. ....................................... 412
75 Nabi, Inc. (c)........................................ 656
30 Phycor, Inc. (b)(c)................................... 851
25 Phymatrix, Inc. (b)(c)................................ 356
30 Rexall Sundown, Inc. (c).............................. 816
</TABLE>
CONTINUED
<PAGE> 428
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
GULF SOUTH GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- -------------------------------------------------------- --------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Health Care, continued:
42 Sano Corp. (c)........................................ $ 641
25 Sofamor Danek Group, Inc. (c)......................... 763
--------
7,593
--------
Raw Materials (3.3%):
24 Caraustar Industries, Inc. ........................... 798
25 Chemfirst, Inc. (c)................................... 562
20 Cytec Industries, Inc. (c)............................ 813
8 Mississippi Chemical Corp. ........................... 200
35 Quanex Corp. ......................................... 958
--------
3,331
--------
Retail (2.4%):
30 Hibbet Sporting Goods, Inc. (c)....................... 435
25 Landry's Seafood Restaurants, Inc. (c)................ 534
20 Proffitts, Inc. (c)................................... 738
35 Stein Mart, Inc. (c).................................. 709
--------
2,416
--------
Shelter (2.2%):
20 Ethan Allen Interiors, Inc. .......................... 770
34 Oakwood Homes Corp. (b)............................... 778
55 Southern Energy Homes, Inc. (c)....................... 632
--------
2,180
--------
Technology (12.3%):
26 Adtran, Inc. (b)(c)................................... 1,079
20 Aspect Telecommunications, Inc. (c)................... 1,270
25 Benchmark Electronics, Inc. (c)....................... 750
40 Coherent Communication System Corp. (c)............... 780
30 Datastream Systems, Inc. (c).......................... 540
41 Harbinger Corp. (c)................................... 1,076
25 Micros Systems, Inc. (c).............................. 769
60 Network General Corp. (c)............................. 1,815
37 SCI Systems, Inc. (b)(c).............................. 1,651
45 Symmetricom, Inc. (c)................................. 894
30 Tech Data Corp. (c)................................... 821
25 Tessco Technologies, Inc. (c)......................... 919
--------
12,364
--------
Transportation (1.7%):
30 Atlantic Southeast Airlines, Inc. .................... 656
25 Heartland Express, Inc. (c)........................... 609
25 MS Carriers, Inc. (c)................................. 400
--------
1,665
--------
Utilities (2.5%):
18 K N Energy, Inc. ..................................... 707
30 LCI International, Inc. (b)(c) ....................... 645
60 Network Long Distance, Inc. (c)....................... 480
45 Southwestern Energy Co. .............................. 681
--------
2,513
--------
Total Common Stocks 95,984
--------
Total Investments, at value 95,984
--------
REPURCHASE AGREEMENTS (4.2%):
$4,231 Lehman Brothers, 7.02%, 1/2/97
(Collateralized by $4,360, various U.S.
Government Agencies, 5.78%-6.39%,
7/2/03-10/22/03, market value-
$4,316).............................................. 4,231
--------
Total Repurchase Agreements................................ 4,231
--------
Total (Cost-$81,453)(a)...................................... $100,215
========
</TABLE>
- -----
Percentages indicated are based on net assets of $100,203.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation....................... $22,537
Unrealized depreciation....................... (3,775)
-------
Net unrealized appreciation................... $18,762
=======
</TABLE>
(b) A portion of this security was loaned as of December 31, 1996.
(c) Non-income producing securities.
See notes to financial statements.
<PAGE> 429
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS (96.8%):
ARGENTINA (0.8%):
Automotive (0.0%):
24,666 CIADEA SA (b) .................................. $ 117
------
Beverages & Tobacco (0.0%):
353 Buenos Aires Embottelladora SA,
Class B ....................................... 67
------
Oil & Gas Exploration, Production & Services (0.4%):
118,606 Perez Companc SA ............................... 834
29,801 YPF Sociedad Anonima ........................... 753
------
1,587
------
Telecommunications (0.4%):
135,520 Telecom Argentina SA, Class B .................. 559
291,680 Telefonicade Argentina SA, Class B ............. 764
------
1,323
------
Total Argentina 3,094
------
AUSTRALIA (2.1%):
Banking (0.6%):
119,800 National Australia Bank Ltd. ................... 1,408
170,900 Westpac Banking Corp., Ltd. .................... 972
------
2,380
------
Broadcasting & Publishing (0.2%):
156,600 News Corp., Ltd. ............................... 826
------
Building Products (0.4%):
102,800 CSR Ltd. ....................................... 359
220,700 Boral Ltd. ..................................... 628
126,700 Pioneer International Ltd. ..................... 377
------
1,364
------
Diversified (0.0%):
40,400 Southcorp Holdings Ltd. ........................ 128
------
Metals & Mining (0.5%):
104,520 Broken Hill Proprietary Co. Ltd. ............... 1,488
34,600 Newcrest Mining Ltd. ........................... 137
79,400 WMC Ltd. ....................................... 500
------
2,125
------
Metals (0.1%):
229,000 M.I.M. Holdings Ltd. ........................... 320
27,600 RGC Ltd. ....................................... 123
------
443
------
Real Estate (0.2%):
138,000 General Property Trust ......................... 269
87,000 Stockland Trust Group .......................... 225
81,100 Westfield Trust ................................ 153
------
647
------
COMMON STOCKS, CONTINUED:
AUSTRALIA, CONTINUED:
Retail Stores/Catalog (0.1%):
102,130 Coles Myer Ltd. ................................ $ 420
------
Total Australia 8,333
------
AUSTRIA (1.4%):
Airlines (0.1%):
2,150 Austrian Airlines/Oesterreichische
Luftverskehrs AG (b) ............................ 327
------
Automotive (0.0%):
6,500 Steyr-Daimler-Puch AG (b) ........................ 104
------
Banking & Financial Services (0.4%):
13,650 Bank Austria AG .................................. 1,008
1,950 Bank Austria AG, Participating Certificates ...... 63
6,050 Creditanstalt-Bankverein ......................... 409
------
1,480
------
Beverages & Tobacco (0.1%):
3,000 Osterreichische Brau-Beteiligungs AG ............. 204
------
Building Products (0.1%):
2,830 Constantia Iso AG ................................ 91
1,575 Wienerberger Baustoffindustrie AG ................ 305
------
396
------
Chemicals (0.1%):
4,050 Lenzing AG ....................................... 258
------
Containers & Packaging (0.0%):
3,140 Constantia Verpackungen AG ....................... 165
------
Environmental Services (0.0%):
900 BWT AG ........................................... 93
------
Insurance (0.2%):
2,850 EA-Generali AG ................................... 841
------
Miscellaneous Manufacturing (0.1%):
8,955 Radex-Heraklith Industriebeteiligungs
AG .............................................. 283
------
Oil & Gas Exploration, Production & Services (0.2%):
7,050 OMV AG ........................................... 794
------
Utilities-Electric & Gas (0.1%):
5,350 Osterreichische Elekrizitaitswirtschafts-
AG, Class A .................................... 400
------
Total Austria 5,345
------
BELGIUM (2.0%):
Banking (0.3%):
1,472 Generale de Banque SA ............................ 527
935 Kredietbank NV ................................... 306
1,302 Kredietbank VVPR ................................. 405
------
</TABLE>
CONTINUED
<PAGE> 430
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
BELGIUM, CONTINUED:
$1,238
------
Chemicals (0.2%):
1,353 Solvay SA ........................................ 827
------
Industrial Holding Company (0.1%):
4,119 Groupe Bruxelles Lambert SA ...................... 530
------
Insurance (0.2%):
3,592 Fortis AG ........................................ 576
1,887 Royale Belge ..................................... 389
------
965
------
Merchandising (0.3%):
18,051 Delhaize-Le Lion SA .............................. 1,071
------
Metals & Mining (0.1%):
2,990 Union Miniere Group (b) .......................... 202
------
Oil & Gas Exploration, Production & Services (0.2%):
2,236 PetroFina SA ..................................... 711
------
Utilities-Electric & Gas (0.6%):
9,224 Electrabel SA .................................... 2,181
------
Total Belgium 7,725
------
BRAZIL (0.5%):
Beverages & Tobacco (0.0%):
41,000 Companhia Cervejaria Brahma (b) .................. 24
------
Chemicals (0.0%):
242,000 Copesul-Companhia Pertoquimica do Sul ............ 15
36,151,000 White Martins SA ................................. 52
------
67
------
Glass Products (0.0%):
5,000 Companhia Vidraria Santa Maria ................... 16
------
Steel (0.1%):
1,955,100 Cia de Acos Especiais Itabira-Acesita ............ 4
3,589,000 Companhia Siderurgica Nacional ................... 102
9,064 Companhia Vale do Rio Doce ....................... 236
------
342
------
Telecommunications (0.2%):
5,392,819 Telecomunicacoes Brasileiras SA .................. 387
828,000 Telecomunicacoes de Sao Paulo SA ................. 179
------
566
------
Tobacco (0.0%):
13,000 Souza Cruz SA (b) ................................ 85
------
Utilities-Electric & Gas (0.2%):
1,211,000 Centrais Electricas Brasilieras SA ............... 434
378,000 Centrais Electricas Brasilieras SA,
Class B ........................................ 140
COMMON STOCKS, CONTINUED
BRAZIL, CONTINUED:
3,516,000 Companhia Paranaense de Energia-Copel ............ $ 37
355,000 Light-Servicos de Electricidade SA ............... 126
------
737
------
Total Brazil 1,837
------
DENMARK (1.7%):
Agriculture (0.0%):
2,500 Korn-OG Foderstof Kompagniet A/S .................. 101
------
Banking & Financial Services (0.2%):
6,700 Den Danske Bank ................................... 539
5,600 Unidanmark A/S, Class A ........................... 290
------
829
------
Beverages & Tobacco (0.2%):
3,550 Carlsberg A/S, Class A ............................ 239
7,300 Carlsberg A/S, Class B ............................ 493
------
732
------
Commercial Services (0.0%):
2,850 ISS International Service System A/S, Class B ..... 75
------
Electrical & Electronic (0.0%):
150 NKT Holding A/S ................................... 9
------
Engineering (0.1%):
2,250 FLS Industries A/S, Class B ....................... 288
------
Food & Household Products (0.1%):
3,072 Royal Copenhagen A/S, Class A ..................... 284
------
Food Products & Services (0.1%):
2,750 Superfos A/S ...................................... 347
------
Pharmaceuticals (0.6%):
13,000 Novo Nordisk A/S, Class B ......................... 2,446
------
Telecommunications (0.2%):
12,650 Tele Danmark A/S, Class B ......................... 697
------
Transportation & Shipping (0.2%):
13 D/S 1912, Class B ................................. 334
9 D/S Svendborg A/S, Class B ........................ 337
300 Lauritzen (J.) Holding A/S (b) .................... 35
------
706
------
Total Denmark 6,514
------
FINLAND (1.0%):
Banking & Financial Services (0.1%):
130,706 Merita Ltd., Class A (b) .......................... 405
------
Forest Products (0.1%):
22,188 UPM-Kymmene Corp. (b) ............................. 465
------
</TABLE>
CONTINUED
<PAGE> 431
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
FINLAND, CONTINUED:
Insurance (0.1%):
10,500 Pohjola Insurance Group, Class B ............... $ 236
3,200 Sampo Insurance Co. Ltd., Class A .............. 252
------
488
------
Metals (0.1%):
26,500 Outokumpo OY, Class A .......................... 451
------
Telecommunications (0.6%):
24,600 Nokia AB, Class A .............................. 1,424
13,600 Nokia AB, Class K .............................. 785
------
2,209
------
Total Finland 4,018
------
FRANCE (10.6%):
Automotive (0.2%):
6,150 PSA Peugeot .................................... 691
------
Banking (1.0%):
19,400 Banque Nationale de Paris ...................... 749
19,950 Compagnie de Suez SA ........................... 847
18,800 Compagnie Financiere de Paribas ................ 1,269
8,273 Societe Generale ............................... 893
------
3,758
------
Beverages & Tobacco (0.8%):
9,340 LVMH (Moet Hennessy Louis Vuitton) ............. 2,603
8,120 Pernod Ricard .................................. 448
------
3,051
------
Broadcast/Cable (0.1%):
2,650 Canal Plus ..................................... 584
------
Building Products (0.4%):
2,850 Imetal SA ...................................... 420
19,608 Lafarge SA ..................................... 1,174
------
1,594
------
Business Services (0.7%):
16,750 Compagnie Generale des Eaux .................... 2,072
7,236 Havas SA ....................................... 507
------
2,579
------
Chemicals (0.6%):
7,375 L'Air Liquide .................................. 1,149
34,000 Rhone-Poulenc SA ............................... 1,157
------
2,306
------
Commercial Services (0.2%):
1,300 Sodexho SA ..................................... 723
------
Construction (0.1%):
4,600 Bouygues ....................................... 476
------
COMMON STOCKS, CONTINUED:
FRANCE, CONTINUED:
Defense (0.3%):
650 Sagem SA ....................................... $ 391
22,250 Thomson CSF .................................... 720
------
1,111
------
Diversified (0.1%):
1,440 Chargeurs International SA (b) ................. 71
11,400 Lagardere SCA .................................. 312
------
383
------
Electrical & Electronic (0.7%):
16,960 Alcatel Alsthom ................................ 1,360
4,750 Legrand SA ..................................... 808
16,900 Schneider SA ................................... 780
------
2,948
------
Energy (1.2%):
31,750 Elf Aquitane SA ................................ 2,884
21,900 Total SA, Class B .............................. 1,778
------
4,662
------
Engineering (0.1%):
3,050 Compagnie Francaise d'Etudes et de
Construction Technip .......................... 286
------
Food & Household Products (0.2%):
4,450 Eridania Beghin-Say SA ......................... 715
------
Food Products & Services (0.2%):
7,100 Groupe Danone .................................. 987
------
Health & Personal Care (0.9%):
6,245 L'OREAL ........................................ 2,347
11,510 Sanofi SA ...................................... 1,142
------
3,489
------
Industrial Goods & Services (0.2%):
17,650 Michelin Class B, Registered ................... 951
------
Industrial Holding Companies (0.3%):
11,700 Lyonnaise des Eaux SA .......................... 1,087
------
Insurance (0.4%):
25,750 AXA SA ......................................... 1,635
------
Leisure (0.2%):
4,350 Accor SA ....................................... 550
2,500 Salomon SA ..................................... 214
------
764
------
Manufacturing-Consumer Goods (0.2%):
6,000 Societe BIC SA ................................. 898
------
Media (0.1%):
1,440 Pathe SA (b) ................................... 346
------
</TABLE>
CONTINUED
<PAGE> 432
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
FRANCE, CONTINUED:
Merchandising (1.1%):
4,074 Carrefour SA ................................... $ 2,646
6,350 Etablissements Economiques du Casino
Guichard-Perrachon ........................... 295
2,400 Pinault-Printemps-Redoute SA ................... 950
2,095 Promodes ....................................... 590
------
4,481
------
Miscellaneous Materials & Commodities (0.3%):
9,300 Compagnie de Saint Gobain ...................... 1,313
------
Oil & Gas Exploration, Production & Services (0.0%):
750 Compagnie Francaise de Petroleum
Total SA, Certificate Petroliers ............. 46
------
Textile Products (0.0%):
1,400 Dollfus-Mieg & Cie ............................. 34
------
Total France 41,898
------
GERMANY (16.2%):
Airlines (0.2%):
55,100 Deutsche Lufthansa AG .......................... 743
------
Automotive (1.9%):
76,100 Daimler-Benz AG (b) ............................ 5,210
2,560 Man AG ......................................... 617
3,820 Volkswagen AG .................................. 1,580
------
7,407
------
Banking (3.0%):
98,150 Bayer AG ....................................... 3,977
27,500 Bayerische Vereinsbank AG ...................... 1,114
112,170 Deutsche Bank AG ............................... 5,226
50,850 Dresdner Bank AG ............................... 1,518
------
11,835
------
Banking & Financial Services (0.2%):
23,350 Bayerische Hypotheken-und
Weschel-Bank AG .............................. 703
------
Building Materials (0.1%)
5,890 Heidelberger Zement AG ......................... 475
------
Business Services (0.3%):
9,530 SAP AG ......................................... 1,302
------
Chemicals (1.3%):
120,200 BASF AG ........................................ 4,602
1,540 Degussa AG ..................................... 699
------
5,301
------
Conglomerates (2.3%):
12,678 Metro AG (b) ................................... 991
2,780 Preussag AG .................................... 628
109,360 VEBA AG ........................................ 6,280
COMMON STOCKS, CONTINUED:
GERMANY, CONTINUED:
Conglomerates, Continued:
3,390 Viag AG ........................................ $ 1,325
------
9,224
------
Construction (0.1%):
9,000 Hochtief AG .................................... 353
------
Consumer Goods & Services (0.2%):
8,520 Adidas AG ...................................... 735
------
Electrical & Electronic (0.9%):
77,580 Siemens AG ..................................... 3,595
------
Engineering (0.6%)
22,760 AGIV AG (b) .................................... 332
3,200 Bilfinger & Berger Bau AG ...................... 119
4,590 Mannesmann AG .................................. 1,972
------
2,423
------
Health Care (0.4%):
16,760 Schering AG .................................... 1,413
------
Insurance (2.5%):
3,464 Allianz AG Holding ............................. 6,226
540 AMB Aachener und Muenchener
Beteiligungs AG, Registered Shares ........... 386
110 AMB Aachener und Muenchener
Beteiligungs AG, Bearer Shares ............... 71
2,970 CKAG Colonia Konzern AG ........................ 247
70 Muenchener Rueckversicherungs
Gesellschaft AG, Bearer Shares ............... 126
1,215 Muenchener Rueckversicherungs
Gesellschaft AG, Registered Shares ........... 2,945
------
10,001
------
Machinery & Equipment (0.1%):
11,350 Kloeckner-Humbolt-Deutz AG (b) ................. 54
540 Linde AG ....................................... 328
------
382
------
Manufacturing-Consumer Goods (0.0%):
220 Salamander AG .................................. 21
------
Metals & Mining (0.5%):
31,700 Fag Kugelfischer Georg Schaefer AG ............. 433
8,435 Thyssen AG ..................................... 1,494
------
1,927
------
Personal Care Products (0.5%):
41,000 Beiersdorf AG .................................. 2,030
------
Pharmaceuticals (0.3%):
28,880 Merck KGaA ..................................... 1,037
------
</TABLE>
CONTINUED
<PAGE> 433
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
GERMANY, CONTINUED:
Retail-General Merchandise (0.0%):
3,100 Douglas Holding AG .............................. $ 125
------
Retail Stores (0.1%):
850 Karstadt AG ..................................... 282
------
Textile Products (0.0%):
630 Escada AG ....................................... 102
------
Utilities-Electric & Gas (0.7%):
65,470 RWE AG .......................................... 2,736
------
Total Germany 64,152
------
GREECE (0.8%):
Agriculture (0.0%):
13,350 Hellenic Sugar Industry SA ...................... 124
------
Banking & Financial Services (0.5%):
12,850 Alpha Credit Bank ............................... 818
9,931 Commercial Bank of Greece SA .................... 280
9,330 Ergo Bank SA .................................... 473
6,940 National Bank of Greece SA ...................... 441
------
2,012
------
Beverages & Tobacco (0.1%):
11,050 Hellenic Bottling Co. SA ........................ 354
------
Building Products (0.1%):
41,820 Heracles General Cement Co. SA .................. 519
------
Telecommunications (0.1%):
5,590 Intracom SA ..................................... 126
------
Total Greece 3,135
------
HONG KONG (1.0%):
Airlines (0.1%):
166,000 Cathay Pacific Airways .......................... 262
------
Banking (0.1%):
69,240 Bank of East Asia Ltd. .......................... 308
------
Banking & Financial (0.0%):
31,728 Wing Lung Bank .................................. 215
------
Broadcasting & Publishing (0.1%):
95,000 Television Broadcasts Ltd. ...................... 380
------
Conglomerates (0.2%):
68,000 Swire Pacific Ltd., Class A ..................... 648
------
Electrical Equipment (0.0%):
450,000 Elec & Eltek International Holdings Ltd. ........ 99
------
Electronic Components/Instruments (0.0%):
272,000 Applied International Holdings Ltd. (b) ......... 16
------
COMMON STOCKS, CONTINUED:
HONG KONG, CONTINUED,
Industrial Holding Company (0.3%):
145,000 Hutchison Whampoa Ltd. ............................ $1,139
------
Printing & Publishing (0.0%):
263,000 Oriental Press Group Ltd. ......................... 118
------
Real Estate (0.1%):
40,000 Sun Hung Kai Properties Ltd. ...................... 490
------
Telecommunications (0.1%):
227,600 Hong Kong Telecommunications Ltd. ................. 366
------
Total Hong Kong 4,041
------
INDONESIA (1.2%):
Agriculture (0.1%):
346,500 PT SMART Corp. .................................... 242
------
Auto Parts (0.1%):
167,000 PT Astra International-Foreign Registry ........... 459
------
Banking & Financial Services (0.3%):
1,201,706 PT Bank International Indonesia-Foreign Registry .. 1,183
------
Building Products (0.1%):
221,500 Indocement Tunggal Prakarsa ....................... 337
------
Forest Products (0.0%):
203,000 PT Barito Pacific Timber .......................... 124
99,500 PT Inti Indorayon Utama-Foreign Registry .......... 73
------
197
------
Telecommunications (0.1%):
107,500 PT Indosat ........................................ 296
------
Textile Products (0.2%):
1,246,000 PT Polysindo Eka Perkasa-Foreign Registry ......... 712
------
Tobacco (0.3%):
166,000 PT Gudang Garam ................................... 717
99,000 PT Hanjaya Mandala Sampoerna ...................... 528
------
1,245
------
Total Indonesia 4,671
------
IRELAND (0.3%):
Banking & Financial Services (0.2%):
132,300 Allied Irish Banks PLC ............................ 878
------
Beverages & Tobacco (0.1%):
77,400 James Crean PLC ................................... 242
------
Total Ireland 1,120
------
</TABLE>
CONTINUED
<PAGE> 434
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
ITALY (6.8%):
Agriculture (0.1%):
305,900 Parmalat Finanziaria SpA ......................... $ 467
------
Airlines (0.0%):
206,000 Alitalia SpA (b) ................................. 79
------
Automotive (0.6%):
616,100 Fiat SpA ......................................... 1,860
168,322 Fiat SpA, Privileged ............................. 277
136,494 Fiat SpA di Risp (Non-convertible) ............... 239
------
2,376
------
Banking (0.6%):
378,000 Banca Commerciale Italiana ....................... 686
160,700 Banca Nazionale dell'Agricoltura (b) ............. 101
82,800 Banco Ambrosiano Veneto SpA ...................... 199
344,000 Credito Italiano SpA ............................. 377
112,600 Istituto Bancario San Paolo di Torino ............ 689
31,680 Riunione Adriatica di Sicurta SpA di
Risp ........................................... 168
------
2,220
------
Building Products (0.0%):
28,000 Italcementi SpA .................................. 157
------
Chemicals (0.1%):
697,739 Montedison SpA (b) ............................... 474
------
Computer Hardware (0.0%):
446,563 Olivetti Group SpA (b) ........................... 157
------
Engineering (0.0%):
145,000 Impregilo SpA (b) ................................ 113
------
Insurance (1.5%):
240,548 Assicurazioni Generali ........................... 4,548
22,600 La Previdente .................................... 123
56,430 Riuniune Adriatici de Sicurta SpA ................ 525
62,800 Societa Assicuratrice Industriale (SAI) SpA ...... 578
------
5,774
------
Oil & Gas Exploration, Production & Services (1.5%):
1,148,900 Ente Nazionale Idrocarburi SpA (ENI) ............. 5,882
------
Paper Products (0.0%):
26,887 Burgo (Cartiere) SpA ............................. 124
------
Restaurants (0.0%):
44,204 Finanziaria Autogrill SpA (b) .................... 43
------
Retail Stores (0.1%):
35,600 La Rinascente SpA ................................ 206
------
Steel (0.0%):
21,500 Falck Acciaierie & Ferriere Lombarde
SpA ............................................ 86
------
COMMON STOCKS, CONTINUED:
ITALY, CONTINUED:
Telecommunications (1.8%):
55,700 Sirti SpA ......................................... $ 337
957,904 Telecom Italia SpA ................................ 2,482
333,400 Telecom Italia SpA di Risp (Non-convertible) ...... 649
1,198,060 Telecom Italia Mobile SpA ......................... 3,022
329,300 Telecom Italia Mobile SpA di Risp (Non-convertible) 469
------
6,959
------
Textile Products (0.1%):
33,400 Benetton Group SpA ................................ 421
------
Tire & Rubber (0.1%):
240,900 Pirelli SpA ....................................... 446
------
Utilities-Electric & Gas (0.3%):
92,400 Edison SpA ........................................ 583
121,400 Italgas SpA ....................................... 506
------
1,089
------
Total Italy 27,073
------
JAPAN (23.6%):
Agriculture (0.0%):
25,000 Nippon Beet Sugar Manufacturing ................... 93
------
Airlines (0.2%):
3,000 All Nippon Airways Co., Ltd. ...................... 23
115,000 Japan Airlines (b) ................................ 609
------
632
------
Aluminum (0.0%):
10,000 Nippon Light Metal Co. ............................ 41
------
Appliances & Household Products (1.0%):
104,000 Matsushita Electric Industrial Co., Ltd. .......... 1,694
11,000 Pioneer Electronic Corp. .......................... 209
95,000 Sanyo Electric Co. ................................ 393
52,000 Sharp Corp. ....................................... 739
16,000 Sony Corp. ........................................ 1,046
------
4,081
------
Automotive (1.9%):
46,000 Honda Motor Co., Ltd. ............................. 1,312
134,000 Nissan Motor Co., Ltd. ............................ 776
14,000 Toyoda Automatic Loom Works ....................... 261
184,000 Toyota Motor Corp. ................................ 5,279
------
7,628
------
Banking (4.3%):
125,000 Asahi Bank Ltd. ................................... 1,109
297,600 Bank of Tokyo-Mitsubishi .......................... 5,513
78,000 Bank of Yokohama Ltd. ............................. 504
75,000 Chiba Bank Ltd. ................................... 510
</TABLE>
CONTINUED
<PAGE> 435
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
BANKING, CONTINUED:
133,000 Fuji Bank Ltd. ................................ $ 1,937
111,000 Industrial Bank of Japan ...................... 1,922
48,000 Joyo Bank ..................................... 289
40,000 Mitsui Trust & Banking Co. .................... 312
178,000 Sakura Bank Ltd. .............................. 1,270
50,000 Shizuoka Bank ................................. 530
145,000 Sumitomo Bank ................................. 2,086
109,000 Tokai Bank .................................... 1,136
------
17,118
------
Banking & Financial Services (0.1%):
27,000 Gunma Bank .................................... 235
------
Basic Industry (0.1%):
42,000 Sekisui Chemical Co., Ltd. .................... 423
------
Beverages & Tobacco (0.2%):
6,000 Asahi Breweries Ltd. .......................... 62
49,000 Kirin Brewery Co., Ltd. ....................... 481
36,000 Takara Shuzo .................................. 253
------
796
------
Brewery (0.0%):
3,000 Sapporo Breweries ............................. 25
------
Building Products (0.1%):
20,000 Chichibu Onoda Cement Co. ..................... 85
9,000 Tostem Corp. .................................. 248
------
333
------
Chemicals (0.9%):
72,000 Asahi Chemical Industry Co., Ltd. ............. 407
97,000 Denki Kagaku Kogyo K.K. ....................... 238
32,000 Kaneka Corp. .................................. 164
4,000 Kureha Chemical Industry ...................... 16
73,000 Mitsubishi Chemical Corp. ..................... 236
51,000 Mitsui Toatsu Chemicals ....................... 155
12,000 Nippon Shokubai K.K. Co. ...................... 89
14,000 NOF Corp. ..................................... 61
12,400 Shin-Etsu Chemical Co. ........................ 225
59,000 Showa Denko K.K. (b) .......................... 135
100,000 Sumitomo Chemical Co. ......................... 395
27,000 Takeda Chemical Industries .................... 565
80,000 Toray Industries, Inc. ........................ 493
72,000 Tosoh Corp. (b) ............................... 246
74,000 Ube Industries Ltd. ........................... 209
------
3,634
------
Construction (0.5%):
13,000 Aoki Corp. (b) ................................ 27
21,000 Daiwa House Industry Co., Ltd. ................ 270
22,000 Haseko (b) .................................... 59
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Construction, continued
56,000 Kumagai Gumi Co., Ltd. ......................... $ 138
12,000 Misawa Homes ................................... 84
18,000 Okumura Corp. .................................. 109
20,000 Penta-Ocean Construction Co., Ltd. ............. 89
61,000 Sekisui House Ltd. ............................. 620
59,000 Shimizu Corp. .................................. 440
43,000 Taisei Corp. ................................... 222
------
2,058
------
Consumer Goods & Services (0.2%):
31,000 Nippon Sheet Glass Co., Ltd. ................... 110
45,000 Toto Ltd. ...................................... 512
------
622
------
Data Processing & Reproduction (0.3%):
117,000 Fujitsu Ltd. ................................... 1,089
------
Distribution (0.1%):
72,000 Itochu Corp. ................................... 386
64,000 Tomen Corp. .................................... 174
------
560
------
Diversified (0.1%):
9,000 Amano Corp. .................................... 96
18,000 Yamaha Corp. ................................... 306
------
402
------
Electrical & Electronic (0.5%):
9,000 Kyocera Corp. .................................. 560
116,000 Mitsubishi Electric Corp. ...................... 690
7,000 Nikon Corp. .................................... 87
17,000 Omron Corp. .................................... 319
7,000 Rohm Co. ....................................... 458
------
2,114
------
Electrical Equipment (0.1%):
7,100 SMC Corp. ...................................... 476
------
Electronic Components/Instruments (0.8%):
13,000 Fanuc Co., Ltd. ................................ 416
3,100 Hirose Electric ................................ 179
167,000 Hitachi Ltd. ................................... 1,554
73,000 NEC Corp. ...................................... 880
23,000 Yokogawa Electric Corp. ........................ 198
------
3,227
------
Energy (0.6%):
51,000 Cosmo Oil Co., Ltd. ............................ 245
211,000 Japan Energy Corp. ............................. 573
264,000 Nippon Oil Co. ................................. 1,353
------
2,171
------
</TABLE>
CONTINUED
<PAGE> 436
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Engineering (0.4%):
9,000 Daito Trust Construction Co., Ltd. ............. $ 100
36,000 Fujita Corp. ................................... 103
33,000 Hazama Corp. ................................... 91
36,000 Kajima Corp. ................................... 257
32,000 Kawasaki Heavy Industries ...................... 132
12,900 Kinden Corp. ................................... 164
19,000 Nishimatsu Construction ........................ 165
53,000 Obayashi Corp. ................................. 357
1,000 Sato Kogyo ..................................... 4
6,000 Toa Corp. ...................................... 31
------
1,404
------
Entertainment (0.1%):
16,000 Tokyo Dome Corp. ............................... 279
1,000 Toei ........................................... 6
------
285
------
Financial Services (0.9%):
11,000 Acom Co., Ltd. (b) ............................. 468
55,000 Daiwa Securities Co., Ltd. ..................... 488
49,000 Mitsubishi Trust & Banking Co. ................. 655
3,000 Nikko Securities Co., Ltd. ..................... 22
12,000 Nippon Shinpan Co. ............................. 67
86,000 Nomura Securities Co. .......................... 1,289
6,000 Orix Corp. ..................................... 249
54,000 Yamaichi Securities Co., Ltd. .................. 240
43,000 Yasuda Trust & Banking ......................... 182
------
3,660
------
Food & Household Products (0.2%):
13,000 Ajinomoto Co., Inc. ............................ 132
39,000 Kao Corp. ...................................... 454
4,000 Nissin Food Products ........................... 85
------
671
------
Food Products & Services (0.1%):
31,000 Daiei, Inc. .................................... 236
------
Forest Products (0.2%):
1,000 Hokuetsu Paper Mills Ltd. ...................... 6
14,000 Mitsubishi Paper Mills ......................... 55
89,333 New Oji Paper Co. .............................. 564
46,000 Nippon Paper Industries Co. .................... 214
------
839
------
Health & Personal Care (0.6%):
9,000 Chugai Pharmaceutical Co., Ltd. ................ 75
20,000 Kyowa Hakko Kogyo Co., Ltd. .................... 152
21,000 Lion Corp. ..................................... 104
27,000 Sankyo Co., Ltd. ............................... 763
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Health & Personal Care, continued:
57,000 Yamanouchi Pharmaceutical Co., Ltd. ............... $1,169
------
2,263
------
Hotels & Lodging (0.0%):
6,000 Fujita Kanko, Inc. ................................ 111
------
Industrial Goods & Services (0.7%):
57,000 Bridgestone Corp. ................................. 1,080
50,000 Denso Corp. ....................................... 1,202
33,000 Mitsui Engineering & Shipbuilding Co., Ltd. (b) ... 67
14,000 NGK Insulators Ltd. ............................... 133
26,000 Sumitomo Electric Industries ...................... 363
------
2,845
------
Insurance (0.2%):
39,000 Mitsui Marine & Fire Insurance Co., Ltd. .......... 209
13,650 Nichido Fire & Marine Insurance Co., Ltd. ......... 78
12,000 Nippon Fire & Marine Insurance .................... 54
22,000 Sumitomo Marine & Fire Insurance .................. 136
48,000 Tokio Marine & Fire Insurance Co. ................. 451
------
928
------
Jewelry (0.1%):
40,000 Citizen Watch Co., Ltd. ........................... 286
------
Leasing (0.1%):
45,000 Yamato Transport Co., Ltd. ........................ 465
------
Machinery & Equipment (1.1%):
20,000 Chiyoda Corp. ..................................... 129
9,000 Daifuku Co., Ltd. ................................. 113
15,000 Daikin Industries Ltd. ............................ 133
8,000 Ebara Corp. ....................................... 104
29,000 Iseki & Co. (b) ................................... 92
49,000 Komatsu Ltd. ...................................... 401
40,000 Koyo Seiko Co., Ltd. .............................. 331
52,000 Kubota Corp. ...................................... 251
32,000 Minebea Co., Ltd. ................................. 267
229,000 Mitsubishi Heavy Industries, Ltd. ................. 1,815
4,000 Mori Seiki ........................................ 55
58,000 Niigata Engineering Co., Ltd. (b) ................. 162
25,000 NSK Ltd. .......................................... 151
37,000 NTN Corp. ......................................... 201
7,000 Tokyo Electron Ltd. ............................... 214
------
4,419
------
Manufacturing-Capital Goods (0.4%):
38,000 Fujikura Ltd. ..................................... 304
16,000 Kokuyo Co., Ltd. .................................. 394
</TABLE>
CONTINUED
<PAGE> 437
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Manufacturing-Capital Goods, continued:
21,000 Makita Corp. .................................. $ 293
15,000 Murata Manufacturing Co., Ltd. ................ 497
22,000 Noritake Co., Ltd. ............................ 183
22,000 Topy Industries Ltd. .......................... 81
------
1,752
------
Manufacturing-Consumer Goods (0.7%):
69,000 Canon, Inc. ................................... 1,522
33,000 Fuji Photo Film Co., Ltd. ..................... 1,086
5,000 Sega Enterprises .............................. 168
------
2,776
------
Materials (0.0%):
15,000 Sumitomo Osaka Cement Co., Ltd. ............... 49
------
Merchandising (0.5%):
28,000 ITO-Yokado Co., Ltd. .......................... 1,216
14,000 JUSCO Co. ..................................... 474
10,000 Marui Co., Ltd. ............................... 180
2,900 Seven-Eleven Japan Ltd. ....................... 169
------
2,039
------
Metals & Mining (0.3%):
14,000 Furukawa Electric Co. ......................... 66
18,000 Hitachi Zosen Corp. ........................... 70
66,000 Japan Steel Works (b) ......................... 150
67,000 Mitsubishi Materials Corp. .................... 270
4,000 Mitsui Mining Co., Ltd. (b) ................... 14
30,000 Mitsui Mining & Smelting ...................... 102
22,000 Sumitomo Metal Mining Co. ..................... 148
44,000 Toho Zinc ..................................... 190
------
1,010
------
Miscellaneous Materials & Commodities (0.1%):
26,000 Asahi Glass Co., Ltd. ......................... 244
------
Office Equipment & Services (0.3%):
57,000 Dai Nippon Printing Co., Ltd. ................. 997
------
Oil & Gas Exploration, Production & Service (0.1%):
9,000 Arabian Oil Co. (b) ........................... 333
9,000 Showa Shell Sekiyu KK ......................... 75
9,000 Teikoku Oil Co. ............................... 49
------
457
------
Oil & Gas Transmission (0.0%):
10,000 Iwatani International Corp. ................... 42
17,000 Mitsubishi Oil Co., Ltd. ...................... 102
------
144
------
Packaging (0.0%):
7,000 Toyo Seikan Kaisha ............................ 168
------
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Pharmaceuticals (0.2%):
12,000 Meiji Seika ....................................... $ 62
13,000 Shionogi & Co. .................................... 93
29,000 Taisho Pharmacuetical Co. ......................... 682
------
837
------
Real Estate (0.5%):
98,000 Mitsubishi Estate Co. ............................. 1,005
75,000 Mitsui Fudosan .................................... 749
------
1,754
------
Restaurants (0.0%):
8,000 Skylark Co., Ltd. ................................. 122
------
Retail Stores/Catalog (0.3%):
10,000 Hankyu Department Stores .......................... 99
12,000 Isetan Co. ........................................ 155
52,000 Mycal Corp. (name changed from Nichii Co., Ltd.) .. 753
26,000 Takashimaya Co. ................................... 311
------
1,318
------
Retail-General Merchandise (0.0%):
8,000 Mitsukoshi Ltd. ................................... 57
------
Services (0.3%):
12,000 Secom ............................................. 725
35,000 Toppan Printing Co., Ltd. ......................... 437
------
1,162
------
Steel (0.7%):
53,000 Daido Steel Co., Ltd. ............................. 196
4,000 Japan Metals & Chemicals (b) ...................... 13
166,000 Kawasaki Steel Corp. .............................. 476
199,000 NKK Corp. (b) ..................................... 447
57,000 Nippon Metal Industry ............................. 172
360,000 Nippon Steel Co. .................................. 1,061
125,000 Sumitomo Metal Industries ......................... 307
------
2,672
------
Storage (0.0%):
1,000 Mitsubishi Logistics Corp. ........................ 13
5,000 Mitsui-Soko Co., Ltd. ............................. 32
------
45
------
Textile Products (0.3%):
244,000 Kanebo Ltd. (b) ................................... 503
2,000 Kurabo Industries ................................. 6
31,000 Kuraray Co., Ltd. ................................. 286
13,000 Nisshinbo Industries .............................. 101
15,000 Teijin Ltd. ....................................... 65
27,000 Toyobo Ltd. ....................................... 81
</TABLE>
CONTINUED
<PAGE> 438
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Textile Products, continued
48,000 Unitika Ltd. (b) ............................. $ 103
-------
1,145
-------
Transportation-Road & Railroad (0.8%):
73,000 Hankyu Corp. ................................. 362
29,870 Keihin Electric Express Railway .............. 137
232,290 Kinki Nippon Railway ......................... 1,447
49,000 Nippon Express Co., Ltd. ..................... 335
35,020 Odakyu Electric Railway ...................... 210
36,000 Tobu Railway Co., Ltd. ....................... 176
49,000 Tokyu Corp. .................................. 278
-------
2,945
-------
Transportation & Shipping (0.2%):
9,000 Kamigumi Co., Ltd. ........................... 59
15,000 Kawasaki Kisen Kaisha Ltd. (b) ............... 34
33,000 Mitsui OSK Lines, Ltd. (b) ................... 79
45,000 Nippon Yusen Kabushiki Kaisha ................ 203
12,000 Seino Transportation ......................... 132
73,000 Showa Line, Ltd. (b) ......................... 87
-------
594
-------
Utilities-Electric & Gas (0.7%):
11,000 Kansai Electric Power Co., Inc. .............. 227
82,000 Osaka Gas Co. ................................ 224
22,200 Tohoku Electric Power ........................ 440
80,500 Tokyo Electric Power ......................... 1,762
92,000 Tokyo Gas Co., Ltd. .......................... 249
-------
2,902
-------
Wholesale & International Trade (0.5%):
123,000 Marubeni Corp. ............................... 528
62,000 Mitsubishi Corp. ............................. 641
59,000 Mitsui & Co. ................................. 478
46,000 Sumitomo Corp. ............................... 362
-------
2,009
-------
Total Japan 93,368
-------
KOREA (0.5%):
Airlines (0.0%):
190 Korean Air ................................... 3
-------
Automotive (0.0%):
100 Hyundai Motor Co. Ltd. ....................... 2
2,800 Kia Motors Corp. (b) ......................... 55
-------
57
-------
Banking (0.0%):
4,800 Cho Hung Bank Co., Ltd. ...................... 37
5,300 Commercial Bank of Korea ..................... 34
COMMON STOCKS, CONTINUED:
KOREA, CONTINUED:
Banking, continued:
6,100 SeoulBank (b) ....................................... $ 31
40 Shinhan Bank ........................................ 1
-------
103
-------
Banking & Financial Services (0.0%):
4,700 Korea Exchange Bank ................................. 43
5,600 Korea First Bank (b) ................................ 28
1,600 Korea Long-Term Credit Bank ......................... 27
-------
98
-------
Chemicals (0.0%):
3,200 Hanwha Chemical Corp. ............................... 25
1,900 Han Wha Corp. (b) ................................... 21
6,700 LG Chemical Ltd. .................................... 64
-------
110
-------
Distribution (0.0%):
4,500 Daewoo Corp. ........................................ 34
2,300 Samsung Corp. (b) ................................... 27
-------
61
-------
Electrical & Electronic (0.1%):
9,100 Daewoo Electronics Co. .............................. 65
8,000 LG Electronics ...................................... 101
800 Samsung Display Devices Co. ......................... 46
-------
212
-------
Electronic (0.0%):
2,200 Samsung Electro-Mechanics Co. ....................... 50
-------
Electronic Components/Instruments (0.1%):
2,100 Samsung Electronics Co. ............................. 113
-------
Engineering (0.0%):
1,500 Dong-Ah Consruction Industrial Co. .................. 32
1,600 Hyundai Engineering & Construction Co. (b) .......... 37
-------
69
-------
Financial Services (0.0%):
1,900 Daewoo Securities Co. (b) ........................... 25
5,100 Hanil Bank .......................................... 35
1,400 Hyundai Securities Co. (b) .......................... 17
1,800 LG Securities (b) ................................... 18
1,600 Ssangyong Investment & Securities Co., Ltd. (b) ..... 15
-------
110
-------
Machinery & Equipment (0.1%):
9,400 Daewoo Heavy Industries ............................. 58
1,500 Hyundai Precision Industry Co. (b) .................. 27
</TABLE>
CONTINUED
<PAGE> 439
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
KOREA, CONTINUED:
Machinery & Equipment, continued:
7,700 Samsung Heavy Industries ........................ $ 80
-------
165
-------
Oil & Gas Exploration, Production & Service (0.0%):
2,100 Ssangyong Oil Refining Co., Ltd. ................ 46
1,945 Yukong Ltd. ..................................... 37
-------
83
-------
Retail-General Merchandise (0.0%):
400 Shinsegae Department Store Co. .................. 17
-------
Steel (0.1%):
5,300 Dongkuk Steel Mill Co. (b) ...................... 105
14,300 Hyundai Pipe Co., Ltd. (b) ...................... 103
2,900 Inchon Iron & Steel Co. (b) ..................... 47
-------
255
-------
Telecommunication- Services & Equipment (0.0%):
400 LG Information & Communication Ltd. ............. 25
-------
Utilities-Electric (0.1%):
10,300 Korea Electric Power Corp. ...................... 300
-------
Total Korea 1,831
-------
MALAYSIA (0.5%):
Agriculture (0.1%):
118,000 Highlands & Lowlands Berhad ..................... 197
-------
Building Products (0.0%):
80,000 Pan-Malaysia Cement Works Berhad ................ 81
-------
Engineering (0.0%):
18,585 United Engineers (Malaysia) Ltd. ................ 168
-------
Financial Services (0.2%):
99,000 Idris Hydraulic (Malaysia) Berhad (b) ........... 114
94,000 Rashid Hussain Berhad ........................... 622
-------
736
-------
Food Products & Services (0.1%):
54,000 Nestle (Malaysia) Berhad ........................ 434
-------
Forest Products (0.0%):
20,500 Land & General Berhad ........................... 49
-------
Hotels & Lodging (0.0%):
29,500 Faber Group Berhad (b) .......................... 28
-------
Utilities-Electric & Gas (0.1%):
51,000 Tenaga Nasional Berhad .......................... 244
-------
Total Malaysia 1,937
-------
COMMON STOCKS, CONTINUED:
MEXICO (0.8%):
Banking (0.0%):
16,160 Grupo Financiero Banamex Accival SA de
CV (b) ......................................... $ 31
-------
Beverages & Tobacco (0.0%):
5,000 Grupo Continental SA, Series CP .................. 24
26,500 Grupo Embotelladoras de Mexico SA de
CV (b) ......................................... 37
-------
61
-------
Brewery (0.0%):
13,000 Fomento Economico Mexicano SA de
CV, Class B .................................... 44
-------
Building Products (0.1%):
8,000 Apasco SA de CV .................................. 55
38,430 Cemex SA de CV, Series A ......................... 138
20,300 Cemex SA de CV, Series B ......................... 79
15,300 Cemex SA de CV, Series CPO ....................... 55
17,960 Tolmex SA de CV, Series B2 (b) ................... 68
-------
395
-------
Diversified (0.1%):
17,286 ALFA SA de CV, Class A ........................... 80
36,500 Carso Global Telecom, Series A-1 (b) ............. 83
4,000 Desc SA de CV, Series A (b) ...................... 20
4,000 Desc SA de CV, Series B (b) ...................... 22
166 Desc SA de CV, Series C (b) ...................... 1
36,500 Grupo Carso SA de CV, Series A1 .................. 190
-------
396
-------
Engineering (0.1%):
9,400 Empresas ICA Sociedad Controladora
SA de CV (b) ................................... 138
69,700 Grupo Tribasa SA de CV (b) ....................... 172
-------
310
-------
Financial Services (0.1%):
47,300 Grupo Financiero Banamex Accival SA
de CV .......................................... 99
112,800 Grupo Financiero Bancomer SA de CV,
Class B (b) .................................... 45
1,274 Grupo Financiero Inbursa SA de CV,
Class B ........................................ 4
-------
148
-------
Food & Household Products (0.2%):
29,000 Kimberly-Clark de Mexico SA de CV,
Class A ........................................ 563
-------
Industrial Goods & Service (0.0%):
7,000 Grupo Industrial Bimbo SA de CV,
Series A ....................................... 40
-------
</TABLE>
CONTINUED
<PAGE> 440
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
MEXICO, CONTINUED:
Merchandising (0.0%):
38,000 Cifra SA de CV, Series B (b) ..................... $ 46
51,000 Cifra SA de CV, Series C (b) ..................... 62
-------
108
-------
Metals & Mining (0.0%):
18,000 Grupo Mexico SA, Series B (b) .................... 58
13,000 Industrias Penoles SA, Series CP ................. 46
-------
104
-------
Retail-General Merchandise (0.0%):
39,000 Controladora Comercial Mexicana Sa de CV (b) ..... 35
-------
Retail Stores/Catalog (0.0%):
37,000 Cifra SA de CV, Series A (b) ..................... 46
42,000 El Puerto de Liverpool SA de CV, Series 1 ........ 38
10,000 Sears Roebuck de Mexico SA de CV (b) ............. 17
-------
101
-------
Steel (0.0%):
18,750 Altos Hornos de Mexico SA (b) .................... 37
6,000 Hylsamex SA ...................................... 24
-------
61
-------
Telecommunications (0.2%):
9,000 Grupo Televisa SA, Series CPO (b) ................ 116
269,000 Telefonos de Mexico SA, Series L ................. 443
-------
559
-------
Tobacco (0.0%):
17,000 Empresas La Moderna SA de CV ..................... 83
-------
Transportation-Shipping (0.0%):
29,880 Vitro SA ......................................... 54
-------
Wholesale Distribution (0.0%):
15,000 Grupo Casa Autrey SA de CV ....................... 29
-------
Total Mexico 3,122
-------
NETHERLANDS (2.7%):
Appliances & Household Products (0.1%):
11,100 Philips Electronics NV ........................... 449
-------
Banking (0.3%):
20,150 ABN Amro Holding NV .............................. 1,309
-------
Beverages & Tobacco (0.1%):
1,625 Heineken NV ...................................... 287
-------
Broadcasting & Publishing (0.2%):
42,700 Elsevier NV ...................................... 721
-------
COMMON STOCKS, CONTINUED:
NETHERLANDS, CONTINUED:
Chemicals (0.2%):
5,500 Akzo Nobel .................................... $ 751
1,550 DSM NV ........................................ 153
-------
904
-------
Energy (0.9%):
19,850 Royal Dutch Petroleum Co. ..................... 3,476
-------
Financial Services (0.5%):
51,650 ING Groep NV .................................. 1,857
-------
Food Products & Services (0.2%):
5,700 Unilever NV CVA ............................... 1,007
-------
Services (0.2%):
17,050 Koninklijke Royal PTT Nederland NV ............ 650
-------
Total Netherlands 10,660
-------
NEW ZEALAND (0.4%):
Beverages & Tobacco (0.0%):
105,500 Lion Nathan Ltd. .............................. 253
-------
Broadcasting & Publishing (0.1%):
43,737 Wilson & Horton Ltd. .......................... 355
-------
Telecommunications (0.3%):
205,400 Telecom Corp. of New Zealand Ltd. ............. 1,048
-------
Total New Zealand 1,656
-------
NORWAY (0.9%):
Engineering (0.1%):
6,090 Kvaerner ASA .................................. 296
-------
Entertainment (0.0%):
42,880 NCL Holdings ASA (b) .......................... 72
-------
Forest Products (0.1%):
7,400 Norske Skogsindustrier ASA .................... 225
-------
Insurance (0.1%):
53,920 Storebrand ASA (b) ............................ 312
-------
Medical Equipment & Supplies (0.0%):
12,800 Hafslund ASA, Class A ......................... 88
-------
Metals & Mining (0.0%):
10,600 Elkem ASA ..................................... 175
-------
Oil & Gas Exploration, Production & Services (0.5%):
11,520 Aker ASA, Class A ............................. 256
5,880 Aker ASA, Class B ............................. 119
32,000 Norsk Hydro ASA ............................... 1,729
-------
2,104
-------
Pharmaceuticals (0.1%):
12,800 Nycomed ASA, Class B (b) ...................... 197
-------
Total Norway 3,469
-------
</TABLE>
CONTINUED
<PAGE> 441
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
PHILLIPINES (0.8%):
Agriculture (0.0%):
310,700 Vitarich Corp. (b) .............................. $ 34
-------
Banking & Financial Services (0.2%):
45,000 Far East Bank & Trust Co. ....................... 180
12,787 Metropolitan Bank & Trust Co. ................... 316
10,800 Phillippine Commercial International
Bank .......................................... 142
15,390 Philippine National Bank (b) .................... 183
-------
821
-------
Beverages & Tobacco (0.1%):
54,637 San Miguel Corp., Class B ....................... 241
-------
Building Products (0.0%):
374,180 Southeast Asia Cement
Holdings, Inc. (b) ............................ 43
-------
Diversified (0.1%):
244,440 Ayala Corp., Class B ............................ 265
38,000 Metro Pacific Corp. ............................. 9
-------
274
-------
Homebuilders (0.0%):
94,500 C&P Homes, Inc. (b) ............................. 48
-------
Oil & Gas Exploration, Production & Services (0.1%):
832,125 Petron Corp. (b) ................................ 282
-------
Real Estate (0.2%):
763,125 Ayala Land, Inc., Class B ....................... 870
78,000 Filinvest Land, Inc. (b) ........................ 24
246,000 SM Prime Holdings, Inc. ......................... 64
-------
958
-------
Telecommunications (0.1%):
7,400 Philippine Long Distance Telephone Co. .......... 407
18,800 Pilipino Telephone Corp. (b) .................... 16
-------
423
-------
Utilities-Electric & Gas (0.0%):
27,885 Manila Electric Co., Class B .................... 228
-------
Total Philippines 3,352
-------
PORTUGAL (0.9%):
BANKING (0.3%):
25,070 Banco Comercial Portugues SA .................... 330
23,751 Banco Espirito Santo e Commerical de
Lisboa SA, Registered (b) ..................... 417
15,885 Banco Internacional do Funchal SA (b) ........... 131
16,927 BPI-SGPS SA, Registered ......................... 210
1,000 Banco Totta & Acores SA ......................... 19
-------
1,107
-------
COMMON STOCKS, CONTINUED:
PORTUGAL, CONTINUED:
Beverages & Tobacco (0.1%):
15,740 UNICER-Uniao Cervejeira SA ........................ $ 272
-------
Building Products (0.0%):
1,300 Cimpor-Cimentos de Portugal, SGPS SA .............. 28
-------
Food & Household Products (0.1%):
7,600 Estabelecimentos Jeronimo Martins & Filho SA ...... 392
-------
Forest Products (0.0%):
8,050 Soporcel-Sociedade Portuguesa de Celulose SA (b) .. 215
-------
Industrial Holding Company (0.2%):
20,700 Sonae Investimentos SA ............................ 655
-------
Insurance (0.0%):
6,100 Companhia de Seguros Tranquilidade, Registered .... 130
-------
Retail-General Merchandise (0.1%):
9,000 Modelo Continente-Sociedade Gestora
de Participacoes Sociais SA ..................... 301
-------
Telecommunications (0.1%):
16,300 Portugal Telecom SA ............................... 464
-------
Total Portugal 3,564
-------
SINGAPORE (0.5%):
Lodging (0.1%):
310,000 Hotel Properties Ltd. ............................. 501
-------
Telecommunications (0.2%):
334,000 Singapore Telecommunications Ltd. ................. 788
-------
Transportation & Shipping (0.2%):
468,000 Chuan Hup Holdings Ltd. ........................... 313
347,000 Neptune Orient Lines Ltd. ......................... 300
-------
613
Total Singapore 1,902
-------
SOUTH AFRICA (0.6%):
Banking & Financial Services (0.1%):
4,700 Nedcor Ltd. ....................................... 64
2,600 Standard Bank Investment Corp., Ltd. .............. 102
-------
166
-------
Brewery (0.1%):
6,600 South African Breweries Ltd. ...................... 167
-------
Diversified (0.1%):
5,300 Anglovaal Industries Ltd. ......................... 24
10,600 Barlow Ltd. ....................................... 94
30,700 Gencor Ltd. ....................................... 112
7,500 Malbak Ltd. ....................................... 33
11,600 Rembrandt Group Ltd. .............................. 104
</TABLE>
CONTINUED
<PAGE> 442
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
SOUTH AFRICA, CONTINUED:
Diversified, continued:
9,900 Smith (C.G.) Ltd. ............................... $ 48
-------
415
-------
Engineering (0.0%):
30,500 Murray & Roberts Holdings Ltd. .................. 69
-------
Entertainment (0.0%):
17,100 Sun International (South Africa) Ltd. ........... 14
-------
Financial Services (0.0%):
6,900 First National Bank Holdings Ltd. ............... 34
9,200 Amalgamated Banks of South Africa ............... 47
-------
81
-------
Food & Household Products (0.0%):
3,400 Tiger Oats Ltd. ................................. 47
-------
Forest Products (0.0%):
11,200 Nampak Ltd. ..................................... 45
12,500 Sappi Ltd. ...................................... 112
-------
157
-------
Industrial Goods & Services (0.0%):
1,100 Anglo American Industrial Corp., Ltd. ........... 40
-------
Insurance (0.1%):
5,300 Liberty Life Association of Africa Ltd. ......... 133
4,100 Southern Life Association Ltd. .................. 35
-------
168
-------
Metals & Mining (0.2%):
5,200 Anglo American Corp of South Africa Ltd. ........ 286
500 Anglo American Gold Investment Co., Ltd. ........ 38
8,400 DeBeers Centenary AG ............................ 241
3,200 Driefontein Consolidated Ltd. ................... 34
1,500 Gold Fields of South Africa Ltd. ................ 41
3,400 Johnnies Industrial Corp., Ltd. ................. 37
3,800 Kloof Gold Mining Company Ltd. .................. 31
8,200 Randfontein Estates Gold Mining Co. ............. 43
4,700 Rustenburg Platinum Holdings Ltd. ............... 64
4,100 Samancor Ltd. ................................... 48
-------
863
-------
Oil & Gas Exploration Products & Services (0.0%):
13,100 Sasol Ltd. ...................................... 155
-------
Total South Africa 2,342
-------
SPAIN (4.0%):
Automotive (0.0%):
3,200 Fabricacion de Automoviles Renault de
Espana SA ..................................... 67
-------
COMMON STOCKS, CONTINUED:
SPAIN, CONTINUED:
Banking (1.0%):
27,300 Banco Bilbao Vizcaya SA, Registered .............. $1,471
21,700 Banco Central Hispanoamericano SA ................ 556
19,000 Banco Santander SA ............................... 1,214
14,200 Corporacion Bancaria de Espana SA ................ 634
-------
3,875
-------
Beverages & Tobacco (0.1%):
7,400 El Aguila SA (b) ................................. 35
6,000 Tabacalera SA, Class A ........................... 258
-------
293
-------
Building Products (0.0%):
13,900 Uralita SA ....................................... 109
-------
Chemicals (0.0%):
54,100 Ercros SA (b) .................................... 33
-------
Energy (0.3%):
30,200 Repsol SA ........................................ 1,156
-------
Food & Household Products (0.1%):
16,900 Ebro Agricolas, Compania de Alimentacion SA ...... 297
-------
Forest Products (0.0%):
5,800 Empresa Nacional de Celulosas SA ................. 69
37,800 Sarrio SA ........................................ 124
-------
193
-------
Industrial Holding Companies (0.1%):
5,600 Corporacion Financiara Alba ...................... 565
-------
Insurance (0.1%):
3,600 Corporacion Mapfre ............................... 219
-------
Miscellaneous Materials & Commodities (0.0%):
6,400 Viscofan Industria Navarra de
Envolturas Celulosicas SA ...................... 94
-------
Real Estate (0.2%):
8,200 Inmobiliaria Metropolitana Vasco
Central SA ..................................... 301
15,700 Vallehermoso SA .................................. 340
-------
641
-------
Steel (0.1%):
3,180 Acerinox SA ...................................... 459
-------
Telecommunications (0.7%):
114,400 Telefonica de Espana ............................. 2,652
-------
Utilities-Electric & Gas (1.3%):
27,700 Empresa Nacional de Electricidad SA .............. 1,968
2,800 Fomento de Construcciones y Contratas SA ......... 260
5,100 Gas Natural SDG SA ............................... 1,184
</TABLE>
CONTINUED
<PAGE> 443
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
SPAIN, CONTINUED:
Utilities-Electric & Gas, continued:
100,700 Iberdrola SA ...................................... $ 1,425
48,310 Union Electric Fenosa SA .......................... 518
-------
5,355
-------
Total Spain 16,008
-------
SWEDEN (1.8%):
Automotive (0.1%):
14,500 Volvo AB, Series B ................................ 320
-------
Banking & Financial Services (0.2%):
27,400 Skandiaviska Enskilda Banken, Class A ............. 281
11,150 Svenska Handlesbanken, Class A .................... 320
800 Svenska Handlesbanken, Class B .................... 22
-------
623
-------
Engineering (0.1%):
2,450 ABB AB, Series A .................................. 276
800 ABB AB, Series B .................................. 91
4,150 Skanska AB, Series B .............................. 183
-------
550
-------
Forest Products (0.2%):
14,000 Stora Kopparbergs Bergslags Aktiebolag, Series A .. 193
5,750 Stora Kopparbergs Bergslags Aktiebolag, Series B .. 78
15,500 Svenska Cellulosa AB, Series B .................... 314
-------
585
-------
Insurance (0.0%):
4,200 Skandia Forsakrings AB ............................ 119
-------
Machinery & Equipment (0.1%):
13,300 Atlas Copco AB, Series A .......................... 322
1,000 Atlas Copco AB, Series B .......................... 24
-------
346
-------
Manufacturing-Consumer Goods (0.1%):
5,524 Electrolux AB, Series B ........................... 320
-------
Metals & Mining (0.0%):
1,750 SKF AB, Series B .................................. 41
7,150 Trelleborg AB, Series B ........................... 95
-------
136
-------
Office Equipment & Services (0.0%):
4,600 Esselte AB, Series B .............................. 102
-------
Pharmaceuticals (0.5%):
29,850 Astra AB, Series A ................................ 1,473
9,850 Astra AB, Series B ................................ 475
-------
1,948
-------
COMMON STOCKS, CONTINUED:
SWEDEN, CONTINUED:
Real Estate (0.0%):
2,740 Diligentia AB (b) ............................... $ 43
-------
Retail-Special Line (0.2%):
6,400 Hennes & Mauritz AB, Class B .................... 885
-------
Telecommunications (0.3%):
37,543 Telefonaktiebolaget LM Ericsson,
Series B ...................................... 1,160
-------
Tobacco (0.0%):
14,500 Swedish Match AB ................................ 51
-------
Total Sweden 7,188
-------
SWITZERLAND (1.9%):
Banking (0.0%):
1,080 Swiss Bank Corp. ................................ 205
-------
Commercial Services (0.1%):
1,492 Addeco SA ....................................... 374
-------
Consumer Goods (0.0%):
1,150 Societe Suisse pour la
Microelectronique et l'Horlogerie AG,
Registered .................................... 163
-------
Diversified (0.1%)
260 ABB AG, Bearer Shares ........................... 322
150 Alusuisse-Lonza Holding AG, Registered .......... 119
-------
441
-------
Financial Services (0.3%):
4,510 CS Holding AG, Registered ....................... 462
624 Union Bank of Switzerland ....................... 545
-------
1,007
-------
Food Products & Services (0.2%):
570 Nestle SA, Registered ........................... 610
-------
Insurance (0.1%):
390 Swiss Reinsurance Co., Registered ............... 415
-------
Pharmaceuticals (1.1%):
2,434 Novartis AG, Bearer (b) ......................... 2,779
130 Roche Holding AG ................................ 1,008
40 Roche Holding AG, Bearer ........................ 450
-------
4,237
-------
Transportation & Shipping (0.0%):
100 Danzas Holding AG, Registered ................... 111
-------
Total Switzerland 7,563
-------
THAILAND (0.5%):
Airlines (0.1%):
136,200 Thai Airways International Public Co.,
Ltd., Foreign Registered Shares ............... 198
-------
</TABLE>
CONTINUED
<PAGE> 444
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
THAILAND, CONTINUED:
Banking (0.2%):
211,190 Krung Thai Bank Ltd. ............................ $ 412
41,800 Bangkok Bank Public Co., Ltd.,
Foreign Registered Shares ....................... 404
------
816
------
Metals & Mining (0.1%):
655,000 Padaeng Industries Public Co., Ltd. (b) ......... 262
------
Telecommunications (0.1%):
30,000 Advanced Information Services PCL,
Foreign Registered Shares ..................... 255
9,800 Shinawatra Computer Co., PLC .................... 118
76,700 TelecomAsia Corp. Public Co., Ltd. (b) .......... 160
------
533
------
Total Thailand 1,809
------
Turkey (1.1%): Appliances & Household Products (0.0%):
1,243,103 Arcelik AS ...................................... 125
------
Automotive (0.1%):
236,000 Otosan Otomobil Sanayii AS ...................... 95
1,747,400 Tofas Turk Otomobil Fabrikas AS (b) ............. 68
------
163
------
Banking & Financial Services (0.2%):
3,301,600 Akbank TAS ...................................... 446
4,806,400 Turkiye Garanti Bankasi AS ...................... 216
------
662
------
Beverages & Tobacco (0.0%):
574,560 Ericiyas Biracilik ve Malt Sanayii .............. 62
301,540 Ege Biracilik ve Malt Sanayi AS ................. 87
------
149
------
Building Products (0.1%):
384,736 Akcansa Cimento AS .............................. 35
266,316 Cimentas AS ..................................... 28
333,000 Cimsa Cimento Sanayi ve Ticaret AS .............. 31
1,090,565 Turk Sise ve Cam Fabrikalari AS ................. 115
------
209
------
Chemicals (0.1%):
687,700 Petkim Petrokimya Holding AS .................... 274
------
Diversified (0.1%):
2,509,670 Dogan Sirketler Grubu Holding AS ................ 48
1,976,833 Koc Holding AS (b) .............................. 344
------
392
------
COMMON STOCKS, CONTINUED:
TURKEY, CONTINUED:
Electrical & Electronical (0.0%):
251,000 Raks Electronik Ev Aletleri (b) ..................... $ 52
------
Financial Services (0.1%):
775,463 Eczacibasi Yatirim Holding Ortakligi
AS (b) ............................................ 67
2,126,000 Turkiye Is Bankasi AS, Class C ...................... 326
5,862,600 Yapi ve Kredi Bankasi AS ............................ 145
------
538
------
Food Products & Services (0.0%):
181,999 Tat Konserve Sanayii AS ............................. 27
------
Forest Products (0.0%):
791,000 Kartonsan Karton Sanayi ve Ticaret AS ............... 76
------
Industrial Goods & Services (0.0%):
95,000 Kordsa Kord Bezi Sanayi ve Ticaret AS ............... 38
------
Investment Companies (0.0%):
189,600 Koc Yatrim ve Sanayi Mamulleri Pazarlama SA ......... 36
------
Manufacturing-Capital Goods (0.0%):
587,000 Turk Demir Dokum Fabrikalari AS ..................... 53
------
Metals & Mining (0.1%):
1,514,450 Eregli Demir ve Celik Fabrikalari TAS ............... 181
8,427,517 Izmir Demir Celik Sanayi AS ......................... 70
------
251
------
Oil & Gas Exploration, Production & Services (0.1%):
467,591 Aygaz AS ............................................ 68
517,300 Petrol Ofisi AS ..................................... 138
961,665 Tupras Turkiye Petrol Rafinerileri AS (b) ........... 238
------
444
------
Telecommunications (0.0%):
307,200 Netas-Northern Elektrik Telekomunikasyon AS ......... 69
------
Textile Products (0.0%):
787,057 Aksa Akrilik Kimya Sanayii AS ....................... 106
------
Tire & Rubber (0.1%):
179,000 Brisa Bridgestone Sabanci Lastik SAN, ve Tic AS ..... 80
96,000 Goodyear Lastikleri TAS ............................. 73
------
153
------
Transportation (0.1%):
1,966,854 Turk Hava Yollari AO (b) ............................ 433
------
Utility-Electric & Gas (0.0%):
96,000 Cukurova Elektrik AS ................................ 114
------
</TABLE>
CONTINUED
<PAGE> 445
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
TURKEY, CONTINUED:
Wholesale Distribution (0.0%):
110,000 Migros Turk TAS ................................. $ 134
------
Total Turkey 4,498
------
UNITED KINGDOM (8.1%):
Aerospace & Military Technology (0.3%):
21,900 British Aerospace PLC ........................... 479
33,200 Rolls-Royce PLC ................................. 146
34,700 Smiths Industries PLC ........................... 476
------
1,101
------
Airlines (0.2%):
64,500 British Airways PLC ............................. 668
------
Appliance s & Household Products (0.1%):
13,600 EMI Group PLC ................................... 321
------
Banking (1.3%):
160,400 Abbey National PLC .............................. 2,100
74,500 Barclays PLC .................................... 1,275
21,000 HSBC Holdings PLC ............................... 469
42,800 HSBC Holdings PLC (Hong Kong Dollars 10) ........ 932
23,500 Royal Bank of Scotland Group PLC ................ 227
------
5,003
------
Banking & Financial Services (0.1%):
37,500 Allied Irish Banks PLC .......................... 251
------
Beverages & Tobacco (0.2%):
49,400 Guinness PLC .................................... 387
50,200 Scottish & Newcastle PLC ........................ 590
------
977
------
Broadcasting/Cable (0.1%):
52,600 British Sky Broadcasting Group PLC .............. 470
------
Building Products (0.1%):
67,300 CAMAS PLC ....................................... 84
158,800 Tarmac PLC ...................................... 266
------
350
------
Chemicals (0.1%):
33,000 Imperial Chemical Industries PLC ................ 434
------
Closed End Funds (0.0%):
12,233 Value Realisation Trust PLC (b) ................. 16
------
Conglomerates (0.2%):
70,400 B.A.T. Industries PLC ........................... 584
53,500 Lonrho PLC ...................................... 114
------
698
------
COMMON STOCKS, CONTINUED:
UNITED KINGDOM, CONTINUED:
Construction (0.0%):
73,500 Taylor Woodrow PLC .............................. $ 194
------
Electrical & Electronic (0.4%):
50,400 Bowthorpe PLC ................................... 390
49,800 Electrocomponents PLC ........................... 454
82,300 General Electric Co., PLC ....................... 538
22,300 Oxford Instruments PLC .......................... 160
------
1,542
------
Energy (0.4%):
135,700 British Petroleum Co., PLC ...................... 1,627
------
Engineering (0.0%):
24,700 Barratt Developments PLC ........................ 107
56,460 Costain Group PLC (b) ........................... 40
------
147
------
Financial Services (0.3%):
143,582 Lloyds TSB Group PLC ............................ 1,058
36,700 St. James's Place Capital PLC ................... 62
------
1,120
------
Food & Household Products (0.2%):
42,285 Cadbury Schweppes PLC ........................... 356
18,700 Unilever PLC .................................... 453
------
809
------
Health & Personal Care (0.6%):
90,100 Glaxo Wellcome PLC .............................. 1,462
26,500 Zeneca Group PLC ................................ 747
------
2,209
------
Industrial Holding Companies (0.4%):
21,900 BICC Group PLC .................................. 104
100,700 BTR PLC ......................................... 489
94,200 Grand Metropolitan PLC .......................... 740
200,900 Hanson PLC ...................................... 280
------
1,613
------
Insurance (0.3%):
56,300 Commercial Union PLC ............................ 659
18,600 Prudential Corp. PLC ............................ 156
33,930 Royal & Sun Alliance Insurance Group PLC ........ 258
------
1,073
------
Leisure (0.2%):
57,800 Granada Group PLC ............................... 852
------
Machinery & Equipment (0.1%):
20,000 GKN PLC ......................................... 343
------
</TABLE>
CONTINUED
<PAGE> 446
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
UNITED KINDOM, CONTINUED:
Merchandising (0.1%):
42,900 Safeway PLC ...................................... $ 297
------
Metals & Mining (0.0%):
48,900 English China Clays PLC .......................... 161
------
Metals (Non-ferrous) (0.2%):
42,500 RTZ Corp., PLC, Registered ....................... 681
------
Metals (Steel) (0.0%):
67,600 British Steel PLC ................................ 186
------
Miscellaneous Materials & Commodities (0.1%):
61,200 Harrisons & Crosfield PLC ........................ 140
50,900 Pilkington PLC ................................... 136
------
276
------
Oil & Gas Exploration Products & Services (0.0%):
3,300 Shell Transport & Trading Co. .................... 57
------
Paper Products (0.1%):
40,900 Rexam PLC ........................................ 252
------
Pharmaceuticals (0.3%):
72,372 SmithKline Beecham PLC ........................... 1,002
------
Printing & Publishing (0.1%):
42,600 Reuters Holdings PLC ............................. 548
------
Real Estate (0.2%):
18,720 British Land Co., PLC ............................ 165
48,600 Land Securities PLC .............................. 619
------
784
------
Retail Stores/Catalog (0.8%):
45,500 Boots Co., PLC ................................... 469
41,000 Great Universal Stores PLC ....................... 429
89,900 Marks & Spencer PLC .............................. 755
22,700 Next PLC ......................................... 220
66,100 Sainsbury (J.) PLC ............................... 439
117,000 Tesco PLC ........................................ 710
13,600 Thorn PLC ........................................ 59
------
3,081
------
Road & Railroad (0.0%):
18,600 Peninsular & Oriental Steam Navigation Co. ....... 188
------
Telecommunications (0.5%):
148,900 British Telecommunications PLC ................... 1,005
65,100 Cable & Wireless PLC ............................. 541
123,700 Vodaphone Group PLC .............................. 522
------
2,068
------
Tobacco (0.0%):
20,090 Imperial Tobacco Group PLC (b) ................... 130
------
COMMON STOCKS, CONTINUED:
UNITED KINGDOM, CONTINUED:
Utilities-Electric & Gas (0.1%):
77,300 British Gas PLC ................................. $ 297
33,800 National Power PLC .............................. 283
------
580
------
Total United Kingdom 32,109
------
UNITED STATES (0.9%):
Banking & Financial Services (0.0%):
5,883 Banco O'Higgins ADR ............................. 135
------
Beverages & Tobacco (0.1%):
6,712 Compania Cervezas Unidas SA ADR ................. 108
4,066 Embotelladora Andina SA ADR ..................... 124
2,500 Vina Concho y Toro SA ADR ....................... 59
------
291
------
Building Products (0.0%):
18,900 Gujarat Ambuja Cements Ltd. GDR ................. 156
------
Chemicals (0.1%):
9,500 Indian Petrochemicals Corp., Ltd. GDR ........... 95
2,870 Millenium Chemicals, Inc. (b) ................... 51
6,409 Quimica Y Minera Chile SA ADR ................... 347
------
493
------
Diversified (0.0%):
1,615 U.S. Industries, Inc. (b) ....................... 56
------
Forest Products (0.1%):
11,887 Maderas Y Sinteticos Anonima SA ADR ............. 166
------
Metals & Mining (0.1%):
7,615 Madeco SA ADR ................................... 185
------
Packaging (0.0%):
8,500 Cristalerias de Chile ADR ....................... 155
------
Pharmaceuticals (0.0%):
4,711 Laboratorio Chile ADR ........................... 78
------
Telecommunications (0.1%):
3,796 Cia de Telecomunicaciones de Chile SA ADR ....... 384
------
Textiles (0.0%):
13,800 Indian Rayon & Industries Ltd. GDR .............. 100
------
Transportation (0.1%):
7,000 Bajaj Auto Ltd. GDR ............................. 185
------
Utilities-Electric (0.3%):
4,662 Chilectra SA ADR ................................ 241
11,891 Chilgener SA ADR ................................ 248
19,962 Empresa Nacional Electricidad ADR ............... 309
10,028 Enersis SA ADR .................................. 278
------
1,076
------
</TABLE>
CONTINUED
<PAGE> 447
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- ----------------------------------------------------- ----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
UNITED STATES, CONTINUED:
Utilities-Electric continued:
Total United States $ 3,460
--------
Total Common Stocks 382,794
--------
CORPORATE BONDS (0.0%):
UNITED KINGDOM (0.0%):
$6,422 Value Realisation Trust ....................... 10
--------
Total Corporate Bonds 10
--------
PREFERRED STOCKS (1.5%):
AUSTRALIA (0.3%):
223,350 News Corp. Ltd. ............................... 993
--------
BRAZIL (0.4%):
Banking (0.0%):
12,023,000 Banco Bradesco SA ............................. 87
131,000 Banco Itau SA ................................. 57
--------
144
--------
Beverages & Tobacco (0.0%):
91,000 Companhia Cervejaria Brahma (b) ............... 50
--------
Electric Utility (0.0%):
1,104,000 Cia Energetica de Sao Paolo ................... 43
2,173,000 Companhia Energetica de Minas Gerais .......... 74
--------
117
--------
Food Products (0.0%):
141,000 Sadia-Concordia SA ............................ 109
--------
Forest Products (0.0%):
2,000 Cia Suzano Papel e Celelose ................... 5
--------
Oil & Gas Exploration, Production & Services (0.1%):
2,158,000 Petroleo Brasileiro SA ........................ 344
--------
Steel (0.1%):
11,664 Companhia Vale do Rio Doce .................... 224
--------
Telecommunications (0.2%):
8,722,000 Telecomunicacoes Brasileiras SA ............... 671
550,000 Telecomunicacoes de Sao Paolo SA .............. 119
--------
790
--------
Total Brazil 1,783
--------
GERMANY (0.8%):
Automotive (0.3%):
3,660 Volkswagen AG ................................. 1,166
--------
Business Services (0.2%):
6,150 SAP AG ........................................ 845
--------
PREFERRED STOCKS, CONTINUED:
GERMANY, CONTINUED:
Utilities-Electric & Gas (0.3%):
28,100 RWE AG ........................................ $ 939
--------
Textiles (0.0%):
700 Escada AG ..................................... 115
--------
Total Germany 3,065
--------
Greece (0.0%): Telecommunications (0.0%):
6,900 Intracom SA ................................... 105
--------
Total Preferred Stocks 5,946
--------
RIGHTS (0.0%):
SOUTH AFRICA (0.0%):
5,300 Anglovaal Industries Ltd. (b) ................. 0
--------
Total Rights 0
--------
WARRANTS (0.0%):
FRANCE (0.0%):
7,750 Lagadere SCA .................................. 8
--------
HONG KONG (0.0%):
16,400 Applied International Warrants (b) ............ 0
26,300 Oriental Press Warrants ....................... 2
--------
2
--------
ITALY (0.0%):
1,780 La Rinascente SpA Warrants .................... 1
--------
Total Warrants 11
--------
U.S. TREASURY OBLIGATIONS (0 .1%):
U.S. Treasury Bills
$ 35,000 2/13/97 (c) ................................... 35
15,000 3/13/97 (c) ................................... 15
150,000 3/20/97 (c) ................................... 148
--------
Total U.S. Treasury Obligations 198
--------
Total Investments, at value 388,959
--------
REPURCHASE AGREEMENTS (1.9%):
7,488,000 State Street Bank, 4.75%, 1/2/97
(collateralized by $7,080 various U.S.
Treasury Securities, 4.75%, 7/15/06,
market value-$7,645) 7,488
--------
TOTAL REPURCHASE AGREEMENTS 7,488
--------
Total (Cost-$355,353)(a) $396,447
========
</TABLE>
- -----
Percentages indicated are based on net assets of $395,418.
CONTINUED
<PAGE> 448
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
(AMOUNTS IN THOUSANDS, EXCEPT SHARES OR PRINCIPAL AMOUNT) DECEMBER 31, 1996
(UNAUDITED)
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $39. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................... $71,250
Unrealized depreciation................... (30,195)
-------
Net unrealized appreciation............... $41,055
=======
</TABLE>
(b) Represents non-income producing security.
(c) Serves as collateral for futures contracts.
ADR American Depository Receipt
GDR Global Depository Receipt
<TABLE>
<CAPTION>
At December 31, 1996, the Fund's open futures contracts were as follows:
Current
Open Market
Positions Value
# OF CONTRACTS Contract Type (000) (000)
- -------------- -------------------------------------------------------------- --------- -------
LONG CONTRACTS
<S> <C> <C> <C>
19 Eurotop 100 Index, March, 1997.............................. $2,991 $3,079
29 Nikkei 225 Index, March, 1997............................... 2,984 2,810
</TABLE>
<TABLE>
<CAPTION>
At December 31, 1996, the Fund's open forward currency contracts were as follows:
Unrealized
Delivery Contract Contract Contract Market Appreciation/
CURRENCY Date Price Amount Value Value (Depreciation)
- -------- -------- -------- -------- -------- ------ ----------------------
Long Contracts:
<S> <C> <C> <C> <C> <C> <C>
European Currency Units................ 3/21/97 0.7967 2,360 $2,962 $2,968 $ 6
Japanese Yen........................... 3/13/97 111.7400 337,000 3,016 2,942 (74)
------ ------ ------
$5,978 $5,910 $ (68)
====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE> 449
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
(UNAUDITIED)
<TABLE>
<CAPTION>
(Amounts in Thousands,
except per share amounts)
Large
Asset Income Equity Value Company
Allocation Equity Index Growth Value
Fund Fund Fund Fund Fund
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value ................................. $ 112,784 $ 415,875 $ 507,163 $ 277,829 $ 621,210
Repurchase agreements, at cost ........................ 7,624 3,482 29,140 7,155 6,011
--------- --------- --------- --------- ---------
Total (cost $113,209; $293,385; $405,033;
$250,906; and $570,741; respectively) .............. 120,408 419,357 536,303 284,984 627,221
Interest and dividends receivable ..................... 809 1,362 893 569 580
Receivable for capital shares issued .................. 149 274 673 -- --
Receivable from brokers for investments sold .......... -- -- -- -- 2,467
Prepaid expenses and other assets ..................... 14 103 65 13 38
--------- --------- --------- --------- ---------
TOTAL ASSETS .......................................... 121,380 421,096 537,934 285,566 630,306
--------- --------- --------- --------- ---------
LIABILITIES:
Cash overdraft ........................................ 4 23 90 100 1,784
Dividends payable ..................................... 333 744 824 205 --
Payable for capital shares redeemed ................... 13 21 30 8 1
Payable to brokers for investments purchased .......... 2,893 -- -- -- --
Net payable for variation margin on futures
contracts .......................................... 109 -- 624 283 --
Accrued expenses and other payables:
Investment advisory fees ........................ 54 263 46 182 393
Administration fees ............................. 8 59 16 40 89
12b-1 fees (Class A) ............................ 5 12 11 8 3
12b-1 fees (Class B) ............................ 22 38 68 6 5
Other ........................................... 77 2 22 49 100
--------- --------- --------- --------- ---------
TOTAL LIABILITIES ..................................... 3,518 1,162 1,731 881 2,375
--------- --------- --------- --------- ---------
NET ASSETS:
Capital ............................................... 109,754 283,496 404,537 245,933 577,653
Distributions in excess of net investment income ...... (6) (3) (394) (10) (91)
Accumulated undistributed (distributions in
excess of) net realized gains (losses) from
investment, options and futures transactions ....... 852 10,469 1,332 4,965 (6,111)
Net unrealized appreciation from investments,
options and futures ................................ 7,262 125,972 130,728 33,797 56,480
--------- --------- --------- --------- ---------
NET ASSETS ............................................ $ 117,862 $ 419,934 $ 536,203 $ 284,685 $ 627,931
========= ========= ========= ========= =========
Net Assets:
Fiduciary ....................................... $ 68,799 $ 319,259 $ 398,706 $ 239,257 $ 610,420
Class A ......................................... 22,455 54,904 54,186 38,790 11,929
Class B ......................................... 26,608 45,771 83,311 6,638 5,582
--------- --------- --------- --------- ---------
Total ...................................... $ 117,862 $ 419,934 $ 536,203 $ 284,685 $ 627,931
========= ========= ========= ========= =========
Outstanding Units of Beneficial Interest (Shares):
Fiduciary ....................................... 5,818 17,505 21,851 24,755 47,037
Class A ......................................... 1,896 3,012 2,969 4,017 916
Class B ......................................... 2,240 2,506 4,563 688 425
--------- --------- --------- --------- ---------
Total ...................................... 9,954 23,023 29,383 29,460 48,378
========= ========= ========= ========= =========
Net Asset Value:
Fiduciary-offering and redemption price per share $ 11.83 $ 18.24 $ 18.25 $ 9.67 $ 12.98
========= ========= ========= ========= =========
Class A-redemption price per share .............. $ 11.84 $ 18.23 $ 18.25 $ 9.66 $ 13.02
========= ========= ========= ========= =========
Class A-maximum sales charge .................... 4.50% 4.50% 4.50% 4.50% 4.50%
========= ========= ========= ========= =========
Class A-maximum offering price per share
(100%/(100%-maximum sales charge) of
net asset value adjusted to nearest cent) ..... $ 12.40 $ 19.09 $ 19.11 $ 10.12 $ 13.63
========= ========= ========= ========= =========
Class B-offering price per share (a) ............ $ 11.88 $ 18.26 $ 18.26 $ 9.65 $ 13.12
========= ========= ========= ========= =========
</TABLE>
- -----
(a) Redemption price per Class B share varies based on length of time shares
are held.
See notes to financial statements.
<PAGE> 450
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
(UNAUDITIED)
<TABLE>
<CAPTION>
(Amounts in Thousands,
except per share amounts)
Large Gulf International
Disciplined Company Growth South Equity
Value Growth Opportunities Growth Index
Fund Fund Fund Fund Fund
--------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value ................. $ 528,861 $ 914,841 $ 534,302 $ 95,984 $ 388,959
Repurchase agreements, at cost ........ 3,790 24,936 55,267 4,231 7,488
--------- --------- --------- --------- ---------
Total (cost $463,484; $737,976;
$550,336; $81,453; and
$355,353; respectively) ............ 532,651 939,777 589,569 100,215 396,447
Foreign currency, at value (cost $12) . -- -- -- -- 12
Interest and dividends receivable ..... 831 2,044 263 48 316
Receivable for capital shares
issued ............................. 1,403 2,302 1,417 15 1,396
Receivable from brokers for
investments sold ................... -- 4,784 15,937 -- --
Tax reclaim receivable ................ -- -- -- -- 417
Organization costs .................... -- 1 -- -- 4
Prepaid expenses and other assets ..... 3 90 51 17 3
--------- --------- --------- --------- ---------
TOTAL ASSETS .......................... 534,888 948,998 607,237 100,295 398,595
--------- --------- --------- --------- ---------
LIABILITIES:
Cash overdraft ........................ 997 1,612 948 -- 922
Dividends payable ..................... 589 909 -- -- 1,727
Payable for capital shares
redeemed ........................... 13 8 8 -- 1
Payable to brokers for investments
purchased .......................... -- 5,118 19,983 -- --
Net payable for variation margin
on futures contracts ............... -- -- -- -- 11
Payable for forward foreign
currency contracts ................. -- -- -- -- 68
Accrued expenses and other
payables:
Investment advisory fees ........... 333 595 368 63 181
Administration fees ................ 75 134 83 6 56
12b-1 fees (Class A) ............... 5 19 6 4 2
12b-1 fees (Class B) ............... 15 69 18 3 6
Other .............................. 99 49 25 16 203
--------- --------- --------- --------- ---------
TOTAL LIABILITIES ..................... 2,126 8,513 21,439 92 3,177
--------- --------- --------- --------- ---------
NET ASSETS:
Capital ............................... 455,974 724,561 555,028 81,076 356,749
Undistributed (distributions in
excess of) net investment
income ............................. (47) 52 (138) (74) (1,326)
Accumulated undistributed
(distributions in excess of) net
realized gains (losses) from
investment, options, futures and
foreign currency transactions ...... 7,668 14,071 (8,325) 439 (944)
Net unrealized appreciation from
investments, options, futures
and translation of assets and
liabilities in foreign currencies .. 69,167 201,801 39,233 18,762 40,939
--------- --------- --------- --------- ---------
NET ASSETS ............................ $ 532,762 $ 940,485 $ 585,798 $ 100,203 $ 395,418
========= ========= ========= ========= =========
Net Assets:
Fiduciary ....................... $ 492,215 $ 766,728 $ 533,522 $ 78,859 $ 377,707
Class A ......................... 22,272 91,704 30,767 17,952 10,610
Class B ......................... 18,275 82,053 21,509 3,392 7,101
--------- --------- --------- --------- ---------
Total ...................... $ 532,762 $ 940,485 $ 585,798 $ 100,203 $ 395,418
========= ========= ========= ========= =========
Outstanding Units of Beneficial
Interest (Shares):
Fiduciary ....................... 34,731 47,951 31,493 7,980 25,221
Class A ......................... 1,569 5,587 1,823 1,814 707
Class B ......................... 1,290 5,071 1,306 345 486
--------- --------- --------- --------- ---------
Total ...................... 37,590 58,609 34,622 10,139 26,414
========= ========= ========= ========= =========
Net Asset Value:
Fiduciary-offering and
redemption price per share .... $ 14.17 $ 15.99 $ 16.94 $ 9.88 $ 14.98
========= ========= ========= ========= =========
Class A-redemption price per
share ......................... $ 14.19 $ 16.41 $ 16.87 $ 9.90 $ 15.00
========= ========= ========= ========= =========
Class A-maximum sales
charge ........................ 4.50% 4.50% 4.50% 4.50% 4.50%
========= ========= ========= ========= =========
Class A-maximum offering
price per share
(100%/(100%-maximum
sales charge) of net asset
value adjusted to nearest cent) $ 14.86 $ 17.18 $ 17.66 $ 10.37 $ 15.71
========= ========= ========= ========= =========
Class B-offering price per
share (a) ..................... $ 14.16 $ 16.18 $ 16.47 $ 9.84 $ 14.59
========= ========= ========= ========= =========
</TABLE>
- -----
(a) Redemption price per Class B share varies based on length of time shares
are held.
See notes to financial statements.
<PAGE> 451
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in Thousands)
Asset Income Equity Value Large
Allocation Equity Index Growth Company
Fund Fund Fund Fund Value Fund
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................................ $ 1,764 $ 932 $ 585 $ 441 $ 616
Dividend income ........................................ 459 5,348 4,818 2,287 8,412
Securities lending income .............................. 11 26 38 24 110
-------- -------- -------- -------- --------
TOTAL INCOME ........................................... 2,234 6,306 5,441 2,752 9,138
-------- -------- -------- -------- --------
EXPENSES:
Investment advisory fees ............................... 326 1,501 696 941 2,243
Administration fees .................................... 83 335 384 210 501
12b-1 fees (Class A) ................................... 36 86 75 64 19
12b-1 fees (Class B) ................................... 115 186 294 29 24
Custodian and accounting fees .......................... 32 16 75 42 40
Legal and audit fees ................................... 3 19 12 13 15
Organization costs ..................................... 2 -- -- -- --
Trustees' fees and expenses ............................ 1 3 2 2 4
Transfer agent fees .................................... 38 48 68 45 23
Registration and filing fees ........................... 23 27 20 4 55
Printing costs ......................................... 3 26 17 36 19
Other .................................................. -- 1 4 11 4
-------- -------- -------- -------- --------
Total expenses before waivers .......................... 662 2,248 1,647 1,397 2,947
Less waivers ........................................... (122) (25) (644) (96) (5)
-------- -------- -------- -------- --------
NET EXPENSES ........................................... 540 2,223 1,003 1,301 2,942
-------- -------- -------- -------- --------
Net Investment Income .................................. 1,694 4,083 4,438 1,451 6,196
-------- -------- -------- -------- --------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS,
OPTIONS AND FUTURES:
Net realized gains (losses) from investment, options and
futures transactions ................................ 2,856 17,707 3,219 15,897 (4,647)
Net change in unrealized appreciation from investments,
options and futures ................................. 2,880 9,362 44,523 8,361 60,686
-------- -------- -------- -------- --------
Net realized/unrealized gains from investments, options
and futures ......................................... 5,736 27,069 47,742 24,258 56,039
-------- -------- -------- -------- --------
Change in net assets resulting from operations ......... $ 7,430 $ 31,152 $ 52,180 $ 25,709 $ 62,235
======== ======== ======== ======== ========
</TABLE>
See notes to financial statements.
<PAGE> 452
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in Thousands)
Large Gulf International
Disciplined Company Growth South Equity
Value Growth Opportunities Growth Index
Fund Fund Fund Fund Fund
----------- -------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income ............................ $ 159 $ 671 $ 818 $ 106 $ 4
Dividend income ............................ 7,279 8,098 10,228 273 2,785
Securities lending income .................. 67 75 206 33 --
Foreign tax withholding .................... -- -- -- -- (332)
-------- -------- -------- -------- --------
TOTAL INCOME ............................... 7,505 8,844 11,252 412 2,457
-------- -------- -------- -------- --------
EXPENSES:
Investment advisory fees ................... 2,006 3,367 2,187 374 1,053
Administration fees ........................ 448 752 489 84 316
12b-1 fees (Class A) ....................... 37 141 50 31 19
12b-1 fees (Class B) ....................... 85 346 85 15 32
Custodian and accounting fees .............. 43 34 60 27 163
Legal and audit fees ....................... 21 41 22 7 10
Organization costs ......................... -- -- -- -- 2
Trustees' fees and expenses ................ 4 6 4 1 2
Transfer agent fees ........................ 68 137 53 43 30
Registration and filing fees ............... 30 30 22 14 8
Printing costs ............................. 31 57 32 12 13
Other ...................................... 2 4 1 -- 2
-------- -------- -------- -------- --------
Total expenses before waivers .............. 2,775 4,915 3,005 608 1,650
Less waivers ............................... (11) (36) (14) (67) (5)
-------- -------- -------- -------- --------
NET EXPENSES ............................... 2,764 4,879 2,991 541 1,645
-------- -------- -------- -------- --------
Net Investment Income (Loss) ............... 4,741 3,965 8,261 (129) 812
-------- -------- -------- -------- --------
REALIZED/UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS, OPTIONS, FUTURES AND
FOREIGN CURRENCIES:
Net realized gains from investment,
options, futures and foreign currency
transactions ............................ 23,995 35,407 2,253 6,229 1,157
Net change in unrealized appreciation
(depreciation) from investments, options,
futures and translation of assets and
liabilities in foreign currencies ....... 15,176 42,213 31,069 (3,378) 1,611
-------- -------- -------- -------- --------
Net realized/unrealized gains from
investments, options, futures and foreign
currencies .............................. 39,171 77,620 33,322 2,851 2,768
-------- -------- -------- -------- --------
Change in net assets resulting from
operations .............................. $ 43,912 $ 81,585 $ 41,583 $ 2,722 $ 3,580
======== ======== ======== ======== ========
</TABLE>
See notes to financial statements.
<PAGE> 453
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
Asset Allocation Fund Income Equity Fund Equity Index Fund
------------------------ ---------------------- -----------------------
Six Months Year Ended Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
December 31, June 30, December 31, June 30, December 31, June 30,
1996 1996 1996 1996 1996 1996
--------- --------- --------- --------- --------- --------
(Unaudited) (Unaudited) (Unaudited)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income ................................ $ 1,694 $ 2,090 $ 4,083 $ 6,029 $ 4,438 $ 6,199
Net realized gains from investment, options and
futures transactions ............................... 2,856 4,144 17,707 8,723 3,219 10,186
Net change in unrealized appreciation from
investments, options and futures ................... 2,880 1,631 9,362 35,127 44,523 47,556
--------- -------- --------- --------- --------- ---------
Change in net assets resulting from
operations ......................................... 7,430 7,865 31,152 49,879 52,180 63,941
--------- -------- --------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income ........................... (1,058) (1,520) (3,413) (5,321) (3,682) (5,782)
In excess of net investment income ................... -- -- -- (25) -- (161)
From net realized gains from investment transactions . (2,959) (640) (10,511) (7,457) (3,288) (8,186)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ........................... (352) (343) (468) (528) (391) (269)
In excess of net investment income ................... -- -- -- (2) -- (7)
From net realized gains from investment transactions . (974) (143) (1,743) (850) (420) (359)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ........................... (309) (216) (218) (180) (354) (149)
In excess of net investment income ................... -- -- -- (1) -- (4)
From net realized gains from investment transactions . (1,129) (99) (1,424) (356) (629) (256)
--------- -------- --------- --------- --------- ---------
Change in net assets from shareholder distributions ..... (6,781) (2,961) (17,777) (14,720) (8,764) (15,173)
--------- -------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued .......................... 37,197 50,091 47,458 267,682 179,952 199,001
Proceeds from shares issued in connection with
acquisition ........................................ -- -- -- 136,786 -- --
Dividends reinvested ................................. 5,836 2,534 10,931 6,734 5,110 11,149
Cost of shares redeemed .............................. (12,567) (16,204) (47,110) (239,261) (84,057) (106,442)
--------- -------- --------- --------- --------- ---------
Change in net assets from share transactions ............ 30,466 36,421 11,279 171,941 101,005 103,708
--------- -------- --------- --------- --------- ---------
Change in net assets .................................... 31,115 41,325 24,654 207,100 144,421 152,476
NET ASSETS:
Beginning of period .................................. 86,747 45,422 395,280 188,180 391,782 239,306
--------- -------- --------- --------- --------- ---------
End of period ........................................ $ 117,862 $ 86,747 $ 419,934 $ 395,280 $ 536,203 $ 391,782
========= ======== ========= ========= ========= =========
SHARE TRANSACTIONS:
Issued ............................................... 3,115 4,377 2,675 13,308 10,475 12,652
Issued in connection with acquisition ................ -- -- -- 7,895 -- --
Reinvested ........................................... 490 221 605 414 285 721
Redeemed ............................................. (1,053) (1,428) (2,647) (11,666) (4,887) (6,924)
--------- -------- --------- --------- --------- ---------
Change in shares ........................................ 2,552 3,170 633 9,951 5,873 6,449
========= ======== ========= ========= ========= =========
Undistributed (distributions in excess of) net investment
income included in net assets:
End of period ....................................... $ (6) $ 19 $ (3) $ 13 $ (394) $ (405)
========= ======== ========= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE> 454
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
LARGE COMPANY
VALUE GROWTH FUND VALUE FUND
------------------------------------------ -------------------------
SIX MONTHS SEVEN MONTHS SIX MONTHS YEAR
ENDED ENDED YEAR ENDED ENDED ENDED
DECEMBER 31, JUNE 30, NOVEMBER 30, DECEMBER 31, JUNE 30,
1996 1996(a) 1995(a) 1996 1996
--------- --------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income ................... $ 1,451 $ 1,254 $ 2,459 $ 6,196 $ 12,313
Net realized gains (losses)
from investment, options
and futures transactions .............. 15,897 50,010 17,559 (4,647) 66,494
Net change in unrealized
appreciation (depreciation)
from investments, options
and futures ........................... 8,361 (28,550) 30,874 60,686 (17,058)
--------- --------- --------- --------- ---------
Change in net assets resulting
from operations ....................... 25,709 22,714 50,892 62,235 61,749
--------- --------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS (B):
From net investment income .............. (1,269) (569) (6,044) (12,140)
In excess of net investment
income ................................ -- (5) -- (119)
From net realized gains from
investment transactions ............... (36,353) -- (47,388) (46,275)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income .............. (173) (680) (2,449) (99) (142)
In excess of net investment
income ................................ -- (5) -- -- (1)
From net realized gains from
investment transactions ............... (5,894) (34,705) (5,515) (904) (631)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income .............. (7) (5) (6) (30) (32)
In excess of net investment
income ................................ -- -- (3) -- --
From net realized gains from
investment transactions ............... (992) (557) (19) (410) (183)
--------- --------- --------- --------- ---------
Change in net assets from
shareholder distributions ............... (44,688) (36,526) (7,992) (54,875) (59,523)
--------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued ............. 57,932 68,807 24,259 100,880 285,428
Dividends reinvested .................... 39,287 27,533 1,480 26,284 32,290
Cost of shares redeemed ................. (25,424) (71,560) (21,348) (104,635) (91,619)
--------- --------- --------- --------- ---------
Change in net assets from share
transactions ............................ 71,795 24,780 4,391 22,529 226,099
--------- --------- --------- --------- ---------
Change in net assets ....................... 52,816 10,968 47,291 29,889 228,325
NET ASSETS:
Beginning of period ..................... 231,869 220,901 173,610 598,042 369,717
--------- --------- --------- --------- ---------
End of period ........................... $ 284,685 $ 231,869 $ 220,901 $ 627,931 $ 598,042
========= ========= ========= ========= =========
SHARE TRANSACTIONS:
Issued .................................. 5,538 1,402 1,628 7,899 22,448
Issued in restatement of net
asset value (c) ...................... -- 7,808 -- -- --
Reinvested .............................. 4,053 1,782 106 2,024 2,670
Redeemed ................................ (2,441) (1,668) (1,398) (8,135) (7,260)
--------- --------- --------- --------- ---------
Change in shares ........................... 7,150 9,324 336 1,788 17,858
========= ========= ========= ========= =========
Undistributed (distributions in
excess of) net investment
income included in net assets:
End of period ......................... $ (10) $ (12) $ (2) $ (91) $ (114)
========= ========= ========= ========= =========
<FN>
- -----
(a) Upon reorganizing as a fund of The One Group, the Paragon Value Growth Fund
became the Value Growth Fund. Changes in net assets for the periods prior
to March 26, 1996 represent the Paragon Value Growth Fund.
(b) Fiduciary Shares of the Value Growth Fund commenced offering on March 26,
1996 upon conversion of certain Class A Shares to Fiduciary Shares.
(c) Pursuant to its reorganization as a fund of The One Group, the Value Growth
Fund issued additional shares at the close of business March 25, 1996 as a
result of restatement of the net asset values of Class A Shares from $15.26
to $10.00 and Class B Shares from $15.21 to $10.00.
</TABLE>
See notes to financial statements.
<PAGE> 455
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
Large Company Growth
Disciplined Value Fund Growth Fund Opportunities Fund
----------------------- ----------------------- -----------------------
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
December 31, June 30, December 31, June 30, December 31, June 30,
1996 1996 1996 1996 1996 1996
--------- --------- --------- --------- --------- ---------
(Unaudited) (Unaudited) Unaudited)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income ........................ $ 4,741 $ 10,841 $ 3,965 $ 8,466 $ 8,261 $ 5,803
Net realized gains from investment, options
and futures transactions .................... 23,995 60,286 35,407 29,317 2,253 150,392
Net change in unrealized appreciation
(depreciation) from investments, options
and futures ................................. 15,176 25,630 42,213 85,542 31,069 (49,094)
--------- --------- --------- --------- --------- ---------
Change in net assets resulting from operations .. 43,912 96,757 81,585 123,325 41,583 107,101
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income ................... (4,513) (10,409) (3,519) (7,921) (7,722) (5,538)
In excess of net investment income ........... -- (84) -- (70) -- (34)
From net realized gains from
investment transactions ..................... (53,221) (27,544) (37,414) (7,625) (83,581) (78,544)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ................... (164) (302) (286) (478) (395) (215)
In excess of net investment income ........... -- (2) -- (4) -- (1)
From net realized gains from investment
transactions ................................ (2,286) (920) (4,265) (558) (4,572) (2,747)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ................... (66) (131) (23) (67) (235) (51)
In excess of net investment income ........... -- (1) -- (1) -- --
From net realized gains from investment
transactions ................................ (1,855) (708) (3,785) (253) (3,102) (896)
--------- --------- --------- --------- --------- ---------
Change in net assets from shareholder
distributions .................................. (62,105) (40,101) (49,292) (16,977) (99,607) (88,026)
--------- --------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued .................. 59,659 146,331 127,190 303,743 188,670 285,336
Proceeds from shares issued in connection
with acquisition ............................ -- -- -- 36,982 -- --
Dividends reinvested ......................... 32,102 21,701 30,926 9,536 56,517 46,859
Cost of shares redeemed ...................... (100,423) (138,383) (127,285) (145,189) (174,852) (205,266)
--------- --------- --------- --------- --------- ---------
Change in net assets from share transactions .... (8,662) 29,649 30,831 205,072 70,335 126,929
--------- --------- --------- --------- --------- ---------
Change in net assets ............................ (26,855) 86,305 63,124 311,420 12,311 146,004
NET ASSETS:
Beginning of period .......................... 559,617 473,312 877,361 565,941 573,487 427,483
--------- --------- --------- --------- --------- ---------
End of period ................................ $ 532,762 $ 559,617 $ 940,485 $ 877,361 $ 585,798 $ 573,487
========= ========= ========= ========= ========= =========
SHARE TRANSACTIONS:
Issued ....................................... 4,141 10,399 8,080 21,224 10,279 15,225
Issued in connection with acquisition ........ -- -- -- 2,673 -- --
Reinvested ................................... 2,280 1,573 1,917 684 3,283 2,828
Redeemed ..................................... (6,921) (9,741) (8,053) (9,886) (9,446) (10,779)
--------- --------- --------- --------- --------- ---------
Change in shares ................................ (500) 2,231 1,944 14,695 4,116 7,274
========= ========= ========= ========= ========= =========
Undistributed (distributions in excess of) net
investment income included in net assets:
End of period ................................ $ (47) $ (45) $ 52 $ (85) $ (138) $ (47)
========= ========= ========= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE> 456
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
International Equity
Gulf South Growth Fund Index Fund
--------------------------------------- ------------------------
Six Months Seven Months Six Months Year
Ended Ended Year Ended Ended Ended
December 31, June 30, November 30, December 31, June 30,
1996 1996(a) 1995(a) 1996 1996
------------ ------------ ------------ ------------ --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss) ......... $ (129) $ (162) $ (329) $ 812 $ 2,940
Net realized gains from
investment, options, futures
and foreign currency
transactions ....................... 6,229 20,607 2,336 1,157 1,467
Net change in unrealized
appreciation (depreciation)
from investments, options,
futures and translation of
assets and liabilities in
foreign currencies ................. (3,378) (8,026) 17,774 1,611 26,748
--------- --------- --------- --------- ---------
Change in net assets resulting from
operations .............................. 2,722 12,419 19,781 3,580 31,155
--------- --------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS (b):
From net investment income ........... - - (3,449) (2,825)
In excess of net investment
income ............................. - - - (429)
From net realized gains from
investment transactions ............ (8,358) (237) (3,811) (2,147)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ........... - - - (58) (72)
In excess of net investment
income ............................. - - - - (11)
From net realized gains from
investment transactions ............ (1,835) (17,443) (1,410) (111) (55)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ........... - - - (26) (43)
In excess of net investment
income ............................. - - - - (7)
From net realized gains from
investment transactions ............ (302) (393) (8) (72) (33)
--------- --------- --------- --------- ---------
Change in net assets from
shareholder distributions ............... (10,495) (18,073) (1,418) (7,527) (5,622)
--------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued .......... 5,371 29,495 13,775 127,352 163,944
Dividends reinvested ................. 9,973 14,226 328 2,711 2,501
Cost of shares redeemed .............. (11,640) (31,076) (12,956) (95,133) (54,557)
--------- --------- --------- --------- ---------
Change in net assets from share
transactions ............................ 3,704 12,645 1,147 34,930 111,888
--------- --------- --------- --------- ---------
Change in net assets ....................... (4,069) 6,991 19,510 30,983 137,421
NET ASSETS:
Beginning of period .................. 104,272 97,281 77,771 364,435 227,014
--------- --------- --------- --------- ---------
End of period ........................ $ 100,203 $ 104,272 $ 97,281 $ 395,418 $ 364,435
========= ========= ========= ========= =========
SHARE TRANSACTIONS:
Issued ............................... 534 620 842 8,596 11,286
Issued in restatement of net
asset value (c) .................... - 3,633 - - -
Reinvested ........................... 1,042 902 22 181 175
Redeemed ............................. (1,141) (838) (768) (6,392) (3,742)
--------- --------- --------- --------- ---------
Change in shares ........................... 435 4,317 96 2,385 7,719
========= ========= ========= ========= =========
Undistributed (distributions in excess
of) net investment income
included in net assets:
End of period ........................ $ (129) $ - $ - $ (1,326) $ 1,395
========= ========= ========= ========= =========
- -----
<FN>
(a) Upon reorganizing as a fund of The One Group, the Paragon Gulf South Growth
Fund became the Gulf South Growth Fund. Capital and share transactions for
the periods prior to March 26, 1996 represent the Paragon Gulf South Growth
Fund.
(b) Fiduciary Shares of the Gulf South Growth Fund commenced offering on March
26, 1996 upon conversion of certain Class A Shares to Fiduciary Shares.
(c) Pursuant to its reorganization as a fund of The One Group, the Gulf South
Growth Fund issued additional shares at the close of business March 25, 1996
as a result of restatement of the net asset values of Class A Shares from
$15.70 to $10.00 and Class B Shares from $15.48 to $10.00.
</TABLE>
See notes to financial statements.
<PAGE> 457
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(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 thirty active funds. The accompanying financial
statements and financial highlights are those of the Asset Allocation Fund,
the Income Equity Fund, the Equity Index Fund, the Value Growth Fund, the
Large Company Value Fund, the Disciplined Value Fund, the Large Company
Growth Fund, the Growth Opportunities Fund, the Gulf South Growth Fund and
the International Equity Index Fund (individually a "Fund", collectively the
"Funds") only. The Funds are each offered in Fiduciary Class, Class A and
Class B Shares. Class A Shares are subject to initial sales charges, imposed
at the time of purchase, in accordance with the Funds' prospectuses. Certain
redemptions of Class B Shares are subject to contingent deferred sales
charges in accordance with the Funds' prospectuses. Each Fund is a
diversified mutual fund except the Gulf South Growth Fund which is
non-diversified.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with the Paragon Portfolio ("Paragon"), a Massachusetts business
trust. Pursuant to the Agreement, all of the assets and liabilities of each
Paragon Fund transferred to a Fund of The One Group in exchange for shares of
the corresponding Fund of The One Group. Subsequent to the reorganization,
the fiscal period end changed from November 30 to June 30 for the Value
Growth Fund and the Gulf South Growth Fund. Therefore, the prior period
statement of changes in net assets and financial highlights for those Funds
present the results for the seven months ended June 30, 1996.
The Funds' investment objectives are as follows:
FUND OBJECTIVE
---- ---------
Asset Allocation Fund To provide total return while preserving capital.
Income Equity Fund Current income through regular payments of
dividends with the secondary goal of achieving
capital appreciation by investing primarily in
equity securities.
Equity Index Fund Investment results that correspond to the
aggregate price and dividend performance of the
securities in the Standard & Poor's 500 Composite
Stock Price Index.
Value Growth Fund Long-term capital growth and growth of income
while, as a secondary objective, providing a
moderate level of current income.
Large Company Value Fund Capital appreciation with the incidental goal of
achieving current income by investing primarily in
equity securities.
Disciplined Value Fund Capital appreciation with the secondary goal of
achieving current income by investing primarily in
equity securities.
Large Company Growth Fund Long-term capital appreciation and growth of
income by investing primarily in equity
securities.
Growth Opportunities Fund Growth of capital and, secondarily, current
income, by investing primarily in equity
securities.
Continued
<PAGE> 458
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
FUND OBJECTIVE
---- ---------
Gulf South Growth Fund Long-term capital growth by investing in a
portfolio of equity securities of
small-capitalization, emerging growth and medium-
capitalization companies which are either
headquartered in or whose primary market is in the
southeastern region of the United States.
International Equity Index To provide investment results that correspond to
Fund the aggregate price and dividend performance of
the securities in the Gross Domestic Product
Weighted Morgan Stanley Capital International
Europe, Australia and Far East Index.
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. 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.
SECURITY VALUATION
Listed securities are valued at the last sales price on the principal
exchange where such securities are traded. Unlisted securities or listed
securities for which last sales prices are not available are valued at the
mean of the latest bid and asked priced in the principal market where such
securities are traded. Short-term investments maturing in 60 days or less are
valued at amortized cost, which approximates market value. Futures contracts
are valued at the settlement price established each day by the board of trade
or exchange on which they are traded. Options traded on an exchange are
valued using the last sale price or, in the absence of a sale, the last
offering price. Options traded over-the-counter are valued using
dealer-supplied valuations. Investments for which there are no such
quotations or valuations are carried at fair value as determined by the
Adviser under the direction of the Board of Trustees.
FOREIGN CURRENCY TRANSLATION
Investment valuations, other assets and liabilities initially expressed in
foreign currencies are converted each business day into U.S. dollars based
upon current exchange rates. Purchases and sales of foreign investments and
income and expenses are converted into U.S. dollars based upon exchange rates
prevailing on the respective dates of such transactions. That portion of
realized gains or losses and unrealized appreciation or depreciation from
investments due to fluctuations in foreign currency exchange rates is not
separately disclosed. Such fluctuations are included with the net realized
and unrealized gain or loss from investments.
FORWARD FOREIGN CURRENCY CONTRACTS
Forward foreign currency contracts are valued at the daily exchange rate of
the underlying currency. Purchases and sales of forward foreign currency
contracts having the same settlement date and broker are presented net on the
Statement of Assets and Liabilities. The forward foreign currency exchange
contracts are adjusted by the daily exchange rate of the underlying currency
and any gains or losses are recorded for financial statement purposes as
unrealized appreciation or depreciation until the contract settlement date.
Continued
<PAGE> 459
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
Gains or losses from the purchase or sale of forward foreign currency
contracts having the same settlement date and broker are recorded as realized
on the date of offset; otherwise gains or losses are recorded as realized on
settlement date.
REPURCHASE AGREEMENTS
The Funds may invest in repurchase agreements with institutions that the
investment adviser has determined are creditworthy. Each repurchase agreement
is recorded at cost. The Fund requires that the securities purchased in a
repurchase agreement 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. Repurchase agreements are considered to be
loans under the 1940 Act.
WRITTEN OPTIONS
The Funds may write covered call or put options for which premiums received
are recorded as liabilities and are subsequently adjusted to the current
value of the options written. Premiums received from writing options which
expire are treated as realized gains. Premiums received from writing options,
which are either exercised or closed, are offset against the proceeds
received or amount paid on the transaction to determine realized gains or
losses.
FUTURES CONTRACTS
The Funds may enter into futures contracts for the delayed delivery of
securities at a fixed price at some future date or for the change in the
value of a specified financial index over a predetermined time period. Cash
or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received by the Fund based on the daily change in
the market value of the position are recorded as unrealized appreciation or
depreciation until the contract is closed out, at which time the appreciation
or depreciation is realized.
INDEXED SECURITIES
The Funds may invest in indexed securities whose value is linked either
directly or inversely to changes in foreign currencies, interest rates,
commodities, indices or other reference instruments. Indexed securities may
be more volatile than the referenced instrument itself, but any loss is
limited to the amount of the original investment.
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 dividends and 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
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
creditworthy 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
Continued
<PAGE> 460
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
termination by the Funds or the borrower at any time, and are, therefore, not
considered to be illiquid investments. As of December 31, 1996, the following
Funds had securities with the following market values on loan (amounts in
thousands):
<TABLE>
<CAPTION>
Market Value
of Loaned
Securities
----------
<S> <C>
Asset Allocation Fund............................................ $ 5,077
Income Equity Fund............................................... 16,965
Equity Index Fund................................................ 54,057
Value Growth Fund................................................ 19,067
Large Company Value Fund......................................... 76,077
Disciplined Value Fund........................................... 60,615
Large Company Growth Fund........................................ 58,897
Growth Opportunities Fund........................................ 74,330
Gulf South Growth Fund........................................... 9,481
</TABLE>
The loaned securities were fully collateralized by cash and U.S. Government
securities as of December 31, 1996.
SECURITY TRANSACTIONS AND RELATED INCOME
Security transactions are accounted for on a trade date basis. Net realized
gains or losses from sales of securities are determined on the specific
identification cost method. Interest income and expenses are recognized on
the accrual basis. Dividends are recorded on the ex-dividend date. Interest
income, including any discount or premium, is accrued as earned using the
effective interest method.
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. Each class of shares bears its
pro-rata portion of expenses attributable to its series, except that each
class separately bears expenses related specifically to that class, such as
distribution fees.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid monthly for all
Funds, except the International Equity Index Fund, which declares and
distributes net investment income annually. Net realized capital gains, if
any, are distributed at least annually. Dividends are declared separately for
each class. No class has preferential dividend rights; differences in per
share dividend rates are generally due to differences in separate class
expenses.
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, foreign
currency transactions, and deferrals of certain losses. Permanent book and
tax basis differences have been reclassified among the components of net
assets.
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
Continued
<PAGE> 461
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
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 of the Trust, have been allocated among the respective Funds 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
The Trust treats each Fund as a separate entity for Federal income tax
purposes. 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. Withholding taxes on foreign dividends have been paid
or provided for in accordance with the applicable country's tax rules and
rates.
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 forty series and four classes: Fiduciary,
Class A, Class B and Service. As of December 31, 1996, no shareholders were
in the Service Class. 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. The following is a summary of
transactions in Fund shares for the periods ended December 31, 1996 and June
30, 1996:
Continued
<PAGE> 462
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
Asset Allocation Fund Income Equity Fund Equity Index Fund
------------------------- ------------------------- --------------------------
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
December 31, June 30, December 31, June 30, December 31, June 30,
1996 1996 1996 1996 1996 1996
------------ -------- ------------ -------- ------------ --------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Fiduciary Shares:
Proceeds from shares issued ............. $ 24,156 $ 20,364 $ 17,294 $ 74,805 $ 103,075 $ 110,800
Proceeds from shares issued in connection
with acquisition ..................... - - - 128,593 - -
Dividends reinvested .................... 3,155 1,810 7,216 5,003 3,420 10,203
Cost of shares redeemed ................. (9,090) (13,065) (37,460) (94,484) (62,427) (79,496)
--------- --------- --------- --------- --------- ---------
Change in net assets from
Fiduciary share transactions ......... $ 18,221 $ 9,109 $ (12,950) $ 113,917 $ 44,068 $ 41,507
========= ========= ========= ========= ========= =========
CLASS A SHARES:
Proceeds from shares issued ............. $ 5,240 $ 14,197 $ 14,575 $ 168,343 $ 36,774 $ 52,581
Proceeds from shares issued in
connection with acquisition .......... - - - 6,780 - -
Dividends reinvested .................... 1,278 453 2,107 1,244 755 565
Cost of shares redeemed ................. (2,094) (2,268) (7,721) (143,907) (19,664) (26,205)
--------- --------- --------- --------- --------- ---------
Change in net assets from Class A
share transactions ................... $ 4,424 $ 12,382 $ 8,961 $ 32,460 $ 17,865 $ 26,941
========= ========= ========= ========= ========= =========
CLASS B SHARES:
Proceeds from shares issued ............. $ 7,801 $ 15,530 $ 15,589 $ 24,534 $ 40,103 $ 35,620
Proceeds from shares issued in connection
with acquisition ..................... - - - 1,413 - -
Dividends reinvested .................... 1,403 271 1,608 487 935 381
Cost of shares redeemed ................. (1,383) (871) (1,929) (870) (1,966) (741)
--------- --------- --------- --------- --------- ---------
Change in net assets from Class B
share transactions ................... $ 7,821 $ 14,930 $ 15,268 $ 25,564 $ 39,072 $ 35,260
========= ========= ========= ========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued .................................. 2,015 1,787 980 2,462 5,987 7,069
Issued in connection with acquisition ... - - - 7,422 - -
Reinvested .............................. 266 159 399 316 191 660
Redeemed ................................ (762) (1,156) (2,104) (3,267) (3,596) (5,207)
--------- --------- --------- --------- --------- ---------
Change in Fiduciary Shares .............. 1,519 790 (725) 6,933 2,582 2,522
========= ========= ========= ========= ========= =========
CLASS A SHARES:
Issued .................................. 442 1,241 820 9,480 2,173 3,351
Issued in connection with acquisition ... - - - 392 - -
Reinvested .............................. 107 38 117 72 42 36
Redeemed ................................ (176) (198) (435) (8,347) (1,177) (1,670)
--------- --------- --------- --------- --------- ---------
Change in Class A Shares ................ 373 1,081 502 1,597 1,038 1,717
========= ========= ========= ========= ========= =========
Class B Shares:
Issued .................................. 658 1,349 875 1,366 2,315 2,232
Issued in connection with acquisition ... - - - 81 - -
Reinvested .............................. 117 24 89 26 52 25
Redeemed ................................ (115) (74) (108) (52) (114) (47)
--------- --------- --------- --------- --------- ---------
Change in Class B Shares ................ 660 1,299 856 1,421 2,253 2,210
========= ========= ========= ========= ========= =========
</TABLE>
Continued
<PAGE> 463
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
Value Growth Fund Large Company Value Fund
---------------------------------------- -----------------------
Six Months Seven Months Year Six Months Year
Ended Ended Ended Ended Ended
December 31, June 30, November 30, December 31, June 30,
1996 1996(a) 1995(a) 1996 1996
--------- --------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Fiduciary Shares (b):
Proceeds from shares issued ... $ 52,273 $ 51,451 $ 92,870 $ 271,886
Proceeds from shares issued in
conversion from Class A
Shares ..................... - 186,991(b) - -
Dividends reinvested .......... 32,451 12 24,853 31,312
Cost of shares redeemed ....... (20,659) (54,571) (99,001) (86,151)
--------- --------- --------- ---------
Change in net assets from
Fiduciary share transactions $ 64,065 $ 183,883 $ 18,722 $ 217,047
========= ========= ========= =========
CLASS A SHARES:
Proceeds from shares issued ... $ 3,770 $ 15,771 $ 21,981 $ 6,756 $ 10,239
Dividends reinvested .......... 5,837 26,959 1,452 996 760
Cost of shares redeemed ....... (4,275) (16,784) (21,210) (5,337) (5,175)
Cost of shares redeemed in
conversion to Fiduciary
Shares ..................... - (186,991)(b) - - -
--------- --------- --------- --------- ---------
Change in net assets from
Class A share transactions . $ 5,332 $(161,045) $ 2,223 $ 2,415 $ 5,824
========= ========= ========= ========= =========
CLASS B SHARES:
Proceeds from shares issued ... $ 1,889 $ 1,585 $ 2,278 $ 1,254 $ 3,303
Dividends reinvested .......... 999 562 28 435 218
Cost of shares redeemed ....... (490) (205) (138) (297) (293)
--------- --------- --------- --------- ---------
Change in net assets from
Class B share transactions . $ 2,398 $ 1,942 $ 2,168 $ 1,392 $ 3,228
========= ========= ========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES (b):
Issued ........................ 4,994 254 7,277 21,371
Issued in conversion from
Class A Shares ............. - 18,699(b) - -
Reinvested .................... 3,349 1 1,915 2,593
Redeemed ...................... (1,986) (556) (7,698) (6,817)
--------- --------- --------- ---------
Change in Fiduciary Shares .... 6,357 18,398 1,494 17,147
========= ========= ========= =========
CLASS A SHARES:
Issued ........................ 362 1,026 1,479 525 815
Issued in restatement of net
asset value (c) ............ - 7,672 - - -
Reinvested .................... 601 1,745 104 76 61
Redeemed ...................... (408) (1,096) (1,389) (414) (417)
Redeemed in conversion to
Fiduciary Shares ........... - (18,699)(b) - - -
--------- --------- --------- --------- ---------
Change in Class A Shares ...... 555 (9,352) 194 187 459
========= ========= ========= ========= =========
CLASS B SHARES:
Issued ........................ 182 122 149 97 262
Issued in restatement of net
asset value (c) ............ - 136 - - -
Reinvested .................... 103 36 2 33 16
Redeemed ...................... (47) (16) (9) (23) (26)
--------- --------- --------- --------- ---------
Change in Class B Shares ...... 238 278 142 107 252
========= ========= ========= ========= =========
- ----------
<FN>
(a) Upon reorganizing as a fund of The One Group, the Paragon Value Growth Fund
became the Value Growth Fund. Capital and share transactions for the periods
prior to March 26, 1996 represent the Paragon Value Growth Fund.
(b) Fiduciary Shares of the Value Growth Fund commenced offering on March 26,
1996 upon conversion of certain Class A Shares to Fiduciary Shares.
(c) Pursuant to its reorganization as a fund of The One Group, the Value Growth
Fund issued additional shares at the close of business March 25, 1996 as a
result of restatement of the net asset values of Class A Shares from $15.26
to $10.00 and Class B Shares from $15.21 to $10.00.
</TABLE>
Continued
<PAGE> 464
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
Disciplined Large Company Growth
Value Fund Growth Fund Opportunities Fund
----------------------- ----------------------- -----------------------
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
December 31, June 30, December 31, June 30, December 31, June 30,
1996 1996 1996 1996 1996 1996
--------- --------- --------- --------- --------- ---------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued ... $ 52,704 $ 131,316 $ 87,363 $ 209,649 $ 138,244 $ 167,309
Proceeds from shares issued in
connection with acquisition - - - 33,161 - -
Dividends reinvested .......... 27,793 19,700 22,645 8,256 48,075 43,247
Cost of shares redeemed ....... (93,845) (130,536) (116,287) (132,702) (132,455) (109,584)
--------- --------- --------- --------- --------- ---------
Change in net assets from
Fiduciary share transactions $ (13,348) $ 20,480 $ (6,279) $ 118,364 $ 53,864 $ 100,972
========= ========= ========= ========= ========= =========
CLASS A SHARES:
Proceeds from shares issued ... $ 5,202 $ 10,777 $ 16,961 $ 46,490 $ 42,148 $ 108,378
Proceeds from shares issued in
connection with acquisition - - - 3,423 - -
Dividends reinvested .......... 2,402 1,180 4,513 904 5,065 2,718
Cost of shares redeemed ....... (5,466) (6,449) (7,859) (10,113) (41,510) (95,119)
--------- --------- --------- --------- --------- ---------
Change in net assets from
Class A share transactions . $ 2,138 $ 5,508 $ 13,615 $ 40,704 $ 5,703 $ 15,977
========= ========= ========= ========= ========= =========
CLASS B SHARES:
Proceeds from shares issued ... $ 1,753 $ 4,238 $ 22,866 $ 47,604 $ 8,278 $ 9,649
Proceeds from shares issued in
connection with acquisition - - - 398 - -
Dividends reinvested .......... 1,907 821 3,768 376 3,377 894
Cost of shares redeemed ....... (1,112) (1,398) (3,139) (2,374) (887) (563)
--------- --------- --------- --------- --------- ---------
Change in net assets from
Class B share transactions . $ 2,548 $ 3,661 $ 23,495 $ 46,004 $ 10,768 $ 9,980
========= ========= ========= ========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued ........................ 3,666 9,341 5,586 14,892 7,557 8,947
Issued in connection with
acquisition ................ - - - 2,403 - -
Reinvested .................... 1,975 1,427 1,411 594 2,790 2,608
Redeemed ...................... (6,474) (9,186) (7,366) (9,049) (7,164) (5,714)
--------- --------- --------- --------- --------- ---------
Change in Fiduciary Shares .... (833) 1,582 (369) 8,840 3,183 5,841
========= ========= ========= ========= ========= =========
CLASS A SHARES:
Issued ........................ 354 760 1,059 3,131 2,268 5,756
Issued in connection with
acquisition ................ - - - 242 - -
Reinvested .................... 170 86 274 63 293 165
Redeemed ...................... (371) (456) (491) (674) (2,233) (5,035)
--------- --------- --------- --------- --------- ---------
Change in Class A Shares ...... 153 390 842 2,762 328 886
========= ========= ========= ========= ========= =========
CLASS B SHARES:
Issued ........................ 121 298 1,435 3,201 454 522
Issued in connection with
acquisition ................ - - - 28 - -
Reinvested .................... 135 60 232 27 200 55
Cost of shares redeemed ....... (76) (99) (196) (163) (49) (30)
--------- --------- --------- --------- --------- ---------
Change in Class B Shares ...... 180 259 1,471 3,093 605 547
========= ========= ========= ========= ========= =========
</TABLE>
Continued
<PAGE> 465
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
International Equity
Gulf South Growth Fund Index Fund
---------------------------------------- ------------------------
Six Months Seven Months Year Six Months Year
Ended Ended Ended Ended Ended
December 31, June 30, November 30, December 31, June 30,
1996 1996 (a) 1995 (a) 1996 1996
--------- --------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES (b):
Proceeds from shares issued ...... $ 2,846 $ 20,747 $ 123,244 $ 154,310
Proceeds from shares issued in
conversion from Class A Shares - 80,504(b) - -
Dividends reinvested ............. 7,857 12 2,520 2,284
Cost of shares redeemed .......... (9,031) (23,690) (92,098) (51,662)
--------- --------- --------- ---------
Change in net assets from
Fiduciary share transactions .. $ 1,672 $ 77,573 $ 33,666 $ 104,932
========= ========= ========= =========
CLASS A SHARES:
Proceeds from shares issued ...... $ 1,602 $ 8,112 $ 12,266 $ 2,299 $ 7,069
Dividends reinvested ............. 1,821 13,830 321 119 135
Cost of shares redeemed .......... (2,450) (7,224) (12,837) (2,463) (2,083)
Cost of shares redeemed in
conversion to Fiduciary Shares - (80,504)(b) - - -
--------- --------- --------- --------- ---------
Change in net assets from Class A
share transactions ............ $ 973 $ (65,786) $ (250) $ (45) $ 5,121
========= ========= ========= ========= =========
CLASS B SHARES:
Proceeds from shares issued ...... $ 923 $ 636 $ 1,509 $ 1,809 $ 2,565
Dividends reinvested ............. 295 384 8 72 82
Cost of shares redeemed .......... (159) (162) (119) (572) (812)
--------- --------- --------- --------- ---------
Change in net assets from Class B
share transactions ............ $ 1,059 $ 858 $ 1,398 $ 1,309 $ 1,835
========= ========= ========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES (b):
Issued ........................... 282 66 8,317 10,623
Issued in conversion from Class A
Shares ........................ - 8,050(b) - -
Reinvested ....................... 821 1 168 160
Redeemed ......................... (880) (360) (6,185) (3,542)
--------- --------- --------- ---------
Change in Fiduciary Shares ....... 223 7,757 2,300 7,241
========= ========= ========= =========
CLASS A SHARES:
Issued ........................... 159 509 750 154 484
Issued in restatement of net asset
value (c) ..................... - 3,555 - - -
Reinvested ....................... 190 876 21 8 10
Redeemed ......................... (245) (466) (761) (167) (143)
Redeemed in conversion to
Fiduciary Shares .............. - (8,050)(b) - - -
--------- --------- --------- --------- ---------
Change in Class A Shares ......... 104 (3,576) 10 (5) 351
========= ========= ========= ========= =========
CLASS B SHARES:
Issued ........................... 93 45 92 125 179
Issued in restatement of net asset
value (c) ..................... - 78 - - -
Reinvested ....................... 31 25 1 5 5
Redeemed ......................... (16) (12) (7) (40) (57)
--------- --------- --------- --------- ---------
Change in Class B Shares ......... 108 136 86 90 127
========= ========= ========= ========= =========
- -----
<FN>
(a) Upon reorganizing as a fund of The One Group, the Paragon Gulf South Growth
Fund became the Gulf South Growth Fund. Capital and share transactions for
the periods prior to March 26, 1996 represent the Paragon Gulf South Growth
Fund.
(b) Fiduciary Shares of the Gulf South Growth Fund commenced offering on March
26, 1996 upon conversion of certain Class A Shares to Fiduciary Shares.
(c) Pursuant to its reorganization as a fund of The One Group, the Gulf South
Growth Fund issued additional shares at the close of business March 25, 1996
as a result of restatement of the net asset values of Class A Shares from
$15.70 to $10.00 and Class B Shares from $15.48 to $10.00.
</TABLE>
Continued
<PAGE> 466
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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 a fee, computed daily and paid monthly, at the annual rate of
0.74% of the average net assets of the Income Equity Fund, the Value Growth
Fund, the Large Company Value Fund, the Disciplined Value Fund, the Large
Company Growth Fund, the Growth Opportunities Fund, and the Gulf South Growth
Fund; 0.65% of the average daily net assets of the Asset Allocation Fund;
0.55% of the average daily net assets of the International Equity Index Fund;
and 0.30% of the average daily net assets of the Equity Index Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services for
a fee that is computed daily and paid monthly, at an annual rate of 0.20% on
the first $1.5 billion of Trust net assets (excluding the Investor Growth
Fund, the Investor Growth & Income Fund, the Investor Conservative Fund, and
the Investor Balanced Fund (the "Investor Funds") and the Treasury Only Money
Market Fund and the Government Money Market Fund (the "Institutional Money
Market Funds")); 0.18% on the next $0.5 billion of Trust net assets
(excluding the Investor Funds and the Institutional Money Market Funds); and
0.16% of Trust net assets (excluding the the Investor Funds and the
Institutional Money Market Funds) over $2 billion. 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 March 25, 1996, Goldman Sachs Asset
Management served as administrator of the Gulf South Growth Fund and the
Value Growth Fund. The terms of the current administration agreement are
substantially the same as the former administration agreement.
The Trust and The One Group Services Company (the "Distributor") are parties
to a distribution agreement under which shares of the Funds are sold on a
continuous basis. Class A and Class B Shares are subject to distribution and
shareholder services plans (the "Plans") pursuant to Rule 12b-1 under the
1940 Act. As provided in the Plans, the Trust will pay the Distributor a fee
of 0.35% of the average daily net assets of Class A Shares of each of the
Funds and 1.00% of the average daily net assets of the Class B Shares of each
of the Funds. Currently, the Distributor has voluntarily agreed to limit
payments under the Plans to 0.25% of average daily net assets of the Class A
Shares of each Fund. Up to 0.25% of the fees payable under the Plans may be
used as compensation for shareholder services by the Distributor and/or
financial institutions and intermediaries. Fees paid under the Plans may be
applied by the Distributor toward (i) compensation for its services in
connection with distribution assistance or provision of shareholder services;
or (ii) payments to financial institutions and intermediaries such as banks
(including affiliates of the Adviser), brokers, dealers and other
institutions, including the Distributor's affiliates and subsidiaries as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of shareholder services. Fiduciary
Class Shares of each Fund are offered without distribution fees. For the
period ended December 31, 1996, the Distributor received $3,430,455 from
commissions earned on sales of Class A Shares and redemptions of Class B
Shares, of which, the Distributor re-allowed $2,911,820 to broker-dealers of
the Funds.
Prior to January 2, 1996, Premier Investment Advisors, L.L.C. ("Premier")
served as investment adviser and Goldman Sachs & Company served as
distributor to the Value Growth Fund and Gulf South Growth Fund. Pursuant to
the approval of the Board of Trustees of the Paragon on October 31, 1995 and
its shareholders on December 20, 1995, Paragon entered into an investment
advisory agreement with the Adviser and a distribution agreement with the
Distributor effective January 2, 1996. The terms of the investment advisory
agreements with Premier and with the Adviser and the distribution agreements
with Goldman Sachs & Company and the Distributor are substantially the same.
Continued
<PAGE> 467
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
The Adviser, the Administrator and the Distributor voluntarily agreed to
waive a portion of their fees. For the period ended December 31, 1996, fees
in the following amounts were waived (amounts in thousands):
<TABLE>
<CAPTION>
Investment
Advisory Fees Administration 12b-1 Fees
Waived Fees Waived Waived
-------------- -------------- ------------
Class A
------------
<S> <C> <C> <C>
Asset Allocation Fund................................. $66 $46 $10
Income Equity Fund.................................... - - 25
Equity Index Fund..................................... 464 158 22
Value Growth Fund..................................... 78 - 18
Large Company Value Fund.............................. - - 5
Disciplined Value Fund................................ - - 11
Large Company Growth Fund............................. - - 36
Growth Opportunities Fund............................. - - 14
Gulf South Growth Fund................................ 30 28 9
International Equity Index Fund....................... - - 5
</TABLE>
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities and purchased options) during the period
ended December 31, 1996 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
U.S. Government
Securities Other Securities
---------------------- ----------------------------
Purchases Sales Purchases Sales
----------- ------- ---------- ---------
<S> <C> <C> <C> <C>
Asset Allocation Fund.................................... $17,321 $6,947 $52,429 $31,714
Income Equity Fund....................................... - - 63,522 54,594
Equity Index Fund........................................ - - 83,910 3,500
Value Growth Fund........................................ - - 199,612 166,459
Large Company Value Fund................................. - - 271,824 262,186
Disciplined Value Fund................................... - - 210,332 264,491
Large Company Growth Fund................................ - - 212,874 242,501
Growth Opportunities Fund................................ - - 1,025,460 1,058,950
Gulf South Growth Fund................................... - - 42,504 51,865
International Equity Index Fund.......................... - - 45,756 18,110
</TABLE>
6. FINANCIAL INSTRUMENTS:
Investing in financial instruments such as written options, futures and sales
of forward foreign currency contracts involves risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The face or contract
amounts reflect the extent of the involvement the Funds have in the
particular class of instrument. Risks associated with these instruments
include an imperfect correlation between the movements in the price of the
instruments and the price of the underlying securities and interest rates, an
illiquid secondary market for the instruments or inability of counterparties
to perform under the terms of the contract, and changes in the value of
currency relative to the U.S. dollar. The Funds enter into these contracts
primarily as a means to hedge against adverse fluctuations in the value of
securities.
Continued
<PAGE> 468
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
The following is a summary of written option activity for the period ended
December 31, 1996 by the Large Company Value Fund (amounts in thousands):
<TABLE>
<CAPTION>
Shares Subject
to Contract Premiums
----------- --------
Covered Call Options
- --------------------
<S> <C> <C>
Balance at beginning of period............................ 590 $ 1,273
Options written........................................... 1,093 3,185
Options closed............................................ (910) (2,377)
Options expired........................................... (289) (324)
Options exercised......................................... (484) (1,757)
----- -------
Options outstanding at end of period...................... - $ -
===== =======
PUT OPTIONS
- -----------
Balance at beginning of period............................ 90 $ -
Options written........................................... 125 345
Options expired........................................... (85) -
Options exercised......................................... (130) (345)
----- -------
Options outstanding at end of period...................... - $ -
===== =======
</TABLE>
7. CONCENTRATION OF CREDIT RISK:
The Gulf South Growth Fund has a relatively large concentration of securities
invested in companies domiciled in the Southeastern region of the United
States. The Fund may be more susceptible to political, social and economic
events adversely affecting the Southeastern region of the United States than
funds not so concentrated.
The International Equity Index Fund has a relatively large concentration of
securities invested in companies domiciled in Japan. The Fund may be more
susceptible to the political, social and economic events adversely affecting
the Japanese companies than funds not so concentrated.
8. REORGANIZATIONS:
The Trust entered an Agreement and Plan of Reorganization ("Reorganization")
with Paragon pursuant to which all of the assets and liabilities of each
Paragon Fund transferred to a Fund of The One Group in exchange for shares of
the corresponding Fund of The One Group. The Paragon Value Equity Income Fund
transferred its assets and liabilities to the Income Equity Fund. The Paragon
Value Growth Fund and the Paragon Gulf South Growth Fund transferred their
assets and liabilities to the Value Growth Fund and Gulf South Growth Fund,
respectively. The Reorganization, which qualified as a tax-free exchange for
Federal income tax purposes, was
Continued
<PAGE> 469
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
completed on March 25, 1996 following approval by shareholders of Paragon at
a special shareholder meeting. The following is a summary of shares
outstanding, net assets, net asset value per share and unrealized
appreciation immediately before and after the Reorganization (amounts in
thousands except net asset values):
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
---------------------------------- --------------
Paragon Value
Equity Income Income Equity Income Equity
Fund Fund Fund
------------- ------------- -------------
<S> <C> <C> <C>
Shares....................................... 8,993 13,779 21,674
Net assets................................... $136,786 $238,679 $375,465
Net asset value:
Fiduciary................................. $17.33 $ 17.33
Class A................................... $15.21 $17.30 $ 17.30
Class B................................... $15.20 $17.33 $ 17.33
Unrealized appreciation...................... $41,324 $71,670 $112,994
After
Before Reorganization Reorganization
---------------------------------- -----------------
Paragon Value Value Growth Value Growth
Growth Fund Fund Fund
------------- ------------- -----------------
Shares....................................... 14,849 - 22,657
Net assets................................... $226,567 - $226,567
Net asset value:
Fiduciary................................. $ 10.00
Class A................................... $15.26 $ 10.00*
Class B................................... $15.21 $ 10.00*
Unrealized appreciation...................... $48,859 - $ 48,859
After
Before Reorganization Reorganization
---------------------------------- --------------
Paragon Gulf
South Gulf South Gulf South
Growth Fund Growth Fund Growth Fund
------------- ----------- -------------
Shares....................................... 6,379 - 10,012
Net assets................................... $100,116 - $100,116
Net asset value:
Fiduciary................................. $ 10.00
Class A................................... $15.70 $ 10.00**
Class B................................... $15.48 $ 10.00**
Unrealized appreciation...................... $19,678 - $ 19,678
- --------
<FN>
* Pursuant to its reorganization as a Fund of the One Group, the Fund issued
additional shares at the close of business March 25, 1996 as a result of the
restatement of the net asset values of Class A Shares from $15.26 to $10.00
and Class B Shares from $15.21 to $10.00.
** Pursuant to its reorganization as a Fund of the One Group, the Fund issued
additional shares at the close of business March 25, 1996 as a result of the
restatement of the net asset values of Class A Shares from $15.70 to $10.00
and Class B Shares from $15.48 to $10.00.
</TABLE>
Continued
<PAGE> 470
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
On May 22, 1995, the Board of Trustees approved a Plan of Reorganization
pursuant to which the Blue Chip Equity Fund would be merged with and into the
Large Company Growth Fund. On September 1, 1995, the Blue Chip Equity Fund
transferred all of its assets and liabilities to the Large Company Growth
Fund in exchange for shares of the Large Company Growth Fund. The
reorganization, which qualified as a tax-free exchange for Federal income tax
purposes, was approved by the shareholders of the Blue Chip Equity Fund, at a
shareholders' meeting on August 28, 1995. The following is a summary of
shares outstanding, net assets, net asset value per share and unrealized
appreciation immediately before and after the reorganization (amounts in
thousands except net asset values):
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- ---------------
Blue Chip Large Large
Equity Company Company
Fund Growth Fund Growth Fund
--------- ----------- ---------------
<S> <C> <C> <C>
Shares........................................... 2,777 44,457 47,130
Net assets....................................... $36,983 $614,499 $651,482
Net asset value:
Fiduciary..................................... $13.32 $13.80 $13.80
Class A....................................... $13.30 $14.17 $14.17
Class B....................................... $13.37 $13.96 $13.96
Unrealized appreciation.......................... $7,227 $86,413 $93,640
</TABLE>
9. SUBSEQUENT EVENT:
Subsequent to December 31, 1996 net assets of certain common trust funds
managed by the Adviser were exchanged in a tax-free conversion for shares of
the corresponding One Group Funds as follows:
<TABLE>
<CAPTION>
FUND NAME Amount Converted (in Thousands)
--------- -------------------------------
<S> <C>
One Group Large Company Value............................. $63,140
One Group Disciplined Value............................... 48,248
One Group Asset Allocation................................ 37,016
One Group Large Company Growth............................ 289,366
One Group Income Equity................................... 283,367
</TABLE>
Continued
<PAGE> 471
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Asset Allocation Fund
-------------------------------------------------------------------
Fiduciary Shares
-------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, ------------------------------------------------
1996 1996 1995 1994 1993 (a)
------------ -------- --------- -------- ----------
(Unaudited)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .............................. $ 11.71 $ 10.73 $ 9.64 $ 10.06 $ 10.00
--------- ------- --------- -------- ---------
Investment Activities
Net investment income ......................... 0.22 0.41 0.38 0.29 0.07
Net realized and unrealized gains (losses) from
investments ................................ 0.66 1.16 1.12 (0.38) 0.06
--------- ------- --------- -------- ---------
Total from Investment Activities ........... 0.88 1.57 1.50 (0.09) 0.13
--------- ------- --------- -------- ---------
Distributions
From net investment income .................... (0.22) (0.41) (0.37) (0.29) (0.07)
From net realized gains ....................... (0.54) (0.18) (0.04) (0.04) -
--------- ------- --------- -------- ---------
Total Distributions ........................ (0.76) (0.59) (0.41) (0.33) (0.07)
--------- ------- --------- -------- ---------
NET ASSET VALUE,
END OF PERIOD .................................... $ 11.83 $ 11.71 $ 10.73 $ 9.64 $ 10.06
========= ======= ========= ======== =========
Total Return ..................................... 7.70%(b) 14.87% 16.06% (1.01)% 5.45%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............. $ 68,799 $50,323 $ 37,658 $ 42,751 $ 30,441
Ratio of expenses to average net assets ....... 0.80%(c) 0.94% 1.06% 1.06% 0.90%(c)
Ratio of net investment income to average net
assets ..................................... 3.66%(c) 3.58% 3.72% 2.91% 3.03%(c)
Ratio of expenses to average net assets* ...... 1.02%(c) 1.19% 1.31% 1.33% 1.34%(c)
Ratio of net investment income to average net
assets* .................................... 3.44%(c) 3.33% 3.47% 2.64% 2.59%(c)
Portfolio turnover (d) ........................ 41.11% 73.38% 115.36% 56.55% 4.05%
Average commission rate paid (e) .............. $ 0.0491 $0.0616
- ---------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Fiduciary Shares commenced offering on April 5, 1993.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 472
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Asset Allocation Fund
-------------------------------------------------------------
Class A Shares
-------------------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, --------------------------------------------
1996 1996 1995 1994 1993 (a)
-------- -------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................... $ 11.72 $ 10.74 $ 9.65 $ 10.06 $ 10.00
-------- -------- -------- -------- --------
Investment Activities
Net investment income ............................... 0.20 0.37 0.35 0.27 0.05
Net realized and unrealized gains (losses) from
investments ...................................... 0.66 1.16 1.13 (0.38) 0.07
-------- -------- -------- -------- --------
Total from Investment Activities ................. 0.86 1.53 1.48 (0.11) 0.12
-------- -------- -------- -------- --------
Distributions
From net investment income .......................... (0.20) (0.37) (0.34) (0.26) (0.06)
In excess of net investment income .................. - - (0.01) - -
From net realized gains ............................. (0.54) (0.18) (0.04) (0.04) -
-------- -------- -------- -------- --------
Total Distributions .............................. (0.74) (0.55) (0.39) (0.30) (0.06)
-------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD .......................................... $ 11.84 $ 11.72 $ 10.74 $ 9.65 $ 10.06
======== ======== ======== ======== ========
Total Return (Excludes Sales Charge) ................... 7.47%(b) 14.48% 15.76% (1.19)% 5.23%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 22,455 $ 17,849 $ 4,745 $ 1,691 $ 571
Ratio of expenses to average net assets ............. 1.05%(c) 1.19% 1.31% 1.33% 1.15%(c)
Ratio of net investment income to average net assets 3.42%(c) 3.33% 3.57% 2.68% 2.84%(c)
Ratio of expenses to average net assets* ............ 1.37%(c) 1.54% 1.66% 1.67% 1.62%(c)
Ratio of net investment income to average net assets* 3.10%(c) 2.98% 3.23% 2.34% 2.37%(c)
Portfolio turnover (d) .............................. 41.11% 73.38% 115.36% 56.55% 4.05%
Average commission rate paid (e) .................... $ 0.0491 $ 0.0616
- -----
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations on April 2, 1993.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 473
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Asset Allocation Fund
---------------------------------------------------------
Class B Shares
---------------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, ---------------------------------------
1996 1996 1995 1994 (a)
------------ --------- --------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................................... $ 11.76 $ 10.76 $ 9.67 $ 10.37
-------- --------- --------- ------------
Investment Activities
Net investment income ..................................... 0.15 0.28 0.27 0.08
Net realized and unrealized gains (losses) from investments 0.67 1.18 1.14 (0.70)
-------- --------- --------- ------------
Total from Investment Activities ....................... 0.82 1.46 1.41 (0.62)
-------- --------- --------- ------------
Distributions
From net investment income ................................ (0.16) (0.28) (0.27) (0.08)
In excess of net investment income ........................ - - (0.01) -
From net realized gains ................................... (0.54) (0.18) (0.04) -
-------- --------- --------- ------------
Total Distributions .................................... (0.70) (0.46) (0.32) (0.08)
-------- --------- --------- ------------
NET ASSET VALUE,
END OF PERIOD ................................................ $ 11.88 $ 11.76 $ 10.76 $ 9.67
======== ========= ========= ============
Total Return (Excludes Sales Charge) ......................... 7.04%(b) 13.79% 14.90% (5.98)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ 26,608 $ 18,575 $ 3,019 $ 1,862
Ratio of expenses to average net assets ................... 1.80%(c) 1.94% 2.07% 2.40%(c)
Ratio of net investment income to average net assets ...... 2.66%(c) 2.58% 2.77% 1.99%(c)
Ratio of expenses to average net assets* .................. 2.02%(c) 2.19% 2.31% 2.40%(c)
Ratio of net investment income to average net assets* ..... 2.44%(c) 2.33% 2.52% 1.99%(c)
Portfolio turnover (d) .................................... 41.11% 73.38% 115.36% 56.55%
Average commission rate paid (e) .......................... $ 0.0491 $ 0.0616
- ---------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 474
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Asset Allocation
Fund
-----------------
Service Shares (a)
-----------------
Year Ended
June 30, 1995
-----------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................... $ 9.62
-------
Investment Activities
Net investment income ............................... 0.22
Net realized and unrealized gains from investments .. 1.05
-------
Total from Investment Activities ................. 1.27
-------
Distributions
Net investment income ............................... (0.22)
In excess of net investment income .................. (0.02)
In excess of net realized gains ..................... (0.04)
-------
Total Distributions .............................. (0.28)
-------
NET ASSET VALUE,
END OF PERIOD .......................................... $ 10.61
=======
Total Return ........................................... (a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ -
Ratio of expenses to average net assets ............. 1.72%(b)
Ratio of net investment income to average net assets 3.06%(b)
Ratio of expenses to average net assets* ............ 1.98%(b)
Ratio of net investment income to average net assets* 2.79%(b)
Portfolio Turnover (c) .............................. 115.36%
- -----
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on July 15, 1994 when they were
designated as Retirement Shares. On April 4, 1995, the name of the
Retirement Shares was changed to Service Shares. As of June 1, 1995, Service
Shares transferred to Class A Shares, and as of June 30, 1995, there were no
shareholders in the Service Class. The total return for the period from July
15, 1994 to June 1, 1995 for the Service Shares was 13.25%.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 475
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Income Equity Fund
-----------------------------------------------------------------------------------
Fiduciary Shares
-----------------------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, ----------------------------------------------------------------
1996 1996 1995 1994 1993 1992
---------- ---------- --------- --------- --------- ---------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................. $ 17.65 $ 15.13 $ 13.22 $ 13.21 $ 12.24 $ 11.35
---------- ---------- --------- --------- --------- ---------
Investment Activities
Net investment income ............. 0.19 0.40 0.40 0.39 0.43 0.49
Net realized and unrealized
gains from investments ......... 1.20 3.22 2.28 0.01 0.97 0.90
---------- ---------- --------- --------- --------- ---------
Total from Investment Activities 1.39 3.62 2.68 0.40 1.40 1.39
---------- ---------- --------- --------- --------- ---------
Distributions
From net investment income ........ (0.19) (0.40) (0.40) (0.39) (0.43) (0.50)
From net realized gains ........... (0.61) (0.70) (0.37) - - -
---------- ---------- --------- --------- --------- ---------
Total Distributions ............ (0.80) (1.10) (0.77) (0.39) (0.43) (0.50)
---------- ---------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ........................ $ 18.24 $ 17.65 $ 15.13 $ 13.22 $ 13.21 $ 12.24
========== ========== ========= ========= ========= =========
Total Return ......................... 7.97%(a) 24.53% 21.04% 3.27% 11.56% 12.36%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) . $ 319,259 $ 321,827 $ 170,919 $ 198,787 $ 153,144 $ 125,050
Ratio of expenses to average net
assets ......................... 0.97%(b) 0.98% 1.01% 0.98% 0.90% 0.70%
Ratio of net investment
income to average net assets ... 2.13%(b) 2.44% 2.85% 3.18% 3.37% 4.12%
Ratio of expenses to average
net assets* .................... 0.97%(b) 1.01% 1.01% 1.05% 1.07% 1.23%
Ratio of net investment income to
average net assets* ............ 2.13%(b) 2.41% 2.85% 3.11% 3.20% 3.59%
Portfolio turnover (c) ............ 14.12% 14.92% 4.03% 22.69% 7.53% 5.99%
Average commission rate paid (d) .. $ 0.0668 $ 0.0673
- ---------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 476
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Income Equity Fund
-----------------------------------------------------------------------
Class A Shares
-----------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, -----------------------------------------------------
1996 1996 1995 1994 1993 1992 (e)
-------- ------- ------- ------- ------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................. $ 17.64 $ 15.11 $ 13.20 $ 13.20 $ 12.23 $ 12.34
-------- ------- ------- ------- ------- -------
Investment Activities
Net investment income ............................... 0.17 0.38 0.03 0.36 0.40 0.20
Net realized and unrealized gains (losses) from
investments ...................................... 1.20 3.20 2.29 - 0.98 (0.10)
-------- ------- ------- ------- ------- -------
Total from Investment Activities ................. 1.37 3.58 2.32 0.36 1.38 0.10
-------- ------- ------- ------- ------- -------
Distributions
From net investment income .......................... (0.17) (0.35) (0.03) (0.34) (0.41) (0.21)
In excess of net investment income .................. - - (0.01) (0.02) - -
From net realized gains ............................. (0.61) (0.70) (0.37) - - -
-------- ------- ------- ------- ------- -------
Total Distributions .............................. (0.78) (1.05) (0.41) (0.36) (0.41) (0.21)
-------- ------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD ........................................ $ 18.23 $ 17.64 $ 15.11 $ 13.20 $ 13.20 $ 12.23
======== ======= ======= ======= ======= =======
Total Return (Excludes Sales Charge) ................... 7.76%(a) 24.23% 20.79% 2.95% 11.38% 2.16%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 54,904 $44,284 $13,793 $12,054 $ 9,513 $ 118
Ratio of expenses to average net assets ............. 1.23%(b) 1.23% 1.26% 1.23% 1.11% 1.29%(b)
Ratio of net investment income to average net assets 1.89%(b) 2.19% 2.61% 3.01% 3.32% 3.97%(b)
Ratio of expenses to average net assets* ............ 1.33%(b) 1.36% 1.36% 1.40% 1.43% 1.49%(b)
Ratio of net investment income to average net assets* 1.79%(b) 2.06% 2.51% 2.84% 3.00% 3.77%(b)
Portfolio turnover (c) .............................. 14.12% 14.92% 4.03% 22.69% 7.53% 5.99%
Average commission rate paid (d) .................... $ 0.0668 $0.0673
- --------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
(e) Class A Shares commenced offering on February 18, 1992.
</TABLE>
See notes to financial statements.
<PAGE> 477
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Income Equity Fund
---------------------------------------------------
Class B Shares
---------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, ---------------------------------
1996 1996 1995 1994 (a)
-------- -------- -------- -------
(Unaudited)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................................ $ 17.68 $ 15.14 $ 13.23 $ 13.83
-------- -------- -------- -------
Investment Activities
Net investment income ..................................... 0.10 0.24 0.26 0.11
Net realized and unrealized gains (losses) from investments 1.19 3.23 2.29 (0.60)
-------- -------- -------- -------
Total from Investment Activities ....................... 1.29 3.47 2.55 (0.49)
-------- -------- -------- -------
Distributions
From net investment income ................................ (0.10) (0.23) (0.25) (0.11)
In excess of net investment income ........................ - - (0.02) -
From net realized gains ................................... (0.61) (0.70) (0.37) -
-------- -------- -------- -------
Total Distributions .................................... (0.71) (0.93) (0.64) (0.11)
-------- -------- -------- -------
NET ASSET VALUE,
END OF PERIOD .............................................. $ 18.26 $ 17.68 $ 15.14 $ 13.23
======== ======== ======== =======
Total Return (Excludes Sales Charge) ......................... 7.31%(b) 23.41% 19.91% (3.37)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ 45,771 $ 29,169 $ 3,468 $ 1,714
Ratio of expenses to average net assets ................... 1.98%(c) 1.98% 2.01% 1.95%(c)
Ratio of net investment income to average net assets ...... 1.14%(c) 1.44% 1.88% 2.70%(c)
Ratio of expenses to average net assets* .................. 1.98%(c) 2.01% 2.02% 1.95%(c)
Ratio of net investment income to average net assets* ..... 1.14%(c) 1.41% 1.87% 2.70%(c)
Portfolio turnover (d) .................................... 14.12% 14.92% 4.03% 22.69%
Average commission rate paid (e) .......................... $ 0.0668 $ 0.0673
- -----
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 478
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Equity Index Fund
-----------------------------------------------------------------------------
Fiduciary Shares
-----------------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, ----------------------------------------------------------
1996 1996 1995 1994 1993 1992 (e)
-------- -------- --------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................ $ 16.66 $ 14.03 $ 11.59 $ 11.92 $ 10.92 $ 10.00
-------- -------- --------- -------- -------- --------
Investment Activities
Net investment income ......................... 0.18 0.33 0.32 0.29 0.30 0.26
Net realized and unrealized gains (losses) from
investments ................................ 1.74 3.16 2.59 (0.20) 1.13 0.95
-------- -------- --------- -------- -------- --------
Total from Investment Activities ........... 1.92 3.49 2.91 0.09 1.43 1.21
-------- -------- --------- -------- -------- --------
Distributions
From net investment income .................... (0.18) (0.33) (0.29) (0.29) (0.30) (0.26)
In excess of net investment income ............ - (0.01) (0.02) (0.04) - -
From net realized gains ....................... (0.15) (0.52) (0.16) (0.09) (0.13) (0.03)
-------- -------- --------- -------- -------- --------
Total Distributions ........................ (0.33) (0.86) (0.47) (0.42) (0.43) (0.29)
-------- -------- --------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD .................................. $ 18.25 $ 16.66 $ 14.03 $ 11.59 $ 11.92 $ 10.92
======== ======== ========= ======== ======== ========
Total Return ..................................... 11.55%(a) 25.47% 25.79% 0.63% 13.04% 12.14%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............. $398,706 $321,058 $ 234,895 $165,370 $ 96,446 $ 62,150
Ratio of expenses to average net assets ....... 0.28%(b) 0.30% 0.33% 0.46% 0.50% 0.73%(b)
Ratio of net investment income to
average net assets ......................... 2.06%(b) 2.18% 2.57% 2.44% 2.46% 2.43%(b)
Ratio of expenses to average net assets* ...... 0.55%(b) 0.59% 0.66% 0.59% 0.87% 1.16%(b)
Ratio of net investment income to average net
assets* .................................... 1.79%(b) 1.89% 2.24% 2.31% 2.09% 2.00%(b)
Portfolio turnover (c) ........................ 0.80% 9.08% 2.71% 11.81% 2.71% 21.90%
Average commission rate paid (d) .............. $ 0.0439 $ 0.0490
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
(e) The Fund commenced operations on July 2, 1991.
</TABLE>
See notes to financial statements.
<PAGE> 479
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Equity Index Fund
----------------------------------------------------------------------
Class A Shares
----------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, ---------------------------------------------------
1996 1996 1995 1994 1993 1992 (e)
------- ------- ------- -------- ------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................. $ 16.67 $ 14.02 $ 11.59 $ 11.91 $ 10.92 $ 10.94
------- ------- ------- -------- ------- -------
Investment Activities
Net investment income ............................... 0.15 0.27 0.29 0.28 0.30 0.08
Net realized and unrealized gains
(losses) from investments ........................ 1.73 3.18 2.58 (0.20) 1.10 -
------- ------- ------- -------- ------- -------
Total from Investment Activities ................. 1.88 3.45 2.87 0.08 1.40 0.08
------- ------- ------- -------- ------- -------
Distributions
From net investment income .......................... (0.15) (0.27) (0.28) (0.27) (0.28) (0.10)
In excess of net investment income .................. - (0.01) - (0.04) - -
From net realized gains ............................. (0.15) (0.52) (0.16) (0.09) (0.13) -
------- ------- ------- -------- ------- -------
Total Distributions .............................. (0.30) (0.80) (0.44) (0.40) (0.41) (0.10)
------- ------- ------- -------- ------- -------
NET ASSET VALUE,
END OF PERIOD ........................................ $ 18.25 $ 16.67 $ 14.02 $ 11.59 $ 11.91 $ 10.92
======= ======= ======= ======== ======= =======
Total Return (Excludes Sales Charge) ................... 11.33%(a) 25.16% 25.43% 0.56% 12.75% 1.32%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $54,186 $32,186 $ 3,003 $ 1,416 $ 512 $ 5
Ratio of expenses to average net assets ............. 0.53%(b) 0.55% 0.56% 0.62% 0.52% 1.09%(b)
Ratio of net investment income to average net assets 1.82%(b) 1.93% 2.38% 2.37% 2.51% 1.97%(b)
Ratio of expenses to average net assets* ............ 0.90%(b) 0.94% 1.01% 0.94% 0.99% 1.27%(b)
Ratio of net investment income to average net assets* 1.45%(b) 1.54% 1.94% 2.05% 2.04% 1.79%(b)
Portfolio turnover (c) .............................. 0.80% 9.08% 2.71% 11.81% 2.71% 21.90%
Average commission rate paid (d) .................... $0.0439 $0.0490
- ---------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
(e) Class A Shares commenced offering on February 18, 1992.
</TABLE>
See notes to financial statements.
<PAGE> 480
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Equity Index Fund
---------------------------------------------------
Class B Shares
---------------------------------------------------
Six Months
Ended Year Ended June 30,
December 31, ---------------------------------
1996 1996 1995 1994 (a)
-------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................................ $ 16.68 $ 14.05 $ 11.61 $ 12.39
-------- -------- -------- --------
Investment Activities
Net investment income ..................................... 0.09 0.16 0.18 0.09
Net realized and unrealized gains (losses) from investments 1.74 3.16 2.61 (0.78)
-------- -------- -------- --------
Total from Investment Activities ....................... 1.83 3.32 2.79 (0.69)
-------- -------- -------- --------
Distributions
From net investment income ................................ (0.10) (0.16) (0.19) (0.09)
In excess of net investment income ........................ - (0.01) - -
From net realized gains ................................... (0.15) (0.52) (0.16) -
-------- -------- -------- --------
Total Distributions .................................... (0.25) (0.69) (0.35) (0.09)
-------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD .............................................. $ 18.26 $ 16.68 $ 14.05 $ 11.61
======== ======== ======== ========
Total Return (Excludes Sales Charge) ......................... 10.97%(b) 24.05% 24.58% (5.57)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ 83,311 $ 38,538 $ 1,408 $ 248
Ratio of expenses to average net assets ................... 1.28%(c) 1.30% 1.34% 1.10%(c)
Ratio of net investment income to average net assets ...... 1.07%(c) 1.18% 1.60% 2.08%(c)
Ratio of expenses to average net assets* .................. 1.55%(c) 1.59% 1.67% 1.15%(c)
Ratio of net investment income to average net assets* ..... 0.80%(c) 0.89% 1.27% 2.03%(c)
Portfolio turnover (d) .................................... 0.80% 9.08% 2.71% 11.81%
Average commission rate paid (e) .......................... $ 0.0439 $ 0.0490
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 481
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Equity Index Fund
---------------------
Service Shares (a)
---------------------
Year Ended June 30,
---------------------
1995 1994
------ ------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................................ $11.51 $12.36
------ ------
Investment Activities
Net investment income ..................................... 0.13 0.05
Net realized and unrealized gains (losses) from investments 2.36 (0.85)
------ ------
Total from Investment Activities ....................... 2.49 (0.80)
------ ------
Distributions
Net investment income ..................................... (0.19) (0.05)
In excess of net investment income ........................ (0.01) -
Net realized gains ........................................ (0.10) -
In excess of net realized gains ........................... (0.06) -
------ ------
Total Distributions .................................... (0.36) (0.05)
------ ------
NET ASSET VALUE,
END OF PERIOD .............................................. $13.64 $11.51
====== ======
Total Return ................................................. (a) (6.52)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ - $ 11
Ratio of expenses to average net assets ................... 1.01%(c) 1.42%(c)
Ratio of net investment income to average net assets ...... 2.18%(c) 1.83%(c)
Ratio of expenses to average net assets* .................. 1.37%(c) 1.69%(c)
Ratio of net investment income to average net assets* ..... 1.82%(c) 1.56%(c)
Portfolio Turnover (d) .................................... 2.71% 11.81%
- --------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designated as Retirement Shares. On April 4, 1995, the name ofthe Retirement
Shares was changed to Service Shares. As of June 1, 1995, Service Shares
transferred to Class A Shares, and as of June 30, 1995, there were no
shareholders in the Service Class. The return for the period from July 1,
1994 to June 1, 1995 for the Service Shares was 22.83%.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 482
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Value Growth Fund
-------------------------------------
Fiduciary Shares
-------------------------------------
Six Months Ended March 26, 1996 to
December 31, 1996 June 30, 1996 (a)
----------------- -----------------
(Unaudited)
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................. $ 10.39 $ 10.00
---------- ----------
Investment Activities
Net investment income ............................... 0.06 0.03
Net realized and unrealized gains from investments .. 1.01 0.39
---------- ----------
Total from Investment Activities ................. 1.07 0.42
---------- ----------
Distributions
From net investment income .......................... (0.06) (0.03)
From net realized gains ............................. (1.73) -
---------- ----------
Total Distributions .............................. (1.79) (0.03)
---------- ----------
NET ASSET VALUE,
END OF PERIOD ........................................ $ 9.67 $ 10.39
========== ==========
Total Return ........................................... 10.37%(c) 10.48%(b)(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 239,257 $ 191,212
Ratio of expenses to average net assets ............. 0.96%(d) 0.95%(d)
Ratio of net investment income to average net assets 1.20%(d) 1.13%(d)
Ratio of expenses to average net assets* ............ 1.02%(d) 1.04%(d)
Ratio of net investment income to average net assets* 1.14%(d) 1.04%(d)
Portfolio turnover (e) .............................. 73.60% 65.21%
Average commission rate paid (f) .................... $ 0.0438 $ 0.0373
- --------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from date reorganized as a fund of The One Group.
(b) Represents total return for Class A Shares from December 1, 1995 through
March 25, 1996 plus total return for Fiduciary Shares for the period from
March 26, 1996 through June 30, 1996
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(f) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 483
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Value Growth Fund
------------------------------------------------------------------------------------
Class A Shares
------------------------------------------------------------------------------------
Six Months Seven Months
Ended Ended Year Ended November 30,
December 31, June 30, ------------------------------------------------
1996 1996 (a) 1995 1994 1993 1992
------------ -------------- -------- -------- --------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ....................... $ 10.39 $ 11.15 $ 9.00 $ 10.02 $ 9.42 $ 7.80
-------- -------- -------- -------- --------- --------
Investment Activities
Net investment income .................... 0.05 0.94 0.12 0.13 0.11 0.11
Net realized and unrealized gains (losses)
from investments ...................... 1.00 0.08 2.44 (0.56) 0.83 1.75
-------- -------- -------- -------- --------- --------
Total from Investment Activities ...... 1.05 1.02 2.56 (0.43) 0.94 1.86
-------- -------- -------- -------- --------- --------
Distributions
From net investment income ............... (0.05) (0.94) (0.12) (0.14) (0.12) (0.10)
In excess of net investment income ....... - (0.01) - - - -
From net realized gains .................. (1.73) (0.83) (0.29) (0.45) (0.22) (0.14)
-------- -------- -------- -------- --------- --------
Total Distributions ................... (1.78) (1.78) (0.41) (0.59) (0.34) (0.24)
-------- -------- -------- -------- --------- --------
NET ASSET VALUE,
END OF PERIOD ............................. $ 9.66 $ 10.39 $ 11.15 $ 9.00 $ 10.02 $ 9.42
======== ======== ======== ======== ========= ========
Total Return (Excludes Sales Charge) ........ 10.12%(b) 10.40%(b) 29.57% (4.32)% 10.13% 24.27%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........ $ 38,790 $ 35,984 $217,978 $173,198 $ 171,141 $133,614
Ratio of expenses to average net assets .. 1.21%(c) 0.97%(c) 0.95% 0.96% 0.96% 0.97%
Ratio of net investment income to average
net assets ............................ 0.95%(c) 0.85%(c) 1.25% 1.34% 1.21% 1.25%
Ratio of expenses to average net assets* . 1.37%(c) 1.05%(c) 0.95% 0.96% 0.96% 0.97%
Ratio of net investment income to average
net assets* ........................... 0.79%(c) 0.77%(c) 1.25% 1.34% 1.21% 1.25%
Portfolio turnover (d) ................... 73.60% 65.21% 77.00% 53.00% 66.00% 43.00%
Average commission rate paid (e) ......... $ 0.0438 $ 0.0373
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Upon reorganizing as a fund of The One Group, the Paragon Value Growth Fund
became the Value Growth Fund. Financial highlights for the periods prior to
March 26, 1996 represent the Paragon Value Growth Fund. The per share data
for the periods prior to March 26, 1996 have been restated to reflect the
impact of restatement of net asset value from $15.26 to 10.00 effective
March 26, 1996.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 484
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- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
VALUE GROWTH FUND
------------------------------------------------------------------
CLASS B SHARES
------------------------------------------------------------------
SIX MONTHS SEVEN MONTHS SEPTEMBER 9,
ENDED ENDED YEAR ENDED 1994 TO
DECEMBER 31, JUNE 30, NOVEMBER 30, NOVEMBER 30,
1996 1996 (a) 1995 1994 (b)
------------- ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................................ $ 10.39 $ 11.16 $ 9.01 $ 9.85
---------- ----------- ---------- --------
Investment Activities
Net investment income ...................................... 0.01 0.91 0.05 0.02
Net realized and unrealized gains (losses) from investments 0.99 0.07 2.46 (0.84)
---------- ----------- ---------- --------
Total from Investment Activities ........................ 1.00 0.98 2.51 (0.82)
---------- ----------- ---------- --------
Distributions
From net investment income ................................. (0.01) (0.91) (0.07) (0.02)
In excess of net investment income ......................... -- (0.01) -- --
From net realized gains .................................... (1.73) (0.83) (0.29) --
---------- ----------- ---------- --------
Total Distributions ..................................... (1.74) (1.75) (0.36) (0.02)
---------- ----------- ---------- --------
NET ASSET VALUE,
END OF PERIOD ............................................. $ 9.65 $ 10.39 $ 11.16 $ 9.01
========== =========== ========== ========
Total Return (Excludes Sales Charge) .................... 9.70%(c) 9.96%(c) 28.74% (8.31)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .......................... $ 6,638 $ 4,673 $ 2,923 $ 412
Ratio of expenses to average net assets .................... 2.09%(d) 1.86%(d) 1.70% 1.71%(d)
Ratio of net investment income to average net assets ....... 0.21%(d) 0.13%(d) 0.38% 0.76%(d)
Ratio of expenses to average net assets* ................... 2.16%(d) 1.94%(d) 1.70% 1.71%(d)
Ratio of net investment income to average net assets* ...... 0.14%(d) 0.05%(d) 0.38% 0.76%(d)
Portfolio turnover (d) ..................................... 73.60% 65.21% 77.00% 53.00%
Average commission rate paid (e) ........................... $ 0.0438 $ 0.0373
<FN>
- -----------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Upon reorganizing as a fund of The One Group, the Paragon Value Growth Fund
became the Value Growth Fund. Financial highlights for the periods prior to
March 26, 1996 represent the Paragon Value Growth Fund. The per share data
for the periods prior to March 26, 1996 have been restated to reflect the
impact of restatement of net asset value from $15.21 to 10.00 effective
March 26, 1996.
(b) Class B Shares commenced offering September 9, 1994.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(f) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 485
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY VALUE FUND
------------------------------------------------------------------------------
FIDUCIARY SHARES
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------------
1996 1996 1995 1994 1993 1992
----------- -------- -------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................... $ 12.83 $ 12.87 $ 11.34 $ 11.64 $ 11.34 $ 10.07
-------- -------- -------- ------- -------- -------
Investment Activities
Net investment income .............................. 0.13 0.31 0.31 0.20 0.18 0.21
Net realized and unrealized gains
(losses) from investments ........................ 1.21 1.20 2.18 (0.01) 0.58 1.34
-------- -------- -------- ------- -------- -------
Total from Investment Activities ................. 1.34 1.51 2.49 0.19 0.76 1.55
-------- -------- -------- ------- -------- -------
Distributions
From net investment income ......................... (0.13) (0.31) (0.32) (0.19) (0.18) (0.21)
From net realized gains ............................ (1.06) (1.24) (0.64) (0.30) (0.28) (0.07)
-------- -------- -------- ------- -------- -------
Total Distributions ............................. (1.19) (1.55) (0.96) (0.49) (0.46) (0.28)
-------- -------- -------- ------- -------- -------
NET ASSET VALUE,
END OF PERIOD ..................................... $ 12.98 $ 12.83 $ 12.87 $ 11.34 $ 11.64 $ 11.34
======== ======== ======== ======= ======== =======
Total Return ......................................... 10.50%(a) 12.71% 23.42% 1.59% 6.73% 15.53%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $610,420 $584,527 $365,376 $69,127 $132,833 $62,075
Ratio of expenses to average net assets ............. 0.96%(b) 0.97% 1.00% 0.95% 0.86% 0.82%
Ratio of net investment income to average net assets 2.06%(b) 2.43% 2.74% 1.72% 1.62% 1.91%
Ratio of expenses to average net assets* ............ 0.96%(b) 0.98% 1.01% 1.02% 1.12% 1.34%
Ratio of net investment income to average net assets* 2.06%(b) 2.42% 2.73% 1.65% 1.36% 1.39%
Portfolio turnover (c) .............................. 38.86% 186.84% 203.13% 111.72% 51.75% 55.90%
Average commission rate paid (d) .................... $ 0.0580 $ 0.0415
<FN>
- ----------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 486
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY VALUE FUND
--------------------------------------------------------------------
CLASS A SHARES
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, -----------------------------------------------------
1996 1996 1995 1994 1993 1992 (e)
----------- -------- ------- ------- ------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 12.87 $ 12.89 $ 11.34 $ 11.64 $ 11.33 $ 11.42
------- -------- ------- ------- ------- -------
Investment Activities
Net investment income ............................... 0.11 0.27 0.28 0.17 0.16 0.07
Net realized and unrealized gains (losses)
from investments ................................. 1.22 1.22 2.20 (0.01) 0.59 (0.08)
------- -------- ------- ------- ------- -------
Total from Investment Activities .................... 1.33 1.49 2.48 0.16 0.75 (0.01)
------- -------- ------- ------- ------- -------
Distributions
From net investment income .......................... (0.12) (0.27) (0.27) (0.16) (0.16) (0.08)
In excess of net investment income .................. -- -- (0.02) -- -- --
From net realized gains ............................. (1.06) (1.24) (0.64) (0.30) (0.28) --
------- -------- ------- ------- ------- -------
Total Distributions ............................... (1.18) (1.51) (0.93) (0.46) (0.44) (0.08)
------- -------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 13.02 $ 12.87 $ 12.89 $ 11.34 $ 11.64 $ 11.33
======= ======== ======= ======= ======= =======
Total Return (Excludes Sales Charge) ................... 10.36%(a) 12.40% 22.64% 1.35% 6.64% (0.33)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $11,929 $ 9,380 $ 3,481 $ 698 $ 451 $ 12
Ratio of expenses to average net assets ............. 1.21%(b) 1.22% 1.25% 1.20% 1.10% 1.02%(b)
Ratio of net investment income to average net assets 1.79%(b) 2.18% 2.52% 1.57% 1.41% 2.12%(b)
Ratio of expenses to average net assets* ............ 1.31%(b) 1.33% 1.37% 1.37% 1.50% 1.22%(b)
Ratio of net investment income to average net assets* 1.69%(b) 2.07% 2.41% 1.40% 1.01% 1.92%(b)
Portfolio turnover (c) .............................. 38.86% 186.84% 203.13% 111.72% 51.75% 55.90%
Average commission rate paid (d) .................... $0.0580 $ 0.0415
<FN>
- -----------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
(e) Class A Shares commenced offering on February 18, 1992.
</TABLE>
See notes to financial statements.
<PAGE> 487
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY VALUE FUND
--------------------------------------------------
CLASS B SHARES
--------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, --------------------------------
1996 1996 1995 1994 (a)
------------ ------ ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................................... $ 12.98 $ 12.96 $ 11.41 $ 11.87
------- ------- ------- -------
Investment Activities
Net investment income ............................................. 0.07 0.18 0.17 0.05
Net realized and unrealized gains (losses) from investments ....... 1.21 1.26 2.19 (0.46)
------- ------- ------- -------
Total from Investment Activities .................................. 1.28 1.44 2.36 (0.41)
------- ------- ------- -------
Distributions
From net investment income ........................................ (0.08) (0.18) (0.17) (0.05)
From net realized gains ........................................... (1.06) (1.24) (0.64) --
------- ------- ------- -------
Total Distributions ............................................. (1.14) (1.42) (0.81) (0.05)
------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD ..................................................... $ 13.12 $ 12.98 $ 12.96 $ 11.41
======= ======= ======= =======
Total Return (Excludes Sales Charge) ................................. 9.88%(b) 11.95% 22.28% (3.48)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................................. $ 5,582 $ 4,135 $ 861 $ 182
Ratio of expenses to average net assets ........................... 1.96%(c) 1.97% 2.00% 2.00%(c)
Ratio of net investment income to average net assets .............. 1.03%(c) 1.43% 1.74% 1.06%(c)
Ratio of expenses to average net assets* .......................... 1.96%(c) 1.98% 2.01% 2.00%(c)
Ratio of net investment income to average net assets* ............. 1.03%(c) 1.42% 1.72% 1.06%(c)
Portfolio turnover (d) ............................................ 38.86% 186.84% 203.13% 111.72%
Average commission rate paid (e) .................................. $0.0580 $0.0415
<FN>
- ------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 488
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DISCIPLINED VALUE FUND
--------------------------------------------------------------------------------
FIDUCIARY SHARES
---------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ---------------------------------------------------------------
1996 1996 1995 1994 1993 1992
----------- -------- -------- -------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ...................... $ 14.69 $ 13.20 $ 11.90 $ 12.76 $ 11.49 $ 10.20
-------- -------- -------- -------- -------- --------
Investment Activities
Net investment income ................... 0.13 0.29 0.28 0.26 0.28 0.34
Net realized and unrealized gains from
investments ........................... 1.09 2.27 1.57 0.29 1.27 1.29
-------- -------- -------- -------- -------- --------
Total from Investment Activities....... 1.22 2.56 1.85 0.55 1.55 1.63
-------- -------- -------- -------- -------- --------
Distributions
From net investment income .............. (0.13) (0.29) (0.27) (0.26) (0.28) (0.34)
From net realized gains ................. (1.61) (0.78) (0.28) (1.15) -- --
-------- -------- -------- -------- -------- --------
Total Distributions ................... (1.74) (1.07) (0.55) (1.41) (0.28) (0.34)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD ........................... $ 14.17 $ 14.69 $ 13.20 $ 11.90 $ 12.76 $ 11.49
======== ======== ======== ======== ======== ========
Total Return ............................... 8.49%(a) 20.10% 16.03% 4.04% 13.58% 16.24%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ....... $492,215 $522,474 $448,530 $418,238 $211,785 $115,234
Ratio of expenses to average net assets . 0.98%(b) 0.99% 1.00% 0.93% 0.89% 0.69%
Ratio of net investment income to average
net assets ........................... 1.79%(b) 2.04% 2.21% 2.14% 2.30% 3.17%
Ratio of expenses to average net assets* 0.98%(b) 1.00% 1.10% 0.98% 1.08% 1.23%
Ratio of net investment income to average
net assets* .......................... 1.79%(b) 2.03% 2.11% 2.09% 2.11% 2.63%
Portfolio turnover (c) .................. 39.44% 90.56% 176.66% 56.33% 108.79% 25.32%
Average commission rate paid (d) ........ $ 0.0594 $ 0.0576
<FN>
- -----------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 489
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DISCIPLINED VALUE FUND
--------------------------------------------------------------------------
CLASS A SHARES
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ---------------------------------------------------------
1996 1996 1995 1994 1993 1992 (e)
---- ------ ------- ------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 14.72 $ 13.22 $ 11.91 $ 12.75 $11.49 $ 11.45
------- ------- ------- ------- ------ -------
Investment Activities
Net investment income ............................... 0.11 0.25 0.24 0.24 0.25 0.12
Net realized and unrealized gains from investments .. 1.08 2.28 1.59 0.30 1.26 0.06
------- ------- ------- ------- ------ -------
Total from Investment Activities ................. 1.19 2.53 1.83 0.54 1.51 0.18
------- ------- ------- ------- ------ -------
Distributions
From net investment income .......................... (0.11) (0.25) (0.24) (0.23) (0.25) (0.14)
From net realized gains ............................. (1.61) (0.78) (0.26) (1.10) -- --
In excess of net realized gains ..................... -- -- (0.02) (0.05) -- --
------- ------- ------- ------- ------ -------
Total Distributions .............................. (1.72) (1.03) (0.52) (1.38) (0.25) (0.14)
------- ------- ------- ------- ------ -------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 14.19 $ 14.72 $ 13.22 $ 11.91 $12.75 $ 11.49
======= ======= ======= ======= ====== =======
Total Return (Excludes Sales Charge) .................. 8.26%(a) 19.80% 15.43% 3.95% 13.27% 1.56%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $22,272 $20,838 $13,560 $10,448 $3,435 $ 35
Ratio of expenses to average net assets ............. 1.23%(b) 1.24% 1.26% 1.18% 1.12% 1.29%(b)
Ratio of net investment income to average net assets 1.53%(b) 1.79% 1.99% 2.00% 2.06% 2.43%(b)
Ratio of expenses to average net assets* ............ 1.33%(b) 1.35% 1.36% 1.33% 1.46% 1.49%(b)
Ratio of net investment income to average net assets* 1.43%(b) 1.68% 1.89% 1.85% 1.72% 2.23%(b)
Portfolio turnover (c) .............................. 39.44% 90.55% 176.66% 56.33% 108.79% 25.32%
Average commission rate paid (d) .................... $0.0594 $0.0576
<FN>
- ----------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
(e) Class A Shares commenced offering on February 18, 1992.
</TABLE>
See notes to financial statements.
<PAGE> 490
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DISCIPLINED VALUE FUND
------------------------------------------------------------
CLASS B SHARES
------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ----------------------------------------
1996 1996 1995 1994 (a)
--------- ------- ------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ......................................... $ 14.69 $ 13.19 $ 11.90 $12.60
------- ------- ------- ------
Investment Activities
Net investment income ....................................... 0.06 0.15 0.15 0.07
Net realized and unrealized gains (losses) from investments . 1.08 2.27 1.58 (0.70)
------- ------- ------- ------
Total from Investment Activities ......................... 1.14 2.42 1.73 (0.63)
------- ------- ------- ------
Distributions
From net investment income .................................. (0.06) (0.14) (0.15) (0.06)
In excess of net investment income .......................... -- -- (0.01) (0.01)
From net realized gains ..................................... (1.61) (0.78) (0.28) --
------- ------- ------- ------
Total Distributions ...................................... (1.67) (0.92) (0.44) (0.07)
------- ------- ------- ------
NET ASSET VALUE,
END OF PERIOD ............................................... $ 14.16 $ 14.69 $ 13.19 $11.90
======= ======= ======= ======
Total Return (Excludes Sales Charge) .......................... 7.78%(b) 18.93% 14.92% (5.00)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .......................... $18,275 $16,305 $11,222 $5,356
Ratio of expenses to average net assets .................... 1.98%(c) 1.99% 2.00% 1.96%(c)
Ratio of net investment income to average net assets ....... 0.78%(c) 1.04% 1.26% 1.80%(c)
Ratio of expenses to average net assets* ................... 1.98%(c) 2.00% 2.01% 1.96%(c)
Ratio of net investment income to average net assets* ...... 0.78%(c) 1.03% 1.25% 1.80%(c)
Portfolio turnover (d) ..................................... 39.44% 90.55% 176.66% 56.33%
Average commission rate paid (e) ........................... $0.0594 $0.0576
<FN>
- -----------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 491
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DISCIPLINED VALUE FUND
-----------------------
SERVICE SHARES (a)
-----------------------
YEAR ENDED JUNE 30,
-----------------------
1995 1994
-------- -------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ..................................................... $ 11.90 $ 12.59
-------- -------
Investment Activities
Net investment income ................................................... 0.17 0.06
Net realized and unrealized gains (losses) from investments ............. 1.37 (0.69)
-------- -------
Total from Investment Activities ..................................... 1.54 (0.63)
-------- -------
Distributions
Net investment income ................................................... (0.16) (0.06)
In excess of net investment income ...................................... (0.01) --
Net realized gains ...................................................... (0.28) --
-------- -------
Total Distributions .................................................. (0.45) (0.06)
-------- -------
NET ASSET VALUE,
END OF PERIOD ........................................................... $ 12.99 $ 11.90
======== =======
Total Return .............................................................. (a) (5.03)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)
Ratio of expenses to average net assets ................................. $ -- $ 47
Ratio of net investment income to average net assets .................... 1.90%(c) 1.84%(c)
Ratio of expenses to average net assets* ................................ 1.89%(c) 1.83%(c)
Ratio of net investment income to average net assets* ................... 1.90%(c) 1.84%(c)
Portfolio turnover (d) .................................................. 1.89%(c) 1.83%(c)
176.66% 56.33%
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designated as Retirement Shares. On April 4, 1995, the name of the
Retirement Shares was changed to Service Shares. As of June 1, 1995,
Service Shares transferred to Class A Shares, and as of June 30, 1995,
there were no shareholders in the Service Class. The return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 13.14%.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 492
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH FUND
---------------------------------------------------------------------------
FIDUCIARY SHARES
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ---------------------------------------------------------
1996 1996 1995 1994 1993 1992 (e)
---- ---- ---- ---- ---- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 15.44 $ 13.47 $ 11.32 $ 10.92 $ 9.85 $ 10.00
-------- -------- -------- -------- ------- -------
Investment Activities
Net investment income ............................... 0.08 0.18 0.20 0.20 0.23 0.08
Net realized and unrealized gains (losses)
from investments ............................ 1.34 2.14 3.04 0.67 1.12 (0.16)
-------- -------- -------- -------- ------- -------
Total from Investment Activities ................ 1.42 2.32 3.24 0.87 1.35 (0.08)
-------- -------- -------- -------- ------- -------
Distributions
From net investment income .......................... (0.07) (0.18) (0.20) (0.20) (0.23) (0.07)
From net realized gains ............................. (0.80) (0.17) (0.89) (0.27) (0.05) --
-------- -------- -------- -------- ------- -------
Total Distributions ............................. (0.87) (0.35) (1.09) (0.47) (0.28) (0.07)
-------- -------- -------- -------- ------- -------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 15.99 $ 15.44 $ 13.47 $ 11.32 $ 10.92 $ 9.85
======== ======== ======== ======== ======= =======
Total Return .......................................... 9.26%(a) 17.36% 21.85% 8.04% 13.92% (0.80)%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $766,728 $745,986 $531,595 $150,035 $41,317 $25,019
Ratio of expenses to average net assets ............. 0.97%(b) 0.96% 1.00% 0.78% 0.39% 0.30%(b)
Ratio of net investment income to average net assets 0.97%(b) 1.20% 1.72% 1.87% 2.24% 2.37%(b)
Ratio of expenses to average net assets* ............ 0.97%(b) 0.99% 1.00% 1.13% 1.43% 1.49%(b)
Ratio of net investment income to average net assets* 0.97%(b) 1.17% 1.72% 1.52% 1.21% 1.12%(b)
Portfolio turnover (c) .............................. 24.28% 35.51% 14.22% 9.04% 10.61% 3.09%
Average commission rate paid (d) .................... $ 0.0668 $ 0.0647
<FN>
- ---------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
(e) The Fund commenced operations on February 28, 1992.
</TABLE>
See notes to financial statements.
<PAGE> 493
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH FUND
----------------------------------------------------------
CLASS A SHARES
---------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, --------------------------------------
1996 1996 1995 1994 (a)
---------- -------- ------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................................... $ 15.83 $ 13.83 $ 11.62 $11.78
------- ------- ------- ------
Investment Activities
Net investment income ......................................... 0.06 0.14 0.17 0.04
Net realized and unrealized gains (losses) from investments ... 1.37 2.17 3.10 (0.16)
------- ------- ------- ------
Total from Investment Activities ............................ 1.43 2.31 3.27 (0.12)
------- ------- ------- ------
Distributions
From net investment income .................................... (0.05) (0.14) (0.16) (0.04)
In excess of net investment income ............................ -- -- (0.01) --
From net realized gains ....................................... (0.80) (0.17) (0.89) --
------- ------- ------- ------
Total Distributions ......................................... (0.85) (0.31) (1.06) (0.04)
------- ------- ------- ------
NET ASSET VALUE,
END OF PERIOD ................................................ $ 16.41 $ 15.83 $ 13.83 $11.62
======= ======= ======= ======
Total Return (Excludes Sales Charge) ............................ 9.09%(b) 16.85% 21.52% (1.02)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............................. $91,704 $75,114 $27,428 $ 368
Ratio of expenses to average net assets ....................... 1.22%(c) 1.21% 1.26% 1.25%(c)
Ratio of net investment income to average net assets .......... 0.73%(c) 0.95% 1.49% 1.78%(c)
Ratio of expenses to average net assets* ...................... 1.31%(c) 1.34% 1.36% 1.35%(c)
Ratio of net investment income to average net assets* ......... 0.64%(c) 0.82% 1.39% 1.68%(c)
Portfolio turnover (d) ........................................ 24.28% 35.51% 14.22% 9.04%
Average commission rate paid (e) .............................. $0.0668 $0.0647
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on January 1, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 494
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH FUND
---------------------------------------------------------
CLASS B SHARES
---------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, -----------------------------------
1996 1996 1995 1994 (a)
----------- -------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................................ $ 15.63 $ 13.63 $11.47 $ 11.57
------- ------- ------ -------
Investment Activities
Net investment income .......................................... -- 0.05 0.09 0.03
Net realized and unrealized gains (losses) from investments .... 1.35 2.17 3.06 (0.10)
------- ------- ------ -------
Total from Investment Activities ............................ 1.35 2.22 3.15 (0.07)
------- ------- ------ -------
Distributions
From net investment income ..................................... -- (0.05) (0.09) (0.03)
In excess of net investment income ............................. -- -- (0.01) --
From net realized gains ........................................ (0.80) (0.17) (0.89) --
------- ------- ------ -------
Total Distributions ......................................... (0.80) (0.22) (0.99) (0.03)
------- ------- ------ -------
NET ASSET VALUE,
END OF PERIOD ................................................. $ 16.18 $ 15.63 $13.63 $ 11.47
======= ======= ====== =======
Total Return (Excludes Sales Charge) ............................. 8.70%(b) 16.41% 20.65% (0.66)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............................... $82,053 $56,261 $6,918 $ 334
Ratio of expenses to average net assets ......................... 1.98%(c) 1.96% 2.01% 1.99%(c)
Ratio of net investment income (loss) to average net assets ..... (0.02)%(c) 0.20% 0.74% 0.96%(c)
Ratio of expenses to average net assets* ........................ 1.98%(c) 1.99% 2.01% 1.99%(c)
Ratio of net investment income (loss)to average net assets* ..... (0.02)%(c) 0.17% 0.74% 0.96%(c)
Portfolio turnover (d) .......................................... 24.28% 35.51% 14.22% 9.04%
Average commission rate paid (e) ................................ $0.0668 $0.0647
<FN>
- ----------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 495
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH FUND
--------------------------------
SERVICE SHARES (a)
--------------------------------
YEAR ENDED JUNE 30,
--------------------------------
1995 1994
--------- ---------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................................................... $ 11.42 $ 11.58
--------- ---------
Investment Activities
Net investment income ........................................................ 0.11 0.03
Net realized and unrealized gains (losses) from investments .................. 2.85 (0.16)
--------- ---------
Total from Investment Activities ........................................ 2.96 (0.13)
--------- ---------
Distributions
Net investment income ........................................................ (0.11) (0.03)
In excess of net realized gains .............................................. (0.89) --
--------- ---------
Total Distributions ..................................................... (1.00) (0.03)
--------- ---------
NET ASSET VALUE,
END OF PERIOD ................................................................ $ 13.38 $ 11.42
========= =========
Total Return ................................................................... (a) (1.13)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........................................... $ -- $ 24
Ratio of expenses to average net assets ..................................... 1.90%(c) 1.75%(c)
Ratio of net investment income to average net assets ........................ 1.05%(c) 1.02%(c)
Ratio of expenses to average net assets* .................................... 1.90%(c) 1.75%(c)
Ratio of net investment income to average net assets* ....................... 1.05%(c) 1.02%(c)
Portfolio turnover (d) ...................................................... 14.22% 9.04%
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designated as Retirement Shares. On April 4, 1995, the name of the
Retirement Shares was changed to Service Shares. As of June 1, 1995,
Service Shares transferred to Class A Shares, and as of June 30, 1995,
there were no shareholders in the Service Class. The return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 19.19%.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 496
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
-----------------------------------------------------------------------
FIDUCIARY SHARES
-----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------------
1996 1996 1995 1994 1993 1992
---- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................... $ 18.81 $ 18.40 $ 15.96 $ 16.96 $ 14.54 $ 12.92
-------- -------- -------- -------- -------- --------
Investment Activities
Net investment income ................................ 0.27 0.20 0.06 0.07 0.06 0.09
Net realized and unrealized gains (losses)
from investments .................................. 1.05 3.83 2.98 (0.05) 2.99 1.87
-------- -------- -------- -------- -------- --------
Total from Investment Activities ............... 1.32 4.03 3.04 0.02 3.05 1.96
-------- -------- -------- -------- -------- --------
Distributions
From net investment income ........................... (0.27) (0.20) (0.06) (0.07) (0.06) (0.08)
From net realized gains .............................. (2.92) (3.42) (0.54) (0.95) (0.57) (0.26)
-------- -------- -------- -------- -------- --------
Total Distributions ............................ (3.19) (3.62) (0.60) (1.02) (0.63) (0.34)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD ........................................ $ 16.94 $ 18.81 $ 18.40 $ 15.96 $ 16.96 $ 14.54
======== ======== ======== ======== ======== ========
Total Return 6.86%(a) 24.63% 19.75% (0.16)% 21.36% 15.15%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $533,522 $532,525 $413,518 $389,567 $232,898 $131,533
Ratio of expenses to average net assets ............. 0.97%(b) 1.00% 0.98% 0.98% 0.89% 0.75%
Ratio of net investment income to average net assets 2.84%(b) 1.15% 0.38% 0.42% 0.41% 0.51%
Ratio of expenses to average net assets* ............ 0.97%(b) 1.01% 0.98% 1.03% 1.11% 1.23%
Ratio of net investment income to average net assets* 2.84%(b) 1.14% 0.38% 0.37% 0.19% 0.03%
Portfolio turnover (c) .............................. 183.99% 435.30% 132.63% 70.67% 64.64% 42.77%
Average commission rate paid (d) .................... $ 0.0317 $ 0.0451
<FN>
- --------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 497
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
------------------------------------------------------------------
CLASS A SHARES
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------
1996 1996 1995 1994 1993 1992 (e)
---- -------- ------- ------ ------ --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ...................................... $ 18.76 $ 18.36 $ 15.93 $16.96 $14.54 $16.53
------- ------- ------- ------ ------ ------
Investment Activities
Net investment income ..................................... 0.24 0.17 0.02 0.04 0.03 0.01
Net realized and unrealized gains (losses)
from investments ..................................... 1.05 3.80 2.98 (0.08) 3.00 (1.99)
------- ------- ------- ------ ------ ------
Total from Investment Activities ....................... 1.29 3.97 3.00 (0.04) 3.03 (1.98)
------- ------- ------- ------ ------ ------
Distributions
From net investment income .............................. (0.26) (0.15) (0.01) (0.03) (0.04) (0.01)
In excess of net investment income ...................... -- -- (0.02) (0.01) -- --
From net realized gains ................................. (2.92) (3.42) (0.54) (0.95) (0.57) --
------- ------- ------- ------ ------ ------
Total Distributions .................................... (3.18) (3.57) (0.57) (0.99) (0.61) (0.01)
------- ------- ------- ------ ------ ------
NET ASSET VALUE,
END OF PERIOD ............................................ $ 16.87 $ 18.76 $ 18.36 $15.93 $16.96 $14.54
======= ======= ======= ====== ====== ======
Total Return (Excludes Sales Charge) ................... 6.70%(a) 24.32% 19.50% (0.52)% 21.70% (34.00)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........................ $30,767 $28,052 $11,178 $8,097 $5,757 $ 84
Ratio of expenses to average net assets .................. 1.22%(b) 1.25% 1.23% 1.22% 1.11% 1.31%(b)
Ratio of net investment income to average net assets ..... 2.54%(b) 0.90% 0.12% 0.27% 0.25% 0.12%(b)
Ratio of expenses to average net assets* ................. 1.32%(b) 1.36% 1.33% 1.38% 1.48% 1.50%(b)
Ratio of net investment income (loss) to average net
assets* ............................................. 2.44%(b) 0.79% 0.02% 0.11% (0.12)% (0.07)%(b)
Portfolio turnover (c) ................................... 183.99% 435.30% 132.63% 70.67% 64.64% 42.77%
Average commission rate paid (d) ......................... $0.0317 $0.0451
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(d) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
(e) Class A Shares commenced offering on February 18, 1992.
</TABLE>
See notes to financial statements.
<PAGE> 498
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
--------------------------------------------------------
CLASS B SHARES
--------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, --------------------------------------
1996 1996 1995 1994 (a)
----------- ------- ------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................................... $ 18.43 $ 18.14 $15.85 $17.44
------- ------- ------ ------
Investment Activities
Net investment income (loss) ................................. 0.17 0.09 (0.07) (0.02)
Net realized and unrealized gains (losses) from investments .. 1.03 3.69 2.90 (1.56)
------- ------- ------ ------
Total from Investment Activities .......................... 1.20 3.78 2.83 (1.58)
------- ------- ------ ------
Distributions
From net investment income ................................... (0.24) (0.07) -- (0.01)
From net realized gains ...................................... (2.92) (3.42) (0.54) --
------- ------- ------ ------
Total Distributions ....................................... (3.16) (3.49) (0.54) (0.01)
------- ------- ------ ------
NET ASSET VALUE,
END OF PERIOD ................................................
$ 16.47 $ 18.43 $18.14 $15.85
======= ======= ====== ======
Total Return (Excludes Sales Charge) ........................... 6.53%(b) 23.53% 18.47% (9.07)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............................ $21,509 $12,910 $2,787 $1,131
Ratio of expenses to average net assets ...................... 1.98%(c) 2.00% 1.98% 2.12%(c)
Ratio of net investment income (loss)to average net assets ... 1.92%(c) 0.15% (0.63)% (0.55)%(c)
Ratio of expenses to average net assets* ..................... 1.98%(c) 2.01% 1.98% 2.12 %(c)
Ratio of net investment income (loss)to average net assets* .. 1.92%(c) 0.14% (0.63)% (0.55)%(c)
Portfolio turnover (d) ....................................... 183.99% 435.30% 132.63% 70.67%
Average commission rate paid (e) ............................. $0.0317 $0.0451
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 499
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
---------------------------
SERVICE SHARES (a)
---------------------------
YEAR ENDED JUNE 30,
---------------------------
1995 1994
---- ----
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................................... $ 15.95 $ 17.47
------- -------
Investment Activities
Net investment income ....................................................... (0.03) (0.01)
Net realized and unrealized gains (losses) from investments ................. 2.14 (1.50)
------- -------
Total from Investment Activities ......................................... 2.11 (1.51)
------- -------
Distributions
Net investment income ....................................................... -- (0.01)
Net realized gains .......................................................... (0.54) --
------- -------
Total Distributions ...................................................... (0.54) (0.01)
------- -------
NET ASSET VALUE,
END OF PERIOD................................................................. $17.52 $15.95
====== ======
Total Return ................................................................... (a) (8.64)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........................................... $ -- $ 35
Ratio of expenses to average net assets ..................................... 1.87%(c) 1.91%(c)
Ratio of net investment income to average net assets ........................ (0.39)%(c) (0.36)%(c)
Ratio of expenses to average net assets* .................................... 1.87%(c) 1.91%(c)
Ratio of net investment income to average net assets* ....................... (0.39)%(c) (0.36)%(c)
Portfolio turnover (d) ...................................................... 132.63% 70.67%
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designated as Retirement Shares. On April 4, 1995, the name of the
Retirement Shares was changed to Service Shares. As of June 1, 1995,
Service Shares transferred to Class A Shares, and as of June 30, 1995,
there were no shareholders in the Service Class. The return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 13.12%.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 500
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GULF SOUTH GROWTH FUND
-----------------------------------
FIDUCIARY SHARES
-----------------------------------
SIX MONTHS MARCH 26, 1996
ENDED TO
DECEMBER 31, JUNE 30,
1996 1996 (a)
---- --------
(UNAUDITED)
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................................ $ 10.75 $ 10.00
------- -------
Investment Activities
Net investment income (loss) .............................................. (0.01) 0.78
Net realized and unrealized gains from investments ........................ 0.24 --
------- -------
Total from Investment Activities .................................. 0.23 0.78
------- -------
Distributions
From net investment income ............................................... -- (0.03)
From net realized gains .................................................. (1.10) --
------- -------
Total Distributions ............................................... (1.10) (0.03)
------- -------
NET ASSET VALUE,
END OF PERIOD.............................................................. $ 9.88 $ 10.75
======= =======
Total Return ................................................................ 2.45%(c) 13.39%(b)(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................................... $78,859 $83,371
Ratio of expenses to average net assets ................................... 1.00%(d) 0.96%(d)
Ratio of net investment income (loss) to average net assets ............... (0.18)%(d) (0.16)%(d)
Ratio of expenses to average net assets* .................................. 1.11%(d) 1.05%(d)
Ratio of net investment income (loss) to average net assets* .............. (0.29)%(d) (0.25)%(d)
Portfolio turnover (e) .................................................... 44.03% 59.57%
Average commission rate paid (f) .......................................... $0.0674 $0.0685
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from date reorganized as a fund of The One Group.
(b) Represents total return for Class A Shares from December 1, 1995 through
March 25, 1996 plus total return for Fiduciary Shares for the period from
March 26, 1996 through June 30, 1996.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(f) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 501
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GULF SOUTH GROWTH FUND
-------------------------------------------------------------------------------
CLASS A SHARES
-------------------------------------------------------------------------------
SIX MONTHS SEVEN MONTHS
ENDED ENDED YEAR ENDED NOVEMBER 30,
DECEMBER 31, JUNE 30, ------------------------------------------------
1996 1996 (a) 1995 1994 1993 1992
------------ ---------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ...................... $ 10.73 $ 11.50 $ 9.36 $ 10.11 $ 9.48 $ 7.38
-------- -------- -------- -------- -------- --------
Investment Activities
Net investment income (loss) ............. (0.02) (0.07) (0.04) (0.04) (0.02) 0.01
Net realized and unrealized gains (losses)
from investments ..................... 0.29 1.40 2.35 (0.63) 0.88 2.10
-------- -------- -------- -------- -------- --------
Total from Investment Activities ..... 0.27 1.33 2.31 (0.67) 0.86 2.11
-------- -------- -------- -------- -------- --------
Distributions
From net investment income ............... -- -- -- -- (0.01) (0.01)
From net realized gains .................. (1.10) (2.10) (0.17) (0.08) (0.22) --
-------- -------- -------- -------- -------- --------
Total Distributions .................. (1.10) (2.10) (0.17) (0.08) (0.23) (0.01)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD ............................ $ 9.90 $ 10.73 $ 11.50 $ 9.36 $ 10.11 $ 9.48
======== ======== ======== ======== ======== ========
Total Return (Excludes Sales Charge) ........ 2.73%(b) 12.85%(b) 25.07% (6.66)% 9.10% 28.59%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ....... $ 17,952 $ 18,356 $ 95,467 $ 77,540 $ 74,982 $ 55,719
Ratio of expenses to average net assets . 1.25%(c) 1.05%(c) 1.03% 1.00% 1.01% 1.00%
Ratio of net investment income (loss) to (0.43)%(c) (0.33)%(c) (0.36)% (0.38)% (0.21)% 0.15%
average net assets ..................
Ratio of expenses to average net assets* 1.46%(c) 1.07%(c) 1.03% 1.00% 1.01% 1.00%
Ratio of net investment income (loss) to
average net assets* ................. (0.64)%(c) (0.35)%(c) (0.36)% (0.38)% (0.21)% 0.15%
Portfolio turnover (d) .................. 44.03% 59.57% 65.00% 51.00% 59.00% 42.00%
Average commission rate paid (e) ........ $ 0.0674 $ 0.0685
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Upon reorganizing as a fund of The One Group, the Paragon Gulf South Growth
Fund became the Gulf South Growth Fund. Financial highlights for the
periods prior to March 26, 1996 represent the Paragon Gulf South Growth
Fund. The per share data for the periods prior to March 26, 1996 have been
restated to reflect the impact of restatement of net asset value from
$15.70 to 10.00 effective March 26, 1996.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 502
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GULF SOUTH GROWTH FUND
-----------------------------------------------------------
CLASS B SHARES
-----------------------------------------------------------
SIX MONTHS SEVEN MONTHS SEPTEMBER 12,
ENDED ENDED YEAR ENDED 1994 TO
DECEMBER 31, JUNE 30, NOVEMBER 30, NOVEMBER 30,
1996 1996 (a) 1995 1994 (b)
------------ ------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................................... $ 10.72 $ 11.56 $ 9.47 $ 10.40
------- ------- ------- -------
Investment Activities
Net investment loss ......................................... (0.05) (0.06) (0.07) (0.01)
Net realized and unrealized gains (losses) from
investments .............................................. 0.27 1.35 2.33 (0.92)
------- ------- ------- -------
Total from Investment Activities ......................... 0.22 1.29 2.26 (0.93)
------- ------- ------- -------
Distributions
From net realized gains ..................................... (1.10) (2.13) (0.17) --
------- ------- ------- -------
Total Distributions ...................................... (1.10) (2.13) (0.17) --
------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD ................................................ $ 9.84 $ 10.72 $ 11.56 $ 9.47
======= ======= ======= =======
Total Return (Excludes Sales Charge) ............................ 2.34%(c) 12.47%(c) 24.21% (9.08)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............................ $ 3,392 $ 2,545 $ 1,814 $ 231
Ratio of expenses to average net assets ...................... 2.00%(d) 1.87%(d) 1.78% 1.75%(d)
Ratio of net investment income (loss) to average net assets .. (1.18)%(d) (1.10)%(d) (1.16)% (0.90)%(d)
Ratio of expenses to average net assets* ..................... 2.11%(d) 1.92%(d) 1.78% 1.75%(d)
Ratio of net investment income (loss)to average net assets* .. (1.29)%(d) (1.15)%(d) (1.16)% (0.90)%(d)
Portfolio turnover (e) ....................................... 44.03% 59.57% 65.00% 51.00%
Average commission rate paid (f) ................................ $0.0674 $0.0685
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Upon reorganizing as a fund of The One Group, the Paragon Gulf South Growth
Fund became the Gulf South Growth Fund. Financial highlights for the
periods prior to March 26, 1996 represent the Paragon Gulf South Growth
Fund. The per share data for the periods prior to March 26, 1996 have been
restated to reflect the impact of restatement of net asset value from
$15.48 to 10.00 effective March 26, 1996.
(b) Class B Shares commenced offering September 12, 1994.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(f) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 503
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX FUND
-----------------------------------------------------------------
FIDUCIARY SHARES
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------
1996 1996 1995 1994 1993 (a)
----------- -------- -------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................. $ 15.17 $ 13.93 $ 13.46 $ 11.80 $ 10.00
-------- -------- -------- -------- -------
Investment Activities
Net investment income ............................... 0.03 0.11 0.13 0.11 0.06
Net realized and unrealized gains from investments .. 0.07 1.43 0.46 1.68 1.75
-------- -------- -------- -------- -------
Total from Investment Activities ................ 0.10 1.54 0.59 1.79 1.81
-------- -------- -------- -------- -------
Distributions
From net investment income .......................... (0.14) (0.16) (0.08) (0.11) (0.01)
In excess of net investment income .................. -- (0.02) -- -- --
From net realized gains ............................. (0.15) (0.12) (0.04) (0.01) --
In excess of net realized gains ..................... -- -- -- (0.01) --
-------- -------- -------- -------- -------
Total Distributions ............................. (0.29) (0.30) (0.12) (0.13) (0.01)
-------- -------- -------- -------- -------
NET ASSET VALUE,
END OF PERIOD ........................................ $ 14.98 $ 15.17 $ 13.93 $ 13.46 $ 11.80
======== ======== ======== ======== =======
Total Return ........................................... 0.71%(b) 11.22% 4.20% 15.44% 26.96%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $377,707 $347,790 $218,299 $145,640 $35,384
Ratio of expenses to average net assets ............. 0.84%(c) 0.97% 1.04% 1.02% 1.22%(c)
Ratio of net investment income to average net assets 0.45%(c) 1.04% 1.25% 1.27% 1.37%(c)
Ratio of expenses to average net assets* ............ 0.84%(c) 1.00% 1.04% 1.02% 2.34%(c)
Ratio of net investment income to average net assets* 0.45%(c) 1.01% 1.25% 1.27% 0.25%(c)
Portfolio turnover (d) .............................. 4.88% 6.28% 4.67% 7.74% 3.10%
Average commission rate paid (e) .................... $ 0.0047 $ 0.0022
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Fiduciary Shares commenced offering on April 5, 1993.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 504
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX FUND
-------------------------------------------------------------------
CLASS A SHARES
-------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------
1996 1996 1995 1994 1993 (a)
------------ -------- ------ ------ ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 15.16 $ 13.92 $13.49 $11.80 $11.74
------- ------- ------ ------ ------
Investment Activities
Net investment income ............................... 0.02 0.14 0.12 0.09 0.02
Net realized and unrealized gains from investments .. 0.05 1.40 0.43 1.67 0.04
------- ------- ------ ------ ------
Total from Investment Activities ................ 0.07 1.54 0.55 1.76 0.06
------- ------- ------ ------ ------
Distributions
From net investment income ......................... (0.08) (0.16) (0.08) (0.05) --
In excess of net investment income ................. -- (0.02) -- -- --
From net realized gains ............................ (0.15) (0.12) (0.04) (0.02) --
------- ------- ------ ------ ------
Total Distributions ............................. (0.23) (0.30) (0.12) (0.07) --
------- ------- ------ ------ ------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 15.00 $ 15.16 $13.92 $13.49 $11.80
======= ======= ====== ====== ======
Total Return (Excludes Sales Charge) .................. 0.49%(b) 11.20% 3.87% 15.18% 2.87%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $10,610 $10,789 $5,028 $2,395 $ 153
Ratio of expenses to average net assets ............. 1.09%(c) 1.22% 1.28% 1.26% 1.47%(c)
Ratio of net investment income to average net assets 0.21%(c) 0.79% 1.09% 1.15% 2.10%(c)
Ratio of expenses to average net assets* ............ 1.19%(c) 1.35% 1.38% 1.36% 2.35%(c)
Ratio of net investment income to average net assets* 0.11%(c) 0.66% 0.99% 1.05% 1.22%(c)
Portfolio turnover (d) .............................. 4.88% 6.28% 4.67% 7.74% 3.10%
Average commission rate paid (e) .................... $0.0047 $0.0022
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations on April 2, 1993.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 505
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX FUND
--------------------------------------------------------
CLASS B SHARES
-------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------
1996 1996 1995 1994 (a)
------------- ------- ------ --------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................................. $ 14.79 $ 13.73 $ 13.40 $ 13.00
-------- -------- ------- -------
Investment Activities
Net investment income ......................................... -- 0.03 0.03 0.06
Net realized and unrealized gains from investments ............ -- 1.32 0.41 0.34
-------- -------- ------- -------
Total from Investment Activities ............................ -- 1.35 0.44 0.40
-------- -------- ------- -------
Distributions
From net investment income ................................... (0.05) (0.15) (0.07) --
In excess of net investment income ........................... -- (0.02) -- --
From net realized gains ...................................... (0.15) (0.12) (0.04) --
-------- -------- ------- -------
Total Distributions ......................................... (0.20) (0.29) (0.11) --
-------- -------- ------- -------
NET ASSET VALUE,
END OF PERIOD.................................................... $ 14.59 $ 14.79 $ 13.73 $ 13.40
======== ======== ======= =======
Total Return (Excludes Sales Charge) .............................. 0.04%(b) 9.97% 3.17% 3.23%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .............................. $ 7,101 $ 5,856 $ 3,687 $ 1,872
Ratio of expenses to average net assets ........................ 1.84%(c) 1.97% 2.04% 2.00%(c)
Ratio of net investment income (loss) to average net assets .... (0.56)%(c) 0.04% 0.25% 1.37%(c)
Ratio of expenses to average net assets* ....................... 1.84%(c) 2.00% 2.04% 2.00%(c)
Ratio of net investment income (loss) to average net assets* ... (0.56)%(c) 0.01% 0.25% 1.37%(c)
Portfolio turnover (d) ......................................... 4.88% 6.28% 4.67% 7.74%
Average commission rate paid (e) ............................... $ 0.0047 $ 0.0022
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) The average commission represents the total dollar amount of commissions
paid on portfolio security transactions divided by total number of
portfolio shares purchased and sold for which commissions were charged.
</TABLE>
See notes to financial statements.
<PAGE> 506
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
INDEX FUND
------------------------
SERVICE SHARES (a)
------------------------
YEAR ENDED JUNE 30,
------------------------
1995 1994
------- -------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................................................... $ 13.44 $ 12.98
------- -------
Investment Activities
Net investment income ........................................................ 0.11 (0.25)
Net realized and unrealized gains from investments ........................... 0.50 0.71
------- -------
Total from Investment Activities ........................................... 0.61 0.46
------- -------
Distributions
Net investment income ....................................................... (0.07) --
Net realized gains .......................................................... (0.04) --
------- -------
Total Distributions ........................................................ (0.11) --
------- -------
NET ASSET VALUE,
END OF PERIOD ................................................................ $ 13.94 $ 13.44
======= =======
Total Return ................................................................... (a) 3.78%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............................................ $ -- $ 74
Ratio of expenses to average net assets ...................................... 1.90%(c) 1.85%(c)
Ratio of net investment income to average net assets ......................... 0.92%(c) 1.97%(c)
Ratio of expenses to average net assets* ..................................... 1.90%(c) 1.85%(c)
Ratio of net investment income to average net assets* ........................ 0.92%(c) 1.97%(c)
Portfolio turnover (d) ....................................................... 4.67% 7.74%
<FN>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designated as Retirement Shares. On April 4, 1995, the name of the
Retirement Shares was changed to Service Shares. As of June 1, 1995,
Service Shares transferred to Class A Shares, and as of June 30, 1995,
there were no shareholders in the Service Class. The return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 4.22%.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 507
<TABLE>
<CAPTION>
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
ULTRA SHORT-TERM INCOME FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- --------- --------------------------------------- -------
<S> <C> <C>
OTHER MORTGAGE BACKED SECURITIES (7.8%):
$1,000 Prudential Home Mortgage Securities,
Series 1992-45, Class A4,
6.50%, 1/25/00........................................ $ 997
1,842 Sears Mortgage Securities Corp. Services,
Series 1992-18, Class A3,
7.69%, 9/25/22........................................ 1,879
2,000 Structured Asset Securities Corp.,
Series 1996-C1, Class C
144A Security, 5.97%, 1/25/97......................... 1,995
1,300 Structured Asset Securities Corp.,
Series 1997-1, Class B2
Series 1997-1, 6.76%, 1/15/25......................... 1,310
--------
Total Other Mortgage Backed Securities 6,181
--------
YANKEE & EURODOLLAR (1.2%):
1,000 United Mexican States, 7.56%, 8/6/01, FRN 1,002
--------
Total Yankee & Eurodollar 1,002
--------
U.S. GOVERNMENT AGENCY MORTGAGES (92.3%):
Federal Home Loan Mortgage Corp.:
2,757 7.87%, 5/1/18, Pool #840160, 1 Year CMT
ARM (b)..................................................... 2,868
578 6.74%, 12/1/21, Pool #645083, 1 Year CMT
ARM......................................................... 581
3,588 9.00%, 9/1/25, Gold #C00387.................................. 3,792
5,729 6.45%, 6/1/26, Pool #785586, 1 Year CMT
ARM......................................................... 5,718
Federal National Mortgage Assoc.:
1,187 7.00%, 3/25/98, Series 1993-112 EA, CMO...................... 1,192
450 6.50%, 11/1/03, Pool #44174.................................. 451
1,248 6.63%, 3/1/17, Pool #47109, 1 Year CMT
ARM......................................................... 1,264
1,991 7.30%, 5/1/18, Pool #075505, 6 Month T-Bill
ARM......................................................... 2,034
604 6.74%, 6/1/18, Pool #70793, 6 Month T-Bill
ARM......................................................... 615
1,828 6.25%, 1/25/20, Series 1993-102G, CMO........................ 1,807
6,821 7.55%, 7/1/20, Pool #133558, 1 Year CMT
ARM (b)..................................................... 7,034
$3,501 7.31%, 12/1/20, Pool #116590, 1 Year CMT
ARM......................................................... $3,611
3,681 6.51%, 12/25/20, Series 1990-145, Class A,
CMO (b)..................................................... 3,684
1,964 7.31%, 4/1/21, Pool #70983, 1 Year CMT
ARM......................................................... 2,028
1,323 7.95%, 11/1/21, Pool #124510, 1 Year CMT
ARM......................................................... 1,378
474 8.00%, 11/1/22, Pool #193013, 1 Year CMT
ARM......................................................... 490
1,957 7.61%, 11/1/23, Pool #241828, 6 Month CD
ARM......................................................... 2,017
4,004 6.22%, 7/1/25, Pool #326092, 1 Year CMT
ARM......................................................... 4,041
3,727 5.73%, 11/1/26, Pool #363030, 1 Year CMT
ARM......................................................... 3,757
5,284 7.24%, 7/1/27, Pool #70179, 1 Year CMT
ARM......................................................... 5,443
5,622 7.63%, 1/1/31, Pool #124945, 1 Year CMT
ARM (b)..................................................... 5,850
Government National Mortgage Assoc.:
6,222 6.00%, 1/20/26, Pool #8790, 1 Year CMT
ARM.......................................................... 6,319
3,421 6.50%, 7/20/26, Pool #8927, 1 Year CMT
ARM.......................................................... 3,473
4,000 6.00%, 1/23/27, TBA, 1 Year CMT
ARM.......................................................... 4,003
--------
Total U.S. Government Agency Mortgages 73,450
--------
Total Investments, at value 80,633
--------
REPURCHASE AGREEMENTS (5.2%):
4,165 Lehman Brothers, Inc., 7.02%, 1/2/97,
(collaterized by $4,085 various U.S.
Government Securities 6.59%-8.57%,
5/16/05-10/26/09, market value-$4,250)..................... $4,165
--------
Total Repurchase Agreements 4,165
--------
TOTAL (COST-$84,711)(A) $84,798
=======
<FN>
- -------------------------
Percentages indicated are based on net assets of $79,602.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
(b) Serves as collateral for futures contracts.
Unrealized appreciation........................... $309
Unrealized depreciation........................... (222)
----
Net unrealized appreciation....................... $87
====
Continued
</TABLE>
<PAGE> 508
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
ULTRA SHORT-TERM INCOME FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
At December 31, 1996, the Portfolio's open futures contracts were as follows:
CURRENT
OPEN MARKET
# OF POSITIONS VALUE
CONTRACTS CONTRACT TYPES (000) (000)
- --------- -------------------------------------------- ---------- ---------
<S> <C> <C> <C>
LONG CONTRACTS
10 U.S. Treasury 10 Year Note, March 1997......... $1,111 $1,091
SHORT CONTRACTS
10 U.S. Treasury 5 Year Note, March 1997.......... 1,080 1,066
45 U.S. Treasury 2 Year Note, March 1997.......... 9,351 9,306
</TABLE>
ARM Adjustable Rate Mortgage
CD Certificate of Deposit Index
CMO Collateralized Mortgage Obligation
CMT Constant Maturity Treasury Index
FRN Floating Rate Note
See notes to financial statements.
<PAGE> 509
<TABLE>
<CAPTION>
===============================================================================
The One Group Family of Mutual Funds
LIMITED VOLATILITY BOND FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ---------------- --------------------------------------------------- ----------
<S> <C> <C>
ASSET BACKED SECURITIES (10.1%):
$ 2,353 CIT Group Securitization Corp.,
Series 1995-1, 7.70%, 8/15/20, Class A1................. $ 2,394
5,000 Countrywide Asset-Backed Certificate,
6.53%, 2/25/14.......................................... 4,982
1,042 Discover Card Trust, 1991-E Class A,
7.30%, 5/21/99.......................................... 1,042
4,463 EQCC Home Equity Loan Trust,
1996-3, Class A3, 6.20%, 7/15/05........................ 4,469
6,944 Fifth Third Auto Grantor Trust, 1996-A,
Class A, 6.20%, 9/15/01................................. 6,960
10,000 Ford Motor Credit Auto Loan,
Series 1995-1, Class A, 6.50%, 8/15/02.................. 10,037
508 Green Tree Home Improvement Loan
Trust, Series 1995-C, Class A, 6.20%, 7/15/20,.......... 509
7,000 National Premier Funding, 1995-6, 7.00%,
6/1/99.................................................. 7,042
3,899 Newcourt Receivables Trust,
6.24%, 12/20/04......................................... 3,879
33 Shawmut National Grantor Trust,
Series 1992-A, 5.55%, 11/15/97........................... 33
13,000 Standard Credit Card Master Trust,
Series 1995-2, 8.63%, 1/7/02............................. 13,046
2,927 UCFC Home Equity Loan, 1994 O1,
8.38%, 3/10/07........................................... 2,962
1,398 Union Federal Savings Bank Trust,
1994 A-A, 5.08%, 5/15/00................................. 1,383
1,216 Union Federal Savings Bank Trust,
Series 1993-A, 4.53%, 5/15/99............................ 1,199
2,354 Union Federal Savings Bank Trust,
Series 1993-C, 4.88%, 2/15/00............................ 2,330
------
Total Asset Backed Securities 62,267
------
CORPORATE BONDS (14.1%):
Bank, Insurance & Finance (11.1%):
3,000 Avco Financial Services, 7.25%, 7/15/99................... 3,071
2,000 BankAmerica Corp., 7.88%, 12/1/02......................... 2,115
7,000 Chrysler Financial Corp., 5.88%, 2/7/01................... 6,834
7,000 Ford Motor Credit, 8.38%, 1/15/00......................... 7,368
10,000 Greenwich Capital, Private Placement,
7.04%, 12/13/99.......................................... 9,999
10,000 International Lease Finance, 5.54%,
5/5/97.................................................. 10,001
4,500 Lehman Brothers Holdings, 8.88%, 11/1/98.................. 4,691
3,000 Lehman Brothers Inc., 7.00%, 5/15/97...................... 3,012
5,000 Lehman Brothers Inc., 7.63%, 8/1/98....................... 5,094
3,000 Lehman Brothers Inc., 10.00%, 5/15/99..................... 3,221
4,000 Lehman Brothers Inc., 9.88%, 10/15/00..................... 4,400
3,000 NationsBank, Corp., 8.13%, 6/15/02........................ 3,210
5,000 Smith Barney Holdings, 6.00%, 3/15/97..................... 5,005
------
68,021
------
CORPORATE BONDS, CONTINUED:
Industrial (2.5%):
$2,000 Columbia Pictures Entertainment, Inc., 9.88%, 2/1/98...... $2,065
5,000 General Motors Corp., 9.63%, 12/1/00...................... 5,525
1,000 IBM, 6.38%, 11/1/97....................................... 1,004
5,000 Sears Robuck Co., 6.69%, 8/13/01.......................... 5,006
2,000 Wal-Mart Stores, 5.50%, 3/1/98............................ 1,993
------
15,593
------
Utility (0.5%):
3,000 Potomac Electric Power, 9.00%, 4/15/00,
Callable 4/15/99 @100 3,154
------
Total Corporate Bonds 86,768
------
OTHER MORTGAGE BACKED SECURITIES (2.5%):
5,150 Evans Withycombe Finance Trust, 7.98%,
8/1/01................................................... 5,409
5,000 Nomura Mortgage Capital Corp.,
7.00%, 6/17/20........................................... 4,892
5,131 Prudential Home Mortgage Securities,
6.50%, 5/25/00........................................... 5,088
------
Total Other Mortgage Backed Securities 15,389
------
YANKEE & EURODOLLAR (0.8%):
5,000 Peoples Republic of China, 7.38%, 7/3/01.................. 5,094
------
Total Yankee & Eurodollar 5,094
------
U.S. GOVERNMENT AGENCY MORTGAGES (33.1%):
Federal Home Loan Mortgage Corp.:
4,766 6.00%, 4/1/00, Gold Pool #M80166.......................... 4,661
2,163 6.50%, 1/1/01, Pool #M8038................................ 2,146
422 9.00%, 12/1/05, Pool #G00005.............................. 441
436 9.00%, 1/1/06, Pool #G00012............................... 457
825 8.00%, 10/1/06, Pool #G00052.............................. 850
2,651 7.00%, 3/1/07, Pool #G34594............................... 2,652
2,338 7.00%, 4/1/07, Pool #G00087............................... 2,339
3,175 7.50%, 4/1/07, Pool #G00084............................... 3,223
3,851 7.50%, 11/1/07, Pool #E00165.............................. 3,910
5,867 8.50%, 2/1/08, Gold Pool #10133........................... 6,107
2,472 7.00%, 12/1/08, Pool #E20065.............................. 2,472
3,007 8.00%, 1/1/10, Pool #G00355............................... 3,096
8,798 8.00%, 2/1/10, Pool #G10328............................... 9,057
10,828 7.00%, 10/1/10, Gold Pool #E61709......................... 10,832
14,409 7.00%, 5/1/11, Pool #E20241............................... 14,414
10,000 5.25%, 9/15/15, REMIC/CMO,
Series 1638, Class BC................................... 9,849
13,209 8.25%, 12/15/16, REMIC/CMO,
Series 1770, Class PD................................... 13,690
3,514 7.25%, 4/15/18, REMIC/CMO,
Series 1254, Class F.................................... 3,514
4,964 6.68%, 10/1/26, Pool #785652.............................. 5,039
7,194 7.02%, 10/1/26, Pool #785674.............................. 7,338
</TABLE>
Continued
<PAGE> 510
<TABLE>
<CAPTION>
===============================================================================
The One Group Family of Mutual Funds
Limited Volatility Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ---------------- --------------------------------------------------- ----------
<S> <C> <C>
U.S. GOVERNMENT MORTGAGES, continued:
Federal National Mortgage Assoc.:
$15,806 6.50%, 4/1/00, Pool #E50720............................... $15,667
10,000 5.64%, 2/20/01, Callable 2/20/98 @100..................... 9,674
9,978 7.00%, 4/1/03, Pool #303865............................... 10,022
255 9.00%, 9/1/05, Pool #50340................................ 267
268 9.00%, 11/1/05, Pool #50361............................... 281
274 8.50%, 4/1/06, Pool #116875............................... 286
8,442 7.00%, 6/1/10, Pool #315928............................... 8,437
7,032 6.50%, 9/1/10, Pool #325479............................... 6,907
5,485 6.50%, 10/1/10, Pool #250377.............................. 5,387
3,536 7.00%, 11/1/10, Pool #250387.............................. 3,534
9,313 7.00%, 1/1/11, Pool #328959............................... 9,308
4,395 7.50%, 2/1/11, Pool #303755............................... 4,458
462 6.00%, 9/25/18, REMIC/CMO,
Series 1989-94, Class E................................. 460
4 8.00%, 2/15/02, Pool #192917.............................. 4
28 8.00%, 3/15/02, Pool #209172.............................. 28
5 9.00%, 6/15/02, Pool #229311.............................. 6
Government National Mortgage Assoc.:
85 9.00%, 10/15/02, Pool #229569............................. 89
21 8.00%, 6/15/05, Pool #28827............................... 22
13 9.00%, 9/15/05, Pool #292569.............................. 14
72 9.00%, 10/15/05, Pool #292589............................. 76
19 8.00%, 5/15/06, Pool #303851.............................. 20
8 8.00%, 7/15/06, Pool #307231.............................. 8
53 8.00%, 8/15/06, Pool #311166.............................. 55
52 8.00%, 9/15/06, Pool #311301.............................. 53
350 8.00%, 10/15/06, Pool #316915............................. 362
46 8.00%, 11/15/06, Pool #311131............................. 48
475 8.00%, 11/15/06, Pool #312210............................. 491
308 8.00%, 11/15/06, Pool #313528............................. 318
102 8.00%, 11/15/06, Pool #315078............................. 105
166 8.00%, 11/15/06, Pool #316671............................. 171
267 8.00 %, 12/15/06, Pool #311384............................ 275
178 8.00%, 1/15/07, Pool #317663.............................. 184
415 8.00%, 2/15/07, Pool #316086.............................. 428
79 8.00%, 3/15/07, Pool #178684.............................. 82
207 8.00%, 3/15/07, Pool #318825.............................. 214
202 8.00%, 4/15/07, Pool #316441.............................. 208
14,202 6.00%, 11/20/25, Pool #8746 ARM........................... 14,495
4,795 6.00%, 1/20/26, Pool #8790 ARM............................ 4,870
---------
Total U.S. Government Agency Mortgages 203,401
---------
U.S. GOVERNMENT AGENCY SECURITIES (17.5%):
Federal Farm Credit Bank:
1,735 5.31%, 5/26/98............................................ 1,724
Federal Home Loan Bank:
2,000 6.85%, 2/25/97............................................ 2,004
4,000 6.60%, 4/13/99............................................ 4,048
17,000 5.58%, 2/23/01............................................ 16,409
10,000 7.78%, 10/19/01........................................... 10,578
U.S. GOVERNMENT AGENCY SECURITIES, CONTINUED:
Federal Home Loan Bank continued:
Federal Home Loan Mortgage Corp.:
$20,000 7.13%, 7/21/99 (b)........................................ $20,515
Federal National Mortgage Assoc.:
3,000 8.20%, 3/10/98............................................ 3,082
2,000 5.30%, 3/11/98............................................ 1,985
3,600 6.90%, 3/27/98............................................ 3,648
4,000 5.35%, 4/1/98............................................. 3,971
4,000 5.18%, 2/1/99, Callable 2/1/98 @100....................... 3,930
4,000 6.29%, 10/20/99........................................... 3,981
22,000 5.72%, 3/8/01............................................. 21,527
10,000 6.16%, 3/29/01 (b)........................................ 9,936
Guaranteed Overseas Private Investment Corp.:
288 5.55%, 1/13/97............................................ 288
---------
Total U.S. Government Agency Securities 107,626
---------
U.S. TREASURY OBLIGATIONS (20.2%):
U.S. Treasury Notes:
3,000 6.50%, 5/15/97 (b)........................................ 3,013
3,500 8.63%, 8/15/97............................................ 3,566
3,000 7.38%, 11/15/97........................................... 3,044
9,000 6.00%, 11/30/97 (b)....................................... 9,022
2,500 7.88%, 1/15/98............................................ 2,556
3,000 5.13%, 3/31/98............................................ 2,980
1,500 5.13%, 4/30/98 (b)........................................ 1,489
11,000 5.13%, 6/30/98 (b)........................................ 10,907
3,000 4.75%, 9/30/98............................................ 2,948
5,000 8.88%, 11/15/98........................................... 5,263
1,000 7.00%, 4/15/99............................................ 1,023
5,000 7.75%, 1/31/00 (b)........................................ 5,234
3,500 8.50%, 2/15/00............................................ 3,738
1,000 8.88%, 5/15/00 (b)........................................ 1,084
7,000 6.25%, 5/31/00 (b)........................................ 7,033
2,500 6.13%, 9/30/00 (b)........................................ 2,500
5,000 6.63%, 6/30/01............................................ 5,082
U.S. Treasury Strips:
15,000 2/15/99 (b)............................................... 13,263
10,000 2/15/00................................................... 8,303
15,000 11/15/01 (b).............................................. 11,158
28,500 2/15/02 (b)............................................... 20,859
---------
Total U.S. Treasury Obligations 124,065
---------
Total Investments, at value 604,610
---------
REPURCHASE AGREEMENTS (0.8%):
4,840 Lehman Brothers Inc., 7.02%, 2/2/97,
(Collateralized by $4,920 Government
National Mortgage Corp., 6.48%-7.88%,
2/18/04-4/28/04, market value-
$4,938) 4,840
---------
Total Repurchase Agreements 4,840
---------
Total (Cost-$606,745)(a) $609,450
========
Continued
</TABLE>
<PAGE> 511
===============================================================================
The One Group Family of Mutual Funds
Limited Volatility Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
- --------------------------------------------
Percentages indicated are based on net assets of $615,255.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $150. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
Unrealized appreciation....................... $ 4,760
Unrealized depreciation....................... (2,205)
-------
Net unrealized appreciation................... $ 2,555
=======
(b) A portion of this security was loaned as of December 31, 1996.
ARM Adjustable Rate Mortgage
CMO Collateralized Mortgage Obligation
REMIC Real Estate Mortgage Investment Conduit
See notes to financial statements.
<PAGE> 512
<TABLE>
<CAPTION>
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERMEDIATE BOND FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
------- ----------------------------- -------
<S> <C> <C>
ASSET BACKED SECURITIES(7.5%):
$ 1,280 Advanta Mortgage Loan Trust,
Series 1994-4, Class A1, 8.55%, 11/25/12................. $ 1,309
3,866 Aircraft Lease Portfolio Securitization Ltd.,
Series 94-1, Class A2, 7.15%, 9/15/04.................... 3,903
5,000 Ford Motor Credit Auto Loan Master
Trust, Series 1995-1, Class A, 6.50%,
8/15/02 (c).............................................. 5,019
4,463 EQCC Home Equity Loan Trust,
Series 1996-3, Class A3, 6.20%, 7/15/05.................. 4,469
305 Green Tree Home Improvement Loan
Trust, Series 1995-C, Class A, 6.20%,
7/15/20.................................................. 306
2,017 UCFC Home Equity Loan, Series 1994-A,
Class A2, 5.53%, 5/10/09................................. 2,014
2,344 Union Acceptance Corp., Series 1995-D,
6.03%, 1/7/03............................................ 2,334
3,000 World Financial Network Credit Card,
Series 96-1, Class A, 6.70%, 2/15/04..................... 3,032
------
Total Asset Backed Securities 22,386
------
CORPORATE BONDS (17.5%):
Banking, Finance, & Insurance (9.8%):
3,000 Bankers Trust, 7.25%, 1/15/03............................. 3,068
3,000 First Hawaiian, Inc., 6.25%, 8/15/00...................... 2,966
3,000 Fleet/Norstar Group, 8.13%, 7/1/04 (b).................... 3,203
4,000 Goldman Sachs, 6.38%, 6/15/00............................. 3,980
5,000 Greenwich Capital, Private Placement,
7.04%, 12/13/99.......................................... 5,000
3,000 Lehman Brothers Holdings, 7.25%,
4/15/03.................................................. 3,023
1,000 Lehman Brothers, Inc., 9.88%, 10/15/00.................... 1,100
4,000 Liberty Mutual Insurance, 8.20%,
5/4/07 (b)............................................... 4,265
3,000 Metropolitan Life, 6.30%, 11/1/03......................... 2,906
------
29,511
------
Industrial (2.4%):
2,000 Dayton Hudson Co., 7.50%, 3/1/99.......................... 2,043
3,000 Excel Paralubes Funding, 7.13%, 11/1/11................... 3,019
2,000 General Motors, 7.63%, 2/15/97............................ 2,004
------
7,066
------
Real Estate (1.4%):
2,000 Colonial Realty Properties, 7.50%, 7/15/01................ 2,030
2,000 Meditrust, 7.60%, 7/15/01................................. 2,038
------
4,068
------
Yankee & Eurodollar (4.0%):
2,000 Hanson Overseas, 6.75%, 9/15/05........................... 1,963
3,000 Peoples Republic of China,
6.63%, 1/15/03(b)........................................ 2,944
3,000 Ras Laffan Gas, 7.63%, 9/15/06............................ 3,020
4,000 United Mexican States, FRN, 7.56%,
8/6/01................................................... 4,008
------
11,935
------
Total Corporate Bonds 52,580
------
OTHER MORTGAGE BACKED SECURITIES (5.3%):
$ 4,000 The Equitable Private Placement,
Series 174, Class A1, 7.24%, 5/15/06.................... $4,085
2,891 Independent National Mortgage Corp.,
Series 1995-S, Class A1, 7.10%, 1/15/26................. 2,912
3,000 Kidder Peabody Acceptance Corp.,
Series 1994-C2, Class A, 7.18%, 10/1/05................. 3,062
2,000 Merrill Lynch Mortgage, Series 1996-C2,
Class B, 6.96%, 11/21/28................................ 1,968
147 Morgan Stanley Mortgage Trust, Series Y,
Class 3, 8.95%, 3/1/16.................................. 149
3,893 Prudential Home Mortgage Securities,
Series 1993-17, Class A1, 6.50%, 5/25/00................ 3,861
------
Total Other Mortgage Backed Securities 16,037
------
U.S. GOVERNMENT AGENCY MORTGAGES (35.9%):
Federal Home Loan Mortgage Corp.:
1,000 7.00%, 6/15/06, Series #1457-PH, CMO..................... 992
1,105 7.50%, 8/1/08, Gold Pool #G10117......................... 1,122
2,362 8.50%, 1/1/10, Gold Pool #E00356......................... 2,458
264 7.00%, 8/1/10, Gold Pool #E20187......................... 264
4,162 7.00%, 9/1/10, Gold Pool #E00393 (c)..................... 4,163
3,888 7.50%, 7/1/11, Gold Pool #E20253......................... 3,948
6,000 6.50%, 12/1/11, Gold 15 Year TBA......................... 5,940
702 7.25%, 4/15/18, Series #1254-F, CMO...................... 703
3,000 6.00%, 4/15/20, Series #1534-F, CMO...................... 2,925
4,000 8.00%, 2/15/20, Gold Series #1770-PE,
CMO.................................................... 4,141
732 8.00%, 7/1/20, Gold Pool #A01047......................... 747
3,000 6.50%, 10/15/21, Series #1590-GA, CMO.................... 2,943
2,000 6.50%, 1/15/22, Series #1573-PI, CMO..................... 1,945
3,084 8.00%,11/1/24, Gold Pool #C00376......................... 3,145
4,471 7.50%, 8/1/25, Gold Pool #C00414 (c)..................... 4,478
3,907 7.00%, 4/1/26, Pool #C00452.............................. 3,835
3,977 7.50%, 4/1/26, Gold Pool #D70219......................... 3,983
4,205 6.98%, 7/1/26, Pool #785618.............................. 4,184
4,969 7.50%, 7/1/26, Gold Pool #D72734......................... 4,976
Federal National Mortgage Assoc.:
500 8.00%, 9/25/04, Series 1991-155G, CMO.................... 513
1,000 6.75%, 12/25/04, Series 1993-6C, CMO..................... 1,007
3,029 7.00%, 6/1/10, Pool #312903.............................. 3,027
2,793 6.50%, 12/1/10, Pool #322598............................. 2,743
2,427 8.00%, 5/1/24, Pool #250066.............................. 2,473
2,188 8.50%, 7/1/24, Pool #250103.............................. 2,267
2,990 7.50%, 10/1/24, Pool #303031............................. 2,990
340 7.50%, 5/1/25, Pool #293928.............................. 340
901 7.50%, 5/1/25, Pool #311810.............................. 901
1,284 8.50%, 5/1/25, Pool #308499.............................. 1,331
1,836 8.50%, 6/1/25, Pool #315277.............................. 1,903
3,751 7.00%, 7/1/25, Pool #290387.............................. 3,671
3,841 7.13%, 6/1/26, Pool #341503.............................. 3,920
Government National Mortgage Assoc.:
6 10.50%, 7/15/98, Pool #069629............................ 7
1 10.50%, 9/15/98, Pool #103573............................ 2
11 11.00%, 6/15/99, Pool #110948............................ 11
10 11.00%, 3/15/00, Pool #123750............................ 10
7 10.00%, 12/15/00, Pool #136214.......................... 8
65 10.00%, 1/15/01, Pool #145167........................... 69
</TABLE>
Continued
<PAGE> 513
<TABLE>
<CAPTION>
==================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERMEDIATE BOND FUND
- ----------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ---------------- --------------------------------------------------- ----------
<S> <C> <C>
U.S. GOVERNMENT AGENCY MORTGAGES, CONTINUED;
Government National Mortgage Assoc., continued:
$ 66 10.00%, 1/15/01, Pool #145328............................. $70
61 8.50%, 6/15/01, Pool #137056.............................. 64
7 8.50%, 6/15/01, Pool #162447.............................. 7
7 9.00%, 6/15/01, Pool #161443.............................. 7
2 9.00%, 6/15/01, Pool #164431.............................. 2
25 9.00%, 6/15/01, Pool #166985.............................. 27
15 9.00%, 7/15/01, Pool #155822.............................. 16
91 8.50%, 8/15/01, Pool #164207.............................. 95
61 9.00%, 8/15/01, Pool #173460.............................. 64
10 9.00%, 9/15/01, Pool #177121.............................. 11
6 9.00%, 10/15/01, Pool #177634............................. 6
103 9.00%, 10/15/01, Pool #179852............................. 109
10 9.00%, 10/15/01, Pool #185596............................. 10
4 8.50%, 11/15/01, Pool #183462............................. 4
14 9.00%, 11/15/01, Pool #174365............................. 14
110 9.00%, 11/15/01, Pool #191819............................. 116
100 8.50%, 12/15/01, Pool #199182............................. 105
15 9.00%, 1/15/02, Pool #205001.............................. 15
85 8.00%, 3/15/02, Pool #205933.............................. 88
70 8.00%, 3/15/02, Pool #210065.............................. 72
80 8.00%, 5/15/02, Pool #180296.............................. 83
47 8.00%, 5/15/02, Pool #203042.............................. 48
65 8.50%, 5/15/02, Pool #213776.............................. 68
51 9.00%, 8/15/02, Pool #232424.............................. 54
80 9.00%, 10/15/02, Pool #246307............................. 84
14 9.00%, 11/15/02, Pool #235553............................. 14
9 9.00%, 6/15/03, Pool #247863.............................. 9
68 8.50%, 10/15/04, Pool #277469............................. 70
106 9.00%, 10/15/04, Pool #281655............................. 111
127 8.50%, 11/15/04, Pool #253471............................. 133
119 9.00%, 5/15/05, Pool #288771.............................. 125
156 9.00%, 8/15/05, Pool #297031.............................. 164
16 9.00%, 10/15/05, Pool #292589............................. 17
91 9.00%, 11/15/05, Pool #292610............................. 95
57 9.00%, 11/15/05, Pool #299161............................. 60
76 9.00%, 12/15/05, Pool #299569............................. 80
113 8.50%, 4/15/06, Pool #307487.............................. 118
209 7.50%, 5/15/07, Pool #329528.............................. 213
106 8.00%, 5/15/09, Pool #385676.............................. 109
26 8.00%, 8/15/09, Pool #372143.............................. 27
682 8.00%, 10/15/09, Pool #380639............................. 705
2,990 8.00%, 7/15/22, Pool #426612.............................. 3,052
U.S. GOVERNMENT AGENCY MORTGAGES, CONTINUED:
Government National Mortgage Assoc., continued:
$1,856 7.00%, 8/15/23, Pool #352108.............................. $1,816
2,635 7.00%, 11/15/23, Pool #352022............................. 2,578
1,952 7.50%, 1/15/26, Pool #416874.............................. 1,953
1,981 7.50%, 3/15/26, Pool #422292.............................. 1,983
2,990 8.00%, 7/15/26, Pool #428509.............................. 3,052
5,964 7.50%, 11/20/26, G2 Pool #2322 (c)........................ 5,939
--------
Total U.S. Government Agency Mortgages 107,747
--------
U.S. TREASURY OBLIGATIONS (34.0%):
U.S.Treasury Bonds
3,000 10.75%, 5/15/03 (b)...................................... 3,695
3,000 8.75%, 5/15/17 (b)....................................... 3,662
8,000 8.13%, 8/15/19 (b)....................................... 9,255
8,000 6.25%, 8/15/23 (b)....................................... 7,508
U.S. Treasury Note
7,000 7.25%, 2/15/98 (b)....................................... 7,115
3,500 5.13%, 3/31/98 (b)....................................... 3,476
10,000 8.25%, 7/15/98 (b)....................................... 10,358
3,000 8.88%, 11/15/98.......................................... 3,158
8,000 5.00%, 1/31/99 (b)....................................... 7,864
4,000 7.50%, 10/31/99.......................................... 4,147
5,000 7.75%, 1/31/00 (b)....................................... 5,234
3,000 7.13%, 2/29/00........................................... 3,089
3,000 5.88%, 6/30/00 (b)....................................... 2,982
5,000 7.75%, 2/15/01........................................... 5,287
5,000 5.75%, 8/15/03 (b)....................................... 4,852
11,000 7.25%, 5/15/04 (b)....................................... 11,581
4,000 6.50%, 5/15/05 (b)....................................... 4,028
5,000 5.88%, 11/15/05 (b)...................................... 4,824
--------
Total U.S. Treasury Obligations 102,115
--------
Total Investments, at value 300,865
--------
REPURCHASE AGREEMENTS (0.9%):
2,743 Lehman Brothers, Inc., 7.02%, 1/2/97,
(collateralized by $2,625 Federal Home
Loan Mortgage Corp., 8.06%, 3/24/10,
market value-$2,799)................................... 2,743
--------
Total Repurchase Agreements 2,743
--------
Total (Cost-$302,377)(a) $303,608
========
<FN>
- -------------------------------------
Percentages indicated are based on net assets of $300,385.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation......................... $3,215
Unrealized depreciation......................... (1,984)
------
Net unrealized appreciation..................... $1,231
======
(b) A portion of this security was loaned as of December 31, 1996.
(c) Serves as collateral for futures contracts.
CMO Collateralized Mortgage Obligation
FRN Floating Rate Note
</TABLE>
Continued
<PAGE> 514
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERMEDIATE BOND FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
At December 31, 1996, the Portfolio's open futures contracts were as
follows:
<TABLE>
<CAPTION>
CURRENT
OPEN MARKET
# OF POSITIONS VALUE
CONTRACTS CONTRACT TYPE (000) (000)
- --------- --------------------------------------------- ---------- -----------
LONG CONTRACTS
<S> <C> <C> <C>
30 U.S. Treasury 2 Year Note, March 1997........ $6,234 $6,204
</TABLE>
See notes to financial statements.
<PAGE> 515
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
GOVERNMENT BOND FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31,1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
------ -------------------- -----
<S> <C> <C>
SUPRANATIONAL GOVERNMENT AGENCY (0.1%):
$ 400 International Bank for Reconstruction and
Development, Medium Term Note,
COLTS, 7.65%, 2/28/97 (c).............................. $ 401
----
Total Supranational Government Agency 401
-----
U.S. GOVERNMENT AGENCY MORTGAGES (86.2%):
Federal Home Loan Mortgage Corp.:
2,000 6.44%, 1/28/00........................................... 2,014
9,569 6.00%, 4/15/01, Gold Balloon,
Pool #G50347........................................... 9,459
4,500 7.13%, 11/18/02.......................................... 4,677
3,000 6.78%, 3/15/04........................................... 2,966
3,000 7.88%, 4/28/04........................................... 3,007
5,000 7.89%, 5/12/04........................................... 5,014
6,120 7.50%, 4/1/09, Gold Pool #E00315......................... 6,213
16,500 6.50%, 9/15/09, Series 1838 G, CMO....................... 15,952
5,212 8.50%, 1/1/10, Gold Pool #G10305......................... 5,425
4,640 6.50%, 1/1/11, Gold Pool #E00413......................... 4,561
9,567 6.50%, 4/1/11, Gold Pool #E00426......................... 9,402
4,788 6.50%, 4/1/11, Gold Pool #E20235......................... 4,705
365 9.00%, 10/1/17, Gold Pool #A00756........................ 386
258 9.00%, 4/1/18, Gold Pool #A01143......................... 272
2,811 7.25%, 4/15/18, Series 1254 F, CMO....................... 2,811
23 9.00%, 8/1/20, Gold Pool #D38661......................... 24
66 9.00%, 10/1/20, Gold Pool #A01134........................ 69
78 9.00%, 1/1/21, Gold Pool #A00948......................... 83
60 9.00%, 4/1/21, Gold Pool #D04193......................... 63
124 9.00%, 6/1/21, Gold Pool #A01017......................... 131
132 9.00%, 7/1/21, Gold Pool #A01093......................... 140
69 9.00%, 9/1/21, Gold Pool #D32271......................... 73
53 9.00%, 11/1/21, Gold Pool #C00078........................ 56
123 9.00%, 11/1/21, Gold Pool #D11191........................ 130
130 9.00%, 11/1/21, Gold Pool #D11866........................ 137
76 9.00%, 5/1/22, Gold Pool #D19142......................... 81
269 9.00%, 5/1/22, Gold Pool #D19203......................... 284
7,219 10.00%, 10/15/23, Series 1591 E, CMO..................... 7,966
17,851 5.00%, 11/15/23, Series 1686 PG, CMO..................... 16,677
5,348 8.50%, 5/1/24, Gold Pool #G00229......................... 5,546
4,850 8.50%, 7/1/24, Gold Pool #C00354......................... 5,029
8,095 7.50%, 9/1/24, Gold Pool #D56307......................... 8,108
7,710 8.00%, 11/1/24, Gold Pool #C00376........................ 7,864
3,001 7.50%, 5/1/25, Gold Pool #D59996......................... 3,005
5,714 7.50%, 6/1/25, Gold Pool #C80321......................... 5,723
7,824 8.00%, 6/1/25, Gold Pool #D60690......................... 7,981
4,720 7.00%, 8/1/25, Gold Pool #C00418......................... 4,633
4,464 7.50%, 8/1/25, Gold Pool #C80334......................... 4,471
4,471 7.50%, 8/1/25, Gold Pool #C00414......................... 4,478
4,695 7.00%, 9/1/25, Gold Pool #D63303......................... 4,608
4,279 8.00%, 9/1/25, Gold Pool #D63705......................... 4,364
9,220 7.50%, 10/1/25, Gold Pool #C80349........................ 9,235
9,620 6.50%, 2/1/26, Gold Pool #D68098......................... 9,202
9,805 6.50%, 3/1/26, Gold Pool #G00453......................... 9,379
12,791 7.00%, 4/1/26, Gold Pool #D69810 (c)..................... 12,555
11,921 7.00%, 4/1/26, Gold Pool #D69811 (c)..................... 11,702
U.S. GOVERNMENT AGENCY MORTGAGES, CONTINUED
Federal National Mortgage Assoc.:
$2,000 8.80%, 7/25/97........................................... $2,036
4,000 8.70%, 6/10/99........................................... 4,238
3,000 8.90%, 6/12/00 (b)....................................... 3,240
11,089 6.00%, 3/1/01, Pool #50783............................... 10,832
750 7.80%, 6/10/02........................................... 756
9,978 7.00%, 4/1/03, 7 Year Balloon............................ 10,022
1,628 7.50%, 5/1/03, Pool #347175.............................. 1,654
3,146 7.50%, 7/1/03, Pool #250656.............................. 3,195
3,000 6.20%, 11/12/03.......................................... 2,890
2,820 8.05%, 5/20/04........................................... 2,834
5,000 7.86%, 5/25/04, Callable 5/25/99 @100.................... 5,065
15,000 7.16%, 5/11/05........................................... 15,492
10,000 5.88%, 2/2/06 (b)........................................ 9,484
5,000 6.67%, 2/6/06, Callable 2/6/98 @100...................... 4,877
4,578 7.00%, 4/1/08, Pool #211750.............................. 4,575
8,000 6.00%, 6/25/09, Series 1994-86 PJ, CMO................... 7,481
4,252 7.00%, 7/1/10, Pool #250326.............................. 4,249
2,684 6.50%, 12/1/10, Pool #332301............................. 2,636
15,000 6.00%, 3/1/11, Pool #340683.............................. 14,433
10,000 6.25%, 2/25/13, Series 1993-2 PC, CMO.................... 9,963
3,596 6.35%, 8/25/13, Series 1993-225B VG,
CMO................................................... 3,488
4,497 7.50%, 6/1/14, Pool #250081............................. 4,497
3,613 7.50%, 7/1/14, Pool #250082............................. 3,613
161 10.00%, 10/1/16, Pool #70110............................ 177
9,016 10.00%, 9/1/17, Pool #303969............................ 9,887
546 10.00%, 10/1/19, Pool #231675........................... 598
10,000 7.00%, 5/25/20, Pool #1990-57........................... 9,921
311 10.00%, 7/1/20, Pool #050318............................ 341
5,584 6.50%, 5/25/21, Series 1992-205 K, CMO.................. 5,365
5,000 7.00%, 9/25/21, Series G92-64 K, CMO.................... 4,927
858 10.00%, 11/1/21, Pool #208372........................... 940
742 10.00%, 11/1/21, Pool #208374........................... 814
5,000 6.55%, 12/25/21, Pool #1993-137 PH, CMO................. 4,876
10,785 6.50%, 2/17/23, Series #G94-12 C, CMO................... 10,045
5,000 6.50%, 5/25/23, Series 1994-110 H, CMO.................. 4,815
9,094 6.35%, 12/25/23, Series 1994-43 PJ, CMO................. 8,543
5,042 7.00%, 1/25/24, Series 1994-62 PJ, CMO.................. 4,841
8,787 7.00%, 2/1/24, Pool #190257............................. 8,600
3,339 9.00%, 12/1/24, Pool #353898............................ 3,521
4,343 7.50%, 5/1/25, Pool #300064............................. 4,343
4,081 7.50%, 6/1/25, Pool #312684............................. 4,081
4,314 7.50%, 6/1/25. Pool #312899............................. 4,314
4,743 7.00%, 8/1/25, Pool #315500............................. 4,643
3,962 7.50%, 9/1/25, Pool #322899............................. 3,962
969 7.50%, 9/1/25, Pool #324749............................. 969
12,326 8.00%, 7/15/26, Pool #C80414............................ 12,573
Government National Mortgage Assoc.:
1 10.50%, 4/15/98, Pool #63591............................ 1
25 10.00%, 9/15/00, Pool #138814........................... 26
10 10.00%, 12/15/00, Pool #136214.......................... 11
6 10.00%, 1/15/01, Pool #145144........................... 7
57 8.50%, 6/15/01, Pool #166491............................ 59
5 8.50%, 7/15/01, Pool #161997............................ 5
</TABLE>
Continued
<PAGE> 516
<TABLE>
<CAPTION>
===============================================================================
The One Group Family of Mutual Funds
Government Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
------ -------------------- -----
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY MORTGAGES, CONTINUED:
Government National Mortgage Assoc., continued:
$ 92 9.00%, 9/15/01, Pool #166928............................. $97
8 9.00%, 9/15/01, Pool #174330............................. 8
66 9.50%, 9/15/01, Pool #180786............................. 70
93 8.50%, 11/15/01, Pool #179383............................ 97
22 9.50%, 11/15/01, Pool #182995............................ 24
68 8.50%, 12/15/01, Pool #199837............................ 71
109 9.00%, 12/15/01, Pool #187723............................ 115
85 8.00%, 3/15/02, Pool #205933............................. 88
231 9.00%, 5/15/03, Pool #154134............................. 243
164 9.00%, 6/15/05, Pool #283904............................. 173
87 9.00%, 8/15/05, Pool #291836............................. 91
58 9.00%, 9/15/05, Pool #292898............................. 61
32 9.00%, 9/15/05, Pool #295227............................. 34
78 8.00%, 7/15/06, Pool #11337.............................. 80
36 7.50%, 7/15/07, Pool #17316.............................. 36
87 8.00%, 8/15/07, Pool #18539.............................. 89
95 8.00%, 8/15/07, Pool #18677.............................. 97
350 7.50%, 12/15/07, Pool #338189............................ 357
70 9.00%, 11/15/08, Pool #27932............................. 73
103 9.00%, 4/15/09, Pool #30352.............................. 108
22 9.00%, 5/15/09, Pool #32214.............................. 23
10 9.50%, 7/15/09, Pool #34487.............................. 11
154 9.50%, 9/15/09, Pool #34878.............................. 166
45 9.50%, 10/15/09, Pool #36804............................. 49
32 11.00%, 11/15/09, Pool #37615............................ 36
1 12.00%, 4/15/15, Pool #125262............................ 2
13 11.00%, 6/15/15, Pool #130125............................ 14
86 9.00%, 5/15/16, Pool #149877............................. 90
119 9.00%, 6/15/16, Pool #166130............................. 126
116 9.00%, 7/15/16, Pool #158921............................. 123
13 9.50%, 7/15/16, Pool #166772............................. 14
76 9.50%, 8/15/16, Pool #177531............................. 82
165 9.00%, 9/15/16, Pool #179044............................. 173
23 9.50%, 1/15/17, Pool #185619............................. 25
349 9.00%, 2/15/17, Pool #195058............................. 368
264 9.00%, 6/15/17, Pool #219079............................. 278
29 9.00%, 8/15/17, Pool #225825............................. 30
80 9.50%, 8/15/17, Pool #218841............................. 87
43 9.50%, 8/15/17, Pool #224015............................. 47
119 9.00%, 6/15/18, Pool #238161............................. 125
86 9.50%, 8/15/18, Pool #248390............................. 93
27 9.00%, 10/15/18, Pool #253188............................ 29
4 9.00%, 10/15/19, Pool #267676............................ 4
66 9.00%, 11/15/19, Pool #162768............................ 70
166 9.50%, 12/15/18, Pool #263400............................ 179
75 9.00%, 1/15/20, Pool #283138............................. 79
77 9.00%, 2/15/20, Pool #276157............................. 81
125 9.00%, 3/15/20, Pool #285283............................. 132
76 9.50%, 9/15/20, Pool #292918............................. 83
99 9.50%, 12/15/20, Pool #291865............................ 106
246 9.00%, 6/15/21, Pool #307120............................. 259
17,877 9.00%, 8/15/21, Pool #306081............................. 18,838
5,223 9.00%, 12/15/21, Pool #780284............................ 5,523
39 7.50%, 2/15/22, Pool #324025............................. 40
U.S. GOVERNMENT AGENCY MORTGAGES, CONTINUED:
Government National Mortgage Assoc., continued:
$658 8.00%, 7/15/22, Pool #321560............................. $672
825 7.50%, 8/15/22, Pool #337141............................. 825
39 7.00%, 10/15/22, Pool #337175............................ 38
222 7.00%, 11/15/22, Pool #323008............................ 217
41 7.00%, 12/15/22, Pool #339969............................ 40
41 7.00%, 1/15/23, Pool #321675............................. 40
497 7.00%, 1/15/23, Pool #332022............................. 486
387 7.00%, 1/15/23, Pool #341536............................. 378
430 7.00%, 1/15/23, Pool #342248............................. 421
239 7.00%, 1/15/23, Pool #346214............................. 234
52 7.00%, 3/15/23, Pool #350110............................. 51
345 6.50%, 5/15/23, Pool #343208............................. 329
630 7.00%, 5/15/23, Pool #221604............................. 617
65 7.00%, 5/15/23, Pool #338005............................. 63
745 7.00%, 5/15/23, Pool #342348............................. 729
815 7.00%, 5/15/23, Pool #346572............................. 798
808 7.00%, 5/15/23, Pool #351041............................. 791
98 6.50%, 6/15/23, Pool #346624............................. 94
418 6.50%, 6/15/23, Pool #348677............................. 399
60 6.50%, 6/15/23, Pool #349788............................. 57
62 6.50%, 6/15/23, Pool #358250............................. 59
271 6.50%, 7/15/23, Pool #322200............................. 259
264 7.00%, 7/15/23, Pool #325977............................. 258
877 7.00%, 7/15/23, Pool #346673............................. 858
26 7.00%, 7/15/23, Pool #350709............................. 25
366 7.00%, 7/15/23, Pool #353569............................. 358
33 7.00%, 7/15/23, Pool #354538............................. 32
194 7.00%, 7/15/23, Pool #357782............................. 190
505 7.00%, 7/15/23, Pool #358382............................. 494
599 7.00%, 7/15/23, Pool #360697............................. 586
469 7.00%, 7/15/23, Pool #360889............................. 459
864 7.00%, 7/15/23, Pool #362982............................. 845
341 6.50%, 8/15/23, Pool #344505............................. 325
452 6.50%, 8/15/23, Pool #353137............................. 431
651 6.50%, 8/15/23, Pool #356717............................. 621
230 6.50%, 8/15/23, Pool #359027............................. 219
184 6.50%, 8/15/23, Pool #360713............................. 175
290 6.50%, 8/15/23, Pool #360738............................. 276
792 6.50%, 9/15/23, Pool #345375............................. 756
50 6.50%, 9/15/23, Pool #339041............................. 48
401 6.00%, 10/15/23, Pool #345389............................ 372
462 6.00%, 10/15/23, Pool #364717............................ 429
34 6.00%, 10/15/23, Pool #370006............................ 32
226 6.50%, 10/15/23, Pool #345391............................ 215
4,014 8.00%, 10/15/23, Pool #354681............................ 4,098
21 6.50%, 11/15/23, Pool #370927............................ 20
658 6.50%, 11/15/23, Pool #369356............................ 628
152 6.50%, 12/15/23, Pool #349944............................ 145
984 6.50%, 12/15/23, Pool #349265............................ 939
134 6.50%, 12/15/23, Pool #365740............................ 128
667 6.50%, 12/15/23, Pool #369830............................ 637
35 6.50%, 12/15/23, Pool #370289............................ 34
761 6.50%, 1/15/24, Pool #379127............................. 726
22,784 6.50%, 2/15/24, Pool #354747............................. 21,737
</TABLE>
Continued
<PAGE> 517
<TABLE>
<CAPTION>
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
GOVERNMENT BOND FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
------ -------------------- -----
<S> <C> <C>
U.S. GOVERNMENT AGENCY MORTGAGES, CONTINUED
Government National Mortgage Assoc., continued
$1,257 6.50%, 2/15/24, Pool #362341............................. $1,200
323 6.50%, 2/15/24, Pool #370338............................. 308
411 6.50%, 2/15/24, Pool #371999............................. 392
356 6.50%, 2/15/24, Pool #389200............................. 340
176 6.50%, 2/15/24, Pool #380818............................. 168
649 7.50%, 6/15/24, Pool #388747............................. 650
94 7.50%, 6/15/24, Pool #389827............................. 94
427 8.00%, 9/15/24, Pool #393908............................. 436
4,085 8.00%, 9/15/24, Pool #403212............................. 4,171
4,970 7.50%, 3/15/26, Pool #422308............................. 4,974
7,089 8.00% 5/15/26, Pool #416233.............................. 7,237
12,727 8.00%, 5/15/26, Pool #422690............................. 12,993
9,976 8.00%, 7/15/26, Pool #412644............................. 10,185
9,962 8.00%, 7/15/26, Pool #423877............................. 10,170
10,000 7.50%, 12/20/26, G2 Pool #2341........................... 9,959
15,000 8.00%, 12/20/26, G2 Pool #2344........................... 15,239
--------
Total U.S. Government Agency Mortgages 618,022
--------
U.S. GOVERNMENT AGENCY SECURITIES (7.1%):
Federal Farm Credit Bank:
5,000 6.88%, 5/1/00............................................ 5,097
2,000 7.95%, 4/1/02............................................ 2,008
Federal Home Loan Bank:
2,000 9.25%, 11/25/98.......................................... 2,117
2,000 9.30%, 1/25/99........................................... 2,125
3,000 8.60%, 6/25/99........................................... 3,174
5,000 6.27%, 1/14/04........................................... 4,829
U.S. GOVERNMENT AGENCY SECURITIES, CONTINUED:
Resolution Funding Corp.:
$25,000 Principal Strip, 10/15/17................................. $5,86
5,000 Principal Strip, 4/15/30.................................. 533
Tennessee Valley Authority:
25,000 6.24%, 7/15/45, Putable on 7/15/01 @ 100.................. 25,062
--------
Total U.S. Government Agency Securities 50,808
--------
U.S. TREASURY OBLIGATIONS (6.1%):
U.S. Treasury Bonds
10,000 7.50%, 11/15/16........................................... 10,836
15,000 8.13%, 8/15/19 (b)........................................ 17,353
5,000 6.00%, 2/15/26 (b)........................................ 4,554
U.S. Treasury Strips
5,000 8/15/02................................................... 3,548
50,000 2/15/25 (b)............................................... 7,647
--------
Total U.S. Treasury Obligations 43,938
--------
Total Investments, at value 713,169
--------
REPURCHASE AGREEMENTS (0.2%):
1,267 Lehman Brothers, Inc., 7.02%, 1/2/97,
(collateralized by $1,235 various U.S.
Government 1,267 Agencies, 7.35%-7.83%,
4/13/05-5/16/05, market value-$1,292) 1,267
--------
Total Repurchase Agreements 1,267
--------
Total (Cost-$710,095) (a) $714,436
========
<FN>
- --------------------------------
Percentages indicated are based on net assets of $716,946.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $51. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
Unrealized appreciation..................... $10,537
Unrealized depreciation..................... (6,247)
-------
Net unrealized appreciation................. $ 4,290
=======
(b) A portion of this security was loaned as of December 31, 1996.
(c) Serves as collateral for futures contracts.
CMO Collateralized Mortgage Obligation
COLTS Continuously Offered Long-Term Securities
At December 31, 1996, the portfolio's open futures contracts were as follows:
CURRENT
OPEN MARKET
# OF POSITIONS VALUE
CONTRACTS CONTRACT TYPE (000) (000)
- ----------- --------------------------------- ---------- ----------
<S> <C> <C> <C>
LONG CONTRACTS
100 U.S. Treasury 10 Year Note, March 1997... $11,073 $10,912
65 U.S. Treasury 7 Year Bond, March 1997.... 7,358 7,320
</TABLE>
See notes to financial statements.
<PAGE> 518
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INCOME BOND FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
------ -------------------- -----
<S> <C> <C>
ASSET BACKED SECURITIES (9.7%):
$7,500 Advanta Mortgage Loan Trust,
Series 1995-1, Class A5, 8.32%,
12/25/19................................................. $7,821
6,185 Aircraft Lease Portfolio Securitization
Ltd., Series 94-1, Class A2, 7.15%,
9/15/04.................................................. 6,244
5,000 Federal Express, Series A-1, 7.85%,
6/1/08................................................... 5,169
3,431 NAL 96, 7.10%, 3/15/01, Private
Placement, Class A, 144A................................. 3,421
7,606 Northwest Air, Series 2, Class A, 9.25%,
6/21/14.................................................. 8,650
4,754 Northwest Air Trust, Series B, 10.23%,
6/21/14.................................................. 5,498
2,631 Olympic Automobile Receivables Trust,
Series 1994-A, Class A, 5.65%, 1/15/01................... 2,627
5,100 Olympic Automobile Receivables Trust,
Series 1994-B, Class A2, 6.85%, 6/15/01.................. 5,154
8,950 Olympic Automobile Receivables Trust,
Series 1995-B A2, 7.35%, 10/15/01........................ 9,079
5,000 Residential Funding Corp., 96-H52, A4,
7.55%, 9/25/12........................................... 5,100
-------
Total Asset Backed Securities 58,763
-------
CORPORATE BONDS (48.0%):
Banking, Finance & Insurance (18.8%):
6,000 Associates Corp., 8.15%, 8/1/09........................... 6,570
5,000 Associates Corp., 8.34%, 11/25/99......................... 5,269
5,000 BankAmerica Corp., 9.50%, 4/1/01.......................... 5,525
8,500 Bank of America, 12/31/26, 8.07%.......................... 8,606
5,000 Bear Stearns Co., 9.13%, 4/15/98.......................... 5,187
5,000 Bear Stearns Co., 8.25%, 2/1/02........................... 5,337
2,000 Fleet/Norstar Group, 8.13%, 7/1/04(b)..................... 2,135
5,000 First Chicago Capital Trust, 7.95%,
12/1/26.................................................. 4,803
1,500 Ford Motor Credit Corp., 6.38%, 10/6/00................... 1,491
8,000 General Motors Acceptance Corp., 7.00%,
3/1/00................................................... 8,120
5,000 Lehman Brothers Holdings, 8.80%,
3/1/15.................................................. 5,650
10,000 Lehman Brothers Holdings, 8.88%,
3/1/02.................................................. 10,825
5,000 Lehman Brothers, Inc., 11.63%, 5/15/05.................... 6,338
6,000 Massachusetts Mutual Life, 7.50%,
3/1/24, 144A............................................ 5,955
3,500 MEPC Finance, Inc., 7.50%, 5/1/03......................... 3,588
5,000 Midland Bank PLC., 7.63%, 6/15/06......................... 5,175
6,000 Morgan Stanley Group, 6.13%, 10/1/03...................... 5,820
4,905 Oslo Seismic Service, 8.28%, 6/1/11,
144A..................................................... 5,031
2,000 Paine Webber Group, 8.06%,6/16/97......................... 2,020
5,000 Principal Mutual, 7.88%, 3/1/24........................... 4,962
CORPORATE BONDS, CONTINUED:
Banking, Finance & Insurance, continued:
$5,000 Security Pacific Corp., 11.00%, 3/1/01.................... $5,769
-------
114,176
-------
Industrial Goods (5.6%):
3,000 Boise Cascade Co., 9.45%, 11/01/09....................... 3,469
3,000 Comdisco, Inc., 6.05%, 10/31/97.......................... 3,003
5,000 Excel Paralubes Funding, 7.13%, 11/1/11.................. 5,031
2,000 Freeport McMoran, Copper & Gold, 7.50%, 11/15/06......... 1,965
5,000 General Motors Corp., 9.13%, 7/15/01..................... 5,475
5,000 Marriott International, Inc., 6.75%, 12/1/09............. 4,713
4,828 Newmont Gold Co., 8.91%, 1/5/09.......................... 5,208
5,000 Penske Truck Leasing, 8.25%, 11/1/99(b).................. 5,263
-------
34,127
-------
Real Estate (4.6%):
2,000 Avalon Properties, 7.38%, 9/15/02........................ 2,007
4,750 Meditrust, 7.77%, 8/16/02................................ 4,887
5,000 Security Capital Pacific Trust, 10/15/02, 6.95%.......... 5,018
5,000 Spieker Properties, 6.65%, 12/15/00...................... 4,888
8,000 Taubman Realty Group, 7.00%, 10/1/03..................... 7,850
3,000 Wellsford Residential Property, 7.25%, 8/15/00........... 3,049
-------
27,699
-------
Utilities (1.4%):
5,000 NRG Energy Corp., 7.63%, 2/1/06.......................... 4,800
3,474 Salton Sea Funding Corp., 6.69%, 5/30/00................. 3,504
-------
8,304
-------
Yankee & Eurodollar (17.6%):
5,000 Bangkok Bank Public Co. Ltd., 7.25%, 9/15/05, 144A....... 4,913
5,000 BCH Cayman Islands, 8.25%, 6/15/04....................... 5,319
5,000 Canadian National Railway, 7.00%, 3/15/04................ 4,994
5,000 Celulosa Arauco, 6.75%, 12/15/03.......................... 4,894
9,170 Centragas, 10.65%, 12/1/10,
Series 144A(b)........................................... 9,904
5,000 China International Trust & Investing, 9.00%, 10/15/06(b). 5,506
5,000 Financiera Energy, 9.38%, 6/15/06(b)...................... 5,281
5,000 Guangdong International, 6.75%, 11/15/03.................. 4,812
6,000 Honam Oil Refinery Co., 7.13%, 10/15/05, 144A............. 5,895
5,000 Kansalis-Osake Pankki, 9.75%, 12/15/98.................... 5,312
5,000 Macmillan Bloedel Ltd., 6.75%, 2/15/06.................... 4,781
5,000 Peoples Republic of China, 7.75%, 7/5/06.................. 5,150
</TABLE>
Continued
<PAGE> 519
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INCOME BOND FUND
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
------ -------------------- -----
<S> <C> <C>
CORPORATE BONDS, CONTINUED:
Yankee & Eurodollar, continued:
$6,000 Peoples Democratic Republic of Poland,
3.75%, 10/27/14......................................... $5,085
5,000 Pohang Iron & Steel Co., 7.38%, 5/15/05.................. 5,050
5,000 Province of Quebec, 6.50%, 1/17/06 (b)................... 4,831
4,250 Ras Laffan, 7.63%, 9/15/06, 144A......................... 4,278
5,000 Republic of Indonesia, 7.75%, 8/1/06..................... 5,054
5,000 Scotland International Finance, 8.80%,
1/27/04, 144A........................................... 5,481
5,000 United Mexican States, FRN, 7.56%,
8/6/01.................................................. 5,011
5,000 Tenaga Nasional Berhad, 7.88%, 6/15/04,
144A.................................................... 5,275
--------
106,826
--------
Total Corporate Bonds 291,132
--------
U.S.GOVERNMENT AGENCY MORTGAGES (16.6%):
Federal Home Loan Mortgage Corp.:
4,731 7.00%, 6/1/09, Pool #E00313............................... 4,733
4,632 7.00%, 2/1/11, Gold Pool #E62602.......................... 4,633
8,670 7.00%, 5/1/11, Gold Pool #E00434.......................... 8,672
9,526 7.50%, 5/1/11, Pool #E00438............................... 9,672
7,775 7.00%, 6/1/11, Gold Pool #E64220.......................... 7,777
1,282 7.50%, 6/1/24, Pool #C80161............................... 1,284
16,579 7.00%, 9/1/24, Pool #G00271............................... 16,273
7,494 7.50%, 10/1/24, Pool #C80245.............................. 7,505
9,978 7.00%, 4/1/03, Pool #303865............................... 10,022
16,330 8.00%, 12/1/09, Pool #250168.............................. 16,804
Federal National Mortgage Assoc.:
13,425 7.50%, 9/1/25, Pool #324179............................... 13,425
--------
Total U.S. Government Agency Mortgages 100,800
--------
U.S. GOVERNMENT AGENCY SECURITIES (4.7%):
Federal Home Loan Bank:
$ 10,000 7.10%, 3/16/98........................................... $10,155
Federal Home Loan Mortgage Corp.:
5,000 7.13%, 7/21/99 (b)....................................... 5,129
Resolution Funding Corp.:
18,000 Principal Strip, 4/15/02................................. 12,994
--------
Total U.S. Government Agency Securities 28,278
--------
U.S. TREASURY OBLIGATIONS (17.6%):
U.S. Treasury Bonds:
3,250 13.38%, 8/15/01........................................... 4,181
9,500 11.88%, 11/15/03 (b)...................................... 12,396
3,000 10.75%, 8/15/05........................................... 3,852
14,000 9.00%, 11/15/18........................................... 17,572
10,000 7.13%, 2/15/23 (b)........................................ 10,444
U.S. Treasury Notes:
20,000 5.50%, 11/15/98 (b)....................................... 19,872
16,000 6.25%, 8/31/00 (b)........................................ 16,065
10,300 6.63%, 6/30/01 (b)........................................ 10,469
8,000 5.75%, 8/15/03 (b)........................................ 7,764
4,000 7.50%, 2/15/05 (b)........................................ 4,277
--------
Total U.S. Treasury Obligations 106,892
--------
Total Investments, at value 585,865
--------
REPURCHASE AGREEMENTS (2.5%):
15,077 Lehman Brothers, Inc., 7.02%, 1/2/97,
(collateralized by $15,525 Federal
Home Loan Mortgage Corp.,
5.99%-6.48%, 11/26/03-2/18/04, market
value-$15,375)......................................... 15,077
--------
Total Repurchase Agreements 15,077
--------
Total (Cost-$581,509)(a) $600,942
========
<FN>
- -----------------------------------
Percentages indicated are based on net assets of $606,364.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation...................... $20,565
Unrealized depreciation...................... (1,132)
-------
Net unrealized appreciation.................. $19,433
=======
(b) A portion of this security was loaned as of December 31, 1996.
FRN Floating Rate Note
</TABLE>
See notes to financial statements.
<PAGE> 520
===============================================================================
The One Group Family of Mutual Funds
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands, except per share amounts)
ULTRA LIMITED
SHORT-TERM VOLATILITY INTERMEDIATE GOVERNMENT INCOME BOND
INCOME FUND BOND FUND BOND FUND BOND FUND FUND
----------- --------- --------- --------- ----
ASSETS:
<S> <C> <C> <C> <C> <C>
Investments, at value ...................... $ 80,633 $ 604,610 $ 300,865 $ 713,169 $ 585,865
Repurchase agreements, at cost ............. 4,165 4,840 2,743 1,267 15,077
--------- --------- --------- --------- ---------
Total (cost $84,711;
$606,745; $302,377; $710,095;
$581,509, respectively) ................. 84,798 609,450 303,608 714,436 600,942
Interest receivable ........................ 504 7,538 4,034 6,073 8,531
Receivable from brokers for investments
sold ..................................... 60 11 3 -- --
Receivable for capital shares
issued ................................... 362 2,973 1,410 2,765 2,278
Net variation margin on futures
contracts ................................ 13 -- -- -- --
Deferred organization costs ................ 5 -- -- 4 --
Prepaid expenses and other assets .......... 7 56 16 118 34
--------- --------- --------- --------- ---------
TOTAL ASSETS ............................... 85,749 620,028 309,071 723,396 611,785
--------- --------- --------- --------- ---------
LIABILITIES:
Cash overdrafts ............................ 321 1,368 907 2,088 1,702
Dividends payable .......................... 407 3,093 1,636 3,827 3,357
Payable to brokers for investments purchased 5,348 -- 5,940 -- --
Payable for capital shares redeemed ........ 5 14 7 7 1
Net variation margin on futures contracts .. -- -- 2 156 --
Accrued expenses and other payables:
Investment advisory fees ................ 14 157 84 251 206
Administration fees ..................... 8 87 42 73 85
12b-1 fees (Class A) .................... 1 4 4 8 3
12b-1 fees (Class B) .................... 1 4 6 9 6
Other ................................... 42 46 58 31 61
--------- --------- --------- --------- ---------
TOTAL LIABILITIES .......................... 6,147 4,773 8,686 6,450 5,421
--------- --------- --------- --------- ---------
NET ASSETS:
Capital .................................... 83,821 619,682 303,755 731,345 638,796
Undistributed(distributions in excess
of) net investment income ................ (297) (121) 94 (325) 396
Accumulated undistributed net realized
losses from investment and futures
transactions ............................. (4,048) (7,011) (4,665) (18,216) (52,261)
Net unrealized appreciation (depreciation)
from investments and futures ............. 126 2,705 1,201 4,142 19,433
--------- --------- --------- --------- ---------
NET ASSETS ................................. $ 79,602 $ 615,255 $ 300,385 $ 716,946 $ 606,364
========= ========= ========= ========= =========
Net Assets
Fiduciary ............................... $ 72,650 $ 589,229 $ 278,201 $ 668,024 $ 584,762
Class A ................................. 5,277 20,953 14,468 37,606 12,527
Class B ................................. 1,675 5,073 7,716 11,316 9,075
--------- --------- --------- --------- ---------
Total ................................ $ 79,602 $ 615,255 $ 300,385 $ 716,946 $ 606,364
========= ========= ========= ========= =========
Outstanding units of beneficial
interest (shares)
Fiduciary ............................... 7,384 56,206 27,923 68,828 61,799
Class A ................................. 537 2,001 1,448 3,873 1,325
Class B ................................. 171 480 775 1,166 951
--------- --------- --------- --------- ---------
Total ................................... 8,092 58,687 30,146 73,867 64,075
========= ========= ========= ========= =========
Net asset value
Fiduciary-offering and
redemption price per
share ................................ $ 9.84 $ 10.48 $ 9.96 $ 9.71 $ 9.46
========= ========= ========= ========= =========
Class A-redemption
price per share ...................... $ 9.83 $ 10.48 $ 9.99 $ 9.71 $ 9.45
========= ========= ========= ========= =========
Class A-maximum
sales charge ......................... 3.00% 3.00% 4.50% 4.50% 4.50%
========= ========= ========= ========= =========
Class A maximum
offering price
(100%/(100%-maxi
mum sales charge)
of net asset value
adjusted to nearest
cent) per share ...................... $ 10.13 $ 10.80 $ 10.46 $ 10.17 $ 9.90
========= ========= ========= ========= =========
Class B-offering price
per share (a) ........................ $ 9.79 $ 10.55 $ 9.96 $ 9.71 $ 9.54
========= ========= ========= ========= =========
<FN>
- ---------------------------------
(a) Redemption price per Class B share varies based on length of time shares
are held.
</TABLE>
See notes to financial statements.
<PAGE> 521
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
ULTRA LIMITED
SHORT-TERM VOLATILITY INTERMEDIATE GOVERNMENT INCOME BOND
INCOME FUND BOND FUND BOND FUND BOND FUND FUND
----------- ----------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income ....................... $ 2,319 $ 20,168 $ 9,982 $ 25,725 $ 21,209
Dividend income ....................... -- 32 -- 2 --
Income from securities lending ........ -- 90 67 61 59
-------- -------- ------- -------- --------
TOTAL INCOME .......................... 2,319 20,290 10,049 25,788 21,268
-------- -------- ------- -------- --------
EXPENSES:
Investment advisory fees .............. 201 1,876 855 1,647 1,732
Administration fees ................... 60 517 236 605 477
12b-1 fees (Class A) .................. 8 38 25 67 21
12b-1 fees (Class B) .................. 7 25 35 56 39
Custodian and accounting fees ......... 7 29 20 43 16
Legal and audit fees .................. 5 19 6 21 7
Organization costs .................... 2 -- -- 2 --
Trustees' fees and expenses ........... -- 3 1 4 2
Transfer agent fees ................... 10 19 12 25 12
Registration and filing fees .......... 8 29 13 43 15
Printing costs ........................ 5 28 8 23 10
Other ................................. -- 2 -- 2 2
-------- -------- ------- -------- --------
Total expenses before waivers ......... 313 2,585 1,211 2,538 2,333
Less waivers .......................... (188) (951) (423) (129) (587)
-------- -------- ------- -------- --------
NET EXPENSES .......................... 125 1,634 788 2,409 1,746
-------- -------- ------- -------- --------
Net Investment Income ................. 2,194 18,656 9,261 23,379 19,522
-------- -------- ------- -------- --------
REALIZED/UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS AND FUTURES:
Net realized gains (losses) from
investment and futures
transactions ....................... (276) (186) (297) 1,827 2,272
Net change in unrealized
appreciation (depreciation) from
investments and futures ............ 630 3,760 3,975 9,020 6,103
-------- -------- ------- -------- --------
Net realized/unrealized gains (losses)
from investments and futures ....... 354 3,574 3,678 10,847 8,375
-------- -------- ------- -------- --------
Change in net assets resulting from
operations ......................... $ 2,548 $ 22,230 $ 12,939 $ 34,226 $ 27,897
======== ======== ======== ======== ========
</TABLE>
See notes to financial statements.
<PAGE> 522
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS DECEMBER 31, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
ULTRA SHORT-TERM LIMITED VOLATILITY INTERMEDIATE
INCOME FUND BOND FUND BOND FUND
-------------------------- ------------------------- ------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1996 1996 1996 1996 1996 1996
------------- ---------- ----------- ----------- ------------ ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ............... $ 2,194 $ 3,180 $ 18,656 $ 28,018 $ 9,261 $ 14,817
Net realized gains (losses) from
investment and futures
transactions ...................... (276) (594) (186) 1,885 (297) 1,421
Net change in unrealized
appreciation (depreciation)
from investments and futures ...... 630 150 3,760 (6,631) 3,975 (5,722)
--------- --------- --------- --------- --------- ---------
Change in net assets resulting from
operations ............................ 2,548 2,736 22,230 23,272 12,939 10,516
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY
SHAREHOLDERS:
From net investment
income ............................. (2,012) (2,924) (17,909) (26,964) (8,620) (14,065)
Tax return of capital ............... -- (26) -- -- -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income .......... (129) (129) (618) (878) (443) (607)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment income ........... (37) (24) (129) (175) (198) (144)
--------- --------- --------- --------- --------- ---------
Change in net assets from
shareholder distributions ............. (2,178) (3,103) (18,656) (28,017) (9,261) (14,816)
--------- --------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued ......... 29,409 38,704 68,094 325,572 86,892 121,175
Proceeds from shares issued in
connection with acquisition ........ -- -- -- 123,673 -- --
Dividends reinvested ................ 272 1,028 2,111 8,797 925 3,437
Cost of shares redeemed ............. (12,838) (32,817) (89,706) (248,283) (41,705) (66,140)
--------- --------- --------- --------- --------- ---------
Change in net assets from share
transactions ......................... 16,843 6,915 (19,501) 209,759 46,112 58,472
--------- --------- --------- --------- --------- ---------
Change in net assets ................... 17,213 6,548 (15,927) 205,014 49,790 54,172
NET ASSETS:
Beginning of period ................. 62,389 55,841 631,182 426,168 250,595 196,423
--------- --------- --------- --------- --------- ---------
End of period ....................... $ 79,602 $ 62,389 $ 615,255 $ 631,182 $ 300,385 $ 250,595
========= ========= ========= ========= ========= =========
SHARE TRANSACTIONS:
Issued .............................. 2,994 3,934 6,505 31,112 8,792 12,114
Issued in connection with acquisition -- -- -- 11,747 -- --
Reinvested .......................... 27 105 203 834 94 343
Redeemed ............................ (1,305) (3,338) (8,583) (23,593) (4,204) (6,607)
--------- --------- --------- --------- --------- ---------
Change in shares ....................... 1,716 701 (1,875) 20,100 4,682 5,850
========= ========= ========= ========= ========= =========
Undistributed (distributions in excess
of) net investment income included
in net assets:
End of period ......................... $ (297) $ (313) $ (121) $ (121) $ 94 $ 94
========= ========= ========= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE> 523
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS DECEMBER 31, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
GOVERNMENT INCOME
BOND FUND BOND FUND
---------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1996 1996 1996 1996
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income .......................... $ 23,379 $ 31,623 $ 19,522 $ 34,329
Net realized gains (losses) from investment and
futures tranctions ............................ 1,827 (2,769) 2,272 (1,361)
Net change in unrealized appreciation
(depreciation) from investments and futures ... 9,020 (15,409) 6,103 (11,155)
--------- --------- --------- ---------
Change in net assets resulting from operations .... 34,226 13,445 27,897 21,813
--------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income ..................... (21,886) (30,195) (18,911) (33,573)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ..................... (1,188) (1,103) (384) (545)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ..................... (305) (324) (227) (211)
--------- --------- --------- ---------
Change in net assets from shareholder distributions (23,379) (31,622) (19,522) (34,329)
--------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued .................... 102,592 451,887 120,217 166,169
Proceeds from shares issued in connection with
acquisition ................................... -- 301,865 -- --
Dividends reinvested ........................... 2,415 8,081 3,351 13,106
Cost of shares redeemed ........................ (125,816) (407,217) (62,055) (113,090)
--------- --------- --------- ---------
Change in net assets from share transactions ...... (20,809) 354,616 61,513 66,185
--------- --------- --------- ---------
Change in net assets .............................. (9,962) 336,439 69,888 53,669
NET ASSETS:
Beginning of period ............................ 726,908 390,469 536,476 482,807
--------- --------- --------- ---------
End of period .................................. $ 716,946 $ 726,908 $ 606,364 $ 536,476
========= ========= ========= =========
SHARE TRANSACTIONS:
Issued ......................................... 10,644 45,897 12,792 17,425
Issued in connection with acquisition .......... -- 30,887 -- --
Reinvested ..................................... 251 821 359 1,371
Redeemed ....................................... (13,054) (41,383) (6,599) (11,865)
--------- --------- --------- ---------
Change in shares .................................. (2,159) 36,222 6,552 6,931
========= ========= ========= =========
Undistributed (distributions in excess of)
net investment income included in net
assets:
End of period ................................. $ (325) $ (325) $ 396 $ 396
========= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE> 524
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(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 thirty active funds. The accompanying financial
statements and financial highlights are those of the Ultra Short-Term
Income Fund (previously named the Government ARM Fund), the Limited
Volatility Bond Fund, the Intermediate Bond Fund, the Government Bond Fund
and the Income Bond Fund (individually a "Fund", collectively the "Funds")
only. The Funds are each offered in Fiduciary Class, Class A and Class B
Shares. Class A Shares are subject to initial sales charges, imposed at the
time of purchase, in accordance with the Funds' prospectuses. Certain
redemptions of Class B Shares are subject to contingent deferred sales
charges in accordance with the Funds' prospectuses. Each Fund is a
diversified mutual fund.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with the Paragon Portfolio ("Paragon"), a Massachusetts
business trust. Pursuant to the Agreement all of the assets and liabilities
of each Paragon Fund transferred to a fund of The One Group in exchange for
shares of the corresponding fund of The One Group. The statements of
changes in net assets and financial highlights for periods prior to the
reorganization, March 25, 1996, are presented for funds of The One Group
only.
The Funds' investment objectives are as follows:
FUND OBJECTIVE
---- ---------
Ultra Short-Term Income Fund A high level of current income
consistent with low volatility of
principal by investing in a
diversified portfolio of short-term
investment grade securities.
Limited Volatility Bond Fund Current income consistent with the
preservation of capital through
investment in high and medium-grade
fixed-income securities.
Intermediate Bond Fund Current income consistent with the
preservation of capital through
investments in high and medium-grade
fixed-income securities with
intermediate maturities.
Government Bond Fund A high level of current income with
liquidity and safety of principal.
Income Bond Fund Current income by investing in a
portfolio of high and medium-grade
fixed-income securities.
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. 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.
SECURITY VALUATION
Corporate debt securities and debt securities of U.S. issuers (other than
short-term investments maturing in 60 days or less), including municipal
securities, are valued on the basis of valuations provided by dealers or by
an independent pricing service approved by the Board of Trustees.
Short-term investments maturing in
Continued
<PAGE> 525
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
60 days or less are valued at amortized cost, which approximates market
value. Futures contracts are valued at the settlement price established
each day by the board of trade or an exchange on which they are traded.
Options traded on an exchange are valued using the last sale price or, in
the absence of a sale, the last offering price. Options traded
over-the-counter are valued using dealer-supplied valuations. Investments
for which there are no such quotations or valuations are valued at fair
value as determined in good faith by the Adviser under the direction of the
Board of Trustees.
REPURCHASE AGREEMENTS
The Funds may invest in repurchase agreements with institutions that the
Adviser has determined are creditworthy. Each repurchase agreement is
recorded at cost. The Fund requires that the securities purchased in a
repurchase agreement 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. Repurchase
agreements are considered to be loans by a fund in the 1940 Act.
WRITTEN OPTIONS
The Funds may write covered call or put options for which premiums received
are recorded as liabilities and are subsequently adjusted to the current
value of the options written. Premiums received from writing options which
expire are treated as realized gains. Premiums received from writing
options, which are either exercised or closed, are offset against the
proceeds received or amount paid on the transaction to determine realized
gains or losses.
FUTURES CONTRACTS
The Funds may enter into futures contracts for the delayed delivery of
securities at a fixed price at some future date or for the change in the
value of a specified financial index over a predetermined time period. Cash
or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received by the fund based on the daily change
in the market value of the position are recorded as unrealized appreciation
or depreciation until the contract is closed out, at which time the
appreciation or depreciation is realized.
INDEXED SECURITIES
The Funds may invest in indexed securities whose value is linked either
directly or inversely to changes in foreign currencies, interest rates,
commodities, indices or other reference instruments. Indexed securities may
be more volatile than the referenced instrument itself, but any loss is
limited to the amount of the original investment.
MORTGAGE ROLLS
The Funds may enter into mortgage "dollar rolls" in which the Fund sells
mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar securities on
a specified future date. During the roll period, the Fund forgoes principal
and interest paid on the mortgage-backed securities. The Fund is
compensated by fee income or the difference between the current sales price
and the lower forward price for the future purchase.
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
Continued
<PAGE> 526
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
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 collateral at 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
creditworthy under guidelines established by the Board of Trustees and
when, in the judgement 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, 1996, the following Funds had securities with the following
market values on loan (amounts in thousands):
<TABLE>
<CAPTION>
Market Value
of Loaned
Securities
-------------
<S> <C>
Limited Volatility Bond Fund......................... $90,857
Intermediate Bond Fund............................... 81,410
Government Bond Fund................................. 44,646
Income Bond Fund..................................... 79,591
</TABLE>
The loaned securities were fully collateralized by cash and U.S. Government
securities as of December 31, 1996.
SECURITY TRANSACTIONS AND RELATED INCOME
Security transactions are accounted for on a trade date basis. Net realized
gains or losses from sales of securities are determined on the specific
identification cost method. Interest income and expenses are recognized on
the accrual basis. Dividends are recorded on the ex-dividend date. Interest
income, including any discount or premium, is accrued as earned using the
effective interest method.
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. Each class of shares bears
its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class,
such as distribution fees.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid monthly for the
Funds. Net realized capital gains, if any, are distributed at least
annually. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
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 mortgage-backed securities, expiring
capital loss carryforwards, and deferrals of certain losses. Permanent book
and tax basis differences have been reclassified among the components of
net assets.
Continued
<PAGE> 527
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
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 of the Trust, have been allocated among
the respective funds 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
The Trust treats each Fund as a separate entity for Federal income tax
purposes. 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.
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 forty series and four classes:
Fiduciary, Class A, Class B and Service. As of December 31, 1996, no
shareholders were in the Service Class. 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. The
following is a summary of transactions in Fund shares for the periods ended
December 31, 1996 and June 30, 1996:
Continued
<PAGE> 528
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
ULTRA SHORT-TERM LIMITED VOLATILITY INTERMEDIATE
INCOME FUND BOND FUND BOND FUND
-------------------------- ------------------------- ------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1996 1996 1996 1996 1996 1996
------------- ---------- ----------- ----------- ------------ ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued .... $ 26,568 $ 35,008 $ 64,730 $ 196,323 $ 82,275 $ 102,645
Proceeds from shares issued
in connection with acquisition -- -- -- 115,134 -- --
Dividends reinvested ........... 139 923 1,543 8,093 472 2,976
Cost of shares redeemed ........ (11,677) (29,367) (85,375) (129,046) (38,775) (62,091)
--------- --------- --------- --------- --------- ---------
Change in net assets from
Fiduciary Share transactions .. $ 15,030 $ 6,564 $ (19,102) $ 190,504 $ 43,972 $ 43,530
========= ========= ========= ========= ========= =========
CLASS A SHARES:
Proceeds from shares issued ... $ 2,286 $ 2,666 $ 2,856 $ 126,619 $ 2,556 $ 12,374
Proceeds from shares issued
in connection with
acquisition .................. -- -- -- 8,153 -- --
Dividends reinvested .......... 109 89 455 569 314 381
Cost of shares redeemed ....... (1,110) (3,395) (3,830) (118,533) (2,282) (3,716)
--------- --------- --------- --------- --------- ----------
Change in net assets from
Class A Share transactions..... $ 1,285 $ (640) $ (519) $ 16,808 $ 588 $ 9,039
========= ========= ========= ========= ========= =========
CLASS B SHARES:
Proceeds from shares issued ... $ 555 $ 1,030 $ 508 $ 2,630 $ 2,061 $ 6,156
Proceeds from shares issued
in connection with
acquisition .................. -- -- -- 386 -- --
Dividends reinvested .......... 24 16 113 135 139 80
Cost of shares redeemed ....... (51) (55) (501) (704) (648) (333)
--------- --------- --------- --------- --------- ----------
Change in net assets from
Class B Share transactions ... $ 528 $ 991 $ 120 $ 2,447 $ 1,552 $ 5,903
========= ========= ========= ========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued ........................ 2,704 3,560 6,184 19,600 8,327 10,266
Issued in connection with
acquisition ................ -- -- -- 10,936 -- --
Reinvested .................... 14 94 148 768 48 296
Redeemed ...................... (1,187) (2,989) (8,169) (12,260) (3,909) (6,200)
--------- --------- --------- --------- --------- ----------
Change in Fiduciary Shares .... 1,531 665 (1,837) 19,044 4,466 4,362
========= ========= ========= ========= ========= =========
CLASS A SHARES:
Issued ........................ 233 269 273 11,297 257 1,231
Issued in connection with
acquisition ................ -- -- -- 775 -- --
Reinvested .................... 11 10 44 54 32 39
Redeemed ...................... (113) (344) (366) (11,265) (230) (373)
--------- --------- --------- --------- --------- ----------
Change in Class A Shares ...... 131 (65) (49) 861 59 897
========= ========= ========= ========= ========= =========
CLASS B SHARES:
Issued ........................ 57 105 48 215 208 617
Issued in connection with
acquisition ................ -- -- -- 36 -- --
Reinvested .................... 2 1 11 12 14 8
Redeemed ...................... (5) (5) (48) (68) (65) (34)
--------- --------- --------- --------- --------- ----------
Change in Class B Shares ...... 54 101 11 195 157 591
========= ========= ========= ========= ========= =========
</TABLE>
Continued
<PAGE> 529
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
GOVERNMENT BOND FUND INCOME BOND FUND
----------------------- ------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1996 1995 1996 1995
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued .............................. $ 96,347 $ 135,419 $ 113,518 $ 154,901
Proceeds from shares issued in connection with acquisition -- 273,384 -- --
Dividends reinvested ..................................... 1,370 7,234 2,907 12,601
Cost of shares redeemed .................................. (117,108) (128,141) (59,996) (109,230)
--------- --------- --------- ---------
Change in net assets from Fiduciary Share transactions ... $ (19,391) $ 287,896 $ 56,429 $ 58,272
========= ========= ========= =========
CLASS A SHARES:
Proceeds from shares issued .............................. $ 4,969 $ 307,157 $ 3,500 $ 6,470
Proceeds from shares issued in connection with acquisition -- 26,507 -- --
Dividends reinvested ..................................... 813 647 298 391
Cost of shares redeemed .................................. (7,566) (278,122) (1,566) (3,302)
--------- --------- --------- ---------
Change in net assets from Class A Share transactions ..... $ (1,784) $ 56,189 $ 2,232 $ 3,559
========= ========= ========= =========
CLASS B SHARES:
Proceeds from shares issued .............................. $ 1,276 $ 9,312 $ 3,199 $ 4,798
Proceeds from shares issued in connection with acquisition -- 1,973 -- --
Dividends reinvested ..................................... 232 200 146 114
Cost of shares redeemed .................................. (1,142) (954) (493) (558)
--------- --------- --------- ---------
Change in net assets from Class B Share transactions ..... $ 366 $ 10,531 $ 2,852 $ 4,354
========= ========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued ................................................... 9,995 16,246 12,081 16,245
Issued in connection with acquisition .................... -- 27,974 -- --
Reinvested ............................................... 143 735 312 1,318
Redeemed ................................................. (12,152) (12,833) (6,380) (11,460)
--------- --------- --------- ---------
Change in Fiduciary Shares ............................... (2,014) 32,122 6,013 6,103
========= ========= ========= =========
CLASS A SHARES:
Issued ................................................... 517 28,902 373 680
Issued in connection with acquisition .................... -- 2,711 -- --
Reinvested ............................................... 84 66 32 41
Redeemed ................................................. (784) (28,451) (167) (347)
--------- --------- --------- ---------
Change in Class A Shares ................................. (183) 3,228 238 374
========= ========= ========= =========
CLASS B SHARES:
Issued ................................................... 132 749 338 500
Issued in connection with acquisition .................... -- 202 -- --
Reinvested ............................................... 24 20 15 12
Redeemed ................................................. (118) (99) (52) (58)
--------- --------- --------- ---------
Change in Class B Shares ................................. 38 872 301 454
========= ========= ========= =========
</TABLE>
Continued
<PAGE> 530
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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 the following percentages of the Funds' average net assets: 0.60% of the
Income Bond Fund, the Intermediate Bond Fund and the Limited Volatility
Bond Fund; 0.55% of the Ultra Short-Term Income Fund; and 0.45% of the
Government Bond Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services
for a fee that is computed daily and paid monthly, at an annual rate of
0.20% on the first $1.5 billion of Trust net assets (excluding the Investor
Growth Fund, the Investor Growth & Income Fund, the Investor Conservative
Growth Fund and the Investor Balanced Fund (the "Investor Funds") and the
Treasury Only Money Market Fund and the Government Money Market Fund-the
"Institutional Money Market Funds"); 0.18% on the next $0.5 billion of
Trust net assets (excluding the Investor Funds and the Institutional Money
Market Funds); and 0.16% of Trust net assets (excluding the Investor Funds
and the Institutional Money Market Funds) over $2 billion. 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 Advisor receives a fee paid by the Administrator. Prior to March
25, 1996, Goldman Sachs Asset Management served as administrator of
Paragon. The terms of the current administration agreement are
substantially the same as the former administration agreement.
The Trust and The One Group Services Company (the "Distributor") are
parties to a distribution agreement under which shares of the Funds are
sold on a continuous basis. Class A and Class B Shares are subject to
distribution and shareholder services plans (the "Plans") pursuant to Rule
12b-1 under the 1940 Act. As provided in the Plans, the Trust will pay the
Distributor a fee of 0.35% of the average daily net assets of Class A
Shares of each of the Funds and 1.00% of the average daily net assets of
the Class B Shares of each of the Funds. Currently, the Distributor has
voluntarily agreed to limit payments under the Plans to 0.25% of average
daily net assets of the Class A Shares of each Fund, 0.75% of average daily
net assets of the Class B Shares of Ultra Short-Term Income Fund and
Limited Volatility Bond Fund and 0.90% of average daily net assets of
Intermediate Bond Fund, Government Bond Fund and Income Bond Fund. Up to
0.25% of the fees payable under the Plans may be used as compensation for
shareholder services by the Distributor and/or financial institutions and
intermediaries. Fees paid under the Plans may be applied by the Distributor
toward (i) compensation for its services in connection with distribution
assistance or provision of shareholder services; or (ii) payments to
financial institutions and intermediaries such as banks (including
affiliates of the Adviser), brokers, dealers and other institutions,
including the Distributor's affiliates and subsidiaries as compensation for
services or reimbursement of expenses incurred in connection with
distribution assistance or provision of shareholder services. Fiduciary
Class Shares of each Fund are offered without distribution fees. For the
period ended December 31, 1996, the Distributor received $279,753 from
commissions earned on sales of Class A Shares and redemptions of Class B
Shares, of which the Distributor re-allowed $189,433 to affiliated
broker-dealers of the Funds.
Prior to January 2, 1996, Premier Investment Advisors, L.L.C. ("Premier")
served as investment adviser and Goldman Sachs & Company served as
distributor to Paragon. Pursuant to the approval of the Board of Trustees
of Paragon on October 31, 1995 and its shareholders on December 20, 1995,
Paragon entered into an investment advisory agreement with the Adviser and
a distribution agreement with the Distributor effective January 2, 1996.
The terms of the investment advisory agreements with Premier and with the
Adviser and the distribution agreements with Goldman Sachs & Company and
the Distributor were substantially the same.
Continued
<PAGE> 531
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
The Adviser, the Administrator and the Distributor voluntarily agreed to
waive a portion of their fees. For the period ended December 31, 1996, fees
in the following amounts were waived (amounts in thousands):
<TABLE>
<CAPTION>
INVESTMENT 12B-1 FEES WAIVED
ADVISORY FEES ADMINISTRATION -----------------
WAIVED FEES WAIVED CLASS A CLASS B
------ ----------- ------- -------
<S> <C> <C> <C> <C>
Ultra Short-Term Income Fund ...... $139 $ 46 $ 2 $ 1
Limited Volatility Bond Fund ...... 937 -- 11 3
Intermediate Bond Fund ............ 412 -- 7 4
Government Bond Fund .............. 49 55 19 6
Income Bond Fund .................. 577 -- 6 4
</TABLE>
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities and purchased options) during the period
ended December 31, 1996 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES OTHER SECURITIES
------------------ -------------------
PURCHASES SALES PURCHASES SALES
--------- ----- --------- -----
<S> <C> <C> <C> <C>
Ultra Short-Term Income Bond Fund $ 33,003 $ 13,531 $ 7,270 $ 108
Limited Volatility Bond Fund .... 83,226 130,615 39,704 18,469
Intermediate Bond Fund .......... 96,076 57,608 33,093 13,900
Government Bond Fund ............ 159,212 169,811 -- --
Income Bond Fund ................ 97,956 53,571 84,315 66,940
</TABLE>
6. FINANCIAL INSTRUMENTS:
Investing in financial instruments such as written options, futures,
structured notes and indexed securities involves risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the Funds have in
the particular class of instrument. Risks associated with these instruments
include an imperfect correlation between the movements in the price of the
instruments and the price of the underlying securities and interest rates,
an illiquid secondary market for the instruments or inability of
counterparties to perform under the terms of the contract. The Funds enter
into these contracts primarily as a means to hedge against adverse
fluctuations in securities.
7. REORGANIZATIONS:
The Trust entered an Agreement and Plan of Reorganization
("Reorganization") with Paragon pursuant to which all of the assets and
liabilities of each Paragon Fund transferred to a fund of The One Group in
exchange for shares of the corresponding fund of The One Group. The Paragon
Short-Term Government Fund and the Paragon Intermediate-Term Bond Fund
transferred their assets and liabilities to the Limited Volatility Bond
Fund and the Government Bond Fund, respectively.
Continued
<PAGE> 532
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
The Reorganization, which qualified as a tax-free exchange for Federal
income tax purposes, was completed on March 25, 1996 following approval by
shareholders of Paragon at a special shareholder meeting. The following is
a summary of shares outstanding, net assets, net asset value per share and
unrealized appreciation immediately before and after the Reorganization
(amounts in thousands except net asset value):
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
-------------------------- -----------------
PARAGON
SHORT-TERM LIMITED LIMITED
GOVERNMENT VOLATILITY VOLATILITY BOND
FUND BOND FUND FUND
---------- ---------- ---------------
<S> <C> <C> <C>
Shares ............................... 12,208 39,898 51,646
Net Assets ........................... $ 123,673 $ 420,044 $543,717
Net Asset Value:
Fiduciary .......................... $ 10.53 $ 10.53
Class A ............................ $ 10.13 $ 10.52 $ 10.52
Class B ............................ $ 10.13 $ 10.59 $ 10.59
Unrealized Appreciation (Depreciation) $ (785) $ 4,397 $ 3,612
</TABLE>
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
--------------------- ---------------
PARAGON
INTERMEDIATE-
TERM BOND GOVERNMENT GOVERNMENT
FUND BOND FUND BOND FUND
--------------- ----------- ---------------
<S> <C> <C> <C>
Shares ......................... 29,536 44,653 75,540
Net Assets ..................... $ 301,865 $ 436,393 $738,258
Net Asset Value:
Fiduciary ................... $ 9.77 $ 9.77
Class A ..................... $ 10.22 $ 9.78 $ 9.78
Class B ..................... $ 10.25 $ 9.77 $ 9.77
Unrealized Appreciation ........ $ 2,883 $ 5,934 $ 8,817
</TABLE>
Additionally, the Limited Volatility Bond Fund and the Government Bond Fund
had capital loss carryforwards from Paragon of approximately $1,106,000 and
$3,757,000, respectively.
8. SUBSEQUENT EVENT
Subsequent to December 31, 1996 net assets of certain common trust funds
managed by the Adviser were exchanged in a tax-free conversion for shares
of the corresponding One Group Funds as follows:
FUND NAME AMOUNT CONVERTED (IN THOUSANDS)
--------- -------------------------------
One Group Intermediate Bond.............. $204,881
One Group Income Bond..................... 128,177
<PAGE> 533
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THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ULTRA SHORT-TERM INCOME FUND
----------------------------------------------------------------
FIDUCIARY
----------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------
1996 1996 1995 1994 1993(a)
--------- -------- --------- --------- ----------
(Unaudited)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 9.79 $ 9.84 $ 9.85 $ 10.03 $ 10.00
--------- -------- --------- --------- ----------
Investment Activities
Net investment income ............................... 0.31 0.62 0.55 0.36 0.17
Net realized and unrealized gains (losses)
from investments and futures ...................... 0.04 (0.07) (0.05) (0.15) 0.03
--------- -------- --------- --------- ----------
Total from Investment Activities ................ 0.35 0.55 0.50 0.21 0.20
--------- -------- --------- --------- ----------
Distributions
Net investment income ............................... (0.30) (0.60) (0.48) (0.37) (0.17)
In excess of net investment income .................. -- -- (0.03) (0.02) --
--------- -------- --------- --------- ----------
Total Distributions .............................. (0.30) (0.60) (0.51) (0.39) (0.17)
--------- -------- --------- --------- ----------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 9.84 $ 9.79 $ 9.84 $ 9.85 $ 10.03
========= ======== ========= ========= ==========
Total Return (Excludes Sales Charge) .................. 3.70%(c) 5.71% 5.14% 2.16% 4.93%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 72,650 $ 57,276 $ 51,050 $ 139,593 $ 154,413
Ratio of expenses to average net assets ............. 0.32%(b) 0.45% 0.61% 0.65% 0.58%(b)
Ratio of net investment income to average net assets 6.05%(b) 6.20% 5.18% 3.70% 4.71%(b)
Ratio of expenses to average net assets* ............ 0.82%(b) 1.06% 1.01% 0.81% 1.03%(b)
Ratio of net investment income to average net assets* 5.55%(b) 5.59% 4.78% 3.54% 4.26%(b)
Portfolio Turnover (d) .............................. 19.81% 67.65% 2.91% 242.20% 109.96%
<FN>
- -------------------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations on February 2, 1993.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements
<PAGE> 534
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ULTRA SHORT-TERM INCOME FUND
----------------------------------------------------------------
CLASS A
----------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------
1996 1996 1995 1994 1993(a)
--------- -------- --------- --------- ----------
(Unaudited)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................ $ 9.78 $ 9.83 $ 9.84 $ 10.03 $ 10.00
---------- -------- -------- --------- ----------
Investment Activities
Net investment income ......................... 0.29 0.58 0.52 0.36 0.14
Net realized and unrealized gains (losses) from
investments and futures .................... 0.05 (0.06) (0.06) (0.17) 0.03
---------- -------- -------- --------- ----------
Total from Investment Activities ........... 0.34 0.52 0.46 0.19 0.17
---------- -------- -------- --------- ----------
Distributions
Net investment income ......................... (0.29) (0.57) (0.46) (0.34) (0.14)
In excess of net investment income ............ -- -- (0.01) (0.04) --
---------- -------- -------- --------- ----------
Total Distributions ........................ (0.29) (0.57) (0.47) (0.38) (0.14)
---------- -------- -------- --------- ----------
NET ASSET VALUE,
END OF PERIOD .................................. $ 9.83 $ 9.78 $ 9.83 $ 9.84 $ 10.03
========== ======== ======== ========= ==========
Total Return (Excludes Sales Charge) ........... 3.48%(c) 5.42% 4.84% 1.95% 4.78%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............. $ 5,277 $ 3,969 $ 4,631 $ 19,053 $ 3,106
Ratio of expenses to average net assets ....... 0.57%(b) 0.70% 0.86% 0.89% 0.81%(b)
Ratio of net investment income to average net
assets ..................................... 5.79%(b) 5.95% 4.88% 3.54% 4.47%(b)
Ratio of expenses to average net assets* ...... 1.21%(b) 1.41% 1.36% 1.14% 1.34%(b)
Ratio of net investment income to average net
assets* .................................... 5.15%(b) 5.24% 4.38% 3.29% 3.95%(b)
Portfolio Turnover (d) ........................ 19.81% 67.65% 2.91% 242.20% 109.96%
<FN>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced offering on March 10, 1993.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 535
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ULTRA SHORT-TERM INCOME FUND
--------------------------------------------------
CLASS B
--------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------
1996 1996 1995 1994(a)
--------- -------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................................ $ 9.76 $ 9.84 $ 9.86 $ 9.98
--------- --------- --------- ---------
Investment Activities
Net investment income ..................................... 0.26 0.52 0.47 0.12
Net realized and unrealized gains (losses) from investments
and futures ............................................ 0.04 (0.07) (0.04) (0.11)
--------- --------- --------- ---------
Total from Investment Activities ....................... 0.30 0.45 0.43 0.01
--------- --------- --------- ---------
Distributions
Net investment income ..................................... (0.27) (0.53) (0.45) (0.12)
In excess of net investment income ........................ -- -- -- (0.01)
--------- --------- --------- ---------
Total Distributions .................................... (0.27) (0.53) (0.45) (0.13)
--------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD .............................................. $ 9.79 $ 9.76 $ 9.84 $ 9.86
========= ========= ========= =========
Total Return (Excludes Sales Charge) ......................... 3.13%(c) 4.63% 4.77% (0.09)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ 1,675 $ 1,144 $ 160 $ 15
Ratio of expenses to average net assets ................... 1.22%(b) 1.20% 1.31% 1.41%(b)
Ratio of net investment income to average net assets ...... 5.15%(b) 5.45% 4.91% 3.49%(b)
Ratio of expenses to average net assets* .................. 1.81%(b) 2.06% 1.96% 1.83%(b)
Ratio of net investment income to average net assets* ..... 4.56%(b) 4.59% 4.26% 3.07%(b)
Portfolio Turnover (d) .................................... 19.81% 67.65% 2.91% 242.20%
<FN>
- -----------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced offering on January 14, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 536
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LIMITED VOLATILITY BOND FUND
------------------------------------------------------------------------------------
FIDUCIARY
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ---------------------------------------------------------------------
1996 1996 1995 1994 1993 1992
--------- -------- --------- -------- ---------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ....................... $ 10.42 $ 10.53 $ 10.33 $ 10.87 $ 10.72 $ 10.26
--------- --------- --------- ----------- --------- ---------
Investment Activities
Net investment income .................... 0.32 0.64 0.60 0.54 0.61 0.70
Net realized and unrealized gains (losses)
from investments and futures ............ 0.06 (0.11) 0.19 (0.45) 0.25 0.47
--------- --------- --------- ----------- --------- ---------
Total from Investment Activities ........ 0.38 0.53 0.79 0.09 0.86 1.17
--------- --------- --------- ----------- --------- ---------
Distributions
Net investment income .................... (0.32) (0.64) (0.59) (0.55) (0.62) (0.70)
In excess of net investment income ....... -- -- -- (0.02) -- --
Net realized gains ....................... -- -- -- (0.06) (0.09) (0.01)
--------- --------- --------- ----------- --------- ---------
Total Distributions ................... (0.32) (0.64) (0.59) (0.63) (0.71) (0.71)
--------- --------- --------- ----------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ............................. $ 10.48 $ 10.42 $ 10.53 $ 10.33 $ 10.87 $ 10.72
========= ========= ========= =========== ========= =========
Total Return (Excludes Sales Charge) ........ 3.65%(b) 5.13% 7.96% 0.79% 8.27% 11.75%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........ $ 589,229 $ 604,916 $ 410,746 $ 447,394 $ 397,820 $ 301,907
Ratio of expenses to average net assets .. 0.51%(a) 0.51% 0.52% 0.50% 0.56% 0.52%
Ratio of net investment
income to average net assets .......... 5.98%(a) 6.06% 5.82% 5.10% 5.70% 6.63%
Ratio of expenses to average
net assets* ........................... 0.81%(a) 0.82% 0.85% 0.85% 0.90% 1.04%
Ratio of net investment
income to average net assets* ......... 5.68%(a) 5.75% 5.49% 4.75% 5.36% 6.11%
Portfolio Turnover (c) ................... 21.27% 75.20% 76.43% 30.61% 40.28% 43.87%
<FN>
- -----------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 537
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LIMITED VOLATILITY BOND FUND
--------------------------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, --------------------------------------------------------------------
1996 1996 1995 1994 1993 1992(a)
---------- ---------- ---------- ---------- ---------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .............. $ 10.41 $ 10.52 $ 10.32 $ 10.87 $ 10.72 $ 10.61
---------- ---------- ---------- ---------- ---------- --------
Investment Activities
Net investment income ........... 0.30 0.63 0.56 0.52 0.59 0.24
Net realized and unrealized
gains (losses) from
investments and futures ...... 0.07 (0.13) 0.21 (0.46) 0.24 0.13
---------- ---------- ---------- ---------- ---------- --------
Total from Investment
Activities ................. 0.37 0.50 0.77 0.06 0.83 0.37
---------- ---------- ---------- ---------- ---------- --------
Distributions
Net investment income ........... (0.30) (0.61) (0.56) (0.51) (0.59) (0.26)
In excess of net investment
income ....................... -- -- (0.01) (0.04) -- --
Net realized gains .............. -- -- -- (0.06) (0.09) --
---------- ---------- ---------- ---------- ---------- --------
Total Distributions .......... (0.30) (0.61) (0.57) (0.61) (0.68) (0.26)
NET ASSET VALUE,
END OF PERIOD .................... $ 10.48 $ 10.41 $ 10.52 $ 10.32 $ 10.87 $ 10.72
========== ========== ========== ========== ========== ========
Total Return (Excludes Sales
Charge) ......................... 3.60%(c) 4.86% 7.67% 0.49% 8.04% 9.84%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 20,953 $ 21,343 $ 12,516 $ 15,216 $ 15,719 $ 161
Ratio of expenses to average net
assets ....................... 0.76%(b) 0.76% 0.77% 0.75% 0.76% 0.99%(b)
Ratio of net investment income
to average net assets ........ 5.73%(b) 5.81% 5.57% 4.92% 5.35% 5.95%(b)
Ratio of expenses to average net
assets* ...................... 1.15%(b) 1.17% 1.20% 1.20% 1.27% 1.29%(b)
Ratio of net investment income
to average net assets* ....... 5.34%(b) 5.40% 5.14% 4.47% 4.84% 5.65%(b)
Portfolio Turnover (d) .......... 21.27% 75.20% 76.43% 30.61% 40.28% 43.87%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on February 18, 1992.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 538
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LIMITED VOLATILITY BOND FUND
------------------------------------------------------
CLASS B
------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31,
1996 1996 1995 1994 (a)
--------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................................ $ 10.49 $ 10.60 $ 10.40 $ 10.78
--------- --------- --------- ---------
Investment Activities
Net investment income ..................................... 0.27 0.55 0.53 0.17
Net realized and unrealized gains (losses) from investments
and futures ............................................ 0.06 (0.10) 0.19 (0.37)
--------- --------- --------- ---------
Total from Investment Activities ....................... 0.33 0.45 0.72 (0.20)
--------- --------- --------- ---------
Distributions
Net investment income ..................................... (0.27) (0.56) (0.52) (0.15)
In excess of net realized gains ........................... -- -- -- (0.03)
--------- --------- --------- ---------
Total Distributions .................................... (0.27) (0.56) (0.52) (0.18)
--------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD .............................................. $ 10.55 $ 10.49 $ 10.60 $ 10.40
========= ========= ========= =========
Total Return (Excludes Sales Charge) ......................... 3.18%(c) 4.28% 7.18% (1.81)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ 5,073 $ 4,923 $ 2,906 $ 1,974
Ratio of expenses to average net assets ................... 1.41%(b) 1.26% 1.28% 1.26%(b)
Ratio of net investment income to average net assets ...... 5.08%(b) 5.31% 5.10% 4.39%(b)
Ratio of expenses to average net assets* .................. 1.81%(b) 1.82% 1.86% 1.86%(b)
Ratio of net investment income to average net assets* ..... 4.68%(b) 4.75% 4.52% 3.79%(b)
Portfolio Turnover (d) .................................... 21.27% 75.20% 76.43% 30.61%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 539
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LIMITED VOLATILITY
BOND FUND
------------------------
SERVICE/RETIREMENT (a)
------------------------
YEARS ENDED JUNE 30,
------------------------
1995 1994
-------- --------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................................... $ 10.38 $ 10.78
-------- --------
Investment Activities
Net investment income ................................................. 0.51 0.10
Net realized and unrealized gains (losses) from investments and futures 0.19 (0.38)
-------- --------
Total from Investment Activities ................................... 0.70 (0.28)
-------- --------
Distributions
Net investment income ................................................. (0.49) (0.08)
In excess of net investment income .................................... -- (0.04)
-------- --------
Total Distributions ................................................ (0.49) (0.12)
-------- --------
NET ASSET VALUE,
END OF PERIOD .......................................................... $ 10.59 $ 10.38
======== ========
Total Return (Excludes Sales Charge) ..................................... - (a) (2.59)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ..................................... $ - $ 16
Ratio of expenses to average net assets ............................... 1.32%(b) 1.26%(b)
Ratio of net investment income to average net assets .................. 5.55%(b) 4.37%(b)
Ratio of expenses to average net assets* .............................. 1.68%(b) 1.60%(b)
Ratio of net investment income to average net assets* ................. 5.20%(b) 4.03%(b)
Portfolio Turnover (d) ................................................ 76.43% 30.61%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designated as "Retirement Shares." On April 4, 1995, the name of the
Retirement Shares was changed to "Service" Shares. As of June 1, 1995,
Service shares transferred to Class A Shares, and as of June 30, 1996 and
1995, there were no shareholders in the Service Class. The return for the
period from July 1, 1994 to June 1, 1995 for the Service Shares was 6.90%.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 540
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
-------------------------------------------------------------------------------
FIDUCIARY
-------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------------
1996 1996 1995 1994 1993 1992 (a)
----------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .............. $ 9.84 $ 10.01 $ 9.72 $ 10.51 $ 10.09 $ 10.00
----------- -------- -------- -------- -------- --------
Investment Activities
Net investment income ........... 0.33 0.66 0.66 0.60 0.63 0.22
Net realized and unrealized
gains (losses) from
investments and futures ...... 0.12 (0.17) 0.29 (0.67) 0.42 0.08
----------- -------- -------- -------- -------- --------
Total from Investment
Activities ................. 0.45 0.49 0.95 (0.07) 1.05 0.30
----------- -------- -------- -------- -------- --------
Distributions
Net investment income ........... (0.33) (0.66) (0.66) (0.60) (0.63) (0.21)
In excess of net investment
income ....................... -- -- -- (0.02) -- --
Net realized gains .............. -- -- -- (0.10) -- --
----------- -------- -------- -------- -------- --------
Total Distributions .......... (0.33) (0.66) (0.66) (0.72) (0.63) (0.21)
----------- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD .................... $ 9.96 $ 9.84 $ 10.01 $ 9.72 $ 10.51 $ 10.09
=========== ======== ======== ======== ======== ========
Total Return (Excludes Sales
Charge) ......................... 4.60%(c) 4.95% 10.15% (0.74)% 10.67% 3.00%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 278,201 $230,812 $191,216 $ 98,483 $ 44,252 $ 23,457
Ratio of expenses to average
net assets ................... 0.52%(b) 0.54% 0.56% 0.32% 0.39% 0.36%(b)
Ratio of net investment
income to average net
assets ....................... 6.53%(b) 6.56% 6.88% 6.04% 6.14% 6.99%(b)
Ratio of expenses to average
net assets* .................. 0.81%(b) 0.87% 0.99% 0.87% 1.17% 1.33%(b)
Ratio of net investment
income to average net
assets* ...................... 6.24%(b) 6.23% 6.45% 5.49% 5.36% 6.02%(b)
Portfolio Turnover (d) .......... 26.00% 101.06% 99.71% 85.62% 21.51% 11.74%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations February 28, 1992
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 541
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
------------------------------------------
CLASS A
------------------------------------------
SIX MONTHS YEARS ENDED
ENDED JUNE 30,
DECEMBER 31, ---------------------
1996 1996 1995 (a)
--------------- ---------- ---------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................................ $ 9.87 $ 10.04 $ 9.45
-------- ---------- ---------
Investment Activities
Net investment income ......................................... 0.31 0.64 0.37
Net realized and unrealized gains (losses) from investments and
futures .................................................... 0.12 (0.17) 0.59
-------- ---------- ---------
Total from Investment Activities ........................... 0.43 0.47 0.96
-------- ---------- ---------
Distributions
Net investment income ......................................... (0.31) (0.64) (0.37)
-------- ---------- ---------
Total Distributions ........................................ (0.31) (0.64) (0.37)
-------- ---------- ---------
NET ASSET VALUE,
END OF PERIOD .................................................. $ 9.99 $ 9.87 $ 10.04
======== ========== =========
Total Return (Excludes Sales Charge) ............................. 4.46%(c) 4.77% 10.29%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............................. $ 14,468 $13,706 $4,941
Ratio of expenses to average net assets ....................... 0.77%(b) 0.79% 0.83%(b)
Ratio of net investment income to average net assets .......... 6.28%(b) 6.31% 6.64%(b)
Ratio of expenses to average net assets* ...................... 1.15%(b) 1.22% 1.66%(b)
Ratio of net investment income to average net assets* ......... 5.90%(b) 5.88% 5.81%(b)
Portfolio Turnover (d) ........................................ 26.00% 101.06% 99.71%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced operations November 30, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 542
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
----------------------------------------
CLASS B
----------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -----------------------
1996 1996 1995 (a)
--------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................................ $ 9.83 $ 10.01 $ 9.45
--------- --------- ---------
Investment Activities
Net investment income ......................................... 0.28 0.58 0.23
Net realized and unrealized gains (losses) from investments and
futures .................................................... 0.13 (0.18) 0.56
--------- --------- ---------
Total from Investment Activities ........................... 0.41 0.40 0.79
--------- --------- ---------
Distributions
Net investment income ......................................... (0.28) (0.58) (0.23)
--------- --------- ---------
Total Distributions ........................................ (0.28) (0.58) (0.23)
--------- --------- ---------
NET ASSET VALUE,
END OF PERIOD .................................................. $ 9.96 $ 9.83 $ 10.01
========= ========= =========
Total Return (Excludes Sales Charge) ............................. 4.23%(c) 4.10% 8.22%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............................. $ 7,716 $ 6,077 $ 266
Ratio of expenses to average net assets ....................... 1.42%(b) 1.44% 1.51%(b)
Ratio of net investment income to average net assets .......... 5.63%(b) 5.66% 6.15%(b)
Ratio of expenses to average net assets* ...................... 1.82%(b) 1.87% 2.34%(b)
Ratio of net investment income to average net assets* ......... 5.23%(b) 5.23% 5.31%(b)
Portfolio Turnover (d) ........................................ 26.00% 101.06% 99.71%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations on November 30, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 543
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
---------------------------------------------------------------
FIDUCIARY
---------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -----------------------------------------------
1996 1996 1995 1994 1993 (a)
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ....................... $ 9.56 $ 9.81 $ 9.35 $ 10.15 $ 10.00
-------- -------- -------- -------- --------
Investment Activities
Net investment income .................... 0.31 0.62 0.62 0.51 0.20
Net realized and unrealized gains (losses)
from investments and futures .......... 0.15 (0.25) 0.46 (0.77) 0.15
-------- -------- -------- -------- --------
Total from Investment Activities ...... 0.46 0.37 1.08 (0.26) 0.35
-------- -------- -------- -------- --------
Distributions
Net investment income .................... (0.31) (0.62) (0.61) (0.50) (0.20)
In excess of net investment income ....... -- -- (0.01) (0.02) --
In excess of net realized gains .......... -- -- -- (0.02) --
-------- -------- -------- -------- --------
Total Distributions ................... (0.31) (0.62) (0.62) (0.54) (0.20)
-------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD ............................. $ 9.71 $ 9.56 $ 9.81 $ 9.35 $ 10.15
======== ======== ======== ======== ========
Total Return (Excludes Sales Charge) ........ 4.90%(c) 3.81% 12.04% (2.73)% 9.03%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........ $668,024 $677,326 $379,826 $209,692 $ 52,152
Ratio of expenses to average net assets .. 0.63%(b) 0.68% 0.71% 0.68% 0.69%(b)
Ratio of net investment income to
average net assets .................... 6.42%(b) 6.34% 6.65% 5.13% 5.43%(b)
Ratio of expenses to average net assets* . 0.66%(b) 0.69% 0.73% 0.71% 1.05%(b)
Ratio of net investment income to
average net assets* ................... 6.39%(b) 6.33% 6.63% 5.10% 5.07%(b)
Portfolio Turnover (d) ................... 22.24% 62.70% 106.14% 377.78% 139.24%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced offering on February 8, 1993.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 544
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
----------------------------------------------------------------
CLASS A
----------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -----------------------------------------------
1996 1996 1995 1994 1993 (a)
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ....................... $ 9.56 $ 9.81 $ 9.35 $ 10.17 $ 10.22
-------- -------- -------- -------- --------
Investment Activities
Net investment income .................... 0.30 0.60 0.61 0.48 0.17
Net realized and unrealized gains (losses)
from investments and futures .......... 0.15 (0.25) 0.45 (0.79) (0.05)
-------- -------- -------- -------- --------
Total from Investment Activities ...... 0.45 0.35 1.06 (0.31) 0.12
-------- -------- -------- -------- --------
Distributions
Net investment income .................... (0.30) (0.60) (0.59) (0.47) (0.17)
In excess of net investment income ....... -- -- (0.01) (0.02) --
In excess of net realized gains .......... -- -- -- (0.02) --
-------- -------- -------- -------- --------
Total Distributions ................... (0.30) (0.60) (0.60) (0.51) (0.17)
-------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD ............................. $ 9.71 $ 9.56 $ 9.81 $ 9.35 $ 10.17
======== ======== ======== ======== ========
Total Return (Excludes Sales Charge) ........ 4.77%(c) 3.58% 11.84% (3.16)% 5.35%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........ $ 37,606 $ 38,800 $ 8,130 $ 1,690 $ 840
Ratio of expenses to average net assets .. 0.88%(b) 0.93% 0.97% 0.92% 0.95%(b)
Ratio of net investment income to average
net assets ............................ 6.17%(b) 6.09% 6.46% 4.84% 5.56%(b)
Ratio of expenses to average net assets* . 1.01%(b) 1.04% 1.09% 1.05% 1.44%(b)
Ratio of net investment income to average
net assets* ........................... 6.04%(b) 5.98% 6.34% 4.71% 5.07%(b)
Portfolio Turnover (d) ................... 22.24% 62.70% 106.14% 377.78% 139.24%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on March 5, 1993.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 545
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
---------------------------------------------------
CLASS B
---------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------
1996 1996 1995 1994 (a)
------------ -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................................ $ 9.56 $ 9.81 $ 9.35 $ 10.04
-------- -------- -------- --------
Investment Activities
Net investment income ..................................... 0.27 0.54 0.55 0.18
Net realized and unrealized gains (losses) from investments
and futures ............................................ 0.15 (0.25) 0.46 (0.69)
-------- -------- -------- --------
Total from Investment Activities ....................... 0.42 0.29 1.01 (0.51)
-------- -------- -------- --------
Distributions
Net investment income ..................................... (0.27) (0.54) (0.55) (0.16)
In excess of net investment income ........................ -- -- -- (0.02)
In excess of net realized gains ........................... -- -- -- --
-------- -------- -------- --------
Total Distributions .................................... (0.27) (0.54) (0.55) (0.18)
-------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD .............................................. $ 9.71 $ 9.56 $ 9.81 $ 9.35
======== ======== ======== ========
Total Return (Excludes Sales Charge) ......................... 4.43%(c) 2.95% 11.20% (4.99%)(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $ 11,316 $ 10,782 $ 2,513 $ 656
Ratio of expenses to average net assets ................... 1.53%(b) 1.58% 1.62% 1.52%(b)
Ratio of net investment income to average net assets ...... 5.52%(b) 5.44% 5.76% 4.60%(b)
Ratio of expenses to average net assets* .................. 1.66%(b) 1.69% 1.74% 1.63%(b)
Ratio of net investment income to average net assets* ..... 5.39%(b) 5.33% 5.64% 4.49%(b)
Portfolio Turnover (d) .................................... 22.24% 62.70% 106.14% 377.78%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 546
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT BOND
FUND
---------------------
SERVICE/RETIREMENT(a)
---------------------
YEAR ENDED
JUNE 30, 1995
---------------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................................... $ 9.32
-------
Investment Activities
Net investment income ................................................. 0.44
Net realized and unrealized gains (losses) from investments and futures 0.46
-------
Total from Investment Activities ................................... 0.90
-------
Distributions
Net investment income ................................................. (0.44)
-------
Total Distributions ................................................ (0.44)
-------
NET ASSET VALUE,
END OF PERIOD .......................................................... $ 9.78
=======
Total Return (Excludes Sales Charge) ..................................... --(a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ..................................... $ --
Ratio of expenses to average net assets ............................... 1.64%(b)
Ratio of net investment income to average net assets .................. 6.65%(b)
Ratio of expenses to average net assets* .............................. 1.66%(b)
Ratio of net investment income to average net assets* ................. 6.62%(b)
Portfolio Turnover (c) ................................................ 106.14%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on July 15, 1994 when they were
designated as "Retirement Shares". On April 4, 1995, the name of the
Retirement Shares was changed to "Service" Shares. As of June 1, 1995,
Service shares transferred to Class A Shares, and as of June 30, 1996 and
1995, there were no shareholders in the Service Class. The return for the
period from July 15, 1994 to June 1, 1995 for the Service Shares was 9.59%.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 547
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME BOND FUND
----------------------------------------------------------------------------
FIDUCIARY
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------------
1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .............. $ 9.33 $ 9.54 $ 9.23 $ 10.43 $ 10.18 $ 9.59
-------- -------- -------- -------- -------- --------
Investment Activities
Net investment income ........... 0.32 0.65 0.64 0.54 0.66 0.71
Net realized and unrealized
gains (losses) from
investments and futures ...... 0.13 (0.21) 0.35 (0.74) 0.38 0.59
-------- -------- -------- -------- -------- --------
Total from Investment
Activities ................. 0.45 0.44 0.99 (0.20) 1.04 1.30
-------- -------- -------- -------- -------- --------
Distributions
Net investment income ........... (0.32) (0.65) (0.64) (0.57) (0.66) (0.71)
Net realized gains .............. -- -- (0.04) (0.43) (0.13) --
-------- -------- -------- -------- -------- --------
Total Distributions .......... (0.32) (0.65) (0.68) (1.00) (0.79) (0.71)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD .................... $ 9.46 $ 9.33 $ 9.54 $ 9.23 $ 10.43 $ 10.18
======== ======== ======== ======== ======== ========
Total Return (Excludes Sales
Charge) ......................... 4.92%(b) 4.62% 11.29% (2.54)% 10.62% 13.85%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $584,762 $520,239 $474,124 $560,071 $483,291 $376,898
Ratio of expenses to average
net assets ................... 0.59%(a) 0.59% 0.59% 0.53% 0.56% 0.49%
Ratio of net investment
income to average net
assets ....................... 6.78%(a) 6.76% 6.94% 5.35% 6.44% 7.18%
Ratio of expenses to average
net assets* .................. 0.79%(a) 0.81% 0.86% 0.85% 0.90% 1.04%
Ratio of net investment
income to average net
assets* ...................... 6.58%(a) 6.54% 6.67% 5.03% 6.10% 6.63%
Portfolio Turnover (c) .......... 21.77% 95.52% 262.25% 131.04% 143.52% 32.50%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 548
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------
INCOME BOND FUND
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------------
1996 1996 1995 1994 1993 1992 (a)
------------ -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .............. $ 9.32 $ 9.54 $ 9.22 $ 10.43 $ 10.16 $ 10.06
-------- -------- -------- -------- -------- --------
Investment Activities
Net investment income ........... 0.31 0.63 0.61 0.52 0.63 0.26
Net realized and unrealized
gains (losses) from
investments and futures ...... 0.13 (0.23) 0.36 (0.75) 0.41 0.11
-------- -------- -------- -------- -------- --------
Total from Investment
Activities ................. 0.44 0.40 0.97 (0.23) 1.04 0.37
-------- -------- -------- -------- -------- --------
Distributions
Net investment income ........... (0.31) (0.62) (0.60) (0.55) (0.64) (0.27)
In excess of net investment
income ....................... -- -- (0.01) -- -- --
Net realized gains .............. -- -- (0.04) (0.43) (0.13) --
-------- -------- -------- -------- -------- --------
Total Distributions .......... (0.31) (0.62) (0.65) (0.98) (0.77) (0.27)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD .................... $ 9.45 $ 9.32 $ 9.54 $ 9.22 $ 10.43 $ 10.16
======== ======== ======== ======== ======== ========
Total Return (Excludes Sales
Charge) ......................... 4.79%(c) 4.26% 10.90% (2.33)% 10.58% 10.16%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 12,527 $ 10,127 $ 6,796 $ 5,347 $ 7,064 $ 188
Ratio of expenses to average net
assets ....................... 0.84%(b) 0.84% 1.01% 0.78% 0.77% 0.97%(b)
Ratio of net investment income
to average net assets ........ 6.53%(b) 6.51% 6.57% 5.25% 6.12% 6.58%(b)
Ratio of expenses to average net
assets* ...................... 1.14%(b) 1.16% 1.38% 1.20% 1.26% 1.27%(b)
Ratio of net investment income
to average net assets* ....... 6.23%(b) 6.19% 6.20% 4.83% 5.63% 6.28%(b)
Portfolio Turnover (d) .......... 21.77% 95.52% 262.25% 131.04% 143.52% 32.50%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A commenced offering on February 18, 1992.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 549
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME BOND FUND
-------------------------------------------------------
CLASS B
-------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------
1996 1996 1995 1994 (a)
------------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................... $ 9.40 $ 9.62 $ 9.29 $ 9.97
--------- --------- --------- ---------
Investment Activities
Net investment income ................................ 0.28 0.56 0.56 0.17
Net realized and unrealized gains (losses) from
investments and futures ........................... 0.14 (0.21) 0.38 (0.70)
--------- --------- --------- ---------
Total from Investment Activities .................. 0.42 0.35 0.94 (0.53)
--------- --------- --------- ---------
Distributions
Net investment income ................................ (0.28) (0.57) (0.57) (0.15)
Net realized gains ................................... -- -- (0.04) --
--------- --------- --------- ---------
Total Distributions ............................... (0.28) (0.57) (0.61) (0.15)
--------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ......................................... $ 9.54 $ 9.40 $ 9.62 $ 9.29
========= ========= ========= =========
Total Return (Excludes Sales Charge) .................... 4.56%(c) 3.65% 10.63% (5.29)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .................... $ 9,075 $ 6,110 $ 1,887 $ 723
Ratio of expenses to average net assets .............. 1.49%(b) 1.49% 1.49% 1.45%(b)
Ratio of net investment income to average net assets . 5.88%(b) 5.86% 6.16% 5.20%(b)
Ratio of expenses to average net assets* ............. 1.81%(b) 1.81% 1.86% 1.84%(b)
Ratio of net investment income to average net assetss* 5.56%(b) 5.54% 5.80% 4.81%(b)
Portfolio Turnover (d) ............................... 21.77% 95.52% 262.25% 131.04%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 17, 1994.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 550
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME BOND FUND
------------------------
SERVICE/RETIREMENT (a)
------------------------
YEARS ENDED JUNE 30,
------------------------
1995 1994
-------- --------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................................... $ 9.05 $ 9.97
-------- --------
Investment Activities
Net investment income ................................................. 0.49 0.12
Net realized and unrealized gains (losses) from investments and futures 0.40 (0.94)
-------- --------
Total from Investment Activities ................................... 0.89 (0.82)
-------- --------
Distributions
Net investment income ................................................. (0.51) (0.10)
Net realized gains .................................................... (0.04) --
-------- --------
Total Distributions ................................................ (0.55) (0.10)
-------- --------
NET ASSET VALUE,
END OF PERIOD .......................................................... $ 9.39 $ 9.05
======== ========
Total Return (Excludes Sales Charge) ..................................... (a) (8.24%)(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ..................................... $ -- $ 57
Ratio of expenses to average net assets ............................... 1.24%(b) 1.30%(b)
Ratio of net investment income to average net assets .................. 5.85%(b) 5.28%(b)
Ratio of expenses to average net assets* .............................. 1.53%(b) 1.59%(b)
Ratio of net investment income to average net assets* ................. 5.57%(b) 4.99%(b)
Portfolio Turnover (d) ................................................ 262.25% 131.04%
- -----
<FN>
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Service Shares commenced offering on January 17, 1994 when they were
designated as "Retirement Shares". On April 4, 1995, the name of the
Retirement Shares was changed to "Service" Shares. As of June 1, 1995,
Service shares transferred to Class A Shares, and as of June 30, 1995 and
1996, there were no shareholders in the Service Class. The return for the
period from July 1, 1994 to June 1, 1995 for the Service Shares was 9.93%.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 551
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS (104.1%):
Alaska (1.2%):
$1,000 Anchorage, GO, 6.00%, 10/1/10, FGIC..........................$ 1,074
1,250 Anchorage, GO, 5.00%, 10/1/15, FGIC.......................... 1,187
1,115 North Slope Boro, GO, Series B, 0.00%,
6/30/04.................................................... 763
------
3,024
------
Arizona (4.8%):
1,000 Educational Loan Marketing Corp., 7.30%,
9/1/03, MBIA............................................... 1,066
1,000 Educational Loan Marketing Corp., 7.35%,
9/1/04, MBIA**............................................. 1,065
775 Educational Loan Marketing Corp., 7.38%,
9/1/05, MBIA**............................................. 824
1,795 Maricopa County Greenery Apartments,
Series A, 5.85%, 1/1/08.................................... 1,805
1,400 Maricopa County School District #28, GO,
Series B, 0.00%, 1/1/05, FGIC.............................. 940
1,000 Maricopa County Unified School District
#097 Deer Valley, GO, 5.10%, 7/1/06,
FGIC**..................................................... 1,019
1,500 Phoenix Airport Revenue, Series D, 6.00%,
7/1/06, AMT, MBIA.......................................... 1,604
1,295 Tucson Individual Development Authority,
5.20%, 12/20/06, MFHR, Los Portales,
GNMA....................................................... 1,293
2,475 Tucson Water Revenue, 5.50%, 7/1/14.......................... 2,497
------
12,113
------
California (3.5%):
1,250 Housing Finance Agency Revenue,
Series G, 5.70%, 8/1/07, AMT, MBIA......................... 1,274
3,580 Orange County Airport, 5.50%, 7/1/11,
AMT, MBIA.................................................. 3,481
3,000 Sacramento Municipal Utilities, 5.40%,
11/15/06, FSA.............................................. 3,061
1,000 San Francisco City & County Airports
Common International Airport Revenue, 6.30%,
5/1/11, AMBAC................................................ 1,070
------
8,886
------
Colorado (7.3%),:
3,290 Arapahoe County Capital Improvements,
Project E-470, 0.00%, 8/31/03.............................. 2,277
1,135 Arapahoe County School District #001
Englewood, GO, 0.00%, 11/1/09, FSA......................... 574
1,580 Boulder County Revenue, NCAR Project,
6.90%, 12/1/07............................................. 1,728
2,000 Denver City & County Airport Revenue,
Series B, 5.75%, 11/15/09, AMT,............................ 2,048
1,160 Denver City & County Airport, Series C,
5.10%, 11/15/01, AMT, MBIA................................. 1,162
MUNICIPAL BONDS, CONTINUED
Colorado, continued
$9,750 Denver City & County School District #1,
GO, Series A, 0.00%, 12/1/06...............................$ 5,832
275 Housing Finance Authority, 5.63%, 5/1/04,
SFMR....................................................... 280
3,220 Housing Finance Authority, GO, Series A,
6.40%, 8/1/06.............................................. 3,359
1,300 Larimer Weld & Boulder Counties School,
5.10%, 12/15/09, FGIC...................................... 1,292
------
18,552
------
Connecticut (2.3%):
1,000 Bridgeport, GO, 6.50%, 9/1/08, AMBAC......................... 1,114
2,475 State, GO, Series B, 6.00%, 10/1/05.......................... 2,689
1,060 State, Special Tax, Series B, 5.38%,
10/1/09, MBIA.............................................. 1,076
1,000 State, Special Tax, Series B, 5.40%,
10/1/10.................................................... 1,008
------
5,887
------
District of Columbia (0.4%):
1,000 Hospital Medlantic, Series B, 6.50%,
8/15/02, MBIA.............................................. 1,087
------
Florida (3.6%):
1,300 Broward County Housing Authority, 5.55%,
7/1/09, GNMA............................................... 1,321
1,000 Dade County Aviation Revenue, Series A,
6.00%, 10/1/08, AMBAC...................................... 1,078
1,785 Dade County Housing Finance Authority
Mortgage, 6.50%, 7/1/22, FHA............................... 1,815
2,000 Escambia County Housing Finance
Authority, Multifamily Housing Revenue,
5.75%, 4/1/04, GNMA ....................................... 2,023
1,185 Indian River County Hospital, 5.95%,
10/1/09, FSA............................................... 1,221
1,285 Indian River County Hospital, 6.00%,
10/1/10, FSA............................................... 1,327
555 Tampa Water & Sewer, 0.00%, 10/1/05,
ETM........................................................ 369
------
9,154
------
Georgia (1.6%):
1,000 Atlanta Airport Facilities Revenue,
Series A, 6.50%, 1/1/07, AMBAC............................. 1,124
1,500 Atlanta Airport Facilities, 6.50%, 1/1/08,
AMBAC...................................................... 1,686
1,215 Columbus Water & Sewer Revenue, 6.30%,
5/1/06, FGIC............................................... 1,320
------
4,130
------
</TABLE>
CONTINUED
<PAGE> 552
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, continued:
Hawaii (1.4%):
$2,000 Honolulu City & County, Series A, 7.35%,
7/1/08.....................................................$ 2,385
1,000 Honolulu City & County, GO, Series A,
5.60%, 4/1/07.............................................. 1,055
------
3,440
------
Idaho (2.4%):
1,000 Boise State University, 5.20%, 4/1/10........................ 988
1,050 Student Loan Fund Marketing Assoc. Inc.,
Student Loan Revenue, 6.25%, 4/1/98........................ 1,059
2,000 Student Loan Fund Marketing Assoc. Inc.,
Student Loan Revenue, 6.40%, 10/1/99....................... 2,041
705 Student Loan Fund Marketing Assoc. Inc.,
5.88%, 4/1/99.............................................. 714
1,300 University of Idaho, 5.75%, 4/1/06........................... 1,385
------
6,187
------
Illinois (5.6%):
1,000 Chicago Metro Water Reclamation
District-Greater Chicago Capital
Improvements, GO, 7.25%, 12/1/12 .......................... 1,201
4,245 Chicago Metro Water Reclamation
District-Greater Chicago Capital
Improvements, GO, 6.25%, 12/1/14 .......................... 4,467
3,045 Chicago Park District, GO, 6.35%,
11/15/08,.................................................. 3,341
1,450 Chicago Residual Revenue, 0.00%, 10/1/09,
MBIA....................................................... 619
1,010 Evanston Residential Mortgage, 6.38%,
1/1/09 AMBAC............................................... 1,062
1,645 Health Facilities Authority Revenue, 6.13%,
11/15/07, MBIA............................................. 1,768
590 Health Facilities Authority Revenue, 7.90%,
8/15/03, MBIA.............................................. 604
1,000 State, GO, 6.25%, 12/1/01.................................... 1,022
------
14,084
------
Indiana (2.1%):
1,000 Fort Wayne Hospital Authority, Parkview
Memorial Hospital Project, Series A,
7.50%, 11/15/11, FGIC ..................................... 1,095
2,870 Indianapolis Economic Development
Revenue, 6.38%, 12/1/04, Knob-in-the-
Woods Project, AMT ........................................ 3,044
1,000 State Vocational Technical College
Building Facilities Fee, 6.50%, 7/1/07,
AMBAC...................................................... 1,119
------
5,258
------
MUNICIPAL BONDS, CONTINUED:
Iowa (1.3%):
$1,610 Finance Authority Single Family
Mortgage, Series F, 6.15%, 7/1/04,
AMBAC......................................................$ 1,655
1,500 Student Loan Liquidity Corp., Student
Loan Revenue, Series C, 6.50%, 12/1/99,
AMBAC...................................................... 1,575
------
3,230
------
Kansas (1.9%):
2,875 Shawnee Multifamily Housing, Haverford
West Apts. Project, 5.40%, 12/1/26......................... 2,879
1,750 Wichita Hospital Revenue, St. Francis
Regional Hospital, 6.25%, 10/1/10, MBIA.................... 1,843
------
4,722
------
Kentucky (1.1%):
1,000 Lexington-Fayette Urban County
Government, Series A1, 6.75%, 11/20/06..................... 1,070
3,325 State Turnpike Authority Economic
Development, 0.00%, 1/1/10, FGIC........................... 1,657
------
2,727
------
Louisiana (0.1%):
257 Housing Agency Mortgage Revenue,
7.80%, 12/1/09, GNMA....................................... 287
------
Maine (0.2%):
535 State Street Housing Preservation Corp.,
100 State Street Project, 7.20%, 1/1/02.................... 561
------
Maryland (1.1%):
1,150 Anne Arundel County, GO, Series B,
7.70%, 3/15/06, AMT........................................ 1,245
1,465 Worcester, GO, Series A, 6.10%, 5/1/08,
MBIA....................................................... 1,583
------
2,828
------
Massachusetts (0.3%):
795 Education Loan Authority, 7.25%, 1/1/09, AMT,
MBIA....................................................... 846
------
Michigan (3.3%):
780 Detroit Convention Facilities, 5.25%,
9/30/12.................................................... 736
2,000 Grand Rapids Community College, 5.38%,
5/1/16, MBIA............................................... 1,956
2,000 State Hospital Finance Authority Revenue,
Mercy Mount Clemens Corp., 6.25%, 5/15/11.................. 2,070
1,500 State Hospital Financial Authority,
Series A, 8.10%, 10/1/13................................... 1,699
965 Warren Michigan Building Authority,
5.45%, 11/1/14, FGIC....................................... 957
</TABLE>
CONTINUED
<PAGE> 553
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Michigan, continued:
$970 Warren Building Authority, 5.45%, 11/1/16,
FGIC.......................................................$ 955
------
8,373
------
Minnesota (1.8%):
1,500 Northern Municipal Power Agency,
Minnesota Electric, Series A, 5.90%,
1/1/07, AMBAC.............................................. 1,592
3,000 University of Minnesota, 5.50%, 7/1/09....................... 3,049
------
4,641
------
Missouri (1.4%):
1,895 Carthage Waterworks & Wastewater
Treatment Systems, 6.30%, 7/1/09,
MBIA**.............................. ...................... 2,029
1,540 Kansas City Industrial Development
Authority, Multifamily Housing Revenue,
Series A, Mews Apt. Project, 5.63%,
7/1/05, AMT................................................ 1,585
------
3,614
------
Montana (0.9%):
1,000 State Long-Range Building Project,
Series D, 5.25%, 8/1/08................................... 1,023
1,380 University of Montana University Higher
Education, Series D, 5.38%, 05/15/15,
MBIA...................................................... 1,366
------
2,389
------
Nebraska (0.9%):
2,250 Higher Education Loan Program,
Series A-6, 5.90%, 6/1/03, AMT............................. 2,331
------
Nevada (2.5%):
2,000 Las Vegas, Sewer Revenue, 6.60%,
10/1/12, FGIC.............................................. 2,225
1,000 State Municipal Bond Bank Project
#20-23A, GO, 7.00%, 7/1/01, ETM............................ 1,044
3,010 Washoe County School District, GO, 6.13%,
8/1/07, MBIA............................................... 3,187
------
6,456
------
New Hampshire (0.5%):
1,225 Higher Education & Health Facilities
Authority Revenue, 6.25%, 1/1/06,
Connie Lee................................................. 1,306
------
New Mexico (5.3%):
1,000 Albuquerque, 6.50%, 7/1/11, AMT,
AMBAC**.................................................... 1,080
3,000 Albuquerque Gross Receipts, 5.38%,
7/1/01..................................................... 3,016
MUNICIPAL BONDS, CONTINUED:
New Mexico, continued:
$1,195 Educational Assistance Foundation,
Student Loan Revenue, Series A, 6.45%,
4/1/99, AMT, AMBAC ........................................$ 1,243
2,070 Educational Assistance Foundation,
Student Loan Revenue, Series A, 6.55%,
4/1/00, AMT, AMBAC ....................................... 2,180
5,455 Educational Assistance Foundation,
Student Loan Revenue, Series A, 6.85%,
4/1/05, AMT, AMBAC ...................................... 5,881
------
13,400
------
Ohio (1.1%):
1,000 Cuyahoga County Hospital Revenue,
University Hospital Health System,
Series 96B, 6.00%, 1/15/05 ................................ 1,076
1,600 Eaton Industrial Development, Baxter Intl.
Project, 6.50%, 12/1/12.................................... 1,705
------
2,781
------
Oregon (5.2%):
845 Eugene Public Safety Facilities, GO, 6.00%,
6/1/06..................................................... 917
2,800 Hillsboro Hospital Facility Authority,
Tuality Hospital, 5.75%, 10/1/12........................... 2,697
2,350 Jackson County School District #5
Ashland, GO, 5.70%, 6/1/07, FSA............................ 2,490
1,250 Lane County School District #52 Bethel,
GO, 6.00%, 6/1/06, FSA..................................... 1,357
2,000 Multnomah County School District #1J,
5.00%, 6/1/04, MBIA........................................ 2,041
1,435 Port Portland Airport Revenue, Series 7-A,
6.75%, MBIA, 7/1/09........................................ 1,563
2,075 Washington County School District #88,
GO, 6.10%, 6/1/05, FSA..................................... 2,257
------
13,322
------
Pennsylvania (5.2%):
3,500 Allegheny County, Series C-34, 0.00%,
2/15/02, MBIA.............................................. 3,753
1,600 Dauphin County Industrial Development
Authority, Pollution Control Revenue,
6.00%, 1/1/08, MBIA ....................................... 1,601
2,750 Indiana County Industrial Development
Authority, Pollution Control Revenue,
6.00%, 6/1/06, MBIA ....................................... 2,976
2,500 Philadelphia Water & Waste, 5.65%,
6/15/12, AMBAC............................................. 2,470
2,350 Philadelphia Airport Revenue, Series A, 5.50%,
6/15/05, AMT, FGIC......................................... 2,438
------
13,238
------
</TABLE>
CONTINUED
<PAGE> 554
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------------------------------------- -------
MUNICIPAL BONDS, continued:
Rhode Island (0.4%):
$1,000 Housing & Mortgage Finance Corp.,
Series 15-B, 6.20%, 10/1/06...............................$ 1,040
------
South Carolina (5.2%):
2,000 Beaufort County School District, GO
5.13%, 3/1/09, MBIA....................................... 1,988
1,760 Greenville School Public Facilities,
Series B 5.60%, 3/1/10, AMBAC............................. 1,791
1,365 Greenville Parking Facility, 5.55%, 6/1/17,
AMBAC..................................................... 1,355
990 Hilton Head Island, GO, 5.40%, 8/1/08,
MBIA...................................................... 1,020
1,045 Hilton Head Island, GO, 5.50%, 8/1/09,
MBIA...................................................... 1,080
1,000 Piedmont Municipal Power Agency
Electric Revenue, Series A, 7.25%,
1/1/22, Prerefunded 9/1/02 @102 .......................... 1,015
1,800 Richland County School District, 5.00%,
3/1/10.................................................... 1,759
2,000 State Highway, Series B 5.63%, 7/1/09....................... 2,098
1,000 York County School District #3, GO, 5.40%,
3/1/08**.................................................. 1,028
------
13,134
------
South Dakota (0.9%):
925 Student Loan Assistance Corp., Series A,
8.00%, 8/1/98............................................. 981
1,255 Student Loan Assistance Corp., Student
Loan Revenue, 7.63%, 8/1/06, AMT,
MBIA...................................................... 1,340
------
2,321
------
Tennessee (0.4%):
1,050 Chattanooga-Hamilton County Hospital
Authority, Hospital Revenue, 5.63%,
10/1/09, FSA.............................................. 1,090
Texas 10.1%):
2,800 Austin Housing Finance Corp.,
Single Family Mortgage Revenue, 0.00%,
12/1/11, MBIA............................................. 1,195
1,000 Austin Utility Systems Revenue, 0.00%,
5/15/08, MBIA............................................. 546
5,000 Coastal Bend Health Facilities, Incarnate
Word Health Services, 5.93%, 11/15/13,
AMBAC*.................................................... 5,081
2,000 Grand Prairie Health Facilities, 6.50%,
11/1/04................................................... 2,209
5,000 Harris County Capital Appreciation-Toll
Rd Sub Lien-A, GO, 0.00%, 8/15/03,
MBIA...................................................... 3,631
MUNICIPAL BONDS, CONTINUED:
Texas, continued:
$1,455 Health Facilities Development Corp.
Hospital Revenue, All Saints Episcopal
Hospital, 6.25%, 8/15/12, MBIA ...........................$ 1,541
1,120 Housing Agency Residential Development
Revenue, Series D, 8.40%, 1/1/21, AMT..................... 1,174
4,925 Hurst Euless Bedford Independent School
District, GO, 0.00%, 8/15/09.............................. 2,483
1,000 Municipal Power Agency Revenue, 6.10%,
9/1/08, ETM............................................... 1,091
1,500 Panhandle-Plains Higher Education,
5.55%, 3/1/05............................................. 1,518
1,000 Port Corpus Christi Authority, PCR,
Hoechst Celanese Corp., 6.88%, 4/1/17..................... 1,071
1,000 San Antonio Electric & Gas, Series B,
7.00%, 2/1/09, FSA........................................ 1,064
2,900 Spring Independent School District, 0.00%,
2/15/08................................................... 1,603
1,415 State Higher Education Coordinating
Board, Student Loan, 7.45%, 10/1/06....................... 1,503
------
25,710
------
Utah (1.6%):
2,000 Intermountain Power Agency, Power
Supply Revenue, Series B, 6.50%,
7/1/09, MBIA........................ ..................... 2,256
1,780 State Housing Finance Agency, 6.35%,
7/1/12, AMT, AMBAC........................................ 1,817
------
4,073
------
Vermont (1.0%):
500 University of Vermont & State Agricultural
College, Series 1973A, 5.80%, 7/1/13...................... 504
1,930 State, GO, Series B, 5.00%, 1/15/09......................... 1,909
------
2,413
------
Virginia (2.1%):
1,585 Newport News Water, Series A, 6.10%,
6/1/08...................................................... 1,682
2,000 State Housing Development Authority,
Commonwealth Mortgage, Series A,
6.80%, 7/1/06, AMT, AMBAC ................................ 2,124
1,340 State Housing Development Authority
Commonwealth Mortgage, Series J,
6.65%, 7/1/10, SFMR ...................................... 1,408
------
5,214
------
Washington (4.8%):
1,000 Chelan County Public Utility, 7.60%,
7/1/25 Mandatory Put 7/1/03 @ 100,
AMT............................ .......................... 1,118
1,500 Clark County School District #114
Evergreen, GO, 6.00%, 12/1/07, AMBAC...................... 1,625
CONTINUED
<PAGE> 555
- -------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Intermediate Tax-Free Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------------------------ --------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Washington, continued:
$1,500 King County School District #400, GO,
6.50%, 12/1/08.................................. $ 1,534
1,084 Kitsap County Consolidated Housing,
7.00%, 8/20/08, GNMA............................ 1,173
3,000 Snohomish County Public Utility District
#001, Electric Revenue, 6.00%, 1/1/13, FGIC..... 3,086
3,500 State Nuclear Project #1, Series A, 6.00%,
7/1/08, AMBAC................................... 3,721
--------
12,257
--------
West Virginia (0.4%):
1,000 State Housing Development, Series B,
7.20%, 11/1/20, AMT**........................... 1,053
--------
Wyoming (0.2%):
1,500 Center District Tax Revenue Capital
Appreciation, Senior Dedicated,
Series A, 0.00%, 12/15/18, MBIA ................ 434
--------
Wisconsin (6.7%):
$6,000 Student Loan Corp., Student Loan
Revenue, 4.10%, 12/1/05, AMT*................... $6,000
6,000 Student Loan Corp., Student Loan Revenue,
4.10%, 1/30/97, AMT*............................ 6,000
1,395 Sweetwater County School District #2,
Green River, GO, 7.00%, 6/1/04, MBIA............ 1,586
2,230 Uinta School District #1, Series A,
6.88%, 6/1/02, FSA............................... 2,471
790 University of Wyoming, University
Revenues 7.10%, 6/1/10, Prerefunded 6/1/00 @101.. 857
--------
16,914
--------
Total Municipal Bonds 264,507
--------
Total (Cost-$257,214) (a) $264,507
========
</TABLE>
- -----
Percentages indicated are based on net assets of $254,062.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $19. Cost for federal income tax purposes differs from
value by net unrealized appreciation as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation ......................... $ 7,402
Unrealized depreciation ......................... (128)
-------
Net unrealized appreciation ..................... $ 7,274
=======
</TABLE>
* Variable rate securities having liquidity sources through bank letters of
credit or other credit and/or liquidity agreements. The interest rate,
which will change periodically, is based upon bank prime rates or an index
of market interest rates. The rate reflected on the Schedule of Portfolio
Investments is the rate in effect at December 31, 1996.
** Additional put and demand features exist allowing the Fund to require the
repurchase of the instrument within variable time periods including daily,
weekly, monthly, or semiannually.
AMBAC Insured by AMBAC Indemnity Corporation
AMT Alternative Minimum Tax Paper
ETM Escrow to Maturity
FGIC Insured by Financial Guaranty Insurance Corp.
FHA Insured by Federal Housing Administration
FSA Insured by Financial Security Assurance
GNMA Insured by Government National Mortgage Association
GO General Obligation
MBIA Insured by Municipal Bond Insurance Association
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
See notes to financial statements.
<PAGE> 556
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- -------- ----------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS (100.2%):
Alaska (0.8%):
$1,355 Home Mortgage Revenue Refunding,
8.00%, 3/1/09, Callable 12/1/00 @ 102.............. $1,460
225 Juneau City & Boro Home Mortgage
Revenue, 8.00%, 2/1/09............................. 242
1,000 State Housing Finance Corp., Insured
Mortgage Program, 1st Series, 7.65%, 12/1/10....... 1,022
20 State Housing Finance Corp., Revenue,
Local Guaranteed Housing, 8.20%, 12/1/97........... 20
--------
2,744
--------
Arizona (0.5%):
1,210 Maricopa County, Industrial Development,
Multi-Family Housing Revenue,
Series A, 6.25%, 7/1/06........................... 1,231
1,000 Tucson & Pima County, 0.00%, 12/1/14,
ETM................................................ 358
--------
1,589
--------
Arkansas(3.5%):
405 Drew County, Public Facilities Board,
7.90%, 8/1/11, Callable 8/1/03 @ 103............... 435
164 Drew County, Public Facilities Board,
7.75%, 8/1/11, Callable, 2/1/04 @ 100.............. 174
599 Jacksonville, Residential Housing Facilities Board,
Single Family Mortgage Revenue, 7.90%, 1/1/11,
Callable 7/1/03 @ 103.............................. 654
289 Jacksonville Residential Housing Facilities Board,
Single Family Mortgage Revenue, 7.75%, 1/1/11,
Callable 7/1/05 @ 103............................. 310
1,000 Jefferson County, PCR, Power & Light Co. Project,
6.13%, 10/1/07, Callable 4/1/06 @ 100............. 1,001
289 Lonoke County, Residential Housing Facilities Board,
Single Family Mortgage Revenue, 7.38%, 4/1/11,
Callable 4/1/03 @ 103............................. 310
696 Lonoke County, Residential Housing Facilities Board,
Single Family Mortgage Revenue,
Series A-2, 7.90%, 4/1/11, FNMA................... 755
1,000 Paragould Hospital Revenue, 6.38%, 10/1/17........... 1,014
1,424 Pope County Residential Facilities, Housing Board
Mortgage Revenue, Series B, 7.75%, 9/1/11,
Callable 8/1/02 @ 102.............................. 1,524
$2,350 State Development Authority Revenue Refunding,
8.00%, 8/15/11, Callable 8/15/01 @ 103, FHA........ 2,532
3,650 State Development Finance Authority Revenue,
0.00%, 12/1/11..................................... 1,217
95 State Development Finance Authority Revenue,
7.70%, 12/1/14, Callable 6/1/97 @ 102.............. 98
920 State Development Finance Authority Revenue,
State Single Family Housing,
AMT, 7.75%, 4/1/21, Callable 4/1/99 @ 102...... 959
557 Stuttgart Public Facilities Board Revenue,
Series A-2, 7.90%, 9/1/11, Callable
9/1/03 @ 103................................... 607
270 Stuttgart Public Facilities Board Revenue,
Series B, 7.75%, 9/1/11, Callable
3/1/06 @ 103....................................... 291
--------
11,881
--------
California (6.8%):
905 ABAG Finance for Nonprofit, Edgewood Apts.,
AMT, 5.75%, 11/1/06................................ 929
680 Housing Finance Agency Revenue, Local or
Guaranteed Housing, Series B, 8.63%, 8/1/15, Callable
8/1/00 @ 100....................................... 716
50 Housing Finance Agency Revenue, State Single Family
Housing, Series C, AMT, 7.45%, 8/1/11.............. 52
940 Housing Finance Agency Revenue, State Single Family
Housing, Series F, 7.88%, 8/1/19,
Callable 8/1/98 @ 102.............................. 979
230 Housing Finance Agency, Series B-1,
AMT, 5.65%, 2/1/16................................. 232
1,330 Housing Finance Mortgages, Series F,
AMT, 7.50%, 2/1/23 Callable 8/1/05 @ 102*.......... 1,458
5,000 Public Power Agency, Series C, 6.88%, 7/1/19......... 5,110
1,000 Redding Joint Powers Financing Authority, 5.25%,
6/1/15............................................. 971
935 Redondo Beach, Redevelopment Agency, Residential
Mortgage Revenue, Series B, 6.25%, 6/1/11,
Callable 6/1/03 @ 100.............................. 951
1,685 Rural Home Mortgage Financing Authority,
AMT, 5.30%, 11/1/05................................ 1,713
1,000 Rural Home Mortgage Financing Authority,
AMT, 7.55%, 11/1/26................................ 1,122
1,000 Rural Home Mortgage Financing Authority,
AMT, 6.45%, 5/1/27................................. 1,120
</TABLE>
Continued
<PAGE> 557
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Municipal Income fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- -------- ----------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, continued:
California, contined:
$ 350 Rural Home Mortgage Financing Authority Revenue,
Single Family Mortgage Revenue, AMT, 7.25%,
12/1/24, Callable 12/1/04 @ 103.................. $ 370
575 Rural Home Mortgage Financing Authority Revenue,
Single Family Mortgage Revenue, Series C,
AMT, 5.50%, 2/1/06............................... 586
3,475 Rural Home Mortgage Financing Authority, Series C,
AMT, Sinking Fund, 6.40%, 2/1/28................. 3,838
2,135 Sacramento, Municipal Utility District,
Electric Revenue, Series P, 6.00%, 7/1/15........ 2,135
1,140 State Department of Veterans, Series A,
AMT, 7.38%, 8/1/12............................... 1,164
--------
23,446
--------
Colorado (14.3%):
1,000 Aurora, Single Family Mortgage Revenue,
0.00%, 9/1/15, ETM............................... 300
2,315 Brush Creek Metropolitan District, GO, Refunding,
6.70%, 11/15/09, Callable
11/15/03 @ 101................................... 2,457
400 Central City Water Revenue, GO, Water Utility
Improvements, 8.63%, 9/15/11, Prerefunded,
Callable 9/15/02 @ 100........................... 422
655 Central City Water Revenue, GO, Water Utility
Improvements, 7.50%, 12/1/12, Prerefunded,
Callable 12/1/02 @ 100........................... 749
1,410 Central City Water Revenue, GO, Water Utility
Improvements, 7.40%, 12/1/07, Prerefunded,
Callable 12/1/02 @ 100........................... 1,605
2,500 Denver City & County Airport Revenue, AMT, 5.63%,
11/15/08, Callable 11/15/06 @ 102*............... 2,555
2,600 Denver City & County Airport,
Series B, AMT, 7.50%, 11/15/25..................... 2,706
1,000 Denver City & County Airport, Series C, AMT,
6.75%, 11/15/13, Callable
11/15/07 @ 100*.................................. 1,095
1,250 Eagle's Nest Metropolitan District, GO,
Refunding, 6.50%, 11/15/17....................... 1,290
278 El Paso County Home Mortgage, Series C, 8.30%,
9/20/18.......................................... 303
1,080 El Paso County Single Family Mortgage Revenue, 0.00%,
9/1/15, ETM...................................... 371
1,415 Englewood Multi-Family Housing, Mark Apartment
Revenue, Series B, 6.00%, 12/15/18, LOC: Citibank,
Callable 12/15/03 @ 100.......................... 1,401
10,450 Health Facilities, 0.00%, 7/15/22.................. 1,853
520 Housing Finance Authority, Capital Appreciation,
Single Family Revenue, 1985 Series A, 0.00%,
9/1/14........................................... 81
320 Housing Finance Authority, GO, Series A, Refunding,
6.90%, 5/1/01.................................... 338
875 Housing Finance Authority, Multi-Family
Insured Mortgage Revenue, 9.00%, 10/1/25......... 882
2,560 Housing Finance Authority, Multi-Family
Insured Mortgage Revenue, 6.00%, 10/1/25......... 2,074
1,685 Housing Finance Authority, Revenue Refunding,
Series A, 6.80%, 8/1/14, Callable 8/1/02
@ 102........................................ 1,756
460 Housing Finance Authority, Series A-3,
AMT, 6.50%, 11/1/23.............................. 472
2,350 Housing Financing Authority, Series B-2, 7.45%,
11/1/27.......................................... 2,615
1,500 Housing Finance Authority, Series C-1, AMT, 7.55%,
11/1/27.......................................... 1,645
915 Housing Finance Authority, Single Family Program,
Series B, 6.13%, 5/1/13, Callable
11/1/04 @ 103.................................... 934
860 Housing Finance Authority, Single Family Program,
Series B, 7.50%, 11/1/24, Callable 11/1/04
@ 105.............................................. 955
245 Housing Finance Authority, Single Family Program,
Series B-2, 6.90%, 8/1/17, Callable 2/1/01
@ 102............................................ 254
985 Housing Finance Authority, Single Family Project,
Series C-2, 7.45%, 6/1/17, Callable 6/1/05
@ 105............................................ 1,091
475 Housing Finance Authority, Single Family Program,
Series D-1, 6.60%, 8/1/17, Callable 8/1/01
@ 102............................................ 482
2,000 Housing Finance Authority, Single Family Program,
Series D-1, 7.38%, 6/1/26........................ 2,186
810 Housing Finance Authority, Single Family Program,
Series E, AMT, 6.25%, 12/1/09, Callable
12/1/04 @ 103................................... 836
445 Housing Finance Authority, Single Family Program,
Sub Series A, AMT, 6.50%, 12/1/02............... 461
2,000 Housing Financing Authority, Single Family Program,
Series A-1, AMT, 7.40%, 11/1/27, Callable
5/1/11 @ 100.................................... 2,193
1,310 Jefferson County, Single Family Revenue Refunding,
8.88%, 10/1/13, Callable 4/1/01 @ 103........... 1,409
</TABLE>
Continued
<PAGE> 558
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Municipal Income fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- -------- ---------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, continued:
Colorado, continued:
$ 4,525 Meridian Metropolitan District, GO,
7.50%, 12/1/11, Callable 12/1/01 @ 101................ $4,977
1,500 Mesa County Residual Revenue Refunding,
0.00%, 12/1/11, ETM................................... 670
1,030 Mountain Village Metropolitan District, San Miguel County,
GO, 7.95%, 12/1/03, Callable 12/1/02 @ 101............ 1,147
2,555 Mountain Village Metropolitan District, San Miguel County,
GO, 8.10%, 12/1/11, Callable 12/1/02 @ 101............ 2,841
1,500 Telluride Housing Authority, Housing Revenue,
Shandoka Apartments Project, 7.50%, 6/1/23,
Callable 6/1/03 @ 101................................. 1,576
500 Telluride Housing Authority, Housing Revenue,
Shandoka Apartments Project, 7.50%, 6/1/12,
Callable 6/1/02 @ 101................................. 526
------
49,508
------
Connecticut (0.1%):
200 State Housing Mortgage, Series A, 7.63%,
11/15/17, Callable 5/15/97 @ 102.5.................... 206
------
Delaware (0.1%):
1,075 New Castle County, Single Family
Mortgage Revenue, 0.00%, 11/1/16...................... 153
------
Florida (9.0%):
1,250 Brevard County Housing Finance Authority,
Family Mortgage Revenue, AMT, 6.13%, 9/1/09,
Callable 9/1/04 @ 102................................. 1,272
4,510 Duval County Housing Finance Authority, Single Family
Mortgage Revenue, Series C, Series C, 7.35%, 7/1/24,
Callable 9/1/00 @ 103................................. 4,820
4,730 Escambia County Housing, AMT, 5.70%, 10/1/06............ 4,811
565 Escambia County Housing Mortgage, AMT, 6.60%,
10/1/12............................................... 574
530 Housing Finance Agency Home Ownership Revenue,
7.50%, 9/1/14, Callable 9/1/00 @ 102, GNMA............ 559
1,000 Leon County Housing Finance Authority,
Multi-County Program, Series B, AMT, 7.30%,
1/1/28................................................ 1,101
3,120 Manatee County Housing Finance Authority,
Mortgage Revenue, AMT, 6.88%, 11/1/26,
Callable 5/1/06 @ 105................................. 3,324
850 Manatee County Housing Finance Authority,
Mortgage Revenue, Sub Series 1, AMT,
8.38%, 5/1/25....................................... 952
3,595 Osceola County Transportation Revenue,
Highway Improvements, 0.00%, 4/1/14................... 1,274
1,155 Palm Beach County Housing Finance Authority,
Single Family Mortgage Revenue, Series A, AMT, 6.38%,
10/1/06, Callable 10/1/04 @ 102....................... 1,187
1,205 Pinellas County Housing Finance Authority, Single
Family Mortgage Revenue, AMT, 6.25%, 8/1/12,
Callable 2/1/05 @ 102................................. 1,236
1,000 Pinellas County Housing Finance Authority, Single
Family Mortgage Revenue, Multi-County, Series A, AMT,
6.35%, 2/1/17, Callable 2/1/05 @ 102................. 1,028
8,715 Plantation Water & Sewer, 0.00%, 3/1/07................. 5,207
2,355 Polk County Housing Finance Authority,
Series A, AMT, 7.88%, 9/1/22, Callable 3/1/00
@ 103................................................. 2,499
1,320 Santa Rosa Bay Bridge Authority, 0.00%, 7/1/08.......... 642
1,625 Santa Rosa Bay Bridge Authority, 0.00%, 7/1/09.......... 733
-------
31,219
-------
Georgia (2.4%):
2,500 Cobb County Housing Authority, Pass thru
Certificates, Signature Series B, 9.00%,
10/1/10............................................... 2,581
910 De Kalb County Housing Authority Revenue, State
Single Family Housing, 7.65%, AMT, 6/1/18,
Callable 6/1/04 @ 100................................. 957
785 De Kalb County Housing, Macon Apts., 6.40%, 5/1/05...... 804
1,765 Fulton County Housing Authority, 6.30%, 7/1/16.......... 1,771
12,000 Richmond County, Sub Series C, 0.00%, 12/1/21, ETM...... 2,241
-------
8,354
-------
Idaho (0.8%):
380 Idaho Housing Agency, Family Mortgage, AMT,
6.30%, 7/1/24......................................... 386
225 Idaho Housing Agency, Family Mortgage,
Series A-2, AMT, 6.55%, 7/1/24........................ 232
</TABLE>
Continued
<PAGE> 559
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Municipal Income fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- -------- ---------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, continued:
Idaho, continued:
$ 2,155 Idaho Housing & Financial Assistance,
Series H, AMT, 6.05%, 7/1/14........................ $ 2,148
-------
2,766
-------
Illinois (5.5%):
5,890 Addison Alton Electric Public Improvements Revenue,
0.00%, 7/1/11, Callable 7/1/04
@ 62.04.............................................. 2,383
215 Aurora Kane & Du Page Counties, Single Family
Mortgage Revenue, Series A, AMT, 7.95%, 10/1/25...... 236
355 Aurora, Single Family Mortgage Revenue Refunding,
Series B, AMT, 8.05%, 9/1/25......................... 394
3,915 Bolingbrook Mortgage Revenue, Capital Appreciation,
Sub Series 1, 0.00%, 1/1/11..,,...................... 1,418l
3,455 Chicago, Single Family Mortgage Revenue,
Series A, AMT, 7.00%, 9/1/27, Callable 3/1/06
@ 105*.....,,........................................ 3,801
1,500 Chicago, Single Family Mortgage, Series B,
AMT, 7.63%, 9/1/27, Callable 6/15/06 @ 105*.......... 1,663
840 Danville Single Family Mortgage Revenue Refunding,
7.30%, 11/1/10, Callable 11/1/03 @ 102............... 881
20,000 Development Regency Park, 0.00%, 7/15/25, ETM.......... 2,894
3,530 Freeport Single Family Mortgage Revenue,
0.00%, 8/1/10, Callable 10/1/01 @ 48.96.............. 1,197
730 Housing Development Authority, Resident
Mortgage Revenue, Series A, AMT, 7.35%, 8/1/10,
Callable 8/1/01 @ 102................................ 762
4,685 Moline Mortgage Revenue, Capital Appreciation,
Sub Series 1, 0.00%, 5/1/02.......................... 1,706
1,145 Quincy Single Family Mortgage Revenue Refunding,
6.87%, 3/1/10, Callable 3/1/04 @ 102................. 1,199
505 Rock Island Residential Mortgage Revenue Refunding,
7.70%, 9/1/08, Callable 9/1/02 @ 102................ 538
-------
19,072
Indiana (1.5%):
2,250 Marion County Hospital Authority Revenue,
6.50%, 9/1/13, Callable 9/1/99 @ 102................. 2,401
1,000 State Housing Financing Authority,
Series A-2, AMT, 6.45%, 7/1/14,
Callable 7/1/05 @ 102................................ 1,035
1,720 State Toll Finance Authority,
Toll Road Revenue, 6.00%, 7/1/15,
Callable 7/1/97 @ 100................................ 1,720
--------
5,156
--------
Iowa (1.4%):
650 Davenport Home Ownership Mortgage
Revenue Refunding, 7.90%, 3/1/10,
Callable 9/1/04 @ 102............................... 690
650 Finance Authority, Single Family Revenue,
AMT, 7.90%, 11/1/22, Callable 11/1/99 @ 102,
GNMA................................................ 682
2,535 Finance Authority, Single Family Revenue
Mortgage Backed Securities Program, Series C,
6.40%, 7/1/19, Callable 1/1/05 @ 102................. 2,616
925 Salix, PCR, Gas & Electric Project, 5.75%,
6/1/03............................................... 930
-------
4,918
-------
Kansas (3.3%):
920 Ford County, Single Family Mortgage Revenue,
7.90%, 8/1/10........................................ 991
2,250 Johnson County, Single Family Mortgage Revenue,
7.10%, 5/1/12........................................ 2,431
580 Labette County, Single Family Mortgage Revenue,
8.40%, 12/1/11....................................... 615
585 Reno County, Mortgage Revenue, 8.70%, 9/1/11........... 618
2,400 Reno & Labette County, Single Family Revenue, 0.00%,
12/1/15........ ..................................... 812
2,290 Sedgwick County, Series B, AMT, 7.80%, 6/1/22,
Callable 6/1/00 @ 103, GNMA.......................... 2,416
760 Sedgwick County, Series C, 8.62%, 11/1/18.............. 792
445 Sedgwick & Shawnee County, Single
Family Revenue, 8.05%, 5/1/14........................ 486
465 Sedgwick & Shawnee County, Single Family Revenue,
7.80%, 5/1/14........................................ 508
470 Sedgwick & Shawnee County, Single Family Revenue,
7.80%, 11/1/24....................................... 521
1,210 Wichita, Single Family Mortgage Revenue,
7.10%, 9/1/09........................................ 1,258
-------
11,448
-------
Kentucky (0.5%):
1,760 Meade County, PCR, Olin Corp. Project,
6.00%, 7/1/07........................................ 1,749
-------
</TABLE>
Continued:
<PAGE> 560
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Municipal Income fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- -------- ----------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, continued:
Louisiana (1.0%):
$ 900 Calcasieu Parish Public Transportation Authority,
0.00%, 5/1/13............................................. $ 289
915 Iberia Home Mortgage Authority, 7.37%, 1/1/11............... 981
1,622 Public Facilities Authority, 8.45%, 12/1/12................. 1,721
96 Public Facilities Authority, 7.50%, 10/1/15................. 102
231 St. Mary Public Finance Authority, 7.63%, 3/25/12........... 253
------
3,346
------
Maine (0.8%):
260 State Housing Authority, 6.90%, AMT, 11/15/01............... 271
810 State Housing Authority, Series 1, 0.00%, AMT, 11/1/10...... 366
535 State Housing Authority, Series 1, 0.00%, AMT, 11/1/11...... 226
1,750 State Housing Mortgage, Series C, 6.10%, AMT, 11/15/16...... 1,742
------
2,605
------
Massachusetts (2.5%):
405 Springfield Housing Authority, 9.50%, 11/1/05............... 433
1,500 Springfield Housing Authority, 9.62%, 11/1/17............... 1,598
3,250 Springfield Housing Authority, 9.62%, 11/1/26............... 3,451
255 State Housing Finance Agency, 7.00%, AMT, 12/1/23........... 260
1,020 State Housing Finance Agency, 7.13%, AMT, 6/1/25............ 1,082
1,920 State Port Authority Revenue, 7.12%, 7/1/12,
Callable 7/1/97 @100...................................... 1,935
------
8,759
------
Michigan (1.1%):
950 Hartland Consolidated School District, 5.12%, 5/1/12........ 919
1,395 State Housing Development Authority, 7.50%, 6/1/15.......... 1,469
880 State Housing Development Authority, 7.70%, 12/1/16......... 899
530 State Housing Development Authority, AMT, 7.65%, 12/1/12.... 557
-------
3,844
-------
Minnesota (0.3%):
2,950 Minneapolis Mortgage Revenue, 0.00%, 10/1/12................ 1,034
-------
Mississippi (2.2%):
915 Higher Education, 6.05%, AMT, 9/1/07........................ 936
720 Home Corp., Single Family Revenue, 7.10%, AMT, 12/1/10...... 741
2,000 Home Corp., Single Family Revenue, 7.90%, AMT, 3/1/25....... 2,215
2,000 Home Corp. Single Family Revenue, Series F, 7.55%,
AMT, 12/1/27.............................................. 2,175
1,525 Housing Finance Corp., 8.25%, AMT, 10/15/18, GNMA........... 1,608
-------
7,675
-------
Missouri (2.8%):
665 Grandview Industrial Development Authority,
9.25%, 5/15/08............................................ 655
2,295 Jackson County Industrial Development Authority,
10.00%, 3/1/10............................................ 2,309
1,415 State Housing Development, 7.38%, AMT, 8/1/23............... 1,501
910 State Housing Development, Common Mortgage Revenue,
Single Family Homeowner, 7.25%, AMT, 9/1/26,
Callable 3/1/06 @ 105..................................... 1,000
1,995 State Housing Development, Common Mortgage
Revenue, Single Family Homeowner, Series A, AMT,
7.20%, 9/1/26, Callable 9/1/06 @ 105*..................... 2,172
2,000 State Housing Mortgage Revenue, AMT, 7.10%, 9/1/27.......... 2,161
-------
9,798
-------
Montana (0.5%):
1,557 Green Plaza Housing Inc., 10.43%, 1/1/22.................... 1,620
Nebraska (0.3%):
3,505 Finance Authority, Single Family Revenue 0.00%,
12/15/13.................................................. 639
250 Finance Authority, Single Family Revenue,
AMT, 6.35%, 3/15/06........................................ 257
-------
896
-------
Nevada (0.8%):
430 Housing Division, 6.20%, 10/1/15............................ 439
1,500 Housing Division, Series C, 6.60%, AMT, 4/1/14.............. 1,545
800 Housing Division, Single Family, Series B-2,
7.90%, AMT, 10/1/21, Callable 4/1/00 @ 102................ 837
-------
2,821
-------
New Jersey (0.7%):
575 State Higher Education Authority, 7.00%,
AMT, 7/1/05............................................... 597
</TABLE>
Continued
<PAGE> 561
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Municipal Income fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- -------- ----------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, continued:
New Jersey, continued:
$ 710 State Housing & Mortgage Finance Agency,
8.38%, 4/1/17............................................. $ 744
935 State Housing & Mortgage Finance Agency,
7.38%, 10/1/17............................................ 982
-------
2,323
-------
New Mexico (2.1%):
335 Bernalillo County, 7.00%, 11/1/08........................... 336
415 Hobbs, Single Family Mortgage Revenue Refunding,
8.75%, 7/1/11............................................. 456
175 Las Cruces Housing Development Corp., Multi-family
Revenue Refund Mortgage, Sub-Series B, 9.00%,
10/1/03................................................... 179
1,140 Las Cruces Housing Development Corp., Multi-Family
Revenue Refunding, Series A, 6.40%,
10/1/19................................................... 1,149
410 Mortgage Financial Authority Refunding,
Single Family Mortgage, Series A-2 6.85%,
7/1/12.................................................... 430
290 Mortgage Financial Authority, Single Family Mortgage,
Series A, AMT, 7.80%, 3/1/21.............................. 302
955 Mortgage Financial Authority, Single Family Mortgage,
Series H, AMT, 6.45%, 7/1/25.............................. 975
1,760 Mortgage Finance Authority Revenue Refunding, 6.90%, 7/1/24,
Callable 7/1/02 @ 102..................................... 1,834
1,000 Student Loan Revenue, Sub Series A-2,
AMT, 6.20%, 11/1/08....................................... 1,016
600 Student Loan Revenue, Sub Series A-2,
AMT, 6.30%, 11/1/09....................................... 611
-------
7,288
-------
New York (2.4%):
2,500 New York City, Japan Airlines, AMT, 6.00%,
11/1/15................................................... 2,549
1,395 State Mortgage Agency Revenue, Homeowner Mortgage,
Series UU, AMT, 7.75%, 10/1/23............................ 1,472
4,450 State Urban Development Corp. Revenue, Series A, 5.50%,
4/1/16, Callable 4/1/06 @ 102............................. 4,408
-------
8,429
-------
North Carolina (2.5%):
1,535 East Power Agency, Series E, 6.50%, 1/1/24,
Callable 1/1/97 @ 100, AMBAC.............................. 1,542
1,795 Housing Finance Authority Agency, Series O,
7.60%, AMT, 3/1/21, Callable 1/1/98 @ 101*................ 1,857
5,350 Municipal Power Agency #1, Catawba Electric Revenue,
Series B, 6.00%, 1/1/20................................... 5,317
-------
8,716
-------
North Dakota (1.5%):
1,000 Grand Forks Sales Tax, 5.90%, 5/1/17........................ 995
475 Municipal Power Agency, Series B, 6.00%, 1/1/20............. 475
1,285 State Housing Financial Agency, Single Family Mortgage
Revenue, Series A, AMT, 8.38%, 7/1/21..................... 1,355
1,585 State Housing Mortgage, Series A,
AMT, 6.00%, 7/1/17........................................ 1,585
300 Student Loan, Series D, AMT, 5.95%, 7/1/07,
Callable 7/1/06 @ 100..................................... 309
300 Student Loan, Series D, AMT, 6.15%, 7/1/09,
Callable 7/1/06 @ 100..................................... 310
-------
5,029
-------
Ohio (1.9%):
1,000 Dayton Air Freight, 6.05%, 10/1/09.......................... 1,023
1,600 Forest Hills Local Schools, 6.25%, 12/1/20.................. 1,646
1,595 Housing Financial Agency, Single Family Mortgage Revenue,
Series A, AMT, 7.65%, 3/1/29, GNMA........................ 1,685
930 Housing Financial Agency, Single Family Mortgage Revenue,
Series D, 7.00%, 9/1/11, Callable 9/1/01 @ 100,
GNMA..................................................... 986
1,060 Housing Financial Agency, Single Family Mortgage,
Series D, 7.05%, 9/1/16.................................. 1,120
-------
6,460
-------
Oklahoma (1.4%):
500 Holdenville Industrial Authority, Correctional
Facility Revenue, 5.95%, 7/1/02.......................... 508
3,000 Housing Mortgage Agency, Series B-2, 7.63%, AMT, 9/1/26,
Callable 3/1/06 @ 105*................................... 3,282
1,000 Langston University, Student Housing, 5.13%, 2/1/17........ 949
-------
4,739
-------
Oregon (0.2%):
600 Eugene Trojan Nuclear Project Revenue, 5.90%, 9/1/09......... 600
-------
</TABLE>
Continued
<PAGE> 562
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Municipal Income fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- -------- ------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, continued:
Pennsylvania (2.2%):
$ 1,000 Clarion County Hospital Authority, 8.10%,
7/1/12............................................. $ 1,061
2,000 Greene County Industrial Development Authority,
PCR, 6.10% 2/1/07, Callable 2/1/97 @ 100........... 2,001
1,280 Housing Finance Authority, Single Family Mortgage,
Series 47, AMT, 6.75%, 10/1/08..................... 1,432
705 Pittsburgh Redevelopment, Sidney Square,
Project A, AMT, 6.10%, 9/1/10...................... 730
1,705 Pittsburgh Urban Redevelopment Authority Mortgage
Revenue, Series A, 8.35%, 10/1/14.................. 1,780
665 Pittsburgh Urban Redevelopment Authority,
Series C, AMT, 7.88%, 12/1/16, GNMA................ 698
-------
7,702
-------
Rhode Island (1.2%):
2,630 Housing & Mortgage Financial Corp.,
AMT, 6.15%, 4/1/17................................. 2,636
840 Housing & Mortgage Financial Corp., Homeownership
Opportunity, Series 1-A, AMT, 8.25%, 10/1/22....... 873
695 Housing & Mortgage Financial Corp., Homeownership
Opportunity, Series C-1, AMT, 6.80%,
10/1/23............................................ 711
-------
4,220
-------
South Carolina (2.3%):
2,485 Piedmont Municipal Power Agency, Electric Revenue
Refunding, Series A, 7.25%, 1/1/22,
Callable 1/1/98 @ 100.............................. 2,522
3,000 Piedmont Municipal Power Agency,
Series A, 6.60%, 1/1/21............................ 3,011
2,500 State Housing Authority, Single Family
Mortgage Purchase, 7.00%, 7/1/11................... 2,575
-------
8,108
-------
South Dakota (3.1%):
5,240 Health & Educational Facility Authority Revenue,
St. Lukes Midland Regional Medical, 6.63%, 7/1/11,
Callable 7/1/01 @ 102.............................. 5,688
400 Housing Development Authority, Homeowner Mortgage,
Series D-1, AMT, 6.80%, 5/1/12..................... 419
1,625 Student Loan Assistance, 7.63%, 8/1/06,
Callable 8/1/99 @ 102*............................. 1,710
1,490 Student Loan Assistance Corp., Student Loan Revenue,
AMT, 7.63%, 8/1/06, Callable 8/1/99
@ 102.............................................. 1,591
1,335 Student Loan, Series A, AMT, 6.65%, 8/1/08........... 1,377
-------
10,785
-------
Tennessee (1.4%):
875 Housing Development Agency, Homeownership Program,
Series P, 7.70%, 7/1/16............................ 919
1,345 Housing Development Agency, Homeownership Program,
Series V, AMT, 7.65%, 7/1/22....................... 1,405
665 La Follette Housing Development Corp., FHA,
Series A, 6.25%, 1/1/16, MBIA...................... 680
380 La Follette Housing Development Corp., FHA,
Series A, 6.37%, 1/1/20, MBIA...................... 385
1,290 Memphis Health, Educational, & Housing
Refunding Multi-Family, 7.37%, 1/20/27............. 1,374
-------
4,763
-------
Texas (10.0%):
1,295 Beaumont Housing Finance Corp. Refunding,
9.20%, 3/1/12...................................... 1,417
1,765 Bexar County Housing Finance Corp., Residual
Revenue Capital Appreciation, GO, 0.00%, 3/1/15,
Callable 9/1/03 @ 49.36............................ 566
2,500 Central Housing Finance Corp., Single
Family Mortgage Revenue, 0.00%, 9/1/16............. 803
5,020 Dallas County Housing Mortgage Revenue,
0.00%, 1/1/17...................................... 728
4,000 Dallas - Fort Worth Regulation Airport Revenue,
6.10%, 11/1/07..................................... 4,001
685 El Paso Housing Finance Corp., Mortgage Refunding,
Single Family, Series A, 8.75%, 10/1/11............ 740
685 El Paso Housing Finance Corp. Mortgage, Single
Family Mortgage Revenue, 7.75%, AMT, 9/1/19,
GNMA............................................... 716
3,830 Fort Worth Housing Finance Corp., Refunding,
8.50%, 10/1/11..................................... 4,177
1,520 Galveston Property Finance Authority Income,
Single Family Mortgage Revenue, Series A, 8.50%,
9/1/11, Callable 9/1/01 @ 103...................... 1,647
2,365 Houston Housing Financial Corp.,
Series B-2, 0.00%, 6/1/14.......................... 630
</TABLE>
Continued
<PAGE> 563
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Municipal Income fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- -------- ----------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, continued:
Texas, continued:
$ 2,500 Houston Housing, Series B-1, 8.00%, 6/1/14................ $ 2,692
1,000 Laredo Housing Finance Corp., Single
Family Mortgage Revenue, 6.20%, AMT, 9/1/19, GNMA &
FNMA.................................................... 1,018
770 Lubbock Housing Finance, 8.00%, AMT, 12/1/20,
GNMA.................................................... 790
600 North Higher Education Authority, Student
Loan Revenue, Series D, 6.88% 4/1/02, Callable 4/1/00 @ 102,
AMBAC................................................... 635
2,000 San Antonio Hotel Occupancy Revenue,
0.00%, 8/15/17.......................................... 614
2,530 Socorro Independent School District,
0.00%, 9/1/11........................................... 1,125
1,555 Southeast Housing Finance Corp., Residual
Revenue Capital Appreciation, Series A,
0.00%, 11/1/14.......................................... 529
510 State Department of Housing & Community
Affairs, Series A, 5.90%, 7/1/06........................ 511
11,000 State Department of Housing & Community Affairs,
Single Family Revenue Capital Appreciation,
Refunding Mortgage, Jr. Lien,
Series A, 0.00%, 3/1/15................................. 3,266
1,500 State Department of Housing, Series A,
6.30%, 1/1/16........................................... 1,509
2,985 State Student Loan, Sr. Lien, AMT,
0.00%, 10/1/25.......................................... 2,533
655 State Veterans Housing Assistance, AMT,
6.05%, 12/1/12.......................................... 664
220 Travis County Housing Finance Corp., Residential
Mortgage Revenue, Series A, 7.00%, 12/1/11,
GNMA & FNMA............................................. 233
1,950 Travis County Housing Finance Corp., Single Family Mortgage
Revenue Refunding, Series A, 6.25%, 4/1/19,
GNMA & FNMA............................................. 2,012
1,000 Winter Garden Housing Finance Corp., Single Family Mortgage
Revenue, AMT, 6.20%, 10/1/19, GNMA & FNMA............... 1,015
--------
34,571
--------
Utah (0.1%):
275 State Housing Finance Agency, Single Family
Mortgage, Series A-1, 6.90%, 7/1/12..................... 289
--------
Virginia (0.2%):
770 Virginia Beach Development Authority, Multi-Family
Housing Revenue, 2nd Mortgage, Series B, 8.75%,
1/15/08................................................. 760
--------
Washington (0.1%):
403 Skagit County Housing Authority, Low Income
Housing Assistance Revenue, Sea Mar Project,
7.00%, 6/20/03, GNMA.................................... 432
--------
West Virginia (1.8%):
315 Charleston, 0.00%, 12/1/11................................ 124
340 Charleston, 0.00%, 12/1/12................................ 123
340 Charleston, 0.00%, 12/1/13................................ 114
385 Charleston, 0.00%, 12/1/15................................ 109
410 Charleston, 0.00%, 12/1/16................................ 107
1,000 Charleston, 0.00%, 12/1/20................................ 194
1,595 Charleston, 0.00%, 12/1/21................................ 289
1,630 Charleston, 0.00%, 12/1/22................................ 276
1,665 Charleston, 0.00%, 12/1/23................................ 263
7,000 Kanawha-Putnam County, 0.00%, 12/1/16, ETM................ 2,216
800 State Housing Development Fund Revenue, 6.13%, 7/1/13,
Callable 7/1/97 @ 100................................... 806
1,500 State Housing Development, Series B, AMT, 7.20%,
11/1/20, Callable 5/1/02 @ 102*......................... 1,579
--------
6,200
--------
Wisconsin (1.2%):
1,510 Housing & Economic Development,
Series E, AMT, 8.00%, 3/1/21............................ 1,543
2,450 State, Series A, 7.50%, 1/1/15, Callable 1/1/97
@ 101.5*................................................ 2,494
--------
4,037
--------
Wyoming (1.1%):
350 Community Development Authority, AMT,
7.75%, 6/1/09, Callable 11/30/99 @ 103*................. 364
150 Community Development Authority, Single Family Mortgage,
Series A, FHA, 6.88%, 6/1/14, Callable
6/1/01 @ 102............................................ 153
3,400 Student Loan Corp. Revenue, 4.10%, 1/30/96................ 3,400
--------
3,917
--------
Total Municipal Bonds 345,975
--------
Total Cost-$(341,207)(a) $345,975
========
</TABLE>
Continued
<PAGE> 564
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Municipal Income fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
- -----
Percentages indicated are based on net assets of $345,372.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $74. Cost for federal income tax purposes differs from
value by net unrealized appreciation as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................ $5,904
Unrealized depreciation................................ (1,210)
------
Net unrealized appreciation............................ $4,694
======
</TABLE>
* Put and demand features exist allowing the Fund to require the repurchase
of the instrument within variable time periods including daily, weekly,
monthly, or semiannually.
AMBAC Insured by AMBAC Indemnity Corporation
AMT Subject to Alternative Minimum Tax.
ETM Escrowed To Maturity
FHA Insured by Federal Housing Administration
FNMA Insured by Federal National Mortgage Assoc.
GNMA Insured by Government National Mortgage Assoc.
GO General Obligation
LOC Letter of Credit
MBIA Insured by Municipal Bond Insurance Assoc.
PCR Pollution Control Revenue
See notes to financial statements.
<PAGE> 565
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Kentucky Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------------- ----------------------------------------------- ------
<S> <C> <C>
MUNICIPAL BONDS (97.7%):
Arizona (0.9%):
$1,000 Tucson & Pima County, Single Family Mortgage, 0.00%,
12/1/14, ETM........................................ $ 358
------
Kentucky (96.2%):
510 Clinton County School District Financial
Corp., 6.10%, 6/12/12............................... 534
2,000 Development Financial Authority Hospital Revenue,
Elizabeth, Med-A, 6.00%, 11/1/10, FGIC.............. 2,066
500 Eastern Kentucky University Revenues,
6.20%, 5/1/04, AMBAC................................ 540
500 Fayette County School District Financial Corp.,
6.00%, 5/1/03....................................... 528
500 Higher Education Student Loan Corp., Insured-Series C,
6.50%, 6/1/02, GSL.................................. 536
1,705 Higher Education, Student Loan Corp., Insured
Student Loan Revenue, Series D, 7.00%, 12/1/06, GSL,
AMT................................................ 1,832
1,500 Higher Education Student Loan Corp.,
Insured Student Loan Revenue, AMT, Series C,
5.45%, 6/1/03, GSL................................. 1,541
400 Housing Corp., Housing Revenue, Series B, 5.85%,
7/1/00, FHA........................................ 415
275 Housing Corp., Housing Revenue, Series B, 6.20%,
7/1/03, FHA........................................ 288
500 Housing Corp., Housing Revenue, Series A, 5.50%,
1/1/06, FHA........................................ 516
500 Housing Corp., Housing Revenue, Series A, 5.60%,
1/1/07, FHA........................................ 514
500 Infrastructure Authority, Series E, 6.50%,
6/1/05............................................. 537
250 Infrastructure Authority, Series G, 6.10%,
6/1/02............................................. 268
1,000 Jefferson City, Series A, 5.50%, 4/1/11,
AMBAC.............................................. 1,013
725 Jefferson County Capital Projects, Series A,
6.10%, 8/15/07..................................... 774
1,000 Jefferson County Capital Projects, Series A,
5.50%, 4/1/10, AMBAC............................... 1,018
400 Jefferson County Health Facilities Revenue,
Jewish Hospital, 6.00%, 5/1/01, AMBAC.............. 424
500 Jefferson County Health Facilities Revenue,
Jewish Hospital, 6.38%, 5/1/08, AMBAC.............. 539
930 Jefferson County Health Facilities Revenue,
Jewish Hospital, 5.65%, 1/1/10..................... 938
500 Jefferson County, Hospital Revenue, Alliant Health,
6.20%, 10/1/04, MBIA............................... 545
500 Kenton County Airport Revenue, International,
AR-A, AMT, 6.10%, 3/1/04, FSA...................... 529
400 Kenton County Airport Revenue, International,
AR-A, AMT, 6.20%, 3/1/05, FSA...................... 423
500 Kenton County Airport Revenue, International,
Series B, AMT, 5.75%, 3/1/07, FSA.................. 516
500 Kenton County Airport Revenue, International,
Series B, AMT, 5.75%, 3/1/08, FSA.................. 512
750 Kenton County School District Financial Corp.,
4.50%, 7/1/99...................................... 755
325 Kenton County School District Financial Corp.,
5.25%, 7/1/07...................................... 330
500 Kentucky State University Revenue, Series G, 6.25%,
5/1/02, MBIA....................................... 542
500 Lexington-Fayette Urban County Government
Sewer System Revenue, 6.35%, 7/1/07, MBIA.......... 544
200 Louisville & Jefferson County, 4.80%, 5/15/98, MBIA.. 203
200 Louisville Public Property Corp., 6.40%,
12/1/07............................................ 217
310 Louisville Water Revenue, 6.38%, 11/1/97, ETM........ 317
500 Louisville Water Works Board Water System,
5.40%, 11/15/04.................................... 519
500 Louisville Water Works Board Water System, 5.63%,
11/15/07........................................... 517
1,040 Louisville Water Works Board Water System, 5.75%,
11/15/09........................................... 1,072
1,000 McCracken County Hospital Revenue, Mercy Health,
Series A, 6.20%, 11/1/05, MBIA..................... 1,100
1,000 McCracken County Hospital Revenue, Mercy Health,
Series A, 6.40%, 11/1/07, MBIA.................... 1,105
200 Morehead State University, Series M, 6.30%,
11/1/08, AMBAC.................................... 214
500 Muhlenberg County School District, 2nd Series,
5.85%, 8/1/10..................................... 518
250 Murray State University Revenue, 5.60%, 5/1/07....... 258
530 Northern Kentucky University Revenue,
6.10%, 5/1/06, AMBAC.............................. 569
600 Perry County School District, School Building Revenue,
6.25%, 7/1/09..................................... 640
</TABLE>
Continued
<PAGE> 566
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Kentucky Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------------------------------- ------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Kentucky, continued:
$ 250 Richmond Water, Gas & Sewer Revenue,
6.50%, 6/1/99, MBIA, ETM........................... $ 263
100 Shelby County School District, 6.25%, 9/1/03.......... 108
500 Shelby County School District, 6.50%, 9/1/05.......... 548
1,000 State Property & Buildings, Project #54,
5.10%, 9/1/00...................................... 1,024
2,000 State Property & Buildings, Project #50,
6.00%, 2/1/10, Prerefunded 2/1/01 @ 100............ 2,116
750 State Turnpike Authority Development,
5.70%, 1/1/03...................................... 789
750 State Turnpike Authority Development,
5.50%, 7/1/08, AMBAC............................... 781
1,000 State Turnpike Authority Development,
5.50%, 7/01/09, AMBAC.............................. 1,035
1,000 State Turnpike Authority Development,
5.63%, 7/1/10, AMBAC............................... 1,031
500 State Turnpike Authority Development,
5.75%, 7/1/11, AMBAC............................... 518
500 State Turnpike Authority Resource Recovery,
6.63%, 7/1/08, ETM................................. 543
1,000 State Turnpike Authority Resource Recovery,
Series A, 6.00%, 7/1/09............................ 1,001
250 State Turnpike Authority Toll Road,
5.80%, 7/1/99, ETM................................. 259
500 University of Kentucky Revenues,
Series F, 5.75%, 5/1/97............................ 504
500 University of Kentucky Revenues,
Series F, 6.25%, 5/1/07............................ 514
500 University of Louisville Revenues,
Series I, 5.40%, 5/1/07............................ 514
500 University of Louisville Revenues,
Series I, 5.40%, 5/1/08............................ 510
500 University of Louisville Revenues,
Series I, 5.40%, 5/1/09............................ 507
660 Western Kentucky University Revenues,
Series L, 5.00%, 5/1/09............................ 650
950 Winchester Utilities Revenue, 5.30%, 7/1/09........... 945
---------
40,926
---------
Louisiana (0.6%):
1,000 Public Facility Authority, 0.00%, 12/1/19,
FNMA, ETM......................................... 261
---------
Total Municipal Bonds 41,545
---------
Investment Companies (1.3%):
569 The One Group Municipal Money Market
Fund, Fiduciary Class............................. 569
---------
Total Investment Companies 569
---------
Total (Cost-$41,082)(a) 42,114
=========
</TABLE>
- -----
Percentages indicated are based on net assets of $42,526.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................. $1,032
Unrealized depreciation............................. 0
------
Net unrealized appreciation......................... $1,032
======
</TABLE>
AMBAC Insured by AMBAC Indemnity Corporation
AMT Alternative Minimum Tax Paper
ETM Escrowed To Maturity
FGIC Insured by Financial Guaranty Insurance Corp.
FHA Insured by Federal Housing Administration
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance
GSL Guaranteed Student Loans
MBIA Insured by Municipal Bond Insurance Association
See notes to financial statements.
<PAGE> 567
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Ohio Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- --------------------------------------------------- --------
<S> <C> <C>
MUNICIPAL BONDS (97.6%):
Colorado (1.5%):
$ 1,890 Housing Finance Authority Revenue,
0.00%, 9/1/14, ETM................................ $ 678
2,810 El Paso County, Single Family, Mortgage Revenue,
Series A, 0.00%, 5/1/15, ETM...................... 983
-------
1,661
Kansas (0.7%):
1,000 Kansas City, Single Family Mortgage, 0.00%,
12/1/14, ETM...................................... 353
1,390 Saline County, Single Family Mortgage, 0.00%,
12/1/15, ETM...................................... 464
-------
817
-------
Massachusetts (1.0%):
1,000 State, GO, 6.75%, 8/1/09.............................. 1,100
-------
Missouri (1.0%):
1,000 State Health, 6.40%, 6/1/10, MBIA..................... 1,112
-------
Ohio (91.5%):
1,045 Akron Sewer Systems, 5.30%, 12/1/05, MBIA............. 1,085
1,000 Akron Sewer Systems, 5.65%, 12/1/08, MBIA*............ 1,049
2,000 Bexley School District, GO, 6.50%, 12/1/16,
Prerefunded 12/1/01/ @102............................. 2,203
725 Bowling Green State University, 5.65%,
6/1/11, AMBAC....................................... 745
1,000 Butler County Hospital Facilities, 6.75%,
11/15/10............................................ 1,104
1,020 Ohio Capital Corp. for Housing, 5.60%,
1/1/07, MBIA*....................................... 1,041
2,775 Clermont County Waterworks, 6.63%,
12/1/15, AMBAC, Prerefunded 12/1/01 @102............ 3,091
1,000 Cleveland, GO, 6.88%, 7/1/09, MBIA,
Prerefunded 7/1/99 @102............................. 1,083
1,000 Cleveland, GO, 6.38%, 7/1/12, MBIA.................... 1,086
2,500 Cleveland Public Power System, 6.40%,
11/15/06, MBIA...................................... 2,776
1,500 Cleveland Public Power System, 0.00%,
11/15/11, MBIA...................................... 682
1,850 Cleveland Waterworks, 6.25%, Series F-92B,
1/1/06, AMBAC....................................... 1,989
35 Cleveland Waterworks, 6.50%, Series F-92B,
1/1/11, AMBAC, Prerefunded 1/1/02 @102.............. 39
2,765 Cleveland Waterworks, 6.50%, Series F-92B,
1/1/11, AMBAC*...................................... 3,006
1,000 Columbus, GO, 4.50%, 6/15/00,......................... 1,010
1,225 Columbus Municipal Airport No. 30-E-U, GO,
6.20%, 4/15/04...................................... 1,301
1,000 Columbus Sewer Improvements, GO, 6.75%,
9/15/06............................................. 1,095
1,285 Columbus Waterworks Enlargement No. 44, GO,
6.00%, 5/1/11....................................... 1,364
1,000 Columbus Waterworks Enlargement No. 44, GO,
6.00%, 5/1/12....................................... 1,055
1,000 Cuyahoga County Hospital, Series A, 5.50%,
1/15/10, MBIA*...................................... 1,017
1,500 Cuyahoga County Public Improvements, GO, 6.70%,
10/1/10, Prerefunded 10/1/99 @102................... 1,626
1,000 Delaware County Library District, GO, 7.25%,
11/1/10, Prerefunded 11/1/00 @102................... 1,125
1,000 Delaware County Sewer, GO, 5.60%, 12/10/10............ 1,019
1,000 Fairfield County Hospital Improvement Revenue,
Lancaster-Fairfield Community Hospital, 7.10%,
6/15/21, MBIA, Prerefunded 6/15/01 @102............. 1,123
1,035 Frankilin County, GO, 5.40%, 12/1/12.................. 1,045
1,290 Franklin County Hospital Revenue, Children's Hospital,
5.65%, 11/1/08*..................................... 1,341
800 Franklin County Hospital Revenue, Children's Hospital,
5.80%, 11/1/10*..................................... 829
1,000 Franklin County Hospital Revenue, Children's
Hospital Project, Series A, 6.50%, 5/1/07........... 1,088
1,000 Franklin County Hospital Revenue, Children's Hospital
Project, Series A, 6.60%, 11/1/11................... 1,109
1,000 Franklin County Hospital Revenue, Riverside United,
Series B, 7.60%, 5/15/20, Prerefunded
5/15/00 @102........................................ 1,119
1,000 Greater Cleveland Regional Transportation
Authority, GO, 5.60%, 12/1/11, FGIC................. 1,025
1,000 Greene County Water System, 6.85%, 12/1/11,
AMBAC............................................... 1,108
1,500 Hamilton City Electric Systems, 6.13%,
10/15/08, FGIC...................................... 1,603
1,500 Hamilton County Building Improvement &
Refunding Museum Center, GO, 6.50%, 12/1/09......... 1,631
1,500 Hamilton County Hospital Facilities, Bethesda
Hospital, Series A, 6.25%, 1/1/12................... 1,538
1,265 Hamilton County Hospital Facilities, Christ Hospital,
Series B, 6.63%, 1/1/06............................. 1,353
</TABLE>
Continued
<PAGE> 568
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Ohio Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------------------------------- --------
<S> <C> <C>
MUNICIPAL BONDS (97.6%):
Ohio, continued:
$ 380 Hamilton County Sewer System, 6.30%, 12/1/01,
Prerefunded 6/1/01 @102............................... $ 415
1,000 Hamilton County Sewer System Refunding & Improvements,
Series A, 4.30%, 12/1/98, FGIC........................ 1,007
1,000 Hamilton Waterworks Water Utility Improvement,
6.40%, 10/15/07, MBIA................................. 1,086
1,000 Hilliard School District School Improvements,
Series A, GO, 5.35%, 12/1/04.......................... 1,039
1,250 Housing Finance Agency Mortgage, Series A-1, 6.20%,
9/1/14, GNMA.......................................... 1,290
1,000 Huron County Correctional Facility, Issue I, GO,
5.70%, 12/1/11, MBIA*................................. 1,036
1,000 Kent State University, 6.45%, 5/1/12, AMBAC............. 1,084
2,000 Lakewood Sanitation Sewer System, Special Obligation,
6.40%, 12/1/11........................................ 2,157
2,000 Middleburg Heights Hospital, 5.70%, 8/15/10, FSA*....... 2,063
2,000 Montgomery County, Sisters of Charity, Series A,
6.50%, 5/15/08, MBIA.................................. 2,168
1,000 North Royalton, GO, 7.50%, 12/1/11...................... 1,117
1,000 Northeast Ohio Regional Sewer District Wastewater,
6.50%, 11/15/08, AMBAC, Prerefunded
11/15/01 @101......................................... 1,100
1,000 Ohio State University, University & College
Improvements, 5.50%, 12/1/03.......................... 1,052
1,000 Ottawa County, GO, 7.00%, 9/1/11, AMBAC................. 1,110
1,000 Pickerington Local School District, GO,
7.00%, 12/1/13, AMBAC, Prerefunded 12/1/00 @102....... 1,114
2,600 Portage County, Robinson Memorial Hospital
Project, 5.63%, 11/15/07, MBIA, 11/15/04 @102......... 2,725
2,220 Rocky River City School District, School
Improvements, GO, 6.90%, 12/1/11,..................... 2,463
1,000 Saint Mary's Electric Systems Mortgage, 7.15%,
12/1/10, AMBAC........................................ 1,111
1,000 Sandusky City School District, GO, 7.30%, 12/1/10....... 1,107
1,000 Shaker Heights City Schools, GO, 7.10%, 12/15/10,....... 1,169
1,000 Springfield, GO, 6.88%, 9/1/06, AMBAC................... 1,112
1,000 State Building Authority, 7.35%, 4/1/09, MBIA,
Prerefunded 4/1/00 @ 102.............................. 1,110
2,000 State Building Authority, Adult Correctional Building,
Series A, 6.13%, 10/1/09.............................. 2,129
1,000 State Building Authority, State Correctional Facilities,
Series A, 6.50%, 10/1/01.............................. 1,086
1,000 State Building Authority, State Facilities,
Administration Building Funds, Series A, 5.75%,
10/1/06, MBIA......................................... 1,064
2,000 State Building Authority, State Facilities, J. Rhodes,
Series A, 6.38%, 6/1/07............................... 2,157
1,165 State Building Authority, State Facilities
Transportation Building Fund, Series A, 6.50%,
9/1/09, AMBAC......................................... 1,290
2,510 State Fresh Water Development, 5.80%, 6/1/11,
AMBAC*................................................ 2,608
1,000 State Liquor Profits Revenue, 6.85%, 9/1/00, BIG........ 1,084
1,000 State Water Development Authority, Pollution Control
Facilities, 5.50%, 12/1/09, MBIA...................... 1,023
1,000 Strongsville, GO, 6.70%, 12/1/11........................ 1,120
1,000 Toledo, GO, 5.63%, 12/1/11, AMBAC,...................... 1,028
1,000 Toledo Sewer System Revenue, 7.38%, 11/15/10, MBIA...... 1,073
1,000 University of Cincinnati Certificates of Participation,
University & College Improvements,
6.75%, 12/1/09, MBIA.................................. 1,106
1,000 University of Cincinnati General Receipts,
Health & Hospital Improvements, 7.10%, 6/1/10,
Prerefunded 6/1/99 @102............................... 1,086
1,000 University of Cincinnati General Receipts,
University & College Improvements, 7.00%,
6/1/11................................................ 1,102
1,000 University of Cincinnati, Series R2, Refund Bonds,
6.25%, 6/1/09......................................... 1,068
1,000 Westerville, Minerva Park & Blendon Joint Township,
Saint Ann's Hospital, Series B, 6.80%,
9/15/06, AMBAC........................................ 1,113
2,750 Westerville, Minerva Park & Blendon Joint
Township, Saint Ann's Hospital, Series B, 7.00%,
9/15/12, AMBAC........................................ 3,093
1,000 Worthington City School District, GO, 7.45%, 12/1/12,
MBIA, Prerefunded 12/1/99 @102........................ 1,108
-------
102,476
-------
Washington (1.9%):
1,000 State, Series A & AT-6, GO, 6.25%, 2/1/11................. 1,099
</TABLE>
Continued
<PAGE> 569
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Ohio Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------------------------------- --------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Washington, continued:
$3,000 State, Series R-97 A, GO, 0.00%, 7/1/15................ $ 1,042
---------
2,141
---------
Total Municipal Bonds 109,307
---------
Investment Companies (2.8%):
754 Fidelity Ohio Tax Free Money Market Fund............... 754
2,407 The One Group Ohio Municipal Money Market
Fund-Fiduciary Class................................. $2,407
---------
Total Investment Companies 3,161
---------
Total (Cost--$106,236)(a) $112,468
========
</TABLE>
- -----
Percentages indicated are based on net assets of $111,986.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation....................... $6,238
Unrealized depreciation....................... (6)
------
Net unrealized appreciation $6,232
======
</TABLE>
* Additional put and demand features exist allowing the Fund to require the
repurchase of the instrument within variable time periods at variable
amounts.
AMBAC Insured by AMBAC Indemnity Corporation
BIG Bond Insurance Guaranty
ETM Escrowed To Maturity
FGIC Insured by Financial Guaranty Insurance Corp.
FSA Insured by Financial Security Assurance
GNMA Insured by Government National Mortgage Association
GO General Obligation
MBIA Insured by Municipal Bond Insurance Association
See notes to financial statements.
<PAGE> 570
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Louisiana Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS (98.1%):
Louisiana (98.1%):
$ 300 Alexandria Public Improvement, Sales & Use Tax,
Series ST-1987, 7.35%, 8/1/97, MBIA................... $ 307
1,165 Ascension Parish, Gravity Drain, 5.40%, 12/1/07, FGIC,
Callable 12/1/06 @ 100................................ 1,199
1,230 Ascension Parish, Gravity Drain, 5.50%, 12/1/08, FGIC,
Callable 12/1/06 @ 100................................ 1,266
2,500 Bastrop Industrial Development Board, Pollution
Control Revenue, International Paper Co.,
6.90%, 3/1/07......................................... 2,715
700 Baton Rouge Public Improvements, Sales & Use Tax,
6.85%, 8/1/00, AMBAC.................................. 754
800 Baton Rouge Public Improvements, Sales & Use Tax,
6.90%, 8/1/01, AMBAC.................................. 860
2,000 Baton Rouge Public Improvements, Sales & Use Tax,
6.00%, 8/1/04, FSA.................................... 2,123
765 Baton Rouge Public Improvements, Sales & Use Tax,
6.38%, 8/1/09, FSA.................................... 817
400 Bossier City Public Improvement, Sales & Use Tax,
Series ST-1989, 6.88%, 11/1/06, FGIC.................. 430
400 Bossier City Public Improvement, Sales & Use Tax,
6.88%, 11/1/07, FGIC.................................. 430
805 Bossier City Public Improvement, Sales & Use Tax,
Series ST, 6.20%, 11/1/07, AMBAC...................... 867
550 Bossier City Public Improvement, Sales & Use Tax,
6.88%, 11/1/08, FGIC................................. 591
1,415 Caddo Parish GO, 5.25%, 2/1/06, MBIA.................... 1,446
750 Caddo Parish GO, 5.25%, 2/1/08, MBIA.................... 755
470 Caddo Parish Industrial Development Board,
Wal-Mart Stores Income Project, 5.95%, 11/1/07........ 474
500 Calcasieu Parish School District #22, Ward 3,
Series A, GO, 7.10%, 2/1/01, BIG...................... 526
2,040 De Soto Parish Pollution Control Revenue,
International Paper Co., Series A, 5.05%, 12/1/02..... 2,077
1,280 East Baton Rouge Mortgage Finance Authority,
5.45%, 10/1/03, FNMA/GNMA............................. 1,290
1,200 East Baton Rouge Mortgage Finance Authority,
5.50%, 10/1/21, FNMA/GNMA............................. 1,217
500 East Baton Rouge Parish Sales & Use Tax
7.10%, 2/1/99, MBIA................................... 530
500 East Baton Rouge Parish Sales & Use Tax, 7.10%,
2/1/00, MBIA.......................................... 536
500 East Baton Rouge Parish Sales & Use Tax,
Series ST, 5.80%, 2/1/07, FGIC........................ 531
845 East Baton Rouge Parish Sales & Use Tax,
Series ST, 5.80%, 2/1/08, FGIC........................ 891
910 East Baton Rouge Parish Sales & Use Tax,
Series ST, 5.80%, 2/1/09, FGIC........................ 954
1,085 East Baton Rouge Parish, Series ST,
5.15%, 2/1/05......................................... 1,100
1,000 East Baton Rouge Parish, Series ST, 5.10%,
2/1/07, FGIC, Callable 2/1/06 @ 101.5................. 1,006
2,280 East Baton Rouge Parish, Series ST-A,
8.00%, 2/1/02, FGIC................................... 2,622
1,390 Greater Baton Rouge Parking Authority,
Sales & Use Tax, 6.38%, 7/1/03........................ 1,393
1,560 Houma Utilities Revenue, 6.13%, 1/1/07, FGIC............ 1,661
730 Housing Finance Agency, Mortgage Revenue
Super Sinker-Single Family A-1, 5.70%, 6/1/15,
GNMA/FNMA/FHLMC......................................... 740
2,225 Housing Family Agency, Mortgage Revenue, 5.13%,
12/1/10, MBIA, GNMA/FNMA.............................. 2,237
510 Housing Family Agency, Mortgage Revenue,
6.10%, 12/1/11, AMT, GNMA/FNMA........................ 514
1,275 Iberia Home Mortgage Authority, 7.38%, 1/1/11........... 1,367
300 Iberville Parish Sales & Use Tax, 6.20%, 1/1/98,
MBIA.................................................. 304
500 Jefferson Parish GO, 7.10%, 1/1/97, FGIC................ 512
500 Jefferson Parish GO, 7.40%, 1/1/99, FGIC................ 511
250 Jefferson Parish GO, 7.70%, 1/1/02, FGIC................ 256
400 Jefferson Parish Construction, Waterworks
District #2, GO, 7.25%, 1/15/00....................... 406
3,180 Jefferson Parish Drain, Sales Tax Revenue,
6.50%, 11/1/06, AMBAC................................. 3,427
340 Jefferson Parish Home Mortgage Authority,
Single Family Mortgage Revenue, 4.50%, 6/1/13......... 337
4,920 Jefferson Parish Sales Tax District Special,
Series A, 6.75%, 12/1/06, FGIC........................ 5,417
1,985 Jefferson Parish Sales Tax District Special,
Series B, 6.75%, 12/1/06, FGIC........................ 2,185
4,000 Jefferson Parish School Board, Sales & Use
Tax Revenue Refunding, 6.05%, 2/1/02, MBIA........... 4,269
</TABLE>
Continued
<PAGE> 571
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Louisiana Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Louisiana, continued:
$1,270 Jefferson Parish School Board, Sales & Use Tax
Revenue Refunding, 6.15%, 2/1/03, MBIA................. $1,372
6,500 Jefferson Parish School Board Sales & Use Tax
Revenue Refunding, 6.25%, 2/1/08, MBIA................. 6,992
880 Kenner Sales & Use Tax Revenue Refunding, 5.75%,
6/1/06, FGIC........................................... 926
1,000 Lafayette Parish Refunding, GO, 7.80%, 3/1/01, FGIC....... 1,058
750 Lafourche Parish Hospital Service District #3
Hospital Revenue, 5.50%, 10/1/04........................ 743
650 Lafourche Parish Water District #1, Water Revenue
Refunding, 5.63%, 1/1/01................................ 672
500 Lincoln Parish School District #1, Ruston
Refunding, GO, 6.20%, 3/1/03, MBIA...................... 529
1,465 Lincoln Parish School District # 1, Ruston Refunding,
GO, 6.40%, 3/1/05, MBIA................................. 1,566
1,580 Louisiana State University, Agriculture & Mechanical
College, University Revenues, 6.00%,
7/1/07, MBIA............................................ 1,708
1,120 Louisiana State University, Agriculture & Mechanical
College, University Revenues, 5.50%,
7/1/13, MBIA........................................... 1,120
1,220 Monroe Parish Special School District, GO,
8.00%, 3/1/01, MBIA.................................... 1,381
1,300 Monroe Parish Special School District, GO,
7.00%, 3/1/02, MBIA.................................... 1,442
1,390 Monroe Parish Special School District, GO,
7.00%, 3/1/03, MBIA.................................... 1,562
1,230 Monroe Parish Special School District, GO,
5.35%, 3/1/05, FGIC.................................... 1,273
1,320 Monroe Parish Special School District, GO,
5.35%, 3/1/06, FGIC.................................... 1,358
1,000 New Orleans, GO, 5.88%, 10/1/11, AMBAC................... 1,039
550 New Orleans, GO, 5.85%, 11/1/07, FGIC.................... 583
500 New Orleans Exhibition Hall Authority 0.00%, 1/15/08,
AMBAC, ETM............................................. 283
500 New Orleans Exhibition Hall Authority 0.00%, 7/15/08,
AMBAC, ETM............................................. 276
1,000 New Orleans Exhibition Hall Authority 5.25%, 7/15/11,
MBIA, Callable 7/15/06 @ 101........................... 985
2,525 Ouachita Parish Hospital Service, Glenwood Regional
Medical Center, Health Care Revenue,
7.50%, 7/1/06, Callable 7/1/01 @ 102................... 2,862
1,500 Ouachita Parish Hospital Service District,
Glenwood, 5.70%, 5/15/16, FSA.......................... 1,520
2,000 Ouachita Parish West School District, GO,
Refunding Series A, 6.50%, 3/1/03, FSA, Callable
3/1/01 @ 102........................................... 2,179
1,250 Ouachita Parish West School District, GO, Refunding
Series A, 6.60%, 3/1/04, FSA, Callable
3/1/01 @ 102........................................... 1,364
2,695 Ouachita Parish West School District, GO, Refunding
Series A, 6.65%, 3/1/05, FSA........................... 2,941
1,655 Ouachita Parish West School District, GO, Refunding
Series A, 6.70%, 3/1/06, FSA........................... 1,803
1,440 Plaquemines Parish, GO, 6.40%, 8/1/04, AMBAC............. 1,561
420 Plaquemines Parish, Sales & Use Tax, 6.70%, 12/1/08...... 447
410 Plaquemines Parish, Sales & Use Tax, 6.70%, 12/1/09...... 434
605 Plaquemines Parish School Board, Sales & Use Tax,
6.65%, 3/1/05.......................................... 655
2,280 Public Facilities Authority, Alton Ochsner Medical
Foundation, Project A, Health Care
Revenue, 6.30%, 5/15/04, MBIA............................ 2,478
1,030 Public Facilities Authority, General Health, Inc.
Project, Health Care Revenue, 5.55%,
11/1/04, MBIA.......................................... 1,081
1,000 Public Facilities Authority, Lafayette General Medical
Center Project, Health Care Revenue,
6.05%, 10/1/04, FSA, Callable 10/1/02 @ 102............ 1,078
1,135 Public Facilities Authority, Mary Bird Perkins
Cancer Center, Health Care Revenue, 5.50%,
1/1/04, FSA............................................ 1,182
500 Public Facilities Authority, Our Lady of Lake Hospital,
Health Care Revenue, 5.70%, 12/1/04,
MBIA, Callable 12/1/01 @ 102........................... 525
6,000 Public Facilities Authority Revenue, 0.00%, 12/1/19,
FNMA, ETM.............................................. 1,565
3,000 Public Facilities Authority Revenue, 0.00%, 2/1/20,
FHLMC, ETM............................................. 777
300 Public Facilities Authority Revenue, Tulane University,
7.50%, 5/15/00......................................... 318
730 Public Facilities Authority Revenue, Women's Hospital
Foundation, 5.40%, 10/1/05, FGIC,
Callable 10/1/04 @ 102................................. 754
1,000 Public Facilities Authority Revenue, Alton Ochsner
Medical Foundation, 5.75%, 5/15/11,
MBIA................................................... 1,014
</TABLE>
Continued
<PAGE> 572
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Louisiana Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Lousiana, continued:
$500 Public Facilities Authority Revenue, Loyola University,
Series A, 7.20%, 10/1/00, Callable
10/1/99 @ 102.......................................... $ 543
1,960 Public Facilities Authority Revenue, Loyola University,
6.60%, 4/1/05, Callable 4/1/02 @ 102................... 2,137
735 Public Facilities Authority Revenue, Tulane University,
5.55%, 10/1/07, AMBAC, Callable
10/1/06 @ 102.......................................... 767
1,605 Public Facilities Authority Revenue, Tulane University,
5.75%, 10/1/09, AMBAC, Callable
10/1/06 @ 102.......................................... 1,679
325 Public Facilities Authority Revenue, Tulane University,
Series A-1, Unrefunded Balance,
5.80%, 2/15/04, FGIC................................... 345
605 Public Facilities Authority Revenue, Tulane University,
Series B, Unrefunded Balance,
7.00%, 8/15/97......................................... 617
170 Public Facilities Authority Revenue, Tulane University,
Series B, Unrefunded Balance,
7.20%, 8/15/98......................................... 177
2,145 Public Facilities Authority Revenue, Tulane University,
Series B, Unrefunded Balance,
6.25%, 7/15/06......................................... 2,290
750 Public Facilities Authority Revenue, Tulane University,
Series C, 7.00%, 8/15/97, AMBAC........................ 766
300 Public Facilities Authority Revenue, Tulane University,
Series C, 7.20%, 8/15/98, Callable
8/15/97 @ 102.......................................... 312
110 Public Facilities Authority Revenue, Sisters of Mercy,
Unrefunded Balance, 7.38%, 6/1/09...................... 118
500 Public Facilities Authority, Women's Hospital Foundation,
Health Care Revenue, 7.20%,
10/1/97, FGIC.......................................... 513
1,235 Public Facilities Authority, Women's Hospital Foundation,
Health Care Revenue, 6.85%,
10/1/05, Callable 10/1/02 @ 102........................ 1,294
1,715 Public Facilities Authority, Women's Hospital Foundation,
Health Care Revenue, 5.50%,
10/1/06, Callable 10/1/04 @ 102, FGIC.................. 1,776
670 Rapides Parish School District #11, GO, 6.90%, 2/1/01,
FGIC................................................... 715
1,475 Rapides Parish School District #11, GO, 6.95%, 2/1/02,
FGIC................................................... 1,571
500 Rapides Parish Consolidated School District #62,
GO, 7.25%, 4/1/00, MBIA................................ 531
750 St. Charles Parish Public Improvement, Sales & Use Tax,
6.60%, 11/1/07......................................... 787
2,350 St. Charles Parish School District #1, GO, 6.45%,
3/1/06, AMBAC.......................................... 2,512
870 St. John Baptist Parish School District #1, GO,
6.25%, 3/1/05.......................................... 914
1,000 St. Landry Parish Consolidated School District #1,
GO, 8.00%, 5/1/98, MBIA................................ 1,054
750 St. Landry Parish Consolidated School District #1,
GO, 6.10%, 5/1/07, MBIA................................ 782
300 St. Tammany Parish Refunding, GO, 7.40%, 3/1/98,
FGIC................................................... 313
1,000 St. Tammany Parish, District #3, Series A, Sales & Use Tax,
6.50%, 12/1/02, FGIC................................... 1,070
1,000 St. Tammany Parish, District #3, Series A, Sales & Use Tax,
6.50%, 12/1/03, FGIC................................... 1,075
750 St. Tammany Parish, District #3, Series A, Sales & Use Tax,
6.50%, 12/1/05, FGIC................................... 797
1,815 St. Tammy Parish Hospital Service, Hospital District #1,
Health Care Revenue, 6.30%, 7/1/07..................... 1,902
620 St. Tammany Parish School Board, Sales & Use Tax Revenue,
6.70%, 4/1/98, FGIC.................................... 641
550 St. Tammany Parish School District #12, Sales & Use Tax,
6.50%, 3/1/01, FGIC.................................... 592
400 St. Tammany Parish School District #12, Sales & Use Tax,
6.50%, 3/1/04, FGIC.................................... 426
480 Shreveport, GO, 6.20%, 3/1/02, AMBAC..................... 509
500 Shreveport, GO, 6.70%, 2/1/03, AMBAC, Prerefunded 2/1/00
@ 100.................................................. 533
480 Shreveport, GO, 5.90%, 2/1/07............................ 499
930 Shreveport Water & Sewer Revenue, Series A, 7.75%,
12/1/02, FGIC.......................................... 1,079
500 Shreveport Water & Sewer Revenue, Series A, 6.25%,
12/1/03, FGIC.......................................... 547
1,665 Stadium & Exposition District, Hotel Occupancy Tax &
Stadium Revenue, 5.65%, 7/1/07,
FGIC, Callable 7/1/04 @ 102............................ 1,743
3,020 State Energy & Power Authority, Power Project Revenue
Refunding, Rodemacher Unit #2,
6.75%, 1/1/08, FGIC.................................... 3,290
800 State Gas & Fuels Tax Revenue, Series A, 7.20%,
11/15/99.............................................. 859
1,500 State Gas & Fuels Tax Revenue, Series A, 7.25%,
11/15/04.............................................. 1,635
</TABLE>
Continued
<PAGE> 573
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Louisiana Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------------------------- -------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Lousiana, continued:
$2,875 State GO, 5.80%, 8/1/10, MBIA............................ $ 3,041
2,750 State GO, 7.10%, 9/1/03, FSA, Callable 9/1/00 @ 102...... 3,035
500 State GO, Series A, 6.10%, 5/11/11, AMBAC................ 525
6,290 State GO, Series A, 6.00%, 5/15/99, MBIA................. 6,551
4,000 State GO, Series A, 6.00%, 8/1/04, FGIC.................. 4,320
430 State GO, Series A, 6.00%, 5/1/08, AMBAC................. 458
3,000 State GO, Series B, 5.63%, 8/1/13, MBIA.................. 3,086
400 State Offshore Terminal Authority, Deepwater Port Revenue
Refunding, 1st Stage Series B,
Loop, Inc., 6.00%, 9/1/01.............................. 419
600 State Offshore Terminal Authority, Deepwater Port Revenue
Refunding, 1st Stage Series B,
Loop, Inc., 6.10%, 9/1/02.............................. 633
1,325 State Offshore Terminal Authority, Deepwater Port Revenue
Refunding, 1st Stage Series B,
Loop, Inc., 6.25%, 9/1/04.............................. 1,415
150 Sulphur Public Improvements, Series B, Sales & Use Tax,
6.00%, 3/1/00, MBIA.................................... 150
615 Sulphur Public Improvements, Series B, Sales & Use Tax,
6.00%, 3/1/01, MBIA.................................... 616
1,435 Tangipahoa Parish Consolidated School District #1
Refunding, Sales & Use Tax, GO, 6.15%,
12/1/07................................................ 1,519
1,250 Tangipahoa Parish Hospital Service, District #1, Health
Care Revenue, 6.13%, 2/1/14,
AMBAC.................................................. 1,312
1,285 Terrebonne Parish Hospital Service, District #1, Terrebonne
General Medical Center Project,
Health Care Revenue Refunding, 7.40%, 4/1/03, BIG...... 1,357
690 Terrebonne Parish Waterworks District #1, Water
Revenue, 5.70%, 11/1/06, FGIC.......................... 729
500 Terrebonne Parish Waterworks District #1, Water
Revenue, 5.75%, 11/1/08, FGIC.......................... 523
555 Vermilion Parish Hospital Service, District #2, Health
Care Revenue Refunding, Series A,
GO, 6.35%, 5/1/00, MBIA................................ 590
--------
Total Municipal Bonds 177,245
--------
INVESTMENT COMPANIES (0.6%):
1,073 The One Group Municipal Money Market Fund,
Fiduciary Class........................................ 1,073
--------
Total Investment Companies 1,073
--------
Total (Cost-$172,389) (a) $178,318
========
</TABLE>
- -----
Percentages indicated are based on net assets of $180,603.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $6,168
Unrealized depreciation......................... (239)
------
Net unrealized appreciation..................... $5,929
</TABLE>
AMBAC Insured by AMBAC Indemnity Corporation
BIG Insured by Bond Insurance Guaranty
ETM Escrowed To Maturity
FGIC Insured by Financial Guaranty Insurance Corp.
FHLMC Insured by Federal Home Loan Mortgage Company
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance
GNMA Insured by Government National Mortgage Association
GO General Obligation
MBIA Insured by Municipal Bond Insurance Association
ST Special Tax
See notes to financial statements.
<PAGE> 574
- -------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands,
except per share amounts)
INTERMEDIATE MUNICIPAL KENTUCKY OHIO LOUISIANA
TAX-FREE BOND INCOME MUNICIPAL BOND MUNICIPAL BOND MUNICIPAL BOND
FUND FUND FUND FUND FUND
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost
$257,214; $341,207;
$41,082; $106,236;
$172,389, respectively).............. $264,507 $345,975 $42,114 $112,468 $178,318
Interest receivable..................... 3,493 5,849 654 1,205 3,160
Receivable from brokers
for investments sold................. 3,710 -- -- -- --
Receivable for capital
shares issued........................ 577 687 103 165 16
Deferred organization
costs................................ -- 1 -- -- --
Prepaid expenses and other
assets............................... 2 13 1 1 1
--------- --------- --------- --------- ---------
TOTAL ASSETS............................ 272,289 352,525 42,872 113,839 181,495
--------- --------- --------- --------- ---------
LIABILITIES:
Cash overdraft ........................ 373 309 104 143 --
Dividends payable ..................... 1,017 1,556 167 480 727
Payable to brokers for
investments purchased............... 16,635 4,902 -- 1,038 --
Payable for capital shares
redeemed............................ -- 46 -- 69 14
Accrued expenses and
other payables:
Investment advisory
fees........................... 81 102 13 29 57
Administration fees ............. 35 48 2 16 25
12b-1 fees (Class A) ............ 1 6 4 3 11
12b-1 fees (Class B) ............ 2 22 2 9 3
Other............................ 83 162 54 66 55
--------- --------- --------- --------- ---------
TOTAL LIABILITIES ..................... 18,227 7,153 346 1,853 892
--------- --------- --------- --------- ---------
NET ASSETS:
Capital ............................... 245,804 349,422 43,316 109,750 175,405
Undistributed net
investment income................... 233 20 -- 8 --
Accumulated undistributed
net realized gains
(losses) from investment
transactions....................... 732 (8,838) (1,822) (4,004) (731)
Net unrealized
appreciation from
investments........................ 7,293 4,768 1,032 6,232 5,929
--------- --------- --------- --------- ---------
NET ASSETS............................ $254,062 $345,372 $42,526 $111,986 $180,603
========= ========= ========= ========= =========
Net Assets
Fiduciary....................... $244,981 $286,951 $32,458 $84,011 $126,727
Class A ........................ 6,357 29,366 8,076 15,858 50,271
Class B ........................ 2,724 29,055 1,992 12,117 3,605
--------- --------- --------- --------- ---------
Total ................................ $254,062 $345,372 $42,526 $111,986 $180,603
========= ========= ========= ========= =========
Outstanding Units of
Beneficial Interest
(Shares):
Fiduciary ...................... 22,505 29,347 3,182 7,719 12,585
Class A ........................ 584 2,995 792 1,453 4,993
Class B ........................ 250 2,973 196 1,102 359
--------- --------- --------- --------- ---------
Total................................. 23,339 35,315 4,170 10,274 17,937
========= ========= ========= ========= =========
Net Asset Value:
Fiduciary
Offering and
redemption price
per share ................. $10.89 $9.78 $10.20 $10.88 $10.07
========= ========= ========= ========= =========
Class A
Redemption price
per share ................. $10.88 $9.81 $10.21 $10.92 $10.07
========= ========= ========= ========= =========
Maximum sales
charge..................... 4.50% 4.50% 4.50% 4.50% 4.50%
========= ========= ========= ========= =========
Maximum offering
price per share
(100%/(100%-maximum
sales charge) of net asset
value adjusted to nearest
cent)...................... $11.39 $10.27 $10.69 $11.43 $10.54
========= ========= ========= ========= =========
Class B
Offering price per
share (a) ................. $10.89 $9.77 $10.14 $10.99 $10.07
========= ========= ========= ========= =========
<FN>
- -----
(a) Redemption price per Class B share varies based on length of time shares
are held.
See notes to financial statements.
</TABLE>
<PAGE> 575
<TABLE>
<CAPTION>
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(Unaudited)
(AMOUNTS IN THOUSANDS)
INTERMEDIATE MUNICIPAL KENTUCKY OHIO LOUISIANA
TAX-FREE INCOME MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND FUND BOND FUND BOND FUND BOND FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income ............ $ 6,572 $ 9,616 $ 1,092 $ 3,065 $ 5,158
Dividend income ............ 42 42 24 62 19
------- ------- ------- ------- -------
TOTAL INCOME ............... 6,614 9,658 1,116 3,127 5,177
------- ------- ------- ------- -------
EXPENSES:
Investment advisory fees ... 735 722 127 328 562
Administration fees ........ 203 265 35 89 155
12b-1 fees (Class A) ....... 11 48 14 29 91
12b-1 fees (Class B) ....... 12 133 9 53 17
Custodian and accounting
fees .................... 22 28 7 9 20
Legal and audit fees ....... 6 10 3 5 10
Trustees' fees and expenses 1 3 -- 1 1
Transfer agent fees ........ 14 26 10 20 28
Registration and filing fees 7 28 -- 8 6
Printing costs ............. 21 23 2 14 20
Other ...................... 1 1 1 1 1
------- ------- ------- ------- -------
Total expenses before
waivers ................. 1,033 1,287 208 557 911
Less waivers ............... (334) (213) (64) (180) (223)
------- ------- ------- ------- -------
NET EXPENSES ............... 699 1,074 144 377 688
------- ------- ------- ------- -------
Net Investment Income ...... 5,915 8,584 972 2,750 4,489
------- ------- ------- ------- -------
REALIZED/UNREALIZED GAINS
(LOSSES) FROM
INVESTMENTS:
Net realized gains (losses)
from investment
transactions ............ 751 (759) (7) (38) (135)
Net change in unrealized
appreciation from
investments ............. 4,467 4,481 662 1,952 2,803
------- ------- ------- ------- -------
Net realized/unrealized
gains from investments .. 5,218 3,722 655 1,914 2,668
------- ------- ------- ------- -------
Change in net assets
resulting from
operations.............. $11,133 $12,306 $1,627 $4,664 $7,157
======= ======= ====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE> 576
<TABLE>
<CAPTION>
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
INTERMEDIATE MUNICIPAL KENTUCKY MUNICIPAL
TAX-FREE BOND FUND INCOME FUND BOND FUND
--------------------- ---------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1996 1996 1996 1996 1996 1996
------------ --------- ------------ ------- ------------ ---------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ................. $ 5,915 $ 11,312 $ 8,584 $ 13,782 $ 972 $ 1,845
Net realized gains (losses) from
investment transactions .............. 751 1,432 (759) (2,505) (7) (36)
Net change in unrealized appreciation
(depreciation) from investments ...... 4,467 (248) 4,481 1,176 662 571
--------- --------- --------- --------- --------- ---------
Change in net assets resulting
from operations ....................... 11,133 12,496 12,306 12,453 1,627 2,380
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income ............ (5,719) (10,698) (7,268) (12,119) (752) (1,450)
From net realized gains
from investment transactions ......... (414) (468) -- -- -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ............ (150) (328) (710) (996) (186) (374)
From net realized gains from investment
transactions ......................... (11) (17) -- -- -- --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ............ (46) (64) (606) (666) (34) (21)
From net realized gains from investment
transactions ......................... (4) (3) -- -- -- --
--------- --------- --------- --------- --------- ---------
Change in net assets from
shareholder distributions ............. (6,344) (11,578) (8,584) (13,781) (972) (1,845)
--------- --------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued ........... 41,721 79,285 80,227 135,163 5,724 7,868
Dividends reinvested .................. 416 1,603 1,101 1,920 120 224
Cost of shares redeemed ............... (19,126) (73,503) (29,784) (51,353) (3,908) (10,109)
--------- --------- --------- --------- --------- ---------
Change in net assets from
share transactions .................... 23,011 7,385 51,544 85,730 1,936 (2,017)
--------- --------- --------- --------- --------- ---------
Change in net assets ..................... 27,800 8,303 55,266 84,402 2,591 (1,482)
NET ASSETS:
Beginning of period ................... 226,262 217,959 290,106 205,704 39,935 41,417
--------- --------- --------- --------- --------- ---------
End of period ......................... $ 254,062 $ 226,262 $ 345,372 $ 290,106 $ 42,526 $ 39,935
========= ========= ========= ========= ========= =========
SHARE TRANSACTIONS:
Issued ................................ 3,873 7,384 8,245 13,875 566 779
Reinvested ............................ 39 148 114 197 12 23
Redeemed .............................. (1,775) (6,824) (3,065) (5,278) (386) (997)
--------- --------- --------- --------- --------- ---------
Change in shares ......................... 2,137 708 5,294 8,794 192 (195)
========= ========= ========= ========= ========= =========
Undistributed net investment
income included in net assets:
End of period ......................... $ 233 $ 233 $ 20 $ 20 $ - $ -
========= ========= ========= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE> 577
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS DECEMBER 31, 1996
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
OHIO MUNICIPAL LOUISIANA MUNICIPAL
BOND FUND BOND FUND (a)
------------------------ ----------------------------------------
SIX MONTHS YEAR SIX MONTHS SEVEN MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, NOVEMBER 30,
1996 1996 1996 1996 1995
--------- --------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ................................ $ 2,750 $ 5,010 $ 4,489 $ 5,578 $ 10,058
Net realized losses from
investment transactions ............................. (38) (253) (135) (146) (11)
Net change in unrealized
appreciation (depreciation)
from investments .................................... 1,952 483 2,803 (3,198) 14,487
--------- --------- --------- --------- ---------
Change in net assets resulting from
operations ........................................... 4,664 5,240 7,157 2,234 24,534
--------- --------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS (b):
From net investment income ........................... (2,117) (4,102) (3,220) (1,732)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ........................... (405) (670) (1,200) (3,782) (10,014)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ........................... (228) (238) (69) (64) (44)
--------- --------- --------- --------- ---------
Change in net assets from shareholder
distributions .......................................... (2,750) (5,010) (4,489) (5,578) (10,058)
--------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued .......................... 15,156 28,462 5,011 13,459 27,568
Dividends reinvested ................................. 579 890 825 929 1,980
Cost of shares redeemed .............................. (11,635) (18,818) (20,644) (26,535) (32,814)
--------- --------- --------- --------- ---------
Change in net assets from share
transactions ........................................... 4,100 10,534 (14,808) (12,147) (3,266)
--------- --------- --------- --------- ---------
Change in net assets .................................... 6,014 10,764 (12,140) (15,491) 11,210
NET ASSETS:
Beginning of period .................................. 105,972 95,208 192,743 208,234 197,024
--------- --------- --------- --------- ---------
End of period ........................................ $ 111,986 $ 105,972 $ 180,603 $ 192,743 $ 208,234
========= ========= ========= ========= =========
Share Transactions:
Issued ............................................... 1,398 2,628 502 870 2,610
Issued in restatement of net
asset value (c) ..................................... -- -- -- 1,261 --
Reinvested ........................................... 53 82 83 89 189
Redeemed ............................................. (1,077) (1,744) (2,067) (2,146) (3,138)
--------- --------- --------- --------- ---------
Change in shares ........................................ 374 966 (1,482) 74 (339)
--------- --------- --------- --------- ---------
Undistributed net investment income included in
net assets:
End of period ........................................ $ 8 $ 8 $ - $ - $ -
========= ========= ========= ========= =========
<FN>
- ---------------------------------------
(a) Upon reorganizing as a fund of The One Group, the Paragon Louisiana
Tax-Free Fund became the Louisiana Municipal Bond Fund. Changes in net
assets for the periods prior to March 26, 1996 represent the Paragon
Louisiana Tax-Free Fund.
(b) Fiduciary Shares of the Louisiana Municipal Bond Fund commenced offering on
March 26, 1996 upon conversion of certain Class A Shares to Fiduciary
Shares.
(c) Pursuant to its reorganization as a fund of The One Group, the Louisiana
Municipal Bond Fund issued additional shares at the close of business March
25, 1996 as a result of restatement of the net asset values of Class A
Shares from $10.67 to $10.00 and Class B Shares from $10.70 to $10.00.
</TABLE>
See notes to financial statements.
<PAGE> 578
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(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 thirty active funds. The accompanying financial
statements and financial highlights are those of the Intermediate Tax-Free
Bond Fund, the Municipal Income Fund, the Kentucky Municipal Bond Fund, the
Ohio Municipal Bond Fund and the Louisiana Municipal Bond Fund
(individually a "Fund", collectively the "Funds") only. The Funds are each
offered in Fiduciary Class, Class A and Class B Shares. Class A Shares are
subject to initial sales charges, imposed at the time of purchase, in
accordance with the Funds' prospectuses. Certain redemptions of Class B
Shares are subject to contingent deferred sales charges in accordance with
the Funds' prospectuses. Each Fund is a diversified mutual fund, except for
the Kentucky Municipal Bond Fund, Ohio Municipal Bond Fund, and the
Louisiana Municipal Bond Fund, which are non-diversified.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with the Paragon Portfolio ("Paragon"), a Massachusetts
business trust. Pursuant to the Agreement all of the assets and liabilities
of each Paragon Fund transferred to a fund of The One Group in exchange for
shares of the corresponding fund of The One Group. Subsequent to the
reorganization, the fiscal period end changed from November 30 to June 30
for the Louisiana Municipal Bond Fund. Therefore, the prior period
statement of changes in net assets for that Fund presents the changes in
net assets for the seven months ended June 30, 1996.
The Funds' investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
---- ---------
<S> <C> <C>
Intermediate Tax-Free Bond Current income exempt from Federal
Fund income taxes consistent with prudent
investment management and the
preservation of capital.
Municipal Income Fund Current income exempt from Federal income
taxes.
Kentucky Municipal Bond Current income both consistent with
Fund the preservation of principal and exempt
from Federal income tax and
Kentucky personal income tax.
Ohio Municipal Bond Fund Current income both consistent with the
preservation of principal and exempt from
Federal income tax and Ohio personal income
tax.
Louisiana Municipal Bond Current income both consistent with the
Fund preservation of principal and exempt from
Federal income tax and Louisiana income tax.
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. 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
<PAGE> 579
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
SECURITY VALUATION
Corporate debt securities and debt securities of U.S. issuers (other than
short-term investments maturing in 60 days or less), including municipal
securities, are valued on the basis of valuations provided by dealers or by
an independent pricing service approved by the Board of Trustees.
Short-term investments maturing in 60 days or less are valued at amortized
cost, which approximates market value. Futures contracts are valued at the
settlement price established each day by the board of trade or an exchange
on which they are traded. Options traded on an exchange are valued using
the last sale price or, in the absence of a sale, the last offering price.
Options traded over-the-counter are valued using dealer-supplied
valuations. Investments for which there are no such quotations or
valuations are valued at fair value as determined in good faith by the
Adviser under the direction of the Board of Trustees.
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 agreement 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.
Repurchase agreements are considered to be loans by a fund under the 1940
Act.
WRITTEN OPTIONS
The Funds may write covered call or put options for which premiums received
are recorded as liabilities and are subsequently adjusted to the current
value of the options written. Premiums received from writing options which
expire are treated as realized gains. Premiums received from writing
options, which are either exercised or closed, are offset against the
proceeds received or amount paid on the transaction to determine realized
gains or losses.
FUTURES CONTRACTS
The Funds may enter into futures contracts for the delayed delivery of
securities at a fixed price at some future date or for the change in the
value of a specified financial index over a predetermined time period. Cash
or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received by the fund based on the daily change
in the market value of the position are recorded as unrealized appreciation
or depreciation until the contract is closed out, at which time the
appreciation or depreciation is realized.
INDEXED SECURITIES
The Funds may invest in indexed securities whose value is linked either
directly or inversely to changes in foreign currencies, interest rates,
commodities, indices or other reference instruments. Indexed securities may
be more volatile than the referenced instrument itself, but any loss is
limited to the amount of the original investment.
MORTGAGE ROLLS
The Funds may enter into mortgage "dollar rolls" in which the Fund sells
mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar securities on
a
Continued
<PAGE> 580
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
specified future date. During the roll period, the Fund forgoes principal
and interest paid on the mortgage-backed securities. The Fund is
compensated by fee income or the difference between the current sales price
and the lower forward price for the future purchase.
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
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 creditworthy under guidelines established by the Board of
Trustees and when, in the judgement 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, 1996 the Funds had no securities on loan.
SECURITY TRANSACTIONS AND RELATED INCOME
Security transactions are accounted for on a trade date basis. Net realized
gains or losses from sales of securities are determined on the specific
identification cost method. Interest income and expenses are recognized on
the accrual basis. Dividends are recorded on the ex-dividend date. Interest
income, including any discount or premium, is accrued as earned using the
effective interest method.
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. Each class of shares bears
its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class,
such as distribution fees.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid monthly for the
Funds. Net realized capital gains, if any, are distributed at least
annually. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
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 mortgage-backed securities, expiring
capital loss carryforwards, and deferrals of certain losses. Permanent book
and tax basis differences have been reclassified among the components of
net assets.
FEDERAL INCOME TAXES
The Trust treats each Fund as a separate entity for Federal income tax
purposes. Each Fund intends to continue to qualify as a regulated
investment company by complying with the provisions available to certain
Continued
<PAGE> 581
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
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.
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 of the Trust, have been allocated among
the respective funds 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.
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 forty series and four classes:
Fiduciary, Class A, Class B and Service. As of December 31, 1996, no
shareholders were in the Service Class. 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. The
following is a summary of transactions in Fund shares for the periods ended
December 31, 1996 and June 30, 1996:
Continued
<PAGE> 582
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
Intermediate Tax-Free Municipal Kentucky Municipal
Bond Fund Income Fund Bond Fund
-------------------------- ------------------------- -------------------------
Six months Year Six months Year Six months Year
ended ended ended ended ended ended
December 31, June 30, December 31, June 30, December 31, June 30,
1996 1996 1996 1996 1996 1996
--------- --------- --------- --------- --------- ---------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued ............ $ 40,871 $ 73,620 $ 68,571 $ 100,593 $ 5,114 $ 6,010
Dividends reinvested ................... 254 1,311 171 835 11 30
Cost of shares redeemed ................ (17,964) (69,859) (26,003) (45,206) (3,471) (8,690)
--------- --------- --------- --------- --------- ---------
Change in net assets
from Fiduciary Share
transactions .......................... $ 23,161 $ 5,072 $ 42,739 $ 56,222 $ 1,654 $ (2,650)
========= ========= ===== ========= ========= =========
CLASS A SHARES:
Proceeds from shares issued ............ 46 $ 4,157 $ 5,144 18,884 $ 56 $ 475
Dividends reinvested ................... 121 246 525 699 91 186
Cost of shares redeemed ................ (559) (3,426) (2,410) (5,106) (371) (1,412)
--------- --------- --------- --------- --------- ---------
Change in net assets
from Class A Share
transactions .......................... $ (392) $ 977 $ 3,259 $ 14,477 $ (224) $ (751)
========= ========= ===== ========= ========= =========
CLASS B SHARES:
Proceeds from shares
issued ................................ $ 804 $ 1,508 $ 6,512 $ 15,686 $ 554 1,383
Dividends reinvested ................... 41 46 405 386 18 8
Cost of shares redeemed ................ (603) (218) (1,371) (1,041) (66) (7)
--------- --------- --------- --------- --------- ---------
Change in net assets
from Class B Share
transactions .......................... $ 242 $ 1,336 5,546 $ 15,031 $ 506 $ 1,384
========= ========= ===== ========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued ................................. 3,795 6,859 7,050 10,330 505 593
Reinvested ............................. 24 121 18 86 1 4
Redeemed ............................... (1,667) (6,488) (2,677) (4,649) (342) (856)
--------- --------- --------- --------- --------- ---------
Change in Fiduciary Shares ............. 2,152 492 4,391 5,767 164 (259)
========= ========= ===== ========= ========= =========
CLASS A SHARES:
Issued ................................. 4 387 526 1,933 6 48
Reinvested ............................. 11 22 54 72 9 18
Redeemed ............................... (52) (316) (247) (522) (37) (140)
--------- --------- --------- --------- --------- ---------
Change in Class A Shares .............. (37) 93 333 1,483 (22) (74)
========= ========= ===== ========= ========= =========
CLASS B SHARES:
Issued ................................. 74 138 669 1,612 55 138
Reinvested ............................. 4 5 42 40 2 1
Redeemed ............................... (56) (20) (141) (108) (7) (1)
--------- --------- --------- --------- --------- ---------
Change in Class B Shares ............... 22 123 570 1,544 50 138
========= ========= ===== ========= ========= =========
</TABLE>
Continued
<PAGE> 583
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
OHIO MUNICIPAL LOUISIANA MUNICIPAL
BOND FUND BOND FUND (a)
-------------------------- ------------------------------------------
SIX MONTHS YEAR SIX MONTHS SEVEN MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, NOVEMBER 30,
1996 1996 1996 1996 1995
--------- --------- --------- ------------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES (b):
Proceeds from shares issued ........................ $ 9,658 $ 16,537 $ 2,820 $ 6,255
Proceeds from shares issued in
conversion from Class A Shares .................... -- -- -- 137,607(b)
Dividends reinvested ............................... 71 245 -- --
Cost of shares redeemed ............................ (7,781) (16,421) (14,010) (6,804)
--------- --------- --------- ---------
Change in net assets from
Fiduciary Share transactions ...................... $ 1,948 $ 361 $ (11,190) $ 137,058
========= ========= ========= =========
CLASS A SHARES:
Proceeds from shares issued ........................ $ 2,087 $ 5,812 $ 1,726 $ 5,814 $ 25,634
Dividends reinvested ............................... 337 479 776 889 1,948
Cost of shares redeemed ............................ (3,350) (1,813) (6,452) (19,453) (32,701)
Cost of shares redeemed in
conversion to Fiduciary Shares .................... -- -- -- (137,607)(b) --
--------- --------- --------- --------- ---------
Change in net assets from
Class A Share transactions ........................ $ (926) $ 4,478 $ (3,950) $(150,357) $ (5,119)
========= ========= ========= ========= =========
CLASS B SHARES:
Proceeds from shares issued ........................ $ 3,411 $ 6,113 $ 465 $ 1,390 $ 1,934
Dividends reinvested ............................... 171 166 49 40 31
Cost of shares redeemed ............................ (504) (584) (182) (278) (112)
--------- --------- --------- --------- ---------
Change in net assets from
Class B Share transactions ........................ $ 3,078 $ 5,695 $ 332 $ 1,152 $ 1,853
========= ========= ========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES (b):
Issued ............................................. 894 1,528 282 195
Issued in conversion from Class A Shares ........... -- -- -- 13,761(b)
Reinvested ......................................... 7 23 -- --
Redeemed ........................................... (722) (1,523) (1,403) (250)
--------- --------- --------- ---------
Change in Fiduciary Shares ......................... 179 28 (1,121) 13,706
========= ========= ========= =========
CLASS A SHARES:
Issued ............................................. 191 539 173 545 2,426
Issued in restatement of net asset
value (c) ........................................ -- -- -- 1,239 --
Reinvested ......................................... 31 44 78 85 186
Redeemed ........................................... (309) (167) (646) (1,869) (3,127)
Redeemed in conversion to
Fiduciary Shares .................................. -- -- -- (13,761)(b) --
--------- --------- --------- --------- ---------
Change in Class A Shares .......................... (87) 416 (395) (13,761) (515)
========= ========= ========= ========= =========
CLASS B SHARES:
Issued ............................................. 313 561 47 130 183
Issued in restatement of net asset
value (c) ......................................... -- -- -- 22 --
Reinvested ......................................... 15 15 5 4 3
Redeemed ........................................... (46) (54) (18) (27) (10)
--------- --------- --------- --------- ---------
Change in Class B Shares ........................... 282 522 34 129 176
========= ========= ========= ========= =========
<FN>
- ------------------------------------
(a) Upon reorganizing as a fund of The One Group, the Paragon Louisiana
Tax-Free Fund became the Louisiana Municipal Bond Fund. Capital and share
transactions for the periods prior to March 26, 1996 represent the Paragon
Louisiana Tax-Free Fund.
(b) Fiduciary Shares of the Louisiana Municipal Bond Fund commenced offering on
March 26, 1996 upon conversion of certain Class A Shares to Fiduciary
Shares.
(c) Pursuant to its reorganization as a fund of The One Group, the Louisiana
Municipal Bond Fund issued additional shares at the close of business March
25, 1996 as a result of restatement of the net asset values of Class A
Shares from $10.67 to $10.00 and Class B Shares from $10.70 to $10.00.
</TABLE>
Continued
<PAGE> 584
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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 the following percentages of the Funds' average net assets: 0.60% of the
Intermediate Tax-Free Bond Fund, the Ohio Municipal Bond Fund and the
Louisiana Municipal Bond Fund; and 0.45% of the Municipal Income Fund and
the Kentucky Municipal Bond Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services
for a fee that is computed daily and paid monthly, at an annual rate of
0.20% on the first $1.5 billion of Trust net assets (excluding the Investor
Growth Fund, the Investor Growth & Income Fund, the Investor Conservative
Fund , and the Investor Balanced Fund, the "Investor Funds" and the
Treasury Only Money Market Fund and the Government Money Market Fund, the
"Institutional Money Market Funds"); 0.18% on the next $0.5 billion of
Trust net assets (excluding the Investor Funds and the Institutional Money
Market Funds); and 0.16% of Trust net assets (excluding the Investor Funds
and the Institutional Money Market Funds) over $2 billion. 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.
The Trust and The One Group Services Company (the "Distributor") are
parties to a distribution agreement under which shares of the Funds are
sold on a continuous basis. Class A and Class B Shares are subject to
distribution and shareholder services plans (the "Plans") pursuant to Rule
12b-1 under the 1940 Act. As provided in the Plans, the Trust will pay the
Distributor a fee of 0.35% of the average daily net assets of Class A
Shares of each of the Funds and 1.00% of the average daily net assets of
the Class B Shares of each of the Funds. Currently, the Distributor has
voluntarily agreed to limit payments under the Plans to 0.25% and 0.90% of
average daily net assets of the Class A Shares and Class B Shares,
respectively, of each Fund. Up to 0.25% of the fees payable under the Plans
may be used as compensation for shareholder services by the Distributor
and/or financial institutions and intermediaries. Fees paid under the Plans
may be applied by the Distributor toward (i) compensation for its services
in connection with distribution assistance or provision of shareholder
services; or (ii) payments to financial institutions and intermediaries
such as banks (including affiliates of the Adviser), brokers, dealers and
other institutions, including the Distributor's affiliates and subsidiaries
as compensation for services or reimbursement of expenses incurred in
connection with distribution assistance or provision of shareholder
services. Fiduciary Class Shares of each Fund are offered without
distribution fees. For the period ended December 31, 1996, the Distributor
received $172,353 from commissions earned on sales of Class A Shares and
redemptions of Class B Shares, of which the Distributor reallowed $95,435
to affiliated broker/dealers of the Funds.
Prior to January 2, 1996, Premier Investment Advisors, L.L.C. ("Premier")
served as investment adviser and Goldman Sachs & Company served as
distributor to the Louisiana Municipal Bond Fund. Pursuant to the approval
of the Board of Trustees of Paragon on October 31, 1995 and its
shareholders on December 20, 1995, Paragon entered into an investment
advisory agreement with the Adviser and a distribution agreement with the
Distributor effective January 2, 1996. The terms of the investment advisory
agreements with Premier and with the Adviser and the distribution
agreements with Goldman Sachs & Company and the Distributor were
substantially the same.
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
Continued
<PAGE> 585
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
The Adviser, the Administrator and the Distributor voluntarily agreed to waive a
portion of their fees. For the period ended December 31, 1996, fees in the
following amounts were waived (amounts in thousands):
<TABLE>
<CAPTION>
12b-1 FEES
INVESTMENT WAIVED
ADVISORY FEES ADMINISTRATION ---------------------
WAIVED FEES WAIVED CLASS A CLASS B
---------- --------------- -------- --------
<S> <C> <C> <C> <C>
Intermediate Tax-Free Bond Fund .............. $330 $- $ 3 $ 1
Municipal Income Fund ........................ 170 16 14 13
Kentucky Municipal Bond Fund ................. 59 -- 4 1
Ohio Municipal Bond Fund ..................... 166 2 8 5
Louisiana Municipal Bond Fund ................ 195 -- 26 2
</TABLE>
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities and purchased options) during the period
ended December 31, 1996 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
PURCHASES SALES
--------- ---------
<S> <C> <C>
Intermediate Tax-Free Bond Fund ...................... $132,917 $107,097
Municipal Income Fund ................................ 141,236 83,829
Kentucky Municipal Bond Fund ......................... 2,529 1,331
Ohio Municipal Bond Fund ............................. 11,539 3,338
Louisiana Municipal Bond Fund ........................ 18,749 33,275
</TABLE>
6. FINANCIAL INSTRUMENTS:
Investing in financial instruments such as written options, futures,
structured notes and indexed securities involves risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the Funds have in
the particular class of instrument. Risks associated with these instruments
include an imperfect correlation between the movements in the price of the
instruments and the price of the underlying securities and interest rates,
an illiquid secondary market for the instruments or inability of
counterparties to perform under the terms of the contract. The Funds enter
into these contracts primarily as a means to hedge against adverse
fluctuation in securities.
7. CONCENTRATION OF CREDIT RISK:
The Kentucky, Ohio and Louisiana Municipal Bond Funds invest in primarily
debt obligations issued by the respective States and their political
subdivisions, agencies and public authorities to obtain funds for various
public purposes. The Funds are more susceptible to economic and political
factors adversely affecting issuers of the state's specific municipal
securities than are municipal bond funds that are not concentrated in these
issuers to the same extent.
8. REORGANIZATION:
The Trust entered an Agreement and Plan of Reorganization
("Reorganization") with Paragon pursuant to which all of the assets and
liabilities of each Paragon Fund transferred to a fund of the One Group in
exchange for shares of the corresponding fund of the One Group. The Paragon
Louisiana Tax-Free Fund transferred its assets and liabilities to the One
Group Louisiana Municipal Bond Fund. The Reorganization, which qualified as
tax-free exchange for Federal income tax purposes, was completed on March
25, 1996 following approval by
Continued
<PAGE> 586
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(Unaudited)
shareholders of Paragon at a special shareholder meeting. The following is
a summary of shares outstanding, net assets, net asset value per share and
unrealized appreciation immediately before and after the Reorganization
(amounts in thousands except net asset value):
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
--------------------------- ----------------
PARAGON LOUISIANA LOUISIANA
LOUISIANA MUNICIPAL MUNICIPAL
TAX-FREE FUND BOND FUND BOND FUND
--------------- ----------- -----------------
<S> <C> <C> <C>
Shares.............................................. 18,757 - 20,018
Net Assets.......................................... $200,185 - $200,185
Net Asset Value:
Fiduciary........................................ $10.00*
Class A.......................................... $10.67 - $10.00*
Class B.......................................... $10.70 - $10.00*
Unrealized Appreciation............................. $4,349 - $4,349
<FN>
- -------------------------------
* Pursuant to its reorganization as a fund of the One Group, the Fund issued
additional shares at the close of business March 25, 1996 as a result of
the restatement of the net asset values of Class A Shares from $10.67 to
$10.00 and Class B Shares from $10.70 to $10.00.
</TABLE>
9. SUBSEQUENT EVENT:
Subsequent to December 31, 1996 net assets of certain common trust funds
managed by the Adviser were exchanged in a tax-free conversion for shares
of the corresponding One Group Funds as follows:
<TABLE>
<CAPTION>
AMOUNT CONVERTED
FUND NAME (IN THOUSANDS)
--------- ----------------
<S> <C>
One Group Municipal Income...................... $54,636
One Group Intermediate Tax Free Bond............ 180,333
One Group Kentucky Municipal Bond............... 77,684
One Group Ohio Municipal Bond................... 38,707
</TABLE>
<PAGE> 587
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS DECEMBER 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------------------------------------------------------
FIDUCIARY
------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................. $ 10.67 $ 10.64 $ 10.49 $ 11.15 $ 10.69 $ 10.28
----------- ----------- ----------- ----------- ----------- -----------
Investment Activities:
Net investment income ................ 0.26 0.52 0.54 0.52 0.53 0.55
Net realized and unrealized
gains (losses) from investments ..... 0.24 0.04 0.15 (0.52) 0.49 0.42
----------- ----------- ----------- ----------- ----------- -----------
Total from Investment
Activities ........................ 0.50 0.56 0.69 0.00 1.02 0.97
----------- ----------- ----------- ----------- ----------- -----------
Distributions:
Net investment income ................ (0.26) (0.51) (0.54) (0.53) (0.52) (0.55)
In excess of net investment income ... -- -- -- (0.01) -- --
Net realized gains ................... (0.02) (0.02) -- (0.01) (0.04) (0.01)
In excess of net realized gains ...... -- -- -- (0.11) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total Distributions ................ (0.28) (0.53) (0.54) (0.66) (0.56) (0.56)
----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE,
END OF PERIOD ....................... $ 10.89 $ 10.67 $ 10.64 $ 10.49 $ 11.15 $ 10.69
=========== =========== =========== =========== =========== ===========
Total Return (Excludes Sales Charge) .. 4.75%(a) 5.39% 6.75% (0.11)% 9.79% 9.54%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ... $ 244,981 $ 217,201 $ 211,229 $ 182,611 $ 166,489 $ 142,672
Ratio of expenses to average
net assets ......................... 0.56%(b) 0.54% 0.53% 0.48% 0.54% 0.55%
Ratio of net investment
income to average net assets ...... 4.84%(b) 4.87% 5.17% 4.78% 4.93% 5.28%
Ratio of expenses to average
net assets* ....................... 0.83%(b) 0.87% 0.88% 0.84% 0.94% 1.07%
Ratio of net investment
income to average net assets* ..... 4.57%(b) 4.54% 4.82% 4.42% 4.53% 4.77%
Portfolio turnover (c) ............. 46.63% 111.58% 199.76% 105.98% 31.99% 11.50%
<FN>
- ----------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 588
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS DECEMBER 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
-----------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------------------
1996 1996 1995 1994 1993 1992(a)
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............... $ 10.67 $ 10.63 $ 10.48 $ 11.14 $ 10.69 $ 10.57
--------- --------- --------- --------- --------- ---------
Investment Activities:
Net investment income ............. 0.25 0.50 0.51 0.50 0.55 0.15
Net realized and unrealized gains
(losses) from investments ........ 0.23 0.05 0.15 (0.52) 0.44 0.18
--------- --------- --------- --------- --------- ---------
Total from Investment Activities . 0.48 0.55 0.66 (0.02) 0.99 0.33
--------- --------- --------- --------- --------- ---------
Distributions:
Net investment income ............. (0.25) (0.49) (0.49) (0.52) (0.50) (0.21)
In excess of net investment income -- -- (0.02) (0.01) -- --
Net realized gains ................ (0.02) (0.02) -- -- (0.04) --
In excess of net realized gains ... -- -- -- (0.11) -- --
--------- --------- --------- --------- --------- ---------
Total Distributions .............. (0.27) (0.51) (0.51) (0.64) (0.54) (0.21)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD .................... $ 10.88 $ 10.67 $ 10.63 $ 10.48 $ 11.14 $ 10.69
========= ========= ========= ========= ========= =========
Total Return (Excludes Sales Charge) 4.52%(b) 5.28% 6.49% (0.33)% 9.47% 8.68%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) . $ 6,357 $ 6,622 $ 5,614 $ 5,556 $ 5,480 $ 5
Ratio of expenses to average net
assets .......................... 0.79%(c) 0.79% 0.78% 0.73% 0.71% 1.02%(c)
Ratio of net investment income to
average net assets .............. 4.58%(c) 4.62% 4.91% 4.57% 4.77% 4.91%(c)
Ratio of expenses to average net
assets* ......................... 1.16%(c) 1.22% 1.23% 1.19% 1.27% 1.32%(c)
Ratio of net investment income to
average net assets* ............. 4.21%(c) 4.19% 4.46% 4.11% 4.21% 4.61%(c)
Portfolio turnover (d) ............ 46.63% 111.58% 199.76% 105.98% 31.99% 11.50%
---------
<FN>
- -----------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on February 18, 1992.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 589
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
-----------------------------------------------------------
CLASS B
-----------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -----------------------------------------
1996 1996 1995 1994(a)
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 10.68 $ 10.65 $ 10.50 $ 11.18
--------- --------- --------- ---------
Investment Activities:
Net investment income ............................... 0.22 0.43 0.46 0.17
Net realized and unrealized gains (losses)
from investments ................................... 0.23 0.04 0.14 (0.67)
--------- --------- --------- ---------
Total from Investment Activities ................... 0.45 0.47 0.60 (0.50)
--------- --------- --------- ---------
Distributions:
Net investment income ............................... (0.22) (0.42) (0.45) (0.17)
Net realized gains .................................. (0.02) (0.02) -- --
In excess of net realized gains ..................... -- -- -- (0.01)
--------- --------- --------- ---------
Total Distributions ................................ (0.24) (0.44) (0.45) (0.18)
--------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 10.89 $ 10.68 $ 10.65 $ 10.50
========= ========= ========= =========
Total Return (Excludes Sales Charge) ................. 4.19%(b) 4.48% 5.89% (4.48)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 2,724 $ 2,439 $ 1,116 $ 549
Ratio of expenses to average net assets ............. 1.48%(c) 1.44% 1.43% 1.40%(c)
Ratio of net investment income to average net assets 4.01%(c) 3.97% 4.29% 4.08%(c)
Ratio of expenses to average net assets* ............ 1.83%(c) 1.87% 1.88% 1.85%(c)
Ratio of net investment income to average net assets* 3.66%(c) 3.54% 3.84% 3.63%(c)
Portfolio turnover (d) .............................. 46.63% 111.58% 199.76% 105.98%
<FN>
- -----------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 590
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS DECEMBER 31, 1996
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
-----------------------------------------------------------------------------
FIDUCIARY
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, --------------------------------------------------------------
1996 1996 1995 1994 1993(a)
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................... $ 9.66 $ 9.69 $ 9.66 $ 10.11 $ 10.00
----------- ----------- ----------- ----------- -----------
Investment Activities:
Net investment income ........................ 0.27 0.56 0.57 0.56 0.19
Net realized and unrealized gains (losses)
from investments ............................ 0.12 (0.03) 0.03 (0.42) 0.11
----------- ----------- ----------- ----------- -----------
Total from Investment Activities ........... 0.39 0.53 0.60 0.14 0.30
----------- ----------- ----------- ----------- -----------
Distributions:
Net investment income ........................ (0.27) (0.56) (0.57) (0.56) (0.19)
Net realized gains ........................... -- -- -- (0.03) --
----------- ----------- ----------- ----------- -----------
Total Distributions ........................ (0.27) (0.56) (0.57) (0.59) (0.19)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE,
END OF PERIOD ............................... $ 9.78 $ 9.66 $ 9.69 $ 9.66 $ 10.11
=========== =========== =========== =========== ===========
Total Return (Excludes Sales Charge) .......... 4.05%(b) 5.54% 6.46% 1.36% 5.18%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............ $ 286,951 $ 241,115 $ 185,916 $ 152,763 $ 40,777
Ratio of expenses to average net assets ...... 0.57%(c) 0.56% 0.56% 0.54% 0.54%(c)
Ratio of net investment income to average
net assets .................................. 5.45%(c) 5.70% 6.02% 5.61% 5.66%(c)
Ratio of expenses to average net assets* ..... 0.69%(c) 0.76% 0.74% 0.71% 1.01%(c)
Ratio of net investment income to average
net assets* ................................. 5.33%(c) 5.50% 5.84% 5.44% 5.19%(c)
Portfolio turnover (d) ....................... 27.20% 83.17% 66.02% 101.48% 66.12%
<FN>
- --------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations on February 9, 1993.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 591
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
----------------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------------
1996 1996 1995 1994 1993(a)
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................. $ 9.69 $ 9.72 $ 9.67 $ 10.12 $ 10.06
---------- ---------- ---------- ---------- ----------
Investment Activities:
Net investment income ........................... 0.26 0.55 0.55 0.55 0.19
Net realized and unrealized gains (losses)
from investments ............................... 0.12 (0.04) 0.05 (0.43) 0.05
---------- ---------- ---------- ---------- ----------
Total from Investment Activities .............. 0.38 0.51 0.60 0.12 0.24
---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income ........................... (0.26) (0.54) (0.55) (0.54) (0.18)
Net realized gains .............................. -- -- -- (0.03) --
---------- ---------- ---------- ---------- ----------
Total Distributions ........................... (0.26) (0.54) (0.55) (0.57) (0.18)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD .................................. $ 9.81 $ 9.69 $ 9.72 $ 9.67 $ 10.12
========== ========== ========== ========== ==========
Total Return (Excludes Sales Charge) ............. 3.93%(b) 5.35% 6.21% 1.34% 6.86%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............... $ 29,366 $ 25,787 $ 11,462 $ 10,725 $ 4,106
Ratio of expenses to average net assets ......... 0.82%(c) 0.81% 0.81% 0.79% 0.80%(c)
Ratio of net investment income to average net
assets ......................................... 5.20%(c) 5.45% 5.76% 5.44% 5.71%(c)
Ratio of expenses to average net assets* ........ 1.04%(c) 1.11% 1.09% 1.06% 1.36%(c)
Ratio of net investment income to average net
assets* ........................................ 4.98%(c) 5.15% 5.48% 5.17% 5.15%(c)
Portfolio turnover (d) .......................... 27.20% 83.17% 66.02% 101.48% 66.12%
<FN>
- -------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on February 23, 1993.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 592
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
-----------------------------------------------------------
CLASS B
-----------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -----------------------------------------
1996 1996 1995 1994(a)
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 9.66 $ 9.69 $ 9.62 $ 10.10
---------- ---------- ---------- ----------
Investment Activities:
Net investment income ............................... 0.22 0.47 0.49 0.24
Net realized and unrealized gains (losses) from
investments ....................................... 0.11 (0.03) 0.07 (0.48)
---------- ---------- ---------- ----------
Total from Investment Activities ................. 0.33 0.44 0.56 (0.24)
---------- ---------- ---------- ----------
Distributions:
Net investment income ............................... (0.22) (0.47) (0.49) (0.24)
---------- ---------- ---------- ----------
Total Distributions .............................. (0.22) (0.47) (0.49) (0.24)
---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 9.77 $ 9.66 $ 9.69 $ 9.62
========== ========== ========== ==========
Total Return (Excludes Sales Charge) ................. 3.49%(b) 4.65% 5.58% (1.98)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 29,055 $ 23,204 $ 8,326 $ 4,855
Ratio of expenses to average net assets ............. 1.47%(c) 1.46% 1.46% 1.41%(c)
Ratio of net investment income to average net assets 4.55%(c) 4.80% 5.14% 4.95%(c)
Ratio of expenses to average net assets* ............ 1.68%(c) 1.76% 1.74% 1.62%(c)
Ratio of net investment income to average net assets* 4.34%(c) 4.50% 4.86% 4.74%(c)
Portfolio turnover (d) .............................. 27.20% 83.17% 66.02% 101.48%
<FN>
- ---------------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 593
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND FUND
----------------------------------------------------------------------
FIDUCIARY
------------------------------------------
SIX MONTHS YEAR JANUARY 20, FEBRUARY 1, MARCH 12,
ENDED ENDED 1995 TO 1994, TO 1993, TO
DECEMBER 31, JUNE 30, JUNE 30, JANUARY 19, JANUARY 31,
1996 1996 1995(A) 1995(B) 1994(B)(C)
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................... $ 10.04 $ 9.92 $ 9.49 $ 10.45 $ 10.00
---------- ---------- ---------- ---------- ----------
Investment Activities:
Net investment income .................. 0.24 0.50 0.20 0.41 0.36
Net realized and unrealized
gains (losses) from investments ....... 0.16 0.12 0.43 (0.95) 0.43
---------- ---------- ---------- ---------- ----------
Total from Investment Activities ..... 0.40 0.62 0.63 (0.54) 0.79
---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income ................. (0.24) (0.50) (0.20) (0.42) (0.34)
---------- ---------- ---------- ---------- ----------
Total Distributions ................. (0.24) (0.50) (0.20) (0.42) (0.34)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD .......... $ 10.20 $ 10.04 $ 9.92 $ 9.49 $ 10.45
========== ========== ========== ========== ==========
Total Return (Excludes Sales Charge) .... 4.02%(d) 6.35% 6.56%(d) (5.17)%(d) 8.05%(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .... $ 32,458 $ 30,300 $ 32,520 $ 41,953 $ 64,663
Ratio of expenses to average net assets 0.60%(e) 0.68% 0.65%(e) 1.03%(e) 0.70%(e)
Ratio of net investment
income to average net assets ......... 4.69%(e) 4.60% 4.70%(e) 4.27%(e) 4.19%(e)
Ratio of expenses to average
net assets* .......................... 0.88%(e) 1.02% 0.97%(e) 1.05%(e) 0.91%(e)
Ratio of net investment
income to average net assets* ......... 4.41%(e) 4.26% 4.38%(e) 4.25%(e) 3.98%(e)
Portfolio turnover (f) ............... 3.30% 16.78% 19.75% 10.00% 5.00%
<FN>
- ----------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from date reorganized as a fund of The One Group.
(b) Prior to reorganizing as a fund of The One Group, the Fund offered only one
class of shares.
(c) Period from commencement of operations.
(d) Not annualized. (e)Annualized. ( f )Portfolio turnover is calculated on the
basis of the Fund as a whole without distinguishing among the classes of
shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 594
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND FUND
---------------------------------------------
CLASS A
---------------------------------------------
SIX MONTHS YEAR JANUARY 20,
ENDED ENDED 1995 TO
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................. $ 10.05 $ 9.93 $ 9.49
--------- --------- ---------
Investment Activities:
Net investment income ................................ 0.22 0.44 0.19
Net realized and unrealized gains from investments ... 0.17 0.12 0.44
--------- --------- ---------
Total from Investment Activities ................... 0.39 0.56 0.63
--------- --------- ---------
Distributions
Net investment income ............................... (0.23) (0.44) (0.19)
--------- --------- ---------
Total Distributions ............................... (0.23) (0.44) (0.19)
--------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 10.21 $ 10.05 $ 9.93
========= ========= =========
Total Return (Excludes Sales Charge) .................. 3.88%(b) 5.70% 5.66%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 8,076 $ 8,178 $ 8,818
Ratio of expenses to average net assets ............. 0.86%(c) 0.93% 0.90%(c)
Ratio of net investment income to average net assets 4.43%(c) 4.35% 4.44%(c)
Ratio of expenses to average net assets* ............ 1.23%(c) 1.37% 1.33%(c)
Ratio of net investment income to average net assets* 4.06%(c) 3.91% 4.01%(c)
Portfolio turnover (d) .............................. 3.30% 16.78% 19.75%
<FN>
- -----------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from date reorganized as a fund of The One Group.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 595
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND FUND
---------------------------------------------
CLASS B
---------------------------------------------
SIX MONTHS YEAR MARCH 16,
ENDED ENDED 1995 TO
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995(a)
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................. $ 9.99 $ 9.87 $ 9.75
--------- --------- ---------
Investment Activities:
Net investment income ................................ 0.19 0.38 0.14
Net realized and unrealized gains from investments ... 0.15 0.13 0.12
--------- --------- ---------
Total from Investment Activities ................... 0.34 0.51 0.26
--------- --------- ---------
Distributions:
Net investment income ................................ (0.19) (0.39) (0.14)
--------- --------- ---------
Total Distributions ................................ (0.19) (0.39) (0.14)
--------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 10.14 $ 9.99 $ 9.87
========= ========= =========
Total Return (Excludes Sales Charge) .................. 3.46%(b) 5.16% 2.63%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 1,992 $ 1,457 $ 79
Ratio of expenses to average net assets ............. 1.50%(c) 1.58% 1.58%(c)
Ratio of net investment income to average net assets 3.77%(c) 3.70% 3.89%(c)
Ratio of expenses to average net assets* ............ 1.89%(c) 2.02% 2.21%(c)
Ratio of net investment income to average net assets* 3.38%(c) 3.26% 3.25%(c)
Portfolio turnover (d) .............................. 3.30% 16.78% 19.75%
<FN>
- ---------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on March 16, 1995.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 596
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
--------------------------------------------------------------------------------------
FIDUCIARY
--------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992(a)
---------- ---------- ---------- ---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............ $ 10.69 $ 10.65 $ 10.58 $ 11.11 $ 10.48 $ 10.00
---------- ---------- ---------- ---------- ---------- ----------
Investment Activities:
Net investment income ......... 0.28 0.56 0.55 0.51 0.54 0.56
Net realized and unrealized
gains (losses) from
investments .................. 0.19 0.04 0.07 (0.50) 0.62 0.47
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment
Activities ................. 0.47 0.60 0.62 0.01 1.16 1.03
---------- ---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income ........... (0.28) (0.56) (0.55) (0.52) (0.53) (0.55)
In excess of net realized
gains .......................... -- -- -- (0.02) -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions ........... (0.28) (0.56) (0.55) (0.54) (0.53) (0.55)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD .................. $ 10.88 $ 10.69 $ 10.65 $ 10.58 $ 11.11 $ 10.48
========== ========== ========== ========== ========== ==========
Total Return (Excludes Sales
Charge) ........................ 4.45%(b) 5.69% 6.07% 0.07% 11.43% 10.64%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 84,011 $ 80,611 $ 79,993 $ 93,261 $ 74,792 $ 45,199
Ratio of expenses to average net
assets ........................ 0.57%(c) 0.57% 0.58% 0.53% 0.55% 0.63%(c)
Ratio of net investment income
to average net assets ......... 5.16%(c) 5.17% 5.29% 4.76% 5.14% 5.61%(c)
Ratio of expenses to average net
assets* ....................... 0.88%(c) 0.95% 0.91% 0.86% 0.94% 1.21%(c)
Ratio of net investment income
to average net assets* ........ 4.85%(c) 4.79% 4.96% 4.43% 4.75% 5.03%(c)
Portfolio turnover (d) .......... 3.21% 24.61% 77.69% 16.77% 26.67% 9.78%
<FN>
- -------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced offering on July 12, 1991.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 597
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
-----------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------------------------
1996 1996 1995 1994 1993 1992(a)
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................... $ 10.72 $ 10.68 $ 10.61 $ 11.13 $ 10.48 $ 10.29
---------- ---------- ---------- ---------- ---------- ----------
Investment Activities:
Net investment income ................ 0.27 0.55 0.53 0.50 0.52 0.20
Net realized and unrealized gains
(losses) from investments .......... 0.20 0.03 0.07 (0.48) 0.64 0.21
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Activities .... 0.47 0.58 0.60 0.02 1.16 0.41
---------- ---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income ................. (0.27) (0.54) (0.51) (0.50) (0.51) (0.22)
In excess of net investment income .... -- -- (0.02) (0.02) -- --
In excess of net realized gains ....... -- -- -- (0.02) -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions .................. (0.27) (0.54) (0.53) (0.54) (0.51) (0.22)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD ........................ $ 10.92 $ 10.72 $ 10.68 $ 10.61 $ 11.13 $ 10.48
========== ========== ========== ========== ========== ==========
Total Return (Excludes Sales Charge) ... 4.32%(b) 5.44% 5.79% (0.05)% 11.40% 10.85%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ..... $ 15,858 $ 16,507 $ 12,006 $ 14,883 $ 13,092 $ 41
Ratio of expenses to average net assets 0.81%(c) 0.82% 0.82% 0.78% 0.77% 1.01%(c)
Ratio of net investment income
to average net assets ............... 4.90%(c) 4.92% 5.01% 4.63% 4.85% 5.16%(c)
Ratio of expenses to average net
assets* ............................. 1.21%(c) 1.30% 1.25% 1.21% 1.25% 1.40%(c)
Ratio of net investment income
to average net assets* .............. 4.50%(c) 4.44% 4.58% 4.20% 4.37% 4.77%(c)
Portfolio turnover (d) ................ 3.21% 24.61% 77.69% 16.77% 26.67% 9.78%
<FN>
- ------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on February 18, 1992.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 598
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
-------------------------------------------------------------
CLASS B
-------------------------------------------------------------
Years ended June 30,
SIX MONTHS ENDED --------------------------------------
DECEMBER 31, 1996 1996 1995 1994 (a)
----------------- ---- ---- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................... $10.79 $10.75 $10.68 $11.31
------- ------ ------ ------
Investment Activities:
Net investment income ............................... 0.24 0.48 0.43 0.17
Net realized and unrealized gains (losses) from
investments ...................................... 0.20 0.03 0.07 (0.62)
------- ------ ------ ------
Total from Investment Activities ................. 0.44 0.51 0.50 (0.45)
------- ------ ------ ------
Distributions:
Net investment income ............................... (0.24) (0.47) (0.43) (0.17)
In excess of net investment income .................. -- -- -- (0.01)
------- ------ ------ ------
Total Distributions .............................. (0.24) (0.47) (0.43) (0.18)
------- ------ ------ ------
NET ASSET VALUE,
END OF PERIOD .......................................... $10.99 $10.79 $10.75 $10.68
======= ====== ====== ======
Total Return (Excludes Sales Charge) ................... 4.07%(b) 4.79% 5.17% (4.02)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $12,117 $8,854 $3,209 $2,043
Ratio of expenses to average net assets ............. 1.46%(c) 1.47% 1.48% 1.28%(c)
Ratio of net investment income to average net assets 4.28%(c) 4.27% 4.40% 4.23%(c)
Ratio of expenses to average net assets* ............ 1.85%(c) 1.95% 1.91% 1.68%(c)
Ratio of net investment income to average net assets* 3.89%(c) 3.79% 3.97% 3.83%(c)
Portfolio turnover (d) .............................. 3.21% 24.61% 77.69% 16.77%
<FN>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 599
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA MUNICIPAL
BOND FUND
---------------------------------------
FIDUCIARY
---------------------------------------
SIX MONTHS MARCH 26, 1996
ENDED THROUGH
DECEMBER 31, 1996 JUNE 30, 1996(a)
------------------ -------------------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................................... $9.93 $10.00
-------- --------
Investment Activities:
Net investment income ..................................... 0.24 0.13
Net realized and unrealized gains (losses) from investments 0.14 (0.07)
-------- --------
Total from Investment Activities ....................... 0.38 0.06
-------- --------
Distributions:
Net investment income ..................................... (0.24) (0.13)
-------- --------
Total Distributions .................................... (0.24) (0.13)
-------- --------
NET ASSET VALUE,
END OF PERIOD ................................................ $10.07 $9.93
======== ========
Total Return (Excludes Sales Charge) ......................... 3.91%(b) 0.90%(b)(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $126,727 $136,041
Ratio of expenses to average net assets ................... 0.65%(c) 0.71%(c)
Ratio of net investment income to average net assets ...... 4.88%(c) 4.76%(c)
Ratio of expenses to average net assets* .................. 0.86%(c) 0.86%(c)
Ratio of net investment income to average net assets* ..... 4.67%(c) 4.61%(c)
Portfolio turnover (e) .................................... 10.24% 16.72%
<FN>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from date reorganized as a fund of The One Group.
(b) Not annualized.
(c) Annualized.
(d) Represents total return for Class A Shares from December 1, 1995 through
March 25, 1996 plus total return for Fiduciary Shares for the period March
26, 1996 through June 30, 1996. (e)Portfolio turnover is calculated on the
basis of the Fund as a whole without distinguishing among the classes of
shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 600
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA MUNICIPAL BOND FUND
--------------------------------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------------------------------
SIX MONTHS SEVEN MONTHS YEARS ENDED NOVEMBER 30,
ENDED ENDED ---------------------------------------------------
DECEMBER 31, 1996 JUNE 30, 1996(a) 1995 1994 1993 1992
----------------- --------------- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ...... $9.93 $10.09 $9.38 $10.27 $9.92 $9.73
------- ------- -------- -------- -------- --------
Investment Activities:
Net investment income .. 0.23 0.24 0.50 0.49 0.52 0.55
Net realized and
unrealized gains
(losses) from
investments ......... 0.14 (0.16) 0.71 (0.79) 0.42 0.26
------- ------- -------- -------- -------- --------
Total from Investment
Activities ........ 0.37 0.08 1.21 (0.30) 0.94 0.82
------- ------- -------- -------- -------- --------
Distributions:
Net investment income .. (0.23) (0.24) (0.50) (0.49) (0.52) (0.55)
Net realized gains ..... -- -- -- (0.10) (0.07) (0.07)
------- ------- -------- -------- -------- --------
Total Distributions . (0.23) (0.24) (0.50) (0.59) (0.59) (0.62)
------- ------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD ............. $10.07 $9.93 $10.09 $9.38 $10.27 $9.92
======= ======= ======== ======== ======== ========
Total Return (Excludes
Sales Charge) .......... 3.78%(b) 0.84%(b) 13.11% (2.97)% 9.65% 8.64%
RATIOS/SUPPLEMENTARY
Data:
Net Assets at end of
period (000) ........ $50,271 $53,479 $206,119 $196,820 $196,534 $135,692
Ratio of expenses to
average net assets .. 0.90%(c) 0.69%(c) 0.62% 0.65% 0.62% 0.58%
Ratio of net investment
income to average net
assets .............. 4.63%(c) 4.71%(c) 5.07% 4.97% 5.07% 5.70%
Ratio of expenses to
average net assets* . 1.21%(c) 0.86%(c) 0.77% 0.80% 0.78% 0.83%
Ratio of net investment
income to average net
assets* ............. 4.32%(c) 4.54%(c) 4.92% 4.82% 4.91% 5.45%
Portfolio turnover (d) . 10.24% 16.72% 28.00% 24.00% 25.00% 32.00%
<FN>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Upon reorganizing as a fund of The One Group, the Paragon Louisiana
Tax-Free Fund became the Louisiana Municipal Bond Fund. Financial
highlights for the periods prior to March 26, 1996 represents the Paragon
Louisiana Tax-Free Fund. The per share data for the periods prior to March
26, 1996 have been restated to reflect the impact of restatement of net
asset value from $10.67 to $10.00 effective March 26, 1996.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 601
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA MUNICIPAL BOND FUND
--------------------------------------------------------------
CLASS B
--------------------------------------------------------------
SIX MONTHS SEVEN MONTHS YEAR SEPTEMBER 16,
ENDED ENDED ENDED 1994 THROUGH
DECEMBER 31, JUNE 30, NOVEMBER 30, NOVEMBER 30,
1996 1996(a) 1995 1994(b)
------------ ------------ ------------ -------------
(Unaudited)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................ $9.93 $10.09 $9.36 $9.73
------ ------ ------ ----
Investment Activities:
Net investment income .................... 0.20 0.21 0.42 0.08
Net realized and unrealized gains (losses)
from investments ...................... 0.14 (0.16) 0.73 (0.37)
------ ------ ------ ----
Total from Investment Activities ...... 0.34 0.05 1.15 (0.29)
------ ------ ------ ----
Distributions:
Net investment income .................... (0.20) (0.21) (0.42) (0.08)
------ ------ ------ ----
Total Distributions ................... (0.20) (0.21) (0.42) (0.08)
------ ------ ------ ----
NET ASSET VALUE,
END OF PERIOD ............................. $10.07 $9.93 $10.09 $9.36
====== ====== ====== =====
Total Return (Excludes Sales Charge) ........ 3.45%(c) 0.48%(c) 12.52% 2.94%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........ $3,605 $3,223 $2,115 $204
Ratio of expenses to average net assets .. 1.55%(d) 1.50%(d) 1.37% 1.41%(d)
Ratio of net investment income to
average net assets .................... 3.96%(d) 3.98%(d) 4.27% 4.45%(d)
Ratio of expenses to average net assets* . 1.89%(d) 1.70%(d) 1.52% 1.56%(d)
Ratio of net investment income to
average net assets* ................... 3.62%(d) 3.78%(d) 4.12% 4.30%(d)
Portfolio turnover (e) ................... 10.24% 16.72% 28.00% 24.00%
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Upon reorganizing as a fund of The One Group, the Paragon Louisiana
Tax-Free Fund became the Louisiana Municipal Bond Fund. Financial
highlights for the periods prior to March 26, 1996 represents the Paragon
Louisiana Tax-Free Fund. The per share data for the periods prior to March
26, 1996 have been restated to reflect the impact of restatement of net
asset value from $10.70 to $10.00 effective March 26, 1996.
(b) Class B Shares commenced offering on September 16, 1994.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 602
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Treasury Only Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ---------------------------------------------------------- ---------
<S> <C> <C>
U.S. Treasury Obligations (99.0%):
U.S. Treasury Bills (36.6%):
$ 50,000 1/2/97 .................................................. $ 49,993
50,000 1/9/97 .................................................. 49,945
6,970 1/30/97 ................................................. 6,943
52,095 2/6/97 ................................................. 51,838
8,841 2/27/97 ................................................. 8,773
50,000 3/6/97 ................................................. 49,550
U.S. Treasury Notes (62.4%):
$ 20,000 8.00%, 1/15/97 (b) ...................................... $ 20,018
59,060 7.50%, 1/31/97 .......................................... 59,168
50,000 4.75%, 2/15/97 .......................................... 49,950
100,000 6.75%, 2/28/97 (b) ...................................... 100,242
60,000 6.88%, 2/28/97 .......................................... 60,143
25,000 6.63%, 3/31/97 .......................................... 25,085
20,000 6.88%, 3/31/97 .......................................... 20,073
10,000 6.50%, 4/30/97 .......................................... 10,029
25,000 5.88%, 7/31/97 .......................................... 25,076
--------
Total U.S. Treasury Obligations 586,826
--------
Total (Cost-$586,826)(a) $586,826
========
- --------
<FN>
Percentages indicated are based on net assets of $593,037.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
(b) A portion of this security was loaned as of December 31, 1996.
</FN>
</TABLE>
See notes to financial statements.
5
<PAGE> 603
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Government Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ---------------------------------------------------------- ------------
<S> <C> <C>
U.S. Government Agencies (52.3%):
Federal Farm Credit Bank:
$10,000 5.40%, 4/1/97 .............................................. $ 9,996
25,000 5.84%, 6/18/97 ............................................. 24,981
Federal
Home Loan
Bank:
-----------
25,000 5.26%, 2/14/97 ............................................. 24,839
16,550 4.94%, 3/4/97 .............................................. 16,545
18,500 5.04%, 3/6/97 .............................................. 18,493
20,000 5.33%, 3/18/97 ............................................. 19,992
25,000 5.42%, 3/20/97 ............................................. 24,706
10,000 5.80%, 8/12/97 ............................................. 9,988
7,000 5.83%, 12/19/97 ............................................ 7,019
Federal
Home Loan
Mortgage
Corp.:
-----------
25,000 5.34%, 2/24/97 ............................................. 24,800
25,000 5.22%, 2/28/97 ............................................. 24,790
25,000 5.30%, 3/19/97 ............................................. 24,71
25,000 5.77%, 6/6/97 .............................................. 24,980
Federal
National
Mortgage
Assoc.:
-----------
41,600 5.34%, 3/10/97 ............................................. 41,180
10,000 5.18%, 4/16/97 ............................................. 9,849
30,000 5.12%, 9/3/97* ............................................. 29,989
19,750 5.64%, 9/3/97 .............................................. 19,693
20,000 5.40%, 12/5/97 ............................................. 19,973
4,000 5.32%, 6/2/99* ............................................. 4,000
20,000 5.32%, 7/26/99* ............................................ 20,000
10,000 5.32%, 9/22/99* ............................................ 10,000
Student
Loan
Marketing
Association
-----------
40,000 5.39%, 11/24/97* ........................................... $40,000
25,000 5.41%, 9/28/98* ............................................ 25,000
25,000 5.41%, 11/10/98* ........................................... 25,000
10,000 5.43%, 1/13/99* ............................................ 9,999
10,000 5.44%, 8/2/99* ............................................. 9,996
--------
Total U.S. Government Agencies 520,525
--------
Total Investments, at amortized cost 520,525
========
Repurchase Agreements (47.9%):
230,000 Lehman Brothers, 7.02%, 1/2/97
(collateralized by $242,160 Various U.S. Government
Securities, 0.00% - 8.36%, 12/02/97 - 07/15/26,
market value $234,559) 230,000
-------
247,047 Prudential Securities, 7.02%, 1/2/97
(collateralized by $318,940 Various U.S. Government
Securities, 0.00% - 12.50%, 01/08/97 - 02/15/25,
market value $252,103) 247,047
-------
Total Repurchase Agreements 477,047
--------
Total (Cost-$997,572) (a) $997,572
========
</TABLE>
- -----
Percentages indicated are based on net assets of $995,936.
(a) Cost for federal income tax and financial reporting purposes are the same.
* Variable rate securities. The interest rate, which will change periodically,
is based upon an index of market interest rates. The rate reflected on the
Schedule of Portfolio Investments is the rate in effect at
December 31, 1996.
See notes to financial statements.
6
<PAGE> 604
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands,
except per share amounts)
TREASURY ONLY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
----------- -----------
<S> <C> <C>
ASSETS:
Investments, at amortized cost ................... $ 586,826 $ 520,525
Repurchase agreements, at cost ................... -- 477,047
----------- -----------
Total ............................................ 586,826 997,572
Interest receivable .............................. 8,688 3,332
Deferred organization costs ...................... 5 31
Prepaid expenses and other assets ................ 20 7
----------- -----------
TOTAL ASSETS ..................................... 595,539 1,000,942
----------- -----------
LIABILITIES:
Dividends payable ................................ 2,373 4,653
Payable for shares redeemed ...................... 1
Accrued expenses and other payables:
Investment advisory fees ................... 37 70
Administration fees ........................ 23 44
Other ...................................... 68 239
----------- -----------
TOTAL LIABILITIES ................................ 2,502 5,006
----------- -----------
NET ASSETS:
Capital .......................................... 593,132 996,134
Accumulated undistributed net realized losses
from investment transactions .................. (95) (198)
----------- -----------
NET ASSETS ....................................... $ 593,037 $ 995,936
=========== ===========
Outstanding units of beneficial interest.......... 593,132 996,134
=========== ===========
Net Asset Value:
Offering and redemption price per share......... $1.00 $1.00
===== =====
</TABLE>
See notes to financial statements.
7
<PAGE> 605
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
TREASURY ONLY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
------------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Interest income ..................................... $ 12,125 $ 25,761
Income from securities lending ...................... 63 11
-------- --------
TOTAL INCOME ........................................ 12,188 25,772
-------- --------
EXPENSES:
Investment advisory fees ............................ 186 380
Administration fees ................................. 116 238
Custodian and accounting fees ....................... 11 3
Legal and audit fees ................................ 5 3
Organization costs .................................. 2 11
Trustees' fees and expenses ......................... 2 1
Transfer agent fees ................................. 4 --
Registration and filing fees ........................ 28 --
Printing costs ...................................... 5 4
Other ............................................... 1 --
-------- --------
TOTAL EXPENSES ...................................... 360 640
-------- --------
Net Investment Income ............................... 11,828 25,132
-------- --------
REALIZED GAINS (LOSSES) FROM INVESTMENT TRANSACTIONS:
Net realized losses from investment transactions .... (19) (132)
-------- --------
Net increase in net assets resulting from operations $ 11,809 $ 25,000
======== ========
</TABLE>
See notes to financial statements.
8
<PAGE> 606
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
TREASURY ONLY MONEY GOVERNMENT MONEY
MARKET FUND MARKET FUND
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1996 1996 1996 1996
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ..................... $ 11,828 $ 18,797 $ 25,132 $ 42,135
----------- ----------- ----------- -----------
Net realized gains (losses) from investment
transactions ............................ (19) (76) (132) 8
----------- ----------- ----------- -----------
Change in net assets resulting from operations .. 11,809 18,721 25,000 42,143
----------- ----------- ----------- -----------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income ................ (11,828) (18,797) (25,132) (42,135)
----------- ----------- ----------- -----------
In excess of net realized gains from
investment transctions .................. -- (21) -- --
----------- ----------- ----------- -----------
Change in net assets from shareholder
distributions ................................ (11,828) (18,818) (25,132) (42,135)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued ............... 831,197 1,135,597 2,097,834 2,638,822
Dividends reinvested ...................... 1,669 2,487 5,370 10,663
Cost of shares redeemed ................... (655,771) (1,010,723) (1,962,749) (2,514,579)
----------- ----------- ----------- -----------
Change in net assets from share transactions .... 177,095 127,361 140,455 134,906
----------- ----------- ----------- -----------
Change in Net Assets ............................ 177,076 127,264 140,323 134,914
NET ASSETS:
Beginning of period ....................... 415,961 288,697 855,613 720,699
----------- ----------- ----------- -----------
End of period ............................. $ 593,037 $ 415,961 $ 995,936 $ 855,613
=========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued .................................... 831,197 1,135,597 2,097,834 2,638,822
Reinvested ................................ 1,669 2,487 5,370 10,663
Redeemed .................................. (655,771) (1,010,723) (1,962,749) (2,514,579)
----------- ----------- ----------- -----------
Change in shares ................................ 177,095 127,361 140,455 134,906
=========== =========== =========== ===========
</TABLE>
9
See notes to financial statements.
<PAGE> 607
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(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 thirty active 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 Funds' investment objectives are as follows:
FUND OBJECTIVE
- ---- ---------
Treasury Only Money Market Fund High current income with liquidity
liquidity and stability of
principal with the added assurance
of a fund that does not purchase
securities that are subject to
repurchase agreements.
Government Money Market Fund High current income with liquidity
and stability of principal.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. 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.
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 Government Money Market Fund 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 agreement
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. Repurchase
agreements are considered to be loans by a fund under the 1940 Act.
SECURITY TRANSACTIONS AND RELATED INCOME
Security transactions are accounted for on a trade date basis. Net
realized gains or losses from 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.
Continued
10
<PAGE> 608
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS CONTINUED DECEMBER 31, 1996
(Unaudited)
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
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 creditworthy under guidelines established by the Board of
Trustees and when, in the judgement 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, 1996, the following Fund had securities with the following
amortized cost on loan (amount in thousands):
<TABLE>
<CAPTION>
AMORTIZED COST OF
LOANED SECURITIES
-----------------
<S> <C>
Treasury Only Money Market Fund................... $75,314
</TABLE>
The loaned securities were fully collateralized by cash and U.S. Government
securities as of December 31, 1996.
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, if
any, have been reclassified among the components of net assets.
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 of the Trust, have been allocated among
the respective Funds' 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.
Continued
11
<PAGE> 609
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS CONTINUED DECEMBER 31, 1996
(Unaudited)
FEDERAL INCOME TAXES
The Trust treats each Fund as a separate entity for Federal income tax
purposes. 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 of net investment income and net
realized capital gains sufficient to relieve it from all, or substantially
all, Federal income taxes.
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 forty series and four classes:
Fiduciary, Class A, Class B and Service. As of December 31, 1996, no
shareholders were in the Service Class. 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, ADMINISTRATIVE AND DISTRIBUTION 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 a fee, computed daily and paid monthly, equal to 0.08%
of the average daily net assets of each Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services
for a fee that is computed daily and paid 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.
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 Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
12
<PAGE> 610
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TREASURY ONLY MONEY MARKET FUND
-------------------------------------------------------------
SIX MONTHS APRIL 16,
ENDED YEAR ENDED JUNE 30, 1993 TO
DECEMBER 31, ----------------------------------- JUNE 30,
1996 1996 1995 1994 1993(a)
--------- -------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- -------- -------- -------- -------
Investment Activities:
Net investment income ................... 0.027 0.052 0.051 0.032 0.006
--------- -------- -------- -------- -------
Distributions:
Net investment income ................... (0.027) (0.052) (0.051) (0.032) (0.006)
--------- -------- -------- -------- -------
NET ASSET VALUE,
END OF PERIOD ........................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ======== ======== ======== =======
Total Return ............................... 2.59%(b) 5.38% 5.22% 3.23% 2.96%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ....... $593,037 $415,961 $288,697 $217,725 $60,330
Ratio of expenses to average net assets . 0.15%(c) 0.17% 0.20% 0.15% 0.07%(c)
Ratio of net investment income to average
net assets ........................... 5.08%(c) 5.23% 5.14% 3.23% 2.95%(c)
Ratio of expenses to average net assets* 0.15%(c) 0.17% 0.21% 0.22% 0.33%(c)
Ratio of net investment income to average 5.08%(c) 5.23% 5.13% 3.16% 2.69%(c)
net assets*
</TABLE>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
13
<PAGE> 611
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND
--------------------------------------------------------------
SIX MONTHS APRIL 16,
ENDED YEAR ENDED JUNE 30, 1993 TO
DECEMBER 31, ----------------------------------- JUNE 30,
1996 1996 1995 1994 1993(a)
--------- -------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- --------- --------- --------- -------
Investment Activities:
Net investment income ................... 0.026 0.055 0.053 0.033 0.001
-------- --------- --------- --------- -------
Distributions:
Net investment income ................... (0.026) (0.055) (0.053) (0.033) (0.001)
-------- --------- --------- --------- -------
NET ASSET VALUE,
END OF PERIOD .............................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return ............................... 2.70%(b) 5.61% 5.41% 3.40% 3.28%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ....... $995,936 $855,613 $720,699 $692,253 $244,991
Ratio of expenses to average net assets . 0.13%(c) 0.18% 0.21% 0.11% 0.07%(c)
Ratio of net investment income to average
net assets ........................... 5.29%(c) 5.46% 5.28% 3.41% 3.13%(c)
Ratio of expenses to average net assets* 0.13%(c) 0.18% 0.22% 0.20% 0.33%(c)
Ratio of net investment income to average 5.29%(c) 5.46% 5.27% 3.32% 2.87%(c)
net assets*
<FN>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
</FN>
</TABLE>
See notes to financial statements.
14
<PAGE> 612
================================================================================
The One Group Family of Mutual Funds
Investor Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ----------- ------------------------------------------------------------------------------------------------------ -------------
<S> <C> <C>
INVESTMENT COMPANIES (100.0%):
185 The One Group Disciplined Value Fund
Fiduciary Class..................................................................................... $2,615
88 The One Group Government Bond Fund
Fiduciary Class..................................................................................... 858
120 The One Group Growth Opportunities Fund
Fiduciary Class..................................................................................... 2,041
73 The One Group Income Bond Fund
Fiduciary Class..................................................................................... 687
52 The One Group Intermediate Bond Fund
Fiduciary Class..................................................................................... 516
104 The One Group International Equity Index Fund Fiduciary Class....................................... 1,562
INVESTMENT COMPANIES, CONTINUED:
235 The One Group Large Company Growth Fund Fiduciary Class............................................. $3,760
359 The One Group Large Company Value Fund
Fiduciary Class..................................................................................... 4,666
33 The One Group Limited Volatility Bond Fund
Fiduciary Class..................................................................................... 345
189 The One Group Prime Money Market Fund
Fiduciary Class..................................................................................... 189
-------
Total Investment Companies 17,239
-------
Total (Cost-$17,336)(a) $17,239
=======
</TABLE>
- -----
Percentage indicated are based on net assets of $17,237.
(a) Represents cost for Federal income tax purposes and differs from value by
net unrealized depreciation as follows:
<TABLE>
<S> <C>
Unrealized appreciation ..................... $ 14
Unrealized depreciation ..................... (111)
-----
Net unrealized depreciation ................. $ (97)
=====
</TABLE>
See notes to financial statements.
5
<PAGE> 613
================================================================================
The One Group Family of Mutual Funds
Investor Growth & Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ----------- ----------------------------------------------------------------------------------------------------- -------------
<S> <C> <C>
INVESTMENT COMPANIES (100.0%):
150 The One Group Disciplined Value Fund
Fiduciary Class..................................................................................... $2,121
235 The One Group Government Bond Fund
Fiduciary Class..................................................................................... 2,279
100 The One Group Growth Opportunities Fund
Fiduciary Class..................................................................................... 1,694
221 The One Group Income Bond Fund
Fiduciary Class..................................................................................... 2,091
96 The One Group Intermediate Bond Fund
Fiduciary Class..................................................................................... 952
90 The One Group International Equity Index Fund Fiduciary Class....................................... 1,345
192 The One Group Large Company Growth Fund Fiduciary Class............................................. 3,071
INVESTMENT COMPANIES, CONTINUED:
309 The One Group Large Company Value Fund
Fiduciary Class..................................................................................... $4,016
73 The One Group Limited Volatility Bond Fund
Fiduciary Class..................................................................................... 764
340 The One Group Prime Money Market Fund
Fiduciary Class..................................................................................... 340
39 The One Group Ultra Short-Term Income Fund
Fiduciary Class..................................................................................... 383
-------
Total Investment Companies 19,056
-------
Total (Cost-$19,112) (a) $19,056
=======
</TABLE>
- -----
Percentages indicated are based on net assets of $19,056.
(a) Represents cost for Federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation ..................... $ 49
Unrealized depreciation ..................... (105)
-----
Net unrealized depreciation ................. $ (56)
=====
</TABLE>
See notes to financail statements.
6
<PAGE> 614
================================================================================
The One Group Family of Mutual Funds
Investor Conservative Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ----------- --------------------------------------------------------------------------------------------------- -------------
<S> <C> <C>
INVESTMENT COMPANIES (100.0%):
26 The One Group Disciplined Value Fund
Fiduciary Class.................................................................................. $ 368
252 The One Group Government Bond Fund
Fiduciary Class.................................................................................. 2,448
21 The One Group Growth Opportunities Fund
Fiduciary Class.................................................................................. 360
220 The One Group Income Bond Fund
Fiduciary Class.................................................................................. 2,086
91 The One Group Intermediate Bond Fund
Fiduciary Class.................................................................................. 908
18 The One Group International Equity Index Fund
Fiduciary Class.................................................................................. 274
34 The One Group Large Company Growth Fund
Fiduciary Class.................................................................................. 542
56 The One Group Large Company Value Fund
Fiduciary Class.................................................................................. 729
69 The One Group Limited Volatility Bond Fund
Fiduciary Class.................................................................................. 728
331 The One Group Prime Money Market Fund
Fiduciary Class.................................................................................. 331
37 The One Group Ultra Short-Term Income Fund
Fiduciary Class................................................................................. 366
------
Total Investment Companies 9,140
------
Total (Cost-$9,203) (a) $9,140
======
</TABLE>
- -----
Percentages indicated are based on net assets of $9,141.
(a) Represents cost for Federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation ...................... $ 2
Unrealized depreciation ...................... (65)
----
Net unrealized depreciation .................. $(63)
====
</TABLE>
See notes to financial statements.
7
<PAGE> 615
================================================================================
The One Group Family of Mutual Funds
Investor Balanced Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1996
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ----------- --------------------------------------------------------------------------------------------------- -------------
<S> <C> <C>
INVESTMENT COMPANIES (100.0%):
248 The One Group Disciplined Value Fund
Fiduciary Class................................................................................. $3,518
848 The One Group Government Bond Fund
Fiduciary Class................................................................................. 8,229
152 The One Group Growth Opportunities Fund
Fiduciary Class................................................................................. 2,571
778 The One Group Income Bond Fund
Fiduciary Class................................................................................. 7,366
349 The One Group Intermediate Bond Fund
Fiduciary Class................................................................................. 3,472
146 The One Group International Equity Index Fund
Fiduciary Class................................................................................. 2,186
324 The One Group Large Company Growth Fund
Fiduciary Class................................................................................. 5,178
INVESTMENT COMPANIES, CONTINUED:
470 The One Group Large Company Value Fund
Fiduciary Class................................................................................. 6,101
249 The One Group Limited Volatility Bond Fund
Fiduciary Class................................................................................. 2,608
682 The One Group Prime Money Market Fund
Fiduciary Class................................................................................. 682
133 The One Group Ultra Short-Term Income
Fund Fiduciary Class............................................................................ 1,308
-------
Total Investment Companies 43,219
-------
Total (Cost-$43,465) (a) $43,219
=======
</TABLE>
- -----
Percentages indicated are based on net assets of $43,220.
(a) Represents cost for Federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation ..................... $ 42
Unrealized depreciation ..................... (288)
-----
Net unrealized depreciation ................. $(246)
=====
</TABLE>
See notes to financial statements.
8
<PAGE> 616
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands,
except per share amounts)
INVESTOR INVESTOR
INVESTOR GROWTH & CONSERVATIVE INVESTOR
GROWTH FUND INCOME FUND GROWTH FUND BALANCED FUND
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value (cost $17,336; $19,112;
$9,203; and $43,465, respectively) ............ $ 17,239 $ 19,056 $ 9,140 $ 43,219
-------- -------- ------- --------
Distributions receivable ......................... 23 35 27 92
Receivable for capital shares issued ............. 1,173 27 2 6,320
-------- -------- ------- --------
TOTAL ASSETS ..................................... 18,435 19,118 9,169 49,631
-------- -------- ------- --------
LIABILITIES:
Cash overdraft ................................... 1,175 27 1 6,319
Dividends payable ................................ 21 33 26 89
Accrued expenses and other payables .............. 2 2 1 3
-------- -------- ------- --------
TOTAL LIABILITIES ................................ 1,198 62 28 6,411
-------- -------- ------- --------
NET ASSETS:
Capital .......................................... 17,334 19,119 9,204 43,466
Accumulated undistributed net realized losses from
investment transactions ....................... -- (7) -- --
Unrealized depreciation from investments ......... (97) (56) (63) (246)
-------- -------- ------- --------
NET ASSETS ....................................... $ 17,237 $ 19,056 $ 9,141 $ 43,220
======== ======== ======= ========
Net Assets:
Fiduciary .................................. $ 17,237 $ 19,056 $ 9,141 $ 43,220
Class A (b) ................................ -- -- -- --
Class B (b) ................................ -- -- -- --
-------- -------- ------- --------
Total ............................................ $ 17,237 $ 19,056 $ 9,141 $ 43,220
======== ======== ======= ========
Outstanding Units of Beneficial Interest (Shares):
Fiduciary .................................. 1,734 1,917 920 4,350
Class A (b) ................................ -- -- -- --
Class B (b) ................................ -- -- -- --
-------- -------- ------- --------
Total ............................................ 1,734 1,917 920 4,350
======== ======== ======= ========
NET ASSET VALUE:
Fiduciary
Offering and redemption price per share .... $ 9.94 $ 9.94 $ 9.94 $ 9.94
======== ======== ======= ========
Class A
Redemption price per share ................. $ 9.96 $ 9.94 $ 9.93 $ 9.95
======== ======== ======= ========
Maximum sales charge ....................... 4.00% 4.00% 4.00% 4.00%
======== ======== ======= ========
Maximum offering price per share
(100%/(100%-maximum sales charge) of
net asset value adjusted to nearest cent) $ 10.38 $ 10.35 $ 10.34 $ 10.36
======== ======== ======= ========
Class B
Offering price per share (a) ............... $ 9.96 $ 9.94 $ 9.93 $ 9.95
======== ======== ======= ========
<FN>
- -----
(a) Redemption price per Class B share varies based on length of time shares
are held.
(b) Dollar and share amounts are less than 1,000.
</TABLE>
See notes to financial statements.
9
<PAGE> 617
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
INVESTOR INVESTOR INVESTOR
INVESTOR GROWTH & CONSERVATIVE BALANCED
GROWTH FUND INCOME FUND GROWTH FUND FUND
------------ ------------ ------------ ------------
DECEMBER 10, DECEMBER 10, DECEMBER 10, DECEMBER 10,
1996 THROUGH 1996 THROUGH 1996 THROUGH 1996 THROUGH
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996(a) 1996(a) 1996(a) 1996(a)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Distribution income ............................ $ 23 $ 35 $ 27 $ 92
---- ---- ---- -----
EXPENSES:
Investment advisory fees* ...................... -- -- -- --
12b-1 fees (Class A)* .......................... -- -- -- --
12b-1 fees (Class B)* .......................... -- -- -- --
Registration and filing fees ................... 1 1 -- 1
Printing costs ................................. 1 -- -- 1
Other .......................................... -- 1 1 1
---- ---- ---- -----
Total expenses before waivers .................. 2 2 1 3
Less waivers* .................................. -- -- -- --
---- ---- ---- -----
NET EXPENSES ................................... 2 2 1 3
---- ---- ---- -----
Net Investment Income .......................... 21 33 26 89
---- ---- ---- -----
REALIZED/UNREALIZED LOSSES FROM INVESTMENTS:
Net realized losses from investment transactions -- (7) -- --
Net change in unrealized depreciation from
investments ................................. (97) (56) (63) (246)
---- ---- ---- -----
Net realized/unrealized losses from investments (97) (63) (63) (246)
---- ---- ---- -----
Change in net assets resulting from operations . $(76) $(30) $(37) $(157)
==== ==== ==== =====
<FN>
- -----
(a) Period from commencement of operations.
*Amounts charged are less than $1,000.
</TABLE>
See notes to financial statements.
10
<PAGE> 618
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
INVESTOR INVESTOR
INVESTOR GROWTH GROWTH & INCOME CONSERVATIVE INVESTOR BALANCED
FUND FUND GROWTH FUND FUND
----------------- ---------------- ----------------- -----------------
DECEMBER 10, 1996 DECEMBER 10, 199 DECEMBER 10, 1996 DECEMBER 10, 1996
THROUGH THROUGH THROUGH THROUGH
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996(a) 1996(a) 1996(a) 1996(a)
----------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net Investment Income............................. $ 21 $ 33 $ 26 $ 89
Net realized losses from investment
transactions.................................... - (7) - -
Net change in unrealized depreciation from
investments..................................... (97) (56) (63) (246)
------- ------- ------ -------
Change in net assets resulting from operations.......... (76) (30) (37) (157)
------- ------- ------ -------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income........................ (21) (33) (26) (89)
------- ------- ------ -------
Change in net assets from shareholder
distributions........................................ (21) (33) (26) (89)
------- ------- ------ -------
CAPITAL TRANSACTIONS:
Proceeds from shares issued....................... 17,354 19,516 9,233 43,695
Cost of shares redeemed........................... (20) (397) (29) (229)
------- ------- ------ -------
Change in net assets from share transactions............ 17,334 19,119 9,204 43,466
------- ------- ------ -------
Change in net assets.................................... 17,237 19,056 9,141 43,220
NET ASSETS:
Beginning of period............................... - - - -
------- ------- ------ -------
End of period..................................... $17,237 $19,056 $9,141 $43,220
======= ======= ====== =======
SHARE TRANSACTIONS:
Issued............................................ 1,736 1,958 923 4,373
Redeemed.......................................... (2) (41) (3) (23)
------- ------- ------ -------
Change in shares........................................ 1,734 1,917 920 4,350
======= ======= ====== =======
- -----
<FN>
(a) Period from commencement of operations.
</TABLE>
See notes to financial statements.
11
<PAGE> 619
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
(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 thirty active funds. The accompanying financial
statements and financial highlights are those of the Investor Growth Fund,
the Investor Growth & Income Fund, the Investor Conservative Growth Fund
and the Investor Balanced Fund (individually a "Fund", collectively the
"Funds") only. The Funds are each offered in Fiduciary Class, Class A and
Class B Shares. Class A Shares are subject to initial sales charges,
imposed at the time of purchase, in accordance with the Funds'
prospectuses. Certain redemptions of Class B Shares are subject to
contingent deferred sales charges in accordance with the Funds'
prospectuses.
The Funds investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
---- ---------
<S> <C>
Investor Growth Fund The Fund seeks long-term capital
appreciation by investing primarily in a
diversified group of The One Group
Mutual Funds which invest primarily in
equity securities. Current income is a
secondary objective.
Investor Growth & Income Fund The Fund seeks long-term capital
appreciation and growth of income by
investing primarily in a diversified
group of The One Group Mutual Funds
which invest primarily in equity
securities.
Investor Conservative Growth Fund The Fund seeks capital appreciation and
income by investing primarily in a
diversified group of The One Group
Mutual Funds which invest primarily in
equity and fixed income securities.
Current income is a secondary objective.
Investor Balanced Fund The Fund seeks high total return
consistent with the preservation of
capital by investing primarily in a
diversified group of The One Group
Mutual Funds which invest primarily in
equity and fixed income securities.
</TABLE>
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. 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.
SECURITY VALUATION
Investments in The One Group Mutual Funds are valued at the closing net
asset value per share of each of The One Group Mutual Funds on the day
of valuation. Listed securities are valued at the last sales price on
the principal exchange where such securities are traded. Unlisted
securities or listed securities for which last sales prices are not
available are valued at the mean of the latest bid and asked priced in
the principal market where such securities are traded. Corporate debt
securities and debt securities of U.S. issuers (other than short-term
investments maturing in 60 days or less), including municipal
securities, are valued on the basis of
Continued
12
<PAGE> 620
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
valuations provided by dealers or by an independent pricing service
approved by the Board of Trustees. Short-term investments maturing in 60
days or less are valued at amortized cost, which approximates market
value. Futures contracts are valued at the settlement price established
each day by the board of trade or an exchange on which they are traded.
Options traded on an exchange are valued using the last sale price or,
in the absence of a sale, the last offering price. Options traded
over-the-counter are valued using dealer-supplied valuations.
Investments for which there are no such quotations or valuations are
valued at fair value as determined in good faith by the Adviser under
the direction of the Board of Trustees.
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. Repurchase agreements are considered loans in the 1940 Act.
WRITTEN OPTIONS
The Funds may write covered call or put options for which premiums
received are recorded as liabilities and are subsequently adjusted to
the current value of the options written. Premiums received from writing
options which expire are treated as realized gains. Premiums received
from writing options, which are either exercised or closed, are offset
against the proceeds received or amount paid on the transaction to
determine realized gains or losses.
FUTURES CONTRACTS
The Funds may enter into futures contracts for the delayed delivery of
securities at a fixed price at some future date or for the change in the
value of a specified financial index over a predetermined time period.
Cash or securities are deposited with brokers in order to maintain a
position. Subsequent payments made or received by the Fund based on the
daily change in the market value of the position are recorded as
unrealized appreciation or depreciation until the contract is closed
out, at which time the appreciation or depreciation is realized.
INDEXED SECURITIES
The Funds may invest in indexed securities whose value is linked either
directly or inversely to changes in foreign currencies, interest rates,
commodities, indices or other reference instruments. Indexed securities
may be more volatile than the referenced instrument itself, but any loss
is limited to the amount of the original investment.
MORTGAGE ROLLS
The Funds may enter into mortgage "dollar rolls" in which the Fund sells
mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar securities
on a specified future date. During the roll period, the Fund forgoes
principal and interest paid on the mortgage-backed securities. The Fund
is compensated by fee income or from the difference between the current
sales price and the lower forward price for the future purchase.
Continued
13
<PAGE> 621
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
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 collateral at 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 creditworthy
under guidelines established by the Board of Trustees and when, in the
judgement 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, 1996, the Funds had no securities on loan.
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. Dividends are recorded on the
ex-dividend date. Interest income, including any discount or premium, is
accrued as earned using the effective interest method.
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. Each class of shares
bears its pro-rata portion of expenses attributable to its series,
except that each class separately bears expenses related specifically to
that class, such as distribution fees.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid monthly for
the Funds. Net realized capital gains, if any, are distributed at least
annually. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates
are generally due to differences in separate class expenses.
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, will be
reclassified to additional paid-in capital.
FEDERAL INCOME TAXES
The Trust treats each Fund as a separate entity for Federal income tax
purposes. 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.
Continued
14
<PAGE> 622
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(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 forty series and four classes:
Fiduciary, Class A, Class B and Service. As of December 31, 1996 there were
no shareholders in the Service Class. 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. The following is
a summary of transactions in Fund shares for the period ended December 31,
1996:
Continued
15
<PAGE> 623
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
INVESTOR INVESTOR
INVESTOR GROWTH GROWTH & INCOME CONSERVATIVE INVESTOR BALANCED
FUND FUND GROWTH FUND FUND
----------------- ----------------- ----------------- -----------------
DECEMBER 10, 1996 DECEMBER 10, 1996 DECEMBER 10, 1996 DECEMBER 10, 1996
THROUGH THROUGH THROUGH THROUGH
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996(a) 1996(a) 1996(a) 1996(a)
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued....................... $17,354 $19,516 $9,233 $43,695
Dividends reinvested.............................. - - - -
Cost of shares redeemed........................... (20) (397) (29) (229)
------- ------- ------ -------
Change in net assets from Fiduciary share
transactions................................... $17,334 $19,119 $9,204 $43,466
======= ======= ====== =======
CLASS A SHARES:(b)
Proceeds from shares issued....................... $ - $ - $ - $ -
Dividends reinvested.............................. - - - -
Cost of shares redeemed........................... - - - -
------- ------- ------ -------
Change in net assets from Class A share
transactions................................... $ 0 $ 0 $ 0 $ 0
======= ======= ====== =======
CLASS B SHARES:(b)
Proceeds from shares issued....................... $ - $ - $ - $ -
Dividends reinvested.............................. - - - -
Cost of shares redeemed........................... - - - -
------- ------- ------ -------
Change in net assets from Class B share
transactions................................... $ 0 $ 0 $ 0 $ 0
======= ======= ====== =======
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued............................................ 1,736 1,958 923 4,373
Reinvested........................................ - - - -
Redeemed.......................................... (2) (41) (3) (23)
------- ------- ------ -------
Change in Fiduciary Shares........................ 1,734 1,917 920 4,350
======= ======= ====== =======
CLASS A SHARES:(b)
Issued............................................ - - - -
Reinvested........................................ - - - -
Redeemed.......................................... - - - -
------- ------- ------ -------
Change in Class A Shares.......................... 0 0 0 0
======= ======= ====== =======
CLASS B SHARES:(b)
Issued............................................ - - - -
Reinvested........................................ - - - -
Redeemed.......................................... - - - -
------- ------- ------ -------
Change in Class B Shares.......................... 0 0 0 0
======= ======= ====== =======
- -----
<FN>
(a) Period from commencement of operations.
(b) Dollar and share amounts are less than 1,000.
</TABLE>
Continued
16
<PAGE> 624
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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 0.05% of the average net assets of the Investor Growth Fund, the
Investor Growth & Income Fund, the Investor Conservative Growth Fund and
the Investor Balanced Fund, respectively.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services
for a fee that is computed daily and payable monthly, at an annual rate of
0.10% on the first $500 million of the Fund's average daily net assets,
0.075% of the Fund's average daily net assets between $500 million and $1
billion, and 0.05% of the Fund's average daily net assets when Fund assets
exceed $1 billion. 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 Advisor receives a fee paid by the
Administrator.
The Trust and The One Group Services Company (the "Distributor") are
parties to a distribution agreement under which shares of the Funds are
sold on a continuous basis. Class A and Class B Shares are subject to a
distribution and shareholder services plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. As provided in the Plans, the Trust will pay the
Distributor a fee of 0.35% of the average daily net assets of Class A
Shares of each of the Funds and 1.00% of the average daily net assets of
the Class B Shares of each of the Funds. Currently, the Distributor has
voluntarily agreed to limit payments under the Plans to 0.25% of average
daily net assets of the Class A Shares of each Fund. Up to 0.25% of the
fees payable under the Plans may be used as compensation for shareholder
services by the Distributor and/or financial institutions and
intermediaries. Fees paid under the Plans may be applied by the Distributor
toward (i) compensation for its services in connection with distribution
assistance or provision of shareholder services; or (ii) payments to
financial institutions and intermediaries such as banks, (including
affiliates of the Adviser), brokers, dealers and other institutions,
including the Distributor's affiliates and subsidiaries as compensation for
services or reimbursement of expenses incurred in connection with
distribution assistance or provision of shareholder services. Fiduciary
Class Shares of each Fund are offered without distribution fees. For the
period ended December 31, 1996 the Distributor did not receive any
commissions earned on sales of Class A Shares or redemptions of Class B
Shares.
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
The Adviser, the Administrator and the Distributor voluntarily agreed to
waive a portion of their fees and to reimburse the Funds for certain
expenses. For the period ended December 31, 1996, the Adviser,
Administrator and Distributor each waived fees totaling less than one
thousand dollars.
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities and purchased options) during the period
ended December 31, 1996 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES OTHER SECURITIES
-------------------------- ---------------------
PURCHASES SALES PURCHASES SALES
--------- ----- --------- -----
<S> <C> <C> <C> <C>
Investor Growth Fund.............................................. $- $- $17,147 $ -
Investor Growth & Income Fund..................................... - - 19,163 385
Investor Conservative Growth Fund................................. - - 8,872 -
Investor Balanced Fund............................................ - - 42,783 -
</TABLE>
Continued
17
<PAGE> 625
================================================================================
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
(Unaudited)
6. FINANCIAL INSTRUMENTS:
Investing in financial instruments such as written options, futures,
structured notes and indexed securities involves risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the Funds have in
the particular class of instrument. Risks associated with these instruments
include an imperfect correlation between the movements in the price of the
instruments and the price of the underlying securities and interest rates,
an illiquid secondary market for the instruments or inability of
counterparties to perform under the terms of the contract. The Funds enter
into these contracts primarily as a means to hedge against adverse
fluctuation in securities.
18
<PAGE> 626
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
GROWTH FUND
-------------
FIDUCIARY
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996 (a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................................. $ 10.00
-------
Investment Activities
Net investment income............................................. 0.01
Net realized and unrealized losses from investments............... (0.06)
-------
Total from Investment Activities............................... (0.05)
-------
Distributions
From net investment income........................................ (0.01)
-------
Total Distributions............................................ (0.01)
-------
NET ASSET VALUE,
END OF PERIOD........................................................ $ 9.94
=======
Total Return (Excludes Sales Charge)................................. (0.48)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................. $17,237
Ratio of expenses to average net assets........................... 0.20%(c)
Ratio of net investment income to average net assets.............. 2.32%(c)
Ratio of expenses to average net assets*.......................... 0.34%(c)
Ratio of net investment income to average net assets*............. 2.18%(c)
Portfolio turnover (d)............................................ 0.00%
- -----
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
See notes to financial statements.
19
<PAGE> 627
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
GROWTH
FUNDS
-------------
CLASS A
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996 (a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..................................................... $10.00
-------
Investment Activities
Net investment income.................................................. 0.01
Net realized and unrealized losses from investments.................... (0.05)
-------
Total from Investment Activities.................................... (0.04)
-------
Distributions
From net investment income............................................. 0.00
-------
Total Distributions................................................. 0.00
-------
NET ASSET VALUE,
END OF PERIOD........................................................... $ 9.96
=======
Total Return (Excludes Sales Charge)...................................... (0.40)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)...................................... $ (e)
Ratio of expenses to average net assets................................ 0.45%(c)
Ratio of net investment income to average net assets................... 1.67%(c)
Ratio of expenses to average net assets*............................... 0.59%(c)
Ratio of net investment income to average net assets*.................. 1.53%(c)
Portfolio turnover (d)................................................. 0.00%
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) Net assets are less than $1,000.
See notes to financial statements.
20
<PAGE> 628
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
GROWTH FUND
-------------
CLASS B
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996 (a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 10.00
Investment Activities
Net investment income.............................................. 0.01
Net realized and unrealized losses from investments................ (0.05)
-------
Total from Investment Activities................................ (0.04)
-------
Distributions
From net investment income......................................... 0.00
-------
Total Distributions............................................. 0.00
-------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 9.96
=======
Total Return (Excludes Sales Charge).................................. (0.40)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................. $ (e)
Ratio of expenses to average net assets............................ 1.20%(c)
Ratio of net investment income to average net assets............... 1.67%(c)
Ratio of expenses to average net assets*........................... 1.34%(c)
Ratio of net investment income to average net assets*.............. 1.53%(c)
Portfolio turnover (d)............................................. 0.00%
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) Net assets are less than $1,000.
See notes to financial statements.
21
<PAGE> 629
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
GROWTH &
INCOME FUND
-------------
FIDUCIARY
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996 (a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................. $ 10.00
-------
Investment Activities
Net investment income.......................................... 0.02
Net realized and unrealized losses from investments............ (0.06)
-------
Total from Investment Activities............................ (0.04)
-------
Distributions
From net investment income..................................... (0.02)
-------
Total Distributions......................................... (0.02)
-------
NET ASSET VALUE,
END OF PERIOD................................................... $ 9.94
=======
Total Return (Excludes Sales Charge).............................. (0.43)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................. $19,056
Ratio of expenses to average net assets........................ 0.16%(c)
Ratio of net investment income to average net assets........... 3.24%(c)
Ratio of expenses to average net assets*....................... 0.29%(c)
Ratio of net investment income to average net assets*.......... 3.11%(c)
Portfolio turnover (c)......................................... 2.30%
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
See notes to financial statements.
22
<PAGE> 630
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
GROWTH &
INCOME FUND
-------------
CLASS A
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996 (a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................... $ 10.00
-------
Investment Activities
Net investment income................................................ 0.01
Net realized and unrealized losses from investments.................. (0.07)
-------
Total from Investment Activities.................................. (0.06)
-------
Distributions
From net investment income........................................... 0.00
-------
Total Distributions............................................... 0.00
-------
NET ASSET VALUE,
END OF PERIOD......................................................... $ 9.94
=======
Total Return (Excludes Sales Charge).................................... (0.60)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................... $ (e)
Ratio of expenses to average net assets.............................. 0.41%(c)
Ratio of net investment income to average net assets................. 1.67%(c)
Ratio of expenses to average net assets*............................. 0.54%(c)
Ratio of net investment income to average net assets*................ 1.54%(c)
Portfolio turnover (d)............................................... 2.30%
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) Net assets are less than $1,000.
See notes to financial statements.
23
<PAGE> 631
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
GROWTH &
INCOME FUND
------------
CLASS B
------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996 (a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................. $10.00
------
Investment Activities
Net investment income........................................... 0.01
Net realized and unrealized losses from investments............. (0.07)
------
Total from Investment Activities.............................. (0.06)
------
Distributions
From net investment income...................................... 0.00
------
Total Distributions........................................... 0.00
------
NET ASSET VALUE,
END OF PERIOD................................................... $9.94
------
Total Return (Excludes Sales Charge).............................. (0.60)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................. $(e)
Ratio of expenses to average net assets........................ 1.16%(c)
Ratio of net investment income to average net assets........... 1.67%(c)
Ratio of expenses to average net assets*....................... 1.29%(c)
Ratio of net investment income to average net assets*.......... 1.54%(c)
Portfolio turnover (d)......................................... 2.30%
<FN>
- ------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) Net assets are less than $1,000.
</TABLE>
See notes to financial statements.
24
<PAGE> 632
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
CONSERVATIVE
GROWTH FUND
-------------
FIDUCIARY
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996(a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $10.00
------
Investment Activities
Net investment income............................................... 0.03
Net realized and unrealized losses from investments................. (0.06)
------
Total from Investment Activities.................................. (0.03)
------
Distributions
From net investment income.......................................... (0.03)
------
Total Distributions............................................... (0.03)
------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 9.94
======
Total Return (Excludes Sales Charge).................................. (0.42)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................. $9,141
Ratio of expenses to average net assets............................ 0.16%(c)
Ratio of net investment income to average net assets............... 5.01%(c)
Ratio of expenses to average net assets*........................... 0.29%(c)
Ratio of net investment income to average net assets*.............. 4.88%(c)
Portfolio turnover (d)............................................. 0.00%
<FN>
- ----------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
25
<PAGE> 633
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
CONSERVATIVE
GROWTH FUND
-------------
CLASS A
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996(a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................. $10.00
------
Investment Activities
Net investment income........................................... 0.00
Net realized and unrealized losses from investments............. (0.07)
------
Total from Investment Activities.............................. (0.07)
------
Distributions
From net investment income...................................... 0.00
------
Total Distributions........................................... 0.00
------
NET ASSET VALUE,
END OF PERIOD.................................................... $9.93
=====
Total Return (Excludes Sales Charge).............................. (0.70)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................... $ (e)
Ratio of expenses to average net assets......................... 0.41%(c)
Ratio of net investment income to average net assets............ 0.00%(c)
Ratio of expenses to average net assets*........................ 0.54%(c)
Ratio of net investment income (loss) to average net assets*.... (0.13)%(c)
Portfolio turnover (d).......................................... 0.00%
<FN>
- ---------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund
as a whole without distinguishing among the classes of shares issued.
(e) Net assets are less than $1,000.
</TABLE>
See notes to financial statements.
26
<PAGE> 634
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
CONSERVATIVE
GROWTH FUND
-------------
CLASS B
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996(a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................... $10.00
------
Investment Activities
Net investment income................................................. 0.00
Net realized and unrealized losses from investments................... (0.07)
------
Total from Investment Activities.................................. (0.07)
------
Distributions
From net investment income............................................ 0.00
------
Total Distributions............................................... 0.00
------
NET ASSET VALUE,
END OF PERIOD......................................................... $9.93
=====
Total Return (Excludes Sales Charge).................................... (0.70)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..................................... $ (e)
Ratio of expenses to average net assets............................... 1.16%(c)
Ratio of net investment income to average net assets.................. 0.00%(c)
Ratio of expenses to average net assets*.............................. 1.29%(c)
Ratio of net investment income to average net assets*................. (0.13)%(c)
Portfolio turnover (d)................................................ 0.00%
<FN>
- ------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
distinguishing among the classes of shares issued.
(e) Net assets are less than $1,000.
</TABLE>
See notes to financial statements.
27
<PAGE> 635
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
BALANCED
FUND
-------------
FIDUCIARY
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996(a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $10.00
------
Investment Activities
Net investment income............................................... 0.02
Net realized and unrealized losses from investments................. (0.06)
------
Total from Investment Activities................................ (0.04)
------
Distributions
From net investment income ......................................... (0.02)
------
Total Distributions............................................. (0.02)
------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 9.94
======
Total Return (Excludes Sales Charge).................................. (0.39)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $43,220
Ratio of expenses to average net assets............................. 0.14%(c)
Ratio of net investment income to average net assets................ 4.30%(c)
Ratio of expenses to average net assets*............................ 0.27%(c)
Ratio of net investment income to average net assets*............... 4.17%(c)
Portfolio turnover (d).............................................. 0.00%
<FN>
- ---------------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
28
<PAGE> 636
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
BALANCED
FUND
-------------
CLASS A
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996(a)
-------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................... $10.00
------
Investment Activities
Net investment income............................................. 0.01
Net realized and unrealized losses from investments............... (0.06)
------
Total from Investment Activities................................ (0.05)
------
Distributions
From net investment income........................................ 0.00
------
Total Distributions............................................. 0.00
------
NET ASSET VALUE,
END OF PERIOD..................................................... $ 9.95
======
Total Return (Excludes Sales Charge)................................ (0.50)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................. $ (e)
Ratio of expenses to average net assets........................... 0.39%(c)
Ratio of net investment to average net assets..................... 1.67%(c)
Ratio of expenses to average net assets*.......................... 0.52%(c)
Ratio of net investment to average net assets*.................... 1.54%(c)
Portfolio turnover (d)............................................ 0.00%
<FN>
- ----------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) Net assets are less than $1,000.
</TABLE>
See notes to financial statements.
29
<PAGE> 637
================================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTOR
BALANCED
FUND
-------------
CLASS B
-------------
DECEMBER 10,
1996 THROUGH
DECEMBER 31,
1996(a)
-------------
<S> <C>
Net Asset Value,
Beginning of Period.................................................... $10.00
------
Investment Activities
Net investment income.................................................. 0.01
Net realized and unrealized losses from investments.................... (0.06)
------
Total from Investment Activities................................... (0.05)
------
Distributions
From net investment income............................................. 0.00
------
Total Distributions................................................. 0.00
------
NET ASSET VALUE,
END OF PERIOD.......................................................... $ 9.95
------
Total Return (Excludes Sales Charge)..................................... (0.50)%(b)
Ratios/Supplementary Data:
Net Assets at end of period (000)...................................... $(e)
Ratio of expenses to average net assets................................ 1.14%(c)
Ratio of net investment income to average net assets................... 1.67%(c)
Ratio of expenses to average net assets*............................... 1.27%(c)
Ratio of net investment income to average net assets*.................. 1.54%(c)
Portfolio turnover (d)................................................. 0.00%
<FN>
- -------------------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
(e) Net assets are less than $1,000.
</TABLE>
See notes to financial statements.
30
<PAGE> 638
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
U.S. TREASURY SECURITIES MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ------------------------------------------ -----------
<C> <S> <C>
U.S. TREASURY BILLS (16.7%):
$ 50,000 8/22/96(b)................................ $ 49,604
75,000 9/19/96(b)................................ 74,131
20,000 11/14/96(b)............................... 19,638
105,000 2/6/97(b)................................. 101,873
5,000 3/6/97.................................... 4,829
35,000 4/3/97(b)................................. 33,616
35,000 5/1/97(b)................................. 33,448
10,000 5/29/97(b)................................ 9,502
-----------
Total U.S. Treasury Bills 326,641
-----------
U.S. TREASURY NOTES (13.9%):
45,000 7.88%, 7/15/96(b)......................... 45,040
10,000 6.13%, 7/31/96(b)......................... 10,004
15,000 7.88%, 7/31/96(b)......................... 15,032
25,000 7.25%, 8/31/96............................ 25,051
20,000 6.50%, 9/30/96(b)......................... 20,032
25,000 8.00%, 10/15/96(b)........................ 25,189
50,000 7.25%, 11/30/96(b)........................ 50,348
50,000 6.88%, 2/28/97............................ 50,581
10,000 6.63%, 3/31/97(b)......................... 10,085
10,000 6.50%, 4/30/97............................ 10,064
10,000 6.13%, 5/31/97(b)......................... 10,023
-----------
Total U.S. Treasury Notes 271,449
-----------
Total Investments, at amortized cost 598,090
-----------
REPURCHASE AGREEMENTS (69.5%)
75,000 Barclays de Zoette Wedd, 5.40%, 7/1/96
(collateralized by $282,824 U.S.
Treasury Securities, 0.00%,
8/15/97-8/15/25, market value
$76,500)................................ 75,000
75,000 CIBC, 5.45%, 7/1/96 (collateralized by
$78,255 Various U.S. Government
Securities, 5.06%-5.375%,
12/26/96-11/30/97, market value
$77,517)................................ 75,000
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ------------------------------------------ -----------
<C> <S> <C>
REPURCHASE AGREEMENTS, CONTINUED:
$ 75,000 Deutsche, Morgan, Grenfell, 5.45%, 7/1/96
(collateralized by $73,008 U.S. Treasury
Securities, 0.00%-8.50%,
7/01/96-8/15/25, market value
$76,500)................................ $ 75,000
75,000 Dresdner Securities, 5.45%, 7/1/96
(collateralized by $73,098 U.S. Treasury
Notes, 7.50%, 12/31/96, market value
$76,523)................................ 75,000
75,000 Goldman, 5.45%, 7/1/96 (collateralized by
$75,663 U.S. Treasury Notes,
6.13%-6.50%, 4/30/97-8/15/02, market
value $76,500).......................... 75,000
475,000 Aubrey G. Lanston & Co., 5.45%, 7/1/96
(collateralized by $486,932 Various U.S.
Government Securities, 0.00%-6.875%,
9/5/96-4/30/01, market value
$484,882)............................... 475,000
434,888 Lehman Brothers, 5.50%, 7/1/96
(collateralized by $841,252 U.S.Treasury
Strips, 0.00%, 5/15/04-5/15/06, market
value $443,587)......................... 434,888
75,000 J.P. Morgan, 5.45%, 7/1/96 (collateralized
by $118,217 U.S. Treasury Securities,
0.00%-6.25%, 8/15/96-2/15/25, market
value $76,501 )......................... 75,000
-----------
Total Repurchase Agreements 1,359,888
-----------
Total (Cost--$1,957,978)(a) $1,957,978
-----------
-----------
</TABLE>
- ------------
Percentage indicated are based on net assets of $1,955,454.
<TABLE>
<C> <S>
(a) Cost for federal income tax and financial reporting purposes are the same.
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9 ----
<PAGE> 639
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ------------ --------------------------------------- -----------
<C> <S> <C>
FUNDING AGREEMENTS (11.8%):
$ 50,000 All State Floating Repo, 5.65%,
9/1/96*.............................. $ 50,000
125,000 General American Life Insurance Co.,
5.64%, 3/19/97....................... 125,000
60,000 Peoples Security Life, 5.55%,
04/22/97*............................ 60,000
25,000 Providian Life & Health Insurance Co.,
5.59%, 3/1/97........................ 25,000
35,000 Providian Life & Health Insurance Co.,
5.59%, 3/1/97........................ 35,000
-----------
Total Funding Agreements 295,000
-----------
COMMERCIAL PAPER (59.1%):
Automotive (5.0%):
20,000 American Honda Finance Corp., 5.34%,
7/25/96.............................. 19,929
40,000 American Honda Finance Corp., 5.35%,
8/14/96.............................. 39,738
41,500 General Motors Acceptance Corp., 5.35%,
8/12/96.............................. 41,241
25,000 General Motors Acceptance Corp., 5.33%,
9/12/96.............................. 24,730
-----------
125,638
-----------
Banking (1.0%):
25,000 Monte Dei Paschi Di Siena, 5.29%,
7/26/96.............................. 24,908
-----------
Banking & Financial Services (2.0%):
50,000 Lehman Brothers Holdings, Inc., 5.31%,
9/17/96.............................. 49,425
-----------
Chemicals (4.9%):
20,000 Akzo Nobel, Inc., 5.30%, 8/19/96....... 19,856
25,000 Akzo Nobel, Inc., 5.45%, 10/18/96...... 24,587
24,400 Akzo Nobel, Inc., 5.45%, 10/21/96...... 23,986
25,000 Akzo Nobel, Inc., 5.45%, 10/25/96...... 24,561
15,000 Akzo Nobel, Inc., 5.40%, 11/22/96...... 14,676
15,000 Akzo Nobel, Inc., 5.40%, 11/26/96...... 14,667
-----------
122,333
-----------
Computer Software (3.9%):
27,500 CSC Enterprises, 5.37%, 7/8/96......... 27,471
20,000 CSC Enterprises, 5.35%, 7/24/96........ 19,932
29,000 CSC Enterprises, 5.34%, 8/23/96........ 28,772
21,000 CSC Enterprises, 5.33%, 8/29/96........ 20,817
-----------
96,992
-----------
Consumer Goods & Services (0.9%):
10,000 Tambrands Corp., 5.35%, 9/26/96........ 9,871
12,000 Tambrands Corp., 5.52%, 11/12/96....... 11,753
-----------
21,624
-----------
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ------------ --------------------------------------- -----------
<C> <S> <C>
COMMERCIAL PAPER, CONTINUED:
Electrical & Electronic (2.6%):
$ 11,000 Hitachi Credit America Corp., 5.32%,
8/27/96.............................. $ 10,907
18,000 Hitachi Securities, 5.32%, 8/29/96..... 17,843
15,000 Toshiba America, Inc., 5.31%,
7/18/96.............................. 14,963
20,000 Toshiba America, Inc., 5.35%, 7/8/96... 19,979
-----------
63,692
-----------
Financial & Insurance (1.2%):
12,658 Enterprise Funding Corp., 5.40%,
8/16/96.............................. 12,570
17,312 Enterprise Funding Corp., 5.40%,
8/26/96.............................. 17,167
-----------
29,737
-----------
Financial Services (9.0%):
12,297 Equipment Funding, Inc., 5.35%,
7/8/96............................... 12,284
21,010 Finova Capital Corp., 5.38%, 7/11/96... 20,978
35,000 Finova Capital Corp., 5.38%, 8/15/96... 34,765
32,000 Finova Capital Corp., 5.40%, 8/22/96... 31,750
40,000 Finova Capital Corp., 5.50%, 9/6/96.... 39,591
25,000 Lehman Brothers Holding, Inc., 5.45%,
9/30/96.............................. 24,656
60,605 Old Line Funding Corp., 5.31%,
7/2/96............................... 60,596
25,000 Old Line Funding Corp., 5.45%,
7/24/96.............................. 24,913
-----------
249,533
-----------
Gas & Electric Utility (3.8%):
30,900 CSW Credit, Inc., 5.29%, 7/17/96....... 30,827
30,500 CSW Credit, Inc., 5.40%, 8/5/96........ 30,340
32,886 National Rural Utilities Finance Corp.,
5.28%, 7/22/96....................... 32,785
-----------
93,952
-----------
Leasing (4.3%):
35,000 International Lease Finance Corp.,
5.33%, 8/7/96........................ 34,809
31,000 International Lease Funding Corp.,
5.30%, 9/20/96....................... 30,630
20,000 USL Capital Corp., 5.30%, 7/2/96....... 19,997
21,000 USL Capital Corp., 5.37%, 7/15/96...... 20,957
-----------
106,393
-----------
Office Equipment & Services (3.6%):
50,000 International Business Machines, 5.90%,
07/29/96............................. 49,998
41,000,000 Xerox Corp., 5.35%, 8/20/96............ 40,695
-----------
90,693
-----------
</TABLE>
CONTINUED
- ----10
<PAGE> 640
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ------------ --------------------------------------- -----------
COMMERCIAL PAPER, CONTINUED:
<C> <S> <C>
Oil & Gas Exploration Products & Services (5.9%):
$ 30,000 Pemex Capital, Inc., 5.32%, 8/2/96..... $ 29,858
15,000 Pemex Capital, Inc., 5.40%, 9/10/96.... 14,840
15,000 Pemex Capital, Inc., 5.40%, 9/12/96.... 14,836
25,000 Petroleo Brasileird S.A., 5.26%,
7/23/96.............................. 24,920
20,000 Petroleo Brasileiro S.A.--Petrobras,
5.33%, 8/9/96........................ 19,885
10,000 Petroleo Brasileiro S.A.--Petrobras
"B", 5.37%, 8/16/96.................. 9,931
13,500 Petroleo Brasileiro S.A., 5.345%,
11/18/96............................. 13,219
20,000 Petroleo Brasileiro S.A., 5.345%,
12/4/96.............................. 19,537
-----------
147,026
-----------
Real Estate (4.4%):
45,000 Countrywide Funding Corp., 5.43%,
7/23/96.............................. 44,851
19,840 Countrywide Funding Corp., 5.45%,
9/3/96............................... 19,648
46,000 Countrywide Funding Corp., 5.42%,
9/9/96............................... 45,515
-----------
110,014
-----------
Telecommunications (5.8%):
30,000 GTE Corp., 5.33%, 7/2/96............... 29,996
50,000 GTE Corp., 5.39%, 7/9/96............... 49,940
17,500 Nynex Corp., 5.37%, 7/8/96............. 17,482
24,500 Nynex Corp., 5.35%, 8/6/96............. 24,369
24,500 Nynex Corp., 5.32%, 8/26/96............ 24,297
-----------
146,084
-----------
Total Commercial Paper 1,478,044
-----------
CORPORATE BONDS (1.7%):
Financial Services (1.7%):
25,000 IBM Credit Corp., 5.90%, 8/28/96....... 24,996
17,875 John Deere, 4.625%, 9/2/96............. 17,838
-----------
Total Corporate Bonds 42,834
-----------
MEDIUM TERM/SENIOR NOTES (13.4%):
Banking (5.0%):
50,000 Abbey National Treasury Services, PLC.,
5.08%, 2/27/97....................... 49,994
25,000 Abbey National Treasury Services, PLC.,
5.08%, 2/27/97....................... 24,994
50,000 Abbey National Treasury Services, PLC.,
5.11%, 3/17/97....................... 49,969
-----------
124,957
-----------
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ------------ --------------------------------------- -----------
<C> <S> <C>
MEDIUM TERM/SENIOR NOTES, CONTINUED:
Banking and Financial Services (3.0%):
$ 50,000 Bear Stearns Companies, Inc., 5.60%,
3/14/97.............................. $ 50,000
25,000 Merrill Lynch & Co., Inc., 5.58%,
3/14/97.............................. 25,000
-----------
75,000
-----------
Brokerage (5.0%):
125,000 Greenwich Capital Holding, Inc., 5.80%,
10/1/96 Master Note Purchase
Agreement*........................... 125,000
-----------
Leasing (0.4%):
10,000 International Leasing Finance, Inc.,
8.73%, 8/9/96........................ 10,033
-----------
Total Medium Term/Senior Notes 334,990
-----------
FLOATING RATE NOTES (3.3%):
31,440 Student Loan Marketing Association,
6.08%, 7/1/96*....................... 31,440
50,000 Student Loan Marketing Assoc., 5.45%,
9/28/98*............................. 50,000
-----------
Total Floating Rate Notes 81,440
-----------
U.S. TREASURY BILLS (1.0%):
25,000 3/6/97................................. 24,144
-----------
Total U.S. Treasury Bills 24,144
-----------
Total Investments, at amortized cost 2,256,452
-----------
REPURCHASE AGREEMENTS (10.0%):
100,000 Lehman Brothers, 5.51%, 7/1/96,
(collateralized by $104,920 Various
U.S. Government Securities,
0.00%-8.36%, 12/24/96-12/08/14,
market value $102,004)............... 100,000
23,841 Lehman Brothers, 5.50%, 7/1/96,
(collateralized by $18,957 U.S.
Treasury Bonds, 8.00%-15.75%
2/15/01-2/15/02, market value
$24,305)............................. 23,841
125,000 Prudential Securities, 5.53%, 7/1/96,
(collateralized by $84,763 Various
U.S. Government Securities,
0.00%-8.25%, 7/02/96-5/15/18, market
value $68,899 and cash-$57,452)...... 125,000
-----------
Total Repurchase Agreements 248,841
-----------
Total (Cost--$2,505,293)(a) $2,505,293
-----------
-----------
</TABLE>
- ------------
Percentages indicated are based on net assets of $2,501,936.
<TABLE>
<C> <S>
(a) Cost for federal income tax and financial reporting purposes is the same.
</TABLE>
<TABLE>
<C> <S>
* Variable rate securities having liquidity sources through bank letters of credit or other credit and/or liquidity
agreements. The interest rate, which will change periodically, is based upon bank prime rates or a index of market
interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in effect at June 30, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11----
<PAGE> 641
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
<C> <S> <C>
MUNICIPAL BONDS (16.2%):
Connecticut (0.9%):
$ 4,500 Special Assessment Unemployment
Compensation Revenue Notes (Curbs),
3.9%, 11/15/01*........................ $ 4,500
-----------
Florida (0.7%):
3,500 Putnam County, Development Authority,
3.50%, 12/15/09*....................... 3,500
-----------
Louisiana (1.0%):
5,000 State Refunding, Series A, 4.20%,
8/1/96................................. 5,002
-----------
Michigan (8.4%):
2,500 Municipal Bond Authority Revenue, Series
B, 4.50%, 7/3/96....................... 2,500
10,000 Muncipal Bond Authority, Series A, 4.50%,
7/3/97................................. 10,058
30,000 State GO Notes, 4.00%, 9/30/96........... 30,073
-----------
42,631
-----------
Nevada (0.4%):
2,000 State GO Bonds, 6.35%, 8/1/96............ 2,005
-----------
Ohio (0.6%):
3,000 School District Cash Flow, 4.53%,
6/30/97................................ 3,015
-----------
Texas (2.5%):
4,980 Austin Independent School District,
6.70%, 8/1/99
Prefunded 8/1/96 at 100................ 4,994
4,000 Dallas Independent School District,
7.10%, 8/15/96
LOC: NationsBank of Texas.............. 4,016
1,400 Gulf Coast Waste Disposal Authority
Texas, PCR, 3.50%, 10/1/17, Amoco Oil
Co. Project*........................... 1,400
2,200 North Central, Health Facilities, 3.65%,
12/1/15, Development Corp., Revenue
Bonds, Series D*....................... 2,200
-----------
12,610
-----------
Virginia (1.0%):
5,300 Public School Authority, Series C, 5.00%,
8/1/96................................. 5,307
-----------
Wisconsin (0.3%):
1,460 Milwaukee, Series BQ, 6.00%, 7/15/96,
GO..................................... 1,461
-----------
Wyoming (0.5%):
2,500 Uinta County, PCR, Amoco Standard Oil Co
Ind., 3.98%, 12/1/12*.................. 2,502
-----------
Total Municipal Bonds 82,533
-----------
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
<C> <S> <C>
DAILY DEMAND NOTES (3.6%):
Alabama (1.2%):
$ 5,900 Phenix County, Al 93-A, 3.75%, 6/1/28,
LOC: Toronto Dominion*................. $ 5,900
-----------
Colorado (0.3%):
1,600 Moffat County PCR, Pacific Corp., 3.60%,
5/1/13*................................ 1,600
-----------
Ohio (0.4%):
1,900 State Air Quality, 3.75%, 12/1/15, LOC:
JP Morgan*............................. 1,900
-----------
Texas (1.4%):
3,000 Brazos River Authority PCR
Coll Utilities Electric Co. Series B,
3.85%, 6/1/30, LOC: Union Bank of
Switzerland, AMT*...................... 3,000
4,300 Sabine River Authority PCR
Utilities Electric Co. Project Series
C, 3.85%, 6/1/30, LOC: Union Bank of
Switzerland, AMT*...................... 4,300
-----------
7,300
-----------
Washington (0.3%):
1,500 State Health Care Facilities Authority,
Fred Hutchinson Cancer-C, 3.65%, 1/1/18
LOC: Morgan Guaranty*.................. 1,500
-----------
Total Daily Demand Notes 18,200
-----------
WEEKLY DEMAND NOTES (56.4%):
Arkansas (1.6%):
8,100 Clark County Solid Waste Disposal Revenue
- Reynolds Metals Co. Project, 3.55%,
8/1/22, LOC: Trust Co. Bank, AMT*...... 8,100
-----------
Colorado (2.3%):
2,500 Student Obligation Bond Authority 90-A
3.40%, 9/1/24, AMT*.................... 2,500
4,400 Student Obligation Bond Authority,
Student Loan Revenue, 3.40%, 7/1/20,
AMT*................................... 4,400
5,000 Regents University Of Colorado Student
Housing Bonds, 3.35%, 6/1/20 LOC:
Morgan Guaranty*....................... 5,000
-----------
11,900
-----------
Florida (2.0%):
10,000 Housing Finance Authority, Woodlands Apt.
855, 3.35%, 12/1/17*................... 10,000
-----------
</TABLE>
CONTINUED
- ----12
<PAGE> 642
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
WEEKLY DEMAND NOTES, CONTINUED:
<C> <S> <C>
Georgia (2.1%):
$ 10,900 Cobb County Georgia Housing Authority
Multifamily Housing Revenue - Pittco
Frey Assoc. Project, 3.15%, 6/1/23,
LOC: Societe Generale*................. $ 10,900
-----------
Illinois (8.9%):
10,900 Chicago O'Hare International
AirportRevenue - Second Lien - Series
B, 3.50%, 1/1/18, LOC: Societe
Generale, AMT*......................... 10,900
5,900 Development Finance Authority Revenue
Special Facility - Little City
Foundation, 3.40%, 2/1/19, LOC: LaSalle
National Bank*......................... 5,900
4,700 Development Finance Authority Revenue
Aurora Central Catholic High School,
3.40%, 4/1/24, LOC: Northern Trust*.... 4,700
4,500 Development Finance Authority Revenue
Roosevelt University Project, 3.40%,
4/1/25, LOC: American National Bank*... 4,500
1,625 Development Finance Authority Revenue St
Pauls House Project, 3.40%, 2/1/25,
LOC: LaSalle National Bank*............ 1,625
2,500 Educational Facility Authority Revenues
Northwestern University, 3.40%, 3/1/28,
LOC: Northern Trust*................... 2,500
1,000 Health Facilities Authority Revenue
Revolving Fund Pooled, Series C, 3.40%,
8/1/15, LOC: First National Bank of
Chicago*............................... 1,000
1,900 Health Facilities Authority Revenue
Hospital Sisters Service Series E,
3.40%, 12/1/14, LOC: Morgan
Guaranty*.............................. 1,900
3,000 Health Facilities Authority Revenue
Washington & Jane Smith Home, 3.50%,
7/1/26, LOC: First Chicago Bank*....... 3,000
5,000 Jacksonville Industrial Project Revenue
Agi Inc. Project, 3.65%, 2/1/26, LOC:
Bank of America*....................... 5,000
2,240 Lombard Industrial Development Revenue
Chicago Roll Co., Inc Project, 3.95%,
2/1/10, LOC: American National Bank*... 2,240
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
<C> <S> <C>
WEEKLY DEMAND NOTES, CONTINUED:
Illinois, continued:
$ 2,000 Orland Hills Multi-Family Mortgage
Revenue 88th Avenue Project, 3.40%,
12/1/04, LOC: LaSalle National Bank*... $ 2,000
-----------
45,265
-----------
Indiana (6.5%):
12,400 Health Facility Financing Authority
Rehabilitation Hospital Indiana, Inc.,
3.40%, 11/1/20, LOC: Toronto Dominion
Bank*.................................. 12,400
3,000 Indianapolis Economic Development Revenue
-Childrens Museum Project, 3.45%,
10/1/25, LOC: National Bank of Detroit,
Indianapolis*.......................... 3,000
3,900 Jasper Economic Development Revenue Best
Chairs Inc. Project, 3.70%, 3/1/19,
LOC: PNC Bank*......................... 3,900
14,035 Rockport PCR, Indiana & Michigan Electric
Co., Series A, 3.15%, 8/1/14, LOC:
Swiss Bank*............................ 14,035
-----------
33,335
-----------
Louisiana (0.8%):
4,000 Jefferson Parish Hospital Service
District No. 2 Hospital Revenue, 3.10%,
12/1/15, FGIC*......................... 4,000
-----------
Michigan (3.4%):
14,100 Higher Education Student Loan, Series B,
3.40%, 10/1/13, AMT, AMBAC*............ 14,100
1,750 State Strategic Fund Limited Wayne
Disposal Oakland Project, 3.60%, 3/1/5,
LOC: Comercia Bank*.................... 1,750
1,000 State Strategic Fund Limited Obligation
Revenue Environmental Quality, 3.60%,
5/1/05 LOC: Comercia Bank, AMT*........ 1,000
-----------
16,850
-----------
Nevada (3.4%):
7,400 Clark County Airport Improvement Revenue
Sub Lien Series A-1, 3.30%, 7/1/25,
LOC: Toronto Dominion Bank*............ 7,400
10,000 Clark County Industrial Development
Revenue - Power Co. Project, Series A,
3.30%, 10/1/30, LOC: Barclays Bank,
AMT*................................... 10,000
-----------
17,400
-----------
</TABLE>
CONTINUED
13----
<PAGE> 643
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
WEEKLY DEMAND NOTES, CONTINUED:
<C> <S> <C>
New Mexico (0.4%):
$ 2,000 Albuquerque Airport Revenue Sub Lien,
3.30%, 7/1/14, AMBAC*.................. $ 2,000
-----------
Ohio (5.7%):
6,000 Franklin County Hospital Revenue Holy
Cross Health Systems, 3.35%, 6/1/16,
LOC: Morgan Guaranty*.................. 6,000
6,800 State Air Quality Development Authority
Revenue Funding Limited Partnership,
Series A, 3.50%, 4/1/28, LOC: Societe
Generale*.............................. 6,800
6,300 Air Quality Development Authority, 3.50%,
4/1/29, LOC: Societe Generale*......... 6,300
4,600 The Ohio State University General
Receipts, Series B, 3.00%, 12/1/12*.... 4,600
5,500 State Water Development Authority Revenue
Timken Company Project, 3.35%, 5/1/07,
LOC: Wachovia Bank*.................... 5,500
-----------
29,200
-----------
Rhode Island (1.0%):
5,000 Commonwealth Student Loan Revenue Bond
#3, 3.45%, 06/01/26, LOC: Nat West*.... 5,000
-----------
South Carolina (0.3%):
1,700 Cherokee County Industrial Revenue
Oshkosh Truck Project, 3.50%, 8/1/19,
LOC: Bank of Nova Scotia, AMT*......... 1,700
-----------
Tennessee (0.7%):
3,800 Oak Ridge Industrial Board Economic
Development Revenue Limited Obligation,
3.45%, 5/1/09
LOC: Algemene Bank Nederland*.......... 3,800
-----------
Texas (12.4%):
14,100 Capital Health Facilities Development
Corp. Island On Lake Travis Limited
Project, 3.40%, 12/1/16, LOC: Credit
Suisse, AMT*........................... 14,100
10,000 Panhandle Plains Higher Education Inc.
Student Loan Revenue, Series A, 3.40%,
6/1/21*................................ 10,000
5,000 Panhandle Plains Higher Education
Authority, Student Loan Revenue, Series
A, 3.40%, 6/1/23, AMT*................. 5,000
15,900 San Antonio Health Facilities Development
Corp. Hospital Revenue Warm Springs
Rehabilitation Foundation Series A,
3.30%, 6/1/08 LOC: Nationsbank of
Texas*................................. 15,900
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
<C> <S> <C>
WEEKLY DEMAND NOTES, CONTINUED:
Texas, continued:
$ 5,900 San Antonio Housing Finance Corp. Harbor
Cove Apartments Project, 3.50%, 6/1/06
LOC: Bank of America Illinois, AMT*.... $ 5,900
4,090 Higher Education Authority Inc.
Educational Series B, 3.10%, 12/1/25,
FGIC*.................................. 4,090
8,100 Travis County Housing Finance Corp.
Multifamily Housing Revenue - Aspen
Hills Apartments Project, 3.50%, 6/1/06
LOC: Bank of America Illinois, AMT*.... 8,100
-----------
63,090
-----------
Utah (2.8%):
14,500 Salt Lake City Airport Revenue, Sub
Series A, 3.40%, 6/1/98, LOC: Credit
Suisse, AMT*........................... 14,500
-----------
Washington (0.7%):
3,715 Pierce County Economic Development Corp.
Industrial Revenue - Mcfarland Cascade
Project, 3.55%, 10/1/07, LOC: First
National Bank of Seattle, AMT*......... 3,715
-----------
West Virginia (1.4%):
2,400 Marion County Community Solid Waste
Disposal Facility Revenue Granttown,
3.60%, 10/1/17, LOC: National
Westminster, AMT*...................... 2,400
4,700 Marion County Community Solid Waste
Disposal Facility Revenue Granttown,
3.40%, 10/1/17, LOC: National
Westminster, AMT*...................... 4,700
-----------
7,100
-----------
Total Weekly Demand Notes 287,855
-----------
MONTHLY DEMAND NOTES (3.1%):
Arizona (0.4%):
2,000 Chandler Industrial Development
Authority, Industrial Development
Revenue - Parsons Municipal Service
Inc., 3.70%, 12/15/09, LOC: National
Westminster*........................... 2,000
-----------
Indiana (2.7%):
13,700 Gary Environmental Improvement Revenue US
Steel Corp. Project, 3.70%, 7/15/02,
LOC: Bank of Nova Scotia*.............. 13,700
-----------
Total Monthly Demand Notes 15,700
-----------
</TABLE>
CONTINUED
- ----14
<PAGE> 644
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
SHORT-TERM PUTS (5.7%):
<C> <S> <C>
Arizona (1.0%):
$ 5,000 Conchise County, PCR, Electric Power
Corp., 3.30%, 9/1/24 AMT**............. $ 5,000
-----------
Florida (0.8%):
4,000 Putnam County, 3.25%, 3/15/14**.......... 4,000
-----------
Missouri (0.6%):
3,000 State Environmental Improvement & Energy
Resource Authority PCR Union Electric
Co. Series B, 3.65%, 6/1/14, LOC: Union
Bank of Switzerland**.................. 3,000
-----------
New Hampshire (1.2%):
5,900 Industrial Development Authority Solid
Waste Disposal Facility Revenue, 3.30%,
9/1/15, AMT**.......................... 5,900
-----------
South Carolina (0.4%):
2,000 York County, Saluda River Project
National Rural Utilities, Series E-2,
3.10%, 8/15/14**....................... 2,000
-----------
Tennessee (1.0%):
5,000 Shelby County Health Educational &
Housing Facility Board Hospital Revenue
Methodist Health System, Series C,
3.90%, 8/1/15, MBIA**.................. 5,000
-----------
Texas (0.8%):
4,065 Gulf Coast Industrial Development
Authority Marine Term Revenue Amoco Oil
Co Project, 3.60%, 6/1/25**............ 4,065
-----------
Total-Short Term Puts 28,965
-----------
TAX-FREE COMMERCIAL PAPER (8.1%):
Alabama (0.8%):
4,000 Phenix County Industrial Development
Board Environmental Improvement Revenue
- Mead Coated Board Project, 3.45%,
12/1/23, LOC: ABN AMRO Bank, AMT*...... 4,000
-----------
Colorado (1.1%):
5,500 Platte River Authority,Electric Power
3.55%, 7/1/96, LOC: Morgan Guaranty.... 5,500
-----------
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
<C> <S> <C>
TAX-FREE COMMERCIAL PAPER, CONTINUED:
Georgia (1.2%):
$ 6,000 Municipal Electric Authority, Series
85-A, 3.65%, 7/17/96 LOC: Credit
Suisse, Morgan, Bayerische
Landesbank............................. $ 6,000
-----------
Michigan (2.9%):
15,000 State Underground Storage Tank Financial
Assurance Authority Series 1, 3.45%,
12/1/04 LOC: Canadian Imperial Bank*... 15,000
-----------
Texas (1.5%):
5,000 Brazos River Authority - Texas Utilities
3.30%, 5/1/29, AMT*.................... 5,000
2,400 State Transportation, 3.65%, 8/20/96..... 2,400
-----------
7,400
-----------
West Virginia (0.7%):
3,500 Public Energy Authority Energy Revenue -
Morgantown Assoc. Project, 3.70%,
7/24/96 LOC: Suisse Bank, AMT.......... 3,500
-----------
Total Tax-Free Commercial Paper 41,400
-----------
ANTICIPATION NOTES (11.3%):
California (3.0%):
15,000 Los Angeles County Tax & Revenue
Anticipation Notes, Series A, 4.50%,
6/30/97, LOC: Credit Suisse............ 15,094
-----------
Idaho (1.8%):
9,000 State Tax Anticipation Note, 4.50%,
6/30/97................................ 9,052
-----------
Pennsylvania (1.2%):
6,000 Penn State University, 4.00%, 12/18/96... 6,017
-----------
Tennessee (1.5%):
7,500 State Anticipation Note, Series 96A,
3.25%, 7/2/01**........................ 7,500
-----------
Texas (3.9%):
20,000 State Tax & Revenue Anticipation Notes,
Series A, 4.75%, 8/30/96............... 20,029
-----------
Total Anticipation Notes 57,692
-----------
Total (Cost--$532,345) (a) 532,345
-----------
-----------
</TABLE>
- ------------
Percentages indicated are based on net assets of $510,527.
<TABLE>
<C> <S>
(a) Cost and value for federal income tax and financial reporting purposes are the same.
</TABLE>
<TABLE>
<C> <S>
* Variable rate securities having liquidity sources through bank letters of credit or other credit and/or liquidity
agreements. The interest rate, which will change periodically, is based upon bank prime rates or an index of market
interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in effect at June 30, 1996.
</TABLE>
CONTINUED
15----
<PAGE> 645
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<C> <S>
** Put and demand features exist allowing the Fund to require the purchase of the instrument within variable time periods
including daily, weekly, monthly, or semiannually.
</TABLE>
<TABLE>
<S> <C>
AMBAC AMBAC Indemnity Corporation
AMT Alternative Minimum Tax Paper
GO General Obligation
FGIC Insured by Financial Guaranty Insurance Corp.
LOC Letter of Credit
PCR Pollution Control Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----16
<PAGE> 646
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
OHIO MUNICIPAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (75.4%):
Ohio:
$ 1,000 Air Quality Development Authority, 3.50%,
4/1/29*................................. $ 1,000
3,050 Clermont County, Series B, 3.35%, 12/1/15,
Hospital Facilities Mercy Health Care of
Cincinnati*............................. 3,050
3,000 Cleveland Waterworks Revenue, 7.75%,
1/1/97, Prerefunded 1/1/97 @ 102,
MBIA.................................... 3,128
2,500 Columbus Sewer Revenue, 3.30%, 6/1/11*.... 2,500
300 Cuyahoga County, 3.40%, 4/1/12, LOC:
Dresdner Bank*.......................... 300
1,600 Cuyahoga County, 3.25%, 12/1/15, LOC:
Union Bank of Switzerland*.............. 1,600
4,000 Cuyahoga County, 3.25%, 1/1/26, LOC:
Morgan Guaranty Bank*................... 4,000
1,500 Franklin County Hospital Authority, 3.45%,
5/1/15, LOC: National Bank of
Detroit*................................ 1,500
1,800 Franklin County Hospital Revenue Holy
Cross Health Systems, 3.35%, 6/1/16,
LOC: Morgan Guaranty Bank*.............. 1,800
1,700 Franklin County Inland Products, Inc.,
3.70%, 6/1/04*.......................... 1,700
2,000 Geauga County Industrial Development,
3.50%, 4/1/04*.......................... 2,000
500 Hamilton County Economic Development
Revenue, 3.55%, 6/15/05*................ 500
2,000 Hamilton County Hospital Revenue, 3.20%,
2/15/24*................................ 2,000
1,000 Higher Education Facility, 3.45%,
9/1/20*................................. 1,000
3,400 Housing Financial Agency, 3.60%, 12/1/15,
LOC: Morgan Guaranty Bank*.............. 3,400
500 Montgomery County, 3.25%, 5/15/25*........ 500
1,000 Ross County, Ohio Hospital Facilities,
3.45%, 12/1/20*......................... 1,000
3,000 School District Cash Flow, 4.53%,
6/30/97................................. 3,015
1,000 Shaker Heights, BAN, 4.30%, 10/18/96...... 1,001
1,000 State, GO, 6.95%, 9/1/98, Prerefunded
9/1/96 @102............................. 1,027
4,500 State Air Quality Development Authority
Revenue JMG Co. Funding Limited
Partnership Series A, 3.50%, 4/1/28,
LOC: Soci'ete Generale*................. 4,500
3,000 State Air Quality Development Revenue
Bonds, 3.35%, 6/1/01, LOC: Soci'ete
Generale*............................... 3,000
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Ohio, continued:
$ 1,000 State Court Street Center, 3.55%,
10/1/98*................................ $ 1,000
2,850 State Higher Education Facilities, 3.35%,
10/1/15, LOC: Bank of Tokyo*............ 2,850
1,900 State Natural Resources Facilities, 4.20%,
10/1/96................................. 1,902
3,000 State Water Development Authority, 3.35%,
6/1/01*................................. 3,000
2,000 Student Loan Funding Corp., 3.45%,
1/1/07*................................. 2,000
2,800 Student Loan Funding Corp., Cincinnati
Student Loan Revenue Series A-3, 3.45%,
1/1/07, LOC: National Westminster Bank,
AMT*.................................... 2,800
500 The Ohio State University, General
Receipts, Series B, 3.40%, 12/1/01*..... 500
1,800 The Ohio State University, General
Receipts, Series B, 3.40%, 12/1/06, LOC:
National Westminster Bank*.............. 1,800
7,950 The Ohio State University, General
Receipts, Series B, 3.00%, 12/1/12*..... 7,950
1,600 Twinsburg Industrial Development Revenue,
3.75%, 12/1/11*......................... 1,600
1,700 University of Cincinnati, General
Receipts, Series K1, 3.75%, 3/20/97..... 1,705
400 Water Development Authority, Series B,
3.60%, 11/1/15*......................... 400
2,100 Wooster Industrial Development Revenue,
3.75%, 12/1/10*......................... 2,100
-----------
Total Municipal Bonds 73,128
-----------
SHORT TERM PUTS (2.5%):
Ohio:
2,500 Air Quality Development Authority Revenue,
Series B, 3.80%, 5/1/18, AMT, LOC: Union
Bank of Switzerland**................... 2,500
-----------
Total Short Term Puts 2,500
-----------
TAX-FREE COMMERCIAL PAPER (11.6%):
Ohio:
1,000 Air Quality Development Authority, 3.60%,
7/10/96, FGIC........................... 1,000
1,300 State Air Quality Development Authority,
Series B, Refunding Revenue Bonds,
3.70%, 7/10/96, FGIC.................... 1,300
2,300 Toledo, (Lucas County) CSX Transportation,
3.35%, 7/15/96, LOC: Bank of Nova
Scotia.................................. 2,300
1,300 Toledo, (Lucas County) CSX Transportation,
3.50%, 8/1/96........................... 1,300
</TABLE>
CONTINUED
17----
<PAGE> 647
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
OHIO MUNICIPAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ------------------------------------------ -----------
TAX-FREE COMMERCIAL PAPER, CONTINUED:
<C> <S> <C>
Ohio, continued:
$ 2,400 Toledo, (Lucas County) Ohio Port
Authority, 3.65%, 7/15/96, LOC: Bank of
Nova Scotia............................. $ 2,400
1,000 Water Development Authority, 3.55%,
9/4/96.................................. 1,000
2,000 Water Development Authority, CEI Co.,
3.55%, 9/4/96........................... 2,000
-----------
Total Tax-Free Commercial Paper 11,300
-----------
ANTICIPATION NOTES (10.1%):
Ohio:
5,000 Brecksville, (Broadview Heights) City
School District, 3.90%, 1/17/97, BAN.... 5,009
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ------------------------------------------ -----------
<C> <S> <C>
ANTICIPATION NOTES, CONTINUED:
Ohio, continued:
$ 1,700 Cincinnati School District, TAN, 6.00%,
7/11/96 LOC: Fifth Third Bank........... $ 1,701
1,670 Summit County, BAN, Series B, 4.00%,
6/5/97.................................. 1,676
1,000 University of Cincinnati, General
Receipts, BAN, Series Aa, 3.89%,
3/20/97................................. 1,002
438 Warren County, 4.58%, 9/5/96, BAN......... 438
-----------
Total Anticipation Notes 9,826
-----------
Total (Cost--$96,754) (a) $ 96,754
-----------
-----------
</TABLE>
- ------------
Percentages indicated are based on net assets of $97,047.
<TABLE>
<C> <S>
(a) Cost for federal income tax and financial reporting purposes is the same.
</TABLE>
<TABLE>
<C> <S>
* Variable rate securities having liquidity sources through bank letters of credit or other credit and/or liquidity
agreements. The interest rate, which will change periodically, is based upon bank prime rates or an index of market
interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in effect at June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
** Put and demand features exist allowing the Fund to require the repurchase of the instrument within variable time
periods including daily, weekly, monthly, or semiannually.
</TABLE>
<TABLE>
<S> <C>
AMT Alternative Minimum Tax Paper
BAN Bond Anticipation Notes
FGIC Insured by Financial Guaranty Insurance Corp.
GO General Obligation
LOC Letter of Credit
MBIA Insured by Municipal Bond Insurance Association
TAN Tax Anticipation Notes
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----18
<PAGE> 648
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands,
except per share amounts)
<S> <C> <C> <C> <C>
U.S. TREASURY
SECURITIES MUNICIPAL OHIO MUNICIPAL
MONEY MARKET PRIME MONEY MONEY MARKET MONEY MARKET
FUND MARKET FUND FUND FUND
-------------- -------------- -------------- ---------------
ASSETS:
Investments, at amortized cost...................... $ 598,090 $ 2,256,452 $ 532,345 $ 96,754
Repurchase agreements, at cost...................... 1,359,888 248,841 -- --
-------------- -------------- -------------- -------
Total............................................... 1,957,978 2,505,293 532,345 96,754
Cash................................................ 1 -- -- 38
Interest receivable................................. 6,156 8,529 3,504 563
Receivable from brokers for investments sold........ -- -- 15,000 --
Receivable from advisor............................. 209 170 67 25
Deferred organization costs......................... -- -- -- 2
-------------- -------------- -------------- -------
TOTAL ASSETS........................................ 1,964,344 2,513,992 550,916 97,382
-------------- -------------- -------------- -------
LIABILITIES:
Cash overdraft...................................... -- -- 75 --
Dividends payable................................... 7,925 10,646 1,273 253
Payable to brokers for investments purchased........ -- -- 38,703 --
Accrued expenses and other payables:
Investment advisory fees........................ 562 745 150 26
Administration fees............................. 266 352 71 14
12b-1 fees (Class A)............................ 25 62 11 9
Other........................................... 112 251 106 33
-------------- -------------- -------------- -------
Total Liabilities................................... 8,890 12,056 40,389 335
-------------- -------------- -------------- -------
NET ASSETS:
Capital............................................. 1,955,445 2,501,956 510,658 97,098
Undistributed (distributions in excess of) net
investment income.................................. 43 7 (127) (51)
Accumulated undistributed net realized losses from
investment transactions............................ (34) (27) (4) --
-------------- -------------- -------------- -------
NET ASSETS.......................................... $ 1,955,454 $ 2,501,936 $ 510,527 $ 97,047
-------------- -------------- -------------- -------
-------------- -------------- -------------- -------
Net Assets
Fiduciary....................................... $ 1,844,590 $ 2,186,562 $ 459,807 $ 55,915
Class A......................................... 110,864 315,374 50,720 41,132
-------------- -------------- -------------- -------
Total............................................... $ 1,955,454 $ 2,501,936 $ 510,527 $ 97,047
-------------- -------------- -------------- -------
-------------- -------------- -------------- -------
Outstanding units of beneficial interest
Fiduciary....................................... 1,844,578 2,186,583 459,924 55,946
Class A......................................... 110,865 315,373 50,734 41,152
-------------- -------------- -------------- -------
Total............................................... 1,955,443 2,501,956 510,658 97,098
-------------- -------------- -------------- -------
-------------- -------------- -------------- -------
Net asset value--offering and redemption price per
share (Fiduciary and Class A shares)............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19----
<PAGE> 649
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C>
U.S. TREASURY
SECURITIES OHIO MUNICIPAL
MONEY MARKET PRIME MONEY MUNICIPAL MONEY MONEY MARKET
FUND MARKET FUND MARKET FUND FUND
--------------- -------------- --------------- ---------------
INVESTMENT INCOME:
Interest income..................................... $ 87,131 $ 142,118 $ 21,285 $ 3,394
Dividend income..................................... -- -- 332 43
Income from securities lending...................... 88 6 -- --
------- -------------- ------- -------
Total Income........................................ 87,219 142,124 21,617 3,437
------- -------------- ------- -------
EXPENSES:
Investment advisory fees............................ 5,456 8,602 2,042 286
Administration fees................................. 2,600 4,102 974 159
12b-1 fees (Class A)................................ 356 965 225 160
Custodian and accounting fees....................... 131 145 80 25
Legal and audit fees................................ 189 262 138 35
Organization costs.................................. -- -- -- 1
Trustees' fees and expenses......................... 30 42 19 4
Transfer agent fees................................. 83 208 85 128
Registration and filing fees........................ 126 207 86 9
Printing costs...................................... 59 76 36 9
Other............................................... 96 41 33 7
------- -------------- ------- -------
Total expense before waivers/reimbursements......... 9,126 14,650 3,718 823
Less waivers/reimbursements......................... (2,265) (2,939) (1,135) (327)
------- -------------- ------- -------
NET EXPENSES........................................ 6,861 11,711 2,583 496
------- -------------- ------- -------
Net Investment Income............................... 80,358 130,413 19,034 2,941
------- -------------- ------- -------
REALIZED GAINS (LOSSES) FROM INVESTMENT
TRANSACTIONS:
Net realized gains (losses) from investment
transactions....................................... (9) 9 (4) --
------- -------------- ------- -------
Net increase in net assets resulting
from operations.................................... $ 80,349 $ 130,422 $ 19,030 $ 2,941
------- -------------- ------- -------
------- -------------- ------- -------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----20
<PAGE> 650
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
OHIO
U.S. TREASURY SECURITIES MUNICIPAL
PRIME MONEY MARKET FUND MUNICIPAL MONEY MARKET MONEY
MONEY MARKET FUND FUND MARKET FUND
------------------------ ------------------------ ------------------------ -----------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995 1996 1995 1996
----------- ----------- ----------- ----------- ----------- ----------- -----------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.... $ 80,358 $ 59,506 $ 130,413 $ 103,272 $ 19,034 $ 16,629 $ 2,941
Net realized gains
(losses) from
investment
transactions........... (9) 14 9 -- (4) (126) --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Change in net assets
resulting from
operations................. 80,349 59,520 130,422 103,272 19,030 16,503 2,941
----------- ----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO FIDUCIARY
SHAREHOLDERS:
From net investment
income................. (75,330) (56,332) (116,410) (96,873) (17,075) (15,228) (1,588)
In excess of net
investment income...... -- -- -- -- -- (43) (22)
From net realized gains
from investment
transactions........... -- -- -- -- (4) -- --
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................. (5,012) (3,144) (13,976) (6,244) (1,947) (1,358) (1,353)
In excess of net
investment income...... -- (30) -- (142) -- -- (19)
DISTRIBUTIONS TO SERVICE
SHAREHOLDERS:
From net investment
income................. -- -- -- (13) -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Change in net assets from
shareholder
distributions.............. (80,342) (59,506) (130,386) (103,272) (19,026) (16,629) (2,982)
----------- ----------- ----------- ----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 4,000,794 3,158,947 5,382,651 4,749,069 1,409,174 1,502,281 337,815
Proceeds from shares
issued in connection
with acquisition....... 356,742 -- -- -- -- -- --
Dividends reinvested..... 4,792 4,531 14,099 13,261 1,889 2,064 1,337
Cost of shares
redeemed............... (3,683,695) (2,909,428) (5,062,234) (4,270,622) (1,394,801) (1,404,255) (329,660)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Change in net assets from
share transactions......... 678,633 254,050 334,516 491,708 16,262 100,090 9,492
----------- ----------- ----------- ----------- ----------- ----------- -----------
Change in Net Assets......... 678,640 254,064 334,552 491,708 16,266 99,964 9,451
NET ASSETS:
Beginning of period...... 1,276,814 1,022,750 2,167,384 1,675,676 494,261 394,297 87,596
----------- ----------- ----------- ----------- ----------- ----------- -----------
End of period............ $1,955,454 $1,276,814 $2,501,936 $2,167,384 $ 510,527 $ 494,261 $ 97,047
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
SHARE TRANSACTIONS:
Issued................... 4,000,794 3,158,947 5,382,651 4,749,069 1,409,174 1,502,281 337,815
Issued in connection with
acquisition............ 356,742 -- -- -- -- -- --
Reinvested............... 4,792 4,531 14,099 13,261 1,889 2,064 1,337
Redeemed................. (3,683,695) (2,909,428) (5,062,234) (4,270,622) (1,394,801) (1,404,255) (329,660)
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Change in shares............. 678,633 254,050 334,516 491,708 16,262 100,090 9,492
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Undistributed (distributions
in excess of) net
investment income included
in net assets:
End of Period............ $ 43 $ 27 $ 7 $ (20) $ (127) $ (139) $ (51)
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
<S> <C>
YEAR ENDED
JUNE 30,
1995
-----------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.... $ 2,785
Net realized gains
(losses) from
investment
transactions........... --
-----------
Change in net assets
resulting from
operations................. 2,785
-----------
DISTRIBUTIONS TO FIDUCIARY
SHAREHOLDERS:
From net investment
income................. (1,535)
In excess of net
investment income...... --
From net realized gains
from investment
transactions........... --
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................. (1,240)
In excess of net
investment income...... (10)
DISTRIBUTIONS TO SERVICE
SHAREHOLDERS:
From net investment
income................. --
-----------
Change in net assets from
shareholder
distributions.............. (2,785)
-----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 376,500
Proceeds from shares
issued in connection
with acquisition....... --
Dividends reinvested..... 1,226
Cost of shares
redeemed............... (382,861)
-----------
Change in net assets from
share transactions......... (5,135)
-----------
Change in Net Assets......... (5,135)
NET ASSETS:
Beginning of period...... 92,731
-----------
End of period............ $ 87,596
-----------
-----------
SHARE TRANSACTIONS:
Issued................... 376,500
Issued in connection with
acquisition............ --
Reinvested............... 1,226
Redeemed................. (382,861)
-----------
-----------
Change in shares............. (5,135)
-----------
-----------
Undistributed (distributions
in excess of) net
investment income included
in net assets:
End of Period............ $ (10)
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21----
<PAGE> 651
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1996
1. ORGANIZATION:
The One Group (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as a diversified, 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-six active funds. The
accompanying financial statements and financial highlights are those of the
U.S. Treasury Securities Money Market Fund, the Prime Money Market Fund, the
Municipal Money Market Fund, and the Ohio Municipal Money Market Fund
(individually, a "Fund"; collectively, the "Funds") only.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with the Paragon Portfolio ("Paragon"), a Massachusetts
business trust. Pursuant to the Agreement all of the assets and liabilities
of each Paragon Fund transferred to a fund of The One Group in exchange for
shares of the corresponding fund of The One Group. Results of operations,
changes in net assets and financial highlights for periods prior to the
Reorganization, March 25, 1996 are presented for funds of The One Group
only.
The Funds' investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
- -------------------------------------------------------- ---------------------------------------------
<S> <C>
U.S. Treasury Securities Money Market Fund Current income with liquidity and stability
of principal.
Prime Money Market Fund Current income with liquidity and stability
of principal.
Municipal Money Market Fund As high a level of current interest income
exempt from Federal income taxes as is
consistent with the preservation of capital
and stability of principal.
Ohio Municipal Money Market Fund As high a level of current interest income
exempt from Federal income taxes and Ohio
personal income tax as is consistent with
the preservation of capital and stability of
principal.
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. 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.
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.
CONTINUED
- ----22
<PAGE> 652
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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
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 creditworthy 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
June 30, 1996, the following Funds had securities with the following market
values on loan (amounts in thousands):
<TABLE>
<CAPTION>
MARKET VALUE
OF LOANED
SECURITIES
--------------
<S> <C>
U.S. Treasury Securities Money Market Fund.......................................................... $ 479,865,232
</TABLE>
The loaned securities were fully collateralized by cash and U.S. Government
securities as of June 30, 1996.
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. Each class of shares bears
its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class,
such as distribution fees.
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
CONTINUED
23----
<PAGE> 653
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
distributed at least annually. Dividends are declared separately for each
class. No class has preferential dividend rights; differences in per share
dividend rates are generally due to differences in separate class expenses.
Net investment income and net capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments of expiring capital loss carryforwards and deferrals
of certain losses.
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 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 of net investment income and net realized capital gains
sufficient to relieve it from all, or substantially all, federal income
taxes.
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 thirty-six series and four classes:
Fiduciary, Class A, Class B, and Service. During the year ended June 30,
1995, Service Shares transferred to Class A Shares. As of June 30, 1996
there were no shareholders in the Service Class. 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. The
following is a summary of transactions in Fund shares for the years ended
June 30, 1996 and 1995:
CONTINUED
- ----24
<PAGE> 654
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
U.S. TREASURY SECURITIES
PRIME MONEY
MONEY MARKET FUND MARKET FUND
-------------------------- --------------------------
YEAR YEAR YEAR
YEAR ENDED JUNE ENDED JUNE ENDED JUNE
ENDED JUNE 30, 30, 30,
30, 1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued.................................. $ 3,573,870 $ 2,783,997 $ 4,119,886 $ 3,951,914
Proceeds from shares issued in connection with acquisition... 333,798 -- -- --
Dividends reinvested......................................... 345 1,467 1,683 7,187
Cost of shares redeemed...................................... (3,241,505) (2,576,713) (3,900,430) (3,594,562)
------------ ------------ ------------ ------------
Change in net assets from Fiduciary Share transactions....... 666,508 $ 208,751 221,139 $ 364,539
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
CLASS A SHARES:
Proceeds from shares issued.................................. $ 426,924 $ 374,950 $ 1,262,765 $ 796,201
Proceeds from shares issued in connection with acquisition... 22,944 -- -- --
Dividends reinvested......................................... 4,447 3,064 12,416 6,061
Cost of shares redeemed...................................... (442,190) (332,715) (1,161,804) (675,053)
------------ ------------ ------------ ------------
Change in net assets from Class A Share transactions......... $ 12,125 $ 45,299 $ 113,377 $ 127,209
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SERVICE SHARES:
Proceeds from shares issued.................................. 954
Dividends reinvested......................................... 13
Cost of shares redeemed...................................... (1,007)
------------
Change in net assets from Service Share transactions......... (40)
------------
------------
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued....................................................... 3,573,870 2,783,997 4,119,886 3,951,914
Issued in connection with acquisition........................ 333,798 -- -- --
Reinvested................................................... 345 1,467 1,683 7,187
Redeemed..................................................... (3,241,505) (2,576,713) (3,900,430) (3,594,562)
------------ ------------ ------------ ------------
Change in Fiduciary Shares................................... 666,508 208,751 221,139 364,539
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
CLASS A SHARES:
Issued....................................................... 426,924 374,950 1,262,765 796,201
Issued in connection with acquisition........................ 22,944 -- -- --
Reinvested................................................... 4,447 3,064 12,416 6,061
Redeemed..................................................... (442,190) (332,715) (1,161,804) (675,053)
------------ ------------ ------------ ------------
Change in Class A Shares..................................... 12,125 45,299 113,377 127,209
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SERVICE SHARES:
Issued....................................................... 954
Reinvested................................................... 13
Redeemed..................................................... (1,007)
------------
Change in Service Shares..................................... (40)
------------
------------
</TABLE>
CONTINUED
25----
<PAGE> 655
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET
OHIO MUNICIPAL MONEY
FUND MARKET FUND
-------------------------- ----------------------
YEAR YEAR YEAR
YEAR ENDED JUNE ENDED JUNE ENDED JUNE
ENDED JUNE 30, 30, 30,
30, 1996 1995 1996 1995
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued...................................... $ 1,109,221 $ 1,202,916 $ 165,403 $ 182,275
Dividends reinvested............................................. 114 738 62 41
Cost of shares redeemed.......................................... (1,087,267) (1,118,500) (161,325) (185,885)
------------ ------------ ---------- ----------
Change in net assets from Fiduciary share transactions........... $ 22,068 $ 85,154 $ 4,140 $ (3,569)
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
CLASS A SHARES:
Proceeds from shares issued...................................... $ 299,953 $ 299,365 $ 172,412 $ 194,225
Dividends reinvested............................................. 1,775 1,326 1,275 1,185
Cost of shares redeemed.......................................... (307,534) (285,755) (168,335) (196,976)
------------ ------------ ---------- ----------
Change in net assets from Class A share transactions............. $ (5,806) $ 14,936 $ 5,352 $ (1,566)
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued........................................................... 1,109,221 1,202,916 165,403 182,275
Reinvested....................................................... 114 738 62 41
Redeemed......................................................... (1,087,267) (1,118,500) (161,325) (185,885)
------------ ------------ ---------- ----------
Change in Fiduciary Shares....................................... 22,068 85,154 4,140 (3,569)
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
CLASS A SHARES:
Issued........................................................... 299,953 299,365 172,412 194,225
Reinvested....................................................... 1,775 1,326 1,275 1,185
Redeemed......................................................... (307,534) (285,755) (168,335) (196,976)
------------ ------------ ---------- ----------
Change in Class A Shares......................................... (5,806) 14,936 5,352 (1,566)
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
</TABLE>
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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
0.35% of the average daily net assets of the U.S. Treasury Money Market
Fund, the Prime Money Market Fund and the Municipal Money Market Fund and
0.30% of the average daily net assets of the Ohio Municipal Money Market
Fund.
The Trust and The 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 0.20%
on each Fund's average daily net assets on the first $1.5 billion of Trust
net assets (excluding the Treasury Only Money Market Fund and the Government
Money Market Fund - the "Institutional Money Market Funds"); 0.18% on the
next $0.5 billion of Trust net assets (excluding the Institutional Money
Market Funds); and 0.16% on Trust net assets (excluding the Institutional
Money Market Funds) over $2 billion. 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
CONTINUED
- ----26
<PAGE> 656
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
as administrator of each Fund under essentially the same terms as the current
administration agreement. Prior to March 26, 1996, Goldman Sachs Asset
Management served as administrator of Paragon. The terms of the current
administraton agreement are substantially the same as the former
administration agreement.
The Trust and The One Group Services Company (the "Distributor") are parties
to a distribution agreement under which shares of the Funds are sold on a
continuous basis. Class A Shares are subject to a distribution and
shareholder services plan (the "Plan") pursuant to Rule 12b-1 under the 1940
Act. As provided in the Plan, the Trust will pay the Distributor a fee of
0.35% of the average daily net assets of Class A Shares of each of the
Funds. The Distributor has voluntarily agreed to limit payments under the
Plan to 0.25% of average daily net assets of the Class A Shares of each
Fund. Up to 0.25% of the fees payable under the Plan may be used as
compensation of shareholder services by the Distributor and/or financial
institutions and intermediaries. Fees paid under the Plan may be applied by
the Distributor toward (i) compensation for its services in connection with
distribution assistance or provision of shareholder services; or (ii)
payments to financial institutions and intermediaries such as banks
(including affiliates of the Adviser), brokers, dealers and other
institutions, including the Distributor's affiliates and subsidiaries as
compensation for services or reimbursement of expenses incurred in
connection with distribution assistance or provision of shareholder
services. Fiduciary Class Shares of each Fund are offered without
distribution fees.
Prior to January 2, 1996, Premier Investment Advisors, L.L.C. ("Premier")
served as investment adviser and Goldman Sachs & Company served as
distributor to Paragon. Pursuant to the approval of the Board of Trustees of
Paragon on October 31, 1995 and its Shareholders on December 20, 1995,
Paragon entered into an investment advisory agreement with the Adviser and a
distribution agreement with the Distributor effective January 2, 1996. The
terms of the investment advisory agreements with Premier and with the
Adviser and the distribution agreements with Goldman Sachs & Company and the
Distributor were substantially the same. Certain officers of the Trust are
affiliated the Administrator. Such officers receive no compensation from the
Funds for serving in their respective roles.
The Adviser, Administrator and Distributor voluntarily agreed to waive a
portion of their fees and to reimburse the Funds for certain expenses. For
the year ended June 30, 1996, fees in the following amounts were waived or
reimbursed to the Funds (amounts in thousands):
<TABLE>
<CAPTION>
INVESTMENT
ADVISORY FEES ADMINISTRATION 12B-1 FEES
WAIVED/ FEES WAIVED/ WAIVED CLASS
REIMBURSED REIMBURSED A
--------------- ----------------- -------------
<S> <C> <C> <C>
U.S. Treasury Securities Money Market Fund.............................. $ 2,120 $ 43 $ 102
Prime Money Market Fund................................................. 2,663 -- 276
Municipal Money Market Fund............................................. 930 141 64
Ohio Municipal Money Market Fund........................................ 114 167 46
</TABLE>
5. CONCENTRATION OF CREDIT RISK:
The Ohio Municipal Money Market Fund invests primarily in debt obligations
issued by the State of Ohio and its political subdivisions, agencies and
public authorities to obtain funds for various public purposes. The Fund is
more susceptible to economic and political factors adversely affecting
issuers of Ohio's specific municipal securities than are municipal bond
funds that are not concentrated in these issuers to the same extent.
CONTINUED
27----
<PAGE> 657
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
6. FEDERAL TAX INFORMATION: (UNAUDITED)
The Funds had the following capital loss carryforwards which are available
to offset future gains, if any, at June 30, 1996 (amounts in thousands):
<TABLE>
<CAPTION>
U.S. TREASURY
SECURITIES MONEY PRIME MONEY MUNICIPAL MONEY
MARKET FUND MARKET FUND MARKET FUND
----------------- ----------------- -----------------
<S> <C> <C> <C>
Expiring in 2001........................................... $ -- $ 1 $ --
Expiring in 2002........................................... -- 26 --
Expiring in 2003........................................... 25 -- --
Expiring in 2004........................................... 9 -- 3
--- --- ---
$ 34 $ 27 $ 3
--- --- ---
--- --- ---
<CAPTION>
OHIO MUNICIPAL
MONEY
MARKET FUND
-----------------
<S> <C>
Expiring in 2001........................................... $ --
Expiring in 2002........................................... --
Expiring in 2003........................................... 1
Expiring in 2004........................................... --
---
$ 1
---
---
</TABLE>
CONTINUED
- ----28
<PAGE> 658
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
Of the dividends paid from net investment income by the Municipal Money
Market Fund and the Ohio Municipal Money Market Fund for the year ended June
30, 1996, 100.0% constituted exempt interest dividends for regular federal
income tax purposes. The percentage break-down of exempt-interest income by
state of the Funds' taxable year ended June 30, 1996 is as follows:
<TABLE>
<CAPTION>
MUNICIPAL OHIO MUNICIPAL
MONEY MARKET FUND MONEY MARKET FUND
---------------------- ----------------------
<S> <C> <C>
Alabama..................................................................... 1.0% 0.1%
Alaska...................................................................... 0.7% 0.1%
Arizona..................................................................... 1.2% --
Arkansas.................................................................... 0.9% --
California.................................................................. 0.1% --
Colorado.................................................................... 4.8% --
Delaware.................................................................... 0.3% --
District of Columbia........................................................ 2.0% --
Florida..................................................................... 5.3% --
Georgia..................................................................... 2.6% --
Hawaii...................................................................... 1.0% --
Idaho....................................................................... 5.6% --
Illinois.................................................................... 10.5% --
Indiana..................................................................... 3.3% --
Iowa........................................................................ 0.1% --
Kentucky.................................................................... 1.4% --
Louisiana................................................................... 1.0% --
Massachusetts............................................................... 0.0% --
Michigan.................................................................... 6.8% 0.1%
Minnesota................................................................... 0.8% --
Missouri.................................................................... 0.4% --
Montana..................................................................... 0.6% --
Nevada...................................................................... 3.4% --
New Hampshire............................................................... 0.5% --
New Mexico.................................................................. 0.9% --
New York.................................................................... 2.3% 0.1%
North Carolina.............................................................. 1.8% --
North Dakota................................................................ 0.8% --
Ohio........................................................................ 5.3% 98.5%
Oregon...................................................................... 0.0% --
Pennsylvania................................................................ 1.1% --
Puerto Rico................................................................. 0.1% 0.6%
South Carolina.............................................................. 2.1% --
Tennessee................................................................... 2.0% --
Texas....................................................................... 20.4% --
Utah........................................................................ 1.0% 0.5%
Virginia.................................................................... 0.7% --
Washington.................................................................. 2.5% 0.1%
West Virginia............................................................... 1.9% --
Wisconsin................................................................... 2.3% --
Wyoming..................................................................... 0.5% --
----- -----
100.0% 100.0%
----- -----
----- -----
</TABLE>
CONTINUED
29----
<PAGE> 659
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
7. REORGANIZATION
The Trust entered an Agreement and Plan of Reorganization with Paragon
pursuant to which all of the assets and liabilities of each Paragon Fund
transferred to a fund of The One Group in exchange for shares of the
corresponding fund of The One Group. The Paragon Treasury Money Market Fund
transferred its assets and liabilities to the U.S. Treasury Securities Money
Market Fund. The reorganization, which qualified as a tax-free exchange for
federal income tax purposes, was completed at the close of business March
25, 1996 following approval by shareholders of the Paragon Portfolio at a
special shareholder meeting. The following is a summary of shares
outstanding, net assets and net asset value per share immediately before and
after the reorganization:
<TABLE>
<CAPTION>
BEFORE REORGANIZATION REORGANIZATION
------------------------------ ---------------
PARAGON U.S. TREASURY U.S. TREASURY
TREASURY SECURITIES SECURITIES
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
-------------- -------------- ---------------
<S> <C> <C> <C>
Shares (000)......................................................... 356,742 1,735,489 2,092,231
Net Assets (000)..................................................... $ 356,742 $ 1,735,505 $ 2,092,247
Net Asset Value:
Fiduciary.......................................................... $ 1.00 $ 1.00
Class A............................................................ $ 1.00 $ 1.00 $ 1.00
</TABLE>
CONTINUED
- ----30
<PAGE> 660
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. TREASURY SECURITIES MONEY MARKET FUND
---------------------------------------------------------
FIDUCIARY
---------------------------------------------------------
YEARS ENDED JUNE 30,
---------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- --------- --------- ---------
Investment Activities
Net investment income........................................ 0.052 0.050 0.030 0.029 0.043
----------- ----------- --------- --------- ---------
Less: Distributions
Net investment income........................................ (0.052) (0.050) (0.030) (0.029) (0.043)
----------- ----------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD................................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- --------- --------- ---------
----------- ----------- --------- --------- ---------
Total Return................................................... 5.34% 5.07% 3.01% 2.89% 4.40%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................ $ 1,844,590 $ 1,178,091 $ 969,326 $ 492,862 $ 410,146
Ratio of expenses to average net assets...................... 0.42% 0.41% 0.40% 0.45% 0.55%
Ratio of net investment income to average net assets......... 5.17% 4.96% 3.02% 2.85% 4.25%
Ratio of expenses to average net assets*..................... 0.56% 0.59% 0.58% 0.67% 0.77%
Ratio of net investment income to average net assets*........ 5.03% 4.78% 2.84% 2.63% 4.04%
</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>
SEE NOTES TO FINANCIAL STATEMENTS.
31----
<PAGE> 661
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. TREASURY SECURITIES MONEY MARKET FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------
1996 1995 1994 1993 1992(a)
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- -----------
Investment Activities
Net investment income................................................ 0.050 0.047 0.027 0.026 0.012
--------- --------- --------- --------- -----------
Less: Distributions
Net investment income................................................ (0.050) (0.047) (0.027) (0.026) (0.012)
--------- --------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD........................................................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total Return........................................................... 5.08% 4.81% 2.76% 2.63% 3.38%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................... $ 110,864 $ 98,723 $ 53,423 $ 30,759 $ 6
Ratio of expenses to average net assets.............................. 0.67% 0.66% 0.63% 0.65% 0.59%(b)
Ratio of net investment income to average net assets................. 4.92% 4.71% 2.81% 2.52% 2.51%(b)
Ratio of expenses to average net assets*............................. 0.91% 0.94% 0.87% 1.02% 0.71%(b)
Ratio of net investment income to average net assets*................ 4.68% 4.43% 2.57% 2.15% 2.39%(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) Class A shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----32
<PAGE> 662
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PRIME MONEY MARKET FUND
-----------------------------------------------------------
FIDUCIARY
-----------------------------------------------------------
YEARS ENDED JUNE 30,
-----------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- --------- ---------
Investment Activities
Net investment income...................................... 0.054 0.052 0.031 0.030 0.045
----------- ----------- ----------- --------- ---------
Less: Distributions
Net investment income...................................... (0.054) (0.052) (0.031) (0.030) (0.045)
----------- ----------- ----------- --------- ---------
NET ASSET VALUE,
END OF PERIOD.............................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- --------- ---------
----------- ----------- ----------- --------- ---------
Total Return................................................. 5.49% 5.34% 3.19% 3.09% 4.64%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).......................... $ 2,186,562 $ 1,965,416 $ 1,600,876 $ 979,275 $ 946,504
Ratio of expenses to average net assets.................... 0.44% 0.41% 0.40% 0.44% 0.59%
Ratio of net investment income to average net assets....... 5.34% 5.27% 3.18% 3.05% 4.49%
Ratio of expenses to average net assets*................... 0.55% 0.57% 0.59% 0.62% 0.76%
Ratio of net investment income to average net assets*...... 5.23% 5.12% 2.99% 2.87% 4.32%
</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>
SEE NOTES TO FINANCIAL STATEMENTS.
33----
<PAGE> 663
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PRIME MONEY MARKET FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------
1996 1995 1994 1993 1992(a)
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- -----------
Investment Activities
Net investment income............................................... 0.051 0.050 0.027 0.030 0.013
--------- --------- --------- --------- -----------
Less: Distributions
Net investment income............................................... (0.051) (0.050) (0.027) (0.030) (0.013)
--------- --------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total Return.......................................................... 5.22% 5.08% 2.93% 2.83% 3.51%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 315,374 $ 201,968 $ 74,759 $ 61,106 $ 511
Ratio of expenses to average net assets............................. 0.69% 0.67% 0.65% 0.65% 0.79%(b)
Ratio of net investment income to average net assets................ 5.09% 5.02% 2.92% 2.67% 3.40%(b)
Ratio of expenses to average net assets*............................ 0.90% 0.92% 0.90% 0.99% 0.94%(b)
Ratio of net investment income to average net assets*............... 4.88% 4.77% 2.67% 2.33% 3.25%(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) Class A shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----34
<PAGE> 664
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PRIME MONEY MARKET
FUND
--------------------
SERVICE RETIREMENT
(a)
--------------------
YEARS ENDED JUNE 30,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................................................................. $ 1.000 $ 1.000
--------- ---------
Investment Activities
Net investment income................................................................................ 0.041 0.008
--------- ---------
Less: Distributions
Net investment income................................................................................ (0.041) (0.008)
--------- ---------
NET ASSET VALUE,
END OF PERIOD........................................................................................ $ 1.000 $ 1.000
--------- ---------
--------- ---------
Total Return........................................................................................... (a) 0.79%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................................................... $ $ 40
Ratio of expenses to average net assets.............................................................. 1.42 (b) 1.18%(b)
Ratio of net investment income to average net assets................................................. 4.52 (b) 3.03%(b)
Ratio of expenses to average net assets*............................................................. 1.60 (b) 1.36%(b)
Ratio of net investment income to average net assets*................................................ 5.23 (b) 2.85%(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) The Service Shares commenced offering on January 17, 1994 when they designated as "Retirement" Shares. On
April 4, 1995 the name of the Retirement Shares was changed to "Service" Shares. As of June 1, 1995,
Service Shares transferred to Class A Shares. As of June 30, 1995, there were no shareholders in the
Service Class. Total return for the period from July 1, 1994 to June 1, 1995 for the Service Shares was
4.11%
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
35----
<PAGE> 665
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET FUND
-----------------------------------------------------
FIDUCIARY
-----------------------------------------------------
YEARS ENDED JUNE 30,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- ---------
Investment Activities
Net investment income........................................... 0.033 0.032 0.021 0.021 0.034
--------- --------- --------- --------- ---------
Less: Distributions
Net investment income........................................... (0.033) (0.032) (0.021) (0.021) (0.034)
--------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD.................................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return...................................................... 3.34% 3.28% 2.16% 2.15% 3.47%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................... $ 459,807 $ 437,743 $ 352,702 $ 175,277 $ 170,961
Ratio of expenses to average net assets......................... 0.41% 0.41% 0.40% 0.46% 0.43%
Ratio of net investment income to average net assets............ 3.29% 3.26% 2.13% 2.12% 3.41%
Ratio of expenses to average net assets*........................ 0.59% 0.59% 0.60% 0.66% 0.80%
Ratio of net investment income to average net assets*........... 3.11% 3.08% 1.93% 1.92% 3.04%
</TABLE>
- ----------
<TABLE>
<S> <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>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----36
<PAGE> 666
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------
1996 1995 1994 1993 1992 (a)
--------- --------- --------- --------- -----------
<S> <S>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- -----------
Investment Activities
Net investment income......................................... 0.030 0.030 0.021 0.019 0.009
--------- --------- --------- --------- -----------
Less: Distributions
Net investment income......................................... (0.030) (0.030) (0.021) (0.019) (0.009)
--------- --------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD................................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total Return.................................................... 3.08% 3.02% 1.96% 1.89% 2.48%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................. $ 50,720 $ 56,518 $ 41,595 $ 18,932 $ 122
Ratio of expenses to average net assets....................... 0.66% 0.66% 0.65% 0.66% 0.84%(b)
Ratio of net investment income to average net assets.......... 3.04% 3.01% 1.92% 1.82% 2.44%(b)
Ratio of expenses to average net assets*...................... 0.94% 0.94% 0.91% 1.01% 0.99%(b)
Ratio of net investment income to average net assets*......... 2.76% 2.73% 1.66% 1.47% 2.29%(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) Class A shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
37----
<PAGE> 667
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL MONEY MARKET FUND
--------------------------------------------
FIDUCIARY
--------------------------------------------
JUNE 9,
YEARS ENDED JUNE 30, 1993 TO
------------------------------- JUNE 30,
1996 1995 1994 1993 (a)
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................................ $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- -----------
Investment Activities
Net investment income.......................................................... 0.033 0.032 0.022 0.013
--------- --------- --------- -----------
Less: Distributions
Net investment income.......................................................... (0.032) (0.032) (0.022) (0.013)
In excess of net investment income............................................. (0.001) -- -- --
--------- --------- --------- -----------
Total Distributions.......................................................... (0.033) (0.032) (0.022) (0.013)
--------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD.................................................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- -----------
--------- --------- --------- -----------
Total Return..................................................................... 3.34% 3.20% 2.25% 2.14%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................................. $ 55,915 $ 51,806 $ 55,375 $ 3,500
Ratio of expenses to average net assets........................................ 0.41% 0.41% 0.34% 0.08%(b)
Ratio of net investment income to average net assets........................... 3.19% 3.13% 2.29% 2.07%(b)
Ratio of expenses to average net assets*....................................... 0.71% 0.60% 0.57% 0.51%(b)
Ratio of net investment income to average net assets*.......................... 2.89% 2.94% 2.06% 1.64%(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>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----38
<PAGE> 668
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL MONEY MARKET FUND
--------------------------------------------------
CLASS A
--------------------------------------------------
YEARS ENDED JUNE 30, JANUARY 26, 1993
------------------------------- TO JUNE 30, 1993
1996 1995 1994 (a)
--------- --------- --------- -----------------
<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 0.029 0.021 0.009
--------- --------- --------- -------
Less: Distributions
Net investment income.................................................. (0.029) (0.029) (0.021) (0.009)
In excess of net investment income..................................... (0.001) -- -- --
--------- --------- --------- -------
Total Distributions.................................................. (0.030) (0.029) (0.021) (0.009)
--------- --------- --------- -------
NET ASSET VALUE,
END OF PERIOD.......................................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- -------
--------- --------- --------- -------
Total Return............................................................. 3.08% 2.98% 2.09% 2.34%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)...................................... $ 41,132 $ 35,790 $ 37,356 $ 25,125
Ratio of expenses to average net assets................................ 0.66% 0.63% 0.44% 0.26%(b)
Ratio of net investment income to average net assets................... 2.94% 2.91% 2.05% 2.03%(b)
Ratio of expenses to average net assets*............................... 1.06% 0.95% 0.94% 0.92%(b)
Ratio of net investment income to average net assets*.................. 2.54% 2.59% 1.55% 1.37%(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>
SEE NOTES TO FINANCIAL STATEMENTS.
39----
<PAGE> 669
- --------------------------------------------------------------------------------
Report of Independent Accountants
- -------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1996
To the Shareholders and Board of Trustees of
The One Group Family of Mutual Funds:
We have audited the accompanying statements of assets and liabilities of the
U.S. Treasury Securities Money Market Fund, the Prime Money Market Fund, the
Municipal Money Market Fund and the Ohio Municipal Money Market Fund (four
series of The One Group Family of Mutual Funds), including the schedules of
portfolio investments, as of June 30, 1996, and the related statements of
operations, statements of changes in net assets and the financial highlights for
each period presented. These financial statements and financial highlights are
the responsibility of The One Group Family of Mutual Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
U.S. Treasury Securities Money Market Fund, the Prime Money Market Fund, the
Municipal Money Market Fund and the Ohio Municipal Money Market Fund as of June
30, 1996, the results of their operations, the changes in their net assets and
the financial highlights for each period presented, in conformity with generally
accepted accounting principles.
Columbus, Ohio Coopers & Lybrand L.L.P.
August 19, 1996
- ----40
<PAGE> 670
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
<C> <S> <C>
ASSET BACKED SECURITIES (1.6%):
$ 800,000 Advanta Mortgage Loan Trust, 7.60%
7/25/10................................... $ 801
262,273 Honda Auto Receivables Grantor Trust, 4.80%,
8/15/99................................... 260
340,339 The Money Store Home Equity Trust, 6.80%,
2/15/13................................... 336
---------
Total Asset Backed Securities 1,397
---------
COMMON STOCKS (48.7%):
Aerospace & Military Technology (0.5%):
3,580 Lockheed Martin Corp. ...................... 300
2,900 Thiokol Corp. .............................. 115
---------
415
---------
Airlines (0.5%):
5,100 Boeing Co. ................................. 444
---------
Automotive (1.1%):
12,900 Ford Motor Co. ............................. 418
6,580 General Motors Corp. ....................... 344
14,200 Yellow Corp. ............................... 188
---------
950
---------
Banking (2.0%):
5,300 Bancorp Hawaii, Inc. ....................... 191
6,720 BankAmerica Corp. .......................... 509
6,200 Charter One Financial, Inc. ................ 216
5,600 KeyCorp..................................... 217
3,600 J.P. Morgan & Co., Inc. .................... 304
3,290 NationsBank Corp. .......................... 272
---------
1,709
---------
Banking & Financial Services (0.2%):
7,300 Southtrust Corp. ........................... 205
---------
Beverages (0.8%):
13,500 The Coca Cola Co. .......................... 660
---------
Building Products (0.2%):
5,300 Masco Corp. ................................ 160
---------
Business Services (0.1%):
3,100 Automatic Data Processing................... 120
---------
Capital Goods (0.3%):
4,700 Tenneco, Inc. .............................. 240
---------
Chemicals (1.7%):
1,800 DuPont (EI) de Nemours & Co. ............... 142
1,900 Eastman Chemical Co. ....................... 116
6,400 Ferro Corp. ................................ 170
6,500 Nalco Chemical Co. ......................... 205
6,700 Praxair, Inc. .............................. 283
8,500 Schulman, Inc. ............................. 208
4,000 Sigma-Aldrich Corp. ........................ 214
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Chemicals, continued:
<TABLE>
<C> <S> <C>
3,200 Union Carbide Corp. ........................ $ 127
---------
1,465
---------
Commercial Services (0.2%):
3,900 Manpower, Inc. ............................. 153
---------
Computer Hardware (1.5%):
2,800 Bay Networks, Inc. (c)...................... 72
4,700 Cisco Systems, Inc. (c)..................... 266
1,900 Digital Equipment Corp. (c)................. 86
3,600 EMC Corp. (c)............................... 67
7,600 Intel Corp. ................................ 558
1,400 Seagate Technology, Inc. (b)(c)............. 63
5,700 Silicon Graphics, Inc. (c).................. 136
2,000 3Com Corp. (b)(c)........................... 92
---------
1,340
---------
Computer Software (1.6%):
2,300 Computer Associates International, Inc. .... 163
5,250 Microsoft (c)............................... 631
5,300 Novell, Inc. (c)............................ 74
5,800 Oracle Corp. (c)............................ 229
1,900 Parametric Technology Corp. (c)............. 82
3,400 Sun Microsystems, Inc. (b) (c).............. 200
---------
1,379
---------
Consumer Goods & Services (1.8%):
9,000 Ball Corp. ................................. 259
9,300 Callaway Golf Co. (b)....................... 309
4,000 Colgate Palmolive Co. ...................... 339
4,600 Nine West Group, Inc. (b)(c)................ 235
4,400 Proctor & Gamble Co. ....................... 399
---------
1,541
---------
Defense (0.3%):
4,100 Rockwell International Corp. ............... 235
---------
Diversified (0.8%):
13,800 BW/IP Holdings, Inc. ....................... 262
5,600 Crane Co. .................................. 230
3,800 ITT Hartford................................ 202
---------
694
---------
Electric Utility (1.8%):
6,700 Allegheny Power Systems, Inc. .............. 207
8,760 Central & South West Corp. ................. 254
8,500 Cinergy Corp. .............................. 272
16,700 Edison International........................ 294
6,500 General Public Utility Corp. ............... 229
6,700 Texas Utilities............................. 287
---------
1,543
---------
</TABLE>
CONTINUED
- ----26
<PAGE> 671
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Electrical & Electronic (1.7%):
2,500 AMP, Inc. .................................. $ 100
2,800 Compaq Computer Corp. (c)................... 138
6,400 E G & G, Inc. .............................. 137
11,680 General Electric Co. ....................... 1,010
3,000 Micron Technology, Inc. (b)................. 78
---------
1,463
---------
Electronic Components/Instruments (0.4%):
6,200 Motorola, Inc. ............................. 390
---------
Engineering (0.2%):
7,300 Jacobs Engineering Group, Inc. (c).......... 193
---------
Entertainment (0.9%):
9,000 Carnival Cruise Lines....................... 260
7,030 Walt Disney Co. ............................ 442
7,300 Station Casinos, Inc. ...................... 105
---------
807
---------
Environmental Services (0.2%):
6,710 Browning-Ferris Industries, Inc. ........... 195
---------
Financial Services (2.2%):
6,300 Chase Manhattan Corp. ...................... 445
2,800 Dean Witter Discover & Co. ................. 160
15,280 Federal National Mortgage Assoc. ........... 512
800 First Chicago Corp. ........................ 31
2,900 SunAmerica, Inc. ........................... 164
8,450 Travelers Group, Inc. ...................... 386
6,800 Washington Mutual, Inc. (b)................. 203
---------
1,901
---------
Food Products & Services (1.5%):
8,200 IBP, Inc. .................................. 227
4,100 Kellogg Co. ................................ 300
8,800 McDonald's Corp. ........................... 411
11,300 PepsiCo, Inc. .............................. 400
---------
1,338
---------
Forest Products (0.2%)
3,300 Mead Corp. ................................. 171
---------
Gas & Electric Utility (0.3%):
9,900 New York State Electric & Gas............... 241
---------
Health Care (2.6%):
10,000 Abbott Labs (b)............................. 435
6,860 Baxter International, Inc. ................. 324
7,700 Columbia/HCA Healthcare Corp. .............. 411
4,900 Foundation Health Corp. (b)(c).............. 176
7,900 Humana, Inc. (c)............................ 141
12,050 Merck & Co., Inc. .......................... 779
---------
2,266
---------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Home Furnishings (0.1%):
4,100 Newell Cos., Inc. .......................... $ 126
---------
Household Products (0.3%):
6,100 Tupperware Corp. (c)........................ 258
---------
Industrial Goods & Services (0.7%):
7,500 Tyco Labs................................... 306
2,300 United Technologies Corp. .................. 264
---------
570
---------
Insurance (1.5%):
5,700 Allstate Corp. ............................. 260
3,500 Loews Corp. (b)............................. 276
5,380 Providian Corp. ............................ 231
5,100 SAFECO Corp. (b)............................ 180
3,600 Torchmark Corp. ............................ 157
2,000 TransAmerica Corp. ......................... 164
---------
1,268
---------
Leisure (0.2%):
5,000 Harley-Davidson, Inc. ...................... 206
---------
Machinery & Equipment (0.5%):
2,500 Applied Materials, Inc. (c)................. 76
4,600 Harnischfeger Industries, Inc. ............. 153
9,700 Keystone International, Inc. ............... 201
---------
430
---------
Manufacturing--Capital Goods (0.5%):
10,035 Mark IV Industries, Inc. ................... 227
4,400 York International Corp. ................... 228
---------
455
---------
Manufacturing--Consumer Goods (0.4%):
2,900 Johnson Controls, Inc. ..................... 202
6,100 Premark International....................... 112
---------
314
---------
Materials (0.2%):
4,200 American Brands, Inc. ...................... 191
---------
Medical Equipment & Supplies (0.9%):
5,500 Amgen, Inc. (c)............................. 297
5,820 Medtronic, Inc. ............................ 326
3,900 Nellcor Puritan Bennett, Inc. (c)........... 189
---------
812
---------
Medical--Hospital Management & Service (0.4%):
2,300 Pacificare Health Systems, Class A (c)...... 152
8,800 Tenet Healthcare Corp. (c).................. 188
---------
340
---------
Metals (0.4%):
6,300 Alumax, Inc. (b)(c)......................... 191
</TABLE>
CONTINUED
27----
<PAGE> 672
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Metals, continued:
<C> <S> <C>
6,700 Cyprus Amax Minerals........................ $ 152
---------
343
---------
Office Equipment & Services (0.8%):
4,000 Hewlett Packard............................. 399
2,000 Pitney Bowes, Inc. ......................... 95
3,000 Xerox Corp. ................................ 161
---------
655
---------
Oil & Gas Exploration Products & Services (4.5%):
5,200 Amoco Corp. ................................ 376
2,110 Atlantic Richfield Co. ..................... 250
4,200 BJ Services Co. (c)......................... 148
6,400 Baker Hughes................................ 210
4,600 Devon Energy Corp. ......................... 113
2,810 Enron Corp. ................................ 115
8,390 Exxon Corp. ................................ 729
4,190 Halliburton Co. ............................ 233
1,900 Mapco, Inc. ................................ 107
3,900 Mobil Corp. ................................ 437
10,800 Rowan Cos., Inc. (c)........................ 159
4,300 Royal Dutch Petroleum Co. (b)............... 661
2,310 Texaco, Inc. ............................... 194
2,200 Tosco Corp. ................................ 111
4,500 Union Pacific Resources Group............... 120
---------
3,963
---------
Oil & Gas Transmission (0.2%):
3,200 Tidewater, Inc. ............................ 140
---------
Pharmaceuticals (1.0%):
7,800 Pharmacia & Upjohn, Inc. ................... 346
5,400 Schering Plough (b)......................... 339
4,400 Watson Pharmaceutical, Inc. (c)............. 167
---------
852
---------
Printing & Publishing (0.7%):
5,960 American Greetings Corp., Class A........... 163
4,600 Belo (A.H.) Corp., Class A.................. 171
6,800 Time Warner, Inc. .......................... 267
---------
601
---------
Restaurants (0.2%):
8,300 Wendy's International, Inc. ................ 155
---------
Retail Stores/Catalog (2.5%):
7,700 Carson Pirie Scott & Co. (c)................ 206
6,300 Dillard Department Stores, Class A.......... 230
8,200 Gap, Inc. .................................. 263
6,300 Kohl's Corp. (c)............................ 231
6,800 Lowe's Cos. ................................ 246
4,860 Smith's Food & Drug......................... 116
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Retail Stores/Catalog, continued:
<TABLE>
<C> <S> <C>
8,700 Supervalu, Inc. (b)......................... $ 274
24,440 Wal-Mart.................................... 620
---------
2,186
---------
Services (0.2%):
5,550 Olsten Corp. (b)............................ 163
---------
Technology (0.4%):
2,750 IBM Corp. .................................. 272
2,200 Texas Instruments........................... 110
---------
382
---------
Telecom Equipment (0.1%):
1,100 U.S. Robotics Corp. (c)..................... 94
---------
Telecommunications (3.7%):
17,390 AT&T Corp. (b).............................. 1,078
10,900 Bell South.................................. 462
12,210 GTE Corp. .................................. 546
8,100 MCI Communications.......................... 208
9,290 SBC Communications, Inc. ................... 458
10,720 Sprint Corp. ............................... 450
---------
3,202
---------
Telecommunications--Services & Equipment (0.2%):
2,600 Northern Telecom, Ltd. ..................... 141
---------
Textile Products(0.2%):
10,800 Donnkenny, Inc. (c)......................... 211
---------
Tobacco (1.6%):
9,400 Phillip Morris Cos., Inc. .................. 978
4,550 RJR Nabisco Holdings Corp. ................. 141
6,900 UST, Inc. .................................. 236
---------
1,355
---------
Transportation (0.2%):
7,400 APL Ltd. ................................... 193
---------
Trucking & Leasing (0.2%):
9,800 USFreightways Corp. ........................ 191
---------
Wholesale Distribution (0.3%):
3,100 Cardinal Health, Inc. ...................... 224
---------
Total Common Stocks 42,239
---------
CORPORATE BONDS (8.6%):
Automotive Finance (0.6%):
$ 500,000 Chrysler Financial Corp., 5.88%, 2/7/01..... 478
---------
Banking (0.8%):
750,000 First Hawaiian Inc., 6.25%, 8/15/00......... 730
---------
Banking & Financial Services (0.5%):
500,000 Midland Bank, PLC, 6.95%, 3/15/11 (b)....... 471
---------
</TABLE>
CONTINUED
- ----28
<PAGE> 673
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
CORPORATE BONDS, CONTINUED:
<C> <S> <C>
Consumer Goods & Services (2.3%):
$ 500,000 Campbell Soup Co., 5.63%, 9/15/03........... $ 462
500,000 Dayton Hudson Co., 7.25%, 9/1/04............ 486
500,000 Occidental Pete, 9.25%, 8/1/19, Putable
8/1/04, @100.............................. 580
500,000 J C Penney & Co., 5.38%, 11/15/98........... 488
---------
2,016
---------
Electric Utility(0.6%):
500,000 Virginia Electric & Power, 6.63%, 4/1/03.... 488
---------
Financial Services (2.1%):
500,000 John Deere Capital, 4.63%, 9/2/96........... 499
500,000 Ford Motor Credit, 8.38%, 1/15/00........... 525
500,000 Lehman Brothers, 9.88%, 10/15/00............ 550
250,000 Lehman Brothers Holdings, 6.38%, 6/01/98.... 249
---------
1,823
---------
Railroads (0.6%):
500,000 Union Pacific Co., 7.60%, 5/1/05............ 512
---------
Telecommunications (1.1%):
500,000 AT&T Corp., 6.00%, 8/1/00................... 479
500,000 AT&T Corp., 6.75%, 4/1/04................... 492
---------
971
---------
Total Corporate Bonds 7,489
---------
U.S. TREASURY BILLS (0.5%):
80,000 7/25/96 (d)................................. 80
45,000 8/1/96 (d).................................. 45
25,000 8/22/96 (d)................................. 25
40,000 8/29/96 (d)................................. 39
220,000 9/12/96 (d)................................. 218
---------
Total U.S. Treasury Bills 407
U.S. TREASURY NOTES (8.8%):
1,500,000 5.38%, 11/30/97 (b)......................... 1,488
2,000,000 7.25%, 2/15/98.............................. 2,036
2,250,000 7.00%, 4/15/99 (b).......................... 2,291
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
</TABLE>
U.S. TREASURY NOTES, CONTINUED:
<TABLE>
<C> <S> <C>
$ 750,000 6.38%, 1/15/00.............................. $ 750
750,000 11.25%, 2/15/15 (b)......................... 1,082
---------
Total U.S. Treasury Notes 7,647
---------
U.S. TREASURY BONDS (1.6%):
1,200,000 8.13%, 8/15/19 (b).......................... 1,347
---------
Total U.S. Treasury Bonds 1,347
---------
U.S. GOVERNMENT AGENCIES (18.8%):
Federal Home Loan Mortgage Corp.
1,000,000 8.50%, 7/1/26............................... 1,027
270,654 10.00%, 9/1/03.............................. 283
334,117 8.00%, 3/1/08............................... 340
336,011 10.50%, 10/1/20............................. 367
938,078 8.00%, 5/1/25, Pool #D60455................. 946
498,452 7.00%, 3/1/26, Pool #D69430................. 480
999,055 7.50%, 5/1/26............................... 987
Federal National Conventional Loan
462,675 8.00%, 6/1/24............................... 466
745,022 8.00%, 6/1/24............................... 750
Federal National Mortgage Assoc.
1,000,000 5.55%, 9/8/98............................... 982
1,000,000 5.53%, 2/10/99.............................. 978
1,000,000 7.50%, 5/1/11............................... 967
997,256 6.50%, 2/1/26, Pool #337115................. 933
986,744 7.50%, 5/1/26............................... 974
999,069 7.00%, 5/1/26............................... 961
Government National Mortgage Assoc.
747,971 7.00%, 8/15/25, Pool #413007................ 718
999,060 7.00%, 5/15/26.............................. 958
999,223 7.50%, 5/15/26.............................. 985
Government National Sinking Fund
1,290,938 8.00%, 8/15/24.............................. 1,302
Federal Home Loan Mortgage Corp.
1,015,745 6.50%, 2/1/26, Pool #D68124................. 952
---------
Total U.S. Government Agencies 16,356
---------
Total Investments, at value 76,882
---------
</TABLE>
CONTINUED
29----
<PAGE> 674
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
REPURCHASE AGREEMENTS (12.1%):
<C> <S> <C>
$ 6,016,860 Aubrey G. Lanston & Co., 5.45%, 7/1/96
(collateralized by $5,923,000 U.S.
Treasury Notes, 6.38%, 6/30/97, market
value--$6,141)............................ $ 6,017
4,455,000 Lehman Brothers, 5.51%, 7/1/96
(collateralized by $4,570,000 Federal Home
Loan Bank Bond, 8.00%, 8/23/10, market
value--$4,549)............................ 4,455
---------
Total Repurchase Agreements 10,472
---------
Total (Cost--$83,029)(a) $ 87,354
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $86,747.
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost basis for federal income tax purposes by the
amount of losses recognized for financial reporting in excess of federal income tax reporting of approximately $146.
Cost for federal income tax purposes differed from value by net unrealized appreciation of securities as follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 5,367
Unrealized depreciation.................................................... (1,188)
---------
Net unrealized appreciation................................................ $ 4,179
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(c) Non-income producing securities.
</TABLE>
<TABLE>
<C> <S>
(d) Serves as collateral for futures contracts.
</TABLE>
At June 30, 1996, the Portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
OPENING CURRENT
# OF POSITIONS MARKET
CONTRACTS CONTRACT TYPE (000) VALUE (000)
- ---------- ----------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
LONG CONTRACTS
18 S & P 500 September, 1996.................................. $ 6,034 $ 6,091
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----30
<PAGE> 675
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INCOME EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
<C> <S> <C>
COMMON STOCKS (85.5%):
Aerospace & Military Technology (1.5%)
68,600 Lockheed Martin Corp. .................. $ 5,762
---------
Airlines (1.3%):
60,000 Boeing Co. ............................. 5,228
---------
Automotive (1.7%):
45,000 Chrysler Corp. ......................... 2,790
116,248 Ford Motor Co. ......................... 3,764
---------
6,554
---------
Banking (3.0%):
76,754 BankAmerica Corp. ...................... 5,814
70,000 J.P. Morgan & Co., Inc. ................ 5,924
---------
11,738
---------
Banking & Financial Services (2.4%):
71,232 Citicorp (b)............................ 5,886
120,000 First Tennessee National Corp. ......... 3,675
---------
9,561
---------
Beverages & Tobacco (1.5%):
120,000 Coca Cola Co. .......................... 5,865
---------
Chemicals (5.9%):
80,000 ARCO Chemical........................... 4,160
115,000 Dow Chemical Co. ....................... 8,740
70,000 DuPont (EI) de Nemours & Co. ........... 5,539
150,000 Nalco Chemical Co. ..................... 4,725
---------
23,164
---------
Computer Hardware (0.7%):
40,000 Intel Corp. ............................ 2,938
---------
Computer Software (2.0%):
148,522 Electronic Data Systems Corp. .......... 7,983
---------
Consumer Goods & Services (3.0%):
100,000 International Flavors & Fragrance....... 4,763
150,000 Sears Roebuck........................... 7,293
---------
12,056
---------
Diversified (1.8%):
100,000 Briggs & Stratton Corp. (b)............. 4,113
80,000 Corning, Inc. .......................... 3,070
---------
7,183
---------
Electric Utility (3.0%):
160,000 Central & South West Corp. ............. 4,640
80,000 Duke Power Co. ......................... 4,100
110,000 Entergy Corp. .......................... 3,121
---------
11,861
---------
Electrical & Electronic (1.8%):
66,500 Avnet, Inc. ............................ 2,802
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Electrical & Electronic, continued:
<TABLE>
<C> <S> <C>
115,000 National Service Industries, Inc. (b)... $ 4,499
---------
7,301
---------
Electrical Equipment (1.4%):
135,000 Cooper Industries, Inc. (b)............. 5,603
---------
Electronic Components/ Instruments (0.9%):
67,200 Raytheon Co. ........................... 3,469
---------
Environmental Services (1.1%):
150,000 Browning-Ferris Industries, Inc. ....... 4,350
---------
Financial Services (2.3%):
125,000 American Express Co. ................... 5,578
105,000 Federal National Mortgage Assoc. ....... 3,518
---------
9,096
---------
Food Products & Services (5.4%):
110,000 Campbell Soup Co. ...................... 7,755
175,000 ConAgra, Inc. .......................... 7,941
200,000 IBP Inc. ............................... 5,525
---------
21,221
---------
Health Care (7.2%):
110,000 American Home Products.................. 6,614
195,000 Baxter International, Inc. ............. 9,214
95,000 Bristol Myers Squibb Co. ............... 8,550
75,000 Columbia/HCA Healthcare Corp. .......... 4,003
---------
28,381
---------
Household Products (1.1%):
100,000 Tupperware Corp. (c).................... 4,225
---------
Insurance (4.7%):
101,973 Allstate Corp. ......................... 4,653
115,000 Lincoln National Corp. ................. 5,319
90,000 Reliastar Financial Corp. .............. 3,881
60,000 TransAmerica Corp. ..................... 4,905
---------
18,758
---------
Machinery & Equipment (0.7%):
70,000 Deere & Co. ............................ 2,800
---------
Manufacturing--Consumer Goods (1.4%):
30,000 Johnson Controls, Inc. ................. 2,085
55,000 V.F. Corp. ............................. 3,279
---------
5,364
---------
Office Equipment & Services (2.3%):
170,000 Xerox Corp. ............................ 9,095
---------
Oil & Gas Exploration, Production & Services (10.2%):
70,000 Amoco Corp. ............................ 5,066
25,000 Atlantic Richfield Co. ................. 2,963
90,000 Exxon Corp. ............................ 7,819
</TABLE>
CONTINUED
31----
<PAGE> 676
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INCOME EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Oil & Gas Exploration, Production & Services, continued:
<C> <S> <C>
85,000 Halliburton Co. ........................ $ 4,718
89,000 Mobil Corp. ............................ 9,978
60,000 Phillips Petroleum Co. ................. 2,513
50,000 Royal Dutch Petroleum Co. .............. 7,687
---------
40,744
---------
Paper Products (0.8%):
90,000 International Paper Co. ................ 3,319
---------
Pharmaceuticals (2.7%):
80,000 Schering Plough (b)..................... 5,020
100,000 Warner Lambert Co. ..................... 5,500
---------
10,520
---------
Photography (1.6%):
80,000 Eastman Kodak Co. ...................... 6,220
---------
Printing & Publishing (3.3%):
70,000 Dun & Bradstreet Corp. ................. 4,374
135,000 Jostens, Inc. .......................... 2,666
130,000 McGraw Hill, Inc. ...................... 5,948
---------
12,988
---------
Telecommunications (6.3%):
130,000 AT&T Corp. ............................. 8,059
110,000 Bell South.............................. 4,661
110,000 GTE Corp. .............................. 4,923
110,000 SBC Communications, Inc. (b)............ 5,418
42,000 Sprint Corp. ........................... 1,764
---------
24,825
---------
Tobacco (2.5%):
95,000 Phillip Morris Cos., Inc. .............. 9,880
---------
Total Common Stocks 338,049
---------
PREFERRED STOCKS (5.5%):
Electric Utility (0.8%):
100,000 WPS Resources........................... 3,163
---------
Financial Services (0.7%):
25,000 Salomon, Inc. .......................... 2,600
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
</TABLE>
PREFERRED STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Industrial Goods & Services (4.0%):
80,000 Corning Delaware........................ $ 4,570
50,000 Cyprus Amax Minerals Co. ............... 2,725
100,000 Sonoco Products......................... 6,025
150,000 Westinghouse Electric................... 2,606
---------
15,926
---------
Total Preferred Stocks 21,689
---------
CONVERTIBLE BONDS (5.1%):
$ 2,500,000 Alza Corp., 5.00%, 5/1/06............... 2,433
1,000,000 Healthsouth Rehabilitation Corp., 5.0%,
4/1/01................................ 1,945
3,500,000 Masco Corp., 5.25%, 2/15/12 (b)......... 3,277
3,000,000 Medical Care International, 6.75%,
10/1/06 (b)........................... 3,071
2,250,000 Pennzoil Co., 6.5%, 1/15/03............. 3,178
3,000,000 Pep Boys-Manny, Moe, & Jack, 4.00%,
9/1/99................................ 3,079
3,000,000 Price Company, 5.5%, 2/28/12 (b)........ 3,188
---------
Total Convertible Bonds 20,171
---------
INVESTMENT COMPANIES (0.7%):
2,573,604 Aquila Churchill Cash Reserves Money
Market Fund........................... 2,574
---------
Total Investment Companies 2,574
---------
Total Investments at value 382,483
---------
REPURCHASE AGREEMENTS (3.1%):
12,335,000 Lehman Brothers, 5.51%, 7/1/96,
(Collateralized by $13,185 Federal
Home Loan Bank notes, 5.40% - 8.00%,
9/5/00 - 8/23/10, market
value--$12,583)....................... 12,335
---------
Total Repurchase Agreements 12,335
---------
Total (Cost--$278,208)(a) $ 394,818
---------
---------
</TABLE>
- ------------
Percentage indicated are based on net assets of $395,280.
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized appreciation of securities as
follows (amounts in thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation................................................... $ 118,003
Unrealized depreciation................................................... (1,393)
---------
Net unrealized appreciation............................................... $ 116,610
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(c) Non-income producing security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----32
<PAGE> 677
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
COMMON STOCKS (96.8%):
Aerospace & Military Technology (0.7%):
4,586 General Dynamics Corp. .................... $ 284
14,998 Lockheed Martin Corp. ..................... 1,260
16,658 McDonnell Douglas Corp. ................... 808
4,178 Northrop Grumman Corp. .................... 285
---------
2,637
---------
Agriculture (0.3%):
11,100 CPC International.......................... 799
6,700 Pioneer Hi Bred............................ 354
---------
1,153
---------
Airlines (0.8%):
6,800 AMR Corp. (c).............................. 619
25,749 Boeing Co. ................................ 2,244
11,000 Southwest Airlines Co. .................... 320
3,943 US Air Group (c)........................... 71
---------
3,254
---------
Automotive (2.4%):
28,059 Chrysler Corp. ............................ 1,739
7,386 Dana Corp. ................................ 229
7,086 Dial Corp. ................................ 203
4,428 Echlin, Inc. (b)........................... 168
87,662 Ford Motor Co. ............................ 2,838
56,070 General Motors Corp. ...................... 2,937
9,164 Genuine Parts Co. ......................... 419
5,841 Navistar International Corp. (c)........... 58
2,945 Paccar, Inc. .............................. 144
4,714 TRW, Inc. ................................. 424
3,224 Varity Corp. .............................. 155
2,243 Yellow Corp. (c)........................... 30
---------
9,344
---------
Auto Parts (0.1%):
5,814 Eaton Corp. ............................... 341
---------
Banking (4.3%):
34,073 Banc One Corp. ............................ 1,158
15,000 Bank of New York Co., Inc. (b)............. 769
27,724 BankAmerica Corp. ......................... 2,100
6,186 Bankers Trust New York Corp. .............. 457
7,314 Barnett Banks, Inc. ....................... 446
11,886 Boatmens Bancshares Inc. .................. 477
8,500 Comerica, Inc. ............................ 379
3,072 Cummins Engine, Inc. ...................... 124
7,400 Fifth Third Bancorp........................ 400
11,000 First Bank System, Inc. ................... 638
21,320 First Union Corp. (b)...................... 1,298
14,343 J.P. Morgan & Co., Inc. ................... 1,214
17,100 KeyCorp.................................... 663
22,277 Nations Bank............................... 1,840
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Banking, continued:
<TABLE>
<C> <S> <C>
27,456 Norwest Corp. ............................. $ 958
25,642 PNC Bank Corp. ............................ 763
11,721 U.S. Bancorp............................... 423
12,700 Wachovia Corp. (b)......................... 555
7,350 Wells Fargo & Co. ......................... 1,756
---------
16,418
---------
Banking & Financial Services (1.6%):
7,971 Bank of Boston Corp. ...................... 395
36,242 Citicorp................................... 2,994
19,285 Fleet Financial Group, Inc. ............... 839
10,092 Mellon Bank Corp. ......................... 575
16,500 National City Corp. ....................... 580
4,000 Republic N Y Corp. ........................ 249
17,256 SunTrust Banks, Inc. ...................... 638
---------
6,270
---------
Beverages & Tobacco (2.6%):
5,192 Brown-Forman Corp., Class B................ 208
187,080 The Coca Cola Co. ......................... 9,144
27,984 Seagram Co., Ltd. (b)...................... 941
---------
10,293
---------
Brewery (0.4%):
19,414 Anheuser Busch Co., Inc. .................. 1,456
2,943 Coors Adolph Co., Class B.................. 52
---------
1,508
---------
Broadcasting/Cable (0.6%):
18,050 Comcast Corp., Special..................... 334
48,914 Tele-Communications, Class A (c)........... 886
27,107 Viacom, Inc., Class B (b)(c)............... 1,054
---------
2,274
---------
Building Products (0.2%):
2,757 Armstrong World Industries, Inc. .......... 159
11,900 Masco Corp. ............................... 360
6,686 Sherwin-Williams Co. ...................... 311
---------
830
---------
Business Services (0.3%):
22,228 Automatic Data Processing.................. 859
4,757 Ceridan Corp. (c).......................... 240
---------
1,099
---------
Capital Goods (0.4%):
6,386 Fluor Corp. ............................... 417
13,428 Tenneco, Inc. ............................. 687
31,271 Westinghouse Electric Corp. ............... 586
---------
1,690
---------
</TABLE>
CONTINUED
33----
<PAGE> 678
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Chemicals (2.9%):
8,456 Air Products & Chemical, Inc. ............. $ 488
18,771 Dow Chemical Co. .......................... 1,427
41,970 DuPont (EI) de Nemours & Co. .............. 3,321
6,249 Eastman Chemical Co. ...................... 380
10,957 Engelhard Corp. ........................... 252
2,657 FMC Corp. (c).............................. 173
3,742 B. F. Goodrich Co. ........................ 140
4,800 Great Lakes Chemical Corp. ................ 299
8,084 Hercules, Inc. ............................ 447
5,813 Mallinckrodt Group, Inc. .................. 226
43,840 Monsanto Co. .............................. 1,425
11,184 Morton International, Inc. ................ 417
5,200 Nalco Chemical Co. ........................ 164
14,614 PPG Industries, Inc. ...................... 712
11,228 Praxair, Inc. ............................. 474
5,196 Rohm & Haas Co. ........................... 326
3,800 Sigma-Aldrich Corp. ....................... 203
10,428 Union Carbide Corp. ....................... 415
---------
11,289
---------
Commercial Services (0.1%):
4,642 Ecolab, Inc. .............................. 153
3,643 Ogden Corp. ............................... 66
---------
219
---------
Computer Hardware (2.4%):
13,800 Bay Networks, Inc. (c)..................... 355
5,400 Cabletron Systems (c)...................... 370
42,600 Cisco Systems, Inc. (b)(c)................. 2,412
11,177 Digital Equipment Corp. (c)................ 503
16,700 EMC Corp. (c).............................. 311
61,384 Intel Corp. ............................... 4,508
12,200 Silicon Graphics, Inc. (c)................. 293
12,100 3Com Corp. (b)(c).......................... 554
---------
9,306
---------
Computer Software (2.9%):
18,285 Computer Associates International, Inc. ... 1,303
16,400 First Data Corp. (b)....................... 1,306
44,300 Microsoft Corp. (c)........................ 5,321
27,600 Novell, Inc. (c)........................... 383
49,138 Oracle Corp. (c)........................... 1,938
1,443 Shared Medical Systems Corp. .............. 93
13,900 Sun Microsystems, Inc. (b)(c).............. 818
---------
11,162
---------
Construction (0.1%):
2,414 Centex Corp. .............................. 75
5 Emcor Group, Inc., Series Z (c)............ 0
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Construction, continued:
<TABLE>
<C> <S> <C>
3,643 Owens-Corning Fiberglass Corp. ............ $ 157
---------
232
---------
Consumer Goods & Services (3.4%):
10,500 Avon Products, Inc. ....................... 474
2,243 Ball Corp. ................................ 64
3,928 Clorox Co. ................................ 348
11,014 Colgate Palmolive Co. ..................... 933
33,000 Gillette Co. .............................. 2,058
8,329 International Flavors & Fragrance.......... 397
5,900 Interpublic Group Cos., Inc. .............. 277
5,886 Liz Claiborne.............................. 204
20,548 Mattel, Inc. .............................. 588
7,757 Maytag Corp. .............................. 162
10,900 Nike, Inc. ................................ 1,120
51,340 Proctor & Gamble Co. ...................... 4,653
29,028 Sears Roebuck.............................. 1,411
5,700 Whirlpool Corp. (b)........................ 283
---------
12,972
---------
Containers & Packaging (0.2%):
4,314 Avery Dennison Corp. ...................... 237
9,171 Crown Cork & Seal Co., Inc. ............... 413
4,371 Temple Inland, Inc. ....................... 204
---------
854
---------
Cosmetics/Personal Care (0.0%):
2,071 Alberto Culver Co., Class B................ 96
---------
Defense (0.2%):
16,371 Rockwell International Corp. .............. 937
---------
Diversified (1.3%):
9,586 Alco Standard Corp. ....................... 434
20,828 Allied Signal, Inc. ....................... 1,190
2,172 Briggs & Stratton Corp. (b)................ 89
17,142 Corning, Inc. ............................. 658
2,379 Crane Co. ................................. 97
8,428 Dover Corp. ............................... 389
8,543 ITT Corp New (c)........................... 566
8,543 ITT Hartford............................... 455
8,543 ITT Industry, Inc. ........................ 215
4,371 Safety Kleen............................... 76
6,686 Textron, Inc. ............................. 534
7,757 Whittman Corp. ............................ 187
---------
4,890
---------
Electric Utility (2.7%):
13,943 American Electric Power, Inc. ............. 594
11,129 Baltimore Gas & Electric Co. .............. 316
12,072 Carolina Power & Light Co. ................ 459
15,742 Central & South West Corp. ................ 457
</TABLE>
CONTINUED
- ----34
<PAGE> 679
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Electric Utility, continued:
<C> <S> <C>
11,478 Cinergy Corp. ............................. $ 367
17,585 Consolidated Edison Co. of New York,
Inc. .................................... 514
12,785 Dominion Resources Inc. of Virginia........ 511
15,314 Duke Power Co. ............................ 785
33,500 Edison International....................... 591
17,143 Entergy Corp. ............................. 487
13,985 Florida Power & Light, Inc. ............... 643
8,400 General Public Utility Corp. .............. 296
5,114 Northern States Power Co. ................. 253
11,585 Ohio Edison Co. ........................... 253
16,500 PECO Energy Corp. ......................... 429
11,900 PP&L Resources, Inc. ...................... 281
21,257 Pacificorp................................. 473
49,814 Southern Co. .............................. 1,227
16,614 Texas Utilities............................ 710
15,900 Unicom Corp. .............................. 443
7,500 Union Electric............................. 302
---------
10,391
---------
Electrical & Electronic (4.2%):
8,543 Amdahl Corp. (c)........................... 92
15,818 AMP, Inc. ................................. 635
19,858 Compaq Computer Corp. (c).................. 978
4,242 E G & G, Inc. ............................. 91
16,685 Emerson Electric Co. ...................... 1,508
124,568 General Electric Co. ...................... 10,775
3,742 General Signal Corp. (b)................... 142
19,456 Houston Industries......................... 479
15,400 Micron Technology, Inc. (b)................ 398
3,828 National Service Industries, Inc. ......... 150
3,257 Perkin-Elmer Corp. ........................ 157
3,257 Raychem Corp. ............................. 234
8,557 Tandem Computers (c)....................... 106
2,528 Tektronix, Inc. ........................... 113
2,542 Thomas & Betts Corp. (b)................... 95
4,128 W. W. Grainger, Inc. ...................... 320
---------
16,273
---------
Electrical Equipment (0.1%):
8,243 Cooper Industries, Inc. (b)................ 342
---------
Electronic Components/Instruments (1.1%):
8,278 Advanced Micro Devices, Inc. (c)........... 113
8,943 Apple Computer, Inc. ...................... 188
43,956 Motorola, Inc. (b)......................... 2,764
9,371 National Semiconductor Corp. (c)........... 145
3,595 Polaroid Corp. ............................ 164
18,556 Raytheon Co. .............................. 958
---------
4,332
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Energy (0.0%):
7,286 Oryx Energy Co. (c)........................ $ 118
---------
Engineering (0.0%):
2,757 Foster Wheeler Corp. ...................... 124
---------
Entertainment (0.9%):
3,785 Bally Entertainment Corp. (c).............. 104
50,246 Walt Disney Co. ........................... 3,159
7,492 Harrah's Entertainment, Inc. (c)........... 212
2,857 King World Productions, Inc. .............. 104
---------
3,579
---------
Environmental Services (0.5%):
15,885 Browning-Ferris Industries, Inc. .......... 460
22,100 Laidlaw Inc., Class B-Non Voting (b)....... 224
36,328 WMX Technologies, Inc. .................... 1,190
---------
1,874
---------
Financial Services (4.2%):
36,406 American Express Co. ...................... 1,625
4,114 Beneficial Corp. .......................... 231
7,656 H & R Block................................ 250
32,565 Chase Manhattan Corp. ..................... 2,300
16,556 CoreStates Financial Corp. ................ 637
12,796 Dean Witter Discover & Co. ................ 733
13,300 Federal Home Loan Mortgage Corp. .......... 1,137
81,856 Federal National Mortgage Assoc. .......... 2,742
23,796 First Chicago Corp. (b).................... 931
4,714 Golden West Financial Corp. ............... 264
10,128 Great Western Financial Corp. ............. 242
10,400 Green Tree Financial Corp. ................ 325
8,743 H. F. Ahmanson & Co. ...................... 236
7,186 Household International, Inc. ............. 546
16,675 MBNA Corp. ................................ 475
13,114 Merrill Lynch.............................. 854
11,700 Morgan Stanley Group, Inc. ................ 575
7,943 Salomon, Inc. ............................. 349
36,019 Travelers Group, Inc. ..................... 1,643
---------
16,095
---------
Food Products & Services (4.4%):
40,252 Archer-Daniels Midland Co. ................ 770
19,056 Campbell Soup Co. ......................... 1,343
18,035 ConAgra, Inc. ............................. 818
2,857 Fleming Co., Inc. ......................... 41
12,171 General Mills, Inc. ....................... 663
27,413 H.J. Heinz Co. ............................ 833
5,771 Hershey Foods Corp. ....................... 424
16,356 Kellogg Co. ............................... 1,198
52,212 McDonald's Corp. .......................... 2,441
117,894 PepsiCo, Inc. ............................. 4,171
10,000 Quaker Oats Co. ........................... 341
</TABLE>
CONTINUED
35----
<PAGE> 680
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Food Products & Services, continued:
<C> <S> <C>
7,943 Ralston Purina Group....................... $ 509
35,970 Sara Lee, Corp. ........................... 1,165
13,642 Sysco Corp. ............................... 467
11,971 Unilever N. V. ............................ 1,737
8,629 Wrigley (Wm) Jr. Co. ...................... 436
---------
17,357
---------
Food & Household Products (0.0%):
5,400 Supervalu, Inc. ........................... 170
---------
Funeral Services (0.1%):
8,464 Service Corp. International (b)............ 487
---------
Forest Products (0.3%):
3,785 Boise Cascade Corp. (c).................... 139
7,071 Champion International Co. ................ 295
6,386 James River Corp. of Virginia.............. 168
7,986 Louisiana Pacific Corp. ................... 177
4,414 Mead Corp. ................................ 229
2,257 Potlatch Corp. ............................ 88
7,535 Westvaco Corp. ............................ 225
---------
1,321
---------
Gas & Electric Utility (0.4%):
11,100 Detroit Edison Co. ........................ 343
4,314 NICOR, Inc. ............................... 123
32,313 Pacific Gas & Electric Co. ................ 751
18,500 Public Service Entertainment............... 506
---------
1,723
---------
Gas Utility (0.1%):
4,128 Columbia Gas System, Inc. ................. 215
6,483 Pacific Enterprises........................ 192
2,657 Peoples Energy Corp. ...................... 89
2,457 Peoples Energy Rights (c).................. 0
---------
496
---------
Health Care (6.3%):
59,480 Abbott Laboratories........................ 2,587
47,342 American Home Products..................... 2,846
20,599 Baxter International, Inc. ................ 973
38,005 Bristol Myers Squibb Co. .................. 3,421
33,037 Columbia/HCA Healthcare Corp. ............. 1,763
3,228 Community Psychiatric (c).................. 31
12,100 Humana, Inc. (c)........................... 216
99,868 Johnson & Johnson.......................... 4,944
4,592 Manor Care................................. 181
92,068 Merck & Co., Inc. ......................... 5,950
11,500 U.S. Healthcare, Inc. ..................... 633
13,386 United Healthcare Corp. ................... 676
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Health Care, continued:
<TABLE>
<C> <S> <C>
4,300 U.S. Surgical.............................. $ 133
---------
24,354
---------
Homebuilders (0.0%):
2,966 Kaufman & Broad Home Corp. ................ 43
2,086 Pulte Corp. ............................... 56
---------
99
---------
Home Furnishings (0.2%):
12,128 Newell Cos, Inc. .......................... 371
12,072 Rubbermaid, Inc. .......................... 329
---------
700
---------
Household Products (0.1%):
4,614 Tupperware Corp. (c)....................... 195
---------
Hotels & Lodging (0.2%):
3,728 Hilton Hotels.............................. 419
9,350 Marriott Corp. International (b)........... 503
---------
922
---------
Industrial Goods & Services (0.4%):
11,556 Tyco Laboratories.......................... 471
9,128 United Technologies Corp. ................. 1,050
---------
1,521
---------
Insurance (3.4%):
8,443 Aetna Life & Casualty Co. (b).............. 604
3,228 Alexander & Alexander Services, Inc. ...... 64
33,520 Allstate Corp. ............................ 1,529
15,556 American General Corp. (b)................. 566
35,448 American International Group............... 3,496
7,900 Aon Corp. ................................. 401
5,700 CIGNA Corp. ............................... 672
13,172 Chubb Corp. ............................... 657
6,286 General Re Corp. .......................... 957
5,575 Jefferson Pilot Corp. ..................... 288
7,786 Lincoln National Corp. .................... 360
8,700 Loews Corp. ............................... 686
5,700 Marsh & McLennan Co., Inc. ................ 550
7,486 Providian Corp. ........................... 321
9,128 SAFECO Corp. .............................. 323
6,520 St Paul Cos. .............................. 349
5,542 Torchmark Corp. ........................... 242
5,400 TransAmerica Corp. ........................ 441
5,800 UNUM Corp. ................................ 361
8,228 USF & G Corp. ............................. 135
2,602 US Life Corp. ............................. 86
---------
13,088
---------
</TABLE>
CONTINUED
- ----36
<PAGE> 681
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Investment Company (0.0%):
971 Eastern Enterprises........................ $ 32
---------
Leasing (0.0%):
2,814 Consolidated Freightways, Inc. ............ 59
---------
Leisure (0.1%):
7,286 Brunswick Corp. ........................... 146
3,542 Fleetwood Enterprises, Inc. ............... 110
1,057 Outboard Marine Corp. ..................... 19
---------
275
---------
Machinery & Equipment (1.1%):
13,100 Applied Materials, Inc. (c)................ 400
6,414 Black & Decker Corp. ...................... 248
5,200 Case Corp. (b)............................. 250
14,514 Caterpillar, Inc. (b)...................... 983
2,857 Cincinnati Milacron, Inc. ................. 69
19,300 Deere & Co. ............................... 772
2,584 Gidding & Lewis, Inc. ..................... 42
3,528 Harnischfeger Industries, Inc. ............ 117
8,856 Illinois Tool Works........................ 599
7,642 Ingersoll Rand Co. ........................ 334
4,243 McDermott International, Inc. ............. 89
8,608 Pall Corp. ................................ 207
3,143 Snap-On, Inc. ............................. 149
6,572 Stanley Works.............................. 195
---------
4,454
---------
Manufacturing--Consumer Goods (0.4%):
2,371 Data General (c)........................... 31
5,800 Fruit of the Loom (c)...................... 148
3,043 Johnson Controls, Inc. .................... 212
3,600 Millipore Corp. ........................... 151
386 Nacco Industries, Inc. .................... 21
5,529 Parker-Hannifin Corp. ..................... 234
6,071 Reebok International Ltd. ................. 204
4,307 Teledyne, Inc. ............................ 156
2,257 Trinova Corp. ............................. 75
4,714 V.F. Corp. (c)............................. 281
---------
1,513
---------
Materials (0.2%):
13,445 American Brands, Inc. ..................... 610
---------
Medical Equipment & Supplies (1.1%):
20,100 Amgen, Inc. (c)............................ 1,085
4,128 C.R. Bard, Inc. ........................... 140
4,414 Bausch & Lomb, Inc. ....................... 188
4,986 Becton Dickinson & Co. .................... 400
8,656 Biomet, Inc. (c)........................... 124
12,900 Boston Scientific Corp. ................... 581
17,356 Medtronic, Inc. ........................... 972
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Medical Equipment & Supplies, continued:
<TABLE>
<C> <S> <C>
6,192 Saint Jude Medical Center.................. $ 208
7,086 W.R. Grace & Co. .......................... 502
---------
4,200
---------
Medical--Hospital Management & Services (0.1%):
6,443 Beverly Enterprises, Inc. (c).............. 77
15,100 Tenet Healthcare Corp. (c)................. 323
---------
400
---------
Metals & Mining (0.5%):
26,500 Barrick Gold Corp. ........................ 719
8,786 Echo Bay Mines Ltd. ....................... 95
10,457 Homestake Mining Co. ...................... 179
7,466 Newmont Mining Corp. ...................... 369
17,816 Placer Dome, Inc. ......................... 425
9,499 Santa Fe Pacific Gold Corp. (c)............ 134
---------
1,921
---------
Metals (0.8%):
16,642 Alcan Aluminum Ltd. ....................... 508
13,172 Aluminum Co. of America.................... 756
3,143 ASARCO, Inc. .............................. 87
7,707 Cyprus Amax Minerals (b)................... 174
15,500 Freeport-McMoran Copper & Gold, Class B.... 494
8,657 Inco Ltd. (b).............................. 279
5,314 Phelps Dodge Corp. ........................ 331
4,514 Reynolds Metals Co. ....................... 235
2,471 Timken Co. ................................ 96
6,838 Worthington Industries, Inc. .............. 143
---------
3,103
---------
Natural Resources (0.1%):
7,086 Amerada Hess Corp. ........................ 380
---------
Office Equipment & Services (1.7%):
7,471 Canadian Moore Corp. Ltd. ................. 141
2,957 Harris Corp. .............................. 181
38,114 Hewlett Packard............................ 3,797
9,400 Honeywell, Inc. ........................... 512
11,372 Pitney Bowes, Inc. ........................ 543
23,613 Xerox Corp. ............................... 1,263
---------
6,437
---------
Oil & Gas Exploration, Production & Services (8.9%):
37,099 Amoco Corp. ............................... 2,685
4,514 Ashland, Inc. (b).......................... 179
12,071 Atlantic Richfield Co. .................... 1,430
10,748 Bakers Hughes, Inc. ....................... 353
9,500 Burlington Northern........................ 409
48,728 Chevron Corp. (b).......................... 2,875
6,986 Consolidated Natural Gas Co. .............. 365
</TABLE>
CONTINUED
37----
<PAGE> 682
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Oil & Gas Exploration, Production & Services, continued:
<C> <S> <C>
13,214 Dresser Industries, Inc. .................. $ 390
19,012 Enron Corp. ............................... 777
5,114 Enserch Corp. ............................. 111
92,869 Exxon Corp. ............................... 8,068
8,557 Halliburton Co. ........................... 475
1,671 Helmerich & Payne, Inc. ................... 61
4,128 Kerr McGee Corp. .......................... 251
2,571 Louisiana Land & Exploration Co. .......... 148
29,442 Mobil Corp. ............................... 3,301
23,885 Occidental Petroleums Corp. ............... 591
2,114 Oneok, Inc. ............................... 53
3,543 Pennzoil Co. .............................. 164
19,642 Phillips Petroleum Co. .................... 823
6,414 Rowan Cos., Inc. (c)....................... 95
40,056 Royal Dutch Petroleum Co. ................. 6,159
6,744 Santa Fe Energy Resources, Inc. ........... 80
18,271 Schlumberger Ltd. ......................... 1,539
6,586 Sonat, Inc. ............................... 296
5,449 Sun Inc. .................................. 166
19,642 Texaco, Inc. .............................. 1,647
21,714 USX-Marathon Group......................... 437
4,400 Western Atlas (c).......................... 256
7,886 Williams Co., Inc. (b)..................... 391
---------
34,575
---------
Oil & Gas Transmission (0.1%):
9,243 Noram Energy Corp. (b)..................... 101
10,986 Panenergy Corp. (b)........................ 361
---------
462
---------
Oil & Gas Utility (0.1%):
7,557 Coastal Corp. ............................. 316
10,814 Niagara Mohawk Power Corp. ................ 83
---------
399
---------
Paper Products (1.0%):
6,886 Georgia Pacific Corp. ..................... 489
22,286 International Paper........................ 822
20,824 Kimberly Clark Corp. ...................... 1,609
5,257 Union Camp Corp. .......................... 256
15,328 Weyerhaeuser Co. .......................... 651
4,300 Williamette Industries, Inc. .............. 256
---------
4,083
---------
Packaging (0.1%):
4,114 Bemis Co. ................................. 144
6,800 Stone Container Corp. ..................... 93
---------
237
---------
Pharmaceuticals (2.8%):
4,700 Allergan, Inc. ............................ 185
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Pharmaceuticals, continued:
<TABLE>
<C> <S> <C>
6,314 Alza Corp. (c)............................. $ 173
41,370 Eli Lilly & Co. ........................... 2,689
47,584 Pfizer, Inc. .............................. 3,396
37,777 Pharmacia & Upjohn, Inc. .................. 1,676
27,270 Schering-Plough (b)........................ 1,711
20,228 Warner Lambert Co. ........................ 1,113
---------
10,943
---------
Photography (0.5%):
25,699 Eastman Kodak Co. ......................... 1,998
---------
Printing & Publishing (1.4%):
5,714 American Greetings Corp., Class A.......... 156
6,386 Deluxe Corp. .............................. 227
7,414 Dow Jones & Co., Inc. ..................... 310
12,791 Dun & Bradstreet Corp. .................... 799
10,671 Gannett, Inc. ............................. 755
2,428 John H. Harland Co. ....................... 60
3,243 Jostens, Inc. ............................. 64
3,828 Knight-Ridder, Inc. ....................... 278
7,756 McGraw Hill, Inc. (b)...................... 355
2,214 Meredith Corp. ............................ 92
7,600 New York Times Co., Class A (b)............ 248
11,972 R.R. Donnelley Co. (b)..................... 418
29,356 Time Warner, Inc. ......................... 1,152
8,128 Times Mirror Co., Class A (b).............. 353
4,914 Tribune Co. ............................... 357
---------
5,624
---------
Railroads (1.0%):
11,400 Burlington Northern Santa Fe Corp. ........ 922
15,414 CSX Corp. ................................. 744
6,086 Conrail, Inc. ............................. 404
9,685 Norfolk Southern Corp. .................... 821
15,414 Union Pacific Corp. ....................... 1,077
---------
3,968
---------
Restaurants (0.1%):
12,171 Darden Restaurants, Inc. .................. 131
1,593 Luby's Cafeteria, Inc. .................... 38
4,243 Ryan Family Steak Houses, Inc. (c)......... 39
3,136 Shoney's, Inc. (c)......................... 34
9,343 Wendy's International, Inc. ............... 174
---------
416
---------
Retail Stores/Catalog (4.3%):
19,228 Albertsons, Inc............................ 796
10,928 American Stores Co. ....................... 451
871 Brown Group, Inc. ......................... 15
14,250 CUC International, Inc. (c)................ 506
7,500 Charming Shoppes (c)....................... 53
</TABLE>
CONTINUED
- ----38
<PAGE> 683
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Retail Stores/Catalog, continued:
<C> <S> <C>
5,400 Dayton Hudson Corp. ....................... $ 557
8,329 Dillard Department Stores.................. 304
15,200 Federated Department Stores, Inc. (b)(c)... 519
22,000 Gap, Inc. ................................. 707
4,414 Giant Food, Inc., Class A.................. 158
5,835 Harcourt General, Inc. .................... 292
35,753 Home Depot, Inc. (b)....................... 1,931
33,942 K Mart, Inc. (b)(c)........................ 420
20,282 Limited, Inc. ............................. 436
11,872 Lowe's Cos. (b)............................ 429
18,960 May Department Stores...................... 830
7,657 Melville Corp. ............................ 310
2,743 Mercantile Stores Co., Inc. ............... 161
16,886 J.C. Penney, Inc. ......................... 887
4,514 Pep Boys-Manny, Moe & Jack................. 153
4,042 Stride Rite Corp. ......................... 33
21,057 Toys R Us (c).............................. 600
18,571 Unocal Corp. (b)........................... 626
171,852 Wal-Mart Stores, Inc. ..................... 4,360
18,856 Walgreen Co. (b)........................... 631
---------
16,165
---------
Retail--General Merchandise (0.7%):
7,286 Circuit City Stores, Inc. ................. 263
2,943 Great Atlantic & Pacific Tea, Inc. ........ 97
6,692 Hasbro, Inc. .............................. 239
9,086 Kroger Co. (c)............................. 359
1,171 Longs Drug Stores, Inc. ................... 52
6,386 Nordstrom, Inc. ........................... 284
14,513 Price/Costco Co. (b)(c).................... 314
6,586 Rite Aid Corp. ............................ 196
5,600 TJX Cos., Inc. (b)......................... 189
4,786 Tandy Corp. ............................... 227
11,372 Winn Dixie Stores, Inc. ................... 402
9,814 Woolworth Corp. (b)(c)..................... 221
---------
2,843
---------
Steel (0.2%):
7,571 Armco, Inc. (c)............................ 38
8,000 Bethlehem Steel Corp. (c).................. 95
3,457 Inland Steel Industries, Inc. ............. 68
6,656 Nucor Corp. ............................... 337
6,111 USX- U. S. Steel Group, Inc. .............. 173
---------
711
---------
Technology (1.9%):
8,800 General Instrument Corp. (c)............... 254
3,528 Intergraph (c)............................. 43
40,656 I.B.M. .................................... 4,024
9,400 LSI Logic Corp. (c)........................ 244
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Technology, continued:
<C> <S> <C>
31,500 Minnesota Mining & Manufacturing Co.
(3M)..................................... $ 2,174
14,088 Texas Instruments.......................... 703
12,614 Unisys, Corp. (c).......................... 90
---------
7,532
---------
Technology--Software (0.1%):
3,742 Autodesk, Inc. ............................ 112
4,100 Computer Science Corp. (c)................. 306
---------
418
---------
Telecommunications (7.1%):
120,227 AT&T Corp. ................................ 7,454
36,942 Airtouch Communications Inc. (c)........... 1,044
14,400 Alltel Corp. .............................. 443
41,756 Ameritech Corp. ........................... 2,479
32,856 Bell Atlantic Corp. (b).................... 2,095
74,156 BellSouth Corp. ........................... 3,142
72,398 GTE Corp. ................................. 3,240
51,784 MCI Communications......................... 1,327
32,056 Nynex Corp. ............................... 1,523
45,770 SBC Communications Inc. ................... 2,254
5,770 Scientific-Atlanta, Inc. .................. 89
32,400 Sprint Corp. .............................. 1,361
34,956 U.S. West Media Group (b)(c)............... 638
14,000 WorldCom, Inc. (c)......................... 775
---------
27,864
---------
Telecommunications--Services & Equipment (1.1%):
4,121 Andrew Corp. (c)........................... 222
8,328 DSC Communications Corp. (c)............... 251
19,157 Northern Telecom, Ltd. .................... 1,042
31,942 Pacific Telesis Group...................... 1,077
6,700 Tellabs, Inc. (c).......................... 448
34,956 U.S. West, Inc. ........................... 1,114
---------
4,154
---------
Textile Products (0.0%):
3,057 Russell Corp. ............................. 85
957 Springs Industries, Inc., Class A.......... 48
---------
133
---------
Tire & Rubber (0.2%)
6,486 Cooper Tire & Rubber Co. .................. 145
11,428 Goodyear Tire & Rubber Co. ................ 551
---------
696
---------
Tobacco (1.8%):
62,513 Phillip Morris Cos., Inc. ................. 6,501
</TABLE>
CONTINUED
39----
<PAGE> 684
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Tobacco, continued:
<C> <S> <C>
15,114 UST, Inc. ................................. $ 518
---------
7,019
---------
Transportation & Shipping (0.0%):
3,043 Caliber Systems, Inc. ..................... 103
---------
Transportation (0.2%):
4,528 Delta Air Lines, Inc. (b).................. 375
4,328 Federal Express Corp. (c).................. 355
6,000 Ryder Systems, Inc. ....................... 169
---------
899
---------
Total Common Stocks 379,255
---------
U.S. TREASURY BILLS (0.2%):
$ 85,000 7/11/96 (d)................................ 85
205,000 7/18/96 (d)................................ 204
345,000 7/25/96 (d)................................ 344
135,000 8/8/96 (d)................................. 134
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
U.S. TREASURY BILLS, CONTINUED:
<C> <S> <C>
$ 120,000 9/12/96 (d)................................ $ 119
---------
Total U.S. Treasury Bills 886
---------
Total Investments, at value 380,141
---------
REPURCHASE AGREEMENTS (2.9%):
9,359,560 Aubrey G. Lanston & Co., 5.45%, 7/1/96,
(Collateralized by $9,406,000 U.S.
Treasury Notes, 6.88%, 10/31/96, market
value--$9,553)........................... 9,360
1,923,000 Lehman Brothers, 5.51%, 7/1/96,
(Collateralized by $1,965,000 FNMA Note,
5.47%, 6/20/97, market value-- $1,965)... 1,923
---------
Total Repurchase Agreements 11,283
---------
Total (Cost--$305,312)(a) $ 391,424
---------
---------
</TABLE>
- ------------
Percentage indicated are based on net assets of $391,782.
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost for federal income tax purposes by the amount of
losses recognized for financial reporting purposes in excess of federal income tax reporting of approximately $413.
Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as follows
(amounts in thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 92,038
Unrealized depreciation.................................................... (6,339)
---------
Net unrealized appreciation................................................ $ 85,699
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996
</TABLE>
<TABLE>
<C> <S>
(c) Represents non-income producing security.
</TABLE>
<TABLE>
<C> <S>
(d) Serves as collateral for futures contracts.
</TABLE>
At June 30, 1996, the Portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
OPEN CURRENT
# OF POSITIONS MARKET
CONTRACTS CONTRACT TYPE (000) VALUE (000)
- ---------- ----------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
LONG CONTRACTS
28 S & P 500 September, 1996.................................. $ 9,382 $ 9,475
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----40
<PAGE> 685
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
VALUE GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
COMMON STOCKS (94.5%):
Aerospace & Military Technology (0.4%):
10,200 Lockheed Martin Corp. ..................... $ 857
---------
Airlines (0.5%):
37,700 Atlantic Southeast Airlines, Inc. ......... 1,065
---------
Automotive (0.2%):
27,800 Yellow Corp. (c)........................... 368
---------
Auto Parts (0.9%):
35,000 Eaton Corp. ............................... 2,052
---------
Banking (3.5%):
29,300 Bancorp Hawaii, Inc. ...................... 1,055
36,700 BankAmerica Corp. ......................... 2,780
28,400 Charter One Financial, Inc. ............... 990
34,500 Keycorp.................................... 1,337
24,100 J.P. Morgan & Co., Inc. ................... 2,040
---------
8,202
---------
Banking & Financial Services (0.9%):
32,300 First Tennessee National Corp. ............ 989
39,400 Southtrust Corp. .......................... 1,108
---------
2,097
---------
Chemicals (3.2%):
63,000 Dow Chemical Co. .......................... 4,788
9,800 DuPont (EI) de Nemours & Co. .............. 776
20,400 Eastman Chemical Co. ...................... 1,242
21,900 Ferro Corp. ............................... 580
---------
7,386
---------
Commercial Services (1.0%):
43,900 Equifax, Inc. (b).......................... 1,152
28,400 Manpower, Inc. ............................ 1,115
---------
2,267
---------
Computer Hardware (4.4%):
47,500 Cisco Systems, Inc. (c).................... 2,690
15,900 Gateway 2000, Inc. (c)..................... 540
93,900 Intel Corp. ............................... 6,896
---------
10,126
---------
Computer Software (3.6%):
80,700 Electronic Data Systems Corp. ............. 4,337
16,500 First Data Corp. .......................... 1,314
45,500 Sun Microsystems, Inc. (b)(c).............. 2,679
---------
8,330
---------
Consumer Goods & Services (2.6%):
37,000 Ball Corp. ................................ 1,064
37,700 Callaway Golf Co. (b)...................... 1,254
22,600 Nine West Group, Inc. (b)(c)............... 1,155
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Consumer Goods & Services, continued:
<TABLE>
<C> <S> <C>
29,000 Proctor & Gamble Co. ...................... $ 2,628
---------
6,101
---------
Defense (0.2%):
8,700 Rockwell International Corp. .............. 498
---------
Diversified (0.4%):
17,000 ITT Hartford............................... 905
---------
Electric Utility (4.7%):
95,000 Central & South West Corp. ................ 2,755
81,000 Consolidated Edison Co. of New York,
Inc. .................................... 2,369
76,200 Edison International....................... 1,343
25,800 General Public Utility Corp. .............. 910
67,000 Texas Utilities Co. ....................... 2,864
23,600 Unicom Corp. .............................. 658
---------
10,899
---------
Electrical & Electronic (3.8%):
26,700 Compaq Computer Corp. (c).................. 1,315
74,700 EG&G, Inc. ................................ 1,597
69,000 General Electric Co. ...................... 5,968
---------
8,880
---------
Electronic Components/Instruments (0.9%):
39,300 Analog Devices, Inc. ...................... 1,002
72,500 National Semiconductor Corp. (c)........... 1,124
---------
2,126
---------
Engineering (0.4%):
37,700 Jacobs Engineering Group, Inc. (c)......... 994
---------
Entertainment (2.1%):
84,000 Carnival Cruise Lines...................... 2,426
28,000 Walt Disney Co. ........................... 1,761
18,200 King World Productions, Inc. (c)........... 662
---------
4,849
---------
Financial Services (5.4%):
25,400 Dean Witter, Discover & Co. ............... 1,454
182,300 Federal National Mortgage Assoc. .......... 6,107
45,500 First Chicago Corp. (b).................... 1,780
20,200 SunAmerica, Inc. (b)....................... 1,141
33,300 Travelers Group, Inc. ..................... 1,520
15,600 Washington Mutual, Inc. (b)................ 466
---------
12,468
---------
Food Products & Services (3.0%):
40,700 IBP, Inc. ................................. 1,124
55,100 McDonald's Corp. .......................... 2,576
</TABLE>
CONTINUED
41----
<PAGE> 686
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
VALUE GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Food Products & Services, continued:
<C> <S> <C>
93,600 PepsiCo, Inc. ............................. $ 3,311
---------
7,011
---------
Food & Household Products (1.1%):
79,000 Supervalu, Inc. ........................... 2,489
---------
Gas & Electric Utility (0.4%):
41,900 New York State Electric & Gas.............. 1,021
---------
Health Care (2.5%):
58,200 Columbia/HCA Healthcare Corp. ............. 3,106
29,500 Foundation Health Corp. (b)(c)............. 1,058
38,700 Humana, Inc. (c)........................... 692
19,800 United Healthcare Corp. ................... 1,000
---------
5,856
---------
Home Furnishings (0.9%):
68,200 Newell Companies, Inc. .................... 2,089
---------
Household Products (0.6%):
35,000 Tupperware Corp. (c)....................... 1,479
---------
Insurance (3.9%):
38,500 AFLAC, Inc. ............................... 1,150
45,000 Allstate Corp. ............................ 2,053
14,900 Loews Corp. ............................... 1,175
30,000 Mid Ocean Ltd. ............................ 1,230
31,000 Providian Corp. ........................... 1,329
19,500 Safeco Corp. .............................. 690
17,300 TransAmerica Corp. ........................ 1,415
---------
9,042
---------
Leisure (0.4%):
23,900 Harley-Davidson, Inc. ..................... 983
---------
Machinery & Equipment (1.3%):
59,000 Harnischfeger Industries, Inc. ............ 1,962
47,400 Keystone International, Inc. .............. 983
---------
2,945
---------
Manufacturing--Capital Goods (1.0%):
49,000 Mark IV Industries, Inc. .................. 1,108
21,000 York International Corp. .................. 1,087
---------
2,195
---------
Manufacturing--Consumer Goods (2.8%):
65,300 Johnson Controls, Inc. .................... 4,538
48,700 Premark International, Inc. ............... 901
15,900 V.F. Corp. ................................ 948
---------
6,387
---------
Materials (1.0%):
52,300 American Brands Inc. ...................... 2,373
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Medical Equipment & Supplies (1.6%):
70,000 Amgen, Inc. (c)............................ $ 3,780
---------
Medical--Hospital Management & Service (1.5%):
22,500 Pacificare Health Systems, Class A (c)..... 1,485
91,400 Tenet Healthcare Corp. (c)................. 1,954
---------
3,439
---------
Metals (1.2%):
31,200 Alumax, Inc. (b)(c)........................ 948
78,300 Cyprus Amax Minerals (b)................... 1,771
---------
2,719
---------
Oil & Gas Exploration Product & Services (7.5%):
25,000 Amoco Corp. (c)............................ 1,809
6,200 Atlantic Richfield Co. (b)................. 735
43,200 Devon Energy Corp. ........................ 1,058
34,400 Enron Corp. ............................... 1,406
18,400 Mapco, Inc. ............................... 1,037
15,800 Mobil Corp. ............................... 1,772
82,400 Rowan Companies, Inc. (c).................. 1,215
63,500 Schlumberger Ltd. ......................... 5,350
10,500 Texaco, Inc. .............................. 881
21,800 Tosco Corp. ............................... 1,096
18,300 Western Atlas (c).......................... 1,066
---------
17,425
---------
Oil & Gas Transmission (0.5%):
27,300 Tidewater, Inc. ........................... 1,198
---------
Oil & Gas Utility (0.6%):
51,700 MCN Corp. ................................. 1,260
---------
Pharmaceuticals (3.0%):
19,300 Pfizer, Inc. .............................. 1,378
90,000 Schering Plough (b)........................ 5,647
---------
7,025
---------
Printing & Publishing (1.7%):
65,300 American Greetings Corp., Class A.......... 1,788
56,600 Time Warner, Inc. ......................... 2,221
---------
4,009
---------
Restaurants (0.7%):
91,000 Wendy's International, Inc. ............... 1,695
---------
Retail Stores/Catalog (5.2%):
89,000 American Stores Co. ....................... 3,671
35,300 Carson Pirie Scott & Co. (c)............... 944
51,000 Dillard Department Stores, Inc., Class A... 1,862
23,200 Home Depot, Inc. (b)....................... 1,253
23,000 Lowe's Cos., Inc. (b)...................... 831
140,000 Wal-Mart Stores, Inc. ..................... 3,553
---------
12,114
---------
</TABLE>
CONTINUED
- ----42
<PAGE> 687
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
VALUE GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Retail--General Merchandise (0.6%):
41,000 General Nutrition Companies (c)............ $ 717
20,500 Hasbro, Inc. (b)........................... 733
---------
1,450
---------
Technology (0.9%):
40,700 Texas Instruments, Inc. ................... 2,030
---------
Telecommunications (7.2%):
120,000 AT&T Corp. ................................ 7,440
67,000 GTE Corp. ................................. 2,998
11,900 NYNEX Corp. ............................... 565
60,300 SBC Communications, Inc. .................. 2,970
18,500 Sprint Corp. .............................. 777
34,200 Worldcom, Inc. (b)(c)...................... 1,894
---------
16,644
---------
Textile Products (0.4%):
49,800 Donnkenny, Inc. (c)........................ 971
---------
Tobacco (3.5%):
60,000 Phillip Morris Companies, Inc. ............ 6,240
42,300 U.S.T., Inc. .............................. 1,449
17,100 Universal Corp. ........................... 453
---------
8,142
---------
Wholesale Distribution (0.4%):
19,600 McKesson Corp. ............................ 933
---------
Total Common Stocks 219,174
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
U.S. TREASURY BILLS (0.1%):
$ 345,000 7/18/96 (d)................................ $ 344
---------
Total Investments, at value 219,518
---------
REPURCHASE AGREEMENTS (5.3%):
7,019,670 Aubrey G. Lanston & Co., 5.45%, 7/1/96
collateralized by $6,977,000 U.S.
Treasury Note, 6.38%, 7/15/99, market
value--$7,184)........................... 7,020
5,325,000 Lehman Brothers, 5.51%, 7/1/96
collateralized by $5,435,000 Federal
National Mortgage Assoc., 5.47%, 6/20/97,
market value--$5,434).................... 5,325
---------
Total Repurchase Agreements 12,345
---------
Total (Cost--$206,479)(a) $ 231,863
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $231,869.
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized appreciation of securities as
follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 29,367
Unrealized depreciation.................................................... (3,983)
---------
Net unrealized appreciation................................................ $ 25,384
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(c) Non-income producing securities.
</TABLE>
<TABLE>
<C> <S>
(d) Serves as collateral for futures contracts.
</TABLE>
At June 30, 1996, the Portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
OPEN CURRENT
# OF POSITIONS MARKET
CONTRACTS CONTRACT TYPE (000) VALUE (000)
- ---------- ----------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
LONG CONTRACTS
21 S & P 500 September, 1996.................................. $ 7,054 $ 7,106
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
43----
<PAGE> 688
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LARGE COMPANY VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
<C> <S> <C>
COMMON STOCKS (90.0%):
Aerospace (1.8%):
250,000 Litton Industries, Inc. (b)(c)............ $ 10,875
---------
Airlines (0.6%):
40,000 Boeing Co. (e)............................ 3,485
---------
Automotive (2.2%):
250,000 General Motors Corp. ..................... 13,094
---------
Banking & Financial Services (1.7%):
125,000 Citicorp (e).............................. 10,328
---------
Broadcasting/Cable (1.1%):
175,000 Viacom, Inc., Class A (c)................. 6,672
---------
Capital Goods (4.1%):
300,000 Tenneco Inc. ............................. 15,338
500,000 Westinghouse Electric Corp. (b)........... 9,375
---------
24,713
---------
Chemicals (4.0%):
100,000 Dow Chemical Co. ......................... 7,600
60,000 DuPont (EI) de Nemours & Co. (e).......... 4,747
125,000 Lubrizol Corp. ........................... 3,797
258,400 Nalco Chemical Co. ....................... 8,140
---------
24,284
---------
Computer Software (0.4%):
175,000 Novell Inc. (c)........................... 2,428
---------
Consumer Goods & Services (1.2%):
250,000 Ball Corp. ............................... 7,188
---------
Defense (2.3%):
250,000 Rockwell International Corp. ............. 14,313
---------
Diversified (1.8%):
800,000 Hanson Trust PLC, ADR (b)................. 11,400
---------
Electric Utility (8.6%):
200,000 American Electric Power, Inc. ............ 8,525
150,000 Carolina Power & Light Co. (b)............ 5,700
200,000 Central & South West Corp. ............... 5,800
200,000 Consolidated Edison Co. of New York,
Inc. ................................... 5,850
160,000 Dominion Resources Inc. of Virginia....... 6,400
250,000 Edison International...................... 4,406
400,000 Southern Co. ............................. 9,850
175,000 Unicom Corp. ............................. 4,878
---------
51,409
---------
Electrical & Electronic (0.8%):
125,000 General Signal Corp. (b).................. 4,734
---------
Electronic Components/Instruments (2.4%):
400,000 Advanced Micro Devices, Inc. (c).......... 5,450
200,000 Apple Computer Inc. (b)................... 4,200
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
</TABLE>
COMMON STOCKS, CONTINUED:
Electronic Components/Instruments, continued:
<TABLE>
<C> <S> <C>
300,000 National Semiconductor Corp. (c).......... $ 4,650
---------
14,300
---------
Environmental Services (1.5%):
300,000 Browning-Ferris Industries, Inc. ......... 8,700
---------
Financial Services (10.2%):
200,000 Chase Manhattan Corp. (e)................. 14,125
308,100 Federal National Mortgage Assoc. (e)...... 10,321
150,000 Great Western Financial Corp. ............ 3,581
350,000 H. F. Ahmanson & Co. ..................... 9,450
600,000 Horsham Corp. (b)......................... 8,325
92,500 Salomon, Inc. ............................ 4,070
241,900 Travelers Group, Inc. .................... 11,037
---------
60,909
---------
Food Products & Services (1.5%):
250,000 IBP, Inc. ................................ 6,906
95,000 McCormick & Co. .......................... 2,102
---------
9,008
---------
Food & Household Products (2.5%):
250,000 Sunbeam Corp. ............................ 3,688
350,000 Supervalu, Inc. .......................... 11,025
---------
14,713
---------
Gas & Electric Utility (1.0%):
250,000 Pacific Gas & Electric Co. ............... 5,813
---------
Health Care (1.7%):
100,000 Baxter International, Inc. ............... 4,725
300,000 Healthsources (b)(c)...................... 5,250
---------
9,975
---------
Insurance (5.1%):
200,000 Allstate Corp. (c)(e)..................... 9,125
60,000 CIGNA Corp. (e)........................... 7,072
30,000 General Re Corp. ......................... 4,568
150,000 ITT Hartford.............................. 7,988
250,000 Reliance Group Holdings, Inc. ............ 1,875
---------
30,628
---------
Leisure (0.7%):
200,000 Brunswick Corp. .......................... 4,000
---------
Manufacturing--Consumer Goods (0.8%):
250,000 Singer Co., N.V. ......................... 5,062
---------
Metals (2.9%):
200,000 Alumax, Inc. (b).......................... 6,075
500,000 Cyprus AMAX Minerals (b)(e)............... 11,313
---------
17,388
---------
Oil & Gas Exploration, Production & Services (10.7%):
160,000 Atlantic Richfield Co. ................... 18,960
</TABLE>
CONTINUED
- ----44
<PAGE> 689
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LARGE COMPANY VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
Oil & Gas Exploration, Production & Services, continued:
<C> <S> <C>
100,000 Burlington................................ $ 4,300
89,000 Enserch Exploration, Inc. (b)(c).......... 957
200,000 Exxon Corp. (e)........................... 17,375
176,000 Pennzoil Co. ............................. 8,145
250,000 Sun Inc. ................................. 7,593
350,000 USX-Marathon Group........................ 7,043
---------
64,373
---------
Paper Products (1.8%):
300,000 International Paper....................... 11,062
---------
Pharmaceuticals (0.9%):
125,000 Pharmacia & Upjohn, Inc. ................. 5,547
---------
Printing & Publishing (1.4%):
300,000 American Greetings Corp., Class A......... 8,213
---------
Railroads (1.4%):
125,000 Conrail, Inc. ............................ 8,296
---------
Retail Stores/Catalog (1.1%):
150,000 May Department Stores..................... 6,562
---------
Retail--General Merchandise (1.2%):
250,000 Rite Aid Corp. ........................... 7,437
---------
Steel (0.9%):
200,600 USX-U S Steel Group Inc. ................. 5,692
---------
Technology (2.6%):
150,000 I.B.M. (e)................................ 14,850
100,000 Unisys (c)................................ 713
---------
15,563
---------
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
</TABLE>
COMMON STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Tire & Rubber (1.2%):
325,000 Cooper Tire............................... $ 7,231
---------
Tobacco (0.5%):
100,000 RJR Nabisco Holdings Corp. (e)............ 3,100
---------
Telecommunications (5.3%):
160,000 AT&T Corp. (e)............................ 9,920
200,000 Bell South................................ 8,475
100,000 GTE Corp. ................................ 4,475
180,000 SBC Communications Inc. .................. 8,865
---------
31,735
---------
Total Common Stocks 540,230
---------
PREFERRED STOCKS (1.9%):
Food Products & Services (1.9%):
1,750,000 RJR, Series C............................. 11,375
---------
Total Preferred Stocks 11,375
---------
U.S. Treasury Bills (0.2%):
$ 990,000 7/11/96 (d)............................... 988
---------
Total U.S. Treasury Bills 988
---------
Investment Companies (0.4%):
2,573,605 Aquila Churchill Cash Reserves Money
Market Funds............................ 2,574
---------
Total Investment Companies 2,574
---------
Total Investments, at value 555,167
---------
</TABLE>
CONTINUED
45----
<PAGE> 690
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LARGE COMPANY VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
REPURCHASE AGREEMENTS (7.5%):
<C> <S> <C>
$ 8,356,750 Aubrey G. Lanston & Co., 5.45%, 7/1/96,
(Collateralized by $6,930,000 U.S.
Treasury Notes, 10.75%, 5/15/03, market
value--$8,583).......................... $ 8,357
36,425,000 Lehman Brothers, 5.51%, 7/1/96,
(Collateralized by $38,270,000 Federal
Home Loan Bank notes, 0.00% - 7.13%,
6/20/97 - 2/1/11, market value--
$37,158)................................ 36,425
---------
Total Repurchase Agreements 44,782
---------
Total (Cost--$604,175)(a) $ 599,949
---------
---------
</TABLE>
- ------------
Percentage indicated are based on net assets of $598,042.
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost basis for federal income tax purposes by the
amount of losses recognized for financial reporting purposes in excess of federal income tax reporting of approximately
$1,367. Cost for federal income tax purposes differs from value by net unrealized depreciation of securities as
follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation................................................... $ 18,918
Unrealized depreciation................................................... (24,511)
---------
Net unrealized depreciation............................................... $ (5,593)
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996
</TABLE>
<TABLE>
<C> <S>
(c) Non-income producing securities.
</TABLE>
<TABLE>
<C> <S>
(d) Serves as collateral for futures contracts.
</TABLE>
<TABLE>
<S> <C> <S>
(e) A portion of the security was held in escrow by the custodian in connection with options written by the Fund.
ADR American Depository Receipt
</TABLE>
At June 30, 1996, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
OPEN CURRENT
# OF POSITIONS MARKET
CONTRACTS CONTRACT TYPE (000) VALUE (000)
- ---------- ----------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
LONG CONTRACTS
25 S & P 500 September, 1996.................................. $ 8,375 $ 8,460
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----46
<PAGE> 691
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
DISCIPLINED VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
<C> <S> <C>
COMMON STOCKS (97.2%):
Aerospace (0.3%):
92,000 Orbital Sciences Corp. (c)................ $ 1,495
---------
Aerospace & Military Technology (0.1%):
18,000 Rohr Industries, Inc. (c)................. 376
---------
Auto Parts (0.6%):
46,300 Arvin Industries, Inc. ................... 1,030
51,300 Kaydon Corp. ............................. 2,206
---------
3,236
---------
Banking (5.3%):
121,000 Bancorp Hawaii, Inc. ..................... 4,356
100,000 Charter One Financial, Inc. .............. 3,488
100,000 First American Bank Corp. ................ 4,475
150,000 First Security Corp. ..................... 3,600
100,000 First Union Corp. (b)..................... 6,087
180,000 Onbancorp, Inc. .......................... 5,894
58,200 Susquehanna Bancshares, Inc. ............. 1,557
---------
29,457
---------
Banking & Financial Services (3.1%):
96,900 Central Fidelity Banks, Inc. ............. 2,204
200,000 Illinova Corp. ........................... 5,750
97,000 Mercantile Bankshares Corp. .............. 2,474
250,000 Southtrust Corp. ......................... 7,031
---------
17,459
---------
Beverages (1.7%):
160,000 Coca Cola Enterprises..................... 5,540
235,000 Coors Adolph Co., Class B................. 4,201
---------
9,741
---------
Capital Goods (0.2%):
73,000 Watts Industries.......................... 1,360
---------
Chemicals (4.0%):
53,600 Arco Chemical............................. 2,787
145,000 Calgon Carbon Corp. ...................... 1,957
41,900 Eastman Chemical Co. ..................... 2,551
42,300 Ferro Corp. .............................. 1,121
90,000 Hanna (M.A.) Co. ......................... 1,879
141,000 IMC Global, Inc. ......................... 5,304
112,200 Lubrizol Corp. ........................... 3,408
38,500 Olin Corp. ............................... 3,436
---------
22,443
---------
Coal (1.0%):
220,000 Valero Energy Corp. (b)................... 5,500
---------
Commercial Services (1.0%):
35,000 Flight Safety International............... 1,899
96,500 Kelly Services, Class A................... 2,822
---------
4,721
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
</TABLE>
COMMON STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Computer Hardware (1.3%):
157,500 Seagate Technology, Inc. (b)(c)........... $ 7,088
---------
Computer Software (0.2%):
74,000 Exabyte Corp. (c)......................... 967
---------
Consumer Goods & Services (1.5%):
110,000 First Brands Corp. ....................... 2,970
156,000 Liz Claiborne............................. 5,402
---------
8,372
---------
Diversified (0.1%):
10 Berkshire Hathaway (c).................... 307
---------
Electric Utility (17.9%):
249,700 Allegheny Power Systems Inc. ............. 7,707
220,000 Central & South West Corp. ............... 6,380
200,000 Central Louisiana Electric (b)............ 5,325
99,700 Consolidated Edison Co. of New York,
Inc. ................................... 2,916
112,200 Delmarva Power & Light.................... 2,356
270,000 Edison International...................... 4,759
200,000 Florida Progress Corp. ................... 6,950
200,000 General Public Utility Corp. ............. 7,050
70,000 Hawaiian Electric Industries, Inc. ....... 2,485
80,000 Idaho Power Co. .......................... 2,490
110,000 Kansas City Power & Light................. 3,025
242,000 L G & E Energy Corp. ..................... 5,536
198,000 Midamerican Energy Co. ................... 3,416
50,000 Montana Power Co. ........................ 1,113
155,000 New England Electric System (b)........... 5,638
101,000 Oklahoma Gas & Electric Co. .............. 4,002
220,000 Pinnacle West Capital..................... 6,683
155,000 Public Service New Mexico................. 3,178
101,000 Southwestern Public Service Co. .......... 3,295
170,000 Union Electric............................ 6,843
55,900 WPL Holdings, Inc. ....................... 1,838
250,000 Wisconsin Energy Corp. ................... 7,217
---------
100,202
---------
Electrical & Electronic (1.5%):
110,000 Avnet, Inc. .............................. 4,634
125,000 Molex, Inc. (b)........................... 3,969
---------
8,603
---------
Electrical Equipment (0.7%):
56,400 Hubbell, Inc. Class B..................... 3,737
---------
Electronic Components/Instruments (0.5%):
33,000 Marshall Industries (c)................... 924
36,000 Raytheon Co. ............................. 1,859
---------
2,783
---------
</TABLE>
CONTINUED
47----
<PAGE> 692
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
DISCIPLINED VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Energy (0.3%):
100,000 Albemarle Corp. .......................... $ 1,825
---------
Engineering (0.3%):
75,200 Granite................................... 1,730
---------
Entertainment (1.6%):
155,000 Grand Casinos (c)......................... 3,991
130,000 King World Productions, Inc. (c).......... 4,729
---------
8,720
---------
Environmental Services (0.2%):
55,000 Wellman, Inc. ............................ 1,286
---------
Financial Services (5.8%):
310,380 Bear Stearns Companies, Inc. ............. 7,332
180,000 Comdisco, Inc. ........................... 4,793
122,000 A.G. Edwards, Inc. ....................... 3,309
140,000 First Chicago Corp. (b)................... 5,478
132,000 Regions Financial Corp. (b)............... 6,170
100,000 Washington Mutual, Inc. (b)............... 2,988
71,000 Wilmington Trust Corp. ................... 2,303
---------
32,373
---------
Food Products & Services (1.3%):
100,000 Michael Foods............................. 1,162
30,000 Smuckers.................................. 589
200,000 Tyson Foods Inc., Class A................. 5,475
---------
7,226
---------
Forest Products (1.3%):
85,000 Consolidated Papers, Inc. ................ 4,420
133,000 Mercer International, Inc. (c)............ 1,796
35,000 Rayonier, Inc. ........................... 1,330
---------
7,546
---------
Gaming (1.5%):
210,000 Circus Circus Entertainment (c)........... 8,610
---------
Gas & Electric Utility (1.5%):
270,000 New York State Electric & Gas............. 6,581
140,000 Northeast Utilities....................... 1,873
---------
8,454
---------
Gas Utility (0.9%):
160,000 AGL Resources............................. 3,020
80,000 Indiana Energy, Inc. ..................... 2,290
---------
5,310
---------
Health Care (1.8%):
215,000 Bergen Brunswig Corp. .................... 5,966
65,000 Datascope (c)............................. 1,154
40,000 Pacificare Health (c)..................... 2,710
---------
9,830
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
</TABLE>
COMMON STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Home Furnishings (0.1%):
21,000 National Presto Industries, Inc. ......... $ 798
---------
Insurance (6.0%):
140,000 Mid Ocean Ltd. ........................... 5,740
190,000 Partnerre Ltd. (b)........................ 5,676
190,000 American Financial Group.................. 5,724
66,500 Arbatax International, Inc. (c)........... 324
49,000 Loews Corporation......................... 3,865
110,000 Progressive Corp-Ohio..................... 5,088
100,000 Transatlantic Holding (b)................. 7,011
---------
33,428
---------
Leisure (0.5%):
88,500 Fleetwood Enterprises, Inc. .............. 2,744
---------
Machinery & Equipment (0.5%):
25,000 Case Corp. (b)............................ 1,200
80,000 Keystone International, Inc. ............. 1,660
---------
2,860
---------
Machine--Diversified (0.8%):
56,000 Albany International Corp., Class A....... 1,267
47,200 Goulds Pumps, Inc. ....................... 1,210
40,000 Tecumseh Products Co. .................... 2,150
---------
4,627
---------
Manufacturing--Capital Goods (0.7%):
42,500 Butler Manufacturing Co. ................. 1,434
105,600 Mark IV Industries, Inc. ................. 2,389
---------
3,823
---------
Manufacturing--Consumer Goods (1.2%):
40,400 Johnson Controls, Inc. ................... 2,808
126,000 Pentair, Inc. ............................ 3,780
---------
6,588
---------
Materials (1.1%):
135,000 American Brands, Inc. .................... 6,126
---------
Miscellaneous Materials & Commodities (0.3%):
55,000 Calenergy, Inc. (c)....................... 1,403
---------
Medical Equipment & Supplies (0.4%):
19,000 Becton Dickinson & Co. (b)................ 1,525
50,000 Biomet (c)................................ 719
---------
2,244
---------
Medical--Biotechnology (0.4%):
66,000 Advanced Technology Labs, Inc. (c)........ 2,409
---------
Metals & Mining (1.1%):
50,000 Black Hills Corp. ........................ 1,244
60,000 Cleveland Cliffs, Inc. ................... 2,347
</TABLE>
CONTINUED
- ----48
<PAGE> 693
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
DISCIPLINED VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
Metals & Mining, continued:
<C> <S> <C>
40,000 Harsco Corp. ............................. $ 2,690
---------
6,281
---------
Metals (1.5%):
121,000 Alumax, Inc. (b)(c)....................... 3,675
61,000 Brush Wellman, Inc. ...................... 1,159
35,000 Phelps Dodge Corp. ....................... 2,183
60,000 Quanex Corp. ............................. 1,418
---------
8,435
---------
Office Equipment & Services (1.2%):
72,000 Harris Corp. ............................. 4,392
39,000 Wallace Computers......................... 2,330
---------
6,722
---------
Office/Business Equipment (0.2%):
100,000 Kentek Information Systems (c)............ 1,063
---------
Oil & Gas Exploration Production & Services (6.6%):
62,100 El Paso Natural Gas....................... 2,391
60,000 Mapco Inc. ............................... 3,383
120,000 Murphy Oil Corp. ......................... 5,445
146,000 Nabors Industries, Inc. (c)............... 2,373
60,000 Parker and Parsley Petro Co. ............. 1,665
120,000 Pride Petroleum Services, Inc. (b)(c)..... 1,710
74,500 Quaker State Corp. ....................... 1,118
207,000 Repsol, S.A., ADR (b)..................... 7,192
110,000 Tosco Corp. .............................. 5,528
280,000 YPF Sociedad Anonima, ADR................. 6,298
---------
37,103
---------
Paper Products (0.3%):
60,000 Chesapeake Corp. ......................... 1,575
---------
Photography (1.0%):
180,000 Brooklyn Union Gas........................ 4,905
55,000 CPI Corp. ................................ 908
---------
5,813
---------
Printing & Publishing (2.5%):
90,000 Banta Corp. .............................. 2,273
70,000 New York Times Co, Class A (b)............ 2,284
29,000 Washington Post Co. ...................... 9,395
---------
13,952
---------
Railroads (1.2%):
63,100 Conrail, Inc. ............................ 4,188
70,000 Trinity Industries........................ 2,380
---------
6,568
---------
Restaurants (1.2%):
300,000 Buffets Inc. (b)(c)....................... 3,675
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
Restaurants, continued:
<C> <S> <C>
50,000 International Dairy Queen (c)............. $ 1,100
74,000 Sbarro, Inc. ............................. 1,859
---------
6,634
---------
Retail Stores/Catalog (2.3%):
60,400 Fred Meyer, Inc. (c)...................... 1,774
80,000 Pier One Imports (b)...................... 1,190
97,600 Ross Stores, Inc. ........................ 3,392
124,652 Smith's Food & Drug....................... 2,976
159,000 Waban, Inc. (c)........................... 3,796
---------
13,128
---------
Retail--General Merchandise (1.2%):
70,000 Duty Free International, Inc. ............ 1,068
155,000 Family Dollar Stores...................... 2,693
90,000 Hannaford Brothers Co. ................... 2,936
---------
6,697
---------
Retail--Special Line (0.3%):
143,000 Ruddick Corp. ............................ 1,877
---------
Steel (0.3%):
45,000 Carpenter Technology...................... 1,440
---------
Technology (0.5%):
66,000 Stratus Computer (c)...................... 1,914
24,000 Teleflex, Inc. ........................... 1,146
---------
3,060
---------
Textile Products (0.5%):
50,000 Springs Industries, Inc. Class A.......... 2,525
---------
Transportation & Shipping (0.1%):
50,000 Airnet Systems, Inc. (b)(c)............... 800
---------
Transportation (1.1%):
160,000 APL Ltd. (b).............................. 4,180
64,000 Alaska Airgroup, Inc. (b)(c).............. 1,752
---------
5,932
---------
Telecommunications (2.9%):
340,000 Nextel Communications, Inc. Class A....... 6,481
106,000 Southern New England Telecommunications,
Inc. ................................... 4,452
60,000 Telephone And Data Systems, Inc. ......... 2,700
50,000 Worldcom, Inc. (c)........................ 2,769
---------
16,402
---------
Water Utility (0.4%):
52,000 American Water Works, Inc. ............... 2,093
---------
Wholesale Distribution (1.4%):
66,000 Arrow Electronics, Inc. (c)............... 2,846
</TABLE>
CONTINUED
49----
<PAGE> 694
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
DISCIPLINED VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
Wholesale Distribution, continued:
<C> <S> <C>
107,000 McKesson Corp. ........................... $ 5,096
---------
7,942
---------
Total Common Stocks 543,849
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
<C> <S> <C>
REPURCHASE AGREEMENTS (2.9%):
$ 16,332,000 Lehman Brothers, 5.51%, 7/1/96,
(Collateralized by $35,160,000 Federal
Home Loan Bank notes, 0.00% - 5.71%,
4/1/97 - 1/25/01, market value--
$16,661)................................ $ 16,332
---------
Total Repurchase Agreements 16,332
---------
Total (Cost--$506,190) (a) $ 560,181
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $559,617.
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost basis for federal income tax purposes by the
amount of losses recognized for financial reporting purposes in excess of federal income tax reporting of approximately
$242. Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 63,429
Unrealized depreciation.................................................... (9,680)
---------
Net unrealized appreciation................................................ $ 53,749
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996
</TABLE>
<TABLE>
<C> <S>
(c) Non-income producing securities.
</TABLE>
<TABLE>
<S> <C>
ADR American Depository Receipt
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----50
<PAGE> 695
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------ ---------
<C> <S> <C>
COMMON STOCKS (98.8%):
Agriculture (0.8%):
140,000 Pioneer Hi Bred........................... $ 7,402
---------
Automotive (0.9%):
200,000 Echlin, Inc. (b).......................... 7,575
---------
Banking (2.3%):
140,000 J.P. Morgan & Co., Inc. .................. 11,847
225,000 US Bancorp................................ 8,128
---------
19,975
---------
Beverages (1.9%):
340,000 The Coca Cola Co. ........................ 16,617
---------
Brewery (1.4%):
160,000 Anheuser Busch Co., Inc. ................. 12,000
---------
Building Products (0.9%):
250,000 Masco Corp. .............................. 7,562
---------
Business Services (1.5%):
350,000 Automatic Data Processing................. 13,519
---------
Capital Goods (1.0%):
140,000 Fluor..................................... 9,153
---------
Chemicals (3.0%):
200,000 Air Products & Chemical................... 11,550
100,000 Dow Chemical Co. ......................... 7,600
225,000 Nalco Chemical Co. (b).................... 7,087
---------
26,237
---------
Computer Hardware (1.5%):
120,000 Intel Corp. .............................. 8,813
175,000 Silicon Graphics, Inc. (c)................ 4,200
---------
13,013
---------
Computer Software (2.2%):
210,000 Electronic Data Systems Corp. ............ 11,288
200,000 Oracle Corp. (c).......................... 7,887
---------
19,175
---------
Consumer Goods & Services (6.1%):
180,000 Colgate Palmolive Co. (b)................. 15,255
225,000 International Flavors & Fragrance......... 10,716
200,000 Interpublic Group Cos., Inc. ............. 9,375
200,000 Proctor & Gamble Co. ..................... 18,125
---------
53,471
---------
Electrical & Electronic (6.4%):
320,000 AMP, Inc. ................................ 12,840
175,000 Emerson Electric Co. ..................... 15,815
250,000 General Electric Co. ..................... 21,625
185,000 Molex, Inc. (b)........................... 5,874
---------
56,154
---------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Electronic Components/Instruments (1.7%):
235,000 Motorola, Inc. ........................... $ 14,776
---------
Entertainment (1.3%):
175,000 Walt Disney Co. .......................... 11,003
---------
Environmental Services (1.2%):
325,000 WMX Technologies, Inc. ................... 10,644
---------
Food Products & Services (9.9%):
165,000 CPC International......................... 11,880
300,000 H.J. Heinz Co. ........................... 9,112
170,000 Hershey Foods Corp. ...................... 12,474
150,000 Kellogg Co. .............................. 10,988
280,000 Mc Donald's Corp. ........................ 13,090
470,000 Pepsico, Inc. ............................ 16,626
90,000 Unilever N V Ny Shares (b)................ 13,061
---------
87,231
---------
Forest Products (0.8%):
140,000 Consolidated Papers, Inc. ................ 7,280
---------
Health Care (8.3%):
380,000 Abbott Labs............................... 16,530
250,000 Columbia/HCA Healthcare Corp. ............ 13,344
275,000 Humana, Inc. (c).......................... 4,915
360,000 Johnson & Johnson......................... 17,820
310,000 Merck & Company, Inc. .................... 20,034
---------
72,643
---------
Insurance (3.9%):
150,000 American International Group.............. 14,794
120,000 Marsh & McLennan Co. Inc. ................ 11,580
150,000 St Paul Companies (b)..................... 8,025
---------
34,399
---------
Machinery & Equipment (2.7%):
110,000 Illinois Tool Works (b)................... 7,439
160,000 Ingersoll Rand Co. ....................... 7,000
400,000 Pall Corp. ............................... 9,650
---------
24,089
---------
Medical Equipment & Supplies (2.7%):
225,000 Bard C.R., Inc. .......................... 7,650
175,000 Biomet (c)................................ 2,516
235,000 Medtronic, Inc. .......................... 13,160
---------
23,326
---------
Metals (0.6%):
250,000 Cyprus Amax Minerals (b).................. 5,656
---------
Office Equipment & Services (0.9%):
80,000 Hewlett Packard........................... 7,970
---------
Oil & Gas Exploration Products & Services (3.7%):
110,000 Consolidated Natural Gas Co. ............. 5,748
</TABLE>
CONTINUED
51----
<PAGE> 696
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
Oil & Gas Exploration Products & Services, continued:
<C> <S> <C>
140,000 Halliburton Co. (b)....................... $ 7,770
90,000 Mobil Corp. .............................. 10,091
100,000 Schlumberger Ltd. ........................ 8,425
---------
32,034
---------
Paper Products (1.6%):
180,000 Kimberly Clark Corp. ..................... 13,905
---------
Pharmaceuticals (5.0%):
320,000 Alza (b)(c)............................... 8,760
165,000 Elan Corporation Public
Limited Co. (b)(c)...................... 9,426
200,000 Pfizer.................................... 14,275
260,000 Pharmacia & Upjohn, Inc. ................. 11,537
---------
43,998
---------
Photography (1.6%):
180,000 Eastman Kodak Co. ........................ 13,995
---------
Printing & Publishing (4.9%):
125,000 Dun & Bradstreet Corp. ................... 7,813
210,000 Gannett, Inc. ............................ 14,857
250,000 McGraw Hill, Inc. (b)..................... 11,438
225,000 Time Warner, Inc. ........................ 8,831
---------
42,939
---------
Railroads (1.4%):
175,000 Union Pacific Corp. (b)................... 12,228
---------
Retail Stores/Catalog (5.7%):
275,000 Home Depot, Inc. (b)...................... 14,850
150,000 Intimate Brands, Inc. (b)................. 3,431
225,000 Unocal.................................... 7,594
400,000 Walgreen Co. ............................. 13,400
425,000 Walmart................................... 10,784
---------
50,059
---------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Technology (3.8%):
90,000 I.B.M. ................................... $ 8,910
210,000 Minnesota Mining And
Manufacturing Co. (3M).................. 14,490
200,000 Texas Instruments......................... 9,975
---------
33,375
---------
Transportation (1.1%):
350,000 Ryder Systems, Inc. ...................... 9,844
---------
Telecommunications (4.6%):
330,000 AT&T Corp. ............................... 20,460
280,000 Alltel.................................... 8,610
250,000 GTE Corp. ................................ 11,188
---------
40,258
---------
Wholesale Distribution (1.5%):
185,000 Cardinal Health, Inc. (b)................. 13,343
---------
Total Common Stocks 866,848
---------
Investment Companies (0.3%):
2,573,605 Aquila Churchill Cash Reserves Money
Market.................................. 2,574
---------
Total Investment Companies 2,574
---------
Total Investments, at value 869,422
---------
Repurchase Agreements (0.9%):
$7,546,000 Lehman Brothers, 5.51%, 7/1/96,
(Collateralized by $7,700,000 FNMA Note,
5.47%, 6/20/97, market value--
$7,698)................................. 7,546
---------
Total Repurchase Agreements 7,546
---------
Total (Cost--$717,380) (a) $ 876,968
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $877,361.
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost basis for federal income tax purposes by the
amount of losses recognized for financial reporting purposes in excess of federal income tax reporting of approximately
$229. Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation................................................... $ 170,315
Unrealized depreciation................................................... (10,956)
---------
Net unrealized appreciation............................................... $ 159,359
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(c) Non-income producing securities.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----52
<PAGE> 697
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
<C> <S> <C>
COMMON STOCKS (93.0%):
Advertising (1.3%):
160,000 Omnicom Group........................... $ 7,440
5,000 Outdoor Systems, Inc. (c)............... 176
---------
7,616
Aerospace (0.1%):
13,000 Stanford Telecommunications (c)......... 731
---------
Airlines (0.7%):
115,000 Atlantic Southeast Airlines............. 3,249
15,000 Precision Castparts..................... 645
---------
3,894
---------
Banking (0.6%):
114,775 Dollar General.......................... 3,357
---------
Broadcasting/Cable (0.7%):
51,600 American Radio Systems Corp., (b)(c).... 2,219
50,000 Home Shopping Network (c)............... 600
40,000 TCA Cable TV, Inc. ..................... 1,210
---------
4,029
---------
Building Products (0.5%):
46,400 Vulcan Materials Co. ................... 2,755
---------
Chemicals (0.9%):
70,800 Cabot Corp. ............................ 1,735
30,000 Georgia Gulf Corp. ..................... 878
50,000 Loctite Corp. .......................... 2,324
---------
4,937
---------
Closed End Funds (0.2%):
60,000 RPM, Inc. Ohio (b)...................... 938
---------
Commercial Services (3.9%):
55,000 Corestaff, Inc. (c)..................... 2,461
268,000 Equifax, Inc. .......................... 7,034
30,000 Flight Safety International............. 1,628
70,000 Health Management Systems, Inc. (c)..... 2,223
90,000 Manpower, Inc. ......................... 3,533
65,000 May & Speh, Inc. (c).................... 1,024
100,700 Medaphis Corp. (c)...................... 4,002
5,000 Nova Corp / Georgia (c)................. 169
15,000 Whittman-Hart, Inc. (c)................. 540
---------
22,614
---------
Computer Hardware (2.9%):
40,000 Amati Communications Corp. (b)(c)....... 795
80,000 Cirrus Logic, Inc. (c).................. 1,400
90,000 Cisco Systems, Inc. (c)................. 5,095
160,700 Dell Computer Corp. (c)................. 8,176
30,000 3Com Corp. (c).......................... 1,373
2,000 Zebra Technologies, Class A (c)......... 36
---------
16,875
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Computer Software (10.7%):
68,500 Adobe Systems, Inc. .................... $ 2,457
125,500 American Online (b)(c).................. 5,491
2,000 Aspect Development, Inc. (c)............ 51
95,000 BMC Software (c)........................ 5,676
235,000 Cadence Design Systems, Inc. (c)........ 7,931
62,000 Compuware Corp. (c)..................... 2,449
80,000 Electronic Arts (c)..................... 2,140
30,000 Factset Research Systems (c)............ 510
70,000 Fiserv, Inc. (c)........................ 2,100
10,000 Forefront Group, Inc. (c)............... 140
100,000 Gandalf Technologies, Inc. (c).......... 800
29,500 HNC Software (c)........................ 1,364
225,600 Informix Corp. (b)(c)................... 5,076
2,000 I2 Technologies, Inc. (c)............... 86
85,000 JDA Software Group, Inc. (c)............ 1,753
8,700 Open Market, Inc. (c)................... 212
60,000 Pairgain Technologies, Inc. (c)......... 3,720
225,000 Parametric Technology Corp. (c)......... 9,759
2,500 Remedy Corp. (c)........................ 183
80,400 Reynolds & Reynolds..................... 4,281
5,000 Segue Software, Inc. (c)................ 149
20,500 Sterling Commerce, Inc. (b)(c).......... 761
20,000 Sterling Software (c)................... 1,540
50,000 Structural Dynamics (c)................. 1,100
50,000 Symantec Corp. (c)...................... 625
5,000 Transition Systems, Inc. (c)............ 143
35,000 Vanstar Corp. (c)....................... 586
1,000 Xylan Corp. (c)......................... 47
---------
61,130
---------
Consumer Goods & Services (1.0%)
80,000 Callaway Golf Co. (b)................... 2,660
65,000 Nine West Group, Inc. (b)(c)............ 3,323
---------
5,983
---------
Electric Utility (0.5%):
100,000 AES Corp. (c)........................... 2,825
---------
Electrical & Electronic (3.4%):
50,000 Altera Corp. (c)........................ 1,900
29,500 BMC Industries, Inc. ................... 848
50,000 California Amplifier, Inc. (c).......... 1,150
85,150 Diebold, Inc. .......................... 4,108
100 Identix, Inc. (c)....................... 1
95,000 Solectron Corp. (b)..................... 3,598
120,000 Stratacom (c)........................... 6,750
75,300 Teradyne, Inc. (c)...................... 1,299
---------
19,654
---------
Electrical Equipment (0.3%):
70,000 Integrated Device Technology, Inc. (c).. 744
</TABLE>
CONTINUED
53----
<PAGE> 698
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Electrical Equipment, continued:
<C> <S> <C>
30,000 Microchip Technology, Inc. (c).......... $ 742
---------
1,486
---------
Electronics (0.5%):
65,000 Symbol Technologies, Inc. (c)........... 2,893
---------
Electronic Components/Instruments (3.1%):
216,200 Analog Devices, Inc. (c)................ 5,513
195,000 Atmel Corp. (c)......................... 5,874
25,100 Cree Reseach, Inc. (b)(c)............... 377
105,500 Maxim Integrated Products, Inc. (c)..... 2,881
80,000 Mentor Graphics Corp. (c)............... 1,300
30,000 Varian Associates, Inc. ................ 1,553
16,170 Vishay International (c)................ 382
---------
17,880
---------
Energy (2.0%):
50,000 California Energy Company, Inc. (c)..... 1,250
247,500 Thermo Electron Corp. (b)(c)............ 10,302
---------
11,552
---------
Engineering (0.2%):
45,000 Jacobs Engineering Group, Inc. (c)...... 1,187
---------
Entertainment (0.6%):
40,000 MGM Grand, Inc. (c)..................... 1,595
30,000 Mirage Resorts (c)...................... 1,620
17,000 Premier Parks, Inc. (c)................. 366
---------
3,581
---------
Environmental Services (0.6%):
110,000 U.S.A. Waste Services, Inc. (c)......... 3,259
---------
Financial--Banking (1.3%):
145,000 State Street Boston Corp. .............. 7,395
---------
Financial Services (4.8%):
33,900 First USA Paymentech, Inc. (c).......... 1,356
133,000 Franklin Resources, Inc. ............... 8,112
110,000 Price (T. Rowe) Associates.............. 3,383
309,000 Schwab (Charles) Corp. (b).............. 7,571
13,700 Security First Network Bank (c)......... 452
160,000 Southern Pacific Funding Corp. (c)...... 2,800
70,000 SunAmerica, Inc. ....................... 3,955
---------
27,629
---------
Food Products & Services (1.3%):
140,000 IBP, Inc. .............................. 3,868
110,000 Richfood Holdings....................... 3,575
---------
7,443
---------
Funeral Services (0.3%):
30,000 Service Corp. International............. 1,725
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Health Care (3.6%):
100,000 Apria Healthcare Group, Inc. (c)........ $ 3,138
104,000 Foundation Health Corp. (b)(c).......... 3,731
190,000 Healthsouth Corp. (b)(c)................ 6,840
121,800 Healthsources (b)(c).................... 2,132
83,500 Health Care & Retirement Corp. (c)...... 1,983
75,000 Oxford Health (c)....................... 3,084
---------
20,908
---------
Home Furnishings (0.5%):
110,000 Leggett & Platt, Inc. .................. 3,053
---------
Hotels & Lodging (3.1%):
231,000 Hospitality Franchise Systems (b)(c).... 16,170
55,000 Promus Hotel Corp. (c).................. 1,629
---------
17,799
---------
Industrial Goods & Services (0.4%):
47,500 Fastenal................................ 2,066
---------
Insurance (2.0%):
228,900 AFLAC, Inc. ............................ 6,838
48,000 Riscorp, Inc., Class A (c).............. 876
83,500 Travelers/Aetna Property Casualty, Class
A (c)................................. 2,369
60,000 Value Health, Inc. (c).................. 1,418
---------
11,501
---------
Investment Company (0.5%):
289,000 Sunstone Hotel Investors, Inc. ......... 3,143
---------
Leisure (1.0%):
134,900 Harley-Davidson, Inc. .................. 5,548
---------
Machinery & Equipment (0.7%):
16,000 Nordson................................. 904
90,000 Sundstrand Corp. ....................... 3,296
---------
4,200
---------
Manufacturing--Capital Goods (1.4%):
95,000 Danaher Corp. .......................... 4,133
75,000 York International Corp. ............... 3,881
---------
8,014
---------
Manufactured Housing (0.5%):
137,875 Clayton Homes, Inc. .................... 2,758
---------
Medical Equipment & Supplies (1.5%):
30,000 Dentsply International.................. 1,275
7,000 Eclipse Surgical Tech (c)............... 96
77,500 Forest Laboratories, Class A (c)........ 2,993
44,500 Nellcor Puritan Bennett, Inc. (c)....... 2,158
80,000 Stryker Corp. .......................... 1,820
600 Ventritex, Inc. (c)..................... 10
---------
8,352
---------
</TABLE>
CONTINUED
- ----54
<PAGE> 699
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Medical--Hospital Services (0.6%):
750 Multicare Companies, Inc. (c)........... $ 14
120,000 Vencor, Inc. (b)(c)..................... 3,660
---------
3,674
---------
Medical--Biotechnology (0.3%):
11,000 Arterial Vascular Engineer (c).......... 399
50,000 Lifecore Biomedical, Inc. (c)........... 1,062
---------
1,461
---------
Medical Supplies (0.2%):
25,000 Beckman Instruments, Inc. .............. 950
10,000 Heartport, Inc. (c)..................... 303
---------
1,253
---------
Medical--Hospital Management & Services (0.6%):
70,000 Healthcare Compare Corp. (c)............ 3,413
12,500 Inphynet Medical Management, Inc. (c)... 234
---------
3,647
---------
Office Equipment & Services (2.0%):
20,000 Hon Industries.......................... 570
167,000 Paychex................................. 8,037
45,000 Wallace Computers....................... 2,689
---------
11,296
---------
Oil & Gas Exploration Production & Services (4.1%):
84,000 Anadarko Petroleum Corp. ............... 4,872
35,000 BJ Services Co. (b)(c).................. 1,229
30,000 Bakers Hughes........................... 986
10,000 Carbo Ceramics, Inc. (c)................ 220
30,000 Dresser Industries, Inc. ............... 885
290,000 Global Marine, Inc. (c)................. 4,024
110,900 Lyondell Petrochemical (b).............. 2,675
99,800 Noble Affiliates, Inc. (b).............. 3,767
35,000 Rutherford-Moran Oil Corp. (c).......... 853
30,000 Smith International, Inc. (c)........... 904
100,000 Weatherford Enterra, Inc. (c)........... 3,000
---------
23,415
---------
Packaging (1.1%):
65,600 Sealed Air Corp. (c).................... 2,206
143,200 Sonoco Products Co. (b)................. 4,063
---------
6,269
---------
Pharmaceuticals (1.9%):
70,300 Biogen (c).............................. 3,858
227,600 Ivax Corp. (b).......................... 3,613
19,900 Mylan Laboratories...................... 343
80,000 Watson Pharmaceutical, Inc. (c)......... 3,030
---------
10,844
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Printing & Publishing (0.4%):
23,700 Belo (A.H.) Corp., Series A............. $ 883
25,000 Scholastic Corp. (c).................... 1,550
---------
2,433
---------
Real Estate (1.1%):
217,000 Imperial Credit Industries, Inc. (c).... 6,564
---------
Research & Development (2.4%):
105,000 Centocor (c)............................ 3,137
64,300 Chiron Corp. (b)(c)..................... 6,301
81,100 Genzyme Corp., General Division
(b)(c)................................ 4,075
---------
13,513
---------
Restaurants (0.8%):
65,000 Lone Star Steakhouse & Saloon (c)....... 2,454
70,000 Outback Steakhouse (c).................. 2,414
---------
4,868
---------
Retail Stores/Catalog (4.5%):
135,000 Bed Bath & Beyond, Inc. (c)............. 3,611
30,000 Claire's Stores, Inc. .................. 803
110,000 Kohl's Corp. (c)........................ 4,029
30,000 Land's End.............................. 743
80,000 Micro Warehouse, Inc. (c)............... 1,600
272,100 Office Depot, Inc. (b)(c)............... 5,543
256,400 Staples (b)(c).......................... 5,000
140,000 Viking Office Products (c).............. 4,393
---------
25,722
---------
Retail--Special Line (0.5%):
120,000 Compucom Systems, Inc. (c).............. 1,305
20,000 Tiffany & Company....................... 1,460
---------
2,765
---------
Services (0.5%):
25,000 Accustaff, Inc. (c)..................... 681
70,000 Olsten Corp. ........................... 2,057
---------
2,738
---------
Technology (1.9%):
220,200 International Game Technologies......... 3,715
102,300 Linear Technology Corp. ................ 3,069
40,000 Verifone (c)............................ 1,690
70,000 Xilinx, Inc. (b)(c)..................... 2,223
---------
10,697
---------
Telecom Equipment (2.3%):
10,000 Boston Communications Group (c)......... 165
155,000 U.S. Robotics Corp. (b)(c).............. 13,253
---------
13,418
---------
</TABLE>
CONTINUED
55----
<PAGE> 700
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
Textile Products (1.5%):
95,000 Cintas Corp. ........................... $ 5,083
5,000 Designer Holdings Ltd. (c).............. 133
65,000 Jones Apparel Group, Inc. (c)........... 3,193
---------
8,409
---------
Transportation (1.3%):
20,000 Atlas Air, Inc. (c)..................... 1,150
112,500 Illinois Central Corp. ................. 3,192
78,000 Kansas City Southern Industries......... 3,344
---------
7,686
---------
Telecommunications (3.5%):
306,500 American Portable Telecom (c)........... 3,295
300,000 Frontier Corp. ......................... 9,187
25,000 Lucent Technologies, Inc. .............. 947
50,000 Panamsat Corp. (c)...................... 1,450
135,000 360 Communications Co. (c).............. 3,240
80,000 Vanguard Cellular Systems, Class A (c).. 1,740
---------
19,859
---------
Telecommunications--Services & Equipment (2.9%):
145,000 ADC Telecommunications, Inc. (c)........ 6,525
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ---------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Telecommunications--Services & Equipment, continued:
<C> <S> <C>
95,000 Century Telephone Enterprises........... $ 3,028
80,000 Federal Signal Corp. ................... 1,880
80,000 Octel Communications Corp. (c).......... 1,580
55,000 Tellabs, Inc. (c)....................... 3,678
---------
16,691
---------
Wholesale Distribution (1.0%):
75,700 Cardinal Health, Inc. .................. 5,460
---------
Total Common Stocks 533,392
---------
REPURCHASE AGREEMENTS (11.7%):
$66,907,000 Lehman Brothers, 5.51%, 7/1/96,
(Collateralized by $69,645,000 Federal
Home Loan Bank notes, 0.00% - 7.23%,
12/28/98 - 2/23/06, market
value--$68,250)....................... 66,907
---------
Total Repurchase Agreements 66,907
---------
Total Cost--$592,135 (a) $ 600,299
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $573,487.
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost basis for federal income tax purposes by the
amount of losses recognized for financial reporting purposes in excess of federal income tax reporting of approximately
$5,991. Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as
follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation................................................... $ 29,598
Unrealized depreciation................................................... (27,425)
---------
Net unrealized appreciation............................................... $ 2,173
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996
</TABLE>
<TABLE>
<C> <S>
(c) Non-income producing securities.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----56
<PAGE> 701
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GULF SOUTH GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
COMMON STOCKS (98.3%):
Airlines (1.9%):
70,000 Atlantic Southeast Airlines, Inc. ......... $ 1,978
---------
Auto Parts (0.7%):
30,000 Discount Auto Parts, Inc. (c).............. 761
---------
Banking (0.6%):
50,000 Alabama National Bankcorp.................. 637
---------
Banking & Financial Services (3.1%):
20,000 CCB Financial Corp. ....................... 1,025
25,000 Centura Banks, Inc. ....................... 919
30,000 First American Corp. ...................... 1,264
---------
3,208
---------
Beverages & Tobacco (0.5%):
15,000 Coca-Cola Bottling Co. .................... 529
---------
Building Products (1.5%):
25,000 NCI Building Systems, Inc. (c)............. 844
10,000 Texas Industries, Inc. .................... 686
---------
1,530
---------
Chemicals (1.0%):
6,000 Cytec Industries, Inc. (c)................. 513
25,000 First Mississippi Corp. ................... 556
---------
1,069
---------
Commercial Services (6.1%):
15,000 Central Parking Corp. ..................... 444
30,000 Corestaff, Inc. (c)........................ 1,343
80,000 Medaphis Corp. (c)......................... 3,180
25,000 Phymatrix, Inc. (b)(c)..................... 581
30,000 Vincam Group, Inc. (c)..................... 780
---------
6,328
---------
Computer Hardware (3.4%):
40,000 Boca Research, Inc. (b)(c)................. 730
35,000 CHS Electronics, Inc. (c).................. 472
25,000 Dell Computer Corp. (c).................... 1,272
60,000 Zebra Technologies, Class A (c)............ 1,065
---------
3,539
---------
Computer Software (4.1%):
35,000 Acxicom Corp. (c).......................... 1,195
20,000 Continuum, Inc. (c)........................ 1,160
15,000 Datastream Systems, Inc. (c)............... 529
12,000 Micros Systems, Inc. (c)................... 334
50,000 Network General Corp. (c).................. 1,075
---------
4,293
---------
Data Processing & Reproduction (0.7%):
32,600 Total System Services, Inc. ............... 746
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Electrical & Electronic (2.3%):
35,000 Allen Group, Inc. ......................... $ 761
24,900 Benchmark Electronics, Inc. (c)............ 722
30,000 Tech-Sym Corp. (c)......................... 893
---------
2,376
---------
Electrical Equipment (3.8%):
30,000 Kemet Corp. (c)............................ 600
22,000 Kent Electronics Corp. (c)................. 687
50,000 Kuhlman Corp. ............................. 869
45,000 SCI Systems, Inc. (b)(c)................... 1,828
---------
3,984
---------
Electronic Components/Instruments (0.5%):
30,000 Dallas Semi-Conductors..................... 544
---------
Entertainment (1.7%):
40,000 Movie Gallery (b)(c)....................... 840
20,000 Regal Cinemas, Inc. (c).................... 915
---------
1,755
---------
Environmental Services (0.5%):
30,000 Imco Recycling, Inc. ...................... 540
---------
Financial--Banking (3.2%):
50,000 Eagle Bancshares, Inc. .................... 794
40,000 First Financial Holdings, Inc. ............ 720
30,000 Synovus Financial Corp. ................... 649
40,000 Union Planters Corp. (b)................... 1,215
---------
3,378
---------
Financial Services (9.5%):
80,000 Amresco, Inc. ............................. 1,370
40,000 Concord EFS, Inc. (c)...................... 1,420
20,000 First Commerce Corp. (b)................... 707
50,000 Olympic Financial Ltd. (b)(c).............. 1,150
100,000 Regional Acceptance Corp. (c).............. 1,163
25,000 Regions Financial Corp. (b)................ 1,169
85,000 United Cos. Financial Corp. (b)............ 2,890
---------
9,869
---------
Food Products & Services (1.6%):
17,000 Dekalb Genetics Corp. ..................... 442
30,000 Foodbrands America, Inc. (c)............... 386
35,000 Longhorn Steaks, Inc. (c).................. 875
---------
1,703
---------
Funeral Services (2.2%):
75,000 Stewart Enterprises, Inc., Class A......... 2,344
---------
Forest Products (0.5%):
20,000 Caraustar Industries, Inc. ................ 530
---------
Health Care (1.4%):
30,000 Healthsouth Corp. (c)...................... 1,080
</TABLE>
CONTINUED
57----
<PAGE> 702
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GULF SOUTH GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Health Care, continued:
<C> <S> <C>
15,000 Invacare Corp. ............................ $ 352
---------
1,432
---------
Homebuilders (1.2%):
55,000 Cavalier Homes, Inc. ...................... 1,272
---------
Insurance (2.4%):
25,000 Protective Life Corp. ..................... 878
20,000 Provident Cos., Inc. ...................... 740
25,000 Triad Guaranty, Inc. (c)................... 919
---------
2,537
---------
Jewelry (0.6%):
25,000 Friedman's, Inc., Class A (c).............. 637
---------
Leisure (0.4%):
30,000 Action Performance Co., Inc. (b)(c)........ 439
---------
Machine--Diversified (3.9%):
33,000 Agco Corp. (c)............................. 916
20,000 Blount International, Inc. ................ 630
40,000 Computational Systems, Inc. (c)............ 865
50,000 Input/Output, Inc. (c)..................... 1,619
---------
4,030
---------
Manufacturing--Capital Goods (2.2%):
75,000 Maverick Tube Corp. (c).................... 881
40,000 Wolverine Tube, Inc. (c)................... 1,400
---------
2,281
---------
Manufacturing--Consumer Goods (0.5%):
10,000 Ionics, Inc. (c)........................... 470
---------
Manufactured Housing (1.2%):
20,000 American Homestar Corp. (c)................ 520
34,000 Oakwood Homes Corp. ....................... 701
---------
1,221
---------
Medical--Biotechnology (0.9%):
25,000 Cryolife, Inc. (c)......................... 925
---------
Medical Equipment & Supplies (0.6%):
15,000 IDEXX Laboratories, Inc. (c)............... 589
---------
Medical Supplies (1.5%):
50,000 Immucor, Inc. (c).......................... 600
35,000 Nabi, Inc. (c)............................. 332
42,000 Sano Corp. (c)............................. 651
---------
1,583
---------
Medical--Hospital Management & Service (1.1%):
60,000 Inphynet Medical Management, Inc. (c)...... 1,125
---------
Metals (0.8%):
35,000 Quanex Corp. .............................. 827
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
</TABLE>
COMMON STOCKS, CONTINUED:
<TABLE>
<C> <S> <C>
Oil & Gas Exploration Products & Services (8.3%):
75,000 Benton Oil & Gas Co. (c)................... $ 1,650
25,000 Geoscience Corp. (c)....................... 350
25,000 Newpark Resources, Inc. (c)................ 919
20,000 Nuevo Energy Co. (c)....................... 645
60,000 Patterson Energy, Inc. (c)................. 930
75,000 Pride Petroleum Services, Inc. (b)(c)...... 1,069
12,000 Seacor Holdings, Inc. (c).................. 537
32,000 Stone Energy Corp. (c)..................... 640
27,000 Swift Energy Co. (b)(c).................... 486
60,000 Tuboscope Vetco International Corp. (c).... 667
20,000 United Meridian Corp. (c).................. 720
---------
8,613
---------
Pharmaceuticals (0.7%):
26,500 Intercardia, Inc. (c)...................... 755
---------
Printing & Publishing (0.8%):
30,000 Scientific Games Holdings Corp. (c)........ 870
---------
Restaurants (0.9%):
35,000 Apple South, Inc. ......................... 936
---------
Retail Stores/Catalog (0.8%):
25,000 Gadzooks', Inc. (c)........................ 806
---------
Retail--Special Line (1.9%):
40,000 Garden Ridge Corp. (b)(c).................. 2,020
---------
Services (3.7%):
120,000 Accustaff, Inc. (c)........................ 3,270
20,000 Envoy Corp. (c)............................ 585
---------
3,855
---------
Telecom Equipment (1.5%):
30,000 Coherent Communication System Corp. (c).... 637
25,000 Tessco Technologies, Inc. (c).............. 913
---------
1,550
---------
Telecommunications (4.1%):
30,000 LCI International, Inc. (b)(c)............. 941
60,000 Worldcom, Inc. (c)......................... 3,323
---------
4,264
---------
Telecommunications--Services & Equipment (2.2%):
25,000 Aspect Telecommunications, Inc. (c)........ 1,238
35,000 DSC Communications Corp. (c)............... 1,054
---------
2,292
---------
Textile Products (2.3%):
40,000 Conso Products Co. (c)..................... 650
35,000 Mohawk Industries Co. (c).................. 621
15,000 Nautica Enterprises, Inc. (c).............. 431
</TABLE>
CONTINUED
- ----58
<PAGE> 703
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GULF SOUTH GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
COMMON STOCKS, CONTINUED:
Textile Products, continued:
<C> <S> <C>
30,000 Westpoint Stevens, Inc. (c)................ $ 717
---------
2,419
---------
Tobacco (0.5%):
30,000 Dimon, Inc. ............................... 555
---------
Transportation (1.0%):
45,000 Trico Marine Services, Inc. (c)............ 1,001
---------
Wholesale Distribution (1.5%):
15,000 Nuco2, Inc. (c)............................ 461
50,000 Tech Data Corp. (c)........................ 1,088
---------
1,549
---------
Total Common Stocks 102,494
---------
Total Investments, at value 102,494
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
REPURCHASE AGREEMENTS (1.5%)
$ 1,538,000 Lehman Brothers, 5.51%, 7/1/96,
(Collateralized by $1,570,000 FNMA Note,
5.47%, 6/20/97, market value-- $1,570)... $ 1,538
---------
Total Repurchase Agreements 1,538
---------
Total (Cost--$81,892)(a) $ 104,032
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $104,272.
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized appreciation of securities as
follows (amounts in thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 25,368
Unrealized depreciation.................................................... (3,228)
---------
Net unrealized appreciation................................................ $ 22,140
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(c) Non-income producing securities.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
59----
<PAGE> 704
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
<C> <S> <C>
COMMON STOCKS (96.8%):
ARGENTINA (0.7%):
Automotive (0.0%):
13,605 Ciadea SA................................. $ 97
---------
Beverages & Tobacco (0.0%):
53 Buenos Airos Embottelladora............... 35
---------
Oil & Gas Exploration, Production & Services (0.4%):
101,106 Cia Naviera Perez......................... 671
29,801 YPF Sociedad Anonima...................... 682
---------
1,353
---------
Telecommunications (0.3%):
89,920 Telecom Argentina, Class B................ 424
258,880 Telefonica de Argentina, Class B.......... 773
---------
1,197
---------
Total Argentina 2,682
---------
AUSTRALIA (2.1%):
Banking (0.5%):
119,800 National Australia Bank Ltd. ............. 1,109
170,900 Westpac Banking Corp. .................... 757
---------
1,866
---------
Broadcasting & Publishing (0.3%):
156,600 News Corp. Ltd. .......................... 889
---------
Building Products (0.3%):
220,700 Boral Ltd. ............................... 573
126,700 Pioneer International Ltd. ............... 369
---------
942
---------
Diversified (0.0%):
40,400 Southcorp Holdings Ltd. .................. 100
---------
Energy (0.4%):
104,520 Broken Hill Proprietary Ltd. ............. 1,445
---------
Industrial Goods & Services (0.1%):
102,800 CSR Ltd. ................................. 363
---------
Manufacturing--Consumer Goods (0.1%):
158,400 Email Ltd. ............................... 411
---------
Metals & Mining (0.2%):
34,600 Newcrest Mining Ltd. ..................... 139
79,400 WMC Holding Ltd. ......................... 569
---------
708
---------
Metals (0.1%):
229,000 M.I.M. Holdings Ltd. ..................... 296
27,600 Renison Goldfields Consolidated Ltd. ..... 134
---------
430
---------
Real Estate (0.1%):
138,000 General Property Trust.................... 237
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
</TABLE>
COMMON STOCKS, CONTINUED:
AUSTRALIA, CONTINUED:
Real Estate, continued:
<TABLE>
<C> <S> <C>
81,100 Westfield Trust........................... $ 146
---------
383
---------
Retail Stores/Catalog (0.0%):
25,730 Coles Myer Ltd. .......................... 94
---------
Transportation (0.0%):
54,600 TNT Ltd. ................................. 61
---------
Total Australia 7,692
---------
AUSTRIA (1.2%):
Airlines (0.0%):
950 Austrian Airlines/Oesterreichische
Luftverskehrs AG........................ 146
---------
Banking & Financial Services (0.4%):
13,650 Bank of Austria........................... 1,097
1,950 Bank of Austria AG, Participating
Certificates............................ 66
6,050 Creditanstalt Bankverein.................. 400
---------
1,563
---------
Beverages & Tobacco (0.1%):
3,000 Osterreichische Brau Beteiligungs AG...... 171
---------
Building Products (0.2%):
2,830 Constantia Industries..................... 119
8,905 Radex-Heraklith Indutriebeteiligungs AG... 278
1,575 Wienerberger Baustoffindustrie AG......... 318
---------
715
---------
Chemicals (0.0%):
1,400 Lenzing AG................................ 88
---------
Containers & Packaging (0.1%):
3,140 Constantia Verpackungen................... 176
---------
Environmental Services (0.0%):
900 BWT AG.................................... 115
---------
Insurance (0.1%):
1,100 EA Generali AG............................ 326
---------
Manufacturing-Consumer Goods (0.0%):
6,500 Steyr-Daimler-Puch AG (b)................. 100
---------
Oil & Gas Exploration, Production & Services (0.2%):
7,050 OEMV AG................................... 714
---------
Utilities--Electric & Gas (0.1%):
5,350 Osterreichische Elekrizitaitswirts AG,
Class A................................. 408
---------
Total Austria 4,522
---------
</TABLE>
CONTINUED
- ----60
<PAGE> 705
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
BELGIUM (1.7%):
Airlines (0.1%):
2,990 ACEC-Union Miniere SA..................... $ 229
---------
Banking (0.2%):
935 Kredietbank............................... 280
1,302 Kredietbank VVPR.......................... 388
---------
668
---------
Chemicals (0.2%):
1,353 Solvay et Cie SA.......................... 830
---------
Commitments (0.1%):
1,472 Generale de Banque SA..................... 511
---------
Energy (0.2%):
2,236 Petrofina SA.............................. 700
---------
Industrial Holding Company (0.0%):
1,116 Groupe Bruxelles Lambert-PS............... 140
---------
Insurance (0.1%):
1,592 Fortis AG................................. 209
699 Royale Belge SA........................... 137
---------
346
---------
Merchandising (0.3%):
18,051 Delhaize-Le Lion PS....................... 902
---------
Utilities--Electric & Gas (0.5%):
9,224 Electrabel NPV............................ 1,970
---------
Total Belgium 6,296
---------
BRAZIL (0.7%):
Beverages & Tobacco (0.0%):
91,000 Cia Cervejaria Brahma..................... 54
41,000 Cia Cervejaria Brahma..................... 26
---------
80
---------
Building Products (0.0%):
5,000 Cia Vidraria Santa Maria.................. 20
---------
Chemicals (0.0%):
242,000 Copesul-Companhia Pertoquimica do Sol..... 16
36,151,000 White Martins SA.......................... 50
---------
66
---------
Energy (0.0%):
3,516,000 Cia Paranaense de Energia................. 40
---------
Food Products (0.0%):
141,000 Sadia Concordia SA........................ 100
---------
Oil & Gas Exploration, Production & Services (0.1%):
978,000 Petroleo Brasiliero SA.................... 122
---------
Steel (0.2%):
1,955,100 Cia de Acos Especias Itabira-Acesita...... 6
9,064 Companhia Vale do Rio Doce................ 225
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
</TABLE>
COMMON STOCKS, CONTINUED:
BRAZIL, CONTINUED:
Steel, continued:
<TABLE>
<C> <S> <C>
11,664 Companhia Vale do Rio Doce................ $ 234
3,589,000 Sioerurgica Nacional CSN.................. 93
---------
558
---------
Telecommunications (0.2%):
5,392,819 Telecomunicacoes Brasileiras SA (b)....... 321
5,268,000 Telecomunicacoes Brasileiras SA (b)....... 377
828,000 Telesp Tel Sao Paulo (b).................. 146
---------
844
---------
Tobacco (0.0%):
13,000 Souza Cruz................................ 114
---------
Utilities--Electric & Gas (0.2%):
1,211,000 Centrais Electricas....................... 332
378,000 Centrais Electricas Brasilieras........... 107
1,426,000 Cia Energetica de Minas Gerais (b)........ 38
355,000 Light Servicos de Electricidade (b)....... 98
---------
575
---------
Total Brazil 2,519
---------
DENMARK (1.5%):
Agriculture (0.0%):
2,500 Korn-Og Foderstof Kompagniet A/S.......... 113
---------
Banking & Financial Services (0.2%):
6,700 Danske Bank............................... 449
5,600 Unidanmark A/S, Class A................... 260
---------
709
---------
Beverages & Tobacco (0.2%):
3,550 Carlsberg AG.............................. 209
7,300 Carlsberg A/S............................. 429
---------
638
---------
Commercial Services (0.0%):
2,850 International Service System A/S, Class
B....................................... 64
---------
Electrical & Electronic (0.0%):
150 NKT Holdings A/S.......................... 7
---------
Engineering (0.0%):
2,250 FLS Industries A/S, Class B............... 226
---------
Food & Household Products (0.1%):
3,072 Royal Copenhagen A/S, Class A............. 259
---------
Food Products & Services (0.1%):
2,750 Superfos A/S.............................. 256
---------
Pharmaceuticals (0.5%):
13,000 Novo Nordisk A/S, Class B................. 1,840
---------
</TABLE>
CONTINUED
61----
<PAGE> 706
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
DENMARK, CONTINUED:
<C> <S> <C>
Telecommunications (0.2%):
12,650 Tele Danmark A/S, Class B................. $ 633
---------
Transportation & Shipping (0.2%):
13 D/S 1912, Class B......................... 295
9 D/S Svendborg, Class B.................... 294
300 J. Lauritzen Holdings A/S, Class B (b).... 34
---------
623
---------
Total Denmark 5,368
---------
FINLAND (0.5%):
Banking & Financial Services (0.1%):
85,506 Merita Ltd. (b)........................... 179
---------
Forest Products (0.2%):
34,360 UPM-Kymmene OY (b)........................ 711
---------
Insurance (0.1%):
3,100 Sampo Insurance Co., Class A.............. 179
---------
Telecommunications (0.1%):
10,900 Nokia AB, Class A......................... 401
6,500 Nokia AB, Class K......................... 237
---------
638
---------
Total Finland 1,707
---------
FRANCE (8.9%):
Automotive (0.2%):
5,600 PSA Peugeot Citroen....................... 749
---------
Banking (0.8%):
19,400 Banque National de Paris.................. 681
19,950 Compagnie de Suez......................... 730
10,750 Compagnie Financiere de Paribas SA........ 635
8,273 Societe Generale de Paris................. 909
---------
2,955
---------
Banking & Financial Services (0.0%):
5,900 Credit Foncier de France (b).............. 38
---------
Beverages & Tobacco (0.7%):
8,140 LVMH Moet Hennessy Louis Vuitton.......... 1,931
8,120 Pernod Ricard............................. 521
---------
2,452
---------
Broadcast/Cable (0.2%):
2,450 Canal Plus................................ 599
---------
Building Products (0.3%):
2,850 Imetal.................................... 404
11,958 Lafarge Coppee............................ 724
---------
1,128
---------
Business Services (0.5%):
13,250 Compagnie Generale des Eaux............... 1,480
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
FRANCE, CONTINUED:
Business Services, continued:
<C> <S> <C>
3,250 Havas SA.................................. $ 266
---------
1,746
---------
Chemicals (0.5%):
5,455 L'Air Liquide............................. 963
26,850 Rhone Poulenc SA.......................... 706
---------
1,669
---------
Commercial Services (0.3%):
2,200 Ecco SA................................... 553
1,300 Sodexho SA................................ 577
---------
1,130
---------
Construction (0.1%):
3,700 Bouygues.................................. 413
---------
Defense (0.2%):
450 Societe d'Applications Generales
D'electricite et de Mecanique........... 270
15,350 Thomson CSF............................... 431
---------
701
---------
Diversified (0.1%):
1,440 Chargeurs International SA (b)............ 64
7,750 Lagardere Group (b)....................... 200
---------
264
---------
Electrical & Electronic (0.8%):
11,800 Alcatel Alsthom........................... 1,029
4,750 Legrand................................... 849
16,900 Schneider SA.............................. 886
---------
2,764
---------
Energy (1.0%):
31,750 Societe Elf Aquitane SA................... 2,335
17,850 Compagnie Francaise de Petroleum Total SA,
Class B................................. 1,324
---------
3,659
---------
Engineering (0.1%):
3,050 Societe Technip SA........................ 281
---------
Food & Household Products (0.2%):
4,450 Eridania Beghin Say....................... 697
---------
Food Products & Services (0.2%):
5,250 Danone Group.............................. 794
---------
Health & Personal Care (0.5%):
4,450 L'Oreal................................... 1,477
7,260 Sanofi SA................................. 544
---------
2,021
---------
</TABLE>
CONTINUED
- ----62
<PAGE> 707
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
FRANCE, CONTINUED:
<C> <S> <C>
Industrial Goods & Services (0.2%):
17,650 Michelin Class B, Registered.............. $ 863
---------
Industrial Holding Companies (0.2%):
8,750 Lyonnaise des Eaux Dumez.................. 836
---------
Insurance (0.3%):
17,750 AZA SA.................................... 971
---------
Leisure (0.2%):
4,350 Accor SA.................................. 608
250 Salomon SA................................ 228
---------
836
---------
Manufacturing--Consumer Goods (0.2%):
6,000 BIC....................................... 852
---------
Media (0.1%):
1,440 Pathe SA (b).............................. 338
---------
Merchandising (0.7%):
2,483 Carrefour (b)............................. 1,391
5,150 Casino Guichard Perrachon et Cie.......... 213
2,150 Pinault-Printemps Redoute................. 752
1,200 Promodes.................................. 346
---------
2,702
---------
Miscellaneous Materials & Commodities (0.3%):
7,950 Compagnie de St. Gobain................... 1,064
---------
Oil & Gas Exploration, Production & Services (0.0%):
750 Compagnie Francaise de Petroleum Total
SA...................................... 41
---------
Textile Products (0.0%):
1,150 Dollfus-Mieg & Cie........................ 51
---------
Total France 32,614
---------
GERMANY (13.6%):
Airlines (0.2%):
5,510 Lufthansa AG.............................. 780
---------
Automotive (1.7%):
7,610 Daimler Benz AG (b)....................... 4,072
2,560 Man AG.................................... 642
3,670 Volkswagen AG............................. 1,366
---------
6,080
---------
Banking (2.0%):
74,100 Bayer AG.................................. 2,607
17,300 Bayerische Vereinsbank AG................. 484
58,760 Deutsche Bank AG.......................... 2,783
50,850 Dresdner Bank AG.......................... 1,276
---------
7,150
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
GERMANY, CONTINUED:
<C> <S> <C>
Banking & Financial Services (0.1%):
19,100 Bayerische Hypotheken--und Wechsel--Bank
AG...................................... $ 464
---------
Building Materials (0.1%)
539 Heidelberger Zement AG.................... 370
---------
Business Services (0.4%):
8,830 SAP AG.................................... 1,301
---------
Chemicals (1.1%):
12,020 BASF AG................................... 3,423
1,540 Degussa................................... 523
---------
3,946
---------
Conglomerates (1.6%):
2,780 Preussag AG............................... 700
79,330 VEBA AG................................... 4,216
2,490 Viag AG................................... 991
---------
5,907
---------
Construction (0.1%):
900 Hochtief AG............................... 402
---------
Diversified (0.0%):
490 Linotype-Hell AG (b)...................... 24
---------
Electrical & Electronic (1.0%):
68,100 Siemens AG................................ 3,650
---------
Engineering (0.5%)
220 Bilfinger & Berger Bau AG................. 93
6,000 Fuer Industrie und Verkehrswesen AG....... 113
4,540 Mannesmann AG............................. 1,563
---------
1,769
---------
Health Care (0.3%):
16,760 Schering AG............................... 1,215
---------
Insurance (2.5%):
3,464 Allianz AG Holdings....................... 6,022
440 Aachener und Muenchener-Beteiligungs AG
(b)..................................... 318
110 Aachener und Muenchener-Beteiligungs AG
(b)..................................... 64
247 Colonia Konzern AG (b).................... 197
70 Muenshener Rueckver 1-Sicherungs
Gesellschaft............................ 117
1,215 Muenshener Rueckver-Sicherungs
Gesellschaft Vink....................... 2,482
---------
9,200
---------
Machinery & Equipment (0.1%):
11,350 Kloeckner, Humbolt-Deutz AG (b)........... 41
</TABLE>
CONTINUED
63----
<PAGE> 708
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
GERMANY, CONTINUED:
Machinery & Equipment, continued:
<C> <S> <C>
490 Linde AG.................................. $ 318
---------
359
---------
Manufacturing--Consumer Goods (0.0%):
220 Salamander AG............................. 28
---------
Metals & Mining (0.3%):
3,040 Fag Kugelfischer George Schaefer
Kommanditgesellschaft Auf Aktien (b).... 455
3,265 Thyssen AG................................ 598
---------
1,053
---------
Personal Care Products (0.6%):
2,050 Beiersdorf AG............................. 2,017
---------
Retail--General Merchandise (0.0%):
3,100 Douglas Holdings AG....................... 123
---------
Retail Stores (0.3%):
580 Asko Deutsche Kaufhaus AG................. 428
500 Karstadt AG............................... 199
1,170 Kaufhof Holdings AG....................... 442
---------
1,069
---------
Textile Products (0.0%):
390 Escada AG................................. 70
---------
Utilities--Electric & Gas (0.7%):
65,470 Rheinisch-Westfaelisches
Elektrizitaetswerk AG................... 2,546
---------
Total Germany 49,523
---------
GREECE (0.8%):
Agriculture (0.0%):
8,650 Hellenic Sugar Industry................... 81
---------
Banking & Financial Services (0.5%):
12,850 Alpha Credit Bank......................... 678
9,931 Commercial Bank of Greece................. 324
9,330 Ergo Bank................................. 513
6,940 National Bank of Greece................... 341
---------
1,856
---------
Beverages & Tobacco (0.1%):
11,050 Hellenic Bottling Co. SA.................. 367
---------
Building Products (0.2%):
41,820 Heracles General Cement Co. .............. 502
---------
Telecommunications (0.0%):
3,090 Intracom SA (b)........................... 55
---------
Total Greece 2,861
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
HONG KONG (0.9%):
Airlines (0.0%):
95,000 Cathay Pacific Airways Ltd. .............. $ 174
---------
Banking (0.1%):
69,240 Bank of East Asia......................... 253
---------
Banking & Financial (0.1%):
31,728 Wing Lung Bank............................ 184
---------
Broadcasting & Publishing (0.1%):
95,000 Television Broadcasts..................... 357
---------
Conglomerates (0.2%):
68,000 Swire Pacific Ltd. Class A................ 582
---------
Electrical Equipment (0.0%):
300,000 Elec & Eltek (Bermuda) International
Holdings (b)............................ 59
---------
Electronic Components/Instruments (0.0%):
252,000 Applied International Holdings Ltd. (b)... 22
---------
Industrial Holding Company (0.2%):
145,000 Hutchison Whampoa......................... 912
---------
Printing & Publishing (0.0%):
263,000 Oriental Press Group Ltd. ................ 141
---------
Real Estate (0.1%):
40,000 Sun Hung Kai Properties Ltd. (b).......... 404
---------
Telecommunications (0.1%):
202,800 Hong Kong Telecommunications.............. 364
---------
Total Hong Kong 3,452
---------
INDONESIA (1.0%):
Agriculture (0.0%):
53,000 Sinar Mas Agro Resources.................. 38
86,000 Sinar Mas Agro Resources.................. 61
---------
99
---------
Auto Parts (0.1%):
167,000 Astra International PT-Foreign Registry... 242
---------
Banking & Financial Services (0.2%):
60,500 Bank International Indonesia PT........... 299
136,000 Bank International Indonesia PT-Foreign
Registry................................ 304
---------
603
---------
Building Products (0.1%):
83,000 Indocement Tunggal Prakarsa PT-Foreign
Registry................................ 321
---------
Forest Products (0.1%):
203,000 Barito Pacific Timber..................... 133
33,000 Init Indorayon Utama...................... 32
</TABLE>
CONTINUED
- ----64
<PAGE> 709
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
INDONESIA, CONTINUED:
Forest Products, continued:
<C> <S> <C>
66,500 Init Indorayon Utama--Foreign Registry.... $ 171
---------
336
---------
Telecommunications (0.1%):
107,500 Indosat PT................................ 361
---------
Textile Products (0.1%):
1,246,000 Polysindo Eka Perkasa PT-Foreign
Registry................................ 589
---------
Tobacco (0.3%):
166,000 Gudang Garam.............................. 711
45,500 Hanjaya Mandala Sampoerna................. 518
---------
1,229
---------
Total Indonesia 3,780
---------
IRELAND (0.2%):
Banking & Financial Services (0.2%):
132,300 Allied Irish Banks........................ 687
---------
Beverages & Tobacco (0.0%):
58,400 James Crean PLC........................... 233
---------
Total Ireland 920
---------
ITALY (7.0%):
Agriculture (0.1%):
305,900 Parmalat Finanziaria SPA.................. 411
---------
Airlines (0.0%):
206,000 Alitalia Italian SPA...................... 92
---------
Automotive (0.8%):
616,100 Fiat SPA.................................. 2,064
330,500 Fiat SPA Privileged....................... 580
106,100 Fiat SPA di Risp.......................... 181
---------
2,825
---------
Banking (0.7%):
378,000 Banca Commerciale Italiana................ 760
160,700 Banca Nazionale Dell'agricoltura SPA...... 95
82,800 Banco Ambrosiano Veneto SPA............... 222
344,000 Credito Italiano.......................... 403
112,600 Istituto Bancario san Paolo di Torina..... 727
31,680 Ras Savings............................... 165
---------
2,372
---------
Building Products (0.1%):
28,000 Italcementi SPA........................... 225
---------
Chemicals (0.1%):
832,100 Montedison SPA............................ 484
---------
Computer Hardware (0.1%):
371,000 Olivetti Ing & Co. SPA (b)................ 200
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
ITALY, CONTINUED:
<C> <S> <C>
Engineering (0.0%):
145,000 Impregilo SPA (b)......................... $ 154
---------
Financial Services (0.1%):
68,720 Mediobanca Banca Di Credito Fina.......... 436
---------
Insurance (1.7%):
218,680 Assicurazioni Generali SPA................ 5,043
22,600 La Previdenta Assicurazoni SPA............ 127
56,430 Riuniune Adriatici de Sicurta SPA......... 583
62,800 Societa Assicuratrice Industriale SPA..... 600
---------
6,353
---------
Oil & Gas Exploration, Production & Services (0.6%):
467,400 Ente Nazionale Idrocarburi SPA............ 2,331
---------
Paper Products (0.0%):
25,500 Burgo (Cartiere) SPA...................... 139
---------
Restaurants (0.0%):
44,204 Autogrill SPA (b)......................... 51
---------
Retail Stores (0.1%):
35,600 La Rinascente SPA (b)..................... 255
---------
Steel (0.2%):
155,000 Acciaerie e Ferriere, Lombarde, Falck
SPA..................................... 580
---------
Telecommunications (1.9%):
1,265,760 Telecom Italia SPA........................ 2,721
329,300 Telecom Italia di Risp SPA................ 449
1,198,060 Telecom Italia Mobile SPA................. 2,677
333,400 Telecom Italia Mobile di Risp SPA......... 575
55,700 Sirti Italian SPA......................... 358
---------
6,780
---------
Textile Products (0.1%):
33,400 Benetton Group SPA........................ 431
---------
Tire & Rubber (0.1%):
240,900 Pirelli SPA............................... 403
---------
Utilities--Electric & Gas (0.3%):
92,400 Edison SPA................................ 558
106,900 Italgas................................... 399
---------
957
---------
Total Italy 25,479
---------
JAPAN (31.7%):
Agriculture (0.0%):
25,000 Beet Sugar Manufacturing.................. 137
---------
Airlines (0.3%):
115,000 Japan Air Lines (b)....................... 930
---------
</TABLE>
CONTINUED
65----
<PAGE> 710
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
<C> <S> <C>
Aluminum (0.0%):
10,000 Nippon Light Metal Co. ................... $ 57
---------
Appliances & Household Products (1.4%):
130,000 Matsushita Electric Industrial Co. ....... 2,418
11,000 Pioneer Electronics Corp. ................ 262
56,000 Sanyo Electric Co. ....................... 342
52,000 Sharp Corp. .............................. 910
15,000 Sony Corp. ............................... 986
---------
4,918
---------
Automotive (1.8%):
39,000 Honda Motor Co. .......................... 1,010
134,000 Nissan Motors Co. ........................ 1,189
14,000 Toyoda Auto Loom Works.................... 280
161,000 Toyota Motor Co. ......................... 4,022
---------
6,501
---------
Banking (6.2%):
125,000 Asahi Bank Ltd. .......................... 1,447
196,600 Bank of Tokyo-Mitsubishi.................. 4,571
78,000 Bank of Yokohama Ltd. .................... 708
75,000 Chiba Bank................................ 661
162,000 Fuji Bank................................. 3,486
44,000 Joyo Bank................................. 333
57,000 Mitsui Trust & Banking Co. ............... 665
178,000 Sakura Bank............................... 1,980
50,000 Shizuoka Bank............................. 643
180,000 Sumitomo Bank Ltd. ....................... 3,479
132,000 The Industrial Bank of Japan.............. 3,273
109,000 Tokai Bank................................ 1,411
---------
22,657
---------
Banking & Financial Services (0.1%):
27,000 Gunma Bank................................ 300
---------
Basic Industry (0.1%):
42,000 Sekisui Chemical.......................... 513
---------
Beverages & Tobacco (0.3%):
3,000 Asahi Breweries Ltd. ..................... 35
49,000 Kirin Brewery Co., Ltd. .................. 599
36,000 Takara Shuzo Co., Ltd. ................... 368
---------
1,002
---------
Building Products (0.1%):
20,000 Onoda Cement Co. ......................... 115
8,000 Tostem Corp. ............................. 236
---------
351
---------
Chemicals (1.3%):
72,000 Asahi Chemical Industry................... 513
97,000 Denki Kagaku Kogyo K.K. .................. 350
32,000 Kaneka Corp. ............................. 215
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Chemicals, continued:
<C> <S> <C>
53,000 Konica Corp. ............................. $ 399
26,000 Kureha Chemical Industry.................. 146
36,000 Mitsubishi Chemical....................... 166
51,000 Mitsui Taotsu Chemical.................... 201
12,000 Nippon Shokubai K.K. Co. ................. 116
14,000 NOF Corp. ................................ 87
8,400 Shin-Etsu Chemical........................ 161
59,000 Showa Denko K.K. (b)...................... 182
100,000 Sumitomo Chemical Co., Ltd. .............. 477
27,000 Takeda Chemical Industries................ 478
75,000 Toray Industries Inc. .................... 517
72,000 Tosoh Corp. (b)........................... 320
74,000 UBE Industries Co. ....................... 281
---------
4,609
---------
Construction (0.8%):
32,000 Aoki Corp. ............................... 119
17,000 Daiwa House Industry Co., Ltd. ........... 263
22,000 Haseko Corp. (b).......................... 95
56,000 Kumagai Gumi Co., Ltd. ................... 225
12,000 Misawa Homes Co., Ltd. ................... 117
18,000 Okumura Corp. ............................ 150
20,000 Penta-Ocean Construction Co., Ltd. ....... 135
61,000 Sekisui House Ltd. ....................... 695
59,000 Shimizu Corp. ............................ 651
43,000 Taisei Corp. ............................. 305
---------
2,755
---------
Consumer Goods & Services (0.2%):
31,000 Nippon Sheet Glass........................ 152
45,000 Toto...................................... 677
---------
829
---------
Data Processing & Reproduction (0.3%):
117,000 Fujitsu Ltd. ............................. 1,067
---------
Distribution (0.4%):
72,000 Itochu Corp. ............................. 503
226,000 Tomen Corp. .............................. 867
---------
1,370
---------
Diversified (0.1%):
9,000 Amano Corp. .............................. 134
4,000 Sanrio Co., Ltd. (b)...................... 46
18,000 Yamaha Corp. ............................. 297
---------
477
---------
Electrical & Electronic (0.6%):
10,000 Kyocera Corp. ............................ 707
116,000 Mitsubishi Electric Corp. ................ 808
17,000 Omron Corp. .............................. 361
</TABLE>
CONTINUED
- ----66
<PAGE> 711
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Electrical & Electronic, continued:
<C> <S> <C>
7,000 Rohm...................................... $ 462
---------
2,338
---------
Electrical Equipment (0.1%):
7,100 SMC Corporation........................... 549
---------
Electronic Components/Instruments (0.9%):
11,000 Fanuc Co. Ltd. ........................... 437
3,100 Hirose Electric........................... 191
167,000 Hitachi Ltd. ............................. 1,553
68,000 NEC Corp. ................................ 738
23,000 Yokogawa Electric Corp. .................. 231
---------
3,150
---------
Energy (0.8%):
51,000 Cosmo Oil Co., Ltd. ...................... 315
211,000 Japan Energy Corp. (Nikko Kyodo Co.,
Ltd.)................................... 783
264,000 Nippon Oil Co., Ltd. ..................... 1,788
---------
2,886
---------
Engineering (0.5%):
9,000 Daito Trust Construction Co. ............. 135
36,000 Fujita Corp. ............................. 167
33,000 Hazama Gumi............................... 144
33,000 Kajima Corp. ............................. 340
9,900 Kinden Corp. ............................. 157
19,000 Nishimatsu Construction................... 208
53,000 Obayashi Gumi............................. 479
6,000 TOA Corp. ................................ 41
---------
1,671
---------
Entertainment (0.0%):
8,000 Tokyo Dome Corp. ......................... 161
---------
Financial Services (1.6%):
11,000 Acom Co., Ltd. (b)........................ 430
125,000 Daiwa Securities Co. Ltd. ................ 1,607
59,000 Mitsubishi Trust & Banking Co. ........... 995
18,000 Nikko Securities Co. ..................... 202
11,000 Nippon Shinpan Co. ....................... 78
83,000 Nomura Securities Co. .................... 1,619
6,000 Orix Corp. ............................... 222
76,000 Yamaichi Securities, Ltd. ................ 521
43,000 Yasuda Trust & Banking.................... 272
---------
5,946
---------
Food & Household Products (0.5%):
13,000 Ajinomoto Co., Inc. ...................... 155
39,000 Kao Corp. ................................ 526
62,000 Nippon Meat Packers, Inc. ................ 882
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Food & Household Products, continued:
<C> <S> <C>
4,000 Nissin Food Products...................... $ 102
---------
1,665
---------
Food Products & Services (0.2%):
24,000 Daiei Inc. ............................... 289
29,000 House Foods Industry...................... 550
---------
839
---------
Forest Products (0.3%):
22,000 Honshu Paper Co., Ltd. ................... 156
71,000 New Oji Paper Co., Ltd. .................. 612
44,000 Nippon Paper Industries Co. .............. 275
---------
1,043
---------
Health & Personal Care (0.6%):
9,000 Chugai Pharmaceutical Ltd. ............... 88
20,000 Kyowa Hakko Kogyo Co., Ltd. .............. 191
21,000 Lion Corp. ............................... 126
27,000 Sankyo Co. ............................... 699
57,000 Yamanouchi Pharmaceutical Co., Ltd. ...... 1,237
---------
2,341
---------
Hotels & Lodging (0.0%):
5,000 Fujita Kanko, Inc. ....................... 100
---------
Industrial Goods & Services (0.7%):
57,000 Bridgestone Corp. ........................ 1,086
33,000 Mitsui Engineering & Shipbuilding Co.
(b)..................................... 100
14,000 NGK Insulators Ltd. ...................... 157
50,000 Nippon Denso Ltd. ........................ 1,085
15,000 Sumitomo Electric Industries.............. 215
---------
2,643
---------
Insurance (0.3%):
39,000 Mitsui Marine & Fire Insurance Co. ....... 310
13,650 Nichido Fire & Marine Insurance Co.,
Ltd. ................................... 105
11,000 Nippon Fire & Marine Insurance Co. ....... 72
22,000 Sumitomo Marine & Fire Insurance Co. ..... 192
43,000 Tokio Marine & Fire Insurance Co. ........ 572
---------
1,251
---------
Jewelry (0.1%):
40,000 Citizen Watch............................. 333
---------
Leasing (0.1%):
45,000 Yamato Transport.......................... 529
---------
Machinery & Equipment (1.5%):
20,000 Chiyoda Chemical Engineering.............. 237
9,000 Daifuku................................... 138
15,000 Daikin Industries......................... 164
</TABLE>
CONTINUED
67----
<PAGE> 712
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Machinery & Equipment, continued:
<C> <S> <C>
7,000 Ebara..................................... $ 112
58,000 Iseki & Co. (b)........................... 268
49,000 Komatsu................................... 482
40,000 Koyo Seiko Co., Ltd. ..................... 390
26,000 Kubota Corp. ............................. 171
32,000 Minebea Co., Ltd. ........................ 269
229,000 Mitsubishi Heavy Industries............... 1,990
4,000 Mori Seiki................................ 80
58,000 Niigata Engineering....................... 221
25,000 NSK Ltd. ................................. 189
37,000 NTN Corp. ................................ 261
11,000 Tokyo Electron Ltd. ...................... 320
---------
5,292
---------
Manufacturing--Capital Goods (0.6%):
42,000 Fujikura.................................. 348
16,000 Kokuyo Co., Ltd. ......................... 442
21,000 Makita Corp. ............................. 341
15,000 Murata Manufacturing...................... 567
22,000 Noritake Co., Ltd. ....................... 229
22,000 Topy Industries Co. ...................... 107
---------
2,034
---------
Manufacturing--Consumer Goods (0.7%):
69,000 Canon Inc. ............................... 1,434
33,000 Fuji Photo Film Ltd. ..................... 1,041
5,000 Sega Enterprise Ltd. ..................... 233
---------
2,708
---------
Materials (0.0%):
15,000 Sumitomo Cement........................... 73
---------
Merchandising (0.7%):
28,000 Ito Yokado Ltd. .......................... 1,687
14,000 Jusco Ltd. ............................... 458
10,000 Marui Ltd. ............................... 222
900 Seven-Eleven Japan Ltd. .................. 57
---------
2,424
---------
Metals & Mining (0.4%):
32,000 Furukawa Electric......................... 191
66,000 Japan Steel Works......................... 217
67,000 Mitsubishi Materials Corp. ............... 364
30,000 Mitsui Mining Co., Ltd. (b)............... 168
30,000 Mitsui Mining & Smelting.................. 123
22,000 Sumitomo Metal & Mining................... 190
44,000 Toho Zinc................................. 282
---------
1,535
---------
Miscellaneous Materials & Commodities (0.1%):
20,000 Asahi Glass Co., Ltd. (b)................. 239
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
<C> <S> <C>
Office Equipment & Services (0.3%):
57,000 Dai Nippon Printing Co., Ltd. ............ $ 1,102
---------
Oil & Gas Exploration, Production & Service (0.3%):
9,000 Arabian Oil Co. .......................... 421
9,000 Showa Shell Sekiyu KK..................... 94
66,000 Teikoko Oil............................... 452
---------
967
---------
Oil & Gas Transmission (0.1%):
10,000 Iwatani International Corp. .............. 58
17,000 Mitsubishi Oil Co. ....................... 145
---------
203
---------
Packaging (0.1%):
7,000 Toyo Seikan Kaisha........................ 244
---------
Pharmaceuticals (0.2%):
12,000 Meiji Seika............................... 74
13,000 Shionogi& Co. ............................ 112
29,000 Taisho Pharmacuetical..................... 627
---------
813
---------
Real Estate (0.7%):
98,000 Mitsubishi Estate Co. .................... 1,349
75,000 Mitsui Fudosan............................ 1,012
---------
2,361
---------
Restaurants (0.0%):
8,000 Skylark................................... 168
---------
Retail Stores/Catalog (0.4%):
10,000 Hankyu Department Stores.................. 131
12,000 Isetan.................................... 182
52,000 Nichii Co., Ltd. ......................... 863
26,000 Takashimaya Co. .......................... 403
---------
1,579
---------
Services (0.4%):
12,000 Secom..................................... 792
35,000 Toppan Printing........................... 511
---------
1,303
---------
Steel (0.9%):
53,000 Daido Steel Co. .......................... 262
27,000 Japan Metals & Chemicals (b).............. 143
164,000 Kawasaki Steel Corp. ..................... 591
199,000 Nippon Kokan (b).......................... 602
57,000 Nippon Metal Industry..................... 282
280,000 Nippon Steel Corp. ....................... 960
125,000 Sumitomo Metal Industries................. 383
---------
3,223
---------
</TABLE>
CONTINUED
- ----68
<PAGE> 713
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
<C> <S> <C>
Storage (0.1%):
34,000 Mitsui-Soko............................... $ 307
---------
Textile Products (0.4%):
244,000 Kanebo Ltd. (b)........................... 727
15,000 Kurabo Industries......................... 60
31,000 Kuraray Co., Ltd. ........................ 348
13,000 Nisshinbo Industries...................... 128
12,000 Teijin.................................... 65
27,000 Toyobo.................................... 101
48,000 Unitika, Ltd. (b)......................... 145
---------
1,574
---------
Transportation--Road & Railroad (1.0%):
73,000 Hankyu Corp. ............................. 427
29,870 Keihin Electric Express Railway........... 177
250,290 Kinki Nippon Railway...................... 1,800
47,000 Nippon Express Co. ....................... 459
35,020 Odakyu Railway............................ 236
18,000 Tobu Railway.............................. 118
46,000 Tokyo Corp. .............................. 350
---------
3,567
---------
Transportation & Shipping (0.2%):
8,000 Kamigumi Co., Ltd. ....................... 73
18,000 Mitsui O.S.K. Lines, Ltd. (b)............. 62
27,000 Nippon Yusen.............................. 156
9,000 Seino Transportation...................... 142
123,000 Showa Line, Ltd. (b)...................... 258
---------
691
---------
Utilities--Electric & Gas (1.3%):
69,300 Kansai Electric Power..................... 1,586
82,000 Osaka Gas Co., Ltd. ...................... 300
22,200 Tohoku Electric Power..................... 496
80,500 Tokyo Electric Power...................... 2,040
92,000 Tokyo Gas Ltd. ........................... 336
---------
4,758
---------
Wholesale & International Trade (0.7%):
123,000 Marubeni Corp. ........................... 673
59,000 Mitsubishi Corp. ......................... 775
59,000 Mitsui & Co. ............................. 534
40,000 Sumitomo Corp. ........................... 355
---------
2,337
---------
Total Japan 115,420
---------
MALAYSIA (0.5%):
Agriculture (0.1%):
94,000 Highlands & Lowlands Berhad............... 167
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
MALAYSIA, CONTINUED:
Agriculture, continued:
<C> <S> <C>
146,000 Industrial Oxygen, Inc. Berhad............ $ 202
---------
369
---------
Building Products (0.0%):
80,000 Pan Malaysia Cement Works................. 88
---------
Engineering (0.1%):
86,000 Promet Berhad (b)......................... 85
18,585 United Engineers Berhad................... 129
---------
214
---------
Financial Services (0.1%):
99,000 Idris Hydraulic Berhad (b)................ 129
94,000 Rashid Hussain............................ 345
---------
474
---------
Food Products & Services (0.1%):
70,000 Nestle Berhad............................. 564
---------
Forest Products (0.0%):
20,500 Land & General Holdings Berhad............ 51
---------
Hotels & Lodging (0.0%):
29,500 Faber Group (b)........................... 31
---------
Utilities--Electric & Gas (0.1%):
51,000 Tenaga Nasional Berhad.................... 214
---------
Total Malaysia 2,005
---------
MEXICO (0.8%):
Beverages & Tobacco (0.0%):
5,000 Grupo Continental SA, Series CP........... 19
12,000 Grupo Embotelladoras de Mexico SA de CV
(b)..................................... 21
---------
40
---------
Brewery (0.0%):
13,000 Fomento Economico......................... 37
---------
Building Products (0.1%):
8,000 Apasco SA de CV........................... 44
31,330 Cementos de Mexico SA de CV, Class A...... 113
16,200 Cementos de Mexico SA de CV, Class B...... 64
7,000 Cemex, SA de CV........................... 25
17,960 Tolmex SA, Class B2 (b)................... 78
---------
324
---------
Diversified (0.1%):
22,286 Alfa SA de CV............................. 100
4,000 Desc SA de CV, Class A.................... 21
4,000 Desc SA de CV, Class B.................... 22
166 Desc SA de CV, Class C (b)................ 1
</TABLE>
CONTINUED
69----
<PAGE> 714
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
MEXICO, CONTINUED:
Diversified, continued:
<C> <S> <C>
36,500 Grupo Carso SA, Class A1 (b).............. $ 259
---------
403
---------
Engineering (0.0%):
4,000 Empresas ICA Sociedad Controladora SA..... 56
14,000 Grupo Tribasa SA de CV (b)................ 40
---------
96
---------
Financial Services (0.0%):
32,000 Grupo Financiero Banamex, Class B (b)..... 67
75,000 Grupo Financiero Bancomer, Class B (b).... 33
---------
100
---------
Food & Household Products (0.2%):
29,000 Kimberly-Clark de Mexico, Class A......... 528
---------
Industrial Goods & Service (0.0%):
7,000 Grupo Industrial, Class A................. 32
---------
Merchandising (0.1%):
38,000 Cifra SA de CV, Class B (b)............... 55
51,000 Cifra SA de CV, Class C (b)............... 73
---------
128
---------
Metals & Mining (0.1%):
18,000 Grupo Mexico SA (b)....................... 55
13,000 Industria Penoles......................... 60
---------
115
---------
Retail--General Merchandise (0.0%):
39,000 Controladora Comercial Mexicana (b)....... 36
---------
Retail Stores/Catalog (0.0%):
37,000 Cifra SA de CV............................ 54
42,000 El Puerto de Liverpool SA de CV........... 35
4,000 Sears Roebuck De Mexico SA de CV (b)...... 10
---------
99
---------
Steel (0.0%):
6,000 Altos Hornos de Mexico SA (b)............. 49
6,000 Hylsamex SA de CV......................... 26
---------
75
---------
Telecommunications (0.2%):
9,000 Grupo Televisa SA......................... 141
269,000 Telefonos de Mexico SA.................... 457
---------
598
---------
Tobacco (0.0%):
17,000 Empresas La Modern........................ 76
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
MEXICO, CONTINUED:
<C> <S> <C>
Transportation--Shipping (0.0%):
29,880 Vitro SA.................................. $ 69
---------
Wholesale Distribution (0.0%):
37,500 Grupo Casa Autrey SA de CV................ 82
---------
Total Mexico 2,838
---------
NETHERLANDS (2.6%):
Appliances & Household Products (0.1%):
11,100 Philips Electronics NV.................... 361
---------
Banking (0.3%):
20,150 ABN Amro Holdings NV...................... 1,081
---------
Beverages & Tobacco (0.1%):
1,625 Heineken NV............................... 363
---------
Broadcasting & Publishing (0.2%):
42,700 Elsevier NV............................... 648
---------
Chemicals (0.2%):
5,500 Akzo Nobel NV............................. 659
1,550 DSM NV.................................... 154
---------
813
---------
Energy (0.9%):
19,850 Royal Dutch Petroleum Co. NV.............. 3,066
---------
Financial Services (0.4%):
51,650 Internationale Nederlanden Group NV....... 1,540
---------
Food Products & Services (0.2%):
5,700 Unilever NV............................... 825
---------
Services (0.2%):
17,050 Koninklijke PTT Nederland NV.............. 645
---------
Total Netherlands 9,342
---------
NEW ZEALAND (0.4%):
Appliances & Household Products (0.0%):
52,200 Fisher & Paykel Industries................ 167
---------
Beverages & Tobacco (0.1%):
78,200 Lion Nathan, Ltd. ........................ 204
---------
Broadcasting & Publishing (0.1%):
34,837 Wilson & Horton, Ltd. .................... 232
---------
Telecommunications (0.2%):
205,400 Telecom Corp. of New Zealand, Ltd. ....... 861
---------
Total New Zealand 1,464
---------
NORWAY (0.6%):
Engineering (0.1%):
6,090 Kvaerner A/S, Class A..................... 257
---------
Entertainment (0.0%):
42,880 NCL Holdings A/S (b)...................... 98
---------
</TABLE>
CONTINUED
- ----70
<PAGE> 715
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
NORWAY, CONTINUED:
<C> <S> <C>
Forest Products (0.1%):
6,640 Norske Skogsindustrier A/S, Class B....... $ 185
---------
Medical Equipment & Supplies (0.0%):
12,800 Hafslund A/S Class A...................... 81
---------
Oil & Gas Exploration, Production & Services (0.4%):
8,400 Aker A/S, Class A......................... 161
5,880 Aker A/S, Class B......................... 105
26,160 Norsk Hydro A/S........................... 1,281
---------
1,547
---------
Pharmaceuticals (0.0%):
12,800 Nycomed ASA, Class B (b).................. 177
---------
Total Norway 2,345
---------
PHILLIPINES (1.0%):
Agriculture (0.0%):
310,700 Vitarich Corp. ........................... 37
---------
Banking & Financial Services (0.2%):
4,500 Far East Bank & Trust..................... 158
10,230 Metropolitan Bank & Trust................. 287
10,800 Phillippine Commercial International Bank
(b)..................................... 135
15,390 Philippine National Bank.................. 257
---------
837
---------
Beverages & Tobacco (0.1%):
54,637 San Miguel Corp., Class B................. 189
---------
Building Products (0.0%):
353,000 Southeast Asia Cement Holding, Inc. (b)... 46
---------
Diversified (0.1%):
162,960 Ayala Corp., Class B...................... 308
38,000 Metro Pacific Corp. ...................... 11
---------
319
---------
Homebuilders (0.0%):
63,000 C&P Homes................................. 55
---------
Oil & Gas Exploration, Production & Services (0.1%)
832,125 Petron Corp. ............................. 381
---------
Real Estate (0.3%):
508,750 Ayala Land, Inc., Class B................. 912
78,000 Filinvest Land, Inc. (b).................. 32
246,000 Prime Holdings, Inc. ..................... 64
---------
1,008
---------
Telecommunications (0.1%):
18,800 Filipino Telephone (b).................... 29
7,400 Philippine Long Distance Telephone Co..... 441
---------
470
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
PHILLIPINES, CONTINUED:
<C> <S> <C>
Utilities--Electric & Gas (0.1%):
21,450 Manila Electric Co., Class B.............. $ 225
---------
Total Philippines 3,567
---------
PORTUGAL (0.7%):
Banking (0.3%):
25,070 Banco Commercial Portuguese............... 296
23,751 Banco Espirito Santo e Commerical de
Lisboa.................................. 381
13,900 Banco Internacional do Funchal............ 132
16,927 Banco Portuguese de Investimento-Soc
Gestora De Participacces Sociais SA..... 214
1,000 Banco Totta & Acores...................... 20
---------
1,043
---------
Beverages & Tobacco (0.1%):
15,740 Unicer-Unioa Cervejiera................... 280
---------
Building Products (0.0%):
1,300 Cimpor Cimentos de Portugal SA............ 27
---------
Food & Household Products (0.1%):
3,800 Jeronimo Martins & Filho.................. 342
---------
Forest Products (0.0%):
5,450 Soporcel (b).............................. 120
---------
Industrial Holding Company (0.1%):
13,800 Sonae Industria e Investimentos........... 358
---------
Insurance (0.0%):
6,100 Companhia de Seguros Tranquilidade........ 113
---------
Retail--General Merchandise (0.1%):
9,000 Modelo Continente Sociedade Gestora de
Participacoes Sociais SA................ 262
---------
Telecommunications (0.0%):
5,000 Portugal Telecom SA....................... 131
---------
Total Portugal 2,676
---------
SINGAPORE (0.4%):
Engineering (0.0%):
12,000 Promet Berhad............................. 12
---------
Lodging (0.1%):
243,000 Hotel & Properties Ltd.................... 431
---------
Telecommunications (0.1%):
148,000 Singapore Telecommunications Ltd. ........ 394
---------
Transportation & Shipping (0.2%):
468,000 Chuan Hup Holdings........................ 358
229,000 Neptune Orient Lines...................... 240
---------
598
---------
Total Singapore 1,435
---------
</TABLE>
CONTINUED
71----
<PAGE> 716
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
<C> <S> <C>
SOUTH AFRICA (0.7%):
Banking & Financial Services (0.1%):
4,700 Nedcor Ltd. .............................. $ 71
2,600 Standard Bank Investment (b).............. 102
---------
173
---------
Brewery (0.1%):
6,600 South African Breweries Ltd. ............. 194
---------
Diversified (0.1%):
4,600 Anglovaal Industries Ltd. (b)............. 23
3,200 Barlow Ltd. .............................. 34
7,500 C.G. Smith Ltd. .......................... 39
30,700 Gencor Ltd. .............................. 113
7,500 Malbak Ltd. .............................. 37
11,600 Rembrandt Group Ltd. ..................... 109
---------
355
---------
Engineering (0.0%):
8,100 Murray & Roberts Holdings Ltd. ........... 32
---------
Entertainment (0.0%):
17,100 Sun International Ltd. ................... 18
---------
Financial Services (0.0%):
6,900 First National Bank Holdings Ltd. ........ 50
9,200 Amalgamated Banks of South Africa......... 51
---------
101
---------
Food & Household Products (0.0%):
3,400 Tiger Oats Ltd. .......................... 48
---------
Forest Products (0.0%):
11,100 Nampak Ltd. .............................. 46
9,500 Sappi Ltd. ............................... 105
---------
151
---------
Industrial Goods & Services (0.0%):
1,100 Anglo American Industrial Corp. Ltd. ..... 44
---------
Insurance (0.1%):
5,300 Liberty Life Association of Africa
Ltd. ................................... 170
4,100 Southern Life Assoc. Ltd. ................ 47
---------
217
---------
Metals & Mining (0.3%):
5,200 Anglo American Corp of South Africa
Ltd. ................................... 330
500 Anglo American Gold Investment............ 44
8,400 DeBeers Consolidated Mines Ltd. .......... 289
3,200 Driefontein Consolidated Ltd. ............ 43
1,500 Gold Fields of South Africa Ltd. ......... 45
3,400 Johnnies Industrial Corp. Ltd. ........... 42
3,800 Kloof Gold Mining Company Ltd. ........... 36
8,200 Randfontein Estates Gold Mining Co. (b)... 50
4,700 Rustenburg Platinum Holdings Ltd. ........ 73
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
SOUTH AFRICA, CONTINUED:
Metals & Mining, continued:
<C> <S> <C>
4,100 Samancor Ltd. ............................ $ 53
---------
1,005
---------
Oil & Gas Exploration Products & Services (0.0%):
13,100 Sasol Ltd. ............................... 142
---------
Total South Africa 2,480
---------
SPAIN (3.4%):
Automotive (0.0%):
3,200 FAS-Renault Fabricacio.................... 70
---------
Banking (0.8%):
27,300 Banco Bilbao Vizcaya, Registered.......... 1,105
11,300 Banco Central SA Spanish, Registered...... 230
17,900 Banco de Santander SA, Registered......... 835
14,200 Corporacion Bancaria de Espana SA......... 619
---------
2,789
---------
Beverages & Tobacco (0.1%):
7,400 El Aguila SA (b).......................... 46
6,000 Tabacalera Spanish SA, Registered......... 302
---------
348
---------
Building Products (0.0%):
13,900 Uralita SA................................ 130
---------
Chemicals (0.0%):
26,900 Ercros SA (b)............................. 16
---------
Energy (0.3%):
30,200 Repsol SA................................. 1,050
---------
Food & Household Products (0.1%):
16,900 Ebro Agricolas, Compania de Alimentacion
SA...................................... 195
---------
Forest Products (0.0%):
4,600 Empresa Nacional de Celulosas............. 65
16,800 Sarrio SA................................. 55
---------
120
---------
Industrial Holding Companies (0.1%):
5,600 Alba...................................... 466
---------
Insurance (0.0%):
2,300 Corporacion Mafre cia International SA.... 117
---------
Miscellaneous Materials & Commodities (0.0%):
6,400 Viscofan Industria Navarra de Envolturas
Celulosicas............................. 101
---------
Real Estate (0.1%):
8,200 Inmobiliaria Metropolitana Vasco Central
SA...................................... 280
</TABLE>
CONTINUED
- ----72
<PAGE> 717
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
SPAIN, CONTINUED:
Real Estate, continued:
<C> <S> <C>
8,300 Vallehermoso SA........................... $ 164
---------
444
---------
Steel (0.1%):
3,180 Acerinox SA, Registered................... 331
---------
Telecommunications (0.6%):
110,000 Telefonica de Espana...................... 2,025
---------
Utilities--Electric & Gas (1.2%):
27,200 Empresa Nacional de Electricidad SA....... 1,695
2,800 Fomento de Construcciones y Contrates
SA...................................... 232
5,100 Gas Natural SDG SA........................ 1,070
100,700 Iberdrola SA.............................. 1,033
48,310 Union Electric Fenosa SA.................. 310
---------
4,340
---------
Total Spain 12,542
---------
SWEDEN (1.6%):
Automotive (0.1%):
14,500 Volvo AB, Class B......................... 330
---------
Banking & Financial Services (0.1%):
20,200 Skandiaviska Enskilda Banken, Class A..... 161
800 Svenska Handlesbanken, Class A............ 16
11,150 Svenska Handlesbanken, Class A............ 233
---------
410
---------
Engineering (0.1%):
2,350 ABB AB, Class A........................... 249
800 ABB AB, Class B........................... 84
4,150 Skanska AB, Class B....................... 147
---------
480
---------
Forest Products (0.2%):
14,000 Stora Kopparberg.......................... 185
5,750 Stora Kopparberg, Class B................. 76
15,500 Svenska Cellulosa, Class B................ 319
---------
580
---------
Insurance (0.0%):
4,200 Skandia Forsakrings AB.................... 111
---------
Machinery & Equipment (0.1%):
13,300 Atlas Copco AB, Class A................... 247
1,000 Atlas Copco AB, Class B................... 19
---------
266
---------
Manufacturing--Consumer Goods (0.1%):
4,450 Electrolux AB, Class B.................... 224
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
SWEDEN, CONTINUED:
<C> <S> <C>
Metals & Mining (0.0%):
1,750 S.K.F. AB, Class B........................ $ 42
7,150 Trelleborg AB, Class B.................... 89
---------
131
---------
Office Equipment & Services (0.0%):
4,600 Esselte AB, Class B....................... 94
---------
Pharmaceuticals (0.5%):
29,850 Astra AB, Class A......................... 1,318
9,850 Astra AB, Class B......................... 429
---------
1,747
---------
Retail--Special Line (0.2%):
6,400 Hennes & Mauritz AB, Class B.............. 593
---------
Telecommunications (0.2%):
29,800 Telelfonaktiebolaget LM Ericsson.......... 642
---------
Tobacco (0.0%):
14,500 Swedish Match AB (b)...................... 45
---------
Total Sweden 5,653
---------
SWITZERLAND (1.8%):
Banking (0.1%):
1,080 Swiss Bank Corp. ......................... 213
---------
Consumer Goods (0.1%):
1,150 Societe Suisse pour la Microelectronique
et l'Horlogerie......................... 180
---------
Diversified (0.1%)
260 ABB AG.................................... 321
150 Alusuisse-Lonza Holding AG................ 124
---------
445
---------
Financial Services (0.3%):
4,510 CS Holdings............................... 429
624 Union Bank of Switzerland................. 610
---------
1,039
---------
Food Products & Services (0.2%):
570 Nestle SA, Registered..................... 651
---------
Insurance (0.1%):
390 Swiss Reinsurance Co. .................... 400
---------
Pharmaceuticals (0.9%):
600 Ciba Geigy AG............................. 731
130 Roche Holdings............................ 992
40 Roche Holdings AG Genusscheine............ 497
1,000 Sandoz AG, Registered..................... 1,143
---------
3,363
---------
</TABLE>
CONTINUED
73----
<PAGE> 718
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
SWITZERLAND, CONTINUED:
<C> <S> <C>
Transportation & Shipping (0.0%):
100 Danzas Holding AG, Registered............. $ 109
---------
Total Switzerland 6,400
---------
THAILAND (0.8%):
Airlines (0.1%):
95,200 Thai Airways International Public Co.
Ltd. ................................... 202
41,000 Thai Airways International Public Co. Ltd.
Foreign Registered Shares............... 91
---------
293
---------
Banking (0.4%):
211,190 Krung Thai Bank Ltd. ..................... 965
41,800 The Bangkok Bank.......................... 566
---------
1,531
---------
Metals & Mining (0.1%):
235,500 Padaeng Industries (b).................... 120
---------
Telecommunications (0.2%):
30,000 Advanced Information Services PLC......... 470
7,700 Shinawatra Computers & Communication...... 166
76,700 Telecomasia Corp. ........................ 163
---------
799
---------
Total Thailand 2,743
---------
TURKEY (1.1%):
Appliances & Household Products (0.0%):
1,243,103 Arcelik AS................................ 115
---------
Automotive (0.1%):
236,000 Otosan Otomobil Sanayii AS................ 80
1,790,400 Tofas Turk Otomobil Fabrikas.............. 86
---------
166
---------
Banking & Financial Services (0.2%):
2,333,400 Akbank.................................... 281
4,806,400 Turkiye Garanti Bankasi AS................ 328
---------
609
---------
Beverages & Tobacco (0.1%):
143,640 Ericiyas Biracilik ve Malt Sanayii........ 81
301,540 Ege Biracilik ve Malt Sanayi.............. 138
---------
219
---------
Building Products (0.1%):
424,000 Akcimento Ticaret AS...................... 38
167,316 Cimentas AS............................... 37
63,000 Cimsa Cimento Sanayi ve Ticaret AS........ 36
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
TURKEY, CONTINUED:
Building Products, continued:
<C> <S> <C>
1,090,565 Turk Sise ve Cam Fabrikalari (b).......... $ 86
---------
197
---------
Chemicals (0.1%):
538,000 Petkim Petrokimya Holdings AS............. 255
---------
Diversified (0.1%):
657,000 Dogan Sirketler Grubu Holding AS.......... 28
1,082,900 Koc Holdings AS........................... 264
---------
292
---------
Electrical & Electronical (0.0%):
251,000 Raks Electronik (b)....................... 70
---------
Financial Services (0.1%):
469,000 Eczacibasi Yatirim Holdings Ortakligi
(b)..................................... 63
1,759,000 Turkiye Is Bankasi AS, Class C............ 163
5,862,600 Yapi ve Kredi Bankasi AS.................. 166
---------
392
---------
Food Products & Services (0.0%):
178,687 Tat Konserve Sanayii AS................... 42
---------
Forest Products (0.0%):
291,000 Kartonsan Karton Sanayi ve Ticaret AS..... 25
---------
Industrial Goods & Services (0.0%):
84,000 Kordsa Kord Bezi Sanayi ve Ticaret AS..... 27
---------
Manufacturing--Capital Goods (0.0%):
342,000 Turk Demir Dokum Fabrikalari AS (b)....... 21
---------
Metals & Mining (0.1%):
1,463,450 Eregli Demir ve Celik Fabrik.............. 162
4,190,516 Izmir Demir Celik Sanayi AS (b)........... 46
---------
208
---------
Oil & Gas Exploration, Production & Services (0.1%):
280,555 Aygaz AS.................................. 50
429,600 Petrol Ofisi AS........................... 118
834,865 Tupras Turkiye Petrol Rafinerileri AS
(b)..................................... 157
---------
325
---------
Telecommunications (0.0%):
232,200 Netas Telekomunik......................... 55
---------
Textile Products (0.0%):
787,057 Aksa Akrilik Kimya Sanayii (b)............ 165
---------
Tire & Rubber (0.0%):
179,000 Brisa Bridgestone Sabanci Lastik SAN, ve
Ticaret................................. 72
96,000 Goodyear Lastikleri TAS................... 39
---------
111
---------
</TABLE>
CONTINUED
- ----74
<PAGE> 719
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
TURKEY, CONTINUED:
<C> <S> <C>
Transportation (0.1%):
1,806,454 Turk Hava Tollari AS (b).................. $ 495
---------
Utility--Electric & Gas (0.0%):
96,000 Cukurova Elektrik AS...................... 77
---------
Wholesale Distribution (0.0%):
110,000 Migros Turk TAS........................... 96
---------
Total Turkey 3,962
---------
UNITED KINGDOM (7.0%):
Aerospace & Military Technology (0.2%):
21,900 British Aerospace PLC..................... 332
33,200 Rolls-Royce PLC........................... 116
34,700 Smiths Industries PLC..................... 380
---------
828
---------
Airlines (0.1%):
28,200 British Airways PLC....................... 243
---------
Appliances & Household Products (0.1%):
13,600 Thorn EMI PLC............................. 379
---------
Banking (0.9%):
160,400 Abbey National PLC........................ 1,348
74,500 Barclays Bank PLC......................... 895
21,000 HSBC Holdings PLC......................... 329
42,800 HSBC Holdings PLC......................... 656
23,500 The Royal Bank of Scotland PLC............ 180
---------
3,408
---------
Banking & Financial Services (0.1%):
37,500 Allied Irish Banks PLC.................... 196
---------
Beverages & Tobacco (0.2%):
49,400 Guinness PLC.............................. 359
50,200 Scottish & Newcastle PLC.................. 514
---------
873
---------
Broadcasting/Cable (0.1%):
43,500 British Sky Broadcasting Group PLC........ 297
---------
Building Products (0.1%):
67,300 Camas..................................... 93
158,800 Tarmac PLC................................ 274
---------
367
---------
Chemicals (0.1%):
15,700 Imperial Chemical PLC..................... 192
---------
Conglomerates (0.2%):
70,400 B.A.T. Industries PLC..................... 548
53,500 Lonrho PLC................................ 154
---------
702
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
UNITED KINGDOM, CONTINUED:
<C> <S> <C>
Construction (0.0%):
73,500 Taylor Woodrow PLC........................ $ 178
---------
Electrical & Electronic (0.2%):
28,300 Bowthorpe PLC............................. 198
49,800 Electrocomponents......................... 296
47,300 General Electric Co. PLC.................. 255
22,300 Oxford Instruments PLC.................... 171
---------
920
---------
Energy (0.3%):
135,700 British Petroleum Co. PLC................. 1,190
---------
Engineering (0.0%):
24,700 Barratt Developments PLC.................. 97
56,460 Costain Group PLC (b)..................... 34
---------
131
---------
Financial Services (0.2%):
143,582 Lloyds TSB Group PLC...................... 703
36,700 St. James's Place Capital PLC............. 69
---------
772
---------
Food & Household Products (0.2%):
42,285 Cadbury Schweppes PLC..................... 334
18,700 Unilever PLC.............................. 372
---------
706
---------
Health & Personal Care (0.7%):
143,600 Glaxo Holdings PLC........................ 1,933
26,500 Zeneca Group PLC.......................... 586
---------
2,519
---------
Industrial Holding Companies (0.5%):
21,900 Bicc PLC.................................. 106
100,700 BTR PLC................................... 397
94,200 Grand Metropolitan........................ 625
200,900 Hanson PLC................................ 563
---------
1,691
---------
Insurance (0.2%):
56,300 Commercial Union PLC...................... 507
18,600 Prudential Corp. PLC...................... 117
31,800 Royal Insurance Holdings PLC.............. 197
---------
821
---------
Leisure (0.1%):
21,600 Granada Group PLC......................... 289
---------
Machinery & Equipment (0.1%):
20,000 GKN PLC................................... 307
---------
Merchandising (0.1%):
42,900 Safeway PLC............................... 231
---------
</TABLE>
CONTINUED
75----
<PAGE> 720
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
COMMON STOCKS, CONTINUED:
UNITED KINGDOM, CONTINUED:
<C> <S> <C>
Metals & Mining (0.1%):
48,900 English China Clays PLC................... $ 197
---------
Metals (Non-ferrous) (0.2%):
42,500 RTZ Corp. ................................ 629
---------
Metals (Steel) (0.0%):
67,600 British Steel PLC......................... 173
---------
Miscellaneous Materials & Commodities (0.1%):
61,200 Harrison & Crossfield PLC................. 130
50,900 Pilkington PLC............................ 143
---------
273
---------
Oil & Gas Exploration Products & Services (0.0%):
3,300 Shell Transport & Trading Co. ............ 48
---------
Paper Products (0.1%):
40,900 Rexam PLC................................. 216
---------
Pharmaceuticals (0.2%):
72,372 Smithkline Beecham PLC.................... 774
---------
Printing & Publishing (0.1%):
42,600 Reuters Holdings PLC...................... 516
---------
Real Estate (0.2%):
18,720 British Land Co. PLC...................... 123
48,600 Land Securities PLC....................... 471
---------
594
---------
Retail Stores/Catalog (0.7%):
22,800 Great Universal Stores PLC................ 232
89,900 Marks & Spencer PLC....................... 657
22,700 Next PLC.................................. 199
54,900 Sainsbury PLC............................. 323
117,000 Tesco PLC................................. 535
45,500 The Boots Co. PLC......................... 409
---------
2,355
---------
Road & Railroad (0.0%):
18,600 Peninsular & Oriental Steam Navigation
Co. .................................... 140
---------
Telecommunications (0.5%):
148,900 British Telecom PLC....................... 801
65,100 Cable & Wireless PLC...................... 431
123,700 Vodaphone................................. 460
---------
1,692
---------
Utilities--Electric & Gas (0.1%):
77,300 British Gas PLC........................... 216
33,800 National Power PLC........................ 273
---------
489
---------
Total United Kingdom 25,336
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
<C> <S> <C>
UNITED STATES (0.9%):
Banking & Financial Services (0.0%):
5,883 Banco O'Higgins ADR....................... $ 142
---------
Beverages & Tobacco (0.1%):
6,712 Compania Cervezas Unidas SA Produce ADR... 158
4,066 Embotelladora Andina SA ADR............... 149
2,500 Vina Concho Y Toro SA ADR................. 46
---------
353
---------
Chemicals (0.1%):
6,409 Quimica Y Minera Chile SA ADR............. 348
---------
Diversified (0.0%):
1,615 U.S. Industries, Inc. (b)................. 39
---------
Forest Products (0.1%):
11,887 Maderas Y Sinteticos ADR.................. 211
---------
Metals & Mining (0.1%):
7,615 Madeco SA ADR............................. 214
---------
Packaging (0.1%):
8,500 Cristalerias de Chile ADR................. 200
---------
Pharmaceuticals (0.0%):
4,711 Laboratorio Chile SA ADR.................. 64
---------
Telecommunications (0.1%):
3,796 Compania Telecomunicacion Chile ADR....... 372
---------
Utilities--Electric (0.3%):
4,662 Chilectra Metro SA ADR.................... 257
11,891 Chilenger SA ADR.......................... 285
19,962 Empresa Nacional de Electric ADR.......... 429
10,028 Enersis SA ADR............................ 311
---------
1,282
---------
Total United States 3,225
---------
Total Common Stocks 352,848
---------
INVESTMENT COMPANIES (0.1%):
AUSTRALIA (0.1%):
104,800 Stockland Trust Group..................... 239
---------
TURKEY (0.0%):
189,600 Koc Yatirim ve Sanayi Mamulleri Pazarlama
SA...................................... 31
---------
Total Investment Companies 270
---------
PREFERRED STOCKS (1.2%):
AUSTRALIA (0.3%):
223,350 News Corp. Ltd. .......................... 1,090
---------
BRAZIL (0.1%):
Banking (0.1%):
11,667,000 Banco Bradesco SA......................... 94
</TABLE>
CONTINUED
- ----76
<PAGE> 721
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
<TABLE>
<CAPTION>
SHARES
OR PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
PREFERRED STOCKS, CONTINUED:
BRAZIL, CONTINUED:
Banking, continued:
<C> <S> <C>
131,000 Banco Itau SA............................. $ 53
---------
147
---------
Electric Utility (0.0%):
864,000 Cia Energetica de Sao Paolo............... 32
---------
Forest Products (0.0%):
2,000 Cia Suzano Papel e Celelose............... 8
---------
Telecommunications (0.0%):
550,000 Telecomunicacore de Sao Paolo SA.......... 118
---------
Total Brazil 305
---------
GERMANY (0.8%):
Automotive (0.3%):
3,660 Volkswagen AG............................. 1,003
---------
Business Services (0.2%):
5,300 SAP AG.................................... 787
---------
Engineering (0.3%):
28,100 Rheinisch-Westfaelisches
Elektrizitaetswerk AG................... 863
---------
Textiles (0.0%):
440 Escada AG................................. 77
---------
Total Germany 2,730
---------
GREECE (0.0%):
Telecommunications (0.0%):
6,900 Intracom SA............................... 73
---------
Total Preferred Stocks 4,198
---------
<CAPTION>
SHARES
OR PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------ ---------
<C> <S> <C>
RIGHTS (0.2%):
FRANCE (0.2%):
2,483 Carrefour Rights.......................... $ 686
---------
Total Rights 686
---------
WARRANTS (0.0%):
FRANCE (0.0%):
7,750 Lagadere Group Warrants................... 5
---------
HONG KONG (0.0%):
16,400 Applied International Warrants............ 1
---------
ITALY (0.0%):
1,780 Rinascente Warrants....................... 1
---------
Total Warrants 7
---------
U.S. TREASURY BILLS (0.0%):
$ 150,000 9/12/96(c)................................ 148
---------
Total U.S. Treasury Bills 148
---------
Total Investments, at value 358,157
---------
REPURCHASE AGREEMENTS (1.4%):
4,945,000 State Street Bank, 4.75%, 7/1/96
(Collateralized by $5,095,000 U.S.
Treasury Bills, 9/5/96, market value
$5,045)................................. 4,945
---------
Total Repurchase Agreements 4,945
---------
Total (Cost--$323,827)(a) $363,102
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $364,435.
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost basis for federal income tax purposes by the
amount of losses recognized for financial reporting purposes in excess of federal income tax reporting of approximately
$46 and other cost basis adjustments of approximately $809. Cost for federal income tax purposes differs from value by
net unrealized appreciation of securities as follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation................................................... $ 50,900
Unrealized depreciation................................................... (12,480)
---------
Net unrealized appreciation............................................... $ 38,420
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) Represents non-income producing income.
</TABLE>
<TABLE>
<C> <S>
(c) Serves as collateral for futures contacts.
</TABLE>
<TABLE>
<S> <C>
ADR American Depository Receipt
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
77----
<PAGE> 722
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands, except Shares or Principal Amount)
At June 30, 1996, the Fund's open forward currency contracts were as follows:
<TABLE>
<CAPTION>
DELIVERY CONTRACT CONTRACT CONTRACT MARKET
CURRENCY DATE PRICE AMOUNT VALUE VALUE
- ------------------------------------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Short Contracts:
European Currency Unit..................................... 9/19/96 $ 0.8042 $ 656 $ 816 $ 818
Japanese Yen............................................... 9/12/96 108.3600 48,000 443 442
----------- -----------
Total Short Contracts $ 1,259 $ 1,260
----------- -----------
----------- -----------
Long Contracts:
European Currency Unit..................................... 9/19/96 $ 0.8052 $ 450 $ 559 $ 561
European Currency Unit..................................... 9/19/96 0.8043 700 870 872
European Currency Unit..................................... 9/19/96 0.8065 450 558 561
European Currency Unit..................................... 9/19/96 0.8092 635 785 792
European Currency Unit..................................... 9/19/96 0.8062 400 496 499
Japanese Yen............................................... 9/12/96 106.4000 22,700 213 209
Japanese Yen............................................... 9/12/96 106.7000 70,000 656 644
Japanese Yen............................................... 9/12/96 107.6300 191,600 1,780 1765
Phillipine Peso............................................ 7/1/96 26.1600 3,106 119 119
Turkish Lire............................................... 7/1/96 81,706 4,167,019 51 51
----------- -----------
Total Long Contracts $ 6,087 $ 6,073
----------- -----------
----------- -----------
<CAPTION>
UNREALIZED
APPRECIATION/
CURRENCY (DEPRECIATION)
- ------------------------------------------------------------- -------------------
<S> <C>
Short Contracts:
European Currency Unit..................................... $ (2)
Japanese Yen............................................... 1
---
Total Short Contracts $ (1)
---
---
Long Contracts:
European Currency Unit..................................... $ 2
European Currency Unit..................................... 2
European Currency Unit..................................... 3
European Currency Unit..................................... 7
European Currency Unit..................................... 3
Japanese Yen............................................... (4)
Japanese Yen............................................... (12)
Japanese Yen............................................... (15)
Phillipine Peso............................................ 0
Turkish Lire............................................... 0
---
Total Long Contracts $ (14)
---
---
</TABLE>
At June 30, 1996, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
# OF CONTRACTS CONTRACT TYPE
- --------------------- ---------------------------------------------------------------------------------------------------
<S> <C>
LONG CONTRACTS
17 Eurotop 100 Index, September 1996................................................................
19 Nikkei 225 Index, September 1996.................................................................
<CAPTION>
CURRENT
OPEN MARKET
POSITIONS VALUE
# OF CONTRACTS (000) (000)
- --------------------- ----------- -----------
<S> <C> <C>
17 $ 2,459 $ 2,455
19 2,085 2,157
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----78
<PAGE> 723
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
ASSET INCOME EQUITY VALUE LARGE
ALLOCATION EQUITY INDEX GROWTH COMPANY
FUND FUND FUND FUND VALUE FUND
----------- --------- --------- --------- -----------
ASSETS:
Investments, at value.................................................. $ 76,882 $ 382,483 $ 380,141 $ 219,518 $ 555,167
Repurchase agreements, at cost......................................... 10,472 12,335 11,283 12,345 44,782
----------- --------- --------- --------- -----------
Total (cost $83,029; $278,208; $305,312; $206,479, $604,175,
respectively)........................................................ 87,354 394,818 391,424 231,863 599,949
Interest and dividends receivable...................................... 533 1,164 562 378 965
Receivable from brokers for investments sold........................... -- -- -- 304 4,167
Receivable for capital shares issued................................... 230 546 615 86 317
Receivable from Adviser................................................ 17 -- 72 14 --
Net receivable for variation margin on futures contracts............... 34 -- -- 39 --
Organization costs..................................................... 2 -- -- -- --
Prepaid expenses and other assets...................................... -- 15 -- -- --
----------- --------- --------- --------- -----------
TOTAL ASSETS........................................................... 88,170 396,543 392,673 232,684 605,398
----------- --------- --------- --------- -----------
LIABILITIES:
Cash overdraft......................................................... 10 102 10 371 281
Dividends payable...................................................... 210 829 564 225 704
Payable to brokers for investments purchased........................... 1,022 -- -- -- 4,613
Payable for capital shares redeemed.................................... 54 6 19 15 --
Net payable for variation margin on futures contracts.................. -- -- 32 -- --
Options written, at value (premiums received $1,173)................... -- -- -- -- 1,238
Accrued expenses and other payables:
Investment advisory fees............................................. 45 240 95 141 363
Administration fees.................................................. 12 54 52 32 81
12b-1 fees (Class A)................................................. 4 9 6 7 2
12b-1 fees (Class B)................................................. 15 23 30 4 3
Other................................................................ 51 -- 83 20 71
----------- --------- --------- --------- -----------
TOTAL LIABILITIES...................................................... 1,423 1,263 891 815 7,356
----------- --------- --------- --------- -----------
NET ASSETS:
Capital................................................................ 79,288 272,217 303,532 174,138 555,124
Undistributed (distributions in excess of) net investment income....... 19 13 (405) (12) (114)
Accumulated undistributed net realized gains from investment and
futures transactions................................................. 3,058 6,440 2,450 32,307 47,238
Net unrealized appreciation (depreciation) from investments and
futures.............................................................. 4,382 116,610 86,205 25,436 (4,206)
----------- --------- --------- --------- -----------
NET ASSETS............................................................. $ 86,747 $ 395,280 $ 391,782 $ 231,869 $ 598,042
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
Net Assets
Fiduciary.......................................................... 50,323 321,827 321,058 $ 191,212 584,527
Class A............................................................ 17,849 44,284 32,186 35,984 9,380
Class B............................................................ 18,575 29,169 38,538 4,673 4,135
----------- --------- --------- --------- -----------
Total.......................................................... $ 86,747 $ 395,280 $ 391,782 $ 231,869 $ 598,042
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
Outstanding shares of beneficial interest
Fiduciary.......................................................... 4,299 18,230 19,269 18,398 45,543
Class A............................................................ 1,523 2,510 1,931 3,462 729
Class B............................................................ 1,580 1,650 2,310 450 318
----------- --------- --------- --------- -----------
Total.......................................................... 7,402 22,390 23,510 22,310 46,590
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
Net Assets
Fiduciary--offering and redemption price per share................. $ 11.71 $ 17.65 $ 16.66 $ 10.39 $ 12.83
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
Class A--redemption price per share................................ $ 11.72 $ 17.64 $ 16.67 $ 10.39 $ 12.87
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
Class A--maximum sales charge...................................... 4.50% 4.50% 4.50% 4.50% 4.50%
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
Class A--maximum offering price (100%/(100%--maximum sales charge)
of net asset value adjusted to nearest cent) per share........... $ 12.27 $ 18.47 $ 17.46 $ 10.88 $ 13.48
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
Class B--offering price per share (a).............................. $ 11.76 $ 17.68 $ 16.68 $ 10.39 $ 12.98
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
</TABLE>
- -------------
<TABLE>
<C> <S>
(a) Redemption price per Class B share varies based on length of time shares are held.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
79----
<PAGE> 724
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
GULF INTERNATIONAL
LARGE GROWTH SOUTH EQUITY
DISCIPLINED COMPANY OPPORTUNITIES GROWTH INDEX
VALUE FUND GROWTH FUND FUND FUND FUND
----------- ----------- ------------- --------- -------------
ASSETS:
Investments, at value........................................ $ 543,849 $ 869,422 $ 533,392 $ 102,494 $ 358,157
Repurchase agreements, at cost............................... 16,332 7,546 66,907 1,538 4,945
----------- ----------- ------------- --------- -------------
Total (cost $506,190; $717,380; $592,135; $81,892, $323,827,
respectively).............................................. 560,181 876,968 600,299 104,032 363,102
Cash......................................................... -- -- 303 183 --
Interest and dividends receivable............................ 753 1,630 190 61 1,035
Foreign currency, at value (Cost $1,813)..................... -- -- -- -- 1,814
Receivable for forward foreign currency contracts............ -- -- -- -- 4,813
Receivable from brokers for investments sold................. -- -- 7,265 -- 1,259
Receivable for capital shares issued......................... 154 910 506 61 506
Receivable from Adviser...................................... -- -- -- 8 --
Net receivable for variation margin on futures contracts..... -- -- -- -- 13
Tax reclaim receivable....................................... -- -- -- -- 523
Organization costs........................................... -- 1 -- -- 5
Prepaid expenses and other assets............................ -- -- 3,713 15 --
----------- ----------- ------------- --------- -------------
TOTAL ASSETS................................................. 561,088 879,509 612,276 104,360 373,070
----------- ----------- ------------- --------- -------------
LIABILITIES:
Cash overdraft............................................... 119 433 -- -- 441
Dividends payable............................................ 810 923 4,209 -- 7
Payable to brokers for investments purchased................. -- -- 34,062 -- 7,608
Payable for capital shares redeemed.......................... 34 61 27 1 1
Net payable for variation margin on futures contracts........ -- -- 12 -- --
Accrued expenses and other payables:
Investment advisory fees................................... 341 532 353 66 162
Administration fees........................................ 76 119 79 15 49
12b-1 fees (Class A)....................................... 4 15 6 4 2
12b-1 fees (Class B)....................................... 14 45 10 2 5
Other...................................................... 73 20 31 360
----------- ----------- ------------- --------- -------------
TOTAL LIABILITIES............................................ 1,471 2,148 38,789 88 8,635
----------- ----------- ------------- --------- -------------
NET ASSETS:
Capital...................................................... 464,636 693,730 484,693 77,424 321,819
Undistributed (distributions in excess of) net investment
income..................................................... (45) (85) (47) -- 1,395
Accumulated undistributed net realized gains from investment,
futures and foreign currency transactions.................. 41,035 24,128 80,677 4,708 1,893
Net unrealized appreciation from investments, futures and
from
translation of assets and liabilities in foreign
currencies................................................. 53,991 159,588 8,164 22,140 39,328
----------- ----------- ------------- --------- -------------
Net Assets................................................... $ 559,617 $ 877,361 $ 573,487 $ 104,272 $ 364,435
----------- ----------- ------------- --------- -------------
----------- ----------- ------------- --------- -------------
Net Assets
Fiduciary................................................ 522,474 $ 745,986 532,525 83,371 347,790
Class A.................................................. 20,838 75,114 28,052 18,356 10,789
Class B.................................................. 16,305 56,261 12,910 2,545 5,856
----------- ----------- ------------- --------- -------------
Total................................................ $ 559,617 $ 877,361 $ 573,487 $ 104,272 $ 364,435
----------- ----------- ------------- --------- -------------
----------- ----------- ------------- --------- -------------
Outstanding shares of beneficial interest
Fiduciary................................................ 35,564 48,320 28,310 7,757 22,921
Class A.................................................. 1,416 4,745 1,495 1,710 712
Class B.................................................. 1,110 3,600 701 237 396
----------- ----------- ------------- --------- -------------
Total.................................................. 38,090 56,665 30,506 9,704 24,029
----------- ----------- ------------- --------- -------------
----------- ----------- ------------- --------- -------------
Net asset value
Fiduciary--offering and redemption price per share....... $ 14.69 $ 15.44 $ 18.81 $ 10.75 $ 15.17
----------- ----------- ------------- --------- -------------
----------- ----------- ------------- --------- -------------
Class A--redemption price per share...................... $ 14.72 $ 15.83 $ 18.76 $ 10.73 $ 15.16
----------- ----------- ------------- --------- -------------
----------- ----------- ------------- --------- -------------
Class A--maximum sales charge............................ 4.50% 4.50% 4.50% 4.50% 4.50%
----------- ----------- ------------- --------- -------------
----------- ----------- ------------- --------- -------------
Class A--maximum offering price (100%/(100%--maximum
sales charge) of net asset value adjusted to nearest
cent) per share........................................ $ 15.41 $ 16.58 $ 19.64 $ 11.24 $ 15.87
----------- ----------- ------------- --------- -------------
----------- ----------- ------------- --------- -------------
Class B--offering price per share (a).................... $ 14.69 $ 15.63 $ 18.43 $ 10.72 $ 14.79
----------- ----------- ------------- --------- -------------
----------- ----------- ------------- --------- -------------
</TABLE>
- -------------
<TABLE>
<C> <S>
(a) Redemption price per Class B share varies based on length of time shares are held.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----80
<PAGE> 725
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C>
ASSET INCOME EQUITY
ALLOCATION EQUITY INDEX VALUE GROWTH
FUND FUND FUND FUND
----------- ----------- ----------- ------------
<CAPTION>
SEVEN MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED JUNE
JUNE 30, JUNE 30, JUNE 30, 30,
1996 1996 1996 1996
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income............................................. $ 2,166 $ 1,061 $ 888 $ 379
Dividend income............................................. 587 7,617 6,339 2,167
Securities lending income................................... 16 18 28 7
----------- ----------- ----------- ------------
TOTAL INCOME................................................ 2,769 8,696 7,255 2,553
----------- ----------- ----------- ------------
EXPENSES:
Investment advisory fees.................................... 398 1,880 876 965
Administration fees......................................... 102 423 487 208
12b-1 fees (Class A)........................................ 36 87 49 33
12b-1 fees (Class B)........................................ 85 122 129 19
Custodian and accounting fees............................... 53 33 137 36
Legal and audit fees........................................ 10 39 34 35
Organization costs.......................................... 3 1 8
---
Trustees' fees and expenses................................. 1 5 6 2
Transfer agent fees......................................... 92 145 122 79
Registration and filing fees................................ 35 30 46 6
Printing costs.............................................. 24 33 24 18
Other....................................................... 2 5 6 12
----------- ----------- ----------- ------------
Total expenses before waivers/reimbursements................ 841 2,803 1,924 1,413
Less waivers/reimbursements................................. (162) (136) (868) (114)
----------- ----------- ----------- ------------
NET EXPENSES................................................ 679 2,667 1,056 1,299
----------- ----------- ----------- ------------
Net Investment Income....................................... 2,090 6,029 6,199 1,254
----------- ----------- ----------- ------------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS AND
FUTURES:
Net realized gains from investment and futures
transactions.............................................. 4,144 8,723 10,186 50,010
Change in unrealized appreciation (depreciation) from
investments and futures................................... 1,631 35,127 47,556 (28,550)
----------- ----------- ----------- ------------
Net realized/unrealized gains from investments and futures.. 5,775 43,850 57,742 21,460
----------- ----------- ----------- ------------
Change in net assets resulting from operations.............. $ 7,865 $ 49,879 $ 63,941 $ 22,714
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
81----
<PAGE> 726
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C>
LARGE LARGE
COMPANY DISCIPLINED COMPANY
VALUE VALUE GROWTH
FUND FUND FUND
----------- ----------- -----------
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30,
1996 1996 1996
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................................................... $ 3,900 $ 1,236 $ 1,068
Dividend income........................................................... 13,341 15,128 14,838
Securities lending income................................................. 58 -- 74
----------- ----------- -----------
TOTAL INCOME.............................................................. 17,299 16,364 15,980
----------- ----------- -----------
EXPENSES:
Investment advisory fees.................................................. 3,764 3,995 5,481
Administration fees....................................................... 849 901 1,236
12b-1 fees (Class A)...................................................... 24 60 180
12b-1 fees (Class B)...................................................... 23 136 270
Custodian and accounting fees............................................. 75 84 68
Legal and audit fees...................................................... 56 79 76
Organization costs........................................................ 10 1
Trustees' fees and expenses............................................... 9 12 12
Transfer agent fees....................................................... 73 214 263
Registration and filing fees.............................................. 83 38 129
Printing costs............................................................ 49 67 82
Other..................................................................... 11 15 12
----------- ----------- -----------
Total expenses before waivers/reimbursements.............................. 5,026 5,601 7,810
Less waivers/reimbursements............................................... (40) (78) (296)
----------- ----------- -----------
NET EXPENSES.............................................................. 4,986 5,523 7,514
----------- ----------- -----------
Net Investment Income..................................................... 12,313 10,841 8,466
----------- ----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS AND FUTURES:
Net realized gains from investment and futures transactions............... 66,494 60,286 29,317
Change in unrealized appreciation (depreciation) from investments and
futures................................................................. (17,058) 25,630 85,542
----------- ----------- -----------
Net realized/unrealized gains from investments and futures................ 49,436 85,916 114,859
----------- ----------- -----------
Change in net assets resulting from operations............................ $ 61,749 $ 96,757 $ 123,325
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----82
<PAGE> 727
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Amounts in Thousands)
GROWTH INTERNATIONAL
OPPORTUNITIES GULF SOUTH EQUITY
FUND GROWTH FUND INDEX FUND
----------- ----------- -----------
SEVEN
YEAR ENDED MONTHS YEAR ENDED
JUNE 30, ENDED JUNE JUNE 30,
1996 30, 1996 1996
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................................ $ 2,051 $ 191 $ 248
Dividend income................................................ 8,638 237 6,421
Securities lending income...................................... 177 21 --
Foreign tax withholding........................................ -- -- (877)
----------- ----------- -----------
TOTAL INCOME................................................... 10,866 449 5,792
----------- ----------- -----------
EXPENSES:
Investment advisory fees....................................... 3,743 414 1,584
Administration fees............................................ 844 93 480
12b-1 fees (Class A)........................................... 64 17 25
12b-1 fees (Class B)........................................... 65 12 44
Custodian and accounting fees.................................. 117 20 513
Legal and audit fees........................................... 52 16 48
Organization costs............................................. -- -- 3
Trustees' fees and expenses.................................... 14 -- 8
Transfer agent fees............................................ 137 60 124
Registration and filing fees................................... 36 -- 64
Printing costs................................................. 49 1 49
Other.......................................................... 14 11 9
----------- ----------- -----------
Total expenses before waivers/reimbursements................... 5,135 644 2,951
Less waivers/reimbursements.................................... (72) (33) (99)
----------- ----------- -----------
NET EXPENSES................................................... 5,063 611 2,852
----------- ----------- -----------
Net Investment Income (loss)................................... 5,803 (162) 2,940
----------- ----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS, FUTURES
AND FOREIGN CURRENCIES:
Net realized gains from investment, futures and foreign
currency transactions........................................ 150,392 20,607 1,467
Change in unrealized appreciation (depreciation) from
investments, futures and translation of assets and
liabilities in foreign currency transactions................. (49,094) (8,026) 26,748
----------- ----------- -----------
Net realized/unrealized gains from investments and futures..... 101,298 12,581 28,215
----------- ----------- -----------
Change in net assets resulting from operations................. $ 107,101 $ 12,419 $ 31,155
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
83----
<PAGE> 728
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
ASSET ALLOCATION FUND INCOME EQUITY FUND EQUITY
INDEX FUND
------------------------ ----------------------- ----------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995 1996
----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income................................... $ 2,090 $ 1,589 $ 6,029 $ 5,632 $ 6,199
Net realized gains (losses) from investment
transactions.......................................... 4,144 (178) 8,723 11,040 10,186
Net change in unrealized appreciation (depreciation)
from investments...................................... 1,631 4,764 35,127 20,447 47,556
----------- ----------- ---------- ----------- ----------
Change in net assets resulting from operations.............. 7,865 6,175 49,879 37,119 63,941
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS (B):
From net investment income.............................. (1,520) (1,408) (5,321) (5,247) (5,782)
In excess of net investment income...................... -- -- (25) -- (161)
From net realized gains from investment transactions.... (640) (7,457) (4,994) (8,186)
In excess of net realized gains from investment
transactions.......................................... -- (175) -- -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income.............................. (343) (97) (528) (261) (269)
In excess of net investment income...................... -- (2) (2) (67) (7)
From net realized gains from investment transactions.... (143) (12) (850) (329) (359)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income.............................. (216) (69) (180) (43) (149)
In excess of net investment income...................... -- (2) (1) (3) (4)
From net realized gains from investment transactions.... (99) (356) (61) (256)
In excess of net realized gains from investment
transactions.......................................... -- (12) -- -- --
DISTRIBUTIONS TO SERVICE SHAREHOLDERS:
From net investment income.............................. -- (2) -- -- --
From net realized gains from investment transactions.... -- -- -- -- --
----------- ----------- ---------- ----------- ----------
Change in net assets from shareholder distributions......... (2,961) (1,779) (14,720) (11,005) (15,173)
----------- ----------- ---------- ----------- ----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................. 50,091 19,304 267,682 39,566 199,001
Proceeds from shares issued in connection with
acquisition........................................... 136,786
Dividends reinvested.................................... 2,534 1,579 6,734 5,343 11,149
Cost of shares redeemed................................. (16,204) (26,161) (239,261) (95,398) (106,442)
----------- ----------- ---------- ----------- ----------
Change in net assets from share transactions................ 36,421 (5,278) 171,941 (50,489) 103,708
----------- ----------- ---------- ----------- ----------
Change in net assets........................................ 41,325 (882) 207,100 (24,375) 152,476
NET ASSETS:
Beginning of period..................................... 45,422 46,304 188,180 212,555 239,306
----------- ----------- ---------- ----------- ----------
End of period........................................... $ 86,747 $ 45,422 $ 395,280 $ 188,180 $ 391,782
----------- ----------- ---------- ----------- ----------
----------- ----------- ---------- ----------- ----------
SHARE TRANSACTIONS:
Issued.................................................. 4,377 1,931 13,308 2,823 12,652
Issued in connection with acquisition................... -- -- 7,895 -- --
Issued in restatement of net asset value (c)............ -- -- -- -- --
Reinvested.............................................. 221 158 414 398 721
Redeemed................................................ (1,428) (2,658) (11,666) (6,867) (6,924)
----------- ----------- ---------- ----------- ----------
Change in shares............................................ 3,170 (569) 9,951 (3,646) 6,449
----------- ----------- ---------- ----------- ----------
----------- ----------- ---------- ----------- ----------
Undistributed (distributions in excess of) net investment
income included in net assets:
End of period........................................... $ 19 $ 8 $ 13 $ 41 $ (405)
----------- ----------- ---------- ----------- ----------
----------- ----------- ---------- ----------- ----------
<CAPTION>
VALUE GROWTH
FUND (A)
---------------------------------------------
YEAR ENDED PERIOD YEAR ENDED YEAR ENDED
JUNE 30, ENDED JUNE NOVEMBER 30, NOVEMBER 30,
1995 30, 1996 1995 1994
----------- ----------- --------------- ---------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income................................... $ 4,825 $ 1,254 $ 2,459 $ 2,380
Net realized gains (losses) from investment
transactions.......................................... 2,042 50,010 17,559 5,534
Net change in unrealized appreciation (depreciation)
from investments...................................... 37,018 (28,550) 30,874 (15,998)
----------- ----------- --------------- ---------------
Change in net assets resulting from operations.............. 43,885 22,714 50,892 (8,084)
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS (B):
From net investment income.............................. (4,390) (569) -- (2,546)
In excess of net investment income...................... (231) (5) -- (3)
From net realized gains from investment transactions.... (2,449) -- -- (8,390)
In excess of net realized gains from investment
transactions.......................................... -- -- -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income.............................. (43) (680) (2,449) (1)
In excess of net investment income...................... -- (5) -- --
From net realized gains from investment transactions.... (25) (34,705) (5,515) --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income.............................. (1) (5) (6) --
In excess of net investment income...................... (8) -- (3) --
From net realized gains from investment transactions.... (6) (557) (19) --
In excess of net realized gains from investment
transactions.......................................... -- -- -- --
DISTRIBUTIONS TO SERVICE SHAREHOLDERS:
From net investment income.............................. (1) -- -- --
From net realized gains from investment transactions.... (1) -- -- --
----------- ----------- --------------- ---------------
Change in net assets from shareholder distributions......... (7,155) (36,526) (7,992) (10,940)
----------- ----------- --------------- ---------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................. 81,505 68,807 24,259 36,323
Proceeds from shares issued in connection with
acquisition...........................................
Dividends reinvested.................................... 5,467 27,533 1,480 1,878
Cost of shares redeemed................................. (51,442) (71,560) (21,348) (16,707)
----------- ----------- --------------- ---------------
Change in net assets from share transactions................ 35,530 24,780 4,391 21,494
----------- ----------- --------------- ---------------
Change in net assets........................................ 72,260 10,968 47,291 2,470
NET ASSETS:
Beginning of period..................................... 167,046 220,901 173,610 171,140
----------- ----------- --------------- ---------------
End of period........................................... $ 239,306 $ 231,869 $ 220,901 $ 173,610
----------- ----------- --------------- ---------------
----------- ----------- --------------- ---------------
SHARE TRANSACTIONS:
Issued.................................................. 6,330 $ 1,402 1,628 2,469
Issued in connection with acquisition................... -- -- -- --
Issued in restatement of net asset value (c)............ -- 7,808 -- --
Reinvested.............................................. 445 1,782 106 129
Redeemed................................................ (4,129) (1,668) (1,398) (1,143)
----------- ----------- --------------- ---------------
Change in shares............................................ 2,646 9,324 336 1,455
----------- ----------- --------------- ---------------
----------- ----------- --------------- ---------------
Undistributed (distributions in excess of) net investment
income included in net assets:
End of period........................................... $ (232) $ (12) $ (2) $ (3)
----------- ----------- --------------- ---------------
----------- ----------- --------------- ---------------
</TABLE>
- ----------------
<TABLE>
<C> <S>
(a) Upon reorganizing as a fund of The One Group, the Paragon Value Growth Fund became the Value Growth Fund. Changes in net
assets for the periods prior to March 26, 1996 represent the Paragon Value Growth Fund.
</TABLE>
<TABLE>
<C> <S>
(b) Fiduciary Shares of the Value Growth Fund commenced operations March 26, 1996 upon the conversion of certain Class A
Shares to Fiduciary Shares.
</TABLE>
<TABLE>
<C> <S>
(c) Pursuant to its reorganization as a fund of The One Group, the Value Growth Fund issued additional shares at the close of
business March 25, 1996 as a result of restatement of the net asset values of Class A Shares from $15.26 to $10.00 and
Class B Shares from $15.21 to $10.00.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----84
<PAGE> 729
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C> <C> <C>
LARGE COMPANY VALUE FUND DISCIPLINED VALUE LARGE COMPANY GROWTH
FUND FUND
------------------------ -------------------- ----------------------
<CAPTION>
YEAR YEAR YEAR
YEAR ENDED YEAR ENDED ENDED ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995 1996 1995
----------- ----------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................. $ 12,313 $ 6,408 $ 10,841 $ 9,767 $ 8,466 $ 5,791
Net realized gains from investment transactions... 66,494 28,406 60,286 9,989 29,317 4,792
Change in unrealized appreciation (depreciation)
from investments and translation of assets and
liabilities of foreign currency................. (17,058) 20,089 25,630 46,373 85,542 70,757
----------- ----------- --------- --------- --------- -----------
Change in net assets resulting from operations........ 61,749 54,903 96,757 66,129 123,325 81,340
----------- ----------- --------- --------- --------- -----------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income........................ (12,140) (6,372) (10,409) (9,376) (7,921) (5,634)
In excess of net investment income................ (119) -- (84) -- (70) (3)
From net realized gains from investment
transactions.................................... (46,275) (10,281) (27,544) (9,434) (7,625) (1,852)
In excess of net realized gains from investment
transactions.................................... -- -- -- -- -- (9)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income........................ (142) (39) (302) (225) (478) (135)
In excess of net investment income................ (1) (2) (2) (3) (4) (4)
From net realized gains from investment
transactions.................................... (631) (85) (920) (246) (558) (16)
In excess of net realized gains from investment
transactions.................................... -- -- -- (18) -- --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income........................ (32) (7) (131) (107) (67) (17)
In excess of net investment income................ -- -- (1) (11) (1) (1)
From net realized gains from investment
transactions.................................... (183) (20) (708) (194) (253) (13)
DISTRIBUTIONS TO SERVICE SHAREHOLDERS:
From net investment income........................ -- -- -- (3) -- (2)
From net realized gains from investment
transactions.................................... -- -- -- (3) -- (2)
----------- ----------- --------- --------- --------- -----------
Change in net assets from shareholder distributions... (59,523) (16,806) (40,101) (19,620) (16,977) (7,688)
----------- ----------- --------- --------- --------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued....................... 285,428 212,431 146,331 129,890 303,743 286,721
Proceeds from shares issued in connection with
acquisition..................................... -- -- -- -- 36,982 131,599
Dividends reinvested.............................. 32,290 10,331 21,701 11,866 9,536 4,561
Cost of shares redeemed........................... (91,619) (61,136) (138,383) (149,012) (145,189) (81,352)
----------- ----------- --------- --------- --------- -----------
Change in net assets from share transactions.......... 226,099 161,626 29,649 (7,256) 205,072 341,529
----------- ----------- --------- --------- --------- -----------
Change in net assets.................................. 228,325 199,723 86,305 39,253 311,420 415,181
NET ASSETS:
Beginning of period............................... 369,717 169,994 473,312 434,059 565,941 150,760
----------- ----------- --------- --------- --------- -----------
End of period..................................... $ 598,042 $ 369,717 $ 559,617 $ 473,312 $ 877,361 $ 565,941
----------- ----------- --------- --------- --------- -----------
----------- ----------- --------- --------- --------- -----------
SHARE TRANSACTIONS:
Issued............................................ 22,448 17,984 10,399 10,433 21,224 23,461
Issued in connection with acquisition............. -- -- -- -- 2,673 11,070
Reinvested........................................ 2,670 924 1,573 980 684 371
Redeemed.......................................... (7,260) (5,160) (9,741) (12,030) (9,886) (6,247)
----------- ----------- --------- --------- --------- -----------
Change in shares...................................... 17,858 13,748 2,231 (617) 14,695 28,655
----------- ----------- --------- --------- --------- -----------
----------- ----------- --------- --------- --------- -----------
Undistributed (distributions in excess of) net
investment income included in net assets:
End of period..................................... $ (114) $ 7 $ (45) $ 43 $ (85) $ (10)
----------- ----------- --------- --------- --------- -----------
----------- ----------- --------- --------- --------- -----------
<CAPTION>
<S> <C> <C>
GROWTH OPPORTUNITIES
FUND
--------------------
YEAR YEAR
ENDED ENDED
JUNE 30, JUNE 30,
1996 1995
--------- ---------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................. $ 5,803 $ 1,508
Net realized gains from investment transactions... 150,392 18,881
Change in unrealized appreciation (depreciation)
from investments and translation of assets and
liabilities of foreign currency................. (49,094) 53,633
--------- ---------
Change in net assets resulting from operations........ 107,101 74,022
--------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income........................ (5,538) (1,520)
In excess of net investment income................ (34) --
From net realized gains from investment
transactions.................................... (78,544) (12,826)
In excess of net realized gains from investment
transactions.................................... -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income........................ (215) (8)
In excess of net investment income................ (1) (9)
From net realized gains from investment
transactions.................................... (2,747) (287)
In excess of net realized gains from investment
transactions.................................... -- --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income........................ (51) --
In excess of net investment income................ -- --
From net realized gains from investment
transactions.................................... (896) (59)
DISTRIBUTIONS TO SERVICE SHAREHOLDERS:
From net investment income........................ -- --
From net realized gains from investment
transactions.................................... -- (8)
--------- ---------
Change in net assets from shareholder distributions... (88,026) (14,717)
--------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued....................... 285,336 138,252
Proceeds from shares issued in connection with
acquisition..................................... -- --
Dividends reinvested.............................. 46,859 9,304
Cost of shares redeemed........................... (205,266) (178,208)
--------- ---------
Change in net assets from share transactions.......... 126,929 (30,652)
--------- ---------
Change in net assets.................................. 146,004 28,653
NET ASSETS:
Beginning of period............................... 427,483 398,830
--------- ---------
End of period..................................... $ 573,487 $ 427,483
--------- ---------
--------- ---------
SHARE TRANSACTIONS:
Issued............................................ 15,225 8,268
Issued in connection with acquisition............. -- --
Reinvested........................................ 2,828 595
Redeemed.......................................... (10,779) (10,620)
--------- ---------
Change in shares...................................... 7,274 (1,757)
--------- ---------
--------- ---------
Undistributed (distributions in excess of) net
investment income included in net assets:
End of period..................................... $ (47) $ (11)
--------- ---------
--------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
85----
<PAGE> 730
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
GULF SOUTH GROWTH FUND (A)
--------------------------------------------------
YEAR ENDED YEAR ENDED
SEVEN MONTHS NOVEMBER 30, NOVEMBER 30,
JUNE 30, 1996 1995 1994
---------------- --------------- ---------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss)......................................... $ (162) $ (329) $ (304)
Net realized gains from investment and foreign currency
transactions....................................................... 20,607 2,336 1,418
Net change in unrealized appreciation (depreciation) from investments
and translation of assets and liabilities in foreign currencies.... (8,026) 17,774 (6,752)
---------------- --------------- ---------------
Change in net assets resulting from operations........................... 12,419 19,781 (5,638)
---------------- --------------- ---------------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS (B):
From net investment income........................................... -- -- --
In excess of net investment income................................... -- -- --
From net realized gains from investment transactions................. (237) -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income........................................... -- -- --
In excess of net investment income................................... -- -- --
From net realized gains from investment transactions................. (17,443) (1,410) (649)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income........................................... -- -- --
In excess of net investment income................................... -- -- --
From net realized gains from investment transactions................. (393) (8)
DISTRIBUTIONS TO SERVICE SHAREHOLDERS:
From net investment income........................................... -- -- --
From net realized gains from investment transactions................. -- -- --
---------------- --------------- ---------------
Change in net assets from shareholder distributions...................... (18,073) (1,418) (649)
---------------- --------------- ---------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued.......................................... 29,495 13,775 18,519
Dividends reinvested................................................. 14,226 328 120
Cost of shares redeemed.............................................. (31,076) (12,956) (9,563)
---------------- --------------- ---------------
Change in net assets from share transactions............................. 12,645 1,147 9,076
---------------- --------------- ---------------
Change in net assets..................................................... 6,991 19,510 2,789
NET ASSETS:
Beginning of period.................................................. 97,281 77,771 74,982
---------------- --------------- ---------------
End of period........................................................ $ 104,272 $ 97,281 $ 77,771
---------------- --------------- ---------------
---------------- --------------- ---------------
SHARE TRANSACTIONS:
Issued............................................................... 620 842 1,162
Issued in restatement of net asset value (c)......................... 3,633 -- --
Reinvested........................................................... 902 22 7
Redeemed............................................................. (838) (768) (601)
---------------- --------------- ---------------
Change in shares......................................................... 4,317 96 568
---------------- --------------- ---------------
---------------- --------------- ---------------
Undistributed (distributions in excess of) net investment income included
in net assets:
End of period........................................................ $ -- $ -- $ --
---------------- --------------- ---------------
---------------- --------------- ---------------
<CAPTION>
INTERNATIONAL EQUITY
INDEX FUND
------------------------
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1996 1995
----------- -----------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss)......................................... $ 2,940 $ 2,326
Net realized gains from investment and foreign currency
transactions....................................................... 1,467 3,373
Net change in unrealized appreciation (depreciation) from investments
and translation of assets and liabilities in foreign currencies.... 26,748 2,455
----------- -----------
Change in net assets resulting from operations........................... 31,155 8,154
----------- -----------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS (B):
From net investment income........................................... (2,825) (1,053)
In excess of net investment income................................... (429) --
From net realized gains from investment transactions................. (2,147) (537)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income........................................... (72) (18)
In excess of net investment income................................... (11) --
From net realized gains from investment transactions................. (55) (10)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income........................................... (43) (17)
In excess of net investment income................................... (7) --
From net realized gains from investment transactions................. (33) (10)
DISTRIBUTIONS TO SERVICE SHAREHOLDERS:
From net investment income........................................... -- (1)
From net realized gains from investment transactions................. -- (1)
----------- -----------
Change in net assets from shareholder distributions...................... (5,622) (1,647)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued.......................................... 163,944 111,465
Dividends reinvested................................................. 2,501 845
Cost of shares redeemed.............................................. (54,557) (41,784)
----------- -----------
Change in net assets from share transactions............................. 111,888 70,526
----------- -----------
Change in net assets..................................................... 137,421 77,033
NET ASSETS:
Beginning of period.................................................. 227,014 149,981
----------- -----------
End of period........................................................ $ 364,435 $ 227,014
----------- -----------
----------- -----------
SHARE TRANSACTIONS:
Issued............................................................... 11,286 8,193
Issued in restatement of net asset value (c)......................... -- --
Reinvested........................................................... 175 63
Redeemed............................................................. (3,742) (3,090)
----------- -----------
Change in shares......................................................... 7,722 5,166
----------- -----------
----------- -----------
Undistributed (distributions in excess of) net investment income included
in net assets:
End of period........................................................ $ 1,395 $ 2,643
----------- -----------
----------- -----------
</TABLE>
- -------------
<TABLE>
<C> <S>
(a) Upon reorganizing as a fund of The One Group, the Paragon Gulf South Growth Fund became the Gulf South Growth Fund.
Changes in net assets for the periods prior to March 26, 1996 represent the Paragon Gulf South Growth Fund.
</TABLE>
<TABLE>
<C> <S>
(b) Fiduciary Shares of the Gulf South Growth Fund commenced operations March 26, 1996 upon the conversion of certain Class A
Shares to Fiduciary Shares.
</TABLE>
<TABLE>
<C> <S>
(c) Pursuant to its reorganization as a fund of The One Group, the Gulf South Growth Fund issued additional shares at the
close of business March 25, 1996 as a result of restatement of the net asset values of Class A Shares from $15.70 to
$10.00 and Class B Shares from $15.48 to $10.00.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----86
<PAGE> 731
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1996
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-six active funds. The accompanying
financial statements and financial highlights are those of the Asset
Allocation Fund, the Income Equity Fund, the Equity Index Fund, the Value
Growth Fund, the Large Company Value Fund, the Disciplined Value Fund, the
Large Company Growth Fund, the Growth Opportunities Fund, the Gulf South
Growth Fund and the International Equity Index Fund (individually a "Fund",
collectively the "Funds") only. The Funds are each offered in Fiduciary
Class, Class A and Class B Shares. Class A Shares are subject to initial
sales charges, imposed at the time of purchase, in accordance with the
Funds' prospectuses. Certain redemptions of Class B Shares are subject to
contingent deferred sales charges in accordance with the Funds'
prospectuses. Each Fund is a diversified mutual fund. On September 1, 1995,
The One Group Blue Chip Equity Fund ceased operations, and all of its assets
and liabilities transferred to the Large Company Growth Fund. Effective
February 7, 1996, the Small Company Growth Fund was renamed the Growth
Opportunities Fund.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with the Paragon Portfolio ("Paragon"), a Massachusetts
business trust. Pursuant to the Agreement all of the assets and liabilities
of each Paragon Fund transferred to a fund of The One Group in exchange for
shares of the corresponding fund of The One Group. Subsequent to the
reorganization, the fiscal year end changed from November 30 to June 30 for
the Value Growth Fund and the Gulf South Growth Fund. Therefore, the current
period statements of operations and changes in net assets for those Funds
present the results of operations and changes in net assets for the seven
months ended June 30, 1996.
The Funds' investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
- ---------------------------------- -------------------------------------------------------------------
<S> <C>
Asset Allocation Fund To provide total return while preserving capital.
Income Equity Fund Current income through regular payments of dividends.
Equity Index Fund Investment results that correspond to the aggregate price and
dividend performance of the securities in the Standard & Poor's 500
Composite Stock Price Index.
Value Growth Fund Long-term capital growth and growth of income while, as a secondary
objective, providing a moderate level of current income.
Large Company Value Fund Capital appreciation with the incidental goal of achieving current
income by investing primarily in equity securities.
Disciplined Value Fund Capital appreciation with the secondary goal of achieving current
income by investing primarily in equity securities.
Large Company Growth Fund Long-term capital appreciation and growth of income by investing
primarily in equity securities.
Growth Opportunities Fund Growth of capital and, secondarily, current income, by investing
primarily in equity securities.
</TABLE>
CONTINUED
87----
<PAGE> 732
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
FUND OBJECTIVE
- ---------------------------------- -------------------------------------------------------------------
Gulf South Growth Fund Long-term capital growth by investment in a portfolio of equity
securities of small capitalization, emerging growth and medium
capitalization companies which are either headquartered in or whose
primary market is in the southeastern region of the United States.
<S> <C>
International Equity Index Fund To provide investment results that correspond to the aggregate
price and dividend performance of the securities in the Gross
Domestic Product Weighted Morgan Stanley Capital International
Europe, Australia and Far East Index.
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. 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.
SECURITY VALUATION
Listed securities are valued at the last sales price on the principal
exchange where such securities are traded. Unlisted securities or listed
securities for which last sales prices are not available are valued at the
mean of the latest bid and asked prices in the principal market where such
securities are traded. Short-term investments maturing in 60 days or less
are valued at amortized cost, which approximates market value. Futures
contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded. Options traded on an
exchange are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations. Investments for which there are no such
quotations or valuations are carried at fair value as determined in good
faith by or at the direction of the Board of Trustees.
FOREIGN CURRENCY TRANSLATION
Investment valuations, other assets and liabilities initially expressed in
foreign currencies are converted each business day into U.S. dollars based
upon current exchange rates. Purchases and sales of foreign investments and
income and expenses are converted into U.S. dollars based upon exchange
rates prevailing on the respective dates of such transactions. That portion
of realized gains or losses and unrealized appreciation or depreciation
from investments due to fluctuations in foreign currency exchange rates is
not separately disclosed.
FORWARD FOREIGN CURRENCY CONTRACTS
Forward foreign currency contracts are valued at the daily exchange rate of
the underlying currency. Purchases and sales of forward foreign currency
contracts having the same settlement date and broker are presented net on
the Statement of Assets and Liabilities. Gains or losses on the purchase or
sale of forward foreign currency contracts having the same settlement date
and broker are recognized on the date of offset; otherwise gains or losses
are recognized on settlement date.
CONTINUED
- ----88
<PAGE> 733
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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 agreement 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.
WRITTEN OPTIONS
The Funds may write covered call or put options for which premiums received
are recorded as liabilities and are subsequently adjusted to the current
value of the options written. Premiums received from writing options which
expire are treated as realized gains. Premiums received from writing
options, which are either exercised or closed, are offset against the
proceeds received or amount paid on the transaction to determine realized
gains or losses.
FUTURES CONTRACTS
The Funds may enter into futures contracts for the delayed delivery of
securities at a fixed price at some future date or for the change in the
value of a specified financial index over a predetermined time period. Cash
or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received by the fund based on the daily change
in the market value of the position are recorded as unrealized appreciation
or depreciation until the contract is closed out, at which time the
appreciation or depreciation is realized.
INDEXED SECURITIES
The Funds may invest in indexed securities whose value is linked either
directly or inversely to changes in foreign currencies, interest rates,
commodities, indices or other reference instruments. Indexed securities may
be more volatile than the referenced instrument itself, but any loss is
limited to the amount of the original investment.
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 dividends and 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
collateral at 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 judgement of the Adviser, the
consideration
CONTINUED
89----
<PAGE> 734
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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 June 30, 1996, the following Funds had securities with
the following market values on loan:
<TABLE>
<CAPTION>
MARKET VALUE
OF LOANED
SECURITIES
-------------
<S> <C>
Asset Allocation Fund.................................................................................. $ 9,352,826
Income Equity Fund..................................................................................... 17,942,122
Equity Index Fund...................................................................................... 28,024,724
Value Growth Fund...................................................................................... 17,924,553
Large Company Value Fund............................................................................... 46,676,798
Disciplined Value Fund................................................................................. 38,357,202
Large Company Growth Fund.............................................................................. 56,341,844
Growth Opportunities Fund.............................................................................. 56,827,625
Gulf South Growth Fund................................................................................. 15,011,488
</TABLE>
The loaned securities were fully collateralized by cash and U.S. Government
securities as of June 30, 1996.
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. Dividends are recorded on the ex-dividend date. Interest
income, including any discount or premium, is accrued as earned using the
effective interest method.
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. Each class of shares bears
its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class,
such as distribution fees.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid monthly for all
Funds, except the International Equity Index Fund, which declares and
distributes net investment income annually. Net realized capital gains, if
any, are distributed at least annually. Dividends are declared separately
for each class. No class has preferential dividend rights; differences in
per share dividend rates are generally due to differences in separate class
expenses.
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,
foreign currency transactions, 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-
CONTINUED
- ----90
<PAGE> 735
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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. Withholding taxes on foreign dividends have been paid or
provided for in accordance with the applicable country's tax rules and
rates.
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 thirty-two series and four classes:
Fiduciary, Class A, Class B and Service. During the year ended June 30,
1995, Service Shares transferred to Class A Shares. As of June 30, 1996
there were no shareholders in the Service Class. 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. The
following is a summary of transactions in Fund shares for the years ended
June 30, 1996 and June 30, 1995:
CONTINUED
91----
<PAGE> 736
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C> <C>
INCOME EQUITY EQUITY
ASSET ALLOCATION FUND FUND INDEX
---------------------- FUND
------------------------ YEAR -----------
YEAR ENDED YEAR ENDED ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995 1996
----------- ----------- --------- ----------- -----------
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued............................ $ 20,364 $ 14,294 $ 74,805 $ 32,862 $ 110,800
Proceeds from shares issued in connection with
acquisition.......................................... -- -- 128,593 -- --
Dividends reinvested................................... 1,810 1,386 5,003 4,624 10,203
Shares redeemed........................................ (13,065) (24,526) (94,484) (89,484) (79,496)
----------- ----------- --------- ----------- -----------
Change in net assets from Fiduciary share
transactions......................................... $ 9,109 $ 8,846 $ 113,917 $ (51,998) $ 41,507
----------- ----------- --------- ----------- -----------
----------- ----------- --------- ----------- -----------
CLASS A SHARES:
Proceeds from shares issued............................ $ 14,197 $ 3,680 $ 168,343 $ 5,144 $ 52,581
Proceeds from shares issued in connection with
acquisition.......................................... -- -- 6,780 -- --
Dividends reinvested................................... 453 111 1,244 614 565
Shares redeemed........................................ (2,268) (1,101) (143,907) (5,677) (26,205)
----------- ----------- --------- ----------- -----------
Change in net assets from Class A share transactions... $ 12,382 $ 2,690 $ 32,460 $ 81 $ 26,941
----------- ----------- --------- ----------- -----------
----------- ----------- --------- ----------- -----------
CLASS B SHARES:
Proceeds from shares issued............................ $ 15,530 $ 1,238 $ 24,534 $ 1,560 $ 35,620
Proceeds from shares issued in connection with
acquisition.......................................... -- -- 1,413 -- --
Dividends reinvested................................... 271 80 487 105 381
Shares redeemed........................................ (871) (432) (870) (237) (741)
----------- ----------- --------- ----------- -----------
Change in net assets from Class B share transactions... $ 14,930 $ 886 $ 25,564 $ 1,428 $ 35,260
----------- ----------- --------- ----------- -----------
----------- ----------- --------- ----------- -----------
SERVICE SHARES:
Proceeds from shares issued............................ $ 92
Dividends reinvested................................... 2
Shares redeemed........................................ (102)
-----------
Change in net assets from Service Share transactions... $ (8)
-----------
-----------
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued................................................. 1,787 1,433 2,462 2,362 7,069
Issued in connection with acquisition.................. -- -- 7,422 -- --
Reinvested............................................. 159 139 316 343 660
Redeemed............................................... (1,156) (2,496) (3,267) (6,450) (5,207)
----------- ----------- --------- ----------- -----------
Change in Fiduciary Shares............................. 790 (924) 6,933 (3,745) 2,522
----------- ----------- --------- ----------- -----------
----------- ----------- --------- ----------- -----------
CLASS A SHARES:
Issued................................................. 1,241 364 9,480 353 3,351
Issued in connection with acquisition.................. -- -- 392 -- --
Reinvested............................................. 38 11 72 47 36
Redeemed............................................... (198) (108) (8,347) (400) (1,670)
----------- ----------- --------- ----------- -----------
Change in Class A Shares............................... 1,081 267 1,597 0 1,717
----------- ----------- --------- ----------- -----------
----------- ----------- --------- ----------- -----------
CLASS B SHARES:
Issued................................................. 1,349 124 1,366 108 2,232
Issued in connection with acquisition.................. -- -- 81 -- --
Reinvested............................................. 24 8 26 8 25
Redeemed............................................... (74) (44) (52) (17) (47)
----------- ----------- --------- ----------- -----------
Change in Class B Shares............................... 1,299 88 1,421 99 2,210
----------- ----------- --------- ----------- -----------
----------- ----------- --------- ----------- -----------
SERVICE SHARES:
Issued................................................. 10
Reinvested............................................. --
Redeemed............................................... (10)
-----------
Change in Service Shares............................... 0
-----------
-----------
<CAPTION>
<S> <C>
YEAR ENDED
JUNE 30,
1995
-----------
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued............................ $ 71,441
Proceeds from shares issued in connection with
acquisition.......................................... --
Dividends reinvested................................... 5,401
Shares redeemed........................................ (43,482)
-----------
Change in net assets from Fiduciary share
transactions......................................... $ 33,360
-----------
-----------
CLASS A SHARES:
Proceeds from shares issued............................ $ 8,926
Proceeds from shares issued in connection with
acquisition.......................................... --
Dividends reinvested................................... 49
Shares redeemed........................................ (7,817)
-----------
Change in net assets from Class A share transactions... $ 1,158
-----------
-----------
CLASS B SHARES:
Proceeds from shares issued............................ $ 1,047
Proceeds from shares issued in connection with
acquisition.......................................... --
Dividends reinvested................................... 15
Shares redeemed........................................ (27)
-----------
Change in net assets from Class B share transactions... $ 1,035
-----------
-----------
SERVICE SHARES:
Proceeds from shares issued............................ $ 91
Dividends reinvested................................... 2
Shares redeemed........................................ (116)
-----------
Change in net assets from Service Share transactions... $ (23)
-----------
-----------
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued................................................. 5,555
Issued in connection with acquisition.................. --
Reinvested............................................. 440
Redeemed............................................... (3,519)
-----------
Change in Fiduciary Shares............................. 2,476
-----------
-----------
CLASS A SHARES:
Issued................................................. 688
Issued in connection with acquisition.................. --
Reinvested............................................. 4
Redeemed............................................... (600)
-----------
Change in Class A Shares............................... 92
-----------
-----------
CLASS B SHARES:
Issued................................................. 80
Issued in connection with acquisition.................. --
Reinvested............................................. 1
Redeemed............................................... (2)
-----------
Change in Class B Shares............................... 79
-----------
-----------
SERVICE SHARES:
Issued................................................. 7
Reinvested............................................. --
Redeemed............................................... (8)
-----------
Change in Service Shares............................... (1)
-----------
-----------
</TABLE>
CONTINUED
- ----92
<PAGE> 737
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C> <C>
LARGE COMPANY VALUE DISCIPLINED
VALUE
VALUE GROWTH FUND (A) FUND FUND
---------------------------- ---------------------- ---------
SEVEN MONTHS YEAR YEAR YEAR
ENDED JUNE ENDED YEAR ENDED ENDED ENDED
30, NOVEMBER 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995 1996
------------- ------------- ----------- --------- ---------
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES (B):
Proceeds from shares issued.............................. $ 51,451 $ 271,886 $ 201,943 $ 131,316
Proceeds from shares issued in conversion from class A
shares................................................. 186,991(b) -- -- --
Dividends reinvested..................................... 12 31,312 10,183 19,700
Shares redeemed.......................................... (54,571) (86,151) (53,653) (130,536)
------------- ----------- --------- ---------
Change in net assets from Fiduciary share transactions... $ 183,883 $ 217,047 $ 158,473 $ 20,480
------------- ----------- --------- ---------
------------- ----------- --------- ---------
CLASS A SHARES:
Proceeds from shares issued.............................. $ 15,771 $ 21,981 $ 10,239 $ 9,809 $ 10,777
Dividends reinvested..................................... 26,959 1,452 760 121 1,180
Shares redeemed.......................................... (16,784) (21,210) (5,175) (7,394) (6,449)
Cost of shares redeemed in conversion to Fiduciary
shares................................................. (186,991)(b) -- -- -- --
------------- ------------- ----------- --------- ---------
Change in net assets from Class A share transactions..... $(161,045) $ 2,223 $ 5,824 $ 2,536 $ 5,508
------------- ------------- ----------- --------- ---------
------------- ------------- ----------- --------- ---------
CLASS B SHARES:
Proceeds from shares issued.............................. $ 1,585 $ 2,278 $ 3,303 $ 679 $ 4,238
Dividends reinvested..................................... 562 28 218 27 821
Shares redeemed.......................................... (205) (138) (293) (89) (1,398)
------------- ------------- ----------- --------- ---------
Change in net assets from Class B share transactions..... $ 1,942 $ 2,168 $ 3,228 $ 617 $ 3,661
------------- ------------- ----------- --------- ---------
------------- ------------- ----------- --------- ---------
SERVICE SHARES:
Proceeds from shares issued..............................
Dividends reinvested.....................................
Shares redeemed..........................................
Change in net assets from Service Share transactions.....
SHARE TRANSACTIONS:
FIDUCIARY SHARES (B):
Issued................................................... 254 21,371 17,128 9,341
Issued in conversion from Class A Shares................. 18,699(b) -- -- --
Reinvested............................................... 1 2,593 911 1,427
Redeemed................................................. (556) (6,817) (4,551) (9,186)
------------- ----------- --------- ---------
Change in Fiduciary Shares............................... 18,398 17,147 13,488 1,582
------------- ----------- --------- ---------
------------- ----------- --------- ---------
CLASS A SHARES:
Issued................................................... 1,026 1,479 815 800 760
Issued in restatement of net asset value(c).............. 7,672 -- -- -- --
Reinvested............................................... 1,745 104 61 11 86
Redeemed................................................. (1,096) (1,389) (417) (601) (456)
Redeemed in conversion to Fiduciary Shares............... (18,699)(b) -- -- -- --
------------- ------------- ----------- --------- ---------
Change in Class A Shares................................. (9,352) 194 459 210 390
------------- ------------- ----------- --------- ---------
------------- ------------- ----------- --------- ---------
CLASS B SHARES:
Issued................................................... 122 149 262 56 298
Issued in restatement of net asset value(c).............. 136 -- -- -- --
Reinvested............................................... 36 2 16 2 60
Redeemed................................................. (16) (9) (26) (8) (99)
------------- ------------- ----------- --------- ---------
Change in Class B Shares................................. 278 142 252 50 259
------------- ------------- ----------- --------- ---------
------------- ------------- ----------- --------- ---------
SERVICE SHARES:
Issued...................................................
Reinvested...............................................
Redeemed.................................................
Change in Service Shares.................................
<CAPTION>
<S> <C>
YEAR
ENDED
JUNE 30,
1995
---------
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES (B):
Proceeds from shares issued.............................. $ 117,175
Proceeds from shares issued in conversion from class A
shares................................................. --
Dividends reinvested..................................... 11,069
Shares redeemed.......................................... (142,398)
---------
Change in net assets from Fiduciary share transactions... $ (14,154)
---------
---------
CLASS A SHARES:
Proceeds from shares issued.............................. $ 6,626
Dividends reinvested..................................... 482
Shares redeemed.......................................... (5,134)
Cost of shares redeemed in conversion to Fiduciary
shares................................................. --
---------
Change in net assets from Class A share transactions..... $ 1,974
---------
---------
CLASS B SHARES:
Proceeds from shares issued.............................. $ 5,594
Dividends reinvested..................................... 309
Shares redeemed.......................................... (903)
---------
Change in net assets from Class B share transactions..... $ 5,000
---------
---------
SERVICE SHARES:
Proceeds from shares issued.............................. $ 495
Dividends reinvested..................................... 6
Shares redeemed.......................................... (577)
---------
Change in net assets from Service Share transactions..... $ (76)
---------
---------
SHARE TRANSACTIONS:
FIDUCIARY SHARES (B):
Issued................................................... 9,425
Issued in conversion from Class A Shares................. --
Reinvested............................................... 913
Redeemed................................................. (11,504)
---------
Change in Fiduciary Shares............................... (1,166)
---------
---------
CLASS A SHARES:
Issued................................................... 521
Issued in restatement of net asset value(c).............. --
Reinvested............................................... 40
Redeemed................................................. (409)
Redeemed in conversion to Fiduciary Shares............... --
---------
Change in Class A Shares................................. 152
---------
---------
CLASS B SHARES:
Issued................................................... 447
Issued in restatement of net asset value(c).............. --
Reinvested............................................... 26
Redeemed................................................. (72)
---------
Change in Class B Shares................................. 401
---------
---------
SERVICE SHARES:
Issued................................................... 40
Reinvested............................................... 1
Redeemed................................................. (45)
---------
Change in Service Shares................................. (4)
---------
---------
</TABLE>
- -------------
<TABLE>
<S> <S>
(a) Upon reorganizing as a fund of The One Group, The Paragon Value Growth Fund became the Value Growth Fund. Capital and
share transactions for the periods prior to March 25, 1996 represent the Paragon Value Growth Fund.
(b) Fiduciary Shares of the Value Growth Fund commenced operations March 26, 1996 upon conversion of certain Class A Shares
to Fiduciary Shares.
(c) Pursuant to its reorganization as a fund of The One Group, the Fund issued additional shares at the close of business
March 25, 1996 as a result of a restatement of the net asset values of Class A Shares from $15.26 to $10.00 and Class B
Shares from $15.21 to $10.00.
</TABLE>
CONTINUED
93----
<PAGE> 738
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
GULF SOUTH
LARGE COMPANY GROWTH GROWTH OPPORTUNITIES GROWTH
FUND FUND FUND (A)
---------------------- -------------------- -----------
YEAR YEAR YEAR
ENDED YEAR ENDED ENDED ENDED PERIOD
JUNE 30, JUNE 30, JUNE 30, JUNE 30, ENDED JUNE
1996 1995 1996 1995 30, 1996
--------- ----------- --------- --------- -----------
<S> <S>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES (B):
Proceeds from shares issued..................................... $ 209,649 $ 264,563 $ 167,309 $ 120,166 $ 20,747
Proceeds from shares issued in connection with acquisition...... 33,161 119,883 -- -- --
Proceeds from shares issued in conversion from class A shares... -- -- -- -- 80,504(b)
Dividends reinvested............................................ 8,256 4,370 43,247 8,942 12
Shares redeemed................................................. (132,702) (77,903) (109,584) (162,832) (23,690)
--------- ----------- --------- --------- -----------
Change in net assets from Fiduciary share transactions.......... $ 118,364 $ 310,913 $ 100,972 $ (33,724) $ 77,573
--------- ----------- --------- --------- -----------
--------- ----------- --------- --------- -----------
CLASS A SHARES:
Proceeds from shares issued..................................... $ 46,490 $ 15,491 $ 108,378 $ 16,237 $ 8,112
Proceeds from shares issued in connection with acquisition...... 3,423 11,716 -- -- --
Dividends reinvested............................................ 904 154 2,718 296 13,830
Shares redeemed................................................. (10,113) (2,767) (95,119) (14,784) (7,224)
Cost of shares redeemed in conversion to Fiduciary shares....... -- -- -- -- (80,504)(b)
--------- ----------- --------- --------- -----------
Change in net assets from Class A share transactions............ $ 40,704 $ 24,594 $ 15,977 $ 1,749 $ (65,786)
--------- ----------- --------- --------- -----------
--------- ----------- --------- --------- -----------
CLASS B SHARES:
Proceeds from shares issued..................................... $ 47,604 $ 6,304 $ 9,649 $ 1,368 $ 636
Proceeds from shares issued in connection with acquisition...... 398 -- -- -- --
Dividends reinvested............................................ 376 32 894 58 384
Shares redeemed................................................. (2,374) (247) (563) (45) (162)
--------- ----------- --------- --------- -----------
Change in net assets from Class B share transactions............ $ 46,004 $ 6,089 $ 9,980 $ 1,381 $ 858
--------- ----------- --------- --------- -----------
--------- ----------- --------- --------- -----------
SERVICE SHARES:
Proceeds from shares issued..................................... $ 363 $ 481
Dividends reinvested............................................ 5 8
Shares redeemed................................................. (435) (547)
----------- ---------
Change in net assets from Service Share transactions............ $ (67) $ (58)
----------- ---------
----------- ---------
SHARE TRANSACTIONS:
FIDUCIARY SHARES (B):
Issued.......................................................... 14,892 21,755 8,947 7,209 66
Issued in connection with acquisition........................... 2,403 10,108 -- -- --
Issued in conversion from Class A Shares........................ -- -- -- -- 8,050(b)
Reinvested...................................................... 594 357 2,608 571 1
Redeemed........................................................ (9,049) (5,992) (5,714) (9,719) (360)
--------- ----------- --------- --------- -----------
Change in Fiduciary Shares...................................... 8,840 26,228 5,841 (1,939) 7,757
--------- ----------- --------- --------- -----------
--------- ----------- --------- --------- -----------
CLASS A SHARES:
Issued.......................................................... 3,131 1,182 5,756 949 509
Issued in connection with acquisition........................... 242 962 -- -- --
Issued in restatement of net asset value(c)..................... -- -- -- -- 3,555
Reinvested...................................................... 63 12 165 19 876
Redeemed........................................................ (674) (205) (5,035) (867) (466)
Redeemed in conversion to Fiduciary Shares...................... -- -- -- -- (8,050)(b)
--------- ----------- --------- --------- -----------
Change in Class A Shares........................................ 2,762 1,951 886 101 (3,576)
--------- ----------- --------- --------- -----------
--------- ----------- --------- --------- -----------
CLASS B SHARES:
Issued.......................................................... 3,201 494 522 82 45
Issued in connection with acquisition........................... 28 -- -- -- --
Issued in restatement of net asset value(c)..................... 78
Reinvested...................................................... 27 2 55 4 25
Redeemed........................................................ (163) (18) (30) (3) (12)
--------- ----------- --------- --------- -----------
Change in Class B Shares........................................ 3,093 478 547 83 136
--------- ----------- --------- --------- -----------
--------- ----------- --------- --------- -----------
SERVICE SHARES:
Issued.......................................................... 30 28
Reinvested...................................................... -- 1
Redeemed........................................................ (32) (31)
----------- ---------
Change in Service Shares........................................ (2) (2)
----------- ---------
----------- ---------
<CAPTION>
YEAR
ENDED
NOVEMBER 30,
1995
-------------
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES (B):
Proceeds from shares issued.....................................
Proceeds from shares issued in connection with acquisition......
Proceeds from shares issued in conversion from class A shares...
Dividends reinvested............................................
Shares redeemed.................................................
Change in net assets from Fiduciary share transactions..........
CLASS A SHARES:
Proceeds from shares issued..................................... $ 12,266
Proceeds from shares issued in connection with acquisition...... --
Dividends reinvested............................................ 321
Shares redeemed................................................. (12,837)
Cost of shares redeemed in conversion to Fiduciary shares.......
-------------
Change in net assets from Class A share transactions............ $ (250)
-------------
-------------
CLASS B SHARES:
Proceeds from shares issued..................................... $ 1,509
Proceeds from shares issued in connection with acquisition...... --
Dividends reinvested............................................ 8
Shares redeemed................................................. (119)
-------------
Change in net assets from Class B share transactions............ $ 1,398
-------------
-------------
SERVICE SHARES:
Proceeds from shares issued.....................................
Dividends reinvested............................................
Shares redeemed.................................................
Change in net assets from Service Share transactions............
SHARE TRANSACTIONS:
FIDUCIARY SHARES (B):
Issued..........................................................
Issued in connection with acquisition...........................
Issued in conversion from Class A Shares........................
Reinvested......................................................
Redeemed........................................................
Change in Fiduciary Shares......................................
CLASS A SHARES:
Issued.......................................................... 750
Issued in connection with acquisition........................... --
Issued in restatement of net asset value(c)..................... --
Reinvested...................................................... 22
Redeemed........................................................ (761)
Redeemed in conversion to Fiduciary Shares...................... --
-------------
Change in Class A Shares........................................ 11
-------------
-------------
CLASS B SHARES:
Issued.......................................................... 92
Issued in connection with acquisition........................... --
Issued in restatement of net asset value(c).....................
Reinvested...................................................... 1
Redeemed........................................................ (7)
-------------
Change in Class B Shares........................................ 86
-------------
-------------
SERVICE SHARES:
Issued..........................................................
Reinvested......................................................
Redeemed........................................................
Change in Service Shares........................................
</TABLE>
- -------------
<TABLE>
<S> <S>
(a) Upon reorganizing as a fund of The One Group, The Paragon Gulf South Growth Fund became the Gulf South Growth Fund.
Capital and share transactions for the periods prior to March 25, 1996 represent the Paragon Gulf South Growth Fund.
(b) Fiduciary Shares of the Value Growth Fund commenced operations March 26, 1996 upon conversion of certain Class A Shares
to Fiduciary Shares.
(c) Pursuant to its reorganization as a fund of The One Group, the Fund issued additional shares at the close of business
March 25, 1996 as a result of a restatement of the net asset values of Class A Shares from $15.70 to $10.00 and Class B
Shares from $15.48 to $10.00.
</TABLE>
CONTINUED
- ----94
<PAGE> 739
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
INTERNATIONAL EQUITY
INDEX FUND
----------------------
YEAR
ENDED YEAR ENDED
JUNE 30, JUNE 30,
1996 1995
--------- -----------
<S> <S>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued..................................................................... $ 154,310 $ 104,876
Dividends reinvested............................................................................ 2,284 788
Shares redeemed................................................................................. (51,662) (39,348)
--------- -----------
Change in net assets from Fiduciary share transactions.......................................... $ 104,932 $ 66,316
--------- -----------
--------- -----------
CLASS A SHARES:
Proceeds from shares issued..................................................................... $ 7,069 $ 3,817
Dividends reinvested............................................................................ 135 28
Shares redeemed................................................................................. (2,083) (1,301)
--------- -----------
Change in net assets from Class A share transactions............................................ $ 5,121 $ 2,544
--------- -----------
--------- -----------
CLASS B SHARES:
Proceeds from shares issued..................................................................... $ 2,565 $ 2,243
Dividends reinvested............................................................................ 82 27
Shares redeemed................................................................................. (812) (506)
--------- -----------
Change in net assets from Class B share transactions............................................ $ 1,835 $ 1,764
--------- -----------
--------- -----------
SERVICE SHARES:
Proceeds from shares issued..................................................................... $ 529
Dividends reinvested............................................................................ 2
Shares redeemed................................................................................. (629)
-----------
Change in net assets from Service Share transactions............................................ $ (98)
-----------
-----------
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued.......................................................................................... 10,623 7,711
Reinvested...................................................................................... 160 59
Redeemed........................................................................................ (3,542) (2,910)
--------- -----------
Change in Fiduciary Shares...................................................................... 7,241 4,860
--------- -----------
--------- -----------
CLASS A SHARES:
Issued.......................................................................................... 484 277
Reinvested...................................................................................... 10 2
Redeemed........................................................................................ (143) (96)
--------- -----------
Change in Class A Shares........................................................................ 351 183
--------- -----------
--------- -----------
CLASS B SHARES:
Issued.......................................................................................... 179 165
Reinvested...................................................................................... 5 2
Redeemed........................................................................................ (57) (38)
--------- -----------
Change in Class B Shares........................................................................ 127 129
--------- -----------
--------- -----------
SERVICE SHARES:
Issued.......................................................................................... 40
Reinvested...................................................................................... --
Redeemed........................................................................................ (46)
-----------
Change in Service Shares........................................................................ (6)
-----------
-----------
</TABLE>
CONTINUED
95----
<PAGE> 740
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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 a fee, computed daily and paid monthly, at the annual rate of
0.74% of the average net assets of the Income Equity Fund, the Value Growth
Fund, the Large Company Value Fund, the Disciplined Value Fund, the Large
Company Growth Fund, the Growth Opportunities Fund, and the Gulf South
Growth Fund; 0.65% of the average daily net assets of the Asset Allocation
Fund, and; 0.55% of the average daily net assets of the International Equity
Index Fund; and 0.30% of the average daily net assets of the Equity Index
Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services for
a fee that is computed daily and payable monthly, at an annual rate of 0.20%
on the first $1.5 billion of Trust net assets (excluding the Treasury Only
Money Market Fund and the Government Money Market Fund--the "Institutional
Money Market Funds"); 0.18% on the next $0.5 billion of Trust net assets
(excluding the Institutional Money Market Funds); and 0.16% of Trust net
assets (excluding the Institutional Money Market Funds) over $2 billion. 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. Prior to March 25, 1996, Goldman Sachs
Asset Management served as administrator of Paragon. The terms of the
current administration agreement are substantially the same as the former
administration agreement.
The Trust and The One Group Services Company (the "Distributor") are parties
to a distribution agreement under which shares of the Funds are sold on a
continuous basis. Class A and Class B Shares are subject to a distribution
and shareholder services plan (the "Plans") pursuant to Rule 12b-1 under the
1940 Act. As provided in the Plans, the Trust will pay the Distributor a fee
of 0.35% of the average daily net assets of Class A Shares of each of the
Funds and 1.00% of the average daily net assets of the Class B Shares of
each of the Funds. Currently, the Distributor has voluntarily agreed to
limit payments under the Plans to 0.25% of average daily net assets of the
Class A Shares of each Fund. Up to 0.25% of the fees payable under the Plans
may be used as compensation for shareholder services by the Distributor
and/or financial institutions and intermediaries. Fees paid under the Plans
may be applied by the Distributor toward (i) compensation for its services
in connection with distribution assistance or provision of shareholder
services; or (ii) payments to financial institutions and intermediaries such
as banks, (including affiliates of the Adviser), brokers, dealers and other
institutions, including the Distributor's affiliates and subsidiaries as
compensation for services or reimbursement of expenses incurred in
connection with distribution assistance or provision of shareholder
services. Fiduciary Class Shares of each Fund are offered without
distribution fees. For the year ended June 30, 1996, the Distributor
received $5,679,889 from commissions earned on sales of Class A Shares and
redemptions of Class B Shares, of which, the Distributor re-allowed
$5,409,347 to affiliated broker-dealers of the Fund.
Prior to January 2, 1996, Premier Investment Advisors, L.L.C. ("Premier")
served as investment adviser and Goldman Sachs & Company served as
distributor to Paragon. Pursuant to the approval of the Board of Trustees of
Paragon on October 31, 1995 and its shareholders on December 20, 1995,
Paragon entered into an investment advisory agreement with the Adviser and a
distribution agreement with the Distributor effective January 2, 1996. The
terms of the investment advisory agreement with Premier and with the Adviser
and the distribution agreements with Goldman Sachs & Company and the
Distributor are substantially the same.
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
CONTINUED
- ----96
<PAGE> 741
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
The Adviser, the Administrator and the Distributor voluntarily agreed to
waive a portion of their fees and to reimburse the Funds for certain
expenses. For the period ended June 30, 1996, fees in the following amounts
were waived or reimbursed to the Funds (amounts in thousands):
<TABLE>
<CAPTION>
INVESTMENT 12B-1 FEES
ADVISORY FEES ADMINISTRATION WAIVED
WAIVED/ FEES WAIVED/ ---------------
REIMBURSED REIMBURSED CLASS A
----------------- ----------------- ---------------
<S> <C> <C> <C>
Asset Allocation Fund.................................................. $ 92 $ 60 $ 10
Income Equity Fund..................................................... 71 40 25
Equity Index Fund...................................................... 639 215 14
Value Growth Fund...................................................... 104 -- 10
Large Company Value Fund............................................... -- 33 7
Disciplined Value Fund................................................. 61 -- 17
Large Company Growth Fund.............................................. 245 -- 51
Growth Opportunities Fund.............................................. 54 -- 18
Gulf South Growth Fund................................................. 26 -- 7
International Equity Index Fund........................................ 92 -- 7
</TABLE>
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities and purchased options) during the periods
ended June 30, 1996 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES OTHER SECURITIES
---------------------- --------------------------
PURCHASES SALES PURCHASES SALES
----------- --------- ------------ ------------
<S> <C> <C> <C> <C>
Asset Allocation Fund............................................. $ 24,119 $ 13,547 $ 49,078 $ 25,280
Income Equity Fund................................................ -- -- 57,497 38,320
Equity Index Fund................................................. -- -- 121,801 25,322
Value Growth Fund................................................. -- -- 152,119 142,716
Large Company Value Fund.......................................... -- -- 1,029,179 832,855
Disciplined Value Fund............................................ -- -- 498,796 470,102
Large Company Growth Fund......................................... -- -- 471,918 253,878
Growth Opportunities Fund......................................... -- -- 2,092,922 2,064,829
Gulf South Growth Fund............................................ -- -- 73,865 59,227
International Equity Index Fund................................... -- -- 131,493 17,814
</TABLE>
6. FINANCIAL INSTRUMENTS:
Investing in financial instruments such as written options, futures and
sales of forward foreign currency contracts involves risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the Funds have in the
particular class of instrument. Risks associated with these instruments
include an imperfect correlation between the movements in the price of the
instruments and the price of the underlying securities and interest rates,
an illiquid secondary market for the instruments or inability of
counterparties to perform under the terms of the contract, and changes in
the value of currency relative to the U.S. dollar. The Funds enter into
these contracts primarily as a means to hedge against adverse fluctuations
in the value of securities.
CONTINUED
97----
<PAGE> 742
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
The following is a summary of written option activity for the year ended
June 30, 1996 by the Large Company Value Fund:
<TABLE>
<CAPTION>
SHARES SUBJECT
TO CONTRACT PREMIUMS
------------------- -----------
<S> <C> <C>
Balance at beginning of year.......................................................... 105 $ 242
Options written....................................................................... 7,547 14,136
Options closed........................................................................ (6,315) (11,696)
Options exercised..................................................................... (837) (1,509)
------ -----------
Options outstanding at end of period.................................................. 500 $ 1,173
<CAPTION>
SHARES SUBJECT
COVERED CALL OPTIONS TO CONTRACT VALUE
- -------------------------------------------------------------------------------------- ------------------- -----------
<S> <C> <C>
Options outstanding at end of period consist of:
Allstate Corp., $45, 7/22/96........................................................ 55 $ 69
AT&T Corp., $65, 7/22/96............................................................ 30 8
Boeing Co., $85,7/22/96............................................................. 40 155
Chase Manhattan Corp., $70, 7/22/96................................................. 25 48
Cigna Corp., $110, 7/22/96.......................................................... 40 350
Citicorp, $80, 7/22/96.............................................................. 75 234
Citicorp, $85, 7/22/96.............................................................. 25 22
Cyprus Amax Minerals, $25, 7/22/96.................................................. 50 9
Exxon, $85, 7/22/96................................................................. 92 265
Federal National Mortgage Assoc., $30, 7/22/96...................................... 8 29
Federal National Mortgage Assoc., $32.5, 7/22/96.................................... 50 94
IBM, $105, 7/22/96.................................................................. 30 32
RJR Nabisco Holding Corp., $35, 7/22/96............................................. 70 9
------ -----------
590 $ 1,324
------ -----------
------ -----------
</TABLE>
As of June 30, 1996, portfolio securities valued at $38,804,000 were held in
escrow by the custodian in connection with covered call options written by
the Fund.
<TABLE>
<CAPTION>
SHARES SUBJECT
PUT OPTIONS TO CONTRACT VALUE
- -------------------------------------------------------------------------------------- ------------------- -----------
<S> <C> <C>
DuPont (EI) de NeMours & Co., $75, 7/22/96........................................... 40 $ 20
IBM, $95, 7/22/96................................................................... 50 66
------ -----------
90 $ 86
------ -----------
------ -----------
</TABLE>
7. CONCENTRATION OF CREDIT RISK:
The Gulf South Growth Fund has a relatively large concentration of
securities invested in companies domiciled in the Southeastern region of the
United States. The Fund may be more susceptible to political, social and
economic events adversely affecting the Southeastern region of the United
States than funds not so concentrated.
The International Equity Index has a relatively large concentration of
securities invested in companies domiciled in Japan. The Fund may be more
susceptible to the political, social and economic events adversely affecting
the Japanese companies than funds not so concentrated.
CONTINUED
- ----98
<PAGE> 743
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
8. FEDERAL TAX INFORMATION (UNAUDITED):
The accompanying table below details distributions from long-term capital
gains for the following funds for the period ended June 30, 1996 (amounts in
thousands):
<TABLE>
<S> <C>
Asset Allocation Fund..................................................... $ 1,731
Income Equity Fund........................................................ 8,347
Equity Index Fund......................................................... 9,003
Value Growth Fund......................................................... 23,395
Large Company Value Fund.................................................. 5,234
Disciplined Value Fund.................................................... 22,726
Large Company Growth Fund................................................. 28,750
Growth Opportunities Fund................................................. 25,117
Gulf South Growth Fund.................................................... 3,445
International Equity Index Fund........................................... 1,973
</TABLE>
Under current tax law, foreign currency losses realized after October 31 may
be deferred and treated as occurring on the first day of the fiscal year
ended June 30, 1997. Losses deferred for the International Equity Index Fund
amounted to $1,203,000 at June 30, 1996. The International Equity Index Fund
elects to pass on the benefits of the foreign tax credit to its shareholders
for the year ended June 30, 1996.
ELIGIBLE DISTRIBUTIONS (UNAUDITED):
The Trust designates the following eligible distributions for the dividends
received deductions for corporations:
<TABLE>
<CAPTION>
ASSET INCOME EQUITY
ALLOCATION EQUITY INDEX
FUND FUND FUND
----------- -------------- -----------
<S> <C> <C> <C>
Dividend Income (000)............................................ $ 587 $ 7,617 $ 6,339
Dividend Income Per Share--Fiduciary............................. 0.086 0.352 0.300
Dividend Income Per Share--Class A............................... 0.078 0.303 0.247
Dividend Income Per Share--Class B............................... 0.060 0.205 0.147
<CAPTION>
LARGE
VALUE COMPANY DISCIPLINED
GROWTH VALUE VALUE
FUND FUND FUND
----------- -------------- -----------
<S> <C> <C> <C>
Dividend Income (000)............................................ $ 2,167 $ 13,341 $ 8,356
Dividend Income Per Share--Fiduciary............................. 0.260 0.238 0.149
Dividend Income Per Share--Class A............................... 0.842 0.207 0.127
Dividend Income Per Share--Class B............................... 0.793 0.138 0.071
<CAPTION>
LARGE GULF
COMPANY GROWTH SOUTH
GROWTH OPPORTUNITIES GROWTH
FUND FUND FUND
----------- -------------- -----------
<S> <C> <C> <C>
Dividend Income (000)............................................ $ 14,838 $ 8,638 $ 237
Dividend Income Per Share--Fiduciary............................. 0.163 0.153 0.162
Dividend Income Per Share--Class A............................... 0.130 0.112 0.146
Dividend Income Per Share--Class B............................... 0.049 0.056 0.148
</TABLE>
CONTINUED
99----
<PAGE> 744
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
9. REORGANIZATIONS:
The Trust entered an Agreement and Plan of Reorganization with Paragon
pursuant to which all of the assets and liabilities of each Paragon Fund
transferred to a fund of The One Group in exchange for shares of the
corresponding fund of The One Group. The Paragon Value Equity Income Fund
transferred its assets and liabilities to the Income Equity Fund. The
Paragon Value Growth Fund and the Paragon Gulf South Growth Fund transferred
its assets and liabilities to the Value Growth Fund and Gulf South Growth
Fund, respectively. The reorganization, which qualified as a tax-free
exchange for federal income tax purposes, was completed on March 25, 1996
following approval by shareholders of Paragon at a special shareholder
meeting. The following is a summary of shares outstanding, net assets, net
asset value per share and unrealized appreciation immediately before and
after the reorganization:
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER
------------------------------ REORGANIZATION
PARAGON VALUE ---------------
EQUITY INCOME INCOME EQUITY INCOME EQUITY
FUND FUND FUND
-------------- -------------- ---------------
<S> <C> <C> <C>
Shares (000)........................................................ 8,993 13,779 21,674
Net Assets (000).................................................... $ 136,786 $ 238,679 $ 375,465
Net asset value:
Fiduciary......................................................... $ 17.33 $ 17.33
Class A........................................................... 15.21 17.30 17.30
Class B........................................................... 15.20 17.33 17.33
Unrealized appreciation............................................. $ 41,324 $ 71,670 $ 112,994
</TABLE>
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
----------------------------- ---------------
PARAGON VALUE VALUE GROWTH VALUE GROWTH
GROWTH FUND FUND FUND
-------------- ------------- ---------------
<S> <C> <C> <C>
Shares (000)......................................................... 14,849 -- 22,657
Net Assets (000)..................................................... $ 226,575 $ -- $ 226,567
Net asset value:
Fiduciary.......................................................... $ 10.00
Class A............................................................ 15.26 10.00
Class B............................................................ 15.21 10.00
Unrealized appreciation.............................................. $ 48,859 $ -- $ 48,859
</TABLE>
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER
---------------------------- REORGANIZATION
PARAGON GULF ---------------
SOUTH GROWTH GULF SOUTH GULF SOUTH
FUND GROWTH FUND GROWTH FUND
------------- ------------- ---------------
<S> <C> <C> <C>
Shares (000)........................................................ 6,379 -- 10,012
Net Assets (000).................................................... $ 100,116 $ -- $ 100,116
Net asset value:
Fiduciary......................................................... $ 10.00
Class A........................................................... 15.70 10.00
Class B........................................................... 15.48 10.00
Unrealized appreciation............................................. $ 19,678 $ -- $ 19,678
</TABLE>
CONTINUED
- ----
100
<PAGE> 745
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
On May 22, 1995, the Board of Trustees approved a Plan of Reorganization
pursuant to which the Blue Chip Equity Fund would be merged with and into the
Large Company Growth Fund. On September 1, 1995, the Blue Chip Equity Fund
transferred all of its assets and liabilities to the Large Company Growth
Fund in exchange for shares of the Large Company Growth Fund. The
reorganization, which qualified as a tax-free exchange for federal income tax
purposes, was approved by the shareholders of the Blue Chip Equity Fund, at a
shareholders' meeting on August 28, 1995. The following is a summary of
shares outstanding, net assets, net asset value per share and unrealized
appreciation immediately before and after the reorganization:
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
----------------------------- ----------------
BLUE CHIP LARGE COMPANY LARGE COMPANY
EQUITY FUND GROWTH FUND GROWTH FUND
----------- ---------------- ----------------
<S> <C> <C> <C>
Shares (000).......................................................... 2,777 44,457 47,130
Net Assets (000)...................................................... $ 36,983 $ 614,499 $ 651,482
Net asset value:
Fiduciary........................................................... $ 13.32 $ 13.80 $ 13.80
Class A............................................................. 13.30 14.17 14.17
Class B............................................................. 13.37 13.96 13.96
Unrealized appreciation............................................... $ 7,227 $ 86,413 $ 93,640
</TABLE>
On October 7, 1994, the Board of Trustees approved an agreement and plan of
reorganization for the acquisition of the Trademark Funds by the Trust. Under
the agreement and plan of reorganization, all assets and liabilities of the
Trademark Equity Fund (the "Acquired Fund") were acquired by the Large
Company Growth Fund in exchange for shares of the Large Company Growth Fund.
The reorganization, which qualified as a tax-free exchange for federal income
tax purposes, was completed following approval by the shareholders of the
Trademark Equity Fund. The following is a summary of shares outstanding, net
assets, unrealized appreciation and net asset value per share immediately
before and after the reorganization (amounts in thousands except net asset
value):
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
-------------------------------- ---------------
TRADEMARK EQUITY LARGE COMPANY LARGE COMPANY
FUND GROWTH FUND GROWTH FUND
----------------- ------------- ---------------
<S> <C> <C> <C>
Shares............................................................ *12,666 23,627 34,697
Net Assets........................................................ *$ 131,599 $ 280,424 $ 412,023
Net Asset Value:
Fiduciary....................................................... *$ 10.39 $ 11.87 $ 11.87
Class A......................................................... 12.18 12.18
Unrealized Appreciation........................................... $ 3,072 $ 11,501 $ 14,573
</TABLE>
------------
* Before the reorganization, the Acquired Fund offered only one class of
shares.
CONTINUED
101----
<PAGE> 746
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
------------------------------------------
FIDUCIARY
------------------------------------------
YEARS ENDED JUNE 30,
------------------------------------------
1996 1995 1994 1993 (A)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................................. $ 10.73 $ 9.64 $ 10.06 $ 10.00
--------- --------- --------- ---------
Investment Activities
Net investment income............................................... 0.41 0.38 0.29 0.07
Net realized and unrealized gains (losses) from investments......... 1.16 1.12 (0.38) 0.06
--------- --------- --------- ---------
Total from Investment Activities.................................. 1.57 1.50 (0.09) 0.13
--------- --------- --------- ---------
Distributions
Net investment income............................................... (0.41) (0.37) (0.29) (0.07)
Net realized gains.................................................. (0.18) (0.04) (0.04) --
--------- --------- --------- ---------
Total Distributions............................................... (0.59) (0.41) (0.33) (0.07)
--------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD........................................................ $ 11.71 $ 10.73 $ 9.64 $ 10.06
--------- --------- --------- ---------
--------- --------- --------- ---------
Total Return.......................................................... 14.87% 16.06% (1.01)% 5.45%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 50,323 $ 37,658 $ 42,751 $ 30,441
Ratio of expenses to average net assets............................. 0.94% 1.06% 1.06% 0.90%(b)
Ratio of net investment income to average net assets................ 3.58% 3.72% 2.91% 3.03%(b)
Ratio of expenses to average net assets*............................ 1.19% 1.31% 1.33% 1.34%(b)
Ratio of net investment income to average net assets*............... 3.33% 3.47% 2.64% 2.59%(b)
Portfolio turnover (c).............................................. 73.38% 115.36% 56.55% 4.05%
Average commission rate paid (d).................................... $ 0.0616
</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) Fiduciary Shares commenced offering on April 5, 1993.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
102
<PAGE> 747
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
--------------------------------------------
CLASS A
--------------------------------------------
YEARS ENDED JUNE 30,
--------------------------------------------
1996 1995 1994 1993 (A)
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................ $ 10.74 $ 9.65 $ 10.06 $ 10.00
--------- --------- --------- -----------
Investment Activities
Net investment income.......................................... 0.37 0.35 0.27 0.05
Net realized and unrealized gains (losses) from investments.... 1.16 1.13 (0.38) 0.07
--------- --------- --------- -----------
Total from Investment Activities............................. 1.53 1.48 (0.11) 0.12
--------- --------- --------- -----------
Distributions
Net investment income.......................................... (0.37) (0.34) (0.26) (0.06)
In excess of net investment income............................. -- (0.01) -- --
Net realized gains............................................. (0.18) (0.04) (0.04) --
--------- --------- --------- -----------
Total Distributions.......................................... (0.55) (0.39) (0.30) (0.06)
--------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD.................................................. $ 11.72 $ 10.74 $ 9.65 $ 10.06
--------- --------- --------- -----------
--------- --------- --------- -----------
Total Return (Excludes Sales Charge)............................. 14.48% 15.76% (1.19)% 5.23 %(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................. $ 17,849 $ 4,745 $ 1,691 $ 571
Ratio of expenses to average net assets........................ 1.19% 1.31% 1.33% 1.15 %(b)
Ratio of net investment income to average net assets........... 3.33% 3.57% 2.68% 2.84 %(b)
Ratio of expenses to average net assets*....................... 1.54% 1.66% 1.67% 1.62 %(b)
Ratio of net investment income to average net assets*.......... 2.98% 32.30% 2.34% 2.37 %(b)
Portfolio turnover (c)......................................... 73.38% 115.36% 56.55% 4.05 %
Average commission rate paid (d)............................... $ 0.0616
</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) The Fund commenced operations on April 2, 1993.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
103----
<PAGE> 748
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................................... $ 10.76 $ 9.67 $ 10.37
--------- --------- -----------
Investment Activities
Net investment income.................................................. 0.28 0.27 0.08
Net realized and unrealized gains (losses) from investments............ 1.18 1.14 (0.70)
--------- --------- -----------
Total from Investment Activities..................................... 1.46 1.41 (0.62)
--------- --------- -----------
Distributions
Net investment income.................................................. (0.28) (0.27) (0.08)
In excess of net investment income..................................... -- (0.01) --
Net realized gains..................................................... (0.18) (0.04) --
--------- --------- -----------
Total Distributions.................................................. (0.46) (0.32) (0.08)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD.......................................................... $ 11.76 $ 10.76 $ 9.67
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)..................................... 13.79% 14.90% (5.98)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)...................................... $ 18,575 $ 3,019 $ 1,862
Ratio of expenses to average net assets................................ 1.94% 2.07% 2.40 %(b)
Ratio of net investment income to average net assets................... 2.58% 2.77% 1.99 %(b)
Ratio of expenses to average net assets*............................... 2.19% 2.31% 2.40 %(b)
Ratio of net investment income to average net assets*.................. 2.33% 2.52% 1.99 %(b)
Portfolio turnover (d)................................................. 73.38% 115.36% 56.55 %
Average commission rate paid (e)....................................... $ 0.0616
</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) The Fund commenced operations on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
104
<PAGE> 749
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ASSET
ALLOCATION FUND
---------------
SERVICE (A)
---------------
YEAR ENDED JUNE
30,
1995
---------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................................................. $ 9.62
------
Investment Activities
Net investment income............................................................ 0.22
Net realized and unrealized gains (losses) from investments...................... 1.05
------
Total from Investment Activities............................................... 1.27
Distributions
Net investment income............................................................ (0.22)
In excess of net investment income............................................... (0.02)
In excess of net realized gains.................................................. (0.04)
------
Total Distributions............................................................ (0.28)
------
NET ASSET VALUE,
END OF PERIOD.................................................................... $ 10.61
------
------
Total Return....................................................................... (a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................ $ --
Ratio of expenses to average net assets.......................................... 1.72 %(b)
Ratio of net investment income to average net assets............................. 3.06 %(b)
Ratio of expenses to average net assets*......................................... 1.98 %(b)
Ratio of net investment income to average net assets*............................ 2.79 %(b)
Portfolio turnover (c)........................................................... 115.36 %
</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) The Service Shares commenced offering on July 15, 1994 when they were designated as Retirement
Shares. On April 4, 1995, the name of the Retirement Shares was changed to Service Shares. As
of June 1, 1995, Service Shares transferred to Class A Shares, and as of June 30, 1995, there
were no shareholders in the Service Class. The total return for the period from July 15, 1994
to June 1, 1995 for the Service Shares was 13.25%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
105----
<PAGE> 750
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME EQUITY FUND
-----------------------------------------------------
FIDUCIARY
-----------------------------------------------------
YEARS ENDED JUNE 30,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................ $ 15.13 $ 13.22 $ 13.21 $ 12.24 $ 11.35
--------- --------- --------- --------- ---------
Investment Activities
Net investment income.......................... 0.40 0.40 0.39 0.43 0.49
Net realized and unrealized gains (losses) from
investments.................................. 3.22 2.28 0.01 0.97 0.90
--------- --------- --------- --------- ---------
Total from Investment Activities............. 3.62 2.68 0.40 1.40 1.39
--------- --------- --------- --------- ---------
Distributions
Net investment income.......................... (0.40) (0.40) (0.39) (0.43) (0.50)
Net realized gains............................. (0.70) (0.37) -- -- --
--------- --------- --------- --------- ---------
Total Distributions.......................... (1.10) (0.77) (0.39) (0.43) (0.50)
--------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD.................................. $ 17.65 $ 15.13 $ 13.22 $ 13.21 $ 12.24
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return..................................... 24.53% 21.04% 3.27% 11.56% 12.36%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............. $ 321,827 $ 170,919 $ 198,787 $ 153,144 $ 125,050
Ratio of expenses to average net assets........ 0.98% 1.01% 0.98% 0.90% 0.70%
Ratio of net investment income to average net
assets....................................... 2.44% 2.85% 3.18% 3.37% 4.12%
Ratio of expenses to average net assets*....... 1.01% 1.01% 1.05% 1.07% 1.23%
Ratio of net investment income to average net
assets*...................................... 2.41% 2.85% 3.11% 3.20% 3.59%
Portfolio turnover (a)......................... 14.92% 4.03% 22.69% 7.53% 5.99%
Average commission rate paid (b)............... $ 0.0673
</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) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(b) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
106
<PAGE> 751
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME EQUITY FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------
1996 1995 1994 1993 1992 (A)
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................. $ 15.11 $ 13.20 $ 13.20 $ 12.23 $ 12.34
--------- --------- --------- --------- -----------
Investment Activities
Net investment income................................ 0.38 0.03 0.36 0.40 0.20
Net realized and unrealized gains (losses) from
investments........................................ 3.20 2.29 -- 0.98 (0.10)
--------- --------- --------- --------- -----------
Total from Investment Activities................... 3.58 2.32 0.36 1.38 0.10
Distributions
Net investment income................................ (0.35) (0.03) (0.34) (0.41) (0.21)
In excess of net investment income................... -- (0.01) (0.02) -- --
Net realized gains................................... (0.70) (0.37) -- -- --
--------- --------- --------- --------- -----------
Total Distributions................................ (1.05) (0.41) (0.36) (0.41) (0.21)
--------- --------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD........................................ $ 17.64 $ 15.11 $ 13.20 $ 13.20 $ 12.23
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total Return (Excludes Sales Charge)................... 24.23% 20.79% 2.95% 11.38% 2.16%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................... $ 44,284 $ 13,793 $ 12,054 $ 9,513 $ 118
Ratio of expenses to average net assets.............. 1.23% 1.26% 1.23% 1.11% 1.29 %(b)
Ratio of net investment income to average net
assets............................................. 2.19% 2.61% 3.01% 3.32% 3.97 %(b)
Ratio of expenses to average net assets*............. 1.36% 1.36% 1.40% 1.43% 1.49 %(b)
Ratio of net investment income to average net
assets*............................................ 2.06% 2.51% 2.84% 3.00% 3.77 %(b)
Portfolio turnover (c)............................... 14.92% 4.03% 22.69% 7.53% 5.99 %
Average commission rate paid (d)..................... $ 0.0673
</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) Class A Shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
107----
<PAGE> 752
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME EQUITY FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................................... $ 15.14 $ 13.23 $ 13.83
--------- --------- -----------
Investment Activities
Net investment income.................................................. 0.24 0.26 0.11
Net realized and unrealized gains (losses) from investments............ 3.23 2.29 (0.60)
--------- --------- -----------
Total from Investment Activities..................................... 3.47 2.55 (0.49)
--------- --------- -----------
Distributions
Net investment income.................................................. (0.23) (0.25) (0.11)
In excess of net investment income..................................... -- (0.02) --
Net realized gains..................................................... (0.70) (0.37) --
--------- --------- -----------
Total Distributions.................................................. (0.93) (0.64) (0.11)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD.......................................................... $ 17.68 $ 15.14 $ 13.23
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)..................................... 23.41% 19.91% (3.37)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)...................................... $ 29,169 $ 3,468 $ 1,714
Ratio of expenses to average net assets................................ 1.98% 2.01% 1.95 %(b)
Ratio of net investment income to average net assets................... 1.44% 1.88% 2.70 %(b)
Ratio of expenses to average net assets*............................... 2.01% 2.02% 1.95 %(b)
Ratio of net investment income to average net assets*.................. 1.41% 1.87% 2.70 %(b)
Portfolio turnover (d)................................................. 14.92% 4.03% 22.69 %
Average commission rate paid (e)....................................... $ 0.0673
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
108
<PAGE> 753
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EQUITY INDEX FUND
---------------------------------------------------------
FIDUCIARY
---------------------------------------------------------
YEARS ENDED JUNE 30,
---------------------------------------------------------
1996 1995 1994 1993 1992 (A)
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.......................................... $ 14.03 $ 11.59 $ 11.92 $ 10.92 $ 10.00
---------- ---------- ---------- ---------- ---------
Investment Activities
Net investment income........................................ 0.33 0.32 0.29 0.30 0.26
Net realized and unrealized gains (losses) from
investments................................................ 3.16 2.59 (0.20) 1.13 0.95
---------- ---------- ---------- ---------- ---------
Total from Investment Activities........................... 3.49 2.91 0.09 1.43 1.21
---------- ---------- ---------- ---------- ---------
Distributions
Net investment income........................................ (0.33) (0.29) (0.29) (0.30) (0.26)
In excess of net investment income........................... (0.01) (0.02) (0.04) -- --
Net realized gains........................................... (0.52) (0.16) (0.09) (0.13) (0.03)
---------- ---------- ---------- ---------- ---------
Total Distributions........................................ (0.86) (0.47) (0.42) (0.43) (0.29)
---------- ---------- ---------- ---------- ---------
NET ASSET VALUE,
END OF PERIOD................................................ $ 16.66 $ 14.03 $ 11.59 $ 11.92 $ 10.92
---------- ---------- ---------- ---------- ---------
---------- ---------- ---------- ---------- ---------
Total Return................................................... 25.47% 25.79% 0.63% 13.04% 12.14%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................ $ 321,058 $ 234,895 $ 165,370 $ 96,446 $ 62,150
Ratio of expenses to average net assets...................... 0.30% 0.33% 0.46% 0.50% 0.73%(b)
Ratio of net investment income to average net assets......... 2.18% 2.57% 2.44% 2.46% 2.43%(b)
Ratio of expenses to average net assets*..................... 0.59% 0.66% 0.59% 0.87% 1.16%(b)
Ratio of net investment income to average net assets*........ 1.89% 2.24% 2.31% 2.09% 2.00%(b)
Portfolio turnover (c)....................................... 9.08% 2.71% 11.81% 2.71% 21.90%
Average commission rate paid (d)............................. $ 0.0490
</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) The Fund commenced operations on July 2, 1991.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
109----
<PAGE> 754
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EQUITY INDEX FUND
----------------------------------------------------------
CLASS A
----------------------------------------------------------
YEARS ENDED JUNE 30,
----------------------------------------------------------
1996 1995 1994 1993 1992 (A)
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................ $ 14.02 $ 11.59 $ 11.91 $ 10.92 $ 10.94
--------- ---------- ---------- ---------- -----------
Investment Activities
Net investment income.......................................... 0.27 0.29 0.28 0.30 0.08
Net realized and unrealized gains (losses) from investments.... 3.18 2.58 (0.20) 1.10 --
--------- ---------- ---------- ---------- -----------
Total from Investment Activities............................. 3.45 2.87 0.08 1.40 0.08
--------- ---------- ---------- ---------- -----------
Distributions
Net investment income.......................................... (0.27) (0.28) (0.27) (0.28) (0.10)
In excess of net investment income............................. (0.01) -- (0.04) -- --
Net realized gains............................................. (0.52) (0.16) (0.09) (0.13) --
--------- ---------- ---------- ---------- -----------
Total Distributions.......................................... (0.80) (0.44) (0.40) (0.41) (0.10)
--------- ---------- ---------- ---------- -----------
NET ASSET VALUE,
END OF PERIOD.................................................. $ 16.67 $ 14.02 $ 11.59 $ 11.91 $ 10.92
--------- ---------- ---------- ---------- -----------
--------- ---------- ---------- ---------- -----------
Total Return (Excludes Sales Charge)............................. 25.16% 25.43% 0.56% 12.75% 1.32%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................. $ 32,186 $ 3,003 $ 1,416 $ 512 $ 5
Ratio of expenses to average net assets........................ 0.55% 0.56% 0.62% 0.52% 1.09 %(b)
Ratio of net investment income to average net assets........... 1.93% 2.38% 2.37% 2.51% 1.97 %(b)
Ratio of expenses to average net assets*....................... 0.94% 1.01% 0.94% 0.99% 1.27 %(b)
Ratio of net investment income to average net assets*.......... 1.54% 1.94% 2.05% 2.04% 1.79 %(b)
Portfolio turnover (c)......................................... 9.08% 2.71% 11.81% 2.71% 21.90 %
Average commission rate paid (d)............................... $ 0.0490
</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) Class A Shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
110
<PAGE> 755
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EQUITY INDEX FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................................................... $ 14.05 $ 11.61 $ 12.39
--------- --------- -----------
Investment Activities
Net investment income..................................................................... 0.16 0.18 0.09
Net realized and unrealized gains (losses) from investments............................... 3.16 2.61 (0.78)
--------- --------- -----------
Total from Investment Activities........................................................ 3.32 2.79 (0.69)
--------- --------- -----------
Distributions
Net investment income..................................................................... (0.16) (0.19) (0.09)
In excess of net investment income........................................................ (0.01) -- --
Net realized gains........................................................................ (0.52) (0.16) --
--------- --------- -----------
Total Distributions..................................................................... (0.69) (0.35) (0.09)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD............................................................................. $ 16.68 $ 14.05 $ 11.61
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)........................................................ 24.05% 24.58% (5.57)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................................................... $ 38,538 $ 1,408 $ 248
Ratio of expenses to average net assets................................................... 1.30% 1.34% 1.10 %(b)
Ratio of net investment income to average net assets...................................... 1.18% 1.60% 2.08 %(b)
Ratio of expenses to average net assets*.................................................. 1.59% 1.67% 1.15 %(b)
Ratio of net investment income to average net assets*..................................... 0.89% 1.27% 2.03 %(b)
Portfolio turnover (d).................................................................... 9.08% 2.71% 11.81 %
Average commission rate paid (e).......................................................... $ 0.0490
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not Annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
111----
<PAGE> 756
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EQUITY INDEX FUND
------------------------
SERVICE/RETIREMENT (A)
------------------------
YEARS ENDED JUNE 30,
------------------------
1995 1994
----------- -----------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................................................ $ 11.51 $ 12.36
----------- -----------
Investment Activities
Net investment income.......................................................................... 0.13 0.05
Net realized and unrealized gains (losses) from investments.................................... 2.36 (0.85)
----------- -----------
Total from Investment Activities............................................................. 2.49 (0.80)
----------- -----------
Distributions
Net investment income.......................................................................... (0.19) (0.05)
In excess of net investment income............................................................. (0.01) --
Net realized gains............................................................................. (0.10) --
In excess of net realized gains................................................................ (0.06) --
----------- -----------
Total Distributions.......................................................................... (0.36) (0.05)
----------- -----------
NET ASSET VALUE,
END OF PERIOD.................................................................................. $ 13.64 $ 11.51
----------- -----------
----------- -----------
Total Return..................................................................................... (a) (6.52)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................................................. $ -- $ 11
Ratio of expenses to average net assets........................................................ 1.01 (b) 1.42 %(b)
Ratio of net investment income to average net assets........................................... 2.18 (b) 1.83 %(b)
Ratio of expenses to average net assets*....................................................... 1.37 (b) 1.69 %(b)
Ratio of net investment income to average net assets*.......................................... 1.82 (b) 1.56 %(b)
Portfolio turnover (d)......................................................................... 2.71 % 11.81 %
</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) The Service Shares commenced offering on January 17, 1994 when they were designated as
"Retirement Shares". On April 4, 1995, the name of the Retirement Shares was changed to
"Service" Shares. As of June 1, 1995, Service shares transferred to Class A Shares, and as of
June 30, 1995, there were no shareholders in the Service Class. The total return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 22.83%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
112
<PAGE> 757
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
VALUE GROWTH FUND
-----------------
FIDUCIARY
-----------------
MARCH 26, 1996
TO
JUNE 30, 1996 (A)
-----------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................................... $ 10.00
--------
Investment Activities
Net investment income................................................................................. 0.03
Net realized and unrealized gains (losses) from investments........................................... 0.39
--------
Total from Investment Activities.................................................................... 0.42
--------
Distributions
Net investment income................................................................................. (0.03)
--------
Total Distributions................................................................................. (0.03)
--------
NET ASSET VALUE,
END OF PERIOD......................................................................................... $ 10.39
--------
--------
Total Return............................................................................................ 10.48%(b)(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..................................................................... $ 191,212
Ratio of expenses to average net assets............................................................... 0.95 %(d)
Ratio of net investment income to average net assets.................................................. 1.13 %(d)
Ratio of expenses to average net assets*.............................................................. 1.04 %(d)
Ratio of net investment income to average net assets*................................................. 1.04 %(d)
Portfolio turnover (e)................................................................................ 65.21 %
Average commission rate paid (f)...................................................................... $ 0.0373
</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 date reorganized as a fund of The One Group.
</TABLE>
<TABLE>
<C> <S>
(b) Represents total return for Class A Shares from December 1, 1995 through March 25, 1996 plus
total return for Fiduciary Shares for the period from March 26, 1996 through June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Annualized.
</TABLE>
<TABLE>
<C> <S>
(e) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(f) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the period from March 26, 1996 through June 30, 1996, divided by total number
of portfolio shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
113----
<PAGE> 758
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
VALUE GROWTH FUND
----------------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------------
SEVEN MONTHS YEARS ENDED NOVEMBER 30,
ENDED JUNE 30, ---------------------------------------------------------
1996 (A) 1995 1994 1993 1992 1991
----------------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD...................... $ 11.15 $ 9.00 $ 10.02 $ 9.42 $ 7.80 $ 6.39
------- ---------- ---------- ---------- ---------- ---------
Investment Activities
Net investment income.................... 0.94 0.12 0.13 0.11 0.11 0.12
Net realized and unrealized gains
(losses) from investments.............. 0.08 2.44 (0.56) 0.82 1.76 1.44
------- ---------- ---------- ---------- ---------- ---------
Total from Investment Activities....... 1.02 2.56 (0.43) 0.93 1.87 1.56
------- ---------- ---------- ---------- ---------- ---------
Distributions
Net investment income.................... (0.94) (0.12) (0.14) (0.12) (0.10) (0.14)
In excess of net investment income....... (0.01) -- -- -- -- --
Net realized gains....................... (0.83) (0.29) (0.45) (0.22) (0.14) (0.01)
------- ---------- ---------- ---------- ---------- ---------
Total Distributions.................... (1.78) (0.41) (0.59) (0.33) (0.24) (0.15)
------- ---------- ---------- ---------- ---------- ---------
NET ASSET VALUE,
END OF PERIOD............................ $ 10.39 $ 11.15 $ 9.00 $ 10.02 $ 9.42 $ 7.80
------- ---------- ---------- ---------- ---------- ---------
------- ---------- ---------- ---------- ---------- ---------
Total Return (Excludes Sales Charge)....... 10.40%(b) 29.57% (4.32)% 10.13% 24.27% 24.97%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........ $ 35,984 $ 217,978 $ 173,198 $ 171,141 $ 133,614 $ 93,400
Ratio of expenses to average net
assets................................. 0.97 (c) 0.95% 0.96% 0.96% 0.97% 0.95%
Ratio of net investment income to average
net assets............................. 0.85 (c) 1.25% 1.34% 1.21% 1.25% 1.73%
Ratio of expenses to average net
assets*................................ 1.05 (c) 0.95% 0.96% 0.96% 0.97% 1.02%
Ratio of net investment income to average
net assets*............................ 0.77 (c) 1.25% 1.34% 1.21% 1.25% 1.66%
Portfolio turnover (d)................... 65.21 % 77.00% 53.00% 66.00% 43.00% 54.00%
Average commission rate paid (e)......... $ 0.0373
</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) Upon reorganizing as a fund of The One Group, the Paragon Value Growth Fund became the Value
Growth Fund. Financial highlights for the periods prior to March 26, 1996 represent the Paragon
Value Growth Fund. The per share data for the periods prior to March 26, 1996 have been
restated to reflect the impact of restatement of net asset value from $15.26 to $10.00
effective March 26, 1996.
</TABLE>
<TABLE>
<C> <S>
(b) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the period from March 26, 1996 through June 30, 1996, divided by total number
of portfolio shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
114
<PAGE> 759
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
VALUE GROWTH FUND
-----------------------------------------------------------
CLASS B
-----------------------------------------------------------
SEVEN SEPTEMBER 9, 1994
MONTHS YEAR TO
ENDED ENDED NOVEMBER 30, NOVEMBER 30,
JUNE 30, 1996 (A) 1995 1994 (B)
----------------- ------------------- -------------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD......................................... $ 11.16 $ 9.01 $ 9.85
------- ------ ------
Investment Activities
Net investment income....................................... 0.91 0.05 0.02
Net realized and unrealized gains (losses) from
investments............................................... 0.07 2.46 (0.84)
------- ------ ------
Total from Investment Activities.......................... 0.98 2.51 (0.82)
------- ------ ------
Distributions
Net investment income....................................... (0.91) (0.07) (0.02)
In excess of net investment income.......................... (0.01) -- --
Net realized gains.......................................... (0.83) (0.29) --
------- ------ ------
Total Distributions....................................... (1.75) (0.35) (0.02)
------- ------ ------
NET ASSET VALUE,
END OF PERIOD............................................... $ 10.39 $ 11.16 $ 9.01
------- ------ ------
------- ------ ------
Total Return (Excludes Sales Charge).......................... 9.96%(c) 28.74 % (8.31 )%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........................... $ 4,673 $ 2,923 $ 412
Ratio of expenses to average net assets..................... 1.86 (d) 1.70 % 1.71 %(d)
Ratio of net investment income to average net assets........ 0.13 (d) 0.38 % 0.76 %(d)
Ratio of expenses to average net assets*.................... 1.94 (d) 1.70 % 1.71 %(d)
Ratio of net investment income to average net assets*....... 0.05 (d) 0.38 % 0.76 %(d)
Portfolio turnover (e)...................................... 65.21 % 77.00 % 53.00 %
Average commission rate paid (f)............................ $ 0.0373
</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) Upon reorganizing as a fund of The One Group, the Paragon Value Growth Fund became the Value
Growth Fund. Financial highlights for the periods prior to March 26, 1996 represent the Paragon
Value Growth Fund. The per share data for the periods prior to March 26, 1996 have been
restated to reflect the impact of restatement of net asset value from $15.21 to $10.00
effective March 26, 1996.
</TABLE>
<TABLE>
<C> <S>
(b) Class B Shares commenced offering September 9, 1994.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Annualized.
</TABLE>
<TABLE>
<C> <S>
(e) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(f) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the period from March 26, 1996 through June 30, 1996, divided by total number
of portfolio shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
115----
<PAGE> 760
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY VALUE FUND
---------------------------------------------------------
FIDUCIARY
---------------------------------------------------------
YEARS ENDED JUNE 30,
---------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................... $ 12.87 $ 11.34 $ 11.64 $ 11.34 $ 10.07
---------- ---------- ---------- ---------- ---------
Investment Activities
Net investment income......................................... 0.31 0.31 0.20 0.18 0.21
Net realized and unrealized gains (losses) from investments... 1.20 2.18 (0.01) 0.58 1.34
---------- ---------- ---------- ---------- ---------
Total from Investment Activities............................ 1.51 2.49 0.19 0.76 1.55
---------- ---------- ---------- ---------- ---------
Distributions
Net investment income......................................... (0.31) (0.32) (0.19) (0.18) (0.21)
Net realized gains............................................ (1.24) (0.64) (0.30) (0.28) (0.07)
---------- ---------- ---------- ---------- ---------
Total Distributions......................................... (1.55) (0.96) (0.49) (0.46) (0.28)
---------- ---------- ---------- ---------- ---------
NET ASSET VALUE,
END OF PERIOD................................................. $ 12.83 $ 12.87 $ 11.34 $ 11.64 $ 11.34
---------- ---------- ---------- ---------- ---------
---------- ---------- ---------- ---------- ---------
Total Return.................................................... 12.71% 23.42% (1.59)% 6.73% 15.53%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................. $ 584,527 $ 365,376 $ 169,127 $ 132,833 $ 62,075
Ratio of expenses to average net assets....................... 0.97% 1.00% 0.95% 0.86% 0.82%
Ratio of net investment income to average net assets.......... 2.43% 2.74% 1.72% 1.62% 1.91%
Ratio of expenses to average net assets*...................... 0.98% 1.01% 1.02% 1.12% 1.34%
Ratio of net investment income to average net assets*......... 2.42% 2.73% 1.65% 1.36% 1.39%
Portfolio turnover (a)........................................ 186.84% 203.13% 111.72% 51.75% 55.90%
Average commission rate paid (b).............................. $ 0.0415
</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) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(b) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
116
<PAGE> 761
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY VALUE FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------
1996 1995 1994 1993 1992 (A)
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 12.89 $ 11.34 $ 11.64 $ 11.33 $ 11.42
--------- --------- --------- --------- -----------
Investment Activities
Net investment income............................................... 0.27 0.28 0.17 0.16 0.07
Net realized and unrealized gains (losses) from investments......... 1.22 2.20 (0.01) 0.59 (0.08)
--------- --------- --------- --------- -----------
Total from Investment Activities.................................. 1.49 2.48 0.16 0.75 (0.01)
--------- --------- --------- --------- -----------
Distributions
Net investment income............................................... (0.27) (0.27) (0.16) (0.16) (0.08)
In excess of net investment income.................................. -- (0.02) -- -- --
Net realized gains.................................................. (1.24) (0.64) (0.30) (0.28) --
--------- --------- --------- --------- -----------
Total Distributions............................................... (1.51) (0.93) (0.46) (0.44) (0.08)
--------- --------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 12.87 $ 12.89 $ 11.34 $ 11.64 $ 11.33
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total Return (Excludes Sales Charge).................................. 12.40% 22.64% 1.35% 6.64% (0.33 )%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 9,380 $ 3,481 $ 698 $ 451 $ 12
Ratio of expenses to average net assets............................. 1.22% 1.25% 1.20% 1.10% 1.02 %(b)
Ratio of net investment income to average net assets................ 2.18% 2.52% 1.57% 1.41% 2.12 %(b)
Ratio of expenses to average net assets*............................ 1.33% 1.37% 1.37% 1.50% 1.22 %(b)
Ratio of net investment income to average net assets*............... 2.07% 2.41% 1.40% 1.01% 1.92 %(b)
Portfolio turnover (c).............................................. 186.84% 203.13% 111.72% 51.75% 55.90 %
Average commission rate paid (d).................................... $ 0.0415
</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) Class A Shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
117----
<PAGE> 762
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY VALUE FUND
-------------------------------
CLASS B
-------------------------------
YEARS ENDED JUNE 30,
-------------------------------
1996 1995 1994 (A)
--------- --------- ---------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD...................................................................... $ 12.96 $ 11.41 $ 11.87
--------- --------- ---------
Investment Activities
Net investment income.................................................................... 0.18 0.17 0.05
Net realized and unrealized gains (losses) from investments.............................. 1.26 2.19 (0.46)
--------- --------- ---------
Total from Investment Activities....................................................... 1.44 2.36 (0.41)
--------- --------- ---------
Distributions
Net investment income.................................................................... (0.18) (0.17) (0.05)
Net realized gains....................................................................... (1.24) (0.64) --
--------- --------- ---------
Total Distributions.................................................................... (1.42) (0.81) (0.05)
--------- --------- ---------
NET ASSET VALUE,
END OF PERIOD............................................................................ $ 12.98 $ 12.96 $ 11.41
--------- --------- ---------
--------- --------- ---------
Total Return (Excludes Sales Charge)....................................................... 11.95% 22.28% 3.48%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........................................................ $ 4,135 $ 861 $ 182
Ratio of expenses to average net assets.................................................. 1.97% 2.00% 2.00%(b)
Ratio of net investment income to average net assets..................................... 1.43% 1.74% 1.06%(b)
Ratio of expenses to average net assets*................................................. 1.98% 2.01% 2.00%(b)
Ratio of net investment income to average net assets*.................................... 1.42% 1.72% 1.06%(b)
Portfolio turnover (d)................................................................... 186.84% 203.13% 111.72%
Average commission rate paid (e)......................................................... $ 0.0415
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not Annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
118
<PAGE> 763
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DISCIPLINED VALUE FUND
----------------------------------------------------------
FIDUCIARY
----------------------------------------------------------
YEARS ENDED JUNE 30,
----------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD......................................... $ 13.20 $ 11.90 $ 12.76 $ 11.49 $ 10.20
---------- ---------- ---------- ---------- ----------
Investment Activities
Net investment income....................................... 0.29 0.28 0.26 0.28 0.34
Net realized and unrealized gains (losses) from
investments............................................... 2.27 1.57 0.29 1.27 1.29
---------- ---------- ---------- ---------- ----------
Total from Investment Activities.......................... 2.56 1.85 0.55 1.55 1.63
---------- ---------- ---------- ---------- ----------
Distributions
Net investment income....................................... (0.29) (0.27) (0.26) (0.28) (0.34)
Net realized gains.......................................... (0.78) (0.28) (1.15) -- --
---------- ---------- ---------- ---------- ----------
Total Distributions....................................... (1.07) (0.55) (1.41) (0.28) (0.34)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD............................................... $ 14.69 $ 13.20 $ 11.90 $ 12.76 $ 11.49
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total Return.................................................. 20.10% 16.03% 4.04% 13.58% 16.24%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........................... $ 522,474 $ 448,530 $ 418,238 $ 211,785 $ 115,234
Ratio of expenses to average net assets..................... 0.99% 1.00% 0.93% 0.89% 0.69%
Ratio of net investment income to average net assets........ 2.04% 2.21% 2.14% 2.30% 3.17%
Ratio of expenses to average net assets*.................... 1.00% 1.10% 0.98% 1.08% 1.23%
Ratio of net investment income to average net assets*....... 2.03% 2.11% 2.09% 2.11% 2.63%
Portfolio turnover (a)...................................... 90.55% 176.66% 56.33% 108.79% 25.32%
Average commission rate paid (b)............................ $ 0.0576
</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) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(b) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
119----
<PAGE> 764
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DISCIPLINED VALUE FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------
1996 1995 1994 1993 1992 (A)
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................ $ 13.22 $ 11.91 $ 12.75 $ 11.49 $ 11.45
--------- --------- --------- --------- -----------
Investment Activities
Net investment income.............................................. 0.25 0.24 0.24 0.25 0.12
Net realized and unrealized gains (losses) from investments........ 2.28 1.59 0.30 1.26 0.06
--------- --------- --------- --------- -----------
Total from Investment Activities................................. 2.53 1.83 0.54 1.51 0.18
--------- --------- --------- --------- -----------
Distributions
Net investment income.............................................. (0.25) (0.24) (0.23) (0.25) (0.14)
Net realized gains................................................. (0.78) (0.26) (1.10) -- --
In excess of net realized gains.................................... -- (0.02) (0.05) -- --
--------- --------- --------- --------- -----------
Total Distributions.............................................. (1.03) (0.52) (1.38) (0.25) (0.14)
--------- --------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD...................................................... $ 14.72 $ 13.22 $ 11.91 $ 12.75 $ 11.49
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total Return (Excludes Sales Charge)................................. 19.80% 15.43% 3.95% 13.27% 1.56%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................. $ 20,838 $ 13,560 $ 10,448 $ 3,435 $ 35
Ratio of expenses to average net assets............................ 1.24% 1.26% 1.18% 1.12% 1.29 %(b)
Ratio of net investment income to average net assets............... 1.79% 1.99% 2.00% 2.06% 2.43 %(b)
Ratio of expenses to average net assets*........................... 1.35% 1.36% 1.33% 1.46% 1.49 %(b)
Ratio of net investment income to average net assets*.............. 1.68% 1.89% 1.85% 1.72% 2.23 %(b)
Portfolio turnover (c)............................................. 90.55% 176.66% 56.33% 108.79% 25.32 %
Average commission rate paid (d)................................... $ 0.0576
</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) Class A Shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
120
<PAGE> 765
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DISCIPLINED VALUE FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD...................................................................... $ 13.19 $ 11.90 $ 12.60
--------- --------- -----------
Investment Activities
Net investment income.................................................................... 0.15 0.15 0.07
Net realized and unrealized gains (losses) from investments.............................. 2.27 1.58 (0.70)
--------- --------- -----------
Total from Investment Activities....................................................... 2.42 1.73 (0.63)
--------- --------- -----------
Distributions
Net investment income.................................................................... (0.14) (0.15) (0.06)
In excess of net investment income....................................................... -- (0.01) (0.01)
Net realized gains....................................................................... (0.78) (0.28) --
--------- --------- -----------
Total Distributions.................................................................... (0.92) (0.44) (0.07)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD............................................................................ $ 14.69 $ 13.19 $ 11.90
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)....................................................... 18.93% 14.92% (5.00)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........................................................ $ 16,305 $ 11,222 $ 5,356
Ratio of expenses to average net assets.................................................. 1.99% 2.00% 1.96 %(b)
Ratio of net investment income to average net assets..................................... 1.04% 1.26% 1.80 %(b)
Ratio of expenses to average net assets*................................................. 2.00% 2.01% 1.96 %(b)
Ratio of net investment income to average net assets*.................................... 1.03% 1.25% 1.80 %(b)
Portfolio turnover (d)................................................................... 90.55% 176.66% 56.33 %
Average commission rate paid (e)......................................................... $ 0.0576
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
121----
<PAGE> 766
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DISCIPLINED VALUE
FUND
--------------------
SERVICE/
RETIREMENT (A)
--------------------
YEARS ENDED JUNE 30,
--------------------
1995 1994
--------- ---------
NET ASSET VALUE,
BEGINNING OF PERIOD........................................................... $ 11.90 $ 12.59
<S> <C> <C>
--------- ---------
Investment Activities
Net investment income......................................................... 0.17 0.06
Net realized and unrealized gains (losses) from investments................... 1.37 (0.69)
--------- ---------
Total from Investment Activities............................................ 1.54 (0.63)
--------- ---------
Distributions
Net investment income......................................................... (0.16) (0.06)
In excess of net investment income............................................ (0.01) --
Net realized gains............................................................ (0.28) --
--------- ---------
Total Distributions......................................................... (0.45) (0.06)
--------- ---------
NET ASSET VALUE,
END OF PERIOD................................................................. $ 12.99 $ 11.90
--------- ---------
--------- ---------
Total Return.................................................................... (a) (5.03)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................................. $ -- $ 47
Ratio of expenses to average net assets....................................... 1.90 (b) 1.84%(b)
Ratio of net investment income to average net assets.......................... 1.89 (b) 1.83%(b)
Ratio of expenses to average net assets*...................................... 1.90 (b) 1.84%(b)
Ratio of net investment income to average net assets*......................... 1.89 (b) 1.83%(b)
Portfolio turnover (d)........................................................ 176.66% 56.33%
</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) The Service Shares commenced offering on January 17, 1994 when they were designated as
"Retirement Shares". On April 4, 1995, the name of the Retirement Shares was changed to
"Service" Shares. As of June 1, 1995, Service Shares transferred to Class A Shares, and as of
June 30, 1995, there were no shareholders in the Service Class. The total return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 13.14%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
122
<PAGE> 767
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH FUND
--------------------------------------------------------
FIDUCIARY
--------------------------------------------------------
YEARS ENDED JUNE 30,
--------------------------------------------------------
1996 1995 1994 1993 1992 (A)
---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................ $ 13.47 $ 11.32 $ 10.92 $ 9.85 $ 10.00
---------- ---------- ---------- --------- ---------
Investment Activities
Net investment income...................................... 0.18 0.20 0.20 0.23 0.08
Net realized and unrealized gains (losses) from
investments.............................................. 2.14 3.04 0.67 1.12 (0.16)
---------- ---------- ---------- --------- ---------
Total from Investment Activities......................... 2.32 3.24 0.87 1.35 (0.08)
---------- ---------- ---------- --------- ---------
Distributions
Net investment income...................................... (0.18) (0.20) (0.20) (0.23) (0.07)
Net realized gains......................................... (0.17) (0.89) (0.27) (0.05) --
---------- ---------- ---------- --------- ---------
Total Distributions...................................... (0.35) (1.09) (0.47) (0.28) (0.07)
---------- ---------- ---------- --------- ---------
NET ASSET VALUE,
END OF PERIOD.............................................. $ 15.44 $ 13.47 $ 11.32 $ 10.92 $ 9.85
---------- ---------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------
Total Return................................................. 17.36% 21.85% 8.04% 13.92% (0.80)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).......................... $ 745,986 $ 531,595 $ 150,035 $ 41,317 $ 25,019
Ratio of expenses to average net assets.................... 0.96% 1.00% 0.78% 0.39% 0.30%(b)
Ratio of net investment income to average net assets....... 1.20% 1.72% 1.78% 0.37% 2.37%(b)
Ratio of expenses to average net assets*................... 0.99% 1.00% 1.13% 1.43% 1.49%(b)
Ratio of net investment income to average net assets*...... 1.17% 1.72% 1.52% 1.21% 1.12%(b)
Portfolio turnover (c)..................................... 35.51% 14.22% 9.04% 10.61% 3.09%
Average commission rate paid (d)........................... $ 0.0647
</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) The Fund commenced operations on February 28, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
123----
<PAGE> 768
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH FUND
---------------------------------
CLASS A
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD...................................................................... $ 13.83 $ 11.62 $ 11.78
--------- --------- -----------
Investment Activities
Net investment income.................................................................... 0.14 0.17 0.04
Net realized and unrealized gains (losses) from investments.............................. 2.17 3.10 (0.16)
--------- --------- -----------
Total from Investment Activities....................................................... 2.31 3.27 (0.12)
--------- --------- -----------
Distributions
Net investment income.................................................................... (0.14) (0.16) (0.04)
In excess of net investment income....................................................... -- (0.01) --
Net realized gains....................................................................... (0.17) (0.89) --
--------- --------- -----------
Total Distributions.................................................................... (0.31) (1.06) (0.04)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD............................................................................ $ 15.83 $ 13.83 $ 11.62
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)....................................................... 16.85% 21.52% (1.02)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........................................................ $ 75,114 $ 27,428 $ 368
Ratio of expenses to average net assets.................................................. 1.21% 1.26% 1.25 %(b)
Ratio of net investment income to average net assets..................................... 0.95% 1.49% 0.96 %(b)
Ratio of expenses to average net assets*................................................. 1.34% 1.36% 1.35 %(b)
Ratio of net investment income to average net assets*.................................... 0.82% 1.39% 1.68 %(b)
Portfolio turnover (d)..................................................................... 35.51% 14.22% 9.04 %
Average commission rate paid (e)........................................................... $ 0.0647
</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) Class A Shares commenced offering on January 1, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
124
<PAGE> 769
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................................................... $ 13.63 $ 11.47 $ 11.57
--------- --------- -----------
Investment Activities
Net investment income..................................................................... 0.05 0.09 0.03
Net realized and unrealized gains (losses) from investments............................... 2.17 3.06 (0.10)
--------- --------- -----------
Total from Investment Activities........................................................ 2.22 3.15 (0.07)
--------- --------- -----------
Distributions
Net investment income..................................................................... (0.05) (0.09) (0.03)
In excess of net investment income........................................................ -- (0.01) --
Net realized gains........................................................................ (0.17) (0.89) --
--------- --------- -----------
Total Distributions..................................................................... (0.22) (0.99) (0.03)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD............................................................................. $ 15.63 $ 13.63 $ 11.47
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)........................................................ 16.41% 20.65% (0.66)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................................................... $ 56,261 $ 6,918 $ 334
Ratio of expenses to average net assets................................................... 1.96% 2.01% 1.99 %(b)
Ratio of net investment income to average net assets...................................... 0.20% 0.74% 0.96 %(b)
Ratio of expenses to average net assets*.................................................. 1.99% 2.01% 1.99 %(b)
Ratio of net investment income to average net assets*..................................... 0.17% 0.74% 0.96 %(b)
Portfolio turnover (d).................................................................... 35.51% 14.22% 9.04 %
Average commission rate paid (e).......................................................... $ 0.0647
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
125----
<PAGE> 770
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH
FUND
--------------------
SERVICE/
RETIREMENT (A)
--------------------
YEARS ENDED JUNE 30,
--------------------
1995 1994
--------- ---------
NET ASSET VALUE,
BEGINNING OF PERIOD............................................................ $ 11.42 $ 11.58
<S> <C> <C>
--------- ---------
Investment Activities
Net investment income.......................................................... 0.11 0.03
Net realized and unrealized gains (losses) from investments.................... 2.85 (0.16)
--------- ---------
Total from Investment Activities............................................. 2.96 (0.13)
Distributions
Net investment income.......................................................... (0.11) (0.03)
Net realized gains............................................................. (0.89) --
--------- ---------
Total Distributions.......................................................... (1.00) (0.03)
--------- ---------
NET ASSET VALUE,
END OF PERIOD.................................................................. $ 13.38 $ 11.42
--------- ---------
--------- ---------
Total Return..................................................................... (a) (1.13)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................................. $ -- $ 24
Ratio of expenses to average net assets........................................ 1.90 (b) 1.75%(b)
Ratio of net investment income to average net assets........................... 1.05 (b) 1.02%(b)
Ratio of expenses to average net assets*....................................... 1.90 (b) 1.75%(b)
Ratio of net investment income to average net assets*.......................... 1.05 (b) 1.02%(b)
Portfolio turnover (d)......................................................... 14.22% 9.04%
</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) The Service Shares commenced offering on January 17, 1994 when they were designated as
"Retirement Shares". On April 4, 1995, the name of the Retirement Shares was changed to
"Service Shares". As of June 1, 1995, Service Shares transferred to Class A Shares, and as of
June 30, 1995, there were no shareholders in the Service Class. The total return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 19.19%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
126
<PAGE> 771
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
-----------------------------------------------------
FIDUCIARY
-----------------------------------------------------
YEARS ENDED JUNE 30,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................ $ 18.40 $ 15.96 $ 16.96 $ 14.54 $ 12.92
--------- --------- --------- --------- ---------
Investment Activities
Net investment income............................. 0.20 0.06 0.07 0.06 0.09
Net realized and unrealized gains (losses) from
investments..................................... 3.83 2.98 (0.05) 2.99 1.87
--------- --------- --------- --------- ---------
Total from Investment Activities................ 4.03 3.04 0.02 3.05 1.96
--------- --------- --------- --------- ---------
Distributions
Net investment income............................. (0.20) (0.06) (0.07) (0.06) (0.08)
Net realized gains................................ (3.42) (0.54) (0.95) (0.57) (0.26)
--------- --------- --------- --------- ---------
Total Distributions............................. (3.62) (0.60) (1.02) (0.63) (0.34)
--------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD...................................... $ 18.81 $ 18.40 $ 15.96 $ 16.96 $ 14.54
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return........................................ 24.63% 19.75% (0.16)% 21.36% 15.15%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................. $ 532,525 $ 413,518 $ 389,567 $ 232,898 $ 131,533
Ratio of expenses to average net assets........... 1.00% 0.98% 0.98% 0.89% 0.75%
Ratio of net investment income to average net
assets.......................................... 1.15% 0.38% 0.42% 0.41% 0.51%
Ratio of expenses to average net assets*.......... 1.01% 0.98% 1.03% 1.11% 1.23%
Ratio of net investment income to average net
assets*......................................... 1.14% 0.38% 0.37% 0.19% 0.03%
Portfolio turnover (a)............................ 435.30% 132.63% 70.67% 64.64% 42.77%
Average commission rate paid (b).................. $ 0.0451
</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) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(b) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
127----
<PAGE> 772
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------
1996 1995 1994 1993 1992 (A)
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................... $ 18.36 $ 15.93 $ 16.96 $ 14.54 $ 16.53
--------- --------- --------- --------- -----------
Investment Activities
Net investment income................................. 0.17 0.02 0.04 0.03 0.01
Net realized and unrealized gains (losses) from
investments......................................... 3.80 2.98 (0.08) 3.00 (1.99)
--------- --------- --------- --------- -----------
Total from Investment Activities.................... 3.97 3.00 (0.04) 3.03 (1.98)
--------- --------- --------- --------- -----------
Distributions
Net investment income................................. (0.15) (0.01) (0.03) (0.04) (0.01)
In excess of net investment income.................... -- (0.02) (0.01) -- --
Net realized gains.................................... (3.42) (0.54) (0.95) (0.57) --
--------- --------- --------- --------- -----------
Total Distributions................................. (3.57) (0.57) (0.99) (0.61) (0.01)
--------- --------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD......................................... $ 18.76 $ 18.36 $ 15.93 $ 16.96 $ 14.54
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total Return (Excludes Sales Charge).................... 24.32% 19.50% (0.52)% 21.70% (34.00 )%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..................... $ 28,052 $ 11,178 $ 8,097 $ 5,757 $ 84
Ratio of expenses to average net assets............... 1.25% 1.23% 1.22% 1.11% 1.31 %(b)
Ratio of net investment income to average net
assets.............................................. 0.90% 0.12% 0.27% 0.25% 0.12 %(b)
Ratio of expenses to average net assets*.............. 1.36% 1.33% 1.38% 1.48% 1.50 %(b)
Ratio of net investment income (loss) to average
net assets*......................................... 0.79% 0.02% 0.11% (0.12%) (0.07 %)(b)
Portfolio turnover (c)................................ 435.30% 132.63% 70.67% 64.64% 42.77 %
Average commission rate paid (d)...................... $ 0.0451
</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) Class A Shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
128
<PAGE> 773
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
-----------------------------------
CLASS B
-----------------------------------
YEARS ENDED JUNE 30,
-----------------------------------
1996 1995 1994(A)
--------- --------- -------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................ $ 18.14 $ 15.85 $ 17.44
--------- --------- -------------
Investment Activities
Net investment income (loss)....................................... 0.09 (0.07) (0.02)
Net realized and unrealized gains (losses) from investments........ 3.69 2.90 (1.56)
--------- --------- -------------
Total from Investment Activities................................. 3.78 2.83 (1.58)
--------- --------- -------------
Distributions
Net investment income.............................................. (0.07) -- (0.01)
Net realized gains................................................. (3.42) (0.54) --
--------- --------- -------------
Total Distributions.............................................. (3.49) (0.54) (0.01)
--------- --------- -------------
NET ASSET VALUE,
END OF PERIOD...................................................... $ 18.43 $ 18.14 $ 15.85
--------- --------- -------------
--------- --------- -------------
Total Return (Excludes Sales Charge)................................. 23.53% 18.47% (9.07)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................. $ 12,910 $ 2,787 $ 1,131
Ratio of expenses to average net assets............................ 2.00% 1.98% 2.12%(b)
Ratio of net investment income (loss) to average net assets........ 0.15% (0.63)% (0.55 )%(b)
Ratio of expenses to average net assets*........................... 2.01% 1.98% 2.12 %(b)
Ratio of net investment income (loss) to average net assets*....... 0.14% (0.63)% (0.55 )%(b)
Portfolio turnover (d)............................................. 435.30% 132.63% 70.67 %
Average commission rate paid (e)................................... $ 0.0451
</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) Class B Shares commenced offering on January 14, 1994.
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
129----
<PAGE> 774
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
--------------------------------
SERVICE/RETIREMENT (A)
--------------------------------
YEARS ENDED JUNE 30,
--------------------------------
1995 1994
------------------- -----------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................... $ 15.95 $ 17.47
------ -----------
Investment Activities
Net investment loss............................................... (0.03) (0.01)
Net realized and unrealized gains (losses) from investments....... 2.14 (1.50)
------ -----------
Total from Investment Activities................................ 2.11 (1.51)
------ -----------
Distributions
Net investment income............................................. -- (0.01)
Net realized gains................................................ (0.54) --
------ -----------
Total Distributions............................................. (0.54) (0.01)
------ -----------
NET ASSET VALUE,
END OF PERIOD..................................................... $ 17.52 $ 15.95
------ -----------
------ -----------
Total Return........................................................ (a) (8.64 )%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................. $ -- $ 35
Ratio of expenses to average net assets........................... 1.87 %(b 1.91 %(b)
Ratio of net investment loss to average net assets................ (0.39 (b) (0.36 )%(b)
Ratio of expenses to average net assets*.......................... 1.87 %(b 1.91 %(b)
Ratio of net investment loss to average net assets*............... (0.39 (b) (0.36 )%(b)
Portfolio turnover (d)............................................ 132.63 % 70.67 %
</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) The Service Shares commenced offering on January 17, 1994 when they were designated as
"Retirement Shares." On April 4, 1995, the name of the Retirement Shares was changed to
"Service Shares." As of June 1, 1995, Service Shares transferred to Class A Shares, and as of
June 30, 1995, there were no shareholders in the Service Class. The total return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 13.12%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
130
<PAGE> 775
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GULF SOUTH
GROWTH FUND
---------------
FIDUCIARY
---------------
MARCH 26, 1996
TO
JUNE 30,
1996 (A)
---------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................................................. $ 10.00
-------
Investment Activities
Net realized and unrealized gains from investments............................... 0.78
-------
Total from Investment Activities............................................... 0.78
-------
Distributions
Net realized gains............................................................... (0.03)
-------
Total Distributions............................................................ (0.03)
-------
NET ASSET VALUE,
END OF PERIOD.................................................................... $ 10.75
-------
-------
Total Return....................................................................... 13.39%(b)(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................ $ 83,371
Ratio of expenses to average net assets.......................................... 0.96 %(d)
Ratio of net investment loss to average net assets............................... (0.16 )%(d)
Ratio of expenses to average net assets*......................................... 1.05 (d)
Ratio of net investment loss to average net assets*.............................. (0.25 )%(d)
Portfolio turnover (e)........................................................... 59.57 %
Average commission rate paid (f)................................................. $ 0.0685
</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 date reorganized as a fund of the One Group.
</TABLE>
<TABLE>
<C> <S>
(b) Represents total return for Class A Shares from December 1, 1995 through March 25, 1996 plus
total return for Fiduciary Shares for the period from March 26, 1996 through June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Annualized.
</TABLE>
<TABLE>
<C> <S>
(e) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(f) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the period from March 26, 1996 through June 30, 1996, divided by total number
of portfolio shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
131----
<PAGE> 776
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GULF SOUTH GROWTH FUND
-------------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------------
FIVE MONTHS
SEVEN MONTHS YEARS ENDED NOVEMBER 30, ENDED
ENDED JUNE 30, ------------------------------------------ NOVEMBER 30,
1996 (A) 1995 1994 1993 1992 1991 (F)
--------------- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................... $ 11.50 $ 9.36 $ 10.11 $ 9.48 $ 7.38 $ 6.37
------- --------- --------- --------- --------- ------------
Investment Activities
Net investment income (loss)........... (0.07) (0.04) (0.04) (0.02) 0.01 0.01
Net realized and unrealized gains
(losses) from investments............ 1.40 2.35 (0.63) 0.88 2.09 1.01
------- --------- --------- --------- --------- ------------
Total from Investment Activities..... 1.33 2.31 (0.67) 0.86 2.11 1.02
------- --------- --------- --------- --------- ------------
Distributions
Net investment income.................. -- -- -- (0.01) (0.01) (0.01)
Net realized gains..................... (2.10) (0.17) (0.08) (0.22) -- --
------- --------- --------- --------- --------- ------------
Total Distributions.................. (2.10) (0.17) (0.08) (0.23) (0.01) (0.01)
------- --------- --------- --------- --------- ------------
NET ASSET VALUE,
END OF PERIOD.......................... $ 10.73 $ 11.50 $ 9.36 $ 10.11 $ 9.48 $ 7.38
------- --------- --------- --------- --------- ------------
------- --------- --------- --------- --------- ------------
Total Return (Excludes Sales Charge)..... 12.85%(b) 25.07% (6.66)% 9.10% 28.59% 16.12 %(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)...... $ 18,356 $ 95,467 $ 77,540 $ 74,982 $ 55,719 $ 34,546
Ratio of expenses to average net
assets............................... 1.05 (c) 1.03% 1.00% 1.01% 1.00% 1.05 %(c)
Ratio of net investment income (loss)
to average net assets................ (0.33 (c) (0.36)% (0.38)% (0.21)% 0.15% 0.31 %(c)
Ratio of expenses to average net
assets*.............................. 1.07 (c) 1.03% 1.00% 1.01% 1.00% 1.05 %(c)
Ratio of net investment income (loss)
to average net assets*............... (0.35 (c) (0.36)% (0.38)% (0.21)% 0.15% 0.31 %(c)
Portfolio turnover (d)................. 59.57 % 65.00% 51.00% 59.00% 42.00% 12.00 %
Average commission rate paid (e)....... $ 0.0685
</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) Upon reorganizing as a fund of The One Group, the Paragon Gulf South Growth Fund became the
Gulf South Growth Fund. Financial highlights for the periods prior to March 26, 1996 represent
the Paragon Gulf South Growth Fund. The per share data for the periods prior to March 26, 1996
have been restated to reflect the impact of restatement of net asset value from $15.70 to
$10.00 effective March 26, 1996.
</TABLE>
<TABLE>
<C> <S>
(b) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the period from March 26, 1996 through June 30, 1996, divided by total number
of portfolio shares purchased and sold for which commissions were charged.
</TABLE>
<TABLE>
<C> <S>
(f) Period from commencement of operations.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
132
<PAGE> 777
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GULF SOUTH GROWTH FUND
--------------------------------------------------
CLASS B
--------------------------------------------------
SEPTEMBER 12, 1994
SEVEN MONTHS YEAR ENDED TO
ENDED JUNE 30, NOVEMBER 30, NOVEMBER 30, 1994
1996 (A) 1995 (B)
--------------- ------------- ------------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................... $ 11.56 $ 9.47 $ 10.40
------- ------ ------
Investment Activities
Net investment loss............................... (0.06) (0.07) (0.01)
Net realized and unrealized gains (losses) from
investments..................................... 1.35 2.33 (0.92)
------- ------ ------
Total from Investment Activities................ 1.29 2.26 (0.93)
------- ------ ------
Distributions
Net realized gains................................ (2.13) (0.17) --
------- ------ ------
Total Distributions............................. (2.13) (0.17) --
------- ------ ------
NET ASSET VALUE,
END OF PERIOD..................................... $ 10.72 $ 11.56 $ 9.47
------- ------ ------
------- ------ ------
Total Return (Excludes Sales Charge)................ 12.47%(c) 24.21% (9.08)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................. $ 2,545 $ 1,814 $ 231
Ratio of expenses to average net assets........... 1.87 (d) 1.78 % 1.75 %(d)
Ratio of net investment loss to average
net assets...................................... (1.10 (d) (1.16 )% (0.90 )%(d)
Ratio of expenses to average net assets*.......... 1.92 (d) 1.78 % 1.75 %(d)
Ratio of net investment loss to average net
assets*......................................... (1.15 (d) (1.16)% (0.90 )%(d)
Portfolio turnover (e)............................ 59.57 % 65.00 % 51.00 %
Average commission rate paid (f).................... $ 0.0685
</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) Upon reorganizing as a fund of The One Group, the Paragon Gulf South Growth Fund became the
Gulf South Growth Fund. Financial highlights for the periods prior to March 26, 1996 represent
the Paragon Value Growth Fund. The per share data for the period prior to March 26, 1996 have
been restated to reflect the impact of restatement of net asset value from $15.48 to $10.00
effective March 26, 1996.
</TABLE>
<TABLE>
<C> <S>
(b) Period from commencement of operations.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Annualized.
</TABLE>
<TABLE>
<C> <S>
(e) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(f) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the period from March 26, 1996 through June 30, 1996, divided by total number
of portfolio shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
133----
<PAGE> 778
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX FUND
---------------------------------------------
FIDUCIARY
---------------------------------------------
YEARS ENDED JUNE 30,
---------------------------------------------
1996 1995 1994 1993 (A)
--------- --------- --------- ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................... $ 13.93 $ 13.46 $ 11.80 $ 10.00
--------- --------- --------- ------------
Investment Activities
Net investment income................................. 0.11 0.13 0.11 0.06
Net realized and unrealized gains from investments.... 1.43 0.46 1.68 1.75
--------- --------- --------- ------------
Total from Investment Activities.................... 1.54 0.59 1.79 1.81
--------- --------- --------- ------------
Distributions
Net investment income................................. (0.16) (0.08) (0.11) (0.01)
In excess of net investment income.................... (0.02) -- -- --
Net realized gains.................................... (0.12) (0.04) (0.01) --
In excess of net realized gains....................... -- -- (0.01) --
--------- --------- --------- ------------
Total Distributions................................. (0.30) (0.12) (0.13) (0.01)
--------- --------- --------- ------------
NET ASSET VALUE,
END OF PERIOD......................................... $ 15.17 $ 13.93 $ 13.46 $ 11.80
--------- --------- --------- ------------
--------- --------- --------- ------------
Total Return............................................ 11.22% 4.20% 15.44% 26.96%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..................... $ 347,790 $ 218,299 $ 145,640 $ 35,384
Ratio of expenses to average net assets............... 0.97% 1.04% 1.02% 1.22%(b)
Ratio of net investment income to average net
assets.............................................. 1.04% 1.25% 1.27% 1.37%(b)
Ratio of expenses to average net assets*.............. 1.00% 1.04% 1.02% 2.34%(b)
Ratio of net investment income to average net
assets*............................................. 1.01% 1.25% 1.27% 0.25%(b)
Portfolio turnover (c)................................ 6.28% 4.67% 7.74% 3.10%
Average commission rate paid (d)...................... $ 0.0022
</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) The Fund commenced operations on October 28, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
134
<PAGE> 779
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX FUND
----------------------------------------------
CLASS A
----------------------------------------------
YEARS ENDED JUNE 30,
----------------------------------------------
1996 1995 1994 1993 (A)
--------- --------- --------- -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................ $ 13.92 $ 13.49 $ 11.80 $ 11.74
--------- --------- --------- ------
Investment Activities
Net investment income...................................... 0.14 0.12 0.09 0.02
Net realized and unrealized gains from investments......... 1.40 0.43 1.67 0.04
--------- --------- --------- ------
Total from Investment Activities......................... 1.54 0.55 1.76 0.06
--------- --------- --------- ------
Distributions
Net investment income...................................... (0.16) (0.08) (0.05) --
In excess of net investment income......................... (0.02) -- -- --
Net realized gains......................................... (0.12) (0.04) (0.02) --
--------- --------- --------- ------
Total Distributions...................................... (0.30) (0.12) (0.07) --
--------- --------- --------- ------
NET ASSET VALUE,
END OF PERIOD.............................................. $ 15.16 $ 13.92 $ 13.49 $ 11.80
--------- --------- --------- ------
--------- --------- --------- ------
Total Return (Excludes Sales Charge)......................... 11.20% 3.87% 15.18% 2.87%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).......................... $ 10,789 $ 5,028 $ 2,395 $ 153
Ratio of expenses to average net assets.................... 1.22% 1.28% 1.26% 1.47%(b)
Ratio of net investment income to average net assets....... 0.79% 1.09% 1.15% 2.10%(b)
Ratio of expenses to average net assets*................... 1.35% 1.38% 1.36% 2.35%(b)
Ratio of net investment income to average net assets*...... 0.66% 0.99% 1.05% 1.22%(b)
Portfolio turnover (c)..................................... 6.28% 4.67% 7.74% 3.10%
Average commission rate paid (d)........................... $ 0.0022
</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) Class A Shares commenced offering on April 23, 1993.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(d) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
135----
<PAGE> 780
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.................................................... $ 13.73 $ 13.40 $ 13.00
--------- --------- -----------
Investment Activities
Net investment income.................................................. 0.03 0.03 0.06
Net realized and unrealized gains from investments..................... 1.32 0.41 0.34
--------- --------- -----------
Total from Investment Activities..................................... 1.35 0.44 0.40
--------- --------- -----------
Distributions
Net investment income.................................................. (0.15) (0.07) --
In excess of net investment income..................................... (0.02) -- --
Net realized gains..................................................... (0.12) (0.04) --
--------- --------- -----------
Total Distributions.................................................. (0.29) (0.11) --
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD.......................................................... $ 14.79 $ 13.73 $ 13.40
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)..................................... 9.97% 3.17% 3.23%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)...................................... $ 5,856 $ 3,687 $ 1,872
Ratio of expenses to average net assets................................ 1.97% 2.04% 2.00 %(b)
Ratio of net investment income to average net assets................... 0.04% 0.25% 1.37 %(b)
Ratio of expenses to average net assets*............................... 2.00% 2.04% 2.00 %(b)
Ratio of net investment income to average net assets*.................. 0.01% 0.25% 1.37 %(b)
Portfolio turnover (d)................................................. 6.28% 4.67% 7.74 %
Average commission rate paid (e)....................................... $ 0.0022
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
<TABLE>
<C> <S>
(e) The average commission represents the total dollar amount of commissions paid on portfolio
transactions, for the seven months ended June 30, 1996, divided by total number of portfolio
shares purchased and sold for which commissions were charged.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
136
<PAGE> 781
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
INDEX FUND
--------------------
SERVICE/
RETIREMENT (A)
--------------------
YEARS ENDED JUNE 30,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................................ $ 13.44 $ 12.98
--------- ---------
Investment Activities
Net investment income.......................................................... 0.11 (0.25)
Net realized and unrealized gains (losses) from investments.................... 0.50 0.71
--------- ---------
Total from Investment Activities............................................. 0.61 0.46
--------- ---------
Distributions
Net investment income.......................................................... (0.07) --
Net realized gains............................................................. (0.04) --
--------- ---------
Total Distributions.......................................................... (0.11) --
--------- ---------
NET ASSET VALUE,
END OF PERIOD.................................................................. $ 13.94 $ 13.44
--------- ---------
--------- ---------
Total Return..................................................................... (a) 3.78%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................................. $ -- $ 74
Ratio of expenses to average net assets........................................ 1.90 (b) 10.85%(b)
Ratio of net investment income to average net assets........................... 0.92 (b) 1.97%(b)
Ratio of expenses to average net assets*....................................... 1.90 (b) 1.85%(b)
Ratio of net investment income to average net assets*.......................... 0.92 (b) 1.97%(b)
Portfolio turnover (d)......................................................... 4.67% 7.74%
</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) The Service Shares commenced offering on January 17, 1994 when they were designated as
"Retirement Shares". On April 4, 1995, the name of the Retirement Shares was changed to
"Service" Shares. As of June 1, 1995, Service Shares transferred to Class A Shares, and as of
June 30, 1995, there were no shareholders in the Service Class. The total return for the period
from July 1, 1994 to June 1, 1995 for the Service Shares was 4.22%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
among the classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
137----
<PAGE> 782
- --------------------------------------------------------------------------------
Report of Independent Accountants
- -------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1996
To the Shareholders and Board of Trustees of
The One Group Family of Mutual Funds:
We have audited the accompanying statements of assets and liabilities of the
Asset Allocation Fund, the Income Equity Fund, the Equity Index Fund, the Value
Growth Fund, the Large Company Value Fund, the Disciplined Value Fund, the Large
Company Growth Fund, the Growth Opportunities Fund (formally the Small Company
Growth Fund), the Gulf South Growth Fund and the International Equity Index Fund
(ten series of The One Group Family of Mutual Funds), including the schedules of
portfolio investments, as of June 30, 1996, and the related statements of
operations, statements of changes in net assets and the financial highlights for
each period presented except as noted in the next paragraph. These financial
statements and financial highlights are the responsibility of The One Group
Family of Mutual Funds' management. Our responsibility is to express an opinion
on these financial statements and the financial highlights based on our audits.
The Large Company Growth Fund's financial highlights for the year ended June 30,
1993 and for the period from February 28, 1992 (commencement of operations) to
June 30, 1992 were audited by other auditors, whose report dated August 25, 1993
expressed an unqualified opinion on the financial highlights. The Value Growth
Fund's statement of changes in net assets for each of the two years in the
period ended November 30, 1995 and the financial highlights for each of the five
years in the period ended November 30, 1995 were audited by other auditors,
whose report dated January 19, 1996 expressed an unqualified opinion on those
financial statements and financial highlights. The Gulf South Growth Fund's
statement of changes in net assets for each of the two years in the period ended
November 30, 1995 and the financial highlights for each of the five years in the
period ended November 30, 1995 were audited by other auditors, whose report
dated January 19, 1996 expressed an unqualified opinion on those financial
statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above, except as noted in the second paragraph present fairly, in all material
respects, the financial position of the Asset Allocation Fund, the Income Equity
Fund, the Equity Index Fund, the Value Growth Fund, the Large Company Value
Fund, the Disciplined Value Fund, the Large Company Growth Fund, the Growth
Opportunities Fund, the Gulf South Growth Fund and the International Equity
Index Fund as of June 30, 1996, the results of their operations, the changes in
their net assets and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
Columbus, Ohio Coopers & Lybrand L.L.P.
August 27, 1996
- ----
138
<PAGE> 783
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GOVERNMENT ARM FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- --------------------------------------------- ---------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (91.3%):
Federal Home Loan Mortgage Corp.
$ 3,022 7.88%, 5/1/18, Pool # 840160................. $ 3,127
3,960 9.00%, 9/1/25, Gold #C00387.................. 4,130
3,574 7.00%, 10/1/25, Pool #877377................. 3,659
FEDERAL NATIONAL MORTGAGE ASSOC.
504 6.50%, 11/1/03, Pool #44174.................. 497
1,166 7.29%, 12/1/18, Pool # 70169*................ 1,193
103 8.50%, 5/25/20, Series 1991-140, Class C*.... 103
7,537 7.06%, 7/1/20, Pool # 133558*................ 7,707
3,737 7.39%, 12/1/20, Pool # 116590*............... 3,822
3,998 6.63%, 12/25/20, Series 1990-145, CIass A*... 3,992
2,123 7.28%, 4/1/21, Pool # 70983*................. 2,170
964 7.52%, 9/1/21, Pool # 124289*................ 993
1,491 7.85%, 11/1/21, Pool # 124510*............... 1,535
1,983 7.04%, 11/1/23, Pool # 241828*............... 2,029
5,606 7.25%, 7/1/27, Pool # 70179*................. 5,732
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- --------------------------------------------- ---------
<C> <S> <C>
FEDERAL NATIONAL MORTGAGE ASSOC., CONTINUED:
$ 6,125 7.65%, 1/1/31, Pool # 124945*................ $ 6,328
GOVERNMENT NATIONAL MORTGAGE ASSOC.
3,500 6.50%, 7/24/96............................... 3,514
6,387 6.00%, 1/20/26, Pool # 8790.................. 6,403
---------
Total U.S. Government Agencies 56,934
---------
Total Investments, at value 56,934
---------
REPURCHASE AGREEMENTS (13.8%):
8,607 Lehman Brothers, 5.51%, 7/1/96,
(collateralized by $9,125 Various Federal
Home Loan Bank Bonds, 5.95% - 7.23%, 3/5/01
- 11/8/05 market value $8,780)............. 8,607
---------
Total Repurchase Agreements 8,607
---------
Total (Cost--$66,003)(a) $ 65,541
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $62,389.
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized depreciation of securities as
follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 59
Unrealized depreciation.................................................... (521)
---------
Net unrealized depreciation................................................ $ (462)
---------
---------
</TABLE>
<TABLE>
<C> <S>
* Variable rate securities having liquidity sources through bank letters of credit or other credit and/or liquidity
agreements. The interest rate, which will change periodically, is based upon bank prime rates or an index of market
interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in effect at June 30, 1996.
</TABLE>
At June 30, 1996, the Portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
OPENING CURRENT
# OF POSITIONS MARKET
CONTRACTS CONTRACT TYPE (000) VALUE (000)
- ---------- ----------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
LONG CONTRACTS
5 U.S. Treasury 10 Year Note, September 1996................. $ 526 $ 538
SHORT CONTRACTS
25 U.S. Treasury Note, September 1996......................... 5,118 5,149
15 U.S. Treasury 5 Year Note, August 1996..................... 1,563 1,586
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----16
<PAGE> 784
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LIMITED VOLATILITY BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
ASSET BACKED SECURITIES (10.1%):
$ 3,203 CIT Group Securitization Corp., Series
1995-1, 7.70%, 8/15/20, Class A1......... $ 3,241
2,292 Discover Card Trust, 1991-E Class A, 7.30%,
5/21/99.................................. 2,305
589 EQCC Home Equity Loan Trust, 1995-2 Class
A1, 6.85%, 9/15/02....................... 591
8,905 Fifth Third Auto Grantor Trust, 1996-A,
Class A, 6.20%, 9/15/01.................. 8,869
10,000 Ford Motor Credit Auto Loan, Series 1995-1,
Class A, 6.50%, 8/15/02.................. 9,963
2,071 Green Tree Home Improvement Loan Trust,
Series 1995-C, Class A, 6.20%, 7/15/20... 2,071
369 Merrill Lynch Asset Backed Corp., Series
1992-1, 5.50%, 5/15/98................... 367
7,000 National Premier Funding, 1995-6, 7.00%,
6/1/99................................... 6,989
110 Shawmut National Grantor Trust, Series
1992-A, 5.55%, 11/15/97.................. 109
13,000 Standard Credit Card Master Trust, Series
1995-2, 8.63%, 1/7/02.................... 13,257
2,284 UCFC Home Equity Loan, 1995 A1, 7.55%,
8/10/04.................................. 2,300
7,000 UCFC Home Equity Loan, 1994 O1, 8.38%,
3/10/07.................................. 7,117
1,853 Union Federal Savings Bank Trust, Series
1993-A, 4.53%, 5/15/99................... 1,823
1,904 Union Federal Savings Bank Trust, 1994 A-A,
5.08%, 5/15/00........................... 1,880
3,221 Union Federal Savings Bank Trust, Series
1993-C, 4.88%, 2/15/00................... 3,171
---------
Total Asset Backed Securities 64,053
---------
CORPORATE BONDS (12.2%):
Bank, Insurance & Finance (9.2%):
3,000 Avco Financial Services, 7.25%, 7/15/99.... 3,053
2,000 BankAmerica Corp., 7.88%, 12/1/02.......... 2,075
7,000 Chrysler Financial Corp., 5.88%, 2/7/01.... 6,711
7,000 Ford Motor Credit, 8.38%, 1/15/00.......... 7,358
10,000 International Lease Finance, 5.54%,
5/5/97................................... 9,961
4,500 Lehman Brothers Holdings, 8.88%, 11/1/98... 4,708
3,000 Lehman Brothers Inc., 7.00%, 5/15/97....... 3,020
5,000 Lehman Brothers Inc., 7.63%, 8/1/98........ 5,094
3,000 Lehman Brothers Inc., 10.00%, 5/15/99...... 3,248
4,000 Lehman Brothers Inc., 9.88%, 10/15/00...... 4,415
3,000 NationsBank, Corp., 8.13%, 6/15/02......... 3,161
5,000 Smith Barney Holdings, 6.00%, 3/15/97...... 5,009
---------
57,813
---------
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
Industrial (2.6%):
$ 5,000 American Home Products, 7.70%, 2/15/00..... $ 5,156
1,000 IBM, 6.38%, 11/1/97........................ 1,001
2,000 Columbia Pictures Entertainment Inc.,
9.88%, 2/1/98............................ 2,083
500 Dayton-Hudson Corp., 6.06%, 12/15/96....... 500
5,000 General Motors Corp., 9.63%, 12/1/00....... 5,513
2,000 Wal-Mart Stores, 5.50%, 3/1/98............. 1,973
---------
16,226
---------
Utility (0.5%):
3,000 Potomac Electric Power, 9.00%, 4/15/00,
Callable 4/15/99 @100.................... 3,184
---------
Total Corporate Bonds 77,223
---------
FOREIGN AGENCY BONDS (0.8%):
5,000 Peoples Republic of China, 7.38%, 7/3/01... 4,979
---------
Foreign Agency Bonds 4,979
---------
U.S. GOVERNMENT AGENCIES (57.8%):
Federal Farm Credit Bank:
1,735 5.31%, 5/26/98............................. 1,706
Federal Home Loan Bank:
20,000 0.00%, 11/15/96............................ 19,588
2,000 6.85%, 2/25/97............................. 2,014
4,000 6.60%, 4/13/99............................. 4,021
17,000 5.58%, 2/23/01............................. 16,184
10,000 7.78%, 10/19/01............................ 10,487
Federal Home Loan Mortgage Corp.:
20,000 7.13%, 7/21/99............................. 20,384
5,067 6.00%, 4/1/00, Gold Pool #M80166........... 4,882
2,320 6.50%, 1/1/01, Pool #M8038................. 2,278
495 9.00%, 12/1/05, Pool #G00005............... 517
483 9.00%, 1/1/06, Pool #G00012................ 504
916 8.00%, 10/1/06, Pool #G00052............... 935
2,935 7.00%, 3/1/07, Pool #G34594................ 2,898
3,482 7.50%, 4/1/07, Pool #G00084................ 3,501
2,550 7.00%, 4/1/07, Pool #G00087................ 2,518
4,230 7.50%, 11/1/07, Pool #E00165............... 4,252
6,791 8.50%, 2/1/08, Gold Pool #10133............ 7,014
2,642 7.00%, 12/1/08, Pool #E20065............... 2,609
3,298 8.00%, 1/1/10, Pool #G00355................ 3,365
9,674 8.00%, 2/1/10, Pool #G10328................ 9,870
12,042 7.00%, 10/1/10, Gold Pool #E61709.......... 11,892
14,953 7.00%, 5/1/11, Pool #E20241................ 14,766
10,000 5.25%, 9/15/15, REMIC/CMO, Series 1638
Class BC................................. 9,755
13,209 8.25%, 12/15/16, REMIC/CMO, Series 1770
Class PD................................. 13,706
5,626 7.25%, 4/15/18, Series 1254, REMIC/ CMO.... 5,656
Federal National Mortgage Assoc.:
20,000 0.00%, 10/21/96............................ 19,662
</TABLE>
CONTINUED
17----
<PAGE> 785
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LIMITED VOLATILITY BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
U.S. GOVERNMENT AGENCIES, CONTINUED:
<C> <S> <C>
Federal National Mortgage Assoc., continued:
$ 3,000 5.35%, 10/10/97............................ $ 2,983
3,000 8.20%, 3/10/98(b).......................... 3,090
2,000 5.30%, 3/11/98(b).......................... 1,967
3,600 6.90%, 3/27/98............................. 3,636
4,000 5.35%, 4/1/98.............................. 3,935
4,000 5.18%, 2/1/99, Callable 2/1/98 @100........ 3,886
17,044 6.50%, 4/1/00, Pool #E50720................ 16,730
15,000 5.64%, 2/20/01, Callable 2/20/98 @100...... 14,333
37,000 5.72%, 3/8/01.............................. 35,629
10,000 6.16%, 3/29/01............................. 9,798
290 9.00%, 9/1/05, Pool #50340................. 303
303 9.00%, 11/1/05, Pool #50361................ 316
290 8.50%, 4/1/06, Pool #116875................ 300
8,933 7.00%, 6/1/10, Pool #315928................ 8,822
7,377 6.50%, 9/1/10, Pool #25479................. 7,137
5,752 6.50%, 10/1/10, Pool #250377............... 5,565
3,729 7.00%, 11/1/10, Pool #250387............... 3,682
9,671 7.00%, 1/1/11, Pool #328959................ 9,550
4,558 7.50%, 2/1/11, Pool #303755................ 4,582
834 6.00%, 9/25/18, REMIC/CMO, Series 1989-94
Class E.................................. 828
Government National Mortgage Assoc.:
5 8.00%, 2/15/02, Pool #192917............... 5
37 8.00%, 3/15/02, Pool #209172............... 38
11 9.00%, 6/15/02, Pool #229311............... 11
90 9.00%, 10/15/02, Pool #229569.............. 95
25 8.00%, 6/15/05, Pool #28827................ 25
14 9.00%, 9/15/05, Pool #292569............... 14
93 9.00%, 10/15/05, Pool #292589.............. 98
20 8.00%, 5/15/06, Pool #303851............... 21
8 8.00%, 7/15/06, Pool #307231............... 9
55 8.00%, 8/15/06, Pool #311166............... 57
54 8.00%, 9/15/06, Pool #311301............... 55
362 8.00%, 10/15/06, Pool #316915.............. 371
48 8.00%, 11/15/06, Pool #311131.............. 49
557 8.00%, 11/15/06, Pool # 312210............. 571
320 8.00%, 11/15/06, Pool #313528.............. 328
123 8.00%, 11/15/06, Pool #315078.............. 126
172 8.00%, 11/15/06, Pool #316671.............. 176
291 8.00%, 12/15/06, Pool #311384.............. 298
292 8.00%, 1/15/07, Pool #317663............... 300
473 8.00%, 2/15/07, Pool #316086............... 484
92 8.00%, 3/15/07, Pool #178684............... 95
214 8.00%, 3/15/07, Pool #318825............... 219
208 8.00%, 4/15/07, Pool #316441............... 213
4,849 6.00%, 10/20/25, Pool #8717................ 4,879
14,617 6.00%, 11/20/25, Pool #8746................ 14,708
4,922 6.00%, 1/20/26, Pool #8790*................ 4,934
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Guaranteed Overseas Private Investment Corp.:
$ 865 5.55%, 1/13/97............................. $ 865
Student Loan Marketing Assoc.:
4,000 6.29%, 10/20/99............................ 3,967
---------
Total U.S. Government Agencies 365,047
---------
U.S. TREASURY NOTES (17.2%):
6,000 6.88%, 4/30/97(b).......................... 6,056
11,000 6.50%, 5/15/97(b).......................... 11,071
6,500 6.38%, 6/30/97(b).......................... 6,539
3,500 8.63%, 8/15/97(b).......................... 3,604
2,500 5.75%, 10/31/97(b)......................... 2,495
3,000 7.38%, 11/15/97(b)......................... 3,055
9,000 6.00%, 11/30/97(b)......................... 9,008
2,500 7.88%, 1/15/98............................. 2,568
4,250 5.63%, 1/31/98(b).......................... 4,225
5,000 5.13%, 3/31/98(b).......................... 4,925
1,500 5.13%, 4/30/98(b).......................... 1,477
11,000 5.13%, 6/30/98(b).......................... 10,803
3,000 4.75%, 9/30/98(b).......................... 2,914
5,000 8.88%, 11/15/98(b)......................... 5,291
1,000 7.00%, 4/15/99(b).......................... 1,019
5,000 7.75%, 1/31/00(b).......................... 5,216
3,500 8.50%, 2/15/00(b).......................... 3,737
1,000 8.88%, 5/15/00(b).......................... 1,084
7,000 6.25%, 5/31/00(b).......................... 6,961
12,500 6.13%, 9/30/00(b).......................... 12,363
4,000 6.38%, 8/15/02(b).......................... 3,969
---------
Total U.S. Treasury Notes 108,380
---------
U.S. TREASURY STRIPS (0.7%):
5,000 2/15/99(b)................................. 4,251
---------
Total U.S. Treasury Strips 4,251
---------
INVESTMENT COMPANIES (0.4%):
2,574 Aquila Churchill Cash Reserves Money Market
Fund..................................... 2,574
---------
Total Investment Companies 2,574
---------
Total Investments, at value 626,507
---------
REPURCHASE AGREEMENTS (0.7%):
$ 4,436 Lehman Brothers Inc., 5.51%, 7/1/96,
(collateralized by $4,885 Federal Home
Loan Bank Bond, 0.00% - 5.69%, 2/25/99 -
3/11/99, market value $4,526)............ 4,436
---------
Total Repurchase Agreements 4,436
---------
Total (Cost--$631,998) (a) $ 630,943
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $631,182.
CONTINUED
- ----18
<PAGE> 786
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LIMITED VOLATILITY BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized depreciation of securities as
follows (amounts in thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 3,541
Unrealized depreciation.................................................... (4,596)
---------
Net unrealized depreciation................................................ $ (1,055)
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<S> <C>
Variable rate securities having liquidity sources through bank letters of credit or other credit and/or
liquidity agreements. The interest rate, which will change periodically, is based upon bank prime rates or an
index of market interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in
* effect at June 30, 1996.
CMO Collateralized Mortgage Obligation
REMIC Real Estate Mortgage Investment Conduit
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19----
<PAGE> 787
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------------------- ---------
<C> <S> <C>
ASSET BACKED SECURITIES (8.5%):
$1,755 Advanta Mortgage Loan Trust, Series 1994-4,
Class A1, 8.55%, 11/25/12................ $ 1,799
4,033 Aircraft Lease Portfolio Securitization
Ltd., Series 94-1, Class A2, 7.15%,
9/15/04.................................. 4,027
5,000 Ford Motor Credit Auto Loan Master Trust,
Series 1995-1, Class A, 6.50%, 8/15/02... 4,981
1,242 Green Tree Home Improvement Loan Trust,
Series 1995-C, Class A, 6.20%, 7/15/20... 1,242
3,000 UCFC Home Equity Loan, Series 1994-A, Class
A2, 5.53%, 5/10/09....................... 2,969
2,850 Union Acceptance Corp., Series 1995-D,
6.03%, 1/7/03............................ 2,818
454 Union Federal Savings Bank Trust, Series
1992-B, Class A, 4.90%, 4/15/98.......... 452
3,000 World Financial Network Credit Card, Series
96-A, Class A, 6.70%, 2/15/04............ 2,972
---------
Total Asset Backed Securities 21,260
---------
CORPORATE BONDS (16.7%):
Banking, Finance & Insurance (11.3%):
3,000 Bankers Trust, 7.25%, 1/15/03.............. 3,000
3,000 First Hawaiian, Inc., 6.25%, 8/15/00....... 2,929
3,000 Fleet/Norstar Group, 8.13%, 7/1/04......... 3,146
4,000 Goldman Sachs, 6.38%, 6/15/00.............. 3,935
3,000 Lehman Brothers Holdings, 7.25%, 4/15/03... 2,977
3,000 Lehman Brothers Inc., 9.88%, 10/15/00...... 3,311
4,000 Liberty Mutual Insurance, 8.20%,
5/4/07,(b)............................... 4,170
2,000 Meditrust, 7.60%, 7/15/01.................. 1,988
3,000 Metropolitan Life, 6.30%, 11/1/03.......... 2,835
---------
28,291
---------
Industrial (2.2%):
2,000 Dayton Hudson Co., 7.50%, 3/1/99........... 2,035
1,430 du Pont, 8.50%, 2/15/03.................... 1,517
2,000 General Motors, 7.63%, 2/15/97............. 2,020
---------
5,572
---------
Yankee & Eurodollar (3.2%):
2,000 Hanson Overseas, 6.75%, 9/15/05............ 1,923
2,000 Peoples Republic of China, 7.38%,
7/3/01,(b)............................... 1,991
1,000 Peoples Republic of China, 6.63%,
1/15/03.................................. 959
3,000 Swedbank, 7.31%, 10/29/49*................. 3,077
---------
7,950
---------
Total Corporate Bonds 41,813
---------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------------------- ---------
<C> <S> <C>
OTHER MORTGAGE BACKED SECURITIES (3.2%):
$3,750 Independent National Mortgage Corp., Series
1995-S, Class A1, 7.10%, 1/15/26......... $ 3,738
4,000 The Equitable Commercial Mortgage, Series
174, Class A1, 7.24%, 5/15/09............ 3,988
255 Morgan Stanley Mortgage Trust, Series Y,
Class 3, 8.95%, 3/1/16................... 260
---------
Total Other Mortgage Backed Securities 7,986
---------
U.S. GOVERNMENT AGENCIES (36.0%):
Federal Home Loan Mortgage Corp.:
1,000 7.00%, 6/15/06, Series #1457-PH, CMO....... 981
1,226 7.50%, 8/1/08, Gold Pool #G10117........... 1,233
2,610 8.50%, 1/1/10, Gold Pool #E00356........... 2,696
277 7.00%, 8/1/10, Gold Pool #E20187........... 274
4,382 7.00%, 9/1/10, Gold Pool #E00393........... 4,327
1,125 7.25%, 4/15/18, Series #1254-F, CMO........ 1,131
6,000 5.85%, 1/25/19............................. 5,694
4,000 8.00%, 2/15/20, Gold Series #1770-PD,
CMO...................................... 4,009
3,000 6.00%, 4/15/20, Series #1534-F, CMO........ 2,877
822 8.00%, 7/1/20, Gold Pool #A01047........... 830
3,000 6.50%, 10/15/21, Series #1590-GA, CMO...... 2,855
2,000 6.50%, 1/15/22, Series #1573-PI, CMO....... 1,884
3,211 8.00%, 11/1/24, Gold Pool #C00376.......... 3,242
4,641 7.50%, 8/1/25, Gold Pool #C00414........... 4,585
3,991 7.00%, 4/1/26, Pool #C00452................ 3,844
3,997 7.50%, 4/1/26, Gold Pool #D70219........... 3,950
Federal National Mortgage Assoc.:
3,922 6.00%, 12/1/02, 7 Year Balloon............. 3,778
3,348 7.00%, 6/1/10, Pool #312903................ 3,306
2,914 6.50%, 12/1/10, Pool 322598................ 2,819
500 8.00%, 9/25/04, Series 1991-155G, CMO...... 518
1,000 6.75%, 12/25/04, Series 1993-6C, CMO....... 1,003
2,530 8.00%, 5/1/24, Pool #250066................ 2,550
2,317 8.50%, 7/1/24, Pool #250103................ 2,379
3,105 7.50%, 10/1/24, Pool #303031............... 3,066
342 7.50%, 5/1/25, Pool #293928................ 338
912 7.50%, 5/1/25, Pool #311810................ 901
1,380 8.50%, 5/1/25, Pool #308499................ 1,417
2,041 8.50%, 6/1/25, Pool #315277................ 2,096
3,884 7.00%, 7/1/25, Pool #290387................ 3,738
2,917 7.00%, 10/1/25, Pool #300778............... 2,807
Government National Mortgage Assoc.:
2 10.50%, 4/15/98, Pool #066627.............. 2
8 10.50%, 7/15/98, Pool #069629.............. 9
2 10.50%, 9/15/98, Pool #103573.............. 2
13 11.00%, 6/15/99, Pool #110948.............. 13
11 11.00%, 3/15/00, Pool #123750.............. 11
8 10.00%, 12/15/00, Pool #136214............. 9
72 10.00%, 1/15/01, Pool #145167.............. 77
73 10.00%, 1/15/01, Pool #145328.............. 77
</TABLE>
CONTINUED
- ----20
<PAGE> 788
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------------------- ---------
U.S. GOVERNMENT AGENCIES, CONTINUED:
<C> <S> <C>
Government National Mortgage Assoc., continued:
$ 67 8.50%, 6/15/01, Pool #137056............... $ 70
8 8.50%, 6/15/01, Pool #162447............... 8
8 9.00%, 6/15/01, Pool #161443............... 8
3 9.00%, 6/15/01, Pool #164431............... 3
28 9.00%, 6/15/01, Pool #166985............... 29
17 9.00%, 7/15/01, Pool #155822............... 18
120 8.50%, 8/15/01, Pool #164207............... 125
68 9.00%, 8/15/01, Pool #173460............... 72
12 9.00%, 9/15/01, Pool #177121............... 13
6 9.00%, 10/15/01, Pool #177634.............. 6
127 9.00%, 10/15/01, Pool #179852.............. 133
14 9.00%, 10/15/01, Pool #185596.............. 14
5 8.50%, 11/15/01, Pool #183462.............. 5
19 9.00%, 11/15/01, Pool #174365.............. 20
131 9.00%, 11/15/01, Pool #191819.............. 137
110 8.50%, 12/15/01, Pool #199182.............. 114
21 9.00%, 1/15/02, Pool #205001............... 22
99 8.00%, 3/15/02, Pool #205933............... 101
79 8.00%, 3/15/02, Pool #210065............... 81
94 8.00%, 5/15/02, Pool #180296............... 97
51 8.00%, 5/15/02, Pool #203042............... 52
96 8.50%, 5/15/02, Pool #213776............... 100
61 9.00%, 8/15/02, Pool #232424............... 64
17 9.00%, 11/15/02, Pool #235553.............. 18
95 9.00%, 10/15/02, Pool #246307.............. 100
9 9.00%, 6/15/03, Pool #247863............... 10
71 8.50%, 10/15/04, Pool #277469.............. 74
130 9.00%, 10/15/04, Pool #281655.............. 136
134 8.50%, 11/15/04, Pool #253471.............. 139
139 9.00%, 5/15/05, Pool #288771............... 146
166 9.00%, 8/15/05, Pool #297031............... 174
21 9.00%, 10/15/05, Pool #292589.............. 22
94 9.00%, 11/15/05, Pool #292610.............. 99
66 9.00%, 11/15/05, Pool #299161.............. 70
81 9.00%, 12/15/05, Pool #299569.............. 85
128 8.50%, 4/15/06, Pool #307487............... 133
246 7.50%, 5/15/07, Pool #329528............... 248
109 8.00%, 5/15/09, Pool #385676............... 111
28 8.00%, 8/15/09, Pool #372143............... 28
736 8.00%, 10/15/09, Pool #380639.............. 753
1,935 7.00%, 8/15/23, Pool #352108............... 1,857
2,767 7.00%, 11/15/23, Pool #352022.............. 2,655
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------------------- ---------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Government National Mortgage Assoc., continued:
$2,939 7.00%, 9/15/25, Pool #406434............... $ 2,821
1,997 7.50%, 1/15/26, Pool # 416874.............. 1,969
1,997 7.50%, 3/15/26, Pool # 422292.............. 1,970
---------
Total U.S. Government Agencies 90,238
---------
U.S. TREASURY BONDS (5.7%):
3,000 8.75%, 11/15/08(b)......................... 3,336
5,000 8.13%, 8/15/19(b).......................... 5,614
6,000 6.25%, 8/15/23(b).......................... 5,443
---------
Total U.S. Treasury Bonds 14,393
---------
U.S. TREASURY NOTES (26.6%):
5,000 6.75%, 2/28/97(b).......................... 5,036
4,000 5.50%, 9/30/97(b).......................... 3,981
3,500 5.13%, 3/31/98(b).......................... 3,448
5,000 8.25%, 7/15/98(b).......................... 5,202
5,200 7.13%, 10/15/98(b)......................... 5,308
6,000 4.75%, 10/31/98............................ 5,818
3,000 8.88%, 11/15/98(b)......................... 3,175
5,000 6.00%, 10/15/99(b)......................... 4,954
4,000 7.50%, 10/31/99............................ 4,133
3,000 7.13%, 2/29/00(b).......................... 3,070
3,000 7.75%, 2/15/01............................. 3,155
10,000 5.75%, 8/15/03(b).......................... 9,528
5,000 7.25%, 5/15/04(b).......................... 5,184
5,000 5.88%, 11/15/05(b)......................... 4,713
---------
Total U.S. Treasury Notes 66,705
---------
INVESTMENT COMPANIES (0.0%):
15 Aquila Churchill Cash Reserves Money Market
Fund..................................... 15
---------
Total Investment Companies 15
---------
Total Investments, at value 242,410
---------
REPURCHASE AGREEMENTS (1.3%):
$3,241 Lehman Brothers Inc., 5.51%, 7/1/96,
(collateralized by $3,310 Federal
National Mortgage Assoc., 5.47%, 6/20/97,
market value $3,309)..................... 3,241
---------
Total Repurchase Agreements 3,241
---------
Total (Cost--$248,425)(a) $ 245,651
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $250,595.
CONTINUED
21----
<PAGE> 789
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized depreciation of securities as
follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 1,878
Unrealized depreciation.................................................... (4,652)
---------
Net Unrealized depreciation................................................ $ (2,774)
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<S> <C>
Variable rate securities having liquidity sources through bank letters of credit or other credit and/or
liquidity agreements. The interest rate, which will change periodically, is based upon bank prime rates or an
index of market interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in
* effect at June 30, 1996.
CMO Collateralized Mortgage Obligation
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----22
<PAGE> 790
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
CORPORATE BONDS (0.1%):
Bank, Finance & Insurance (0.1%):
$ 400 International Bank for Reconstruction and
Development Medium Term Note, COLTS,
7.65%, 2/28/97........................... $ 405
---------
Total Corporate Bonds 405
---------
U.S. GOVERNMENT AGENCIES (82.7%):
Federal Farm Credit Bank (1.0%):
5,000 6.88%, 5/1/00.............................. 5,044
2,000 7.95%, 4/1/02.............................. 2,012
Federal Home Loan Bank (1.7%):
2,000 9.25%, 11/25/98............................ 2,129
2,000 9.30%, 1/25/99............................. 2,132
3,000 8.60%, 6/25/99(b) 3,172
5,000 6.27%, 1/14/04............................. 4,761
Federal Home Loan Mortgage Corp. (36.2%):
2,000 6.44%, 1/28/00............................. 1,990
10,116 6.00%, 4/15/01, Gold Balloon, Pool
#G50347.................................. 9,898
4,500 7.13%, 11/18/02............................ 4,574
25,000 6.11%, 1/17/03, Callable 1/17/00 @100...... 23,922
3,000 6.78%, 3/15/04............................. 2,919
3,000 7.88%, 4/28/04............................. 3,002
5,000 7.89%, 5/12/04............................. 5,004
6,591 7.50%, 4/1/09, Gold Pool #E00315........... 6,626
16,500 6.50%, 9/15/09, Series 1838, CMO........... 15,370
5,701 8.50%, 1/1/10, Gold Pool # G10305.......... 5,888
4,855 6.50%, 1/1/11, Gold Pool #E00413........... 4,700
9,932 6.50%, 4/1/11, Gold Pool #E00426........... 9,616
4,966 6.50%, 4/1/11, Gold Pool #E20235........... 4,808
413 9.00%, 10/1/17, Gold Pool #A00756.......... 431
283 9.00%, 4/1/18, Gold Pool #A01143........... 295
4,501 7.25%, 4/15/18, Series 1254 - CMO.......... 4,525
38 9.00%, 8/1/20, Gold Pool #D38661........... 40
77 9.00%, 10/1/20, Gold Pool #A01134.......... 80
83 9.00%, 1/1/21, Gold Pool #A00948........... 87
62 9.00%, 4/1/21, Gold Pool #D04193........... 65
137 9.00%, 6/1/21, Gold Pool #A01017........... 143
149 9.00%, 7/1/21, Gold Pool #A01093........... 155
165 9.00%, 9/1/21, Gold Pool #D32271........... 172
143 9.00%, 11/1/21, Gold Pool #C00078.......... 149
54 9.00%, 11/1/21, Gold Pool #D11191.......... 56
138 9.00%, 11/1/21, Gold Pool #D11866.......... 144
77 9.00%, 5/1/22, Gold Pool #D19142........... 80
271 9.00%, 5/1/22, Gold Pool #D19203........... 283
7,519 10.00%, 10/15/23, Series 1591-E, CMO....... 8,133
17,851 5.00%, 11/15/23, Series 1686, CMO.......... 16,294
5,712 8.50%, 5/1/24, Gold Pool #G00229........... 5,871
5,223 8.50%, 7/1/24, Gold Pool #C00354........... 5,368
8,584 7.50%, 9/1/24, Gold Pool #D56307........... 8,482
8,028 8.00%, 11/1/24, Gold Pool #C00376.......... 8,105
3,030 7.50%, 5/1/25, Gold Pool #D59996........... 2,994
5,920 7.50%, 6/1/25, Gold Pool #C80321........... 5,850
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Federal Home Loan Mortgage Corp., continued:
$ 8,096 8.00%, 6/1/25, Gold Pool #D60690........... $ 8,174
4,926 7.00%, 8/1/25, Gold Pool #C00418........... 4,744
4,641 7.50%, 8/1/25, Gold Pool #C00414........... 4,586
4,642 7.50%, 8/1/25, Gold Pool #C80334........... 4,587
4,851 7.00%, 9/1/25, Gold Pool #D63303........... 4,672
4,513 8.00%, 9/1/25, Gold Pool #D63705........... 4,556
9,503 7.50%, 10/1/25, Gold Pool #C80349.......... 9,390
9,964 6.50%, 2/1/26, Gold Pool #D68098........... 9,342
24,912 6.50%, 3/1/26, Gold Pool #G00453........... 23,355
12,978 7.00%, 4/1/26, Gold Pool #D69810........... 12,499
11,980 7.00%, 4/1/26, Gold Pool #D69811........... 11,538
Federal National Mortgage Assoc. (28.9%):
2,000 9.20%, 6/10/97............................. 2,059
2,000 8.80%, 7/25/97............................. 2,059
4,000 8.70%, 6/10/99............................. 4,244
3,000 8.90%, 6/12/00............................. 3,233
11,998 6.00%, 3/1/01, Pool #50983................. 11,559
2,000 7.90%, 4/10/02............................. 2,006
750 7.80%, 6/10/02............................. 752
2,004 7.50%, 5/1/03.............................. 2,025
3,246 7.50%, 7/1/03.............................. 3,281
3,000 6.20%, 11/12/03............................ 2,839
2,820 8.05%, 5/20/04............................. 2,826
5,000 7.86%, 5/25/04, Callable on 5/25/99 @100... 5,043
15,000 7.16%, 5/11/05............................. 15,145
10,000 5.88%, 2/2/06(b)........................... 9,230
5,000 6.67%, 2/6/06, Callable on 2/6/98 @100..... 4,791
4,994 7.00%, 4/1/08, Pool #211750................ 4,932
8,000 6.00%, 6/25/09, Pool #1994-86.............. 7,176
4,473 7.00%, 7/1/10.............................. 4,418
2,820 6.50%, 12/1/10............................. 2,728
10,000 6.25%, 2/25/13, Pool #1993-2............... 9,953
3,596 6.35%, 8/25/13............................. 3,380
4,750 7.50%, 6/1/14, Pool #250081................ 4,690
3,747 7.50%, 7/1/14.............................. 3,701
184 10.00%, 10/1/16, Pool #70110............... 199
10,000 10.00%, 9/1/17............................. 10,847
611 10.00%, 10/1/19, Pool #231675.............. 663
10,000 7.00%, 5/25/20, Pool #1990-57.............. 9,717
341 10.00%, 7/1/20, Pool #050318............... 370
5,584 6.50%, 5/25/21, Series 1992-205K, CMO...... 5,241
5,000 7.00%, 9/25/21, Series G92-64, CMO......... 4,906
924 10.00%, 11/1/21, Pool #208372.............. 1,002
765 10.00%, 11/1/21, Pool #208374.............. 829
5,000 6.55%, 12/25/21, Pool #1993-137, CMO....... 4,770
10,785 6.50%, 2/17/23, Series #G94-12, CMO........ 10,130
5,000 6.50%, 5/25/23............................. 4,756
9,094 6.35%, 12/25/23, Pool #1994-43............. 8,298
5,042 7.00%, 1/25/24, Pool #1994-62.............. 4,706
9,164 7.00%, 2/1/24, Pool #190257................ 8,820
4,541 7.50%, 5/1/25.............................. 4,484
</TABLE>
CONTINUED
23----
<PAGE> 791
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
U.S. GOVERNMENT AGENCIES, CONTINUED:
<C> <S> <C>
Federal National Mortgage Assoc., continued:
$ 4,230 7.50%, 6/1/25.............................. $ 4,177
4,484 7.50%, 6/1/25.............................. 4,428
4,887 7.00%, 8/1/25, Pool #315500................ 4,704
3,985 7.50%, 9/1/25, Pool #322899................ 3,935
973 7.50%, 9/1/25, Pool #324749................ 961
Government National Mortgage Assoc. (11.5%):
3 10.50%, 4/15/98, Pool #63591............... 4
27 10.00%, 9/15/00, Pool #138814.............. 29
11 10.00%, 12/15/00, Pool #136214............. 12
9 10.00%, 1/15/01, Pool #145144.............. 10
76 8.50%, 6/15/01, Pool #166491............... 79
7 8.50%, 7/15/01, Pool #161977............... 7
102 9.00%, 9/15/01, Pool #166928............... 107
10 9.00%, 9/15/01, Pool #174330............... 10
84 9.50%, 9/15/01, Pool #180786............... 89
101 8.50%, 11/15/01, Pool #179383.............. 105
32 9.50%, 11/15/01, Pool #182995.............. 34
87 8.50%, 12/15/01, Pool #199837.............. 91
121 9.00%, 12/15/01, Pool #187723.............. 127
99 8.00%, 3/15/02, Pool #205933............... 101
253 9.00%, 5/15/03, Pool #154134............... 265
184 9.00%, 6/15/05, Pool #283904............... 193
90 9.00%, 8/15/05, Pool #291836............... 95
67 9.00%, 9/15/05, Pool #292898............... 70
38 9.00%, 9/15/05, Pool #295227............... 40
86 8.00%, 7/15/06, Pool #11337................ 87
39 7.50%, 7/15/07, Pool #17316................ 38
96 8.00%, 8/15/07, Pool #18539................ 97
104 8.00%, 8/15/07, Pool #18677................ 105
397 7.50%, 12/15/07, Pool #338189.............. 400
71 9.00%, 11/15/08, Pool #27932............... 75
111 9.00%, 4/15/09, Pool #30352................ 116
26 9.00%, 5/15/09, Pool #32214................ 27
10 9.50%, 7/15/09, Pool #34487................ 11
157 9.50%, 9/15/09, Pool #34878................ 168
46 9.50%, 10/15/09, Pool #36804............... 50
40 11.00%, 11/15/09, Pool #37615.............. 45
2 12.00%, 4/15/15, Pool #125262.............. 2
13 11.00%, 6/15/15, Pool #130125.............. 14
93 9.00%, 5/15/16, Pool #149877............... 98
131 9.00%, 6/15/16, Pool #166130............... 137
124 9.00%, 7/15/16, Pool #158921............... 130
13 9.50%, 7/15/16, Pool #166772............... 14
101 9.50%, 8/15/16, Pool #177531............... 108
167 9.00%, 9/15/16, Pool #179044............... 175
28 9.50%, 1/15/17, Pool #185619............... 30
352 9.00%, 2/15/17, Pool #195058............... 369
284 9.00%, 6/15/17, Pool #219079............... 297
29 9.00%, 8/15/17, Pool #225285............... 30
81 9.50%, 8/15/17, Pool #218841............... 87
44 9.50%, 8/15/17, Pool #224015............... 47
120 9.00%, 6/15/18, Pool #238161............... 125
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Government National Mortgage Assoc., continued:
$ 98 9.50%, 8/15/18, Pool #248390............... $ 105
33 9.00%, 10/15/18, Pool #253188.............. 35
167 9.50%, 12/15/18, Pool #263400.............. 179
5 9.00%, 10/15/19, Pool #267676.............. 5
67 9.00%, 11/15/19, Pool #162768.............. 70
76 9.00%, 1/15/20, Pool #283138............... 79
86 9.00%, 2/15/20, Pool #276157............... 90
126 9.00%, 3/15/20, Pool #285283............... 132
92 9.50%, 9/15/20, Pool #292918............... 99
102 9.50%, 12/15/20, Pool #291865.............. 109
345 9.00%, 6/15/21, Pool #307120............... 361
43 7.50%, 2/15/22, Pool #324025............... 42
688 8.00%, 7/15/22, Pool #321560............... 694
829 7.50%, 8/15/22, Pool #337141............... 818
40 7.00%, 10/15/22, Pool #337175.............. 38
231 7.00%, 11/15/22, Pool #323008.............. 222
43 7.00%, 12/15/22, Pool #339969.............. 41
264 7.00%, 1/15/23, Pool #346214............... 254
43 7.00%, 1/15/23, Pool #321675............... 42
501 7.00%, 1/15/23, Pool #332022............... 481
390 7.00%, 1/15/23, Pool #341536............... 374
472 7.00%, 1/15/23, Pool #342248............... 453
52 7.00%, 3/15/23, Pool #350110............... 50
347 6.50%, 5/15/23, Pool #343208............... 324
860 7.00%, 5/15/23, Pool #346572............... 826
814 7.00%, 5/15/23, Pool #351041............... 781
680 7.00%, 5/15/23, Pool #221604............... 653
68 7.00%, 5/15/23, Pool #338005............... 65
751 7.00%, 5/15/23, Pool #342348............... 720
99 6.50%, 6/15/23, Pool #346624............... 92
444 6.50%, 6/15/23, Pool #348677............... 414
60 6.50%, 6/15/23, Pool #349788............... 56
63 6.50%, 6/15/23, Pool #358250............... 58
273 6.50%, 7/15/23, Pool #322200............... 254
912 7.00%, 7/15/23, Pool #346673............... 875
26 7.00%, 7/15/23, Pool #350709............... 25
368 7.00%, 7/15/23, Pool #353569............... 353
36 7.00%, 7/15/23, Pool #354538............... 34
223 7.00%, 7/15/23, Pool #357782............... 214
523 7.00%, 7/15/23, Pool #358382............... 502
603 7.00%, 7/15/23, Pool #360697............... 578
528 7.00%, 7/15/23, Pool #360889............... 507
869 7.00%, 7/15/23, Pool #362982............... 834
272 7.00%, 7/15/23, Pool #325977............... 261
343 6.50%, 8/15/23............................. 320
456 6.50%, 8/15/23, Pool #353137............... 425
185 6.50%, 8/15/23, Pool #360713............... 172
319 6.50%, 8/15/23, Pool #360738............... 297
713 6.50%, 8/15/23, Pool #356717............... 664
258 6.50%, 8/15/23, Pool #359027............... 241
798 6.50%, 9/15/23, Pool #345375............... 743
56 6.50%, 9/15/23, Pool #339041............... 53
</TABLE>
CONTINUED
- ----24
<PAGE> 792
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
U.S. GOVERNMENT AGENCIES, CONTINUED:
<C> <S> <C>
Government National Mortgage Assoc., continued:
$ 424 6.00%, 10/15/23, Pool #345389.............. $ 384
466 6.00%, 10/15/23, Pool #364717.............. 421
35 6.00%, 10/15/23, Pool #370006.............. 31
231 6.50%, 10/15/23, Pool #345391.............. 215
4,277 8.00%, 10/15/23, Pool #354681.............. 4,317
686 6.50%, 11/15/23, Pool #369356.............. 639
22 6.50%, 11/15/23, Pool #370927.............. 21
153 6.50%, 12/15/23, Pool #346944.............. 142
991 6.50%, 12/15/23, Pool #349265.............. 923
143 6.50%, 12/15/23, Pool #365740.............. 133
696 6.50%, 12/15/23, Pool #369830.............. 648
37 6.50%, 12/15/23, Pool #370289.............. 34
836 6.50%, 1/15/24, Pool #379127............... 779
1,267 6.50%, 2/15/24, Pool #362341............... 1,180
23,438 6.50%, 2/15/24, pool #354747............... 21,834
332 6.50%, 2/15/24, Pool #370338............... 309
414 6.50%, 2/15/24, Pool #371999............... 385
180 6.50%, 2/15/24, Pool #380818............... 168
381 6.50%, 2/15/24, Pool #389200............... 355
653 7.50%, 6/15/24, Pool #388747............... 644
96 7.50%, 6/15/24, Pool #389827............... 95
440 8.00%, 9/15/24, Pool #393908............... 444
4,246 8.00%, 9/15/24, Pool #403212............... 4,286
4,993 7.50%, 3/15/26, Pool #422308............... 4,924
12,873 8.00%, 5/15/26............................. 12,994
7127 8.00%, 5/15/26............................. 7,193
Tennessee Valley Authority (3.4%):
25,000 6.24%, 7/15/45, Putable on 7/15/01 @ 100... 24,438
---------
Total U.S. Government Agencies 601,225
---------
U.S. GOVERNMENT AGENCY--STRIPS (0.1%):
5,000 Resolution Funding Corporation Principal
Strip, 4/15/30........................... 473
---------
Total U.S. Government Agency--Strips 473
---------
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
U.S. TREASURY BONDS (8.1%):
$ 8,000 8.25%, 5/15/05(b).......................... $ 8,421
10,000 8.38%, 8/15/08(b).......................... 10,971
20,000 7.50%, 11/15/16(b)......................... 21,030
1,500 8.88%, 8/15/17(b).......................... 1,802
15,000 8.13%, 8/15/19(b).......................... 16,843
---------
Total U.S. Treasury Bonds 59,067
---------
U.S. TREASURY NOTES (6.5%):
10,000 9.00%, 5/15/98(b).......................... 10,508
8,000 8.25%, 7/15/98(b).......................... 8,323
2,800 8.88%, 11/15/98(b)......................... 2,963
3,400 8.88%, 2/15/99(b).......................... 3,613
4,000 9.13%, 5/15/99(b).......................... 4,293
2,600 6.38%, 7/15/99............................. 2,608
14,500 7.50%, 5/15/02(b).......................... 15,197
---------
Total U.S. Treasury Notes 47,505
---------
U.S. TREASURY STRIPS (0.5%):
5,000 8/15/02(b)................................. 3,370
---------
Total U.S. Treasury Strips 3,370
---------
Total Investments, at value 712,045
---------
REPURCHASE AGREEMENTS (2.4%):
17,114 Lehman Brothers Inc., 5.51%, 7/1/96,
(collateralized by $18,225 various U.S.
Government Securities, 5.75% - 6.70%,
2/2/01 - 9/26/03, market value -
$17,458)................................. 17,114
---------
Total Repurchase Agreements 17,114
---------
Total (Cost--$733,350) (a) $ 729,159
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $726,908.
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized depreciation of securities as
follows (amounts in thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 8,566
Unrealized depreciation.................................................... (12,757)
---------
Net unrealized depreciation................................................ $ (4,191)
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<S> <C>
COLTS Continuously Offered Long-Term Securities
CMO Collateralized Mortgage Obligation
</TABLE>
At June 30, 1996, the Portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
OPENING CURRENT
# OF POSITIONS MARKET
CONTRACTS CONTRACT TYPE (000) VALUE (000)
- ---------- ----------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
SHORT CONTRACTS
200 U.S. Treasury 20 Year Bond, September 1996................. $ 21,219 $ 21,906
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25----
<PAGE> 793
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INCOME BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
<C> <S> <C>
ASSET BACKED SECURITIES (11.9%):
$ 5,000 Advanta Corp., 6.98%, 10/3/96............... $ 5,017
7,500 Advanta Mortgage Loan Trust, Series 1995-1,
8.32%, 12/25/19........................... 7,748
6,453 Aircraft Lease Portfolio Securitization
Ltd., Series 94-1, Class A2, 7.15%,
9/15/04................................... 6,442
5,000 Federal Express, 7.85%, 6/1/08.............. 5,050
4,680 NAL 96, 7.10%, 3/15/01, Private Placement,
Class A, 144A............................. 4,667
7,705 Northwest Air, Series 2, Class A, 9.25%,
6/21/14................................... 8,537
4,815 Northwest Air Trust, 10.23%, 6/21/14........ 5,493
3,534 Olympic Automobile Receivables Trust, Series
1994-A, Class A, 5.65%, 1/15/01........... 3,515
17,000 Standard Credit Card Trust, Series 90-3,
Class A, 9.50%, 7/10/98................... 17,644
---------
Total Asset Backed Securities 64,113
---------
CORPORATE BONDS (50.7%):
Banking, Finance & Insurance (20.5%):
5,000 Associates Corp., 8.34%, 11/25/99........... 5,250
6,000 Associates Corp., 8.15%, 8/1/09............. 6,465
2,000 Avalon Properties, 7.38%, 9/15/02........... 1,958
5,000 BankAmerica Corp., 9.50%, 4/1/01............ 5,500
5,000 Bear Stearns Co., 9.13%, 4/15/98............ 5,206
5,000 Bear Stearns Co., 8.25%, 2/1/02............. 5,256
5,000 Financiera Energy, 9.38%, 6/15/06, 144A..... 5,057
2,000 Fleet/Norstar Group, 8.13%, 7/1/04.......... 2,097
1,500 Ford Motor Credit Corp., 6.38%, 10/6/00..... 1,476
8,000 General Motors Acceptance Corp., 7.00%,
3/1/00.................................... 8,060
10,000 Lehman Brothers Holdings, 8.88%, 3/1/02..... 10,724
5,000 Lehman Brothers Holdings, 8.80%, 3/1/15..... 5,506
5,000 Lehman Brothers Inc., 11.63%, 5/15/05....... 6,275
6,000 Massachusetts Mutual Life, 7.50%, 3/1/24,
144A...................................... 5,595
4,750 Meditrust, 7.77%, 8/16/02................... 4,726
5,000 Midland Bank PLC, 7.63%, 6/15/06 (b)........ 5,063
6,000 Morgan Stanley, 6.13%, 10/1/03.............. 5,670
5,000 Principal Mutual, 7.88%, 3/1/24............. 4,694
5,000 Spieker Properties, 6.65%, 12/15/00......... 4,825
8,000 Taubman Realty Group, 7.00%, 10/1/03........ 7,660
3,000 Wellsford Residential Property, 7.25%,
8/15/00................................... 2,974
---------
110,037
---------
Industrial (11.1%):
3,000 Boise Cascade Co., 9.45%, 11/01/09.......... 3,390
2,000 CSX Corp., 8.25%, 11/1/96................... 2,015
5,000 Consolidated Freightways, 9.13%, 8/15/99.... 5,225
10,000 General Motors Corp., 9.13%, 7/15/01........ 10,888
5,000 Lockheed Corp., 5.65%, 4/1/97............... 4,987
5,000 Marriott International, 6.75%, 12/1/09...... 4,581
6,300 McDonnell Douglas, 8.63%, 4/1/97............ 6,418
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Industrial, continued:
$ 5,000 Newmont Gold Co., 8.91%, 1/5/09............. $ 5,312
5,000 Penske Truck Leasing, 8.25%, 11/1/99........ 5,250
6,000 Sun Co., Inc., 8.13%, 11/1/99............... 6,225
5,000 Tenneco, Inc., 10.00%, 8/1/98............... 5,331
---------
59,622
---------
Utilities (2.2%):
3,991 Salton Sea Funding Corp., 6.69%, 5/30/00.... 3,996
5,000 NRG Energy Corp., 7.63%, 2/1/06, 144A....... 4,694
3,000 Transcont Gas, 9.00%, 11/15/96.............. 3,034
---------
11,724
---------
Yankee & Eurodollar (16.9%):
5,000 BCH Cayman Islands, 8.25%, 6/15/04.......... 5,187
5,000 Bangkok Bank Public Co. Ltd., 7.25%,
9/15/05, 144A............................. 4,819
5,000 Canadian National Railway, 7.00%, 3/15/04... 4,894
5,000 Celulosa Arauco, 6.75%, 12/15/03............ 4,713
9,170 Centragas, Series 144A, 10.65%, 12/1/10..... 9,583
5,000 China International Trust & Investing,
9.00%, 10/15/06........................... 5,300
6,000 Honam Oil Refinery Co., 7.13%, 10/15/05,
144A...................................... 5,738
5,000 Macmillan Bloedel Ltd., 6.75%, 2/15/06...... 4,675
3,500 MEPC Finance Inc., 7.50%, 5/1/03............ 3,522
5,000 Oslo Seismic Service, 8.28%, 6/1/11, 144A... 5,044
6,000 Peoples Republic of China, 7.38%, 7/3/01.... 5,974
5,000 Pohang Iron & Steel Co., 7.38%, 5/15/05..... 4,938
5,000 Province of Quebec, 6.50%, 1/17/06.......... 4,706
5,000 Security Pacific Corp., 11.00%, 3/1/01...... 5,788
5,000 Kansalis-Osake Pankki, 9.75%, 12/15/98...... 5,350
5,000 Scotland International Finance, 8.80%,
1/27/04, 144A............................. 5,413
5,000 Tenaga Nasional Berhad, 7.88%, 6/15/04,
144A...................................... 5,169
---------
90,813
---------
Total Corporate Bonds 272,196
---------
OTHER MORTGAGE BACKED SECURITIES (0.9%):
5,813 Chase Manhattan Finance Corp., 6.25%,
12/15/09 Series 93-D, Class A2............ 4,890
---------
Total Other Mortgage Backed Securities 4,890
---------
U.S. GOVERNMENT AGENCIES (20.3%):
Federal Home Loan Bank:
10,000 7.10%, 3/16/98.............................. 10,130
Federal Home Loan Mortgage Corp.:
5,000 7.13%, 7/21/99.............................. 5,096
5,069 7.00%, 6/1/09, Gold Pool #E00313............ 5,005
8,973 7.00%, 5/1/11, Gold Pool #E00434............ 8,861
9,953 7.50%, 5/1/11............................... 10,005
7,976 7.00%, 6/1/11............................... 7,876
</TABLE>
CONTINUED
- ----26
<PAGE> 794
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INCOME BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
U.S. GOVERNMENT AGENCIES, CONTINUED:
<C> <S> <C>
Federal Home Loan Mortgage Corp.:, continued:
$ 4,929 7.00%, 2/01/11.............................. $ 4,868
1,340 7.50%, 6/1/24, Pool #C80161................. 1,324
17,480 7.00%, 9/1/24, Pool #G00271................. 16,836
7,740 7.50%, 10/1/24.............................. 7,648
Federal National Mortgage Assoc.:
17,618 8.00%, 12/1/09, Pool #250168................ 17,987
13,658 7.50%, 9/1/25, Pool #324179................. 13,488
---------
Total U.S. Government Agencies 109,124
---------
U.S. TREASURY BONDS (10.4%):
3,250 13.38%, 8/15/01 (b)......................... 4,221
9,500 11.88%, 11/15/03 (b)........................ 12,374
4,000 10.75%, 8/15/05 (b)......................... 5,085
28,000 9.00%, 11/15/18............................. 34,170
---------
Total U.S. Treasury Bonds 55,850
---------
<CAPTION>
PRINCIPAL MARKET
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- -------------------------------------------- ---------
<C> <S> <C>
U.S. TREASURY NOTES (4.3%):
$ 5,000 7.25%, 8/15/04 (b).......................... $ 5,182
5,000 7.50%, 2/15/05 (b).......................... 5,262
13,000 5.88%, 6/30/00 (b).......................... 12,753
---------
Total U.S. Treasury Notes 23,197
---------
Total Investment, at value 529,370
---------
REPURCHASE AGREEMENTS (1.6%):
8,346 Lehman Brothers, 5.51%, 7/1/96,
(collateralized by $8,820 Federal Home
Loan Bank, 7.22%, 11/8/05, market value
$8,514) 8,346
---------
Total Repurchase Agreements 8,346
---------
Total (Cost--$523,732)(a) $ 537,716
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $536,476.
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized appreciation of securities as
follows
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 16,145
Unrealized depreciation.................................................... (2,161)
---------
Net unrealized appreciation................................................ $ 13,984
---------
---------
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
At June 30, 1996, the Portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
OPEN CURRENT
# OF POSITIONS MARKET
CONTRACTS CONTRACT TYPE (000) VALUE (000)
- ---------- ----------------------------------------------------------- ----------- -----------
<C> <S> <C> <C>
SHORT CONTRACTS
200 U.S. Treasury 20 Year Bond, September 1996................. $ 21,252 $ 21,906
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27----
<PAGE> 795
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
LIMITED
GOVERNMENT VOLATILITY BOND INTERMEDIATE GOVERNMENT INCOME
ARM FUND FUND BOND FUND BOND FUND BOND FUND
------------- --------------- ----------- ----------- -----------
ASSETS:
Investments, at value........................ $ 56,934 $ 626,507 $ 242,410 $ 712,045 $ 529,370
Repurchase agreements, at cost............... 8,607 4,436 3,241 17,114 8,346
------------- --------------- ----------- ----------- -----------
Total (cost $66,003; $631,998; $248,425;
$733,350; $523,732, respectively).......... 65,541 630,943 245,651 729,159 537,716
Interest receivable.......................... 361 8,259 3,451 7,521 8,104
Receivable from brokers for investments
sold....................................... 372 209 5,139 -- --
Receivable for capital shares issued......... 24 168 594 309 387
Receivable from advisor...................... 29 147 60 -- 87
Deferred organization costs.................. 8 -- -- 5 --
------------- --------------- ----------- ----------- -----------
Total Assets............................. 66,335 639,726 254,895 736,994 546,294
------------- --------------- ----------- ----------- -----------
LIABILITIES:.................................
Cash overdrafts.............................. 23 138 517 238 160
Dividends payable............................ 312 2,955 1,325 3,870 3,016
Payable to brokers for investments
purchased.................................. 3,484 4,978 1,991 5,289 5,974
Payable for capital shares redeemed.......... 1 2 1 1 1
Net variation margin on futures contracts.... 15 -- -- 223 213
Accrued expenses and other payables:
Investment advisory fees................... 28 294 121 268 261
Administration fees........................ 8 81 33 99 72
12b-1 fees (Class A)....................... 1 4 3 8 2
12b-1 fees (Class B)....................... 1 4 4 8 4
Other...................................... 73 88 305 82 115
------------- --------------- ----------- ----------- -----------
Total Liabilities........................ 3,946 8,544 4,300 10,086 9,818
------------- --------------- ----------- ----------- -----------
NET ASSETS:
Capital...................................... 66,978 639,183 257,643 752,154 577,283
Undistributed (distributions in excess of)
net investment income...................... (313) (121) 94 (325) 396
Accumulated undistributed net realized losses
from investment and futures transactions... (3,772) (6,825) (4,368) (20,043) (54,533)
Net unrealized appreciation (depreciation)
from investments and futures............... (504) 1,055 (2,774) (4,878) 13,330
------------- --------------- ----------- ----------- -----------
Net Assets................................... $ 62,389 $ 631,182 $ 250,595 $ 726,908 $ 536,476
------------- --------------- ----------- ----------- -----------
------------- --------------- ----------- ----------- -----------
Net Assets...................................
Fiduciary.................................. $ 57,276 $ 604,916 $ 230,812 $ 677,326 $ 520,239
Class A.................................... 3,969 21,343 13,706 38,800 10,127
Class B.................................... 1,144 4,923 6,077 10,782 6,110
------------- --------------- ----------- ----------- -----------
$ 62,389 $ 631,182 $ 250,595 $ 726,908 $ 536,476
------------- --------------- ----------- ----------- -----------
------------- --------------- ----------- ----------- -----------
Outstanding units of beneficial interest
(shares)...................................
Fiduciary.................................. 5,853 58,043 23,457 70,842 55,786
Class A.................................... 406 2,050 1,389 4,056 1,087
Class B.................................... 117 469 618 1,128 650
------------- --------------- ----------- ----------- -----------
Total.................................... 6,376 60,562 25,464 76,026 57,523
------------- --------------- ----------- ----------- -----------
------------- --------------- ----------- ----------- -----------
Net asset value
Fiduciary--offering and redemption price
per share................................ $ 9.79 $ 10.42 $ 9.84 $ 9.56 $ 9.33
------------- --------------- ----------- ----------- -----------
------------- --------------- ----------- ----------- -----------
Class A--redemption price per share........ $ 9.78 $ 10.41 $ 9.87 $ 9.57 $ 9.32
------------- --------------- ----------- ----------- -----------
------------- --------------- ----------- ----------- -----------
Class A--maximum sales charge.............. 3.00 % 3.00 % 4.50 % 4.50 % 4.50 %
------------- --------------- ----------- ----------- -----------
------------- --------------- ----------- ----------- -----------
Class A maximum offering price
(100%/(100%-- maximum sales charge) of
net asset value adjusted to nearest cent)
per share................................ $ 10.08 $ 10.73 $ 10.34 $ 10.02 $ 9.76
------------- --------------- ----------- ----------- -----------
------------- --------------- ----------- ----------- -----------
Class B--offering price per share (a)...... $ 9.76 $ 10.49 $ 9.83 $ 9.56 $ 9.40
------------- --------------- ----------- ----------- -----------
------------- --------------- ----------- ----------- -----------
</TABLE>
- ------------
<TABLE>
<C> <S>
(a) Redemption price per Class B share varies based on length of time shares are held.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----28
<PAGE> 796
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C> <C>
LIMITED INTERMEDIATE
GOVERNMENT VOLATILITY BOND BOND GOVERNMENT INCOME
ARM FUND FUND FUND BOND FUND BOND FUND
------------- --------------- ------------- ----------- -----------
INVESTMENT INCOME:
Interest income.............................. $ 3,423 $ 30,286 $ 16,008 $ 34,941 $ 37,285
Dividend income.............................. -- 62 25 --
Income from securities lending............... -- 120 91 178 91
------ ------- ------------- ----------- -----------
Total Income................................. 3,423 30,468 16,099 35,144 37,376
------ ------- ------------- ----------- -----------
EXPENSES:
Investment advisory fees..................... 283 2,781 1,359 2,253 3,053
Administration fees.......................... 86 774 378 835 850
12b-1 fees (Class A)......................... 8 53 34 63 29
12b-1 fees (Class B)......................... 3 34 25 60 36
Custodian and accounting fees................ 27 57 59 94 39
Legal and audit fees......................... 16 55 36 71 56
Organization costs........................... 5 3 -- 3 --
Trustees' fees and expenses.................. 2 8 5 11 8
Transfer agent fees.......................... 74 85 65 106 61
Registration and filing fees................. 35 32 54 79 21
Printing costs............................... 8 30 24 51 36
Other........................................ 12 8 3 8 6
------ ------- ------------- ----------- -----------
Total expenses before
waivers/reimbursements..................... 559 3,920 2,042 3,634 4,195
Less waivers/reimbursements.................. (316) (1,470) (760) (113) (1,148)
------ ------- ------------- ----------- -----------
Net Expenses............................. 243 2,450 1,282 3,521 3,047
------ ------- ------------- ----------- -----------
Net Investment Income........................ 3,180 28,018 14,817 31,623 34,329
------ ------- ------------- ----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS AND FUTURES:
Net realized gains (losses) from investment
and futures transactions................... (594) 1,885 1,421 (2,769) (1,361)
Net change in unrealized appreciation
(depreciation) from investments and
futures.................................... 150 (6,631) (5,722) (15,409) (11,155)
------ ------- ------------- ----------- -----------
Net realized/unrealized losses from
investments and futures.................... (444) (4,746) (4,301) (18,178) (12,516)
------ ------- ------------- ----------- -----------
Change in net assets resulting from
operations................................. $ 2,736 23,272 10,516 $ 13,445 $ 21,813
------ ------- ------------- ----------- -----------
------ ------- ------------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29----
<PAGE> 797
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT LIMITED INTERMEDIATE
ARM FUND VOLATILITY BOND FUND BOND FUND
---------------------- -------------------- ------------------------
<CAPTION>
YEAR YEAR YEAR
YEAR ENDED ENDED ENDED ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995 1996 1995
----------- --------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.................... $ 3,180 $ 4,538 $ 28,018 $ 24,649 $ 14,817 $ 9,509
Net realized gains (losses) from
investment and futures transactions.... (594) (2,023) 1,885 (7,605) 1,421 (4,330)
Net change in unrealized appreciation
(depreciation) from investments and
futures................................ 150 1,410 (6,631) 14,800 (5,722) 7,307
----------- --------- --------- --------- ----------- -----------
Change in net assets resulting from
operations................................ 2,736 3,925 23,272 31,844 10,516 12,486
----------- --------- --------- --------- ----------- -----------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income............... (2,924) (3,574) (26,964) (23,512) (14,065) (9,373)
In excess of net investment income....... -- (222) -- (107) -- --
Tax return of capital.................... (26) -- -- -- -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income............... (129) (554) (878) (732) (607) (136)
In excess of net investment income....... -- (12) -- (16) -- --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income............... (24) (5) (175) (121) (144) (1)
DISTRIBUTIONS TO SERVICE SHAREHOLDERS:
From net investment income............... -- -- -- (3) -- --
----------- --------- --------- --------- ----------- -----------
Change in net assets from shareholder
distributions............................. (3,103) (4,367) (28,017) (24,491) (14,816) (9,510)
----------- --------- --------- --------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued.............. 38,704 35,084 325,572 157,468 121,175 126,318
Proceeds from shares issued in connection
with acquisition....................... -- -- 123,673 -- -- 39,916
Dividends reinvested..................... 1,028 1,806 8,797 8,292 3,437 2,748
Cost of shares redeemed.................. (32,817) (139,268) (248,283) (211,545) (66,140) (74,018)
----------- --------- --------- --------- ----------- -----------
Change in net assets from share
transactions.............................. 6,915 (102,378) 209,759 (45,785) 58,472 94,964
----------- --------- --------- --------- ----------- -----------
Change in net assets......................... 6,548 (102,820) 205,014 (38,432) 54,172 97,940
NET ASSETS:
Beginning of period...................... 55,841 158,661 426,168 464,600 196,423 98,483
----------- --------- --------- --------- ----------- -----------
End of period............................ $ 62,389 $ 55,841 $ 631,182 $ 426,168 $ 250,595 $ 196,423
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
SHARE TRANSACTIONS:
Issued................................... 3,934 3,568 31,111 15,271 12,114 12,678
Issued in connection with acquisition.... -- -- 11,748 -- -- 4,204
Reinvested............................... 105 183 834 803 343 282
Redeemed................................. (3,338) (14,185) (23,593) (20,592) (6,607) (7,677)
----------- --------- --------- --------- ----------- -----------
Change in shares............................. 701 (10,434) 20,100 (4,518) 5,850 9,487
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
Undistributed (distributions in excess of)
net investment income included in net
assets:
End of period............................ $ (313) $ (236) $ (121) $ (122) $ 94 $ 116
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----30
<PAGE> 798
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C>
GOVERNMENT INCOME
BOND FUND BOND FUND
-------------------- --------------------
<CAPTION>
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................................. $ 31,623 $ 19,067 $ 34,329 $ 34,411
Net realized gains (losses) from investment and futures
transactions.................................................... (2,769) (7,094) (1,361) (53,134)
Net change in unrealized appreciation (depreciation) from
investments and futures......................................... (15,409) 16,133 (11,155) 68,445
--------- --------- --------- ---------
Change in net assets resulting from operations........................ 13,445 28,106 21,813 49,722
--------- --------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income........................................ (30,195) (18,433) (33,573) (33,925)
In excess of net investment income................................ -- (300) -- (61)
In excess of net realized gains from investment transactions...... -- -- -- (2,306)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income........................................ (1,103) (247) (545) (338)
In excess of net investment income................................ -- (4) -- (11)
In excess of net realized gains from investment transactions...... -- -- -- (24)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income........................................ (324) (76) (211) (73)
In excess of net realized gains from investment transactions...... -- -- -- (5)
DISTRIBUTIONS TO SERVICE SHAREHOLDERS:
From net investment income........................................ -- -- -- (11)
In excess of net realized gains from investment transactions...... -- -- -- (1)
--------- --------- --------- ---------
Change in net assets from shareholder distributions................... (31,622) (19,060) (34,329) (36,755)
--------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued....................................... 451,887 175,681 166,169 147,583
Proceeds from shares issued in connection with acquisition........ 301,865 96,760 -- --
Dividends reinvested.............................................. 8,081 7,435 13,106 17,360
Cost of shares redeemed........................................... (407,217) (110,491) (113,090) (261,301)
--------- --------- --------- ---------
Change in net assets from share transactions.......................... 354,616 169,385 66,185 (96,358)
--------- --------- --------- ---------
Change in net assets.................................................. 336,439 178,431 53,669 (83,391)
NET ASSETS:
Beginning of period............................................... 390,469 212,038 482,807 566,198
--------- --------- --------- ---------
End of period..................................................... $ 726,908 $ 390,469 $ 536,476 $ 482,807
--------- --------- --------- ---------
--------- --------- --------- ---------
SHARE TRANSACTIONS:
Issued............................................................ 45,897 17,640 17,425 16,030
Issued in connection with acquisition............................. 30,887 10,564 -- --
Reinvested........................................................ 821 789 1,371 1,893
Redeemed.......................................................... (41,383) (11,871) (11,865) (28,705)
--------- --------- --------- ---------
--------- --------- --------- ---------
Change in shares...................................................... 36,222 17,122 6,931 (10,782)
--------- --------- --------- ---------
--------- --------- --------- ---------
Undistributed (distributions in excess of) net investment income
included in net assets:
End of period..................................................... $ (325) $ (302) $ 396 $ (71)
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31----
<PAGE> 799
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1996
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-six active funds. The accompanying
financial statements and financial highlights are those of the Government
ARM Fund, the Limited Volatility Bond Fund, the Intermediate Bond Fund, the
Government Bond Fund and the Income Bond Fund (individually a "Fund",
collectively the "Funds") only. The Funds are each offered in Fiduciary
Class, Class A and Class B Shares. Class A Shares are subject to initial
sales charges, imposed at the time of purchase, in accordance with the
Funds' prospectuses. Certain redemptions of Class B Shares are subject to
contingent deferred sales charges in accordance with the Funds'
prospectuses. Each Fund is a diversified mutual fund.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with the Paragon Portfolio ("Paragon"), a Massachusetts business
trust. Pursuant to the Agreement all of the assets and liabilities of each
Paragon Fund transferred to a fund of The One Group in exchange for shares of
the corresponding fund of The One Group. Results of operations, changes in
net assets and financial highlights for periods prior to the Reorganization
March 25, 1996, are presented for funds of The One Group only.
The Government ARM Fund will be renamed the Ultra Short-Term Income Fund
effective September 1, 1996.
The Funds' investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
- -------------------------------- ----------------------------------------------------------------
<S> <C>
Government ARM Fund A high level of current income consistent with low volatility of
principal.
Limited Volatility Bond Fund Current income consistent with preservation of capital through
investment in high and medium-grade fixed-income securities.
Intermediate Bond Fund Current income consistent with the preservation of capital
through investment in high and medium-grade fixed-income
securities with intermediate maturities.
Government Bond Fund A high level of current income with liquidity and safety of
principal.
Income Bond Fund Current income by investing in a portfolio of high and
medium-grade fixed-income securities.
</TABLE>
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. 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.
SECURITY VALUATION
Corporate debt securities and debt securities of U.S. issuers (other than
short-term investments maturing in 60 days or less), including municipal
securities, are valued on the basis of valuations provided by dealers or by
an independent pricing service approved by the Board of Trustees.
Short-term investments maturing in 60
CONTINUED
- ----32
<PAGE> 800
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
days or less are valued at amortized cost, which approximates market value.
Futures contracts are valued at the settlement price established each day
by the board of trade or an exchange on which they are traded. Options
traded on an exchange are valued using the last sale price or, in the
absence of a sale, the last offering price. Options traded over-the-counter
are valued using dealer-supplied valuations. Investments for which there
are no such quotations or valuations are valued at fair value as determined
in good faith by the investment adviser under the direction of the Board of
Trustees.
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 agreement 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.
WRITTEN OPTIONS
The Funds may write covered call or put options for which premiums received
are recorded as liabilities and are subsequently adjusted to the current
value of the options written. Premiums received from writing options which
expire are treated as realized gains. Premiums received from writing
options, which are either exercised or closed, are offset against the
proceeds received or amount paid on the transaction to determine realized
gains or losses.
FUTURES CONTRACTS
The Funds may enter into futures contracts for the delayed delivery of
securities at a fixed price at some future date or for the change in the
value of a specified financial index over a predetermined time period. Cash
or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received by the fund based on the daily change
in the market value of the position are recorded as unrealized appreciation
or depreciation until the contract is closed out, at which time the
appreciation or depreciation is realized.
INDEXED SECURITIES
The Funds may invest in indexed securities whose value is linked either
directly or inversely to changes in foreign currencies, interest rates,
commodities, indices or other reference instruments. Indexed securities may
be more volatile than the referenced instrument itself, but any loss is
limited to the amount of the original investment.
MORTGAGE ROLLS
The Funds may enter into mortgage "dollar rolls" in which the Fund sells
mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar securities on
a specified future date. During the roll period, the Fund forgoes principal
and interest paid on the mortgage-backed securities. The Fund is
compensated by fee income, for the difference between the current sales
price and the lower forward price for the future purchase.
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
CONTINUED
33----
<PAGE> 801
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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
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 creditworthy 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
June 30, 1996, the following Funds had securities with the following market
values on loan:
<TABLE>
<CAPTION>
MARKET VALUE
OF LOANED
SECURITIES
--------------
<S> <C>
Limited Volatility Bond Fund....................................................... $ 97,087,522
Intermediate Bond Fund............................................................. 65,589,541
Government Bond Fund............................................................... 115,339,591
Income Bond Fund................................................................... 40,252,844
</TABLE>
The loaned securities were fully collateralized by cash and U.S. Government
securities as of June 30, 1996.
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. Dividends are recorded on the ex-dividend date. Interest
income, including any discount or premium, is accrued as earned using the
effective interest method.
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. Each class of shares bears
its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class,
such as distribution fees.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid monthly for the
Funds. Net realized capital gains, if any, are distributed at least
annually. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
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 mortgage-backed securities, 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
CONTINUED
- ----34
<PAGE> 802
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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
The Trust treats each Fund as a separate entity for Federal income tax
purposes. 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.
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 thirty-two series and four classes:
Fiduciary, Class A, Class B and Service. During the year ended June 30,
1995, Service Shares transferred to Class A Shares. As of June 30, 1996
there were no shareholders in the Service Class. 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. The
following is a summary of transactions in Fund shares for the years ended
June 30, 1996 and June 30, 1995:
CONTINUED
35----
<PAGE> 803
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT ARM FUND LIMITED VOLATILITY
BOND FUND INTERMEDIATE BOND FUND
---------------------- --------------------
YEAR YEAR YEAR ------------------------
YEAR ENDED ENDED ENDED ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995 1996 1995
----------- --------- --------- --------- ----------- -----------
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued..................... $ 35,008 $ 34,868 $ 196,323 $ 152,849 $ 102,645 $ 125,119
Proceeds from shares issued in connection with
acquisition................................... -- -- 115,134 -- -- 35,113
Dividends reinvested............................ 923 1,732 8,093 7,661 2,976 2,663
Cost of shares redeemed......................... (29,367) (124,793) (129,046) (204,209) (62,091) (73,001)
----------- --------- --------- --------- ----------- -----------
Change in net assets from Fiduciary Share
transactions.................................. $ 6,564 $ (88,193) $ 190,504 $ (43,699) $ 43,530 $ 89,894
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
CLASS A SHARES:
Proceeds from shares issued..................... $ 2,666 $ 70 $ 126,619 $ 3,343 $ 12,374 $ 934
Proceeds from shares issued in connection with
acquisition................................... -- -- 8,153 -- -- 4,803
Dividends reinvested............................ 89 70 569 518 381 84
Cost of shares redeemed......................... (3,395) (14,471) (118,533) (6,811) (3,716) (1,016)
----------- --------- --------- --------- ----------- -----------
Change in net assets from Class A Share
transactions.................................. $ (640) $ (14,331) $ 16,808 $ (2,950) $ 9,039 $ 4,805
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
CLASS B SHARES:
Proceeds from shares issued..................... $ 1,030 $ 146 $ 2,630 $ 1,164 $ 6,156 $ 265
Proceeds from shares issued in connection with
acquisition................................... -- -- 386 -- -- --
Dividends reinvested............................ 16 4 135 110 80 1
Cost of shares redeemed......................... (55) (4) (704) (391) (333) (1)
----------- --------- --------- --------- ----------- -----------
Change in net assets from Class B Share
transactions.................................. $ 991 $ 146 $ 2,447 $ 883 $ 5,903 $ 265
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
SERVICE SHARES:
Proceeds from shares issued..................... $ 112
Dividends reinvested............................ 3
Cost of shares redeemed......................... (134)
---------
Change in net assets from Service Share
transactions.................................. $ (19)
---------
---------
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued.......................................... 3,560 3,545 19,600 14,826 10,266 12,567
Issued in connection with acquisition........... -- -- 10,936 -- -- 3,700
Reinvested...................................... 94 176 768 742 296 274
Redeemed........................................ (2,989) (12,706) (12,260) (19,884) (6,200) (7,573)
----------- --------- --------- --------- ----------- -----------
Change in Fiduciary Shares...................... 665 (8,985) 19,044 (4,316) 4,362 8,968
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
CLASS A SHARES:
Issued.......................................... 269 8 11,297 323 1,231 84
Issued in connection with acquisition........... -- -- 775 -- -- 504
Reinvested...................................... 10 7 54 50 39 8
Redeemed........................................ (344) (1,479) (11,265) (658) (373) (104)
----------- --------- --------- --------- ----------- -----------
Change in Class A Shares........................ (65) (1,464) 861 (285) 897 492
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
CLASS B SHARES:
Issued.......................................... 105 15 215 111 617 27
Issued in connection with acquisition........... -- -- 36 -- -- --
Reinvested...................................... 1 -- 12 11 8 --
Redeemed........................................ (5) -- (68) (38) (34) --
----------- --------- --------- --------- ----------- -----------
Change in Class B Shares........................ 101 15 195 84 591 27
----------- --------- --------- --------- ----------- -----------
----------- --------- --------- --------- ----------- -----------
SERVICE SHARES:
Issued.......................................... 11
Reinvested...................................... --
Redeemed........................................ (12)
---------
Change in Service Shares........................ (1)
---------
---------
</TABLE>
CONTINUED
- ----36
<PAGE> 804
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C>
GOVERNMENT BOND FUND
INCOME BOND FUND
-------------------- --------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
--------- --------- --------- ---------
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued......................................... $ 135,419 $ 170,196 $ 154,901 $ 142,061
Proceeds from shares issued in connection with acquisition.......... 273,384 92,808 -- --
Dividends reinvested................................................ 7,234 7,203 12,601 17,045
Cost of shares redeemed............................................. (128,141) (108,841) (109,230) (257,754)
--------- --------- --------- ---------
Change in net assets from Fiduciary Share transactions.............. $ 287,896 $ 161,366 $ 58,272 $ (98,648)
--------- --------- --------- ---------
--------- --------- --------- ---------
CLASS A SHARES:
Proceeds from shares issued......................................... $ 307,157 $ 3,603 $ 6,470 $ 3,989
Proceeds from shares issued in connection with acquisition.......... 26,507 3,952 -- --
Dividends reinvested................................................ 647 178 391 260
Cost of shares redeemed............................................. (278,122) (1,509) (3,302) (2,993)
--------- --------- --------- ---------
Change in net assets from Class A Share transactions................ $ 56,189 $ 6,224 $ 3,559 $ 1,256
--------- --------- --------- ---------
--------- --------- --------- ---------
CLASS B SHARES:
Proceeds from shares issued......................................... $ 9,312 $ 1,870 $ 4,798 $ 1,213
Proceeds from shares issued in connection with acquisition.......... 1,973 -- --
Dividends reinvested................................................ 200 54 114 43
Cost of shares redeemed............................................. (954) (129) (558) (151)
--------- --------- --------- ---------
Change in net assets from Class B Share transactions................ $ 10,531 $ 1,795 $ 4,354 $ 1,105
--------- --------- --------- ---------
--------- --------- --------- ---------
SERVICE SHARES:
Proceeds from shares issued......................................... $ 12 $ 320
Dividends reinvested................................................ -- 12
Cost of shares redeemed............................................. (12) (403)
--------- ---------
Change in net assets from Service Share transactions................ $ 0 $ (71)
--------- ---------
--------- ---------
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued.............................................................. 16,246 17,086 16,245 15,438
Issued in connection with acquisition............................... 27,974 10,133 -- --
Reinvested.......................................................... 735 764 1,318 1,859
Redeemed............................................................ (12,833) (11,695) (11,460) (28,323)
--------- --------- --------- ---------
Change in Fiduciary Shares.......................................... 32,122 16,288 6,103 (11,026)
--------- --------- --------- ---------
--------- --------- --------- ---------
CLASS A SHARES:
Issued.............................................................. 28,902 359 680 427
Issued in connection with acquisition............................... 2,711 431 -- --
Reinvested.......................................................... 66 19 41 28
Redeemed............................................................ (28,451) (161) (347) (323)
--------- --------- --------- ---------
Change in Class A Shares............................................ 3,228 648 374 132
--------- --------- --------- ---------
--------- --------- --------- ---------
CLASS B SHARES:
Issued.............................................................. 749 194 500 130
Issued in connection with acquisition............................... 202 -- -- --
Reinvested.......................................................... 20 6 12 5
Redeemed............................................................ (99) (14) (58) (17)
--------- --------- --------- ---------
Change in Class B Shares............................................ 872 186 454 118
--------- --------- --------- ---------
--------- --------- --------- ---------
SERVICE SHARES:
Issued.............................................................. 1 35
Reinvested.......................................................... -- 1
Redeemed............................................................ (1) (42)
--------- ---------
Change in Service Shares............................................ 0 (6)
--------- ---------
--------- ---------
</TABLE>
CONTINUED
37----
<PAGE> 805
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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
the following percentages of the Funds' average net assets: 0.60% of the
Income Bond Fund, the Intermediate Bond Fund and the Limited Volatility Bond
Fund; 0.55% of the Government ARM Fund; and 0.45% of the Government Bond
Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services for
a fee that is computed daily and payable monthly, at an annual rate of 0.20%
on the first $1.5 billion of Trust net assets (excluding the Treasury Only
Money Market Fund and the Government Money Market Fund--the "Institutional
Money Market Funds"); 0.18% on the next $0.5 billion of Trust net assets
(excluding the Institutional Money Market Funds); and 0.16% of Trust net
assets (excluding the Institutional Money Market Funds) over $2 billion. 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 Advisor 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. Prior to March 26, 1996, Goldman Sachs Asset
Management served as administrator of Paragon. The terms of the current
administration agreement are substantially the same as the former
administration agreement.
The Trust and The One Group Services Company (the "Distributor") are parties
to a distribution agreement under which shares of the Funds are sold on a
continuous basis. Class A and Class B Shares are subject to a distribution
and shareholder services plan (the "Plans") pursuant to Rule 12b-1 under the
1940 Act. As provided in the Plans, the Trust will pay the Distributor a fee
of 0.35% of the average daily net assets of Class A Shares of each of the
Funds and 1.00% of the average daily net assets of the Class B Shares of each
of the Funds. Currently, the Distributor has voluntarily agreed to limit
payments under the Plans to 0.25% of average daily net assets of the Class A
Shares of each Fund, 0.75% of average daily net assets of the Class B Shares
of Government ARM Fund and Limited Volatility Bond Fund and 0.90% of average
daily net assets of Intermediate Bond Fund, Government Bond Fund and Income
Bond Fund. Up to 0.25% of the fees payable under the Plans may be used as
compensation for shareholder services by the Distributor and/or financial
institutions and intermediaries. Fees paid under the Plans may be applied by
the Distributor toward (i) compensation for its services in connection with
distribution assistance or provision of shareholder services; or (ii)
payments to financial institutions and intermediaries such as banks,
(including affiliates of the Adviser), brokers, dealers and other
institutions, including the Distributor's affiliates and subsidiaries as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of shareholder services. Fiduciary
Class Shares of each Fund are offered without distribution fees. For the year
ended June 30, 1996 the Distributor received $1,156,417 from commissions
earned on sales of Class A Shares and redemptions of Class B Shares, of which
the Distributor re-allowed $1,093,677 to affiliated broker-dealers of the
Fund.
Prior to January 2, 1996, Premier Investment Advisors, L.L.C. ("Premier")
served as investment adviser and Goldman Sachs & Company served as
distributor to Paragon. Pursuant to the approval of the Board of Trustees of
Paragon on October 31, 1995 and its shareholders on December 20, 1995,
Paragon entered into an investment advisory agreement with the Adviser and a
distribution agreement with the Distributor effective January 2, 1996. The
terms of the investment advisory agreements with Premier and with the Adviser
and the distribution agreements with Goldman Sachs & Company and the
Distributor were substantially the same.
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
CONTINUED
- ----38
<PAGE> 806
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
The Adviser, the Administrator and the Distributor voluntarily agreed to
waive a portion of their fees and to reimburse the Funds for certain
expenses. For the year ended June 30, 1996, fees in the following amounts
were waived or reimbursed to the Funds (amounts in thousands):
<TABLE>
<CAPTION>
12B-1 FEES WAIVED/
INVESTMENT
ADVISORY FEES REIMBURSED
WAIVED/ ADMINISTRATION FEES --------------------------
REIMBURSED WAIVED/ REIMBURSED CLASS A CLASS B
--------------- ------------------- ----------- -------------
<S> <C> <C> <C> <C>
Government ARM Fund............................................. $ 227 $ 86 $ 2 $ 1
Limited Volatility Bond Fund.................................... 1,450 -- 15 5
Intermediate Bond Fund.......................................... 747 -- 10 3
Government Bond Fund............................................ 70 19 18 6
Income Bond Fund................................................ 1,136 -- 8 4
</TABLE>
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities and purchased options) during the year
ended June 30, 1996 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES OTHER SECURITIES
----------------------- -----------------------
PURCHASES SALES PURCHASES SALES
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Government ARM Fund................................................. $ 36,776 $ 31,220 $ -- $ --
Limited Volatility Bond Fund........................................ 343,836 288,077 59,167 47,975
Intermediate Bond Fund.............................................. 163,753 113,801 53,344 151,182
Government Bond Fund................................................ 416,248 309,638 -- 1,070
Income Bond Fund.................................................... 319,475 286,740 210,826 178,968
</TABLE>
6. FINANCIAL INSTRUMENTS:
Investing in financial instruments such as written options, futures,
structured notes and indexed securities involves risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the Funds have in the
particular class of instrument. Risks associated with these instruments
include an imperfect correlation between the movements in the price of the
instruments and the price of the underlying securities and interest rates,
an illiquid secondary market for the instruments or inability of
counterparties to perform under the terms of the contract. The Funds enter
into these contracts primarily as a means to hedge against adverse
fluctuation in securities.
CONTINUED
39----
<PAGE> 807
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
7. FEDERAL TAX INFORMATION (UNAUDITED):
At June 30, 1996 the following Funds have capital loss carryforwards which
are available to offset future capital gains, if any:
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYFORWARD (000) EXPIRES
------------------ -----------
<S> <C> <C>
Government ARM Fund.................................................................... $ 1,065 2004
Government ARM Fund.................................................................... 2,283 2003
Limited Volatility Bond Fund........................................................... 3,301 2004
Limited Volatility Bond Fund........................................................... 2,720 2003
Limited Volatility Bond Fund........................................................... 443 2002
Limited Volatility Bond Fund........................................................... 165 2001
Limited Volatility Bond Fund........................................................... 197 2000
Intermediate Bond Fund................................................................. 1,980 2004
Intermediate Bond Fund................................................................. 1,321 2003
Intermediate Bond Fund................................................................. 845 2002
Intermediate Bond Fund................................................................. 222 2001
Government Bond Fund................................................................... 10,809 2003
Government Bond Fund................................................................... 2,565 2002
Income Bond Fund....................................................................... 1,942 2004
Income Bond Fund....................................................................... 52,042 2003
</TABLE>
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal
year. The following deferred losses will be treated as arising on the first
day of the fiscal year ended June 30, 1997:
<TABLE>
<CAPTION>
POST-OCTOBER
CAPITAL LOSSES
(000)
---------------
<S> <C> <C>
Government ARM Fund........................................................................ $ 468
Government Bond Fund....................................................................... 7,357
Income Bond Fund........................................................................... 1,183
</TABLE>
8. REORGANIZATIONS:
The Trust entered an Agreement and Plan of Reorganization ("Reorganization")
with Paragon pursuant to which all of the assets and liabilities of each
Paragon Fund transferred to a fund of The One Group in exchange for shares
of the corresponding fund of The One Group. The Paragon Short-Term
Government Fund and the Paragon Intermediate-Term Bond Fund transferred
their assets and liabilities to the Limited Volatility Bond Fund and the
Government Bond Fund, respectively. The Reorganization, which qualified as a
tax-free exchange for federal income tax purposes, was completed at the
close of business March 25, 1996 following approval by
CONTINUED
- ----40
<PAGE> 808
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
shareholders of Paragon at a special shareholder meeting. The following is a
summary of shares outstanding, net assets, net asset value per share and
unrealized appreciation immediately before and after the Reorganization
(amounts in thousands except net asset value):
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER
--------------------------- REORGANIZATION
PARAGON ---------------
SHORT-TERM LIMITED LIMITED
GOVERNMENT VOLATILITY VOLATILITY BOND
FUND BOND FUND FUND
------------- ------------ ---------------
<S> <C> <C> <C>
Shares................................................................. 12,208 39,898 51,646
Net Assets............................................................. $ 123,673 $ 420,044 $ 543,717
Net Asset Value:
Fiduciary............................................................ $ 10.53 $ 10.53
Class A.............................................................. $ 10.13 10.52 10.52
Class B.............................................................. 10.13 10.59 10.59
Unrealized Appreciation (Depreciation)................................. $ (785) $ 4,397 $ 3,612
<CAPTION>
BEFORE REORGANIZATION
--------------------------- AFTER
PARAGON REORGANIZATION
INTERMEDIATE- ---------------
TERM BOND GOVERNMENT GOVERNMENT BOND
FUND BOND FUND FUND
------------- ------------ ---------------
<S> <C> <C> <C>
Shares................................................................. 29,536 44,653 75,540
Net Assets............................................................. $ 301,865 $ 436,393 $ 738,258
Net Asset Value:
Fiduciary............................................................ $ 9.77 $ 9.77
Class A.............................................................. $ 10.22 9.78 9.78
Class B.............................................................. 10.25 9.77 9.77
Unrealized Appreciation................................................ $ 2,883 $ 5,934 $ 8,817
</TABLE>
Additionally, the Limited Volatility Bond Fund and the Government Bond Fund
had capital loss carryforwards from Paragon of approximately $1,106,000 and
$3,757,000, respectively.
On October 7, 1994, the Board of Trustees approved an agreement and plan of
reorganization for the acquisition of the Trademark Funds by the Trust. Under
the agreement and plan of reorganization, all assets and liabilities of the
Trademark Government Income Fund and the Trademark Short-Intermediate
Government Fund (the "Acquired Funds") were acquired by the Government Bond
Fund and the Intermediate Bond Fund, respectively (the "Acquiring Funds"), in
exchange for shares of each Acquiring Fund. The reorganization, which
qualified as a tax-free exchange for federal income tax purposes, was
completed following approval by the
CONTINUED
41----
<PAGE> 809
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
shareholders of the Acquired Funds. The following is a summary of shares
outstanding, net assets, unrealized depreciation and net asset value per
share immediately before and after the reorganization (amounts in thousands
except net asset value):
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
------------------------------------------- ---------------
TRADEMARK SHORT-INTERMEDIATE INTERMEDIATE INTERMEDIATE
GOVERNMENT FUND BOND FUND BOND FUND
----------------------------- ------------ ---------------
<S> <C> <C> <C>
Shares: *4,378 14,387 18,592
Net Assets: *$ 39,916 $ 136,529 $ 176,445
Net Asset Value:
Fiduciary............................................ *$ 9.12 $ 9.49 $ 9.49
Class A.............................................. $ 9.52 $ 9.52
Unrealized Depreciation................................ $ (3,636) $ (5,186) $ (8,822)
<CAPTION>
TRADEMARK GOVERNMENT GOVERNMENT GOVERNMENT BOND
INCOME FUND BOND FUND FUND
----------------------------- ------------ ---------------
<S> <C> <C> <C>
Shares: *10,770 25,385 35,949
Net Assets: *$ 96,760 $ 232,446 $ 329,206
Net Asset Value:
Fiduciary............................................ *$ 8.98 $ 9.16 $ 9.16
Class A.............................................. $ 9.16 $ 9.16
Unrealized Depreciation................................ $ (10,216) $ (7,028) $ (17,244)
</TABLE>
- ------------
<TABLE>
<C> <S>
* Before the reorganization, the Acquired Funds offered only one class of shares.
</TABLE>
Additionally, the Government Bond Fund and the Intermediate Bond Fund had
capital loss carryforwards from the Acquired Funds of approximately
$1,040,000 and $971,000, respectively.
CONTINUED
- ----42
<PAGE> 810
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT ARM FUND
-----------------------------------------------------------
FIDUCIARY
-----------------------------------------------------------
YEARS ENDED JUNE 30,
-----------------------------------------------------------
1996 1995 1994 1993 (A)
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................. $ 9.84 $ 9.85 $ 10.03 $ 10.00
------------ ------------ ------------- -------------
Investment Activities
Net investment income........................... 0.62 0.55 0.36 0.17
Net realized and unrealized gains (losses) from
investments................................... (0.07) (0.05) (0.15) 0.03
------------ ------------ ------------- -------------
Total from Investment Activities.............. 0.55 0.50 0.21 0.20
------------ ------------ ------------- -------------
Distributions
Net investment income........................... (0.60) (0.48) (0.37) (0.17)
In excess of net investment income.............. -- (0.03) (0.02) --
------------ ------------ ------------- -------------
Total Distributions........................... (0.60) (0.51) (0.39) (0.17)
------------ ------------ ------------- -------------
NET ASSET VALUE,
END OF PERIOD................................... $ 9.79 $ 9.84 $ 9.85 $ 10.03
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Total Return (Excludes Sales Charge).............. 5.71% 5.14% 2.16% 4.93%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............... $ 57,276 $ 51,050 $ 139,593 $ 154,413
Ratio of expenses to average net assets......... 0.45% 0.61% 0.65% 0.58%(b)
Ratio of net investment income to average net
assets........................................ 6.20% 5.18% 3.70% 4.71%(b)
Ratio of expenses to average net assets*........ 1.06% 1.01% 0.81% 1.03%(b)
Ratio of net investment income to average net
assets*....................................... 5.59% 4.78% 3.54% 4.26%(b)
Portfolio Turnover (c).......................... 67.65% 2.91% 242.20% 109.96%
</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) The Fund commenced operations on February 2, 1993.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
43----
<PAGE> 811
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT ARM FUND
-----------------------------------------------------
CLASS A
-----------------------------------------------------
YEARS ENDED JUNE 30,
-----------------------------------------------------
1996 1995 1994 1993 (A)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 9.83 $ 9.84 $ 10.03 $ 10.00
----------- ----------- ----------- -----------
Investment Activities
Net investment income............................................... 0.58 0.52 0.36 0.14
Net realized and unrealized gains (losses) from investments......... (0.06) (0.06) (0.17) 0.03
----------- ----------- ----------- -----------
Total from Investment Activities.................................. 0.52 0.46 0.19 0.17
----------- ----------- ----------- -----------
Distributions
Net investment income............................................... (0.57) (0.46) (0.34) (0.14)
In excess of net investment income.................................. -- (0.01) (0.04) --
----------- ----------- ----------- -----------
Total Distributions............................................... (0.57) (0.47) (0.38) (0.14)
----------- ----------- ----------- -----------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 9.78 $ 9.83 $ 9.84 $ 10.03
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Total Return (Excludes Sales Charge).................................. 5.42% 4.84% 1.95% 4.78%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 3,969 $ 4,631 $ 19,053 $ 3,106
Ratio of expenses to average net assets............................. 0.70% 0.86% 0.89% 0.81%(b)
Ratio of net investment income to average net assets................ 5.95% 4.88% 3.54% 4.47%(b)
Ratio of expenses to average net assets*............................ 1.41% 1.36% 1.14% 1.34%(b)
Ratio of net investment income to average net assets*............... 5.24% 4.38% 3.29% 3.95%(b)
Portfolio Turnover (c).............................................. 67.65% 2.91% 242.20% 109.96%
</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) Class A Shares commenced offering on March 10, 1993.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----44
<PAGE> 812
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT ARM FUND
----------------------------------------
CLASS B
----------------------------------------
YEARS ENDED JUNE 30,
----------------------------------------
1996 1995 1994 (A)
----------- ----------- ------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 9.84 $ 9.86 $ 9.98
Investment Activities
Net investment income............................................... 0.52 0.47 0.12
Net realized and unrealized gains (losses) from investments......... (0.07) (0.04) (0.11)
----------- ----------- ------------
Total from Investment Activities.................................. 0.45 0.43 0.01
----------- ----------- ------------
Distributions
Net investment income............................................... (0.53) (0.45) (0.12)
In excess of net investment income.................................. -- -- (0.01)
----------- ----------- ------------
Total Distributions............................................... (0.53) (0.45) (0.13)
----------- ----------- ------------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 9.76 $ 9.84 $ 9.86
----------- ----------- ------------
----------- ----------- ------------
Total Return (Excludes Sales Charge).................................. 4.63% 4.77% (0.09)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 1,144 $ 160 $ 15
Ratio of expenses to average net assets............................. 1.20% 1.31% 1.41%(b)
Ratio of net investment income to average net assets................ 5.45% 4.91% 3.49%(b)
Ratio of expenses to average net assets*............................ 2.06% 1.96% 1.83%(b)
Ratio of net investment income to average net assets*............... 4.59% 4.26% 3.07%(b)
Portfolio Turnover (d).............................................. 67.65% 2.91% 242.20%
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
45----
<PAGE> 813
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LIMITED VOLATILITY BOND FUND
---------------------------------------------
FIDUCIARY
---------------------------------------------
YEARS ENDED JUNE 30,
---------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 10.53 $ 10.33 $ 10.87
------------- ------------- -------------
Investment Activities
Net investment income............................................... 0.64 0.60 0.54
Net realized and unrealized gains (losses) from investments......... (0.11) 0.19 (0.45)
------------- ------------- -------------
Total from Investment Activities.................................. 0.53 0.79 0.09
------------- ------------- -------------
Distributions
Net investment income............................................... (0.64) (0.59) (0.55)
In excess of net investment income.................................. -- -- (0.02)
Net realized gains.................................................. -- -- (0.06)
------------- ------------- -------------
Total Distributions............................................... (0.64) (0.59) (0.63)
------------- ------------- -------------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 10.42 $ 10.53 $ 10.33
------------- ------------- -------------
------------- ------------- -------------
Total Return (Excludes Sales Charge).................................. 5.13% 7.96% 0.79%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 604,916 $ 410,746 $ 447,394
Ratio of expenses to average net assets............................. 0.51% 0.52% 0.50%
Ratio of net investment income to average net assets................ 6.06% 5.82% 5.10%
Ratio of expenses to average net assets*............................ 0.82% 0.85% 0.85%
Ratio of net investment income to average net assets*............... 5.75% 5.49% 4.75%
Portfolio Turnover (a).............................................. 75.20% 76.43% 30.61%
<CAPTION>
1993 1992
------------- -------------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 10.72 $ 10.26
------------- -------------
Investment Activities
Net investment income............................................... 0.61 0.70
Net realized and unrealized gains (losses) from investments......... 0.25 0.47
------------- -------------
Total from Investment Activities.................................. 0.86 1.17
------------- -------------
Distributions
Net investment income............................................... (0.62) (0.70)
In excess of net investment income.................................. -- --
Net realized gains.................................................. (0.09) (0.01)
------------- -------------
Total Distributions............................................... (0.71) (0.71)
------------- -------------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 10.87 $ 10.72
------------- -------------
------------- -------------
Total Return (Excludes Sales Charge).................................. 8.27% 11.75%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 397,820 $ 301,907
Ratio of expenses to average net assets............................. 0.56% 0.52%
Ratio of net investment income to average net assets................ 5.70% 6.63%
Ratio of expenses to average net assets*............................ 0.90% 1.04%
Ratio of net investment income to average net assets*............... 5.36% 6.11%
Portfolio Turnover (a).............................................. 40.28% 43.87%
</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) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----46
<PAGE> 814
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LIMITED VOLATILITY BOND FUND
---------------------------------------------------------
CLASS A
---------------------------------------------------------
YEARS ENDED JUNE 30,
---------------------------------------------------------
1996 1995 1994 1993
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 10.52 $ 10.32 $ 10.87 $ 10.72
------------ ------------ ------------ ------------
Investment Activities
Net investment income............................................... 0.63 0.56 0.52 0.59
Net realized and unrealized gains (losses) from investments......... (0.13) 0.21 (0.46) 0.24
------------ ------------ ------------ ------------
Total from Investment Activities.................................. 0.50 0.77 0.06 0.83
------------ ------------ ------------ ------------
Distributions
Net investment income............................................... (0.61) (0.56) (0.51) (0.59)
In excess of net investment income.................................. -- (0.01) (0.04) --
Net realized gains.................................................. -- -- (0.06) (0.09)
------------ ------------ ------------ ------------
Total Distributions............................................... (0.61) (0.57) (0.61) (0.68)
------------ ------------ ------------ ------------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 10.41 $ 10.52 $ 10.32 $ 10.87
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return (Excludes Sales Charge).................................. 4.86% 7.67% 0.49% 8.04%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 21,343 $ 12,516 $ 15,216 $ 15,719
Ratio of expenses to average net assets............................. 0.76% 0.77% 0.75% 0.76%
Ratio of net investment income to average net assets................ 5.81% 5.57% 4.92% 5.35%
Ratio of expenses to average net assets*............................ 1.17% 1.20% 1.20% 1.27%
Ratio of net investment income to average net assets*............... 5.40% 5.14% 4.47% 4.84%
Portfolio Turnover (c).............................................. 75.20% 76.43% 30.61% 40.28%
<CAPTION>
1992 (A)
-----------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 10.61
-----------
Investment Activities
Net investment income............................................... 0.24
Net realized and unrealized gains (losses) from investments......... 0.13
-----------
Total from Investment Activities.................................. 0.37
-----------
Distributions
Net investment income............................................... (0.26)
In excess of net investment income.................................. --
Net realized gains.................................................. --
-----------
Total Distributions............................................... (0.26)
-----------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 10.72
-----------
-----------
Total Return (Excludes Sales Charge).................................. 9.84%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 161
Ratio of expenses to average net assets............................. 0.99%(b)
Ratio of net investment income to average net assets................ 5.95%(b)
Ratio of expenses to average net assets*............................ 1.29%(b)
Ratio of net investment income to average net assets*............... 5.65%(b)
Portfolio Turnover (c).............................................. 43.87%
</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) Class A Shares commenced offering on February 18, 1992.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
47----
<PAGE> 815
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LIMITED VOLATILITY
BOND FUND
---------------------------------------
CLASS B
---------------------------------------
YEARS ENDED JUNE 30,
---------------------------------------
1996 1995 1994 (A)
----------- ----------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 10.60 $ 10.40 $ 10.78
----------- ----------- -----------
Investment Activities
Net investment income............................................... 0.55 0.53 0.17
Net realized and unrealized gains (losses) from investments......... (0.10) 0.19 (0.37)
----------- ----------- -----------
Total from Investment Activities.................................. 0.45 0.72 (0.20)
----------- ----------- -----------
Distributions
Net investment income............................................... (0.56) (0.52) (0.15)
In excess of net realized gains..................................... -- -- (0.03)
----------- ----------- -----------
Total Distributions............................................... (0.56) (0.52) (0.18)
----------- ----------- -----------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 10.49 $ 10.60 $ 10.40
----------- ----------- -----------
----------- ----------- -----------
Total Return (Excludes Sales Charge).................................. 4.28% 7.18% (1.81)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ 4,923 $ 2,906 $ 1,974
Ratio of expenses to average net assets............................. 1.26% 1.28% 1.26%(b)
Ratio of net investment income to average net assets................ 5.31% 5.10% 4.39%(b)
Ratio of expenses to average net assets*............................ 1.82% 1.86% 1.86%(b)
Ratio of net investment income to average net assets*............... 4.75% 4.52% 3.79%(b)
Portfolio Turnover (d).............................................. 75.20% 76.43% 30.61%
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----48
<PAGE> 816
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LIMITED VOLATILITY
BOND FUND
-------------------------
SERVICE/RETIREMENT (A)
-------------------------
YEARS ENDED JUNE 30,
-------------------------
1995 1994
----------- -----------
NET ASSET VALUE,
BEGINNING OF PERIOD................................................. $ 10.38 $ 10.78
<S> <C> <C>
----------- -----------
Investment Activities
Net investment income............................................... 0.51 0.10
Net realized and unrealized gains (losses) from investments......... 0.19 (0.38)
----------- -----------
Total from Investment Activities.................................. 0.70 (0.28)
----------- -----------
Distributions
Net investment income............................................... (0.49) (0.08)
In excess of net investment income.................................. (0.04)
----------- -----------
Total Distributions............................................... (0.49) (0.12)
----------- -----------
NET ASSET VALUE,
END OF PERIOD....................................................... $ 10.59 $ 10.38
----------- -----------
----------- -----------
Total Return (Excludes Sales Charge).................................. )(a (2.59)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................... $ $ 16
Ratio of expenses to average net assets............................. 1.32%(b) 1.26%(b)
Ratio of net investment income to average net assets................ 5.55%(b) 4.37%(b)
Ratio of expenses to average net assets*............................ 1.68%(b) 1.60%(b)
Ratio of net investment income to average net assets*............... 5.20%(b) 4.03%(b)
Portfolio Turnover (d).............................................. 76.43% 30.61%
</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) The Service Shares commenced offering on January 17, 1994 when they were designated as "Retirement
Shares". On April 4, 1995, the name of the Retirement Shares was changed to "Service" Shares. As of June
1, 1995, Service Shares transferred to Class A Shares, and as of June 30, 1996 and 1995, there were no
shareholders in the Service Class. The return for the period from July 1, 1994 to June 1, 1995 for the
Service Shares was 6.90%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
49----
<PAGE> 817
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE BOND
-----------------------------------------------------
FIDUCIARY
-----------------------------------------------------
YEARS ENDED JUNE 30,
-----------------------------------------------------
1996 1995 1994 1993 1992 (A)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................. $ 10.01 $ 9.72 $ 10.51 $ 10.09 $ 10.00
--------- --------- --------- --------- ---------
Investment Activities
Net investment income........................................... 0.66 0.66 0.60 0.63 0.22
Net realized and unrealized gains (losses) from investments..... (0.17) 0.29 (0.67) 0.42 0.08
--------- --------- --------- --------- ---------
Total from Investment Activities.............................. 0.49 0.95 (0.07) 1.05 0.30
--------- --------- --------- --------- ---------
Distributions
Net investment income........................................... (0.66) (0.66) (0.60) (0.63) (0.21)
In excess of net investment income.............................. -- -- (0.02) -- --
Net realized gains.............................................. -- -- (0.10) -- --
--------- --------- --------- --------- ---------
Total Distributions........................................... (0.66) (0.66) (0.72) (0.63) (0.21)
--------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD................................................... $ 9.84 $ 10.01 $ 9.72 $ 10.51 $ 10.09
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return (Excludes Sales Charge).............................. 4.95% 10.15% (0.74)% 10.67% 3.00%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................... $ 230,812 $ 191,216 $ 98,483 $ 44,252 $ 23,457
Ratio of expenses to average net assets......................... 0.54% 0.56% 0.32% 0.39% 0.36%(b)
Ratio of net investment income to average net assets............ 6.56% 6.88% 6.04% 6.14% 6.99%(b)
Ratio of expenses to average net assets*........................ 0.87% 0.99% 0.87% 1.17% 1.33%(b)
Ratio of net investment income to average net assets*........... 6.23% 6.45% 5.49% 5.36% 6.02%(b)
Portfolio Turnover (d).......................................... 101.06% 99.71% 85.62% 21.51% 11.74%
</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) The Fund commenced operations February 28, 1992
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----50
<PAGE> 818
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE BOND
--------------------
CLASS A
--------------------
YEARS ENDED JUNE 30,
--------------------
1996 1995 (A)
--------- ---------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................................ $ 10.04 $ 9.45
--------- ---------
Investment Activities
Net investment income.............................................................................. 0.64 0.37
Net realized and unrealized gains (losses) from investments........................................ (0.17) 0.59
--------- ---------
Total from Investment Activities................................................................. 0.47 0.96
--------- ---------
Distributions
Net investment income.............................................................................. (0.64) (0.37)
--------- ---------
Total Distributions.............................................................................. (0.64) (0.37)
--------- ---------
NET ASSET VALUE,
END OF PERIOD...................................................................................... $ 9.87 $ 10.04
--------- ---------
--------- ---------
Total Return (Excludes Sales Charge)................................................................. 4.77% 10.29%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................................................. $ 13,706 $ 4,941
Ratio of expenses to average net assets............................................................ 0.79% 0.83%(b)
Ratio of net investment income to average net assets............................................... 6.31% 6.64%(b)
Ratio of expenses to average net assets*........................................................... 1.22% 1.66%(b)
Ratio of net investment income to average net assets*.............................................. 5.88% 5.81%(b)
Portfolio Turnover (d)............................................................................. 101.06% 99.71%
</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) Class A Shares commenced operations November 30, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
51----
<PAGE> 819
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE BOND
--------------------
CLASS B
--------------------
YEARS ENDED JUNE 30,
--------------------
1996 1995 (A)
--------- ---------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................................ $ 10.01 $ 9.45
--------- ---------
Investment Activities
Net investment income.............................................................................. 0.58 0.23
Net realized and unrealized gains (losses) from investments........................................ (0.18) 0.56
--------- ---------
Total from Investment Activities................................................................. 0.40 0.79
--------- ---------
Distributions
Net investment income.............................................................................. (0.58) (0.23)
--------- ---------
Total Distributions.............................................................................. (0.58) (0.23)
--------- ---------
NET ASSET VALUE,
END OF PERIOD...................................................................................... $ 9.83 $ 10.01
--------- ---------
--------- ---------
Total Return (Excludes Sales Charge)................................................................. 4.10% 8.22%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................................................................. $ 6,077 $ 266
Ratio of expenses to average net assets............................................................ 1.44% 1.51%(b)
Ratio of net investment income to average net assets............................................... 5.66% 6.15%(b)
Ratio of expenses to average net assets*........................................................... 1.87% 2.34%(b)
Ratio of net investment income to average net assets*.............................................. 5.23% 5.31%(b)
Portfolio Turnover (d)............................................................................. 101.06% 99.71%
</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) Class B Shares commenced operations on November 30, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----52
<PAGE> 820
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
--------------------------------------------
FIDUCIARY
--------------------------------------------
YEARS ENDED JUNE 30,
--------------------------------------------
1996 1995 1994 1993 (A)
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.......................................................... $ 9.81 $ 9.35 $ 10.15 $ 10.00
--------- --------- --------- -----------
Investment Activities
Net investment income........................................................ 0.62 0.62 0.51 0.20
Net realized and unrealized gains (losses) from investments.................. (0.25) 0.46 (0.77) 0.15
--------- --------- --------- -----------
Total from Investment Activities........................................... 0.37 1.08 (0.26) 0.35
--------- --------- --------- -----------
Distributions
Net investment income........................................................ (0.62) (0.61) (0.50) (0.20)
In excess of net investment income........................................... -- (0.01) (0.02) --
In excess of net realized gains.............................................. -- -- (0.02) --
--------- --------- --------- -----------
Total Distributions........................................................ (0.62) (0.62) (0.54) (0.20)
--------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD................................................................ $ 9.56 $ 9.81 $ 9.35 $ 10.15
--------- --------- --------- -----------
--------- --------- --------- -----------
Total Return (Excludes Sales Charge)........................................... 3.81% 12.04% (2.73)% 9.03%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................................ $ 677,326 $ 379,826 $ 209,692 $ 52,152
Ratio of expenses to average net assets...................................... 0.68% 0.71% 0.68% 0.69 %(b)
Ratio of net investment income to average net assets......................... 6.34% 6.65% 5.13% 5.43 %(b)
Ratio of expenses to average net assets*..................................... 0.69% 0.73% 0.71% 1.05 %(b)
Ratio of net investment income to average net assets*........................ 6.33% 6.63% 5.10% 5.07 %(b)
Portfolio Turnover (c)....................................................... 62.70% 106.14% 377.78% 139.24 %
</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) The Fund commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
53----
<PAGE> 821
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
--------------------------------------------
CLASS A
--------------------------------------------
YEARS ENDED JUNE 30,
--------------------------------------------
1996 1995 1994 1993 (A)
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................................. $ 9.81 $ 9.35 $ 10.17 $ 10.22
--------- --------- --------- -----------
Investment Activities
Net investment income........................................................... 0.60 0.61 0.48 0.17
Net realized and unrealized gains (losses) from investments..................... (0.25) 0.45 (0.79) (0.05)
--------- --------- --------- -----------
Total from Investment Activities.............................................. 0.35 1.06 (0.31) 0.12
--------- --------- --------- -----------
Distributions
Net investment income........................................................... (0.60) (0.59) (0.47) (0.17)
In excess of net investment income.............................................. (0.01) (0.02)
In excess of net realized gains................................................. (0.02)
--------- --------- --------- -----------
Total Distributions........................................................... (0.60) (0.60) (0.51) (0.17)
--------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD................................................................... $ 9.56 $ 9.81 $ 9.35 $ 10.17
--------- --------- --------- -----------
--------- --------- --------- -----------
Total Return (Excludes Sales Charge).............................................. 3.58% 11.84% (3.16)% 5.35%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................................... $ 38,800 $ 8,130 $ 1,690 $ 840
Ratio of expenses to average net assets......................................... 0.93% 0.97% 0.92% 0.95 %(b)
Ratio of net investment income to average net assets............................ 6.09% 6.46% 4.84% 5.56 %(b)
Ratio of expenses to average net assets*........................................ 1.04% 1.09% 1.05% 1.44 %(b)
Ratio of net investment income to average net assets*........................... 5.98% 6.34% 4.71% 5.07 %(b)
Portfolio Turnover (c).......................................................... 62.70% 106.14% 377.78% 139.24 %
</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) Class A Shares commenced offering on March 5, 1993.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----54
<PAGE> 822
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................................................... $ 9.81 $ 9.35 $ 10.04
--------- --------- -----------
Investment Activities
Net investment income..................................................................... 0.54 0.55 0.18
Net realized and unrealized gains (losses) from investments............................... (0.25) 0.46 (0.69)
--------- --------- -----------
Total from Investment Activities........................................................ 0.29 1.01 (0.51)
--------- --------- -----------
Distributions
Net investment income..................................................................... (0.54) (0.55) (0.16)
In excess of net investment income........................................................ -- -- (0.02)
--------- --------- -----------
Total Distributions..................................................................... (0.54) (0.55) (0.18)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD............................................................................. $ 9.56 $ 9.81 $ 9.35
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)........................................................ 2.95% 11.20% (4.99)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................................................... $ 10,782 $ 2,513 $ 656
Ratio of expenses to average net assets................................................... 1.58% 1.62% 1.52%(b)
Ratio of net investment income to average net assets...................................... 5.44% 5.76% 4.60 %(b)
Ratio of expenses to average net assets*.................................................. 1.69% 1.74% 1.63 %(b)
Ratio of net investment income to average net assets*..................................... 5.33% 5.64% 4.49 %(b)
Portfolio Turnover (d).................................................................... 62.70% 106.14% 377.78 %
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
55----
<PAGE> 823
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND
----------------------
SERVICE/RETIREMENT (A)
----------------------
YEAR ENDED JUNE 30,
----------------------
1995
----------------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................................................................. $ 9.32
-------
Investment Activities
Net investment income............................................................................ 0.44
Net realized and unrealized gains (losses) from investments...................................... 0.46
-------
Total from Investment Activities............................................................... 0.90
-------
Distributions
Net investment income............................................................................ (0.44)
-------
Total Distributions............................................................................ (0.44)
-------
NET ASSET VALUE,
END OF PERIOD.................................................................................... $ 9.78
-------
-------
Total Return (Excludes Sales Charge)............................................................... (a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................................ $ --
Ratio of expenses to average net assets.......................................................... 1.64%(b)
Ratio of net investment income to average net assets............................................. 6.65 %(b)
Ratio of expenses to average net assets*......................................................... 1.66 %(b)
Ratio of net investment income to average net assets*............................................ 6.62 %(b)
Portfolio Turnover (c)........................................................................... 106.14 %
</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) The Service Shares commenced offering on July 15, 1994 when they were designated as "Retirement Shares".
On April 4, 1995, the name of the Retirement Shares was changed to "Service" Shares. As of June 1, 1995,
Service shares transferred to Class A Shares, and as of June 30, 1996 and 1995, there were no shareholders
in the Service Class. The return for the period from July 15, 1994 to June 1, 1995 for the Service Shares
was 9.59%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualzied.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----56
<PAGE> 824
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME BOND FUND
-----------------------------------------------------
FIDUCIARY
-----------------------------------------------------
YEARS ENDED JUNE 30,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................. $ 9.54 $ 9.23 $ 10.43 $ 10.18 $ 9.59
--------- --------- --------- --------- ---------
Investment Activities
Net investment income........................................... 0.65 0.64 0.54 0.66 0.71
Net realized and unrealized gains (losses) from investments..... (0.21) 0.35 (0.74) 0.38 0.59
--------- --------- --------- --------- ---------
Total from Investment Activities.............................. 0.44 0.99 (0.20) 1.04 1.30
--------- --------- --------- --------- ---------
Distributions
Net investment income........................................... (0.65) (0.64) (0.57) (0.66) (0.71)
Net realized gains.............................................. -- (0.04) (0.43) (0.13) --
--------- --------- --------- --------- ---------
Total Distributions........................................... (0.65) (0.68) (1.00) (0.79) (0.71)
--------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD................................................... $ 9.33 $ 9.54 $ 9.23 $ 10.43 $ 10.18
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return (Excludes Sales Charge).............................. 4.62% 11.29% (2.54)% 10.62% 13.85%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................... $ 520,239 $ 474,124 $ 560,071 $ 483,291 $ 376,898
Ratio of expenses to average net assets......................... 0.59% 0.59% 0.53% 0.56% 0.49%
Ratio of net investment income to average net assets............ 6.76% 6.94% 5.35% 6.44% 7.18%
Ratio of expenses to average net assets*........................ 0.81% 0.86% 0.85% 0.90% 1.04%
Ratio of net investment income to average net assets*........... 6.54% 6.67% 5.03% 6.10% 6.63%
Portfolio Turnover (a).......................................... 95.52% 262.25% 131.04% 143.52% 32.50%
</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) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
57----
<PAGE> 825
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME BOND FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------
1996 1995 1994 1993 1992 (A)
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................... $ 9.54 $ 9.22 $ 10.43 $ 10.16 $ 10.06
--------- --------- --------- --------- -----------
Investment Activities
Net investment income............................................. 0.63 0.61 0.52 0.63 0.26
Net realized and unrealized gains (losses) from investments....... (0.23) 0.36 (0.75) 0.41 0.11
--------- --------- --------- --------- -----------
Total from Investment Activities................................ 0.40 0.97 (0.23) 1.04 0.37
--------- --------- --------- --------- -----------
Distributions
Net investment income............................................. (0.62) (0.60) (0.55) (0.64) (0.27)
In excess of net investment income................................ -- (0.01) -- -- --
Net realized gains................................................ -- (0.04) (0.43) (0.13) --
--------- --------- --------- --------- -----------
Total Distributions............................................. (0.62) (0.65) (0.98) (0.77) (0.27)
--------- --------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD..................................................... $ 9.32 $ 9.54 $ 9.22 $ 10.43 $ 10.16
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total Return (Excludes Sales Charge)................................ 4.26% 10.90% (2.33)% 10.58% 10.16%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................. $ 10,127 $ 6,796 $ 5,347 $ 7,064 $ 188
Ratio of expenses to average net assets........................... 0.84% 1.01% 0.78% 0.77% 0.97 %(b)
Ratio of net investment income to average net assets.............. 6.51% 6.57% 5.25% 6.12% 6.58 %(b)
Ratio of expenses to average net assets*.......................... 1.16% 1.38% 1.20% 1.26% 1.27 %(b)
Ratio of net investment income to average net assets*............. 6.19% 6.20% 4.83% 5.63% 6.28 %(b)
Portfolio Turnover (c)............................................ 95.52% 262.25% 131.04% 143.52% 32.50 %
</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) Class A commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----58
<PAGE> 826
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME BOND FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................................................................ $ 9.62 $ 9.29 $ 9.97
--------- --------- -----------
Investment Activities
Net investment income...................................................................... 0.56 0.56 0.17
Net realized and unrealized gains (losses) from investments................................ (0.21) 0.38 (0.70)
--------- --------- -----------
Total from Investment Activities......................................................... 0.35 0.94 (0.53)
--------- --------- -----------
Distributions
Net investment income...................................................................... (0.57) (0.57) (0.15)
Net realized gains......................................................................... -- (0.04) --
--------- --------- -----------
Total Distributions...................................................................... (0.57) (0.61) (0.15)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD.............................................................................. $ 9.40 $ 9.62 $ 9.29
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)......................................................... 3.65% 10.63% (5.29)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 6,110 $ 1,887 $ 723
Ratio of expenses to average net assets.................................................... 1.49% 1.49% 1.45%(b)
Ratio of net investment income to average net assets....................................... 5.86% 6.16% 5.20 %(b)
Ratio of expenses to average net assets*................................................... 1.81% 1.86% 1.84 %(b)
Ratio of net investment income to average net assets*...................................... 5.54% 5.80% 4.81 %(b)
Portfolio Turnover (d)..................................................................... 95.52% 262.25% 131.04 %
</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) Class B Shares commenced offering on January 17, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
59----
<PAGE> 827
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME BOND FUND
----------------------------
SERVICE/RETIREMENT (A)
----------------------------
YEARS ENDED JUNE 30,
----------------------------
1995 1994
------------- -------------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.......................................................................... $ 9.05 $ 9.97
------ ------
Investment Activities
Net investment income........................................................................ 0.49 0.12
Net realized and unrealized gains (losses) from investments.................................. 0.40 (0.94)
------ ------
Total from Investment Activities........................................................... 0.89 (0.82 )
------ ------
Distributions
Net investment income........................................................................ (0.51 ) (0.10 )
In excess of net investment income
Net realized gains........................................................................... (0.04 )
------ ------
Total Distributions........................................................................ (0.55 ) (0.10 )
------ ------
NET ASSET VALUE,
END OF PERIOD................................................................................ $ 9.39 $ 9.05
------ ------
------ ------
Total Return (Excludes Sales Charge)...........................................................(a) (8.24 )%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................................................ $ -- $ 57
Ratio of expenses to average net assets...................................................... 1.24(b) 1.30(b)
Ratio of net investment income to average net assets......................................... 5.85(b) 5.28(b)
Ratio of expenses to average net assets*..................................................... 1.53(b) 1.59(b)
Ratio of net investment income to average net assets*........................................ 5.57(b) 4.99(b)
Portfolio Turnover (d)....................................................................... 262.25 % 131.04 %
</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) The Service Shares commenced offering on January 17, 1994 when they were designated as "Retirement
Shares". On April 4, 1995, the name of the Retirement Shares was changed to "Service" Shares. As of June
1, 1995, Service shares transferred to Class A Shares, and as of June 30, 1995, there were no shareholders
in the Service Class. The return for the period from July 1, 1994 to June 1, 1995 for the Service Shares
was 9.93%.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----60
<PAGE> 828
- --------------------------------------------------------------------------------
Report of Independent Accountants
- -------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1996
To the Shareholders and Board of Trustees of
The One Group Family of Mutual Funds:
We have audited the accompanying statements of assets and liabilities of the
Government ARM Fund, the Limited Volatility Bond Fund, the Intermediate Bond
Fund, the Government Bond Fund and the Income Bond Fund (five series of The One
Group Family of Mutual Funds), including the schedules of portfolio investments,
as of June 30, 1996, and the related statements of operations, statements of
changes in net assets and the financial highlights for each period presented
except as noted in the next paragraph. These financial statements and financial
highlights are the responsibility of The One Group Family of Mutual Funds'
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
The financial highlights for the two years in the period ended June 30, 1993 for
the Intermediate Bond Fund were audited by other auditors whose report dated
August 25, 1993 expressed an unqualified opinion on the financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above, except as noted in the second paragraph, present fairly, in all material
respects, the financial position of the Government ARM Fund, the Limited
Volatility Bond Fund, the Intermediate Bond Fund, the Government Bond Fund and
the Income Bond Fund as of June 30, 1996, the results of their operations, the
changes in their net assets and the financial highlights for each period
presented, in conformity with generally accepted accounting principles.
Columbus, Ohio Coopers & Lybrand L.L.P.
August 19, 1996
61
<PAGE> 829
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS (101.7%):
Alaska (2.5%):
$ 1,000 Anchorage, 6.00%, 10/1/10.................. $ 1,048
3,625 North Slope Boro, GO, Series A, 5.90%,
6/30/03.................................. 3,794
1,415 North Slope Boro, GO, Series B, 0.00%,
6/30/04.................................. 926
---------
5,768
---------
Arizona (4.8%):
1,000 Educational Loan Marketing Corp., 7.30%,
9/1/03, MBIA............................. 1,057
1,000 Educational Loan Marketing Corp., 7.35%,
9/1/04, Callable 9/1/99 @102**........... 1,056
775 Educational Loan Marketing Corp., 7.38%,
9/1/05, Callable 9/1/99 @102**........... 817
400 Maricopa County Pollution Control Corp.,
3.60%, 5/1/29, LOC: Bank of America*..... 400
1,000 Maricopa County School District No. 4 Mesa
United, GO, Series E, 5.55%, 7/1/04...... 1,025
1,000 Maricopa County School District No. 11
Peoria, GO, 5.75%, 7/1/05................ 1,049
2,500 Maricopa County Unified School District No.
097 Deer Valley, 5.10%, 7/1/06, GO,
Callable 7/1/04 @102..................... 2,489
1,500 Phoenix Airport Revenue, Series D, 6.00%,
7/1/06, AMT, Callable 7/1/04 @102........ 1,564
1,305 Pima County Community College District, GO,
6.38%, 7/1/07, Callable 7/1/06 @101...... 1,428
---------
10,885
---------
California (2.8%):
1,250 Housing Finance Agency Revenue, Series G,
5.70%, 8/1/07, AMT, Callable 8/1/05
@102..................................... 1,257
3,000 Sacramento Municipal Utilities, 5.40%,
11/15/06*................................ 2,946
1,000 San Francisco City & County Airports Common
International Airport Revenue, 6.30%,
5/1/11, Callable 5/1/02 @102............. 1,041
1,040 South County Regional Wastewater Authority
Revenue, 6.00%, 8/1/07, FGIC, Callable
8/1/02 @102**............................ 1,089
---------
6,333
---------
Colorado (9.8%):
1,000 Adams County School District No. 12, GO,
6.75%, 12/15/07, Callable 12/15/05
@102..................................... 1,131
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Colorado, continued:
$ 3,290 Arapahoe County Capital Improvements,
0.00%, 8/31/03........................... $ 2,106
1,135 Arapahoe County School District No. 001
Englewood, GO, 0.00%, 11/1/09............ 529
1,580 Boulder County Revenue GO, 6.90%, 12/1/07,
Callable 12/1/01 @101.................... 1,703
2,000 Denver City & County Airport Revenue,
Series B, 5.75%, 11/15/09, AMT, Callable
11/15/06 @102............................ 1,976
9,750 Denver City & County School District No. 1,
GO, Series A, 0.00%, 12/1/06............. 5,477
1,000 Denver City & County School District, No.
1, GO, 5.50%, 6/1/07..................... 1,003
1,000 El Paso County School District GO, Series
B, 6.35%, 12/15/06....................... 1,093
2,210 Fort Collins Wastewater Utility Enterprise
Sewer Revenue, 5.25%, 12/1/07, Callable
12/1/05 @100............................. 2,202
3,260 Housing Finance Authority, Series A, 6.40%,
8/1/06, Callable 8/1/02 @102............. 3,376
405 Mountain College Residence Hall Authority,
5.25%, 6/1/07, Callable 6/1/06 @101...... 404
430 Mountain College Residence Hall Authority,
5.38%, 6/1/08, Callable 6/1/06 @101**.... 429
740 Student Obligation Bond Authority, Student
Loan Revenue, Series A-3, 7.25%, 9/1/05,
AMT, Callable 9/1/00 @100................ 776
---------
22,205
---------
Connecticut (1.6%):
1,000 Bridgeport, GO, 6.50%, 9/1/08 1,083
2,475 State, GO, Series B, 6.00%, 10/1/05........ 2,636
---------
3,719
---------
District of Columbia (0.8%):
1,000 3.80%, 10/1/07, LOC: Toronto Dominion
Bank*.................................... 1,000
875 GO, Series B, 5.40%, 6/1/02................ 887
---------
1,887
---------
Florida (3.9%):
1,300 Broward County Housing Authority, 5.55%,
7/1/09, Callable 7/1/06 @102............. 1,300
1,000 Dade County Aviation Revenue, Series A,
6.00%, 10/1/08, Callable 10/1/05 @102.... 1,052
</TABLE>
CONTINUED
- ----16
<PAGE> 830
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Florida, continued:
$ 2,000 Escambia County Housing Finance Authority,
Multifamily Housing Revenue, 5.75%,
4/1/04, Callable 4/1/99 @102............. $ 2,005
2,300 Halifax Hospital Medical Center Florida,
Series A, 4.00%, 10/1/19*................ 2,300
3,595 Osceola County Transportation Revenue,
0.00%, 4/1/14, Callable 4/1/02 @47.62.... 1,197
1,000 State Division Bond Finance Department,
General Services Revenue, 5.13%, 7/1/07,
FSA, Callable 7/1/05 @101................ 987
---------
8,841
---------
Georgia (3.2%):
1,000 Atlanta Airport Facilities Revenue, Series
A, 6.50%, 1/1/07......................... 1,104
1,500 Atlanta Airport Facilities, 6.50%,
1/1/08................................... 1,654
1,000 Atlanta Airport Facilities, 5.25%, 1/1/09,
Callable 1/1/07 @101..................... 964
1,215 Columbus Water & Sewer Revenue, 6.30%,
5/1/06, Callable 11/1/02 @102............ 1,301
2,000 State, GO, Series F, 6.50%, 12/1/01........ 2,177
---------
7,200
---------
Hawaii (0.5%):
1,000 Honolulu City & County, GO, Series A,
5.60%, 4/1/07, FSA....................... 1,029
---------
Idaho (2.4%):
1,050 Student Loan Fund Marketing Assoc. Inc.,
Student Loan Revenue, 6.25%, 4/1/98...... 1,055
2,250 Student Loan Fund Marketing Assoc. Inc.,
Student Loan Revenue, 6.40%, 10/1/99..... 2,271
705 Student Loan Fund Marketing Assoc. Inc.,
5.88%, 4/1/99............................ 706
1,300 University of Idaho, 5.75%, 4/1/06......... 1,355
---------
5,387
---------
Illinois (5.7%):
1,000 Chicago Metro Water Reclamation
District--Greater Chicago Capital
Improvements, GO, 7.25%, 12/1/12......... 1,180
3,245 Chicago Metro Water Reclamation
District--Greater Chicago Capital
Improvements, GO, 6.25%, 12/1/14......... 3,321
3,045 Chicago Park District GO, 6.35%, 11/15/08,
Callable 5/15/05 @102.................... 3,273
1,450 Chicago Residual Revenue, 0.00%, 10/1/09,
Callable 10/1/05 @78.60.................. 586
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Illinois, continued:
$ 1,140 Evanston Residential Mortgage, 6.38%,
1/1/09, Callable 7/1/02 @102............. $ 1,190
1,645 Health Facilities Authority Revenue, 6.13%,
11/15/07, Callable 11/15/04 @102......... 1,719
594 Health Facilities Authority Revenue, 7.90%,
8/15/03.................................. 608
1,000 State, GO, 6.25%, 12/1/01, Callable 12/1/96
@102..................................... 1,029
---------
12,906
---------
Indiana (4.5%):
1,000 Fort Wayne Hospital Authority, Parkview
Memorial Hospital Project, Series A,
7.50%, 11/15/11, Callable 11/15/99
@102..................................... 1,095
2,885 Indianapolis Economic Development Revenue,
6.38%, 12/1/04, AMT...................... 3,007
5,000 Rockport Pollution Control Revenue AEP-A,
3.55%, 7/1/25, AMBAC*.................... 5,000
1,000 State Vocational Technical College Building
Facilities Fee, 6.50%, 7/1/07, Callable
1/1/05 @102.............................. 1,096
---------
10,198
---------
Iowa (1.4%):
1,655 Finance Authority Single Family Mortgage,
Series F, 6.15%, 7/1/04, Callable 1/1/03
@103..................................... 1,689
1,500 Student Loan Liquidity Corp., Student Loan
Revenue, Series C, 6.50%, 12/1/99........ 1,573
---------
3,262
---------
Kansas (0.8%):
1,750 Wichita Hospital Revenue, 6.25%, 10/1/10,
Callable 10/1/02 @102.................... 1,813
---------
Louisiana (0.1%):
257 Housing Agency Mortgage Revenue, 7.80%,
12/1/09, Callable 6/1/04 @105............ 284
---------
Maryland (0.6%):
1,150 Anne Arundel County, GO, Series B, 7.70%,
3/15/06, AMT, Callable 3/15/99 @102...... 1,258
---------
Massachusetts (0.7%):
1,465 Worcester, GO, Series A, 6.10%, 5/1/08,
Callable 5/1/05 @102..................... 1,547
---------
Michigan (0.5%):
1,200 Detroit Convention Facilities, 5.10%,
9/30/04.................................. 1,198
---------
</TABLE>
CONTINUED
17----
<PAGE> 831
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Minnesota (2.7%):
$ 1,500 Detroit Lakes Health Care Facilities
Revenue, 6.00%, 2/15/12, Connie Lee,
Callable 2/15/03 @102.................... $ 1,510
1,500 Northern Municipal Power Agency Minnesota
Electric, Series A, 5.90%, 1/1/07,
Callable 1/1/03 @102..................... 1,563
2,500 State, GO, 5.50%, 5/1/05................... 2,579
400 University of Minnesota, 4.80%, 8/15/03.... 391
---------
6,043
---------
Missouri (2.3%):
1,895 Carthage Waterworks & Wastewater Treatment
Systems, 6.30%, 7/1/09, MBIA, Callable
7/1/04 @101**............................ 1,985
1,600 Kansas City Industrial Development
Authority, Multifamily Housing Revenue,
Series A, 5.63%, 7/1/05, AMT............. 1,615
1,615 State Enviornmental Improvement & Energy
Resource Authority, PCR, 5.25%, 12/1/07,
Callable 12/1/06 @101.................... 1,600
---------
5,200
---------
Nebraska (3.0%):
2,500 Educational Finance Authortiy, 5.60%,
1/1/07, Callable 1/1/06 @101............. 2,528
2,250 Higher Education Loan Program, Series A-6,
5.90%, 6/1/03, AMT....................... 2,271
2,000 Public Power District, 5.70%, 1/1/05,
Callable 1/1/03 @102**................... 2,073
---------
6,872
---------
Nevada (2.1%):
1,000 State Municipal Bond Bank Project No.
20-23-A, GO, 7.00%, 7/1/01, Callable
7/1/96 @102.............................. 1,054
500 State Municipal Bond Bank Project, GO,
5.00%, 11/1/06........................... 492
3,010 Washoe County School District, GO, 6.13%,
8/1/07, MBIA, Callable 8/1/02 @101....... 3,144
---------
4,690
---------
New Hampshire (0.6%):
1,225 Higher Education & Health Facilities
Authority Revenue, 6.25%, 1/1/06, Connie
Lee, Callable 7/1/04 @102................ 1,274
---------
New Mexico (4.5%):
1,000 Albuquerque, 6.50%, 7/1/11, Callable 7/1/00
@105**................................... 1,048
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
New Mexico, continued:
$ 1,195 Educational Assistance Foundation, Student
Loan Revenue, Series A, 6.45%, 4/1/99,
AMT...................................... $ 1,239
2,070 Educational Assistance Foundation, Student
Loan Revenue, Series A, 6.55%, 4/1/00,
AMT...................................... 2,158
5,455 Educational Assistance Foundation, Student
Loan Revenue, Series A, 6.85%, 4/1/05,
AMT...................................... 5,722
---------
10,167
---------
New York (0.7%):
1,500 State Medical Care Facilities Financial
Agency Revenue, 6.00%, 8/15/02........... 1,590
---------
Ohio (0.9%):
2,000 Cuyahoga County Hospital Revenue, Series
96B, 6.00%, 1/15/05...................... 2,109
---------
Oregon (5.1%):
850 Eugene Public Safety Facilities, GO, 6.00%,
6/1/05................................... 905
845 Eugene Public Safety Facilities, GO, 6.00%,
6/1/06................................... 898
2,350 Jackson County School District No. 5
Ashland, GO, 5.70%, 6/1/07............... 2,428
1,250 Lane County School District #52 Bethel, GO,
6.00%, 6/1/06............................ 1,328
1,000 Metro Open Spaces Program, GO, Series A,
5.00%, 9/1/04, Callable 9/1/03 @102...... 1,003
1,435 Port Portland Airport Revenue 6.75%,
7/1/09, Series 7-A, Callable 7/1/01
@101..................................... 1,542
1,250 State Department Administrative Services,
Series A, 5.25%, 5/1/08, Callable 5/1/06
@101**................................... 1,229
2,075 Washington County School District No 88,
GO, 6.10%, 6/1/05, FSA................... 2,216
---------
11,549
---------
Pennsylvania (4.6%):
3,500 Allegheny County, Series C-34, 0.00%,
2/15/02, MBIA............................ 3,619
1,600 Dauphin County Industrial Development
Authority, PCR, 6.00%, 1/1/08, MBIA...... 1,600
2,750 Indiana County Industrial Development
Authority, PCR, Series A, 6.00%, 6/1/06.. 2,906
2,350 Philadelphia Airport Revenue, Series A,
5.50%, 6/15/05, AMT...................... 2,376
---------
10,501
---------
</TABLE>
CONTINUED
- ----18
<PAGE> 832
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Rhode Island (0.5%):
$ 1,000 Housing & Mortgage Finance Corp., Series
15-B, 6.20%, 10/1/06, MBIA, Callable
4/1/04 @102.............................. $ 1,027
---------
South Carolina (1.8%):
990 Hilton Head Island, GO, 5.40%, 8/1/08...... 991
1,045 Hilton Head Island, GO, 5.50%, 8/1/09...... 1,046
1,000 Piedmont Municipal Power Agency Electric
Revenue, Series A, 7.25%, 1/1/22......... 1,021
1,000 York County School District #3, GO, 5.40%,
3/1/08, Callable 3/1/06 @101**........... 1,001
---------
4,059
---------
South Dakota (1.2%):
925 Student Loan Assistance Corp., Series A,
8.00%, 8/1/98, Callable 8/1/97 @102...... 974
1,545 Student Loan Assistance Corp., Student Loan
Revenue, 7.63%, 8/1/06, AMT, Callable
8/1/99 @102.............................. 1,642
---------
2,616
---------
Tennessee (0.5%):
1,050 Chattanooga-Hamilton County Hospital
Authority, Hospital Revenue, 5.63%,
10/1/09, FSA............................. 1,058
---------
Texas (9.2%):
2,800 Austin Housing Finance Corp., Single Family
Mortgage Revenue, 0.00%, 12/1/11,
Callable 12/1/05 @71.20.................. 1,105
1,000 Austin Utility Systems Revenue, 0.00%,
5/15/08.................................. 511
5,000 Coastal Bend, 5.93%, 11/15/13*............. 4,956
2,000 Grand Prairie Health Facilities, 6.50%,
11/1/04.................................. 2,168
5,000 Harris County Capital Appreciation--Toll
Rd--Sub Lien--A, GO, 0.00%, 8/15/03...... 3,460
1,455 Health Facilities Development Corp.,
Hospital Revenue, 6.25%, 8/15/12,
Callable 8/15/03 @102.................... 1,509
4,925 Hurst Euless Bedford Independent School
District, GO, 0.00%, 8/15/09............. 2,316
1,185 Housing Agency Residential Development
Revenue, Series D, 8.40%, 1/1/21, AMT,
Callable 7/1/99 @102..................... 1,244
1,500 Panhandle--Plains Higher Education, 5.55%,
3/1/05................................... 1,473
1,000 Municipal Power Agency Revenue, 6.10%,
9/1/08................................... 1,065
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Texas, continued:
$ 1,000 San Antonio Electric & Gas, Series B,
7.00%, 2/1/09, FSA, Callable 2/1/99
@101.5................................... $ 1,063
---------
20,870
---------
Utah (2.4%):
2,000 Intermountain Power Agency Power Supply
Revenue, Series B, 6.50%, 7/1/09......... 2,182
1,900 State Housing Finance Agency, 6.35%,
7/1/12, AMT, Callable 1/1/05 @102........ 1,912
1,250 State Municipal Finance Corp., Local
Government Revenue, 7.05%, 3/1/05, FSA,
Callable 3/1/01 @100..................... 1,336
---------
5,430
---------
Vermont (0.4%):
1,000 University of Vermont & State Agricultural
College, Series 1973A, 5.80%, 7/1/13,
Callable 7/1/96 @101..................... 994
---------
Virginia (2.0%):
1,000 State Housing Development Authority
Commonwealth Management, Series
C--Subseries C-9--RMK, 5.85%, 7/1/04,
Callable 1/1/02 @102*.................... 1,017
2,000 State Housing Development Authority
Commonwealth Mortgage, Series A, 6.80%,
7/1/06, AMT, Callable 1/1/06 @102........ 2,114
1,340 State Housing Development Authority
Commonwealth Mortgage, Series J, 6.65%,
7/1/10, Callable 1/1/05 @102............. 1,397
---------
4,528
---------
Washington (4.7%):
1,500 Clark County School District No. 114
Evergreen, GO, 6.00%, 12/1/07............ 1,585
1,360 King County School District #400, GO,
6.50%, 12/1/08........................... 1,475
3,000 Snohomish County Public Utility District
No. 1, Electric Revenue, 6.00%, 1/1/13,
Callable 1/1/03 @102..................... 3,032
1,000 State Public Power Supply System Nuclear
Project #2 Revenue, Series A, 5.70%,
7/1/02................................... 1,009
2,150 State Public Power Supply System Nuclear
Project #3 Revenue, Series B, 7.00%,
7/1/05................................... 2,326
1,200 State Nuclear Power Project #3, Series B,
5.60%, 7/1/07, MBIA...................... 1,204
---------
10,631
---------
</TABLE>
CONTINUED
19----
<PAGE> 833
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
West Virginia (2.4%):
$ 5,000 Kanawha-Putnam County, 0.00%, 12/1/16...... $ 1,434
2,600 Parkersburg Waterworks & Sewage System
Revenue, 4.85%, 3/1/03................... 2,603
260 Parkersburg Waterworks & Sewage System
Revenue, 5.10%, 3/1/06................... 259
1,000 State Housing Development, Series B, 7.20%,
11/1/20, AMT, Callable 5/1/02 @102**..... 1,046
---------
5,342
---------
Wisconsin (0.2%):
1,500 Center District Tax Revenue Capital
Appreciation, Senior Dedicated, Series A,
0.00%, 12/15/18.......................... 394
---------
Wyoming (3.3%):
1,395 Sweetwater County School District No. 2,
Green River, GO, 7.00%, 6/1/04........... 1,567
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Wyoming, continued:
$ 2,230 Uinta County School District No. 1, Series
A, 6.88%, 6/1/02......................... $ 2,408
790 University of Wyoming, University Revenues,
7.10%, 6/1/10, Callable 6/1/00 @101...... 864
2,600 Student Loan Corp., Student Loan Revenue,
4.10%, 1/30/96, AMT, GSL*................ 2,600
---------
7,439
---------
Total Municipal Bonds 230,103
---------
INVESTMENT COMPANIES (0.2%):
472 Provident Municash Tax-Free Money Market
Fund..................................... 472
---------
Total Investment Companies 472
---------
Total (Cost--$227,749) (a) $ 230,575
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $226,262.
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost for federal income tax purposes by the amount of
losses recognized for financial reporting purposes in excess of federal income tax reporting of approximately $19. Cost
for federal income tax purposes differs from value by net unrealized appreciation of securities as follows (amounts in
thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation..................................................... $ 3,404
Unrealized depreciation..................................................... (597)
---------
Net unrealized appreciation................................................. $ 2,807
---------
---------
</TABLE>
<TABLE>
<S> <C>
Variable rate securities having liquidity sources through bank letters of credit or other credit and/or
liquidity agreements. The interest rate, which will change periodically, is based upon bank prime rates or an
index of market interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in
* effect at June 30, 1996.
** Additional put and demand features exist allowing the Fund to require the repurchase of the instrument within variable
time periods at variable amounts.
AMBAC Insured by AMBAC Indemnity Corporation
AMT Alternative Minimum Tax Paper
FGIC Insured by Financial Guaranty Insurance Corp.
FSA Insured by Financial Security Assurance
GO General Obligation
GSL Guaranteed Student Loans
LOC Letter of Credit
MBIA Insured by Municipal Bond Insurance Association
PCR Pollution Control Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----20
<PAGE> 834
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS (71.0%):
Alaska (2.4%):
$ 1,500 Home Mortgage Revenue Refunding, 8.00%,
3/1/09, Callable 12/1/00 @102............ $ 1,614
290 Juneau City & Boro Home Mortgage Revenue,
8.00%, 2/1/09............................ 312
5,000 North Slope Boro, GO, Series A, 0.00%,
6/30/04.................................. 3,287
1,325 North Slope Boro, GO, Series A, 0.00%,
6/30/05.................................. 819
1,000 State Housing Finance Corp., Insured
Mortgage Program 1st Series, 7.65%,
12/1/10.................................. 1,023
30 State Housing Finance Corp., Revenue, Local
Guaranteed Housing, 8.20%, 12/1/97....... 31
---------
7,086
---------
Arizona (1.0%):
1,210 Maricopa County, Industrial Development,
Multi-Family Housing Revenue, Series A,
6.25%, 7/1/06............................ 1,204
1,800 Maricopa County, PCR, 5/1/29, LOC: Bank of
America*................................. 1,800
---------
3,004
---------
Arkansas (3.6%):
427 Drew County, Public Facilities Board,
7.90%, 8/1/11, Callable 8/1/03 @103...... 456
185 Drew County, Public Facilities Board,
7.75%, 8/1/11, Callable 2/1/04 @100...... 196
633 Jacksonville, Residential Housing
Facilities Board, Single Family Mortgage
Revenue, 7.90%, 1/1/11, Callable 7/1/03
@103..................................... 688
298 Jacksonville, Residential Housing
Facilities Board, Single Family Mortgage
Revenue, 7.75%, 1/1/11, Callable 7/1/05
@103..................................... 317
1,000 Jefferson County, PCR, Power & Light Co.
Project 6.13%, 10/1/07, Callable 4/1/06
@100..................................... 1,001
334 Lonoke County, Residential Housing
Facilities Board, Single Family Mortgage
Revenue, 7.38%, 4/1/11, Callable 4/1/03
@103..................................... 355
743 Lonoke County, Residential Housing
Facilities Board, Single Family Mortgage
Revenue, 7.90%, 4/1/11, Series A-2,
FNMA..................................... 799
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Arkansas, continued:
$ 1,560 Pope County, Residential Facilities Housing
Board Mortgage Revenue, 7.75%, 9/1/11,
Series B, Callable 8/1/02 @102........... $ 1,667
2,550 State Development Authority Revenue
Refunding, 8.00%, 8/15/11, FHA, Callable
8/15/01 @103............................. 2,743
3,650 State Development Finance Authority
Revenue, 0.00%, 12/1/11.................. 1,167
110 State Development Finance Authority
Revenue, State Single Family Housing,
7.70%, 12/1/14, Callable 6/1/97 @102..... 114
584 Stuttgart Public Facilities Board Revenue,
7.90%, 9/1/11, Series A-2, Callable
9/1/03 @103.............................. 635
293 Stuttgart Public Facilities Board Revenue,
7.75%, 9/1/11, Series B, Callable 3/1/06
@103..................................... 314
---------
10,452
---------
California (1.9%):
1,255 Fairfield Water, Revenue Capital
Appreciation, 0.00%, 4/1/15, Callable
4/1/05 @56.75............................ 385
680 Housing Finance Agency, Revenue Local or
Guaranteed Housing, 8.63%, 8/1/15, series
B, Callable 8/1/00 @100.................. 704
1,000 Housing Finance Agency, Revenue State
Single Family Housing, 7.88%, 8/1/19,
Series F, Callable 8/1/98 @102........... 1,045
975 Redondo Beach, Redevelopment Agency,
Residential Mortgage Revenue, 6.25%,
6/1/11, Series B, Callable 6/1/03 @100... 979
2,135 Sacramento Municipal Utility District,
Electric Revenue, Series P, 6.00%,
7/1/15, Callable 7/1/96 @100............. 2,125
1,000 Southern, Public Power Authority,
Transmission Project, Revenue Capital
Appreciation, 0.00%, 7/1/15, MBIA........ 322
---------
5,560
---------
Colorado (11.8%):
1,000 Aurora Single Family Mortgage Revenue,
0.00%, 9/1/15............................ 278
1,000 Aurora Golf Course, Saddle Rock Project,
5.70%, 12/1/05........................... 981
2,430 Brush Creek Metropolitan District, GO,
Refunding, 6.70%, 11/15/09, Callable
11/15/03 @101............................ 2,550
</TABLE>
CONTINUED
21----
<PAGE> 835
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Colorado, continued:
$ 1,410 Central City Water Revenue, GO, Water
Utility Improvements, 7.40%, 12/1/07,
Callable 12/1/02 @100.................... $ 1,595
655 Central City Water Revenue, GO, Water
Utility Improvements, 7.50%, 12/1/12,
Callable 12/1/02 @100.................... 744
400 Central City Water Revenue, Water Utility
Improvements, 8.63%, 9/15/11, Callable
9/15/02 @100............................. 417
1,250 Eagle's Nest Metropolitan District, GO,
Refunding, 6.50%, 11/15/17............... 1,258
291 El Paso County Home Mortgage, Series C,
8.30%, 9/20/18........................... 312
1,080 El Paso County Single Family Mortgage
Revenue, 0.00%, 9/1/15................... 337
1,445 Englewood Multi-Family Housing Mark
Apartment Revenue, Series B, 6.00%,
12/15/18, LOC: Citibank, Callable
12/15/03 @100............................ 1,386
585 Housing Finance Authority, Capital
Appreciation Single Family Revenue, 1985
Series A, 0.00%, 9/1/14.................. 84
355 Housing Finance Authority, GO, Refunding,
Series A, 6.90%, 5/1/01.................. 375
2,660 Housing Finance Authority, Multi-Family
Insured Mortgage Revenue, 6.00%,
10/1/25.................................. 1,970
875 Housing Finance Authority, Multi-Family
Insured Mortgage Revenue, 9.00%,
10/1/25.................................. 881
1,725 Housing Finance Authority, Revenue
Refunding, Series A, 6.80%, 8/1/14,
Callable 8/1/02 @102..................... 1,783
705 Housing Finance Authority, Single Family
Program, Series D, 5.75%, 12/1/03........ 703
995 Housing Finance Authority, Single Family
Program, Series B, 6.13%, 5/1/13,
Callable 11/1/04 @103.................... 1,005
750 Housing Finance Authority, Single Family
Program, Series D-2, 7.10%, 6/1/14....... 808
1,740 Housing Finance Authority, Single Family
Program, Series B-2, 7.50%, 12/1/16,
Callable 6/1/05 @105..................... 1,923
1,000 Housing Finance Authority, Single Family
Program, Series C-2, 7.45%, 6/1/17,
Callable 6/1/05 @105..................... 1,100
520 Housing Finance Authority, Single Family
Program, Series D-1, 6.60%, 8/1/17,
Callable 8/1/01 @102..................... 524
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Colorado, continued:
$ 275 Housing Finance Authority, Single Family
Program, Series B-2, 6.90%, 8/1/17,
Callable 2/1/01 @102..................... $ 284
930 Housing Finance Authority, Single Family
Program, Series B, 7.50%, 11/1/24,
Callable 11/1/04 @105.................... 1,025
1,435 Jefferson County Single Family Revenue
Refunding, 8.88%, 10/1/13, Callable
4/1/01 @103.............................. 1,538
4,525 Meridian Metropolitan District, GO, 7.50%,
12/1/11, Callable 12/1/01 @101........... 4,894
1,500 Mesa County Residual Revenue Refunding,
0.00%, 12/1/11........................... 602
400 Mountain Village Metropolitan District, San
Miguel County, 7.95%, 12/1/03, GO,
Callable 12/1/02 @101.................... 440
1,980 Mountain Village Metropolitan District, San
Miguel County, 8.10%, 12/1/11, GO,
Callable 12/1/02 @101.................... 2,201
500 Telluride Housing Authority Housing
Revenue, Shandoka Apartments Project,
7.50%, 6/1/12, Callable 6/1/02 @101...... 524
1,500 Telluride Housing Authority Housing Revenue
Shandoka Apartments Project, 7.50%,
6/1/23, Callable 6/1/03 @101............. 1,566
---------
34,088
---------
Connecticut (0.6%):
1,620 State Housing Mortgage, Series A, 7.63%,
11/15/17, Callable 11/15/96 @103**....... 1,676
---------
Delaware (0.1%):
1,270 New Castle County, Single Family Mortgage
Revenue, 0.00%, 11/1/16.................. 168
---------
Florida (3.6%):
35 Duval County Housing Finance Authority,
Single Family Mortgage Revenue, GNMA,
Series C, 7.30%, 9/1/15, Callable 9/1/00
@103..................................... 36
3,650 Duval County Housing Finance Authority,
Single Family Mortgage Revenue, GNMA,
7.35%, 7/1/24, Callable 1/1/03 @103...... 3,837
1,000 Halifax Hospital Medical Center, Series A,
10/1/19*................................. 1,000
580 Housing Finance Agency, Home Ownership
Revenue, GNMA, 7.50%, 9/1/14, Callable
9/1/00 @102.............................. 612
</TABLE>
CONTINUED
- ----22
<PAGE> 836
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Florida, continued:
$ 8,645 Plantation Water & Sewer, 0.00%, 3/1/07.... $ 4,740
---------
10,225
---------
Georgia (0.9%):
2,500 Cobb County Housing Authority Pass thru
Certificates, Signature Series B, 9.00%,
10/1/10.................................. 2,562
---------
Idaho (1.0%):
3,000 Health Facility Authority Revenue, St.
Lukes Regional Medical Center Project,
5/1/22, LOC: Credit Suisse*.............. 3,000
---------
Illinois (3.1%):
5,890 Addison Alton Electric Public Improvements
Revenue, 0.00%, 7/1/11, Callable 7/1/04
@62.04................................... 2,235
4,595 Bolingbrook Mortgage Revenue, Capital
Appreciation, Sub Series 1, 0.00%,
1/1/11................................... 1,596
920 Danville Single Family Mortgage Revenue
Refunding, 7.30%, 11/1/10, Callable
11/1/03 @102............................. 957
3,530 Freeport Single Family Mortgage Revenue
0.00%, 8/1/10, Callable 10/1/01 @48.96... 1,143
4,685 Moline Mortgage Revenue Capital
Appreciation, Sub Series 1, 0.00%,
5/1/02................................... 1,629
645 Quincy Single Family Mortgage Revenue,
Refunding, 6.88%, 3/1/10, Callable 3/1/04
@102..................................... 675
585 Rock Island Residential Mortgage Revenue
Refunding, 7.70%, 9/1/08, Callable 9/1/02
@102..................................... 622
---------
8,857
---------
Indiana (1.4%):
2,250 Marion County Hospital Authority Revenue,
6.50%, 9/1/13, Callable 9/1/99 @102...... 2,349
1,720 State Toll Finance Authority, Toll Road
Revenue, 6.00%, 7/1/15, Callable 7/1/97
@100..................................... 1,720
---------
4,069
---------
Iowa (1.4%):
650 Davenport Home Ownership Mortgage Revenue
Refunding, 7.90%, 3/1/10, Callable 9/1/04
@102..................................... 686
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Iowa, continued:
$ 2,535 Finance Authority, Single Family Revenue
Mortgage Backed Securities Program,
Series C, 6.40%, 7/1/19, Callable 1/1/05
@102..................................... $ 2,574
925 Salix, PCR, Gas & Electric Project, 5.75%
6/1/03................................... 930
---------
4,190
---------
Kansas (3.0%):
800 Ford County, Single Family Mortgage
Revenue, 7.90%, 8/1/10................... 860
2,250 Johnson County, Single Family Mortgage
Revenue, 7.10%, 5/1/12................... 2,410
640 Labette County, Single Family Mortgage
Revenue, 8.40%, 12/1/11.................. 678
615 Reno County, Mortgage Revenue, 8.70%,
9/1/11................................... 646
2,400 Reno & Labette County, Single Family
Revenue, 0.00%, 12/1/15.................. 739
465 Sedwick & Shawnee County, Single Family
Revenue, 7.80%, 5/1/14................... 507
450 Sedwick & Shawnee County, Single Family
Revenue, 8.05%, 5/1/14................... 493
470 Sedwick & Shawnee County, Single Family
Revenue, 7.80%, 11/1/24.................. 518
950 Sedwick County, Single Family Revenue,
8.20%, 5/1/14............................ 1,058
750 Wichita, Single Family Mortgage Revenue,
7.10%, 9/1/09............................ 776
---------
8,685
---------
Kentucky (0.7%):
1,930 Meade County, PCR, Olin Corp. Project,
6.00%, 7/1/07, Callable 7/1/96 @100...... 1,920
---------
Louisiana (1.7%):
900 Calcasieu Parish Public Transportation
Authority, 0.00%, 5/1/13................. 277
1,010 Iberia Home Mortgage Authority, 7.38%,
1/1/11................................... 1,075
1,731 Public Facilities Authority, 8.45%,
12/1/12.................................. 1,826
108 Public Facilities Authority, 7.50%,
10/1/15.................................. 114
5,335 Public Facilities Authority, 0.00%,
12/1/19.................................. 1,262
279 St. Mary, Public Finance Authority, 7.63%,
3/25/12.................................. 301
---------
4,855
---------
Maine (0.5%):
1,500 Skowhegan, PCR, Scott Paper Co. Project,
5.90%, 11/1/13........................... 1,523
---------
</TABLE>
CONTINUED
23----
<PAGE> 837
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Massachusetts (0.7%):
$ 1,920 State Port Authority Revenue, 7.13%,
7/1/12, Callable 7/1/96 @100.5**......... $ 1,934
---------
Michigan (2.2%):
2,000 Farmington Hills Economic Development
Corp., 2/15/96*.......................... 2,000
2,000 State Hospital Finance Authority Revenue,
Mercy Mount Clemens Corp., 6.25%,
5/15/11, Callable 5/15/01 @102........... 2,037
1,395 State Housing Development Authority, 7.50%,
6/1/15................................... 1,468
880 State Housing Development Authority, 7.70%,
12/1/16.................................. 913
---------
6,418
---------
Minnesota (0.3%):
2,950 Minneapolis Mortgage Revenue, 0.00%,
10/1/12.................................. 975
---------
Missouri (1.5%):
1,425 Carthage Waterworks & Wastewater, Series B,
6.50%, 7/1/16, Callable 7/1/04 @101**.... 1,460
665 Grandview Industrial Development Authority,
9.25%, 5/15/08........................... 648
2,295 Jackson County Industrial Development
Authority, 10.00%, 3/1/10................ 2,309
---------
4,417
---------
Montana (0.9%):
1,562 Green Plaza Housing Inc., 10.43%, 1/1/22... 1,624
1,000 State Board Housing Revenue, 6.40%,
12/1/12.................................. 1,021
---------
2,645
---------
Nebraska (0.3%):
4,545 Finance Authority, Single Family Revenue,
0.00%, 12/15/13.......................... 775
---------
Nevada (0.1%):
430 Housing Division, 6.20%, 10/1/15........... 433
---------
New Jersey (0.6%):
710 State Housing & Mortgage Finance Agency,
8.38%, 4/1/17............................ 747
935 State Housing & Mortgage Finance Agency,
7.38%, 10/1/17........................... 982
---------
1,729
---------
New Mexico (1.6%):
540 Bernalillo County, 7.00%, 11/1/08.......... 534
445 Hobbs, Single Family Mortgage Revenue
Refunding, 8.75%, 7/1/11................. 479
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
New Mexico, continued:
$ 180 Las Cruces Housing Development Corp.,
Multifamily Revenue Refund Mortgage,
Sub-Series B, 9.00%, 10/1/03............. $ 183
1,140 Las Cruces Housing Development Corp.,
Multi-Family Revenue Refunding, Series A,
6.40%, 10/1/19........................... 1,132
430 Mortgage Financial Authority Refunding,
Single Family Mortgage, Series A-2,
6.85%, 7/1/12............................ 448
1,845 Mortgage Finance Authority Revenue
Refunding 6.90%, 7/1/24, Callable 7/1/02
@102..................................... 1,913
---------
4,689
---------
North Carolina (2.1%):
515 East Power Agency, Series E, 6.50%, 1/1/24,
AMBAC, Callable 1/1/97 @100.............. 515
5,350 Municipal Power Agency No. 1, Catawba
Electric Revenue, Series B, 6.00%,
1/1/20................................... 5,245
475 Municipal Power Agency, Series B, 6.00%,
1/1/20, Callable 1/1/97 @100............. 475
---------
6,235
---------
Ohio (0.8%):
960 Housing Financial Agency, Single Family
Mortgage Revenue, GNMA, Series D, 7.00%,
9/1/11, Callable 9/1/01 @100............. 1,012
1,100 Housing Financial Agency, Single Family
Mortgage, Series D, 7.05%, 9/1/16........ 1,157
---------
2,169
---------
Oregon (0.1%):
350 Eugene Trojan Nuclear Project Revenue,
5.90%, 9/1/09, Callable 9/1/96 @100...... 350
---------
Pennsylvania (1.6%):
2,000 Greene County Industrial Development
Authority, PCR, 6.10%, 2/1/07, Callable
2/1/97 @100.............................. 2,003
2,515 Pittsburgh Urban Redevelopment Authority
Mortgage Revenue, Series A, 8.35%,
10/1/14.................................. 2,643
---------
4,646
---------
South Carolina (2.2%):
2,185 Piedmont Municipal Power Agency, Electric
Revenue Refunding, Series A, 7.25%,
1/1/22, Callable 1/1/98 @100............. 2,232
2,250 State Electric Expansion System, 5.88%,
7/1/18, Callable 7/1/96 @100............. 2,238
</TABLE>
CONTINUED
- ----24
<PAGE> 838
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
South Carolina, continued:
$ 2,000 State Housing Authority, Single Family
Mortgage Purchase, 7.00%, 7/1/11......... $ 2,035
---------
6,505
---------
South Dakota (2.7%):
5,240 Health & Educational Facility Authority
Revenue, St. Lukes Midland Regional
Medical, 6.63%, 7/1/11, Callable 7/1/01
@102..................................... 5,606
2,000 Student Loan Assistance, 7.63%, 8/1/06,
Callable 08/01/99 @102**................. 2,117
---------
7,723
---------
Tennessee (1.2%):
995 Housing Development Agency Homeownership
Program, Series P, 7.70%, 7/1/16......... 1,041
665 La Follette Housing Development Corp., FHA,
Series A, 6.25%, 1/1/16, MBIA............ 668
380 La Follette Housing Development Corp., FHA
, Series A, 6.38%, 1/1/20, MBIA.......... 379
1,295 Memphis Health, Educational & Housing
Refunding Multi-Family, 7.38%, 1/20/27... 1,365
---------
3,453
---------
Texas (9.6%):
1,385 Beaumont Housing Finance Corporation
Refunding, 9.20%, 3/1/12................. 1,500
1,765 Bexar County Housing Finance Corp.,
Residual Revenue Capital Appreciation,
0.00%, 3/1/15, GO, Callable 9/1/03
@49.36................................... 542
2,500 Central Housing Finance Corp., Single
Family Mortgage Revenue, 0.00%, 9/1/16... 725
5,055 Dallas County Housing Mortgage Revenue,
0.00%, 1/1/17............................ 680
4,000 Dallas -- Fort Worth Regulation Airport
Revenue, 6.10%, 11/1/07.................. 4,000
725 El Paso Housing Finance Corporation,
Mortgage Refunding Single Family, Series
A, 8.75%, 10/1/11........................ 782
2,755 Fort Worth Housing Finance Corporation
Refunding, 8.50%, 10/1/11................ 2,973
1,685 Galveston Property Finance Authority
Income, Single Family Mortgage Revenue,
Series A, 8.50%, 9/1/11, Callable 9/1/01
@103..................................... 1,819
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Texas, continued:
$ 600 North Higher Education Authority, Student
Loan Revenue, Series D, AMBAC, 6.88%,
4/1/02, Callable 4/1/00 @102............. $ 629
800 Red River Authority, PCR, 6.63%, 3/1/09.... 802
4,000 Sabine River Authority, PCR, 8.20%, 7/1/14,
Callable 7/1/96 @102**................... 4,091
2,000 San Antonio Hotel Occupancy Revenue, 0.00%,
8/15/17.................................. 558
485 San Antonio Housing Corp., 2nd Mortgage,
American Foundation Housing, Series B,
9.50%, 12/1/05, Callable 6/1/04 @102..... 478
2,530 Socorro Independent School District, 0.00%,
9/1/11, GO............................... 1,035
1,555 Southeast Housing Finance Corp. Residual
Revenue Capital Appreciation, Series A,
0.00%, 11/1/14........................... 491
15,810 State Department of Housing & Community
Affairs, Single Family Revenue Capital
Appreciation, Refunding Mortgage, Jr.
Lien, Series A, 0.00%, 3/1/15............ 4,483
1,950 Travis County Housing Finance Corp., Single
Family Mortgage Revenue Refunding, GNMA &
FNMA, Series A, 6.25%, 4/1/19............ 1,993
220 Travis County Housing Finance Corp.,
Residential Mortgage Revenue, GNMA &
FNMA, Series A, 7.00%, 12/1/11........... 230
---------
27,811
---------
Utah (1.3%):
1,200 Salt Lake County, PCR Revenue, Service
Station Holdings Project, 2/1/08 3.60%*.. 1,200
2,340 State Housing Finance Authority, Single
Family Mortgage, 5.88%, 7/1/08........... 2,364
310 State Housing Finance Agency, Single Family
Mortgage, Series A-1, 6.90%, 7/1/12...... 323
---------
3,887
---------
Virginia (0.3%):
770 Virginia Beach Development Authority,
Multi-Family Housing Revenue, 2nd
Mortgage, Series B, 8.75%, 1/15/08....... 753
---------
</TABLE>
CONTINUED
25----
<PAGE> 839
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Washington (0.1%):
$ 403 Skagit County Housing Authority, Low Income
Housing Assistance Revenue, GNMA, Sea Mar
Project, 7.00%, 6/20/03.................. $ 428
---------
West Virginia (0.4%):
230 Parkersburg Waterworks & Sewers, 5.10%,
9/1/06................................... 229
800 State Housing Development Fund Revenue,
6.13%, 7/1/13, Callable 7/1/97 @100...... 806
---------
1,035
---------
Wisconsin (1.1%):
2,700 Center District Tax Revenue Capital
Appreciation, Senior Dedicated, Series A,
0.00%, 12/15/18.......................... 709
2,450 State, Series A, 7.50%, 1/1/15, Callable
1/1/97 @101.5**.......................... 2,506
---------
3,215
---------
Wyoming (0.6%):
180 Community Development Authority, Single
Family Mortgage, Series A, FHA, 6.88%,
6/1/14, Callable 6/1/01 @102............. 182
1,550 Student Loan Corp. Revenue, 12/1/05*....... 1,550
---------
1,732
---------
Total Municipal Bonds 205,877
---------
ALTERNATIVE MINIMUM TAX PAPER (29.5%):
Arkansas (0.3%):
965 State Development Finance Authority
Revenue, State Single Family Housing,
7.75%, 4/1/21, Callable 4/1/99 @102...... 1,005
---------
California (2.0%):
65 Housing Finance Agency Revenue, State
Single Family Housing, Series C, 7.45%,
8/1/11................................... 68
1,330 Housing Finance Mortgages, Series F, 7.50%,
2/1/23, Callable 8/1/05 @102**........... 1,448
350 Rural Home Mortgage Finance Authority,
Single Family Mortgage Revenue, 7.25%,
12/1/24, Callable 12/1/04 @103........... 366
1,685 Rural Home Mortgage Financing Authority,
5.30%, 11/1/05........................... 1,682
1,000 Rural Home Mortgage Financing Authority,
7.55%, 11/1/26........................... 1,101
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
ALTERNATIVE MINIMUM TAX PAPER, CONTINUED:
California, continued:
$ 1,000 Rural Home Mortgage Financing Authority,
6.45%, 5/1/27............................ $ 1,096
---------
5,761
---------
Colorado (3.2%):
1,000 Denver City & County Airport, Series C,
6.75%, 11/15/13, Callable 11/15/07 @
100**.................................... 1,060
2,500 Denver City & County Airport Revenue,
5.63%, 11/15/08, Callable 11/15/06
@102**................................... 2,466
485 Housing Finance Authority, Single Family
Program, Sub Series A, 6.50%, 12/1/02.... 494
880 Housing Finance Authority, Single Family
Program, Series E, 6.25%, 12/1/09,
Callable 12/1/04 @103.................... 892
1,000 Housing Finance Authority, Single Family
Program, Series B-1, 7.90%, 12/1/25,
Callable 6/1/05 @105..................... 1,110
3,000 Housing Financing Authority, Single Family
Program, Series A-1, 7.40%, 11/1/27,
Callable 5/1/96 @105**................... 3,237
---------
9,259
---------
Florida (4.9%):
1,250 Brevard County Housing Finance Authority,
Family Mortgage Revenue, 6.13%, 9/1/09,
Callable 9/1/04 @102..................... 1,259
1,000 Leon County Housing Finance Authority,
Multi-County Progress, Series B, 7.30%,
1/1/28................................... 1,083
880 Manatee County Housing Finance Authority
Mortgage Revenue, Sub Series 1, 8.38%,
5/1/25................................... 968
3,145 Manatee County Housing Finance Authority
Mortgage Revenue, 6.88%, 11/1/26,
Callable 5/1/06 @105**................... 3,374
1,405 Palm Beach County Housing Finance
Authority, Single Family Mortgage
Revenue, Series A, 6.38%, 10/1/06,
Callable 10/1/04 @102.................... 1,423
1,205 Pinellas County Housing Finance Authority,
Single Family Mortgage Revenue, 6.25%,
8/1/12, Callable 2/1/05 @102............. 1,215
1,000 Pinellas County Housing Finance Authority,
Single Family Mortgage Revenue,
Multi-County Series A, 6.35%, 2/1/17,
Callable 2/1/05 @102..................... 1,018
</TABLE>
CONTINUED
- ----26
<PAGE> 840
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
ALTERNATIVE MINIMUM TAX PAPER, CONTINUED:
<C> <S> <C>
Florida, continued:
$ 1,500 Pinellas County Housing Finance Authority,
Single Family Mortgage Revenue, Series A,
5.00%, 10/1/25, Callable 4/1/06 @102**... $ 1,462
2,370 Polk County Housing Finance Authority,
Series A, 7.88%, 9/1/22, Callable 3/1/00
@103..................................... 2,514
---------
14,316
---------
Georgia (0.4%):
1,010 De Kalb County Housing Authority Revenue,
State Single Family Housing, 7.65%,
6/1/18, Callable 6/1/04 @100............. 1,056
---------
Illinois (2.2%):
355 Aurora, Single Family Mortgage Revenue
Refunding, Series B, 8.05%, 9/1/25....... 390
215 Aurora Kane & Du Page Counties, Single
Family Revenue Mortgage, Series A, 7.95%,
10/1/25.................................. 232
3,455 Chicago, Single Family Mortgage Revenue,
Series A, 7.00%, 9/1/27, Callable 3/1/06
@105**................................... 3,752
1,500 Chicago, Single Family Mortgage, Series B,
7.63%, 9/1/27, Callable 6/15/06 @105**... 1,645
245 Housing Development Authority, Resident
Mortgage Revenue, Series A, 7.35%,
8/1/10, Callable 8/1/01 @102............. 254
---------
6,273
---------
Indiana (0.4%):
1,000 State Housing Financing Authority, Series
A-2, 6.45%, 7/1/14, Callable 7/1/05
@102..................................... 1,020
---------
Iowa (0.3%):
715 Finance Authority, Single Family Revenue,
GNMA, 7.90%, 11/1/22, Callable 11/1/99
@102..................................... 750
---------
Kentucky (0.8%):
2,160 Sedgwick County, GNMA, Series B, 7.80%,
6/1/22, Callable 6/1/00 @103............. 2,264
---------
Maine (0.1%):
300 State Housing Authority, 6.90%, 11/15/01... 312
---------
Massachusetts (0.5%):
335 State Housing Finance Agency, 7.00%,
12/1/23.................................. 340
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
ALTERNATIVE MINIMUM TAX PAPER, CONTINUED:
Massachusetts, continued:
$ 985 State Housing Finance Agency, 7.13%,
6/1/25................................... $ 1,024
---------
1,364
---------
Michigan (0.2%):
645 State Housing Development Authority, 7.65%,
12/1/12.................................. 679
---------
Mississippi (2.0%):
960 Higher Education, 6.05%, 9/1/07............ 978
755 Home Corp., Single Family Revenue, 7.10%,
12/1/10.................................. 769
2,000 Home Corp., Single Family Revenue, 7.90%,
3/1/25................................... 2,204
1,635 Housing Finance Corp., GNMA, 8.25%,
10/15/18................................. 1,716
---------
5,667
---------
Missouri (1.6%):
910 State Housing Development, Common Mortgage
Revenue, Single Family Homeowner, 7.25%,
9/1/26, Callable 3/1/06 @105............. 984
2,000 State Housing Development, Common Mortgage
Revenue, Single Family Homeowner, Series
A ,7.20%, 9/1/26, Callable 9/1/06
@105**................................... 2,153
1,415 State Housing Development, 7.38%, 8/1/23... 1,492
---------
4,629
---------
Nebraska (0.1%):
260 Finance Authority, Single Family Revenue,
6.35%, 3/15/06........................... 266
---------
Nevada (0.3%):
845 Housing Division, Single Family, Series B2,
7.90%, 10/1/21, Callable 4/1/00 @102..... 881
---------
New Jersey (0.2%):
615 State Higher Education Authority, 7.00%,
7/1/05................................... 626
---------
New Mexico (0.5%):
310 Mortgage Financial Authority, Single Family
Mortgage, Series A, 7.80%, 3/1/21........ 322
1,000 Mortgage Financial Authority, Single Family
Mortgage, Series H, 6.45%, 7/1/25........ 1,010
---------
1,332
---------
</TABLE>
CONTINUED
27----
<PAGE> 841
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
ALTERNATIVE MINIMUM TAX PAPER, CONTINUED:
<C> <S> <C>
New York (0.5%):
$ 1,395 State Mortgage Agency Revenue, Homeowner
Mortgage, Series UU, 7.75%, 10/1/23...... $ 1,466
---------
North Carolina (0.7%):
1,835 Housing Finance Authority Agency, Series O,
7.60%, 3/1/21, Callable 1/1/98 @101**.... 1,936
---------
North Dakota (0.7%):
1,375 State Housing Financial Agency, Single
Family Mortgage Revenue, Series A, 8.38%,
7/1/21................................... 1,450
300 Student Loan, Series D, 5.95%, 7/1/07,
Callable 7/1/06 @100..................... 300
300 Student Loan, Series D, 6.15%, 7/1/09,
Callable 7/1/06 @100..................... 301
---------
2,051
---------
Ohio (0.6%):
1,655 Housing Financial Agency, Single Family
Mortgage Revenue, GNMA, Series A, 7.65%,
3/1/29................................... 1,737
---------
Oklahoma (2.1%):
2,730 Housing Finance Authority, Single Family
Revenue Mortgage, Series A, 7.05%,
9/1/26, Callable 9/1/06 @105............. 2,919
3,000 Housing Mortgage Agency, Series B-2, 7.63%,
9/1/26, Callable 3/1/06 @105**........... 3,243
---------
6,162
---------
Pennsylvania (0.7%):
1,280 Housing Finance Authority, Single Family
Mortgage, Series 47, 6.75%, 10/1/08...... 1,388
740 Pittsburgh Urban Redevelopment Authority,
GNMA, Series C, 7.88%, 12/1/16........... 780
---------
2,168
---------
Rhode Island (0.3%):
780 Housing & Mortgage Financial Corp.,
Homeownership Opportunity, Series C-1,
6.80%, 10/1/23........................... 792
---------
South Dakota (0.8%):
400 Housing Development Authority, Homeowner
Mortgage, Series D-1, 6.80%, 5/1/12...... 415
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
ALTERNATIVE MINIMUM TAX PAPER, CONTINUED:
South Dakota, continued:
$ 1,830 Student Loan Assistance Corp. Student Loan
Revenue, 7.63%, 8/1/06, Callable 8/1/99
@102..................................... $ 1,945
---------
2,360
---------
Tennessee (0.5%):
1,370 Housing Development Agency, Homeownership
Program, Issue V, 7.65%, 7/1/22.......... 1,435
---------
Texas (2.1%):
795 El Paso Housing Finance Corp. Mortgage
GNMA, Single Family Mortgage Revenue,
7.75%, 9/1/19............................ 830
1,000 Laredo Housing Finance Corp., Single Family
Mortgage Revenue, GNMA & FNMA, 6.20%,
10/1/19.................................. 1,008
970 San Antonio Housing Finance Corp., Britt
Oak Ltd.-B, 9.75%, 1/1/10, Callable
7/1/04 @103.............................. 960
2,985 State Student Loan, SR. Lien, 0.00%,
10/1/25.................................. 2,298
1,000 Winter Garden Housing Finance Corp., Single
Family Mortgage Revenue, GNMA & FNMA,
6.20%, 10/1/19........................... 1,005
---------
6,101
---------
West Virginia (0.5%):
1,500 State Housing Development, Series B, 7.20%,
11/1/20, Callable 5/1/02 @102**.......... 1,569
---------
Wyoming (0.1%):
350 Community Development Authority, 7.75%,
6/1/09, Callable 11/30/99 @103**......... 367
---------
Total Alternative Minimum Tax Paper 85,604
---------
INVESTMENT COMPANIES (0.0%):
81 Provident Municash Tax-Free Money Market
Fund..................................... 81
---------
Total Investment Companies 81
---------
Total (Cost--$291,275) (a) $ 291,562
---------
---------
</TABLE>
- ------------
Percentage indicated are based on net assets of $290,106.
CONTINUED
- ----28
<PAGE> 842
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<C> <S>
(a) Represents cost for financial reporting purposes and differs from cost basis for federal income tax purposes by the
amount of losses recognized for financial reporting in excess of federal income tax reporting of approximately $129.
Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 2,560
Unrealized depreciation.................................................... (2,402)
---------
Net unrealized appreciation................................................ $ 158
---------
---------
</TABLE>
<TABLE>
<S> <C>
Variable rate securities having liquidity sources through bank letters of credit or other credit and/or
liquidity agreements. The interest rate, which will change periodically, is based upon bank prime rates or an
index of market interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in
* effect at June 30, 1996.
** Additional put & demand features exist allowing the fund to require the repurchase of the instrument within variable
time periods, at variable amounts.
AMBAC Insured by American Municipal Bond Association Corp.
FHA Insured by Federal Housing Administration
FNMA Insured by Federal National Mortgage Assoc.
GNMA Insured by Government National Mortgage Assoc.
GO General Obligation
LOC Letter of Credit
MBIA Insured by Municipal Bond Insurance Assoc.
PCR Pollution Control Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29----
<PAGE> 843
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
KENTUCKY MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------ ---------
<C> <S> <C>
MUNICIPAL BONDS (96.9%):
Kentucky (96.9%):
$ 510 Clinton County School District Financial
Corp., 6.10%, 6/1/12.................... $ 524
2,000 Development Financial Authority Hospital
Revenue, Elizabeth, Med-A, 6.00%,
11/1/10, FGIC........................... 2,033
500 Eastern Kentucky University Revenues,
6.20%, 5/1/04........................... 534
500 Fayette County School District Financial
Corp., 6.00%, 5/1/03.................... 524
500 Higher Education Student Loan Corp.,
6.50%, 6/1/02, GSL...................... 531
1,705 Higher Education Student Loan Corp.,
7.00%, 12/1/06, GSL..................... 1,833
500 Higher Education Student Loan Corp.,
Insured Student Loan, 5.45%, 6/1/03,
GSL..................................... 503
400 Housing Corp., Housing Revenue, Series B,
5.85%, 7/1/00, FHA...................... 413
275 Housing Corp., Housing Revenue, Series A,
6.20%, 7/1/03, FHA...................... 285
500 Housing Corp., Housing Revenue, Series A,
5.50%, 1/1/06, FHA...................... 509
500 Housing Corp., Housing Revenue, Series A,
5.60%, 1/1/07, FHA...................... 509
1,000 Housing Corp., Housing Revenue, Series B,
5.15%, 7/1/07, FHA...................... 982
250 Infrastructure Authority, Series G, 6.10%,
6/1/02.................................. 264
500 Infrastructure Authority, Series E, 6.50%,
6/1/05.................................. 534
725 Jefferson County Capital Projects, 6.10%,
8/15/07................................. 755
1,000 Jefferson County Capital Projects, 5.50%,
4/1/10, AMBAC........................... 992
400 Jefferson County Health Facilities
Revenue, 6.00%, 5/1/01.................. 421
500 Jefferson County Health Facilities
Revenue, 6.38%, 5/1/08, AMBAC........... 529
500 Jefferson County Hospital Revenue, 6.20%,
10/1/04, MBIA........................... 538
500 Kenton County Airport Revenue,
International, AR-A, AMT, 6.10%, 3/1/04,
FSA..................................... 522
400 Kenton County Airport Revenue,
International, AR-A, AMT, 6.20%, 3/1/05,
FSA..................................... 418
500 Kenton County Airport Revenue,
International, Series B, AMT 5.75%,
3/1/07, FSA............................. 502
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------ ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Kentucky, continued:
$ 500 Kenton County Airport Revenue,
International, Series B, AMT 5.75%,
3/1/08, FSA............................. $ 501
750 Kenton County School District Financial
Corp., 4.50%, 7/1/99.................... 749
325 Kenton County School District Financial
Corp., 5.25%, 7/1/07.................... 321
500 Kentucky State University Revenue, 6.25%,
5/1/02, MBIA............................ 537
500 Lexington-Fayette Urban County Government
Sewer System Revenue, 6.35%, 7/1/07,
MBIA.................................... 538
200 Louisville & Jefferson County, 4.80%,
5/15/98, MBIA........................... 202
200 Louisville Public Property Corp., 6.40%,
12/1/07................................. 212
310 Louisville Water Revenue, 6.38%,
11/1/97................................. 320
500 Louisville Water Works Board Water System,
5.40%, 11/15/04......................... 510
500 Louisville Water Works Board Water System,
5.63%, 11/15/07......................... 508
1,040 Louisville Water Works Board Water System,
5.75%, 11/15/09......................... 1,052
1,000 McCracken County Hospital Revenue, Series
A, 6.20%, 11/1/05, MBIA................. 1,079
1,000 McCracken County Hospital Revenue, Series
A, 6.40%, 11/1/07, MBIA................. 1,086
200 Morehead State University, Series M,
6.30%, 11/1/08, AMBAC................... 212
500 Muhlenberg County School District, 2nd
Series, 5.85%, 8/1/10................... 507
250 Murray State University Revenue, 5.60%,
5/1/07.................................. 251
530 Northern Kentucky University Revenue,
6.10%, 5/1/06, AMBAC.................... 562
600 Perry County School District, 6.25%,
7/1/09.................................. 631
250 Richmond Water, Gas & Sewer Revenue,
6.50%, 6/1/99, MBIA..................... 264
100 Shelby County School District, 6.25%,
9/1/03.................................. 107
500 Shelby County School District, 6.50%,
9/1/05.................................. 545
1,000 State Property & Buildings, Project No.
54, 5.10%, 9/1/00....................... 1,015
2,000 State Property & Buildings, Project No.
50, 6.00%, 2/1/10....................... 2,104
750 State Turnpike Authority Development,
5.70%, 1/1/03........................... 779
</TABLE>
CONTINUED
- ----30
<PAGE> 844
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
KENTUCKY MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------ ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Kentucky, continued:
$ 750 State Turnpike Authority Development ,
5.50%, 7/1/08........................... $ 759
1,000 State Turnpike Authority Development ,
5.50%, 7/1/09........................... 1,006
1,000 State Turnpike Authority Development,
5.63%, 7/1/10, AMBAC.................... 1,009
500 State Turnpike Authority Development,
5.75%, 7/1/11, AMBAC.................... 507
500 State Turnpike Authority Resource
Recovery, 6.63%, 7/1/08................. 542
1,000 State Turnpike Authority Resource
Recovery, Series A, 6.00%, 7/1/09....... 1,001
250 State Turnpike Authority Toll Road, 5.80%,
7/1/99.................................. 258
500 University of Kentucky Revenues, Series F,
5.75%, 5/1/97........................... 508
500 University of Kentucky Revenues, Series F,
6.25%, 5/1/07........................... 520
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------ ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Kentucky, continued:
500 University of Louisville Revenues, Series
I, 5.40%, 5/1/07........................ 502
$ 500 University of Louisville Revenues, Series
I, 5.40% 5/1/08......................... $ 499
500 University of Louisville Revenues, Series
I, 5.40%, 5/1/09........................ 494
985 Western Kentucky University Revenues,
5.00%, 5/1/09........................... 945
950 Winchester Utilities Revenue, 5.30%,
7/1/09.................................. 914
---------
Total Municipal Bonds 38,711
---------
INVESTMENT COMPANIES (2.0%):
812 The One Group Municipal Money Market Fund,
Class A................................. 812
---------
Total Investment Companies 812
---------
Total (Cost--$39,153)(a) $ 39,523
---------
---------
</TABLE>
- ------------
Percentage indicated are based on net assets of $39,935.
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized appreciation of securities as
follows (amounts in thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation.................................................... $ 432
Unrealized depreciation.................................................... (62)
---------
Net unrealized appreciation................................................ $ 370
---------
---------
</TABLE>
<TABLE>
<S> <C>
AMBAC Insured by American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax Paper
FGIC Insured by Financial Guaranty Insurance Corp.
FHA Insured by Federal Housing Administration
FSA Insured by Financial Security Assurance
GSL Guaranteed Student Loans
MBIA Insured by Municipal Bond Insurance Association
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31----
<PAGE> 845
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
OHIO MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS (93.6%):
Massachusetts (1.0%):
$ 1,000 6.75%, 8/1/09, Callable 8/1/01 @102........ $ 1,085
---------
Missouri (1.0%):
1,000 State Health, 6.40%, 6/1/10, MBIA.......... 1,086
---------
Ohio (91.5%):
1,045 Akron Sewer Systems, 5.30%, 12/1/05,
MBIA..................................... 1,057
1,000 Akron Sewer Systems, 5.65%, 12/1/08,
Callable 12/1/06 @101**.................. 1,018
2,000 Bexley School District, 6.50%, 12/1/16, GO,
Prerefunded 12/1/01 @102................. 2,185
725 Bowling Green State University, 5.65%,
6/1/11, AMBAC............................ 724
1,000 Butler County Hospital Facilities, 6.75%,
11/15/10 Callable 11/15/01 @102.......... 1,079
1,050 Capital Corp. for Housing, 5.60%, 1/1/07,
Callable 7/1/03 @102**................... 1,060
2,775 Clermont County Waterworks, 6.63%, 12/1/15,
AMBAC, Prerefunded 12/1/01 @102.......... 3,061
1,000 Cleveland, 6.88%, 7/1/09, GO, MBIA,
Prerefunded 7/1/99 @102.................. 1,083
1,000 Cleveland, 6.38%, 7/1/12, GO, MBIA,
Callable 7/1/02 @102..................... 1,049
1,500 Cleveland Public Power System, 0.00%,
11/15/11, MBIA........................... 630
2,500 Cleveland Public Power System, 6.40%,
11/15/06, MBIA, Callable 11/15/04........ 2,738
1,850 Cleveland Waterworks, 6.25%, Series F-928,
1/1/06, AMBAC, Callable 1/1/02 @102...... 1,962
2,800 Cleveland Waterworks Revenue, Series F-928,
6.50%, 1/1/11, Callable 1/1/02 @102...... 2,969
1,225 Columbus Municipal Airport No. 30-E-U,
6.20%, 4/15/04, GO, Callable 4/15/01
@100..................................... 1,291
1,000 Columbus Sewer Improvements, 6.75%,
9/15/06, GO, Callable 9/15/01 @100....... 1,080
1,285 Columbus Waterworks Enlargement No. 44,
6.00%, 5/1/11, GO, Callable 9/1/03
@102..................................... 1,331
1,000 Columbus Waterworks Enlargement No. 44,
6.00%, 5/1/12, GO, Callable 9/1/03
@102..................................... 1,032
1,000 Cuyahoga County Hospital, Series A, 5.50%,
1/15/10, Callable 1/15/06 @102**......... 990
1,500 Cuyahoga County Public Improvements, 6.70%,
10/1/10, GO, Prerefunded 10/1/99 @102.... 1,621
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Ohio, continued:
$ 1,000 Delaware County Library District, 7.25%,
11/1/10, GO, Prerefunded 11/1/00 @102.... $ 1,116
1,000 Delaware County Sewer, 5.60%, 12/10/10, GO,
Callable 12/1/05 @101.................... 999
1,000 Fairfield County Hospital Improvement
Revenue, Lancaster-Fairfield Community
Hospital, 7.10%, 6/15/21, MBIA,
Prerefunded 6/15/01 @102................. 1,118
1,290 Franklin County Hospital Revenue, 5.65%,
11/1/08, Callable 11/1/06 @101**......... 1,284
800 Franklin County Hospital Revenue, 5.80%,
11/1/10 Callable 11/1/06 @101**.......... 796
1,000 Franklin County Hospital Revenue,
Children's Hospital Project, Series A,
6.50%, 5/1/07, Callable 11/1/02 @102..... 1,063
1,000 Franklin County Hospital Revenue,
Children's Hospital Project, Series A,
6.60%, 11/1/11, Callable 11/1/01 @102.... 1,099
1,000 Franklin County Hospital Revenue, Riverside
United, Series B, 7.60%, 5/15/20,
Prerefunded 5/15/00 @102................. 1,118
1,000 Greene County Water System, 6.85%, 12/1/11,
AMBAC, Callable 12/1/01 @102............. 1,084
1,500 Hamilton City Electric Systems, 6.13%,
10/15/08, FGIC, Callable 10/15/02 @102... 1,576
1,500 Hamilton County Building Improvement &
Refunding Museum Center, 6.50%, 12/1/09,
GO, Callable 12/1/01 @102................ 1,612
1,265 Hamilton County Hospital Facilities, Christ
Hospital, Series B, 6.63%, 1/1/06,
Callable 1/1/01 @100..................... 1,340
1,500 Hamilton County Hospital Facilities,
Bethesda Hospital, Series A , 6.25%,
1/1/12, Callable 1/1/03 @102............. 1,512
1,000 Hamilton County Sewer System Refunding &
Improvements, Series A, 4.30%, 12/1/98,
FGIC..................................... 1,001
380 Hamilton County Sewer System, 6.30%,
12/1/01, Prerefunded 6/1/01 @102......... 411
1,000 Hamilton Waterworks Water Utility
Improvement, 6.40%, 10/15/07, MBIA,
Callable 10/15/01 @102................... 1,073
1,000 Hilliard School District School
Improvements, Series A, 5.35%, 12/1/04,
GO....................................... 1,015
</TABLE>
CONTINUED
- ----32
<PAGE> 846
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
OHIO MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Ohio, continued:
$ 1,250 Housing Finance Agency Mortgage, Series
A-1, 6.20%, 9/1/14, GNMA, Callable 3/1/05
@102..................................... $ 1,267
1,000 Kent State University, 6.45%, 5/1/12,
AMBAC, Callable 9/1/02 @102.............. 1,054
2,000 Lakewood Sanitation Sewer System, Special
Obligation, 6.40%, 12/1/11, GO, Callable
12/1/01 @102............................. 2,087
2,000 Middleburg Heights Hospital, 5.70%,
8/15/10, FSA, Callable 8/15/08 @102**.... 2,000
2,000 Montgomery County Sisters of Charity,
Series A, 6.50%, 5/15/08, MBIA, Callable
5/15/01 @102............................. 2,130
1,000 Northeast Regional Sewer District
Wastewater, 6.50%, 11/15/08, AMBAC,
Prerefunded 11/15/01 @101................ 1,089
1,000 North Royalton, 7.50%, 12/1/11, GO,
Callable 12/1/00 @102.................... 1,117
1,000 Pickerington Local School District, 7.00%,
12/1/13, GO, AMBAC, Prerefunded 12/1/00
@102..................................... 1,107
2,600 Portage County, Robinson Memorial Hospital
Project, 5.63%, 11/15/07, MBIA, 11/15/04
@102..................................... 2,654
1,315 Portage County, Robinson Memorial Hospital,
5.50%, 11/15/09, MBIA, Callable
12/15/05................................. 1,308
2,220 Rocky River City School District, School
Improvements, 6.90%, 12/1/11, GO,
Callable 12/1/00 @102.................... 2,400
1,000 Saint Mary's Electric Systems Mortgage,
7.15%, 12/1/10 AMBAC, Callable 12/1/00
@102..................................... 1,102
1,000 Sandusky City School District, 7.30%,
12/1/10, GO, Callable 12/1/00 @102....... 1,093
1,000 Shaker Heights, City Schools, 7.10%,
12/15/10, GO............................. 1,135
1,000 Springfield, 6.88%, 9/1/06, GO, AMBAC,
9/1/01 @102.............................. 1,101
1,000 State Building Authority, 7.35%, 4/1/09,
Prerefunded 4/01/00 @102................. 1,108
2,000 State Building Authority, Adult
Correctional Building, Series A, 6.13%,
10/1/09, Callable 10/1/03 @102........... 2,082
1,000 State Building Authority, State
Correctional Facilities, 6.50%, 10/1/01.. 1,079
2,000 State Building Authority, State Facilities,
J. Rhodes, Series A, 6.38%, 6/1/07,
Callable 6/1/01 @102..................... 2,117
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Ohio, continued:
$ 1,000 State Building Authority, State Facilities
Administration Building Funds, Series A
,5.75%, 10/1/06, MBIA, Callable 10/1/04
@102..................................... $ 1,038
1,165 State Building Authority, State Facilities
Transportation Building Fund, Projects,
Series A, 6.50%, 9/1/09, AMBAC, Callable
9/1/04 @102.............................. 1,259
1,000 State Liquor Profits Revenue, 6.85%,
9/1/00, BIG.............................. 1,081
1,000 State University, University & College
Improvements, 5.50%, 12/1/03, Callable
12/1/02 @102............................. 1,033
2,510 State Fresh Water Development, 5.80%,
6/1/11, Callable 6/1/05 @102**........... 2,554
1,000 State Water Development Authority,
Pollution Control Facilities, 5.50%,
12/1/09, MBIA, Callable 6/1/05 @101...... 996
1,000 Ottawa County, 7.00%, 9/1/11, GO, AMBAC,
Callable 9/1/01 @102..................... 1,102
1,000 Toledo Sewer System Revenue, 7.38%,
11/15/10, MBIA Callable 11/15/98 @102.... 1,080
1,000 University of Cincinnati Certificates of
Participation, University & College
Improvements, 6.75%, 12/1/09, MBIA,
Callable 12/1/01 @102.................... 1,079
1,000 University of Cincinnati General Receipts,
Health & Hospital Improvements, 7.10%,
6/1/10, Prerefunded 6/1/99 @102.......... 1,089
1,000 University of Cincinnati General Receipts,
University & College Improvements, 7.00%,
6/1/11, Callable 6/1/01 @102............. 1,091
1,000 University of Cincinnati, Series R2, Refund
Bonds, 6.25%, 6/1/09, Callable 12/1/02
@102..................................... 1,046
1,000 Westerville, Minerva Park & Blendon Joint
Township, Saint Ann's Hospital, Series B,
6.80%, 9/15/06, AMBAC, Callable 9/15/01
@102..................................... 1,109
2,750 Westerville, Minerva Park & Blendon Joint
Township, Saint Ann's Hospital, Series B,
7.00%, 9/15/12 AMBAC, Callable 9/15/01
@102..................................... 3,077
1,000 Worthington City School District, 7.45%,
12/1/12, MBIA, Prerefunded 12/1/99
@102..................................... 1,108
---------
95,949
---------
</TABLE>
CONTINUED
33----
<PAGE> 847
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
OHIO MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Ohio, continued:
Washington (1.0%):
$ 1,000 State, Series A & AT-6, 6.25%, 2/1/11,
GO....................................... $ 1,073
---------
Total Municipal Bonds 99,193
---------
INVESTMENT COMPANIES (5.4%):
603 Fidelity Tax-Free Money Market Fund........ 603
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
5,159 The One Group Ohio Municipal Money Market
Fund--Fiduciary Class.................... $ 5,159
---------
Total Investment Companies 5,762
---------
Total (Cost--$100,675) (a) $ 104,955
---------
---------
</TABLE>
- ------------
Percentage indicated are based in net assets of $105,972
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized appreciation of securities as
follows (amounts in thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation..................................................... $ 4,341
Unrealized depreciation..................................................... (61)
---------
Net unrealized appreciation................................................. $ 4,280
---------
---------
</TABLE>
<TABLE>
<S> <C>
Additional put and demand features exist allowing the Fund to require the repurchase of the instrument within
** variable time periods at variable amounts.
AMBAC Insured by AMBAC Indemnity Corporation
BIG Bond Insurance Guaranty
FGIC Insured by Financial Guaranty Insurance Corp.
FSA Insured by Financial Security Assurance
GNMA Insured by Government National Mortgage Assoc.
GO General Obligation
MBIA Insured by Municipal Bond Insurance Assoc.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----34
<PAGE> 848
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LOUISIANA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS (98.5%):
Louisiana (98.5%):
$ 300 Alexandria Public Improvement, Sales & Use
Tax, Series ST-1987, 7.35%, 8/1/97,
MBIA..................................... $ 311
750 Alexandria, Utilities Revenue, 5.25%,
5/1/06, FGIC............................. 749
1,165 Ascension Parish, Gravity Drain, 5.40%,
12/1/07, Callable 12/1/06 @100........... 1,169
1,230 Ascension Parish, Gravity Drain, 5.50%,
12/1/08, Callable 12/1/06 @100........... 1,234
2,500 Bastrop Industrial Development Board,
Pollution Control Revenue, 6.90%, 3/1/07,
International Paper Co................... 2,685
700 Baton Rouge Public Improvements, Sales &
Use Tax, 6.85%, 8/1/00, AMBAC............ 754
800 Baton Rouge Public Improvements, Sales &
Use Tax, 6.90%, 8/1/01, AMBAC............ 860
2,000 Baton Rouge Public Improvements, Sales &
Use Tax, 6.00%, 8/1/04, FSA.............. 2,107
765 Baton Rouge Public Improvements, Sales &
Use Tax, 6.38%, 8/1/09, FSA.............. 801
1,145 Baton Rouge, Sales & Use Tax--Series A,
6.00%, 8/1/06, Callable 8/1/01 @101.5,
FSA...................................... 1,192
400 Bossier City Public Improvement, Sales &
Use Tax, Series ST-1989, 6.88%, 11/1/06,
FGIC..................................... 429
400 Bossier City Public Improvement, Sales &
Use Tax, 6.88%, 11/1/07, FGIC............ 429
805 Bossier City Public Improvement, Sales &
Use Tax, Series ST, 6.20%, 11/1/07,
AMBAC.................................... 849
550 Bossier City Public Improvement, Sales &
Use Tax, 6.88%, 11/1/08, FGIC............ 590
795 Bossier City Utilities Revenue, 5.10%,
10/1/08.................................. 767
1,415 Caddo Parish GO, 5.25%, 2/1/06, MBIA....... 1,416
750 Caddo Parish GO, 5.25%, 2/1/08, MBIA....... 738
470 Caddo Parish Industrial Development Board,
5.95%, 11/1/07, Wal-Mart Stores Income
Project.................................. 462
500 Caddo Parish School District, 5.00%,
3/1/03, GO, MBIA......................... 501
500 Calcasieu Parish School District, # 22,
Ward 3, Series A, GO, 7.10%, 2/1/01,
BIG...................................... 527
4,335 De Soto Parish Pollution Control Revenue
Series A, 5.05%,12/1/02, International
Paper Co................................. 4,340
120 De Soto Parish School District # 2, GO,
8.00%, 8/1/05............................ 129
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Louisiana, continued:
$ 1,280 East Baton Rouge Mortgage Finance
Authority, 5.45%, 10/1/03, GNMA/ FNMA.... $ 1,268
740 East Baton Rouge Mortgage Finance
Authority, 4.50%, 10/1/09, GNMA/ FNMA.... 710
530 East Baton Rouge Mortgage Finance
Authority, 4.75%, 10/1/09, GNMA/ FNMA.... 513
1,200 East Baton Rouge Mortgage Finance
Authority, 5.50%, 10/1/21, GNMA/ FNMA.... 1,201
500 East Baton Rouge Parish Sales & Use Tax,
7.10%, 2/1/99, MBIA...................... 532
500 East Baton Rouge Parish Sales & Use Tax,
7.10%, 2/1/00, MBIA...................... 539
500 East Baton Rouge Parish Sales & Use Tax,
Series ST, 5.80%, 2/1/07, FGIC........... 518
845 East Baton Rouge Parish Sales & Use Tax,
Series ST, 5.80%, 2/1/08, FGIC........... 870
910 East Baton Rouge Parish Sales & Use Tax,
Series ST, 5.80%, 2/1/09, FGIC........... 930
1,085 East Baton Rouge Parish, Series ST, 5.15%,
2/1/05................................... 1,071
1,145 East Baton Rouge Parish, Series ST, 5.15%,
2/1/06................................... 1,117
2,280 East Baton Rouge Parish, Series ST-A,
8.00%, 2/1/02, FGIC...................... 2,614
1,000 East Baton Rouge Parish, Series ST, 5.10%,
2/1/07, FGIC, Callable 2/1/06 @101.5..... 973
1,390 Greater Baton Rouge Parking Authority,
Sales & Use Tax, 6.38%, 7/1/03........... 1,394
1,560 Houma Utilities Revenue, 6.13%, 1/1/07,
FGIC..................................... 1,633
730 Housing Finance Agency, Mortgage Revenue
Super Sinker--Single Family A-1, 5.70%,
6/1/15, GNMA/FNMA/ FHLMC................. 732
2,500 Housing Family Agency, Mortgage Revenue,
5.13%, 12/1/10........................... 2,478
1,395 Iberia Home Mortgage Authority, 7.38%,
1/1/11................................... 1,485
300 Iberville Parish Sales & Use Tax, 6.20%,
9/1/98, MBIA............................. 305
500 Jefferson Parish GO, 7.10%, 9/1/97, FGIC... 519
500 Jefferson Parish GO, 7.40%, 9/1/99, FGIC... 516
250 Jefferson Parish GO, 7.70%, 9/1/02, FGIC... 259
400 Jefferson Parish Construction Waterworks
District # 2 GO, 7.25%, 1/15/00.......... 405
3,180 Jefferson Parish Drain, Sales Tax Revenue,
6.50%, 11/1/06, AMBAC.................... 3,393
</TABLE>
CONTINUED
35----
<PAGE> 849
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LOUISIANA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Louisiana, continued:
$ 350 Jefferson Parish Home Mortgage Authority,
Single Family Mortgage Revenue, 4.50%,
6/1/13................................... $ 341
4,920 Jefferson Parish Sales Tax District
Special, Series A, 6.75%, 12/1/06,
FGIC..................................... 5,354
1,985 Jefferson Parish Sales Tax District
Special, Series B, 6.75%, 12/1/06,
FGIC..................................... 2,160
1,000 Jefferson Parish School Board, Sales & Use
Tax, 4.75%, 2/1/06, AMBAC................ 949
4,000 Jefferson Parish School Board, Sales & Use
Tax Revenue Refunding, 6.05%, 2/1/02,
MBIA..................................... 4,228
1,270 Jefferson Parish School Board, Sales & Use
Tax Revenue Refunding, 6.15%, 2/1/03,
MBIA..................................... 1,350
4,500 Jefferson Parish School Board, Sales & Use
Tax Revenue Refunding, 6.25%, 2/1/08,
MBIA..................................... 4,735
880 Kenner Sales & Use Tax Revenue Refunding,
5.75%, 6/1/06, FGIC...................... 910
1,000 Lafayette Parish Refunding, 7.80%, 3/1/01,
GO, FGIC................................. 1,067
750 Lafourche Parish Hospital Service District
# 3 Hospital Revenue, 5.50%, 10/1/04..... 721
1,730 Lafayette Parish Public Power Authority
Electricity Revenue, 6.80%, 11/1/00...... 1,797
4,000 Lafayette Parish Public Power Authority
Electricity Revenue Refunding-- Series
ST-1987, 7.13%, 11/1/07.................. 4,146
500 Lafayette Parish Public Power Authority
Electricity Revenue Refunding, 7.25%,
11/1/12, BIG............................. 520
650 Lafourche Parish Water District # 1 Water
Revenue Refunding, 5.63%, 1/1/01......... 665
500 Lincoln Parish School District # 1 Ruston
Refunding, 6.20%, 3/1/03, GO, MBIA....... 524
1,465 Lincoln Parish School District # 1 Ruston
Refunding, 6.40%, 3/1/05, GO, MBIA....... 1,540
1,220 Monroe Parish Special School District GO,
8.00%, 3/1/01, MBIA...................... 1,381
1,300 Monroe Parish Special School District GO,
7.00%, 3/1/02, MBIA...................... 1,432
1,390 Monroe Parish Special School District GO,
7.00%, 3/1/03, MBIA...................... 1,545
1,230 Monroe Parish Special School District GO,
5.35%, 3/1/05, FGIC...................... 1,246
1,320 Monroe Parish Special School District GO,
5.35%, 3/1/06, FGIC...................... 1,327
550 New Orleans, 5.85%, 11/1/07, GO, FGIC...... 570
500 New Orleans Exhibition Hall Authority,
0.00%, 1/15/08........................... 265
500 New Orleans Exhibition Hall Authority,
0.00%, 7/15/08........................... 257
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Louisiana, continued:
$ 2,525 Ouachita Parish Hospital Service, Glenwood
Regional Medical Center, Health Care
Revenue, 7.50%, 7/1/06, Callable 7/1/01
@102..................................... $ 2,628
2,000 Ouachita Parish West School District
GO--Refunding Series A, 6.50%, 3/1/03,
FSA, Callable 3/1/01 @102................ 2,159
1,250 Ouachita Parish West School District
GO--Refunding Series A, 6.60%, 3/1/04,
FSA, Callable 3/1/01 @102................ 1,354
2,695 Ouachita Parish West School District
GO--Refunding Series A, 6.65%, 3/1/05,
FSA...................................... 2,926
1,655 Ouachita Parish West School District
GO--Refunding Series A, 6.70%, 3/1/06,
FSA...................................... 1,796
1,440 Plaquemines Parish GO, 6.40%, 8/1/04,
AMBAC.................................... 1,548
420 Plaquemines Parish, Sales & Use Tax, 6.70%,
12/1/08.................................. 443
410 Plaquemines Parish, Sales & Use Tax, 6.70%,
12/1/09.................................. 430
605 Plaquemines Parish School Board, Sales &
Use Tax, 6.65%, 3/1/05................... 649
2,280 Public Facilities Authority, Alton Ochsner
Medical Foundation, Project A, Health
Care Revenue, 6.30%, 5/15/04, MBIA....... 2,437
1,030 Public Facilities Authority, General
Health, Inc. Project, Health Care
Revenue, 5.55%, 11/1/04, MBIA............ 1,060
1,000 Public Facilities Authority, Lafayette
General Medical Center Project, Health
Care Revenue, 6.05%, 10/1/04, FSA,
Callable 10/1/02 @102.................... 1,059
1,135 Public Facilities Authority, Mary Bird
Perkins Cancer Center, Health Care
Revenue, 5.50%, 1/1/04, FSA.............. 1,159
500 Public Facilities Authority, Our Lady of
Lake Hospital, Health Care Revenue,
5.70%, 12/1/04, MBIA, Callable 12/1/01
@102..................................... 514
1,785 Public Facilities Authority Revenue, Health
& Education, Health Care Revenue, 7.30%,
12/1/15, Sumitomo Bank, Ltd., Mandatory
Put 6/1/97 @100*......................... 1,831
3,925 Public Facilities Authority Revenue, Health
& Education Series B, Health Care
Revenue, 7.30%, 12/1/15, Sumitomo Bank,
Ltd., Mandatory Put 6/1/97 @100*......... 4,045
500 Public Facilities Authority Revenue, Loyola
University Series A, 7.20%, 10/1/00,
Callable 10/1/99 @102.................... 542
</TABLE>
CONTINUED
- ----36
<PAGE> 850
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LOUISIANA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Louisiana, continued:
$ 1,960 Public Facilities Authority Revenue, Loyola
University, 6.60%, 4/1/05, Callable
4/1/02 @102.............................. $ 2,119
750 Public Facilities Authority Revenue, Tulane
University Series C, 7.00%, 8/15/97...... 775
300 Public Facilities Authority Revenue, Tulane
University Series C, 7.20%, 8/15/98,
Callable 8/15/97 @102.................... 315
300 Public Facilities Authority Revenue, Tulane
University Series A, 7.50%, 5/15/00,
Callable 5/15/98 @102.................... 319
735 Public Facilities Authority Revenue, Tulane
University, 5.55%, 10/1/07, AMBAC,
Callable 10/1/06 @102.................... 742
1,605 Public Facilities Authority Revenue, Tulane
University, 5.75%, 10/1/09, AMBAC,
Callable 10/1/06 @102.................... 1,619
2,145 Public Facilities Authority Revenue, Tulane
University, Unrefunded Balance, 6.25%,
7/15/06.................................. 2,238
550 Public Facilities Authority Revenue, Tulane
University, Unrefunded Balance, 6.40%,
11/15/07................................. 579
605 Public Facilities Authority Revenue, Tulane
University Series B, Unrefunded Balance,
7.00%, 8/15/97........................... 625
170 Public Facilities Authority Revenue, Tulane
University Series B, Unrefunded Balance,
7.20%, 8/15/98........................... 178
325 Public Facilities Authority Revenue, Tulane
University Series A-1, Unrefunded
Balance, 5.80%, 2/15/04, FGIC............ 340
725 Public Facilities Authority Revenue, Tulane
University Series A-1, Unrefunded
Balance, 6.00%, 2/15/07, FGIC............ 758
710 Public Facilities Authority Revenue
Refunding, Multi-Family Housing, Linlake
Village, 5.25%, 6/1/07*.................. 718
110 Public Facilities Authority Revenue,
Special Assessment (Escrowed), 7.38%,
6/1/09................................... 119
870 Public Facilities Authority, St. Francis
Medical Center Project, Health Care
Revenue, 4.90%, 7/1/05, FSA, Callable
7/1/04 @102.............................. 843
500 Public Facilities Authority, Women's
Hospital Foundation, Health Care Revenue,
7.20%, 10/1/97, FGIC..................... 519
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Louisiana, continued:
$ 1,235 Public Facilities Authority, Women's
Hospital Foundation, Health Care Revenue,
6.85%, 10/1/05, Callable 10/1/02 @102.... $ 1,250
730 Public Facilities Authority, Women's
Hospital Foundation, Health Care Revenue,
5.40%, 10/1/05, FGIC, Callable 10/1/04
@102..................................... 733
1,715 Public Facilities Authority, Women's
Hospital Foundation, Health Care Revenue,
5.50%, 10/1/06, FGIC, Callable 10/1/04
@102..................................... 1,723
670 Rapides Parish School District #11 GO,
6.90%, 2/1/01, FGIC...................... 715
1,475 Rapides Parish School District #11 GO,
6.95%, 2/1/02, FGIC...................... 1,570
500 Rapides Parish Consolidated School District
#62 GO, 7.25%, 4/1/00, MBIA.............. 533
750 St Charles Parish Public Improvement, Sales
& Use Tax, 6.60%, 11/1/07................ 783
1,000 St. Charles Parish School District # 1 GO,
6.25%, 3/1/04, AMBAC..................... 1,058
2,350 St. Charles Parish School District # 1 GO,
6.45%, 3/1/06, AMBAC..................... 2,485
870 St John Baptist Parish School District #1
GO, 6.25%, 3/1/05........................ 904
1,000 St. Landry Parish Consolidated School
District # 1 GO, 8.00%, 5/1/98, MBIA..... 1,066
750 St. Landry Parish Consolidated School
District # 1 GO, 6.10%, 5/1/07, MBIA..... 777
300 St. Tammany Parish Refunding GO, 7.40%,
3/1/98, FGIC............................. 315
1,000 St. Tammany Parish District # 3 Series A,
Sales & Use Tax, 6.50%, 12/1/02, FGIC.... 1,066
1,000 St. Tammany Parish District # 3 Series A,
Sales & Use Tax, 6.50%, 12/1/03, FGIC.... 1,071
750 St. Tammany Parish District # 3 Series A,
Sales & Use Tax, 6.50%, 12/1/05, FGIC.... 792
1,815 St. Tammany Parish Hospital Service,
Hospital District # 1, Health Care
Revenue, 6.30%, 7/1/07, FGIC............. 1,867
620 St. Tammany Parish School Board, Sales &
Use Tax, 6.70%, 4/1/98, FGIC............. 645
550 St. Tammany Parish School District # 12,
Sales & Use Tax, 6.50%, 3/1/01, FGIC..... 590
400 St. Tammany Parish School District # 12,
Sales & Use Tax, 6.50%, 3/1/04, FGIC..... 422
480 Shreveport GO, 6.20%, 3/1/02, AMBAC........ 506
500 Shreveport GO, 6.70%, 2/1/03, AMBAC........ 533
480 Shreveport GO, 5.90%, 2/1/07............... 490
1,000 Shreveport GO, 5.20%, 2/1/10, AMBAC........ 960
930 Shreveport Water & Sewer Revenue Series A,
7.75%, 12/1/02, FGIC..................... 1,073
</TABLE>
CONTINUED
37----
<PAGE> 851
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LOUISIANA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
MUNICIPAL BONDS, CONTINUED:
<C> <S> <C>
Louisiana, continued:
$ 500 Shreveport Water & Sewer Revenue Series A,
6.25%, 12/1/03, FGIC..................... $ 540
1,665 Stadium & Exposition District, Hotel
Occupancy Tax & Stadium Revenue, 5.65%,
7/1/07, Callable 7/1/04 @102............. 1,702
2,750 State GO, 7.10%, 9/1/03, FSA, Callable
9/1/00 @102.............................. 3,031
1,750 State GO, 5.80%, 8/1/10.................... 1,795
750 State Correctional Facilities Corporate
Lease Revenue Refunding, 5.60%, 12/15/03,
FSA...................................... 773
3,020 State Energy & Power Authority Power
Project Revenue Refunding-- Rodemacher
Unit # 2, 6.75%, 1/1/08, FGIC............ 3,270
800 State Gas & Fuels Tax Revenue Series A,
7.20%, 11/15/99.......................... 860
1,500 State Gas & Fuels Tax Revenue Series A,
7.25%, 11/15/04.......................... 1,633
400 State Offshore Terminal Authority Deepwater
Port Revenue, Refunding, 1st Stage Series
B, Loop Inc., 6.00%, 9/1/01.............. 416
1,065 State Offshore Terminal Authority Deepwater
Port Revenue, Refunding, 1st Stage Series
B, Loop Inc., 6.10%, 9/1/02.............. 1,115
2,750 State Offshore Terminal Authority Deepwater
Port Revenue, Refunding, 1st Stage Series
B, Loop Inc., 6.25%, 9/1/04.............. 2,903
4,000 State Reference Series A, 6.00%, 8/1/04,
FGIC..................................... 4,247
2,160 State Reference Series A, GO, 7.00%,
8/1/02, Callable 8/1/97 @102............. 2,276
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------------------- ---------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Louisiana, continued:
$ 430 State Series A, 6.00%, 5/1/08, AMBAC....... $ 445
1,500 State Series A, GO, 6.00%, 8/1/00.......... 1,573
6,290 State Series A, GO, 6.00%, 5/15/99, MBIA... 6,533
150 Sulphur Public Improvements Series B, Sales
& Use Tax, 6.00%, 3/1/00, MBIA........... 150
615 Sulphur Public Improvements Series B, Sales
& Use Tax, 6.00%, 3/1/01, MBIA........... 616
1,435 Tangipahoa Parish Consolidated School
District # 1 Refunding, Sales & Use Tax,
6.15%, 12/1/07, GO....................... 1,498
1,285 Terrebonne Parish Hospital Service,
District # 1 Terrebone General Medical
Center Project, Health Care Revenue
Refunding, 7.40%, 4/1/03, BIG............ 1,366
690 Terrebonne Parish Waterworks District # 1,
Water Revenue, 5.70%, 11/1/06, FGIC...... 714
500 Terrebonne Parish Waterworks District # 1,
Water Revenue, 5.75%, 11/1/08, FGIC...... 509
555 Vermilion Parish Hospital Service, District
# 2, Health Care Revenue Refunding Series
A, GO, 6.35%, 5/1/00, MBIA............... 584
---------
Total Municipal Bonds 189,906
---------
INVESTMENT COMPANIES (1.5%):
2,929 The One Group Municipal Money Market Fund,
Fiduciary Class.......................... 2,929
---------
Total Investment Companies 2,929
---------
Total (Cost--$189,709) (a) $ 192,835
---------
---------
</TABLE>
- ------------
Percentages indicated are based on net assets of $192,743.
<TABLE>
<C> <S>
(a) Represents cost for federal income tax purposes and differs from value by net unrealized appreciation of securities as
follows (amounts in thousands):
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation..................................................... $ 4,000
Unrealized depreciation..................................................... (874)
---------
Net unrealized appreciation................................................. $ 3,126
---------
---------
</TABLE>
CONTINUED
- ----38
<PAGE> 852
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
LOUISIANA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<S> <C>
Variable rate securities having liquidity sources through bank letters of credit or other credit and/or
liquidity agreements. The interest rate, which will change periodically, is based upon bank prime rates or an
index of market interest rates. The rate reflected on the Schedule of Portfolio Investments is the rate in
* effect at June 30, 1996.
AMBAC Insured by AMBAC Indemnity Corporation
BIG Insured by Bond Insurance Guaranty
FGIC Insured by Financial Guaranty Insurance Corp.
FHLMC Insured by Federal Home Loan Mortgage Corp.
FNMA Insured by Federal National Mortgage Assoc.
FSA Insured by Financial Security Assurance
GNMA Insured by Government National Mortgage Assoc.
GO General Obligation
MBIA Insured by Municipal Bond Insurance Assoc.
ST Special Tax
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
39----
<PAGE> 853
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands, except per share amounts)
<S> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL KENTUCKY OHIO
TAX-FREE BOND INCOME MUNICIPAL BOND MUNICIPAL BOND
FUND FUND FUND FUND
-------------- ----------- ---------------- ----------------
ASSETS:
Investments, at value (cost $227,749; $291,275; $39,153;
$100,675; $189,709).................................... $ 230,575 $ 291,562 $ 39,523 $ 104,955
Interest receivable..................................... 3,134 4,987 644 1,160
Receivable from brokers for investments sold............ -- 772 -- --
Receivable for capital shares issued.................... 1,107 1,456 30 585
Receivable from adviser................................. 55 39 10 29
Deferred organization costs............................. -- 6 -- --
-------------- ----------- -------- --------
TOTAL ASSETS............................................ 234,871 298,822 40,207 106,729
-------------- ----------- -------- --------
LIABILITIES:
Cash overdrafts......................................... 1,107 1,063 28 186
Dividends payable....................................... 890 1,285 154 433
Payable to brokers for investments purchased............ 6,333 5,985 -- --
Payable for capital shares redeemed..................... 10 49 -- 4
Accrued expenses and other payables:
Investment advisory fees............................ 110 106 20 51
Administration fees................................. 30 39 5 14
12b-1 fees (Class A)................................ 1 5 2 4
12b-1 fees (Class B)................................ 2 17 1 6
Other............................................... 126 167 62 59
-------------- ----------- -------- --------
TOTAL LIABILITIES....................................... 8,609 8,716 272 757
-------------- ----------- -------- --------
NET ASSETS:
Capital................................................. 222,793 297,878 41,380 105,650
Undistributed net investment income..................... 233 20 -- 8
Accumulated undistributed net realized gains (losses)
from investment transactions........................... 410 (8,079) (1,815) (3,966)
Net unrealized appreciation (depreciation) from
investments............................................ 2,826 287 370 4,280
-------------- ----------- -------- --------
NET ASSETS.............................................. $ 226,262 $ 290,106 $ 39,935 $ 105,972
-------------- ----------- -------- --------
-------------- ----------- -------- --------
Net Assets
Fiduciary........................................... $ 217,201 $ 241,115 $ 30,300 $ 80,611
Class A............................................. 6,622 25,787 8,178 16,507
Class B............................................. 2,439 23,204 1,457 8,854
-------------- ----------- -------- --------
$ 226,262 $ 290,106 $ 39,935 $ 105,972
-------------- ----------- -------- --------
-------------- ----------- -------- --------
Outstanding units of beneficial interest (shares)
Fiduciary........................................... 20,353 24,956 3,018 7,540
Class A............................................. 621 2,662 814 1,540
Class B............................................. 228 2,403 146 820
-------------- ----------- -------- --------
Total................................................... 21,202 30,021 3,978 9,900
-------------- ----------- -------- --------
-------------- ----------- -------- --------
Net asset value
Fiduciary--offering and redemption price per
share............................................. $ 10.67 $ 9.66 $ 10.04 $ 10.69
-------------- ----------- -------- --------
-------------- ----------- -------- --------
Class A--redemption price per share................. $ 10.67 $ 9.69 $ 10.05 $ 10.72
-------------- ----------- -------- --------
-------------- ----------- -------- --------
Class A--maximum sales charge....................... 4.50% 4.50% 4.50% 4.50%
-------------- ----------- -------- --------
-------------- ----------- -------- --------
Class A maximum offering price (100%/ (100%-maximum
sales charge) of net asset value adjusted to
nearest cent) per share........................... $ 11.17 $ 10.15 $ 10.52 $ 11.23
-------------- ----------- -------- --------
-------------- ----------- -------- --------
Class B--offering price per share (a)............... $ 10.68 $ 9.66 $ 9.99 $ 10.79
-------------- ----------- -------- --------
-------------- ----------- -------- --------
<CAPTION>
<S> <C>
LOUISIANA
MUNICIPAL BOND
FUND
----------------
ASSETS:
Investments, at value (cost $227,749; $291,275; $39,153;
$100,675; $189,709).................................... $ 192,835
Interest receivable..................................... 3,197
Receivable from brokers for investments sold............ --
Receivable for capital shares issued.................... 32
Receivable from adviser................................. 32
Deferred organization costs............................. --
--------
TOTAL ASSETS............................................ 196,096
--------
LIABILITIES:
Cash overdrafts......................................... --
Dividends payable....................................... 733
Payable to brokers for investments purchased............ 2,395
Payable for capital shares redeemed..................... 21
Accrued expenses and other payables:
Investment advisory fees............................ 95
Administration fees................................. 26
12b-1 fees (Class A)................................ 11
12b-1 fees (Class B)................................ 2
Other............................................... 70
--------
TOTAL LIABILITIES....................................... 3,353
--------
NET ASSETS:
Capital................................................. 190,213
Undistributed net investment income..................... --
Accumulated undistributed net realized gains (losses)
from investment transactions........................... (596)
Net unrealized appreciation (depreciation) from
investments............................................ 3,126
--------
NET ASSETS.............................................. $ 192,743
--------
--------
Net Assets
Fiduciary........................................... $ 136,041
Class A............................................. 53,479
Class B............................................. 3,223
--------
$ 192,743
--------
--------
Outstanding units of beneficial interest (shares)
Fiduciary........................................... 13,706
Class A............................................. 5,388
Class B............................................. 325
--------
Total................................................... 19,419
--------
--------
Net asset value
Fiduciary--offering and redemption price per
share............................................. $ 9.93
--------
--------
Class A--redemption price per share................. $ 9.93
--------
--------
Class A--maximum sales charge....................... 4.50%
--------
--------
Class A maximum offering price (100%/ (100%-maximum
sales charge) of net asset value adjusted to
nearest cent) per share........................... $ 10.40
--------
--------
Class B--offering price per share (a)............... $ 9.93
--------
--------
</TABLE>
- ---------
<TABLE>
<C> <S>
(a) Redemption price per Class B share varies based on length of time shares are held.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----40
<PAGE> 854
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL KENTUCKY OHIO
TAX-FREE INCOME MUNICIPAL MUNICIPAL
BOND FUND FUND BOND FUND BOND FUND
--------------- ----------- ----------------- -----------------
INVESTMENT INCOME:
Interest income......................................... $ 12,507 $ 15,260 $ 2,128 $ 5,574
Dividend income......................................... 105 82 17 85
------- ----------- ------ ------
Total Income............................................ 12,612 15,342 2,145 5,659
------- ----------- ------ ------
EXPENSES:
Investment advisory fees................................ 1,400 1,103 241 586
Administration fees..................................... 390 409 68 165
12b-1 fees (Class A).................................... 25 64 30 48
12b-1 fees (Class B).................................... 16 139 5 56
Custodian and accounting fees........................... 56 93 22 29
Legal and audit fees.................................... 29 55 15 20
Organization costs...................................... 1 3 -- 6
Trustees' fees and expenses............................. 6 7 1 3
Transfer agent fees..................................... 67 100 42 88
Registration and filing fees............................ 48 46 10 21
Printing costs.......................................... 31 36 8 17
Other................................................... 10 13 3 5
------- ----------- ------ ------
Total expenses before waivers/reimbursements............ 2,079 2,068 445 1,044
Less waivers/reimbursements............................. (779) (507) (146) (395)
------- ----------- ------ ------
Net expenses............................................ 1,300 1,561 300 649
------- ----------- ------ ------
Net Investment Income................................... 11,312 13,781 1,845 5,010
------- ----------- ------ ------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains (losses) from investment
transactions........................................... 1,432 (2,505) (36) (253)
Net change in unrealized appreciation (depreciation)
from investments....................................... (248) 1,176 571 483
------- ----------- ------ ------
Net realized/unrealized gains (losses) from
investments............................................ 1,184 (1,329) 535 230
------- ----------- ------ ------
Change in net assets resulting from operations.......... $ 12,496 $ 12,452 $ 2,380 $ 5,240
------- ----------- ------ ------
------- ----------- ------ ------
<CAPTION>
<S> <C>
LOUISIANA
MUNICIPAL
BOND FUND(A)
----------------
INVESTMENT INCOME:
Interest income......................................... $ 6,372
Dividend income......................................... 40
-------
Total Income............................................ 6,412
-------
EXPENSES:
Investment advisory fees................................ 641
Administration fees..................................... 185
12b-1 fees (Class A).................................... 52
12b-1 fees (Class B).................................... 14
Custodian and accounting fees........................... 51
Legal and audit fees.................................... 26
Organization costs...................................... 1
Trustees' fees and expenses............................. 2
Transfer agent fees..................................... 55
Registration and filing fees............................ --
Printing costs.......................................... 6
Other................................................... 19
-------
Total expenses before waivers/reimbursements............ 1,052
Less waivers/reimbursements............................. (218)
-------
Net expenses............................................ 834
-------
Net Investment Income................................... 5,578
-------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains (losses) from investment
transactions........................................... (146)
Net change in unrealized appreciation (depreciation)
from investments....................................... (3,198)
-------
Net realized/unrealized gains (losses) from
investments............................................ (3,344)
-------
Change in net assets resulting from operations.......... $ 2,234
-------
-------
</TABLE>
- ---------
<TABLE>
<C> <S>
(a) For the period from December 1, 1995 to June 30, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41----
<PAGE> 855
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE KENTUCKY MUNICIPAL BOND
TAX-FREE BOND FUND MUNICIPAL FUND
INCOME FUND ------------------------
------------------------ ------------------------ PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED ENDED JUNE
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, 30,
1996 1995 1996 1995 1996 1995 (A)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.................. $ 11,312 $ 10,310 $ 13,782 $ 10,865 $ 1,845 $ 886
Net realized gains (losses) from
investment and transactions.......... 1,432 1,387 (2,505) (3,212) (36) (447)
Net change in unrealized appreciation
(depreciation) from investments...... (248) 1,623 1,176 3,441 571 2,403
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting from
operations............................... 12,496 13,320 12,453 11,094 2,380 2,842
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income............. (10,698) (9,992) (12,119) (9,899) (1,450) (704)
From net realized gains from investment
transactions......................... (468) -- -- -- -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income............. (328) (237) (996) (593) (374) (182)
In excess of net investment income..... -- (11) -- -- -- --
From net realized gains from investment
transactions......................... (17) -- -- -- -- --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income............. (64) (35) (666) (343) (21) --
From net realized gains from investment
transactions......................... (3) -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets from shareholder
distributions............................ (11,578) (10,275) (13,781) (10,835) (1,845) (886)
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............ 79,285 76,973 135,163 92,292 7,868 13,688
Dividends reinvested................... 1,603 1,337 1,920 1,490 224 117
Cost of shares redeemed................ (73,503) (52,112) (51,353) (56,680) (10,109) (16,297)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets from share
transactions............................. 7,385 26,198 85,730 37,102 (2,017) (2,492)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets....................... 8,303 29,243 84,402 37,361 (1,482) (536)
NET ASSETS:
Beginning of period.................... 217,959 188,716 205,704 168,343 41,417 41,953
----------- ----------- ----------- ----------- ----------- -----------
End of period.......................... $ 226,262 $ 217,959 $ 290,106 $ 205,704 $ 39,935 $ 41,417
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
SHARE TRANSACTIONS:
Issued................................. 7,384 7,387 13,875 9,619 779 1,341
Reinvested............................. 148 128 197 155 23 12
Redeemed............................... (6,824) (5,012) (5,278) (5,967) (997) (1,602)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Change in shares........................... 708 2,503 8,794 3,807 (195) (249)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Undistributed (distributions in excess of)
net investment income included in net
assets:
End of period.......................... $ 233 $ 11 $ 20 $ 19 $ -- $ --
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
PERIOD
ENDED
JANUARY 19,
1995 (B)
------------
<S> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.................. $ 2,318
Net realized gains (losses) from
investment and transactions.......... (1,331)
Net change in unrealized appreciation
(depreciation) from investments...... (4,798)
------------
Change in net assets resulting from
operations............................... (3,811)
------------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income............. (2,409)
From net realized gains from investment
transactions......................... --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income............. --
In excess of net investment income..... --
From net realized gains from investment
transactions......................... --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income............. --
From net realized gains from investment
transactions......................... --
------------
Change in net assets from shareholder
distributions............................ (2,409)
------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............ 12,790
Dividends reinvested................... 340
Cost of shares redeemed................ (29,620)
------------
Change in net assets from share
transactions............................. (16,490)
------------
Change in net assets....................... (22,710)
NET ASSETS:
Beginning of period.................... 64,663
------------
End of period.......................... $ 41,953
------------
------------
SHARE TRANSACTIONS:
Issued................................. 1,300
Reinvested............................. 35
Redeemed............................... (3,103)
------------
------------
Change in shares........................... (1,768)
------------
------------
Undistributed (distributions in excess of)
net investment income included in net
assets:
End of period.......................... $ --
------------
------------
</TABLE>
- ---------
<TABLE>
<C> <S>
(a) For the period from January 20, 1995 (date merged) to June 30, 1995.
</TABLE>
<TABLE>
<C> <S>
(b) For the period from February 1, 1994 to January 19, 1995.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----42
<PAGE> 856
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
LOUISIANA MUNICIPAL BOND FUND (A)
------------------------ ----------------------------------------------
YEAR ENDED YEAR ENDED SEVEN MONTHS YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, ENDED JUNE 30, NOVEMBER 30, NOVEMBER 30,
1996 1995 1996 1995 1994
----------- ----------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........................... $ 5,010 $ 5,282 $ 5,578 $ 10,058 $ 10,034
Net realized losses from investment
transactions.................................. (253) (3,290) (146) (11) (403)
Net change in unrealized appreciation
(depreciation) from investments............... 483 3,601 (3,198) 14,487 (15,995)
----------- ----------- -------------- -------------- --------------
Change in net assets resulting from operations...... 5,240 5,593 2,234 24,534 (6,364)
----------- ----------- -------------- -------------- --------------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS (B):
From net investment income...................... (4,102) (4,520) (1,732) -- --
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income...................... (670) (627) (3,782) (10,014) (10,033)
In excess of net investment income.............. -- (22) -- -- --
From net realized gains......................... -- -- -- -- (2,114)
In excess of net realized gains from investment
transactions.................................. -- -- -- -- (36)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income...................... (238) (112) (64) (44) (2)
In excess of net investment income.............. -- (1) -- -- --
----------- ----------- -------------- -------------- --------------
Change in net assets from shareholder
distributions..................................... (5,010) (5,282) (5,578) (10,058) (12,185)
----------- ----------- -------------- -------------- --------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..................... 28,462 12,266 13,459 27,568 44,951
Dividends reinvested............................ 890 870 929 1,980 2,653
Cost of shares redeemed......................... (18,818) (28,426) (26,535) (32,814) (28,565)
----------- ----------- -------------- -------------- --------------
Change in net assets from share transactions........ 10,534 (15,290) (12,147) (3,266) 19,039
----------- ----------- -------------- -------------- --------------
Change in net assets................................ 10,764 (14,979) (15,491) 11,210 490
NET ASSETS:
Beginning of period............................. 95,208 110,187 208,234 197,024 196,534
----------- ----------- -------------- -------------- --------------
End of period................................... $ 105,972 $ 95,208 $ 192,743 $ 208,234 $ 197,024
----------- ----------- -------------- -------------- --------------
----------- ----------- -------------- -------------- --------------
SHARE TRANSACTIONS:
Issued.......................................... 2,628 1,160 870 2,610 4,251
Issued in restatement of net asset value (c).... 1,261
Reinvested...................................... 82 82 89 189 250
Redeemed........................................ (1,744) (2,717) (2,146) (3,138) (2,744)
----------- ----------- -------------- -------------- --------------
Change in shares.................................... 966 (1,475) 74 (339) 1,757
----------- ----------- -------------- -------------- --------------
----------- ----------- -------------- -------------- --------------
Undistributed (distributions in excess of) net
investment income included in net assets:
End of period................................... $ 8 $ 8 $ -- $ -- $ --
----------- ----------- -------------- -------------- --------------
----------- ----------- -------------- -------------- --------------
</TABLE>
- ---------
<TABLE>
<C> <S>
(a) Upon reorganizing as a fund of The One Group, the Paragon Louisiana Tax-Free Fund became the Louisiana Municipal Bond
Fund. Changes in net assets for the periods prior to March 26, 1996 represent the Paragon Louisiana Tax-Free Fund.
</TABLE>
<TABLE>
<C> <S>
(b) Fiduciary Shares of the Louisiana Municipal Bond Fund commenced operations March 26, 1996 upon the conversion of
certain Class A Shares to Fiduciary Shares.
</TABLE>
<TABLE>
<C> <S>
(c) Pursuant to its reorganization as a fund of The One Group, the Louisiana Municipal Bond Fund issued additional shares
at the close of business March 25, 1996 as a result of restatement of the net asset values of Class A Shares from
$10.67 to $10.00 and Class B Shares from $10.70 to $10.00.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
43----
<PAGE> 857
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1996
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-six active funds. The accompanying
financial statements and financial highlights are those of the Intermediate
Tax-Free Bond Fund, the Municipal Income Fund, the Kentucky Municipal Bond
Fund, the Ohio Municipal Bond Fund and the Louisiana Municipal Bond Fund
(individually a "Fund", collectively the "Funds") only. The Funds are each
offered in Fiduciary Class, Class A and Class B Shares. Class A Shares are
subject to initial sales charges, imposed at the time of purchase, in
accordance with the Funds' prospectuses. Certain redemptions of Class B
Shares are subject to contingent deferred sales charges in accordance with
the Funds' prospectuses. Each Fund is a diversified mutual fund, except for
the Kentucky Municipal Bond Fund, Ohio Municipal Bond Fund, and the
Louisiana Municipal Bond Fund, which are non-diversified. Effective February
7, 1996, the Tax-Free Bond Fund was renamed the Municipal Income Fund.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with the Paragon Portfolio ("Paragon"), a Massachusetts
business trust. Pursuant to the Agreement all of the assets and liabilities
of each Paragon Fund transferred to a fund of The One Group in exchange for
shares of the corresponding fund of The One Group. Subsequent to the
reorganization, the fiscal year end changed from November 30 to June 30 for
the Louisiana Municipal Bond Fund. Therefore, the current period statements
of operations and changes in net assets for that Fund present the results of
operations and changes in net assets for the seven months ended June 30,
1996.
The Funds' investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
- ---------------------------------- -------------------------------------------------------------------
<S> <C>
Intermediate Tax-Free Bond Fund Current income exempt from Federal income taxes consistent with
prudent investment management and the preservation of capital.
Municipal Income Fund Current income exempt from Federal income taxes.
Kentucky Municipal Bond Fund Current income both consistent with the preservation of capital and
exempt from federal income tax and Kentucky personal income tax.
Ohio Municipal Bond Fund Current income both consistent with the preservation of principal
and exempt from federal and Ohio income tax.
Louisiana Municipal Bond Fund Current income both consistent with the preservation of principal
and exempt from federal and Louisiana income tax.
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. 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
- ----44
<PAGE> 858
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
SECURITY VALUATION
Corporate debt securities and debt securities of U.S. issuers (other than
short-term investments maturing in 60 days or less), including municipal
securities, are valued on the basis of valuations provided by dealers or by
an independent pricing service approved by the Board of Trustees.
Short-term investments maturing in 60 days or less are valued at amortized
cost, which approximates market value. Futures contracts are valued at the
settlement price established each day by the board of trade or an exchange
on which they are traded. Options traded on an exchange are valued using
the last sale price or, in the absence of a sale, the last offering price.
Options traded over-the-counter are valued using dealer-supplied
valuations. Investments for which there are no such quotations or
valuations are valued at fair value as determined in good faith by the
investment adviser under the direction of the Board of Trustees.
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 agreement 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.
WRITTEN OPTIONS
The Funds may write covered call or put options for which premiums received
are recorded as liabilities and are subsequently adjusted to the current
value of the options written. Premiums received from writing options which
expire are treated as realized gains. Premiums received from writing
options, which are either exercised or closed, are offset against the
proceeds received or amount paid on the transaction to determine realized
gains or losses.
FUTURES CONTRACTS
The Funds may enter into futures contracts for the delayed delivery of
securities at a fixed price at some future date or for the change in the
value of a specified financial index over a predetermined time period. Cash
or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received by the fund based on the daily change
in the market value of the position are recorded as unrealized appreciation
or depreciation until the contract is closed out, at which time the
appreciation or depreciation is realized.
INDEXED SECURITIES
The Funds may invest in indexed securities whose value is linked either
directly or inversely to changes in foreign currencies, interest rates,
commodities, indices or other reference instruments. Indexed securities may
be more volatile than the referenced instrument itself, but any loss is
limited to the amount of the original investment.
MORTGAGE ROLLS
The Funds may enter into mortgage "dollar rolls" in which the Fund sells
mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar securities on
a specified future date. During the roll period, the Fund forgoes principal
and interest paid on the mortgage-backed securities. The Fund is
compensated by fee income, for the difference between the current sales
price and the lower forward price for the future purchase.
CONTINUED
45----
<PAGE> 859
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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
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 creditworthy 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
June 30, 1996, the Funds had no securities on loan.
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. Dividends are recorded on the ex-dividend date. Interest
income, including any discount or premium, is accrued as earned using the
effective interest method.
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. Each class of shares bears
its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class,
such as distribution fees.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid monthly for the
Funds. Net realized capital gains, if any, are distributed at least
annually. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
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 mortgage-backed securities, 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
CONTINUED
- ----46
<PAGE> 860
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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
The Trust treats each Fund as a separate entity for Federal income tax
purposes. 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.
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 thirty-two 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. The following
is a summary of transactions in Fund shares for the periods ended June 30,
1996 and June 30, 1995:
CONTINUED
47----
<PAGE> 861
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
INTERMEDIATE TAX-FREE MUNICIPAL INCOME FUND KENTUCKY MUNICIPAL BOND FUND
BOND FUND ---------------------- -------------------------------------
------------------------ YEAR PERIOD PERIOD
YEAR ENDED YEAR ENDED ENDED YEAR ENDED YEAR ENDED ENDED JUNE ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, 30, 1995 JANUARY 19,
1996 1995 1996 1995 1996 (A) 1995 (B)(C)
----------- ----------- --------- ----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued......... $ 73,620 $ 74,654 $ 100,593 $ 84,681 $ 6,010 $ 2,966 $ 12,790
Dividends reinvested................ 1,311 1,137 835 805 30 6 340
Cost of shares redeemed............. (69,859) (50,142) (45,206) (52,518) (8,690) (14,827) (29,620)
----------- ----------- --------- ----------- ----------- ----------- -----------
Change in net assets from Fiduciary
Share transactions................ $ 5,072 $ 25,649 $ 56,222 $ 32,968 $ (2,650) $ (11,855) $ (16,490)
----------- ----------- --------- ----------- ----------- ----------- -----------
----------- ----------- --------- ----------- ----------- ----------- -----------
CLASS A SHARES:
Proceeds from shares issued......... $ 4,157 $ 1,577 $ 18,884 $ 2,951 $ 475 $ 10,642
Dividends reinvested................ 246 176 699 470 186 111
Cost of shares redeemed............. (3,426) (1,755) (5,106) (2,721) (1,412) (1,470)
----------- ----------- --------- ----------- ----------- -----------
Change in net assets from Class A
Share transactions................ $ 977 $ (2) $ 14,477 $ 700 $ (751) $ 9,283
----------- ----------- --------- ----------- ----------- -----------
----------- ----------- --------- ----------- ----------- -----------
CLASS B SHARES:
Proceeds from shares issued......... $ 1,508 $ 742 $ 15,686 $ 4,660 $ 1,383 $ 80
Dividends reinvested................ 46 24 386 215 8
Cost of shares redeemed............. (218) (215) (1,041) (1,441) (7)
----------- ----------- --------- ----------- ----------- -----------
Change in net assets from Class B
Share transactions................ $ 1,336 $ 551 $ 15,031 $ 3,434 $ 1,384 $ 80
----------- ----------- --------- ----------- ----------- -----------
----------- ----------- --------- ----------- ----------- -----------
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued.............................. 6,859 7,168 10,330 8,830 593 307 1,300
Reinvested.......................... 121 109 86 84 4 1 35
Redeemed............................ (6,488) (4,824) (4,649) (5,532) (856) (1,453) (3,103)
----------- ----------- --------- ----------- ----------- ----------- -----------
Change in Fiduciary Shares.......... 492 2,453 5,767 3,382 (259) (1,145) (1,768)
----------- ----------- --------- ----------- ----------- ----------- -----------
----------- ----------- --------- ----------- ----------- ----------- -----------
CLASS A SHARES:
Issued.............................. 387 148 1,933 304 48 1,026
Reinvested.......................... 22 17 72 49 18 11
Redeemed............................ (316) (167) (522) (283) (140) (149)
----------- ----------- --------- ----------- ----------- -----------
Change in Class A Shares............ 93 (2) 1,483 70 (74) 888
----------- ----------- --------- ----------- ----------- -----------
----------- ----------- --------- ----------- ----------- -----------
CLASS B SHARES:
Issued.............................. 138 71 1,612 485 138 8
Reinvested.......................... 5 2 40 22 1
Redeemed............................ (20) (21) (108) (152) (1)
----------- ----------- --------- ----------- ----------- -----------
Change in Class B Shares............ 123 52 1,544 355 138 8
----------- ----------- --------- ----------- ----------- -----------
----------- ----------- --------- ----------- ----------- -----------
</TABLE>
- ------------
<TABLE>
<C> <S>
(a) For the period from January 20, 1995 (date merged) to June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(b) Prior to January 20, 1995, the Kentucky Municipal Bond Fund Shares were unclassified.
(c) For the period from February 1, 1994 to January 19, 1995.
</TABLE>
CONTINUED
- ----48
<PAGE> 862
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
OHIO MUNICIPAL LOUISIANA MUNICIPAL
BOND FUND BOND FUND (A)
-------------------- -------------------------------
YEAR YEAR YEAR
ENDED ENDED SEVEN MONTHS ENDED
JUNE 30, JUNE 30, ENDED JUNE 30, NOVEMBER 30,
1996 1995 1996 1995 (D)
--------- --------- --------------- --------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES (B):
Proceeds from shares issued...................................... $ 16,537 $ 9,413 6,255
Proceeds from shares issued in conversion from Class A Shares.... -- -- 137,607(b)
Dividends reinvested............................................. 245 298 --
Cost of shares redeemed.......................................... (16,421) (23,281) (6,804)
--------- --------- ---------------
Change in net assets from Fiduciary Share transactions........... $ 361 $ (13,570) $ 137,058
--------- --------- ---------------
--------- --------- ---------------
CLASS A SHARES:
Proceeds from shares issued...................................... $ 5,812 $ 1,338 $ 5,814 $ 25,634
Dividends reinvested............................................. 479 486 889 1,948
Cost of shares redeemed.......................................... (1,813) (4,694) (19,453) (32,701)
Cost of shares redeemed in conversion to Fiduciary Shares........ -- -- (137,607)(b) --
--------- --------- --------------- --------------
Change in net assets from Class A Share transactions............. $ 4,478 $ (2,870) $ (150,357) $ (5,119)
--------- --------- --------------- --------------
--------- --------- --------------- --------------
CLASS B SHARES:
Proceeds from shares issued...................................... $ 6,113 $ 1,515 $ 1,390 $ 1,934
Dividends reinvested............................................. 166 86 40 31
Cost of shares redeemed.......................................... (584) (451) (278) (112)
--------- --------- --------------- --------------
Change in net assets from Class B Share transactions............. $ 5,695 $ 1,150 $ 1,152 $ 1,853
--------- --------- --------------- --------------
--------- --------- --------------- --------------
SHARE TRANSACTIONS:
FIDUCIARY SHARES (B):
Issued........................................................... 1,528 892 195
Issued in conversion from Class A Shares......................... -- -- 13,761(b)
Reinvested....................................................... 23 28 --
Redeemed......................................................... (1,523) (2,223) (250)
--------- --------- ---------------
Change in Fiduciary Shares....................................... 28 (1,303) 13,706
--------- --------- ---------------
--------- --------- ---------------
CLASS A SHARES:
Issued........................................................... 539 126 545 2,426
Issued in restatement of net asset value(c)...................... -- -- 1,239 --
Reinvested....................................................... 44 46 85 186
Redeemed......................................................... (167) (451) (1,869) (3,127)
Redeemed in conversion to Fiduciary Shares....................... -- -- (13,761)(b)
--------- --------- --------------- --------------
Change in Class A Shares......................................... 416 (279) (13,761) (515)
--------- --------- --------------- --------------
--------- --------- --------------- --------------
CLASS B SHARES:
Issued........................................................... 561 142 130 183
Issued in restatement of net asset value(c)...................... -- -- 22 --
Reinvested....................................................... 15 8 4 3
Redeemed......................................................... (54) (43) (27) (10)
--------- --------- --------------- --------------
Change in Class B Shares......................................... 522 107 129 176
--------- --------- --------------- --------------
--------- --------- --------------- --------------
</TABLE>
- ------------
<TABLE>
<C> <S>
(a) Upon reorganizing as a fund of The One Group, The Paragon Louisiana Tax-Free Fund became the Louisiana Municipal Bond
Fund. Capital and share transactions for the period prior to March 26, 1996 represent the Paragon Louisiana Tax-Free
Fund.
</TABLE>
<TABLE>
<C> <S>
(b) Fiduciary Shares of the Louisiana Municipal Bond Fund commenced operations March 26, 1996 upon the conversion of
certain Class A Shares to Fiduciary Shares.
</TABLE>
<TABLE>
<C> <S>
(c) Pursuant to its reorganization as a fund of The One Group, the Louisiana Municipal Bond Fund issued additional shares
at the close of business March 25, 1996 as a result of restatement of the net asset values of Class A Shares from
$10.67 to $10.00 and Class B Shares from $10.70 to $10.00.
</TABLE>
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION 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
CONTINUED
49----
<PAGE> 863
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
to the following percentages of the Funds' average net assets: 0.60% of the
Intermediate Tax-Free Bond Fund, Kentucky Municipal Bond Fund, the Ohio
Municipal Bond Fund and the Louisiana Municipal Bond Fund; and 0.45% of the
Municipal Income Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services for
a fee that is computed daily and payable monthly, at an annual rate of 0.20%
on the first $1.5 billion of Trust net assets (excluding the Treasury Only
Money Market Fund and the Government Money Market Fund--the "Institutional
Money Market Funds"); 0.18% on the next $0.5 billion of Trust net assets
(excluding the Institutional Money Market Funds); and 0.16% of Trust net
assets (excluding the Institutional Money Market Funds) over $2 billion. 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 Advisor 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 (except Louisiana Municipal Bond Fund) under
essentially the same terms as the current administration agreement. Prior to
March 26, 1996, Goldman Sachs Asset Management served as administrator of
Paragon. The terms of the current administration agreement are substantially
the same as the former administration agreement.
The Trust and The One Group Services Company (the "Distributor") are parties
to a distribution agreement under which shares of the Funds are sold on a
continuous basis. Class A and Class B Shares are subject to a distribution
and shareholder services plan (the "Plan") pursuant to Rule 12b-1 under the
1940 Act. As provided in the Plans, the Trust will pay the Distributor a fee
of 0.35% of the average daily net assets of Class A Shares of each of the
Funds and 1.00% of the average daily net assets of the Class B Shares of
each of the Funds. Currently, the Distributor has voluntarily agreed to
limit payments under the Plans to 0.25% and 0.90% of average daily net
assets of the Class A Shares and Class B Shares, respectively, of each Fund.
Up to 0.25% of the fees payable under the Plans may be used as compensation
for shareholder services by the Distributor and/or financial institutions
and intermediaries. Fees paid under the Plans may be applied by the
Distributor toward (i) compensation for its services in connection with
distribution assistance or provision of shareholder services; or (ii)
payments to financial institutions and intermediaries such as banks,
(including affiliates of the Adviser), brokers, dealers and other
institutions, including the Distributor's affiliates and subsidiaries as
compensation for services or reimbursement of expenses incurred in
connection with distribution assistance or provision of shareholder
services. Fiduciary Class Shares of each Fund are offered without
distribution fees. For the year ended June 30, 1996, the Distributor
received $1,493,085 from commissions earned on sales of Class A Shares and
redemptions of Class B Shares, of which the Distributor reallowed $1,431,454
to affiliated broker/dealers of the Fund.
Prior to January 2, 1996, Premier Investment Advisors, L.L.C. ("Premier")
served as investment adviser and Goldman Sachs & Company served as
distributor to Paragon. Pursuant to the approval of the Board of Trustees of
Paragon on October 31, 1995 and its shareholders on December 20, 1995,
Paragon entered into an investment advisory agreement with the Adviser and a
distribution agreement with the Distributor effective January 2, 1996. The
terms of the investment advisory agreements with Premier and with the
Adviser and the distribution agreements with Goldman Sachs & Company and the
Distributor were substantially the same.
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
CONTINUED
- ----50
<PAGE> 864
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
The Adviser, Administrator and Distributor voluntarily agreed to waive a
portion of their fees and to reimburse the Funds for certain expenses. For
the period ended June 30, 1996, fees in the following amounts were waived or
reimbursed to the Funds (amounts in thousands):
<TABLE>
<CAPTION>
INVESTMENT 12B-1 FEES WAIVED
ADVISORY FEES ADMINISTRATION
WAIVED/ FEES WAIVED/ ------------------------
REIMBURSED REIMBURSED CLASS A CLASS B
----------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>
Intermediate Tax-Free Bond Fund................................. $ 770 $ -- $ 7 $ 2
Municipal Income Fund........................................... 388 87 18 14
Kentucky Municipal Bond Fund.................................... 133 3 9 1
Ohio Municipal Bond Fund........................................ 348 27 14 6
Louisiana Municipal Bond Fund*.................................. 170 32 15 1
</TABLE>
------------
* For the period December 1, 1995 to June 30, 1996.
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities and purchased options) during the period
ended June 30, 1996 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
PURCHASES SALES
----------- ----------
<S> <C> <C>
Intermediate Tax-Free Bond Fund......................................................... $ 258,530 $ 243,360
Municipal Income Fund................................................................... 286,477 199,431
Kentucky Municipal Bond Fund............................................................ 6,605 8,569
Ohio Municipal Bond Fund................................................................ 33,151 23,310
Louisiana Municipal Bond Fund *......................................................... 32,302 53,078
</TABLE>
------------
* For the period December 1, 1995 to June 30, 1996.
6. FINANCIAL INSTRUMENTS:
Investing in financial instruments such as written options, futures,
structured notes and indexed securities involves risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the Funds have in the
particular class of instrument. Risks associated with these instruments
include an imperfect correlation between the movements in the price of the
instruments and the price of the underlying securities and interest rates,
an illiquid secondary market for the instruments or inability of
counterparties to perform under the terms of the contract. The Funds enter
into these contracts primarily as a means to hedge against adverse
fluctuation in securities.
7. CONCENTRATION OF CREDIT RISK:
The Kentucky, Ohio and Louisiana Municipal Bond Funds invest in primarily
debt obligations issued by the respective States and their political
subdivisions, agencies and public authorities to obtain funds for various
public purposes. The Funds are more susceptible to economic and political
factors adversely affecting issuers of the state's specific municipal
securities than are municipal bond funds that are not concentrated in these
issuers to the same extent.
CONTINUED
51----
<PAGE> 865
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
8. FEDERAL TAX INFORMATION (UNAUDITED):
The accompanying table below details distributions from long-term capital
gains for the following fund for the period ended June 30, 1996 (amounts in
thousands):
<TABLE>
<CAPTION>
DISTRIBUTIONS
---------------
<S> <C>
Intermediate Tax-Free Bond Fund......................................................................... $ 714
</TABLE>
At June 30, 1996, the following Funds have capital loss carryforwards which
are available to offset future capital gains, if any (amounts in thousands):
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYFORWARD EXPIRES
--------------- -----------
<S> <C> <C>
Municipal Income Bond Fund.................................................................. $ 2,173 2003
Kentucky Municipal Bond Fund................................................................ 483 2004
Kentucky Municipal Bond Fund................................................................ 1,332 2003
Ohio Municipal Bond Fund.................................................................... 1,463 2004
Ohio Municipal Bond Fund.................................................................... 2,319 2003
Louisiana Municipal Bond Fund............................................................... 268 2004
Louisiana Municipal Bond Fund............................................................... 48 2003
Louisiana Municipal Bond Fund............................................................... 282 2002
</TABLE>
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal
year. The following deferred losses will be treated as arising on the first
day of the fiscal year ended June 30, 1997 (amounts in thousands):
<TABLE>
<CAPTION>
POST-OCTOBER
CAPITAL LOSSES
---------------
<S> <C>
Municipal Income Bond Fund............................................................................ $ 5,776
Ohio Municipal Bond Fund.............................................................................. 183
</TABLE>
The Funds designate the following exempt-interest dividends for the taxable year
ended June 30, 1996:
<TABLE>
<CAPTION>
INTERMEDIATE KENTUCKY OHIO LOUISIANA
TAX-FREE MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND INCOME FUND BOND FUND BOND FUND BOND FUND
------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Exempt-interest dividends:
Fiduciary Shares (000)................................ $ 6,841 $ 10,344 $ 1,424 $ 2,836 $ 1,716
Class A Shares (000).................................. 210 850 367 463 3,747
Class B Shares (000).................................. 41 568 21 165 63
Exempt-interest dividends per share:
Fiduciary Shares...................................... 0.329 0.476 0.493 0.386 0.449
Class A Shares........................................ 0.316 0.462 0.493 0.370 0.443
Class B Shares........................................ 0.270 0.405 0.347 0.326 0.378
</TABLE>
CONTINUED
- ----52
<PAGE> 866
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
The percentage break-down of exempt-interest income by state for the Fund's
taxable year ended June 30, 1996 (March 26, 1996 through June 30, 1996 for
the Louisiana Municipal Bond Fund) is as follows:
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE MUNICIPAL INCOME KENTUCKY MUNICIPAL OHIO MUNICIPAL
BOND FUND FUND BOND FUND BOND FUND
------------------------ -------------------- ---------------------- ------------------
<S> <C> <C> <C> <C>
Alaska.................. 3.3% 1.9% -- --
Arizona................. 3.0% 0.4% -- --
Arkansas................ 0.8% 4.7% -- --
California.............. 5.9% 4.8% -- --
Colorado................ 8.6% 16.6% -- --
Connecticut............. 0.7% 0.1% -- --
Delaware................ 0.9% -- -- --
District of Columbia.... 0.5% -- -- --
Florida................. 3.3% 7.4% -- --
Georgia................. 1.5% 1.9% -- --
Hawaii.................. 0.4% -- -- --
Idaho................... 1.6% -- -- --
Illinois................ 10.6% 5.4% -- --
Indiana................. 3.4% 1.8% -- --
Iowa.................... 1.6% 1.9% -- --
Kansas.................. 1.0% 3.7% -- --
Kentucky................ 0.2% 0.1% 100.0% --
Louisiana............... 0.3% 2.5% -- --
Maine................... -- 0.7% -- --
Maryland................ 0.7% -- -- --
Massachusetts........... 1.7% 1.2% -- 1.2%
Michigan................ 0.6% 2.4% -- --
Minnesota............... 1.9% 0.9% -- --
Mississippi............. 0.1% 2.0% -- --
Missouri................ 1.5% 3.5% -- 0.6%
Montana................. 0.1% 1.5% -- --
Nebraska................ 1.3% 0.5% -- --
Nevada.................. 2.2% 0.7% -- --
New Hampshire........... 0.8% 0.1% -- --
New Jersey.............. -- 0.9% -- --
New Mexico.............. 5.0% 2.2% -- --
New York................ 1.1% 1.7% -- --
North Carolina.......... 0.0% 1.2% -- --
North Dakota............ 0.3% 0.8% -- --
Ohio.................... 1.3% 1.6% -- 96.9%
Oklahoma................ 0.1% 0.9% -- --
Oregon.................. 2.3% 0.1% -- --
Pennsylvania............ 3.0% 2.2% -- --
Puerto Rico............. 0.5% 0.6% -- --
Rhode Island............ 0.9% 0.6% -- --
South Carolina.......... 0.6% 1.9% -- --
South Dakota............ 1.2% 2.1% -- --
Tennessee............... 0.7% 2.0% -- --
Texas................... 11.0% 10.8% -- 0.1%
Utah.................... 2.3% 0.9% -- --
Vermont................. 0.1% -- -- --
Virginia................ 2.3% 0.4% -- --
Washington.............. 4.4% 0.2% -- 1.1%
West Virginia........... 1.5% 0.3% -- --
Wisconsin............... 0.1% 0.7% -- 0.1%
Wyoming................. 2.8% 1.2% -- --
----- ----- ----- -----
100.0% 100.0% 100.0% 100.0%
----- ----- ----- -----
----- ----- ----- -----
<CAPTION>
LOUISIANA MUNICIPAL
BOND FUND
----------------------
<S> <C>
Alaska.................. --
Arizona................. --
Arkansas................ --
California.............. --
Colorado................ --
Connecticut............. --
Delaware................ --
District of Columbia.... --
Florida................. --
Georgia................. --
Hawaii.................. --
Idaho................... --
Illinois................ --
Indiana................. --
Iowa.................... --
Kansas.................. --
Kentucky................ --
Louisiana............... 100.0%
Maine................... --
Maryland................ --
Massachusetts........... --
Michigan................ --
Minnesota............... --
Mississippi............. --
Missouri................ --
Montana................. --
Nebraska................ --
Nevada.................. --
New Hampshire........... --
New Jersey.............. --
New Mexico.............. --
New York................ --
North Carolina.......... --
North Dakota............ --
Ohio.................... --
Oklahoma................ --
Oregon.................. --
Pennsylvania............ --
Puerto Rico............. --
Rhode Island............ --
South Carolina.......... --
South Dakota............ --
Tennessee............... --
Texas................... --
Utah.................... --
Vermont................. --
Virginia................ --
Washington.............. --
West Virginia........... --
Wisconsin............... --
Wyoming................. --
-----
100.0%
-----
-----
</TABLE>
CONTINUED
53----
<PAGE> 867
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
9. REORGANIZATIONS:
The Trust entered an Agreement and Plan of Reorganization with Paragon
pursuant to which all of the assets and liabilities of each Paragon Fund
transferred to a fund of the One Group in exchange for shares of the
corresponding fund of the One Group. The Paragon Louisiana Tax-Free Fund
transferred its assets and liabilities to the One Group Louisiana Municipal
Bond Fund. The reorganization, which qualified as tax-free exchange for
federal income tax purposes, was completed at the close of business March
25, 1996 following approval by shareholders of Paragon at a special
shareholder meeting. The following is a summary of shares outstanding, net
assets net asset value per share and unrealized appreciation immediately
before and after the reorganization (amounts in thousands except net asset
value):
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
------------------------------ ---------------
PARAGON LOUISIANA LOUISIANA
LOUISIANA MUNICIPAL BOND MUNICIPAL BOND
TAX-FREE FUND FUND FUND
-------------- -------------- ---------------
<S> <C> <C> <C>
Shares.................................................................... 18,757 -- 20,018*
Net Assets................................................................ $ 200,185 -- $ 200,185
Net Asset Value:
Fiduciary............................................................... -- $ 10.00*
Class A................................................................. 10.67 -- 10.00*
Class B................................................................. 10.70 -- 10.00*
Unrealized Appreciation................................................... $ 4,349 -- $ 4,349
</TABLE>
------------
* Pursuant to its reorganization as a fund of The One Group, the Fund issued
additional shares at the close of business March 25, 1996 as a result of
restatement of the net asset values of Class A Shares from $10.67 to
$10.00 and Class B Shares from $10.70 to $10.00.
On October 7, 1994, the Board of Trustees approved an agreement and plan of
reorganization for the acquisition of the Trademark Funds by the Trust. Under
the agreement and plan of reorganization, all assets and liabilities of the
Trademark Kentucky Municipal Bond Fund (the "Acquired Fund") were acquired by
the Kentucky Municipal Bond Fund, (the "Acquiring Fund"), in exchange for
shares of the Acquiring Fund. The reorganization, which qualified as a
tax-free exchange for federal income tax purposes, was completed following
approval by the shareholders of the Acquired Fund. The following is a summary
of shares outstanding, net assets, unrealized depreciation and net asset
value per share immediately before and after the reorganization (amounts in
thousands except net asset value):
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
-------------------------------- ---------------
TRADEMARK KENTUCKY KENTUCKY KENTUCKY
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------- ----------- ---------------
<S> <C> <C> <C>
Shares............................................................ 4,422* -- 4,422
Net Assets:
Fiduciary....................................................... $ 41,953* $ -- $ 41,953
Net Asset Value:
Fiduciary....................................................... $ 9.49* $ -- $ 9.49
Unrealized Depreciation........................................... $ (2,604) $ -- $ (2,604)
</TABLE>
------------
* Before the reorganization, the Acquired Funds offered only one class of
shares.
CONTINUED
- ----54
<PAGE> 868
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------------------------------------
FIDUCIARY
------------------------------------------------------------------------
YEARS ENDED JUNE 30,
------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................. $ 10.64 $ 10.49 $ 11.15 $ 10.69 $ 10.28
------------ ------------ ------------ ------------ ------------
Investment Activities
Net investment income........................... 0.52 0.54 0.52 0.53 0.55
Net realized and unrealized gains (losses) from
investments................................... 0.04 0.15 (0.52) 0.49 0.42
------------ ------------ ------------ ------------ ------------
Total from Investment Activities.............. 0.56 0.69 0.00 1.02 0.97
------------ ------------ ------------ ------------ ------------
Distributions
Net investment income........................... (0.51) (0.54) (0.53) (0.52) (0.55)
In excess of net investment income.............. -- -- (0.01) -- --
Net realized gains.............................. (0.02) -- (0.01) (0.04) (0.01)
In excess of net realized gains................. -- -- (0.11) -- --
------------ ------------ ------------ ------------ ------------
Total Distributions........................... (0.53) (0.54) (0.66) (0.56) (0.56)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE,
END OF PERIOD................................... $ 10.67 $ 10.64 $ 10.49 $ 11.15 $ 10.69
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (Excludes Sales Charge).............. 5.39% 6.75% (0.11)% 9.79% 9.54%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............... $ 217,201 $ 211,229 $ 182,611 $ 166,489 $ 142,672
Ratio of expenses to average net assets......... 0.54% 0.53% 0.48% 0.54% 0.55%
Ratio of net investment income to average net
assets........................................ 4.87% 5.17% 4.78% 4.93% 5.28%
Ratio of expenses to average net assets*........ 0.87% 0.88% 0.84% 0.94% 1.07%
Ratio of net investment income to average net
assets*....................................... 4.54% 4.82% 4.42% 4.53% 4.77%
Portfolio Turnover (a).......................... 111.58% 199.76% 105.98% 31.99% 11.50%
</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.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
55----
<PAGE> 869
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------
YEARS ENDED JUNE 30,
------------------------------------------------------------------------
1996 1995 1994 1993 1992 (A)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................. $ 10.63 $ 10.48 $ 11.14 $ 10.69 $ 10.57
------------ ------------ ------------ ------ ------
Investment Activities
Net investment income........................... 0.50 0.51 0.50 0.55 0.15
Net realized and unrealized gains (losses) from
investments................................... 0.05 0.15 (0.52) 0.44 0.18
------------ ------------ ------------ ------ ------
Total from Investment Activities.............. 0.55 0.66 (0.02) 0.99 0.33
------------ ------------ ------------ ------ ------
Distributions
Net investment income........................... (0.49) (0.49) (0.52) (0.50) (0.21)
In excess of net investment income.............. -- (0.02) (0.01) -- --
Net realized gains.............................. (0.02) -- -- (0.04) --
In excess of net realized gains................. -- -- (0.11) -- --
------------ ------------ ------------ ------ ------
Total Distributions........................... (0.51) (0.51) (0.64) (0.54) (0.21)
------------ ------------ ------------ ------ ------
NET ASSET VALUE,
END OF PERIOD................................... $ 10.67 $ 10.63 $ 10.48 $ 11.14 $ 10.69
------------ ------------ ------------ ------ ------
------------ ------------ ------------ ------ ------
Total Return (Excludes Sales Charge).............. 5.28% 6.49% (0.33)% 9.47% 8.68%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............... $ 6,622 $ 5,614 $ 5,556 $ 5,480 $ 5
Ratio of expenses to average net assets......... 0.79% 0.78% 0.73% 0.71% 1.02%(b)
Ratio of net investment income to average net
assets........................................ 4.62% 4.91% 4.57% 4.77% 4.91%(b)
Ratio of expenses to average net assets*........ 1.22% 1.23% 1.19% 1.27% 1.32%(b)
Ratio of net investment income to average net
assets*....................................... 4.19% 4.46% 4.11% 4.21% 4.61%(b)
Portfolio Turnover (c).......................... 111.58% 199.76% 105.98% 31.99% 11.50%
</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) Class A Shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----56
<PAGE> 870
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------
CLASS B
------------------------------------------
YEARS ENDED JUNE 30,
------------------------------------------
1996 1995 1994 (A)
------------ ------------ ------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................. $ 10.65 $ 10.50 $ 11.18
------ ------ ------
Investment Activities
Net investment income........................... 0.43 0.46 0.17
Net realized and unrealized gains (losses) from
investments................................... 0.04 0.14 (0.67)
------ ------ ------
Total from Investment Activities.............. 0.47 0.60 (0.50)
------ ------ ------
Distributions
Net investment income........................... (0.42) (0.45) (0.17)
In excess of net investment income.............. -- -- --
Net realized gains.............................. (0.02) -- --
In excess of net realized gains................. -- -- (0.01)
------ ------ ------
Total Distributions........................... (0.44) (0.45) (0.18)
------ ------ ------
NET ASSET VALUE,
END OF PERIOD................................... $ 10.68 $ 10.65 $ 10.50
------ ------ ------
------ ------ ------
Total Return (Excludes Sales Charge).............. 4.48% 5.89% (4.48)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............... $ 2,439 $ 1,116 $ 549
Ratio of expenses to average net assets......... 1.44% 1.43% 1.40%(b)
Ratio of net investment income to average net
assets........................................ 3.97% 4.29% 4.08%(b)
Ratio of expenses to average net assets*........ 1.87% 1.88% 1.85%(b)
Ratio of net investment income to average net
assets*....................................... 3.54% 3.84% 3.63%(b)
Portfolio Turnover (d).......................... 111.58% 199.76% 105.98%
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
57----
<PAGE> 871
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
-------------------------------------------------------------
FIDUCIARY
-------------------------------------------------------------
YEARS ENDED JUNE 30,
-------------------------------------------------------------
1996 1995 1994 1993 (A)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 9.69 $ 9.66 $ 10.11 $ 10.00
------------- ------------- ------------- -------------
Investment Activities
Net investment income..................................... 0.56 0.57 0.56 0.19
Net realized and unrealized gains (losses) from
investments............................................. (0.03) 0.03 (0.42) 0.11
------------- ------------- ------------- -------------
Total from Investment Activities........................ 0.53 0.60 0.14 0.30
------------- ------------- ------------- -------------
Distributions
Net investment income..................................... (0.56) (0.57) (0.56) (0.19)
In excess of net realized gains........................... -- -- (0.03) --
------------- ------------- ------------- -------------
Total Distributions..................................... (0.56) (0.57) (0.59) (0.19)
------------- ------------- ------------- -------------
NET ASSET VALUE,
END OF PERIOD............................................. $ 9.66 $ 9.69 $ 9.66 $ 10.11
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total Return (Excludes Sales Charge)........................ 5.54% 6.46% 1.36% 5.18%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................... $ 241,115 $ 185,916 $ 152,763 $ 40,777
Ratio of expenses to average net assets................... 0.56% 0.56% 0.54% 0.54%(b)
Ratio of net investment income to average net assets...... 5.70% 6.02% 5.61% 5.66%(b)
Ratio of expenses to average net assets*.................. 0.76% 0.74% 0.71% 1.01%(b)
Ratio of net investment income to average net assets*..... 5.50% 5.84% 5.44% 5.19%(b)
Portfolio Turnover (c).................................... 83.17% 66.02% 101.48% 66.12%
</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) The Fund commenced operations on February 9, 1993.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----58
<PAGE> 872
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
--------------------------------------------
CLASS A
--------------------------------------------
YEARS ENDED JUNE 30,
--------------------------------------------
1996 1995 1994 1993 (A)
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................................. $ 9.72 $ 9.67 $ 10.12 $ 10.06
--------- --------- --------- -----------
Investment Activities
Net investment income........................................................... 0.55 0.55 0.55 0.19
Net realized and unrealized gains (losses) from investments..................... (0.04) 0.05 (0.43) 0.05
--------- --------- --------- -----------
Total from Investment Activities.............................................. 0.51 0.60 0.12 0.24
--------- --------- --------- -----------
Distributions
Net investment income........................................................... (0.54) (0.55) (0.54) (0.18)
In excess of net realized gains................................................. -- -- (0.03) --
--------- --------- --------- -----------
Total Distributions........................................................... (0.54) (0.55) (0.57) (0.18)
--------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD................................................................... $ 9.69 $ 9.72 $ 9.67 $ 10.12
--------- --------- --------- -----------
--------- --------- --------- -----------
Total Return (Excludes Sales Charge).............................................. 5.35% 6.21% 1.34% 6.86%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................................... $ 25,787 $ 11,462 $ 10,725 $ 4,106
Ratio of expenses to average net assets......................................... 0.81% 0.81% 0.79% 0.80%(b)
Ratio of net investment income to average net assets............................ 5.45% 5.76% 5.44% 5.71%(b)
Ratio of expenses to average net assets*........................................ 1.11% 1.09% 1.06% 1.36%(b)
Ratio of net investment income to average net assets*........................... 5.15% 5.48% 5.17% 5.15%(b)
Portfolio Turnover (c).......................................................... 83.17% 66.02% 101.48% 66.12%
</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) Class A Shares commenced offering on February 23, 1993.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
59----
<PAGE> 873
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
---------------------------------
CLASS B
---------------------------------
YEARS ENDED JUNE 30,
---------------------------------
1996 1995 1994 (A)
--------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................................................... $ 9.69 $ 9.62 $ 10.10
--------- --------- -----------
Investment Activities
Net investment income..................................................................... 0.47 0.49 0.24
Net realized and unrealized gains (losses) from investments............................... (0.03) 0.07 (0.48)
--------- --------- -----------
Total from Investment Activities........................................................ 0.44 0.56 (0.24)
--------- --------- -----------
Distributions
Net investment income..................................................................... (0.47) (0.49) (0.24)
--------- --------- -----------
Total Distributions..................................................................... (0.47) (0.49) (0.24)
--------- --------- -----------
NET ASSET VALUE,
END OF PERIOD............................................................................. $ 9.66 $ 9.69 $ 9.62
--------- --------- -----------
--------- --------- -----------
Total Return (Excludes Sales Charge)........................................................ 4.65% 5.58% (1.98)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................................................... $ 23,204 $ 8,326 $ 4,855
Ratio of expenses to average net assets................................................... 1.46% 1.46% 1.41%(b)
Ratio of net investment income to average net assets...................................... 4.80% 5.14% 4.95%(b)
Ratio of expenses to average net assets*.................................................. 1.76% 1.74% 1.62%(b)
Ratio of net investment income to average net assets*..................................... 4.50% 4.86% 4.74%(b)
Portfolio Turnover (d).................................................................... 83.17% 66.02% 101.48%
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----60
<PAGE> 874
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND FUND
------------------------------------------------------
FIDUCIARY
------------------------- FEBRUARY 1, MARCH 12,
YEAR ENDED JANUARY 20, 1994, TO 1993, TO
JUNE 30, 1995 TO JUNE JANUARY 19, JANUARY 31,
1996 30, 1995 (A) 1995 (D) 1994 (D)(E)
----------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................. $ 9.92 $ 9.49 $ 10.45 $ 10.00
----------- ------------ ------------- ------------
Investment Activities
Net investment income........................................... 0.50 0.20 0.41 0.36
Net realized and unrealized gains from investments.............. 0.12 0.43 (0.95) 0.43
----------- ------------ ------------- ------------
Total from Investment Activities.............................. 0.62 0.63 (0.54) 0.79
----------- ------------ ------------- ------------
Distributions
Net investment income........................................... (0.50) (0.20) (0.42) (0.34)
----------- ------------ ------------- ------------
Total Distributions........................................... (0.50) (0.20) (0.42) (0.34)
----------- ------------ ------------- ------------
NET ASSET VALUE,
END OF PERIOD................................................... $ 10.04 $ 9.92 $ 9.49 $ 10.45
----------- ------------ ------------- ------------
----------- ------------ ------------- ------------
Total Return (Excludes Sales Charge).............................. 6.35% 6.56%(c) (5.17)%(c) 8.05%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................... $ 30,300 $ 32,520 $ 41,953 $ 64,663
Ratio of expenses to average net assets......................... 0.68% 0.65%(b) 1.03%(b) 0.70%(b)
Ratio of net investment income to average net assets............ 4.60% 4.70%(b) 4.27%(b) 4.19%(b)
Ratio of expenses to average net assets*........................ 1.02% 0.97%(b) 1.05%(b) 0.91%(b)
Ratio of net investment income to average net assets*........... 4.26% 4.38%(b) 4.25%(b) 3.98%(b)
Portfolio Turnover (f).......................................... 16.78% 19.75% 10.00% 5.00%
</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 date reorganized as a fund of The One Group.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Prior to reorganizing as a fund of The One Group, the Fund offered only one class of shares.
</TABLE>
<TABLE>
<C> <S>
(e) Period from commencement of operations.
</TABLE>
<TABLE>
<C> <S>
(f) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
61----
<PAGE> 875
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND
FUND
--------------------------
CLASS A
--------------------------
YEAR ENDED JANUARY 20,
JUNE 30, 1995 TO JUNE
1996 30, 1995 (A)
----------- -------------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................................................. $ 9.93 $ 9.49
----------- ------
Investment Activities
Net investment income........................................................................... 0.44 0.19
Net realized and unrealized gains from investments.............................................. 0.12 0.44
----------- ------
Total from Investment Activities.............................................................. 0.56 0.63
----------- ------
Distributions
Net investment income........................................................................... (0.44) (0.19)
----------- ------
Total Distributions........................................................................... (0.44) (0.19)
----------- ------
NET ASSET VALUE,
END OF PERIOD................................................................................... $ 10.05 $ 9.93
----------- ------
----------- ------
Total Return (Excludes Sales Charge).............................................................. 5.70% 5.66%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............................................................... $ 8,178 $ 8,818
Ratio of expenses to average net assets......................................................... 0.93% 0.90%(b)
Ratio of net investment income to average net assets............................................ 4.35% 4.44%(b)
Ratio of expenses to average net assets*........................................................ 1.37% 1.33%(b)
Ratio of net investment income to average net assets*........................................... 3.91% 4.01%(b)
Portfolio Turnover (d).......................................................................... 16.78% 19.75%
</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 date reorganized as a fund of The One Group.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<S> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----62
<PAGE> 876
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND
FUND
--------------------------
CLASS B
--------------------------
MARCH 16,
1995 TO
YEAR ENDED JUNE 30,
JUNE 30, 1996 1995 (A)
------------- -----------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................................................................ $ 9.87 $ 9.75
------ -----------
Investment Activities
Net investment income.......................................................................... 0.38 0.14
Net realized and unrealized gains (losses) from investments.................................... 0.13 0.12
------ -----------
Total from Investment Activities............................................................. 0.51 0.26
------ -----------
Distributions
Net investment income.......................................................................... (0.39) (0.14)
------ -----------
Total Distributions.......................................................................... (0.39) (0.14)
------ -----------
NET ASSET VALUE,
END OF PERIOD.................................................................................. $ 9.99 $ 9.87
------ -----------
------ -----------
Total Return (Excludes Sales Charge)............................................................. 5.16% 2.63%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............................................................. $ 1,457 $ 79
Ratio of expenses to average net assets........................................................ 1.58% 1.58%(b)
Ratio of net investment income to average net assets........................................... 3.70% 3.89%(b)
Ratio of expenses to average net assets*....................................................... 2.02% 2.21%(b)
Ratio of net investment income to average net assets*.......................................... 3.26% 3.25%(b)
Portfolio Turnover (d)......................................................................... 16.78% 19.75%
</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) Class B Shares commenced offering on March 16, 1995.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
63----
<PAGE> 877
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
---------------------------------------------------------
FIDUCIARY
---------------------------------------------------------
YEARS ENDED JUNE 30,
---------------------------------------------------------
1996 1995 1994 1993
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 10.65 $ 10.58 $ 11.11 $ 10.48
------------ ------------ ------------ ------------
Investment Activities
Net investment income..................................... 0.56 0.55 0.51 0.54
Net realized and unrealized gains (losses) from
investments............................................. 0.04 0.07 (0.50) 0.62
------------ ------------ ------------ ------------
Total from Investment Activities........................ 0.60 0.62 0.01 1.16
------------ ------------ ------------ ------------
Distributions
Net investment income..................................... (0.56) (0.55) (0.52) (0.53)
In excess of net realized gains........................... -- -- (0.02) --
------------ ------------ ------------ ------------
Total Distributions..................................... (0.56) (0.55) (0.54) (0.53)
------------ ------------ ------------ ------------
NET ASSET VALUE,
END OF PERIOD............................................. $ 10.69 $ 10.65 $ 10.58 $ 11.11
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return (Excludes Sales Charge)........................ 5.69% 6.07% 0.07% 11.43%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................... $ 80,611 $ 79,993 $ 93,261 $ 74,792
Ratio of expenses to average net assets................... 0.57% 0.58% 0.53% 0.55%
Ratio of net investment income to average net assets...... 5.17% 5.29% 4.76% 5.14%
Ratio of expenses to average net assets*.................. 0.95% 0.91% 0.86% 0.94%
Ratio of net investment income to average net assets*..... 4.79% 4.96% 4.43% 4.75%
Portfolio Turnover (c).................................... 24.61% 77.69% 16.77% 26.67%
<CAPTION>
1992 (A)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 10.00
------------
Investment Activities
Net investment income..................................... 0.56
Net realized and unrealized gains (losses) from
investments............................................. 0.47
------------
Total from Investment Activities........................ 1.03
------------
Distributions
Net investment income..................................... (0.55)
In excess of net realized gains........................... --
------------
Total Distributions..................................... (0.55)
------------
NET ASSET VALUE,
END OF PERIOD............................................. $ 10.48
------------
------------
Total Return (Excludes Sales Charge)........................ 10.64%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................... $ 45,199
Ratio of expenses to average net assets................... 0.63%(b)
Ratio of net investment income to average net assets...... 5.61%(b)
Ratio of expenses to average net assets*.................. 1.21%(b)
Ratio of net investment income to average net assets*..... 5.03%(b)
Portfolio Turnover (c).................................... 9.78%
</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) The Fund commenced operations on July 2, 1991.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----64
<PAGE> 878
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------
YEARS ENDED JUNE 30,
------------------------------------------------------------------------
1996 1995 1994 1993 1992 (A)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................. $ 10.68 $ 10.61 $ 11.13 $ 10.48 $ 10.29
------------ ------------ ------------ ------------ ------
Investment Activities
Net investment income........................... 0.55 0.53 0.50 0.52 0.20
Net realized and unrealized gains (losses) from
investments................................... 0.03 0.07 (0.48) 0.64 0.21
------------ ------------ ------------ ------------ ------
Total from Investment Activities.............. 0.58 0.60 0.02 1.16 0.41
------------ ------------ ------------ ------------ ------
Distributions
Net investment income........................... (0.54) (0.51) (0.50) (0.51) (0.22)
In excess of net investment income.............. -- (0.02) (0.02) -- --
In excess of net realized gains................. -- -- (0.02) -- --
------------ ------------ ------------ ------------ ------
Total Distributions........................... (0.54) (0.53) (0.54) (0.51) (0.22)
------------ ------------ ------------ ------------ ------
NET ASSET VALUE,
END OF PERIOD................................... $ 10.72 $ 10.68 $ 10.61 $ 11.13 $ 10.48
------------ ------------ ------------ ------------ ------
------------ ------------ ------------ ------------ ------
Total Return (Excludes Sales Charge).............. 5.44% 5.79% (0.05)% 11.40% 10.85%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............... $ 16,507 $ 12,006 $ 14,883 $ 13,092 $ 41
Ratio of expenses to average net assets......... 0.82% 0.82% 0.78% 0.77% 1.01%(b)
Ratio of net investment income to average net
assets........................................ 4.92% 5.01% 4.63% 4.85% 5.16%(b)
Ratio of expenses to average net assets*........ 1.30% 1.25% 1.21% 1.25% 1.40%(b)
Ratio of net investment income to average net
assets*....................................... 4.44% 4.58% 4.20% 4.37% 4.77%(b)
Portfolio Turnover (c).......................... 24.61% 77.69% 16.77% 26.67% 9.78%
</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) Class A Shares commenced offering on February 18, 1992.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
65----
<PAGE> 879
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL
BOND FUND
------------------------------------------
CLASS B
------------------------------------------
YEARS ENDED JUNE 30,
------------------------------------------
1996 1995 1994 (A)
------------ ------------ ------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 10.75 $ 10.68 $ 11.31
------ ------ ------------
Investment Activities
Net investment income..................................... 0.48 0.43 0.17
Net realized and unrealized gains (losses) from
investments............................................. 0.03 0.07 (0.62)
------ ------ ------------
Total from Investment Activities........................ 0.51 0.50 (0.45)
------ ------ ------------
Distributions
Net investment income..................................... (0.47) (0.43) (0.17)
In excess of net investment income........................ -- -- (0.01)
------ ------ ------------
Total Distributions..................................... (0.47) (0.43) (0.18)
------ ------ ------------
NET ASSET VALUE,
END OF PERIOD............................................. $ 10.79 $ 10.75 $ 10.68
------ ------ ------------
------ ------ ------------
Total Return (Excludes Sales Charge)........................ 4.79% 5.17% (4.02)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................... $ 8,854 $ 3,209 $ 2,043
Ratio of expenses to average net assets................... 1.47% 1.48% 1.28%(b)
Ratio of net investment income to average net assets...... 4.27% 4.40% 4.23%(b)
Ratio of expenses to average net assets*.................. 1.95% 1.91% 1.68%(b)
Ratio of net investment income to average net assets*..... 3.79% 3.97% 3.83%(b)
Portfolio Turnover (d).................................... 24.61% 77.69% 16.77%
</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) Class B Shares commenced offering on January 14, 1994.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----66
<PAGE> 880
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA
MUNICIPAL BOND
FUND
-----------------
FIDUCIARY
-----------------
MARCH 26, 1996
THROUGH
JUNE 30, 1996 (A)
-----------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................................... $ 10.00
--------
Investment Activities
Net investment income................................................................................. 0.13
Net realized and unrealized losses from investments................................................... (0.07)
--------
Total from Investment Activities.................................................................... 0.06
--------
Distributions
Net investment income................................................................................. (0.13)
--------
Total Distributions................................................................................. (0.13)
--------
NET ASSET VALUE,
END OF PERIOD......................................................................................... $ 9.93
--------
--------
Total Return (Excludes Sales Charge).................................................................... 0.90%(b)(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..................................................................... $ 136,041
Ratio of expenses to average net assets............................................................... 0.71 %(c)
Ratio of net investment income to average net assets.................................................. 4.76 %(c)
Ratio of expenses to average net assets*.............................................................. 0.86 %(c)
Ratio of net investment income to average net assets*................................................. 4.61 %(c)
Portfolio Turnover (e)................................................................................ 16.72 %
</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 date reorganized as a fund of The One Group.
</TABLE>
<TABLE>
<C> <S>
(b) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Represents total return for Class A Shares from December 1, 1995 through March 25, 1996 plus total return
for Fiduciary Shares for the period March 26, 1996 through June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
(e) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
67----
<PAGE> 881
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA MUNICIPAL BOND FUND
----------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------
SEVEN MONTHS
ENDED YEARS ENDED NOVEMBER 30,
JUNE 30, 1996 -----------------------------------------------------
(A) 1995 1994 1993 1992 1991
--------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................. $ 10.09 $ 9.38 $ 10.27 $ 9.92 $ 9.73 $ 9.51
------- --------- --------- --------- --------- ---------
Investment Activities
Net investment income........................... 0.24 0.50 0.49 0.52 0.55 0.56
Net realized and unrealized gains (losses) from
investments................................... (0.16) 0.71 (0.79) 0.42 0.26 0.22
------- --------- --------- --------- --------- ---------
Total from Investment Activities.............. 0.08 1.21 (0.30) 0.94 0.82 0.78
------- --------- --------- --------- --------- ---------
Distributions
Net investment income........................... (0.24) (0.50) (0.49) (0.52) (0.55) (0.56)
Net realized gains.............................. -- -- (0.10) (0.07) (0.07) --
------- --------- --------- --------- --------- ---------
Total Distributions........................... (0.24) (0.50) (0.59) (0.59) (0.62) (0.56)
------- --------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD................................... $ 9.93 $ 10.09 $ 9.38 $ 10.27 $ 9.92 $ 9.73
------- --------- --------- --------- --------- ---------
------- --------- --------- --------- --------- ---------
Total Return (Excludes Sales Charge).............. 0.84%(c) 13.11% (2.97)% 9.65% 8.64% 8.45%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............... $ 53,479 $ 206,119 $ 196,820 $ 196,534 $ 135,692 $ 88,503
Ratio of expenses to average net assets......... 0.69 (b) 0.62% 0.65% 0.62% 0.58% 0.61%
Ratio of net investment income to average net
assets........................................ 4.71 (b) 5.07% 4.97% 5.07% 5.70% 5.86%
Ratio of expenses to average net assets*........ 0.86 (b) 0.77% 0.80% 0.78% 0.83% 0.86%
Ratio of net investment income to average net
assets*....................................... 4.54 (b) 4.92% 4.82% 4.91% 5.45% 5.61%
Portfolio Turnover (d).......................... 16.72 % 28.00% 24.00% 25.00% 32.00% 35.00%
</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) Upon reorganizing as a fund of The One Group, the Paragon Louisiana Tax-Free Fund became the Louisiana
Municipal Bond Fund. Financial highlights for the periods prior to March 26, 1996 represent the Paragon
Louisiana Tax-Free Fund. The per share data for the periods prior to March 26, 1996 have been restated to
reflect the impact of restatement of net asset value from $10.67 to $10.00 effective March 26, 1996.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----68
<PAGE> 882
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA MUNICIPAL BOND FUND
-----------------------------------------------
CLASS B
-----------------------------------------------
SEVEN MONTHS YEAR SEPTEMBER 16,
ENDED ENDED 1994 THROUGH
JUNE 30, NOVEMBER 30, NOVEMBER 30,
1996 (A) 1995 1994 (B)
--------------- -------------- --------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.09 $ 9.36 $ 9.73
------- -------------- --------------
Investment Activities
Net investment income 0.21 0.42 0.08
Net realized and unrealized gains (losses) from investments............. (0.16) 0.73 (0.37)
------- -------------- --------------
Total from Investment Activities...................................... 0.05 1.15 (0.29)
------- -------------- --------------
Distributions
Net investment income................................................... (0.21) (0.42) (0.08)
------- -------------- --------------
Total Distributions................................................... (0.21) (0.42) (0.08)
------- -------------- --------------
NET ASSET VALUE,
END OF PERIOD........................................................... $ 9.93 $ 10.09 $ 9.36
------- -------------- --------------
------- -------------- --------------
Total Return (Excludes Sales Charge)...................................... 0.48%(d) 12.52 % 2.94 %(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 3,223 $ 2,115 $ 204
Ratio of expenses to average net assets................................. 1.50 (c) 1.37 % 1.41 %(c)
Ratio of net investment income to average net assets.................... 3.98 (c) 4.27 % 4.45 %(c)
Ratio of expenses to average net assets*................................ 1.70 (c) 1.52 % 1.56 %(c)
Ratio of net investment income to average net assets*................... 3.78 (c) 4.12 % 4.30 %(c)
Portfolio Turnover (e).................................................. 16.72 % 28.00 % 24.00 %
</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) Upon reorganizing as a fund of The One Group, the Paragon Louisiana Tax-Free Fund became the Louisiana
Municipal Bond Fund. Financial highlights for the periods prior to March 26, 1996 represent the Paragon
Louisiana Tax-Free Fund. The per share data for the periods prior to March 26, 1996 have been restated to
reflect the impact of restatement of net asset value from $10.70 to $10.00 effective March 26, 1996.
</TABLE>
<TABLE>
<C> <S>
(b) Class B Shares commenced offering September 16, 1994.
</TABLE>
<TABLE>
<C> <S>
(c) Annualized.
</TABLE>
<TABLE>
<C> <S>
(d) Not annualized.
</TABLE>
<TABLE>
<C> <S>
(e) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
69----
<PAGE> 883
- --------------------------------------------------------------------------------
Report of Independent Accountants
- -------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1996
To the Shareholders and Board of Trustees of
The One Group Family of Mutual Funds:
We have audited the accompanying statements of assets and liabilities of the
Intermediate Tax-Free Bond Fund, the Municipal Income Fund (formally the
Tax-Free Bond Fund), the Kentucky Municipal Bond Fund, the Ohio Municipal Bond
Fund and the Louisiana Municipal Bond Fund (five series of The One Group Family
of Mutual Funds), including the schedules of portfolio investments, as of June
30, 1996, and the related statements of operations, statements of changes in net
assets and the financial highlights for each period presented except as noted in
the next paragraph. These financial statements and financial highlights are the
responsibility of The One Group Family of Mutual Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
The Kentucky Municipal Bond Fund's statement of changes in net assets for the
period from February 1, 1994 to January 19, 1995 and the financial highlights
for the period from February 1, 1994 to January 19, 1995 and the period from
March 12, 1993 (commencement of operations) to January 31, 1994 were audited by
other auditors whose report dated April 6, 1995 expressed an unqualified opinion
on those financial statements and financial highlights. The Louisiana Municipal
Bond Fund's statement of changes in net assets for each of the two years in the
period ended November 30, 1995 and the financial highlights for each of the five
years in the period ended November 30, 1995 were audited by other auditors,
whose report dated January 19, 1996 expressed an unqualified opinion on those
financial statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above, except as noted in the second paragraph, present fairly, in all material
respects, the financial position of the Intermediate Tax-Free Bond Fund, the
Municipal Income Fund, the Kentucky Municipal Bond Fund, the Ohio Municipal Bond
Fund and the Louisiana Municipal Bond Fund as of June 30, 1996, the results of
their operations, the changes in their net assets and the financial highlights
for the periods presented, in conformity with generally accepted accounting
principles.
Columbus, Ohio Coopers & Lybrand L.L.P.
August 19, 1996
70
<PAGE> 884
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
TREASURY ONLY MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ------------------------------------------ -----------
<C> <S> <C>
U.S. TREASURY BILLS (66.6%):
$ 160,688 7/5/96(b)................................. $ 160,602
5,000 8/22/96................................... 4,960
17,005 9/12/96................................... 16,828
85,844 9/19/96................................... 84,872
3,150 9/26/96................................... 3,112
1,883 2/6/97.................................... 1,828
5,000 4/3/97.................................... 4,803
-----------
Total U.S. Treasury Bills 277,005
-----------
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ------------------------------------------ -----------
<C> <S> <C>
U.S. TREASURY NOTES (32.9%):
$ 26,430 7.88%, 7/15/96(b)......................... $ 26,457
25,000 7.88%, 7/31/96............................ 25,056
15,082 6.13%, 7/31/96............................ 15,095
25,000 6.25%, 8/31/96............................ 25,030
5,000 6.50%, 9/30/95............................ 5,008
10,000 7.25%, 11/30/96........................... 10,070
20,000 8.00%, 1/15/97............................ 20,262
10,000 6.50%, 4/30/97............................ 10,074
-----------
Total U.S. Treasury Notes 137,052
-----------
Total Investments (Cost--$414,057)(a) $ 414,057
-----------
-----------
</TABLE>
- ------------
Percentages indicated are based on net assets of $415,961.
<TABLE>
<C> <S>
(a) Cost for federal income tax and financial reporting purposes is the same.
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
----
7
<PAGE> 885
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (67.0%):
Federal Farm Credit Bank:
$ 10,000 5.53%, 10/1/96........................... $ 9,993
10,000 5.40%, 4/1/97............................ 9,987
25,000 5.84%, 6/18/97........................... 24,961
Federal Home Loan Bank:
20,000 5.18%, 8/14/96........................... 19,873
10,000 5.10%, 9/6/96............................ 9,905
16,550 4.94%, 3/4/97............................ 16,529
18,500 5.04%, 3/6/97............................ 18,475
20,000 5.33%, 3/18/97........................... 19,972
Federal Home Loan Mortgage Corp.:
25,000 5.21%, 7/30/96........................... 24,895
10,000 5.26%, 9/3/96............................ 9,907
10,000 5.30%, 11/27/96.......................... 9,781
25,000 5.73%, 6/6/97............................ 24,957
Federal National Mortgage Assoc.:
20,000 5.29%, 7/8/96............................ 19,980
7,230 8.00%, 7/10/96(b)........................ 7,234
10,000 5.23%, 8/6/96............................ 9,948
25,000 5.23%, 8/8/96............................ 24,861
20,000 5.58%, 8/9/96............................ 19,879
25,000 5.25%, 9/12/96........................... 24,734
20,000 5.64%, 10/2/96........................... 19,992
20,000 5.60%, 11/1/96........................... 19,990
10,055 5.02%, 11/20/96.......................... 9,856
8,320 7.70%, 12/10/96.......................... 8,397
4,000 5.45%, 6/2/99*........................... 4,000
20,000 5.45%, 7/26/99*.......................... 20,000
10,000 5.45%, 9/22/99*.......................... 10,000
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- ----------- ----------------------------------------- -----------
</TABLE>
U.S. GOVERNMENT AGENCIES, CONTINUED:
<TABLE>
<C> <S> <C>
Student Loan Marketing Assoc.:
$ 30,000 5.41%, 10/14/97*......................... $ 29,987
40,000 5.41%, 11/24/97*......................... 40,000
25,000 5.44%, 9/28/98*.......................... 25,000
25,000 5.43%, 11/10/98*......................... 25,000
10,000 5.45%, 1/13/99*.......................... 9,999
10,000 5.45%, 2/8/99*........................... 10,000
25,000 5.44%, 2/22/99*.......................... 25,000
10,000 5.46%, 8/2/99*........................... 9,995
-----------
Total U.S. Government Agencies 573,087
-----------
U.S. TREASURY BILLS (4.0%):
25,000 2/6/97(b)................................ 24,260
10,000 3/6/97................................... 9,657
-----------
Total U.S. Treasury Bills 33,917
-----------
Investments, at amortized cost 607,004
-----------
REPURCHASE AGREEMENTS (29.0%):
75,000 Hong Kong Shanghai Banc Corp., 5.50%,
dated 6/28/96, due 7/1/96
(collateralized by $77,370 various U.S.
Government Securities, 0.00% - 8.45%,
8/1/96 - 2/14/06, Market Value
$76,501)............................... 75,000
173,417 Prudential Securities, 5.53%, dated
6/28/96, due 7/1/96, (collateralized by
$225,311 various U.S. Government
Securities, 0.00% - 9.50%, 7/1/96 -
8/15/22, market value $175,345)........ 173,417
-----------
Total Repurchase Agreements 248,417
-----------
Total (Cost--$855,421)(a) $ 855,421
-----------
-----------
</TABLE>
- ------------
Percentages indicated are based on net assets of $855,613.
<TABLE>
<C> <S>
(a) Cost for federal income tax and financial reporting purposes is the same.
</TABLE>
<TABLE>
<C> <S>
(b) A portion of this security was loaned as of June 30, 1996.
</TABLE>
<TABLE>
<C> <S>
* Variable rate securities that have interest rates that change weekly based on the three month treasury bill bond
equivalent yield. The final maturity date for valuation purposes is the next reset date. The rate shown on the Schedule
of Portfolio Investments is the reset rate in effect on June 30, 1996.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
8
<PAGE> 886
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands
except per share amounts)
TREASURY ONLY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
------------- -------------
<S> <C> <C>
ASSETS:
Investments, at amortized cost........................................ $ 414,057 $ 607,004
Repurchase agreements, at cost........................................ -- 248,417
------------- -------------
Total................................................................. 414,057 855,421
Cash.................................................................. 1 1
Interest receivable................................................... 3,688 4,330
Deferred organization costs........................................... 7 42
------------- -------------
TOTAL ASSETS.......................................................... 417,753 859,794
------------- -------------
LIABILITIES:
Dividends payable..................................................... 1,652 3,698
Accrued expenses and other payables:
Investment advisory fees.......................................... 26 56
Administration fees............................................... 16 35
Other............................................................. 98 392
------------- -------------
TOTAL LIABILITIES..................................................... 1,792 4,181
------------- -------------
NET ASSETS:
Capital............................................................... 416,037 855,679
Accumulated undistributed net realized losses from investment
transactions......................................................... (76) (66)
------------- -------------
NET ASSETS............................................................ $ 415,961 $ 855,613
------------- -------------
------------- -------------
Outstanding shares of beneficial interest............................. 416,037 855,679
------------- -------------
------------- -------------
Net asset value--offering and redemption price per share.............. $ 1.00 $ 1.00
----- -----
----- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
----
9
<PAGE> 887
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
(Amounts in Thousands)
TREASURY ONLY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
------------- -------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income................................................. $ 19,404 $ 43,537
------------- -------------
Total Income.................................................... 19,404 43,537
------------- -------------
EXPENSES:
Investment advisory fees........................................ 288 618
Administration fees............................................. 180 386
Custodian and accounting fees................................... 18 68
Legal and audit fees............................................ 41 157
Organization costs.............................................. 4 21
Trustees' fees and expenses..................................... 5 20
Transfer agent fees............................................. 14 22
Registration and filing fees.................................... 32 39
Printing costs.................................................. 18 65
Other........................................................... 7 11
------------- -------------
Total expenses before waivers/reimbursements.................... 607 1,407
Less waivers/reimbursements..................................... -- (5)
------------- -------------
NET EXPENSES.................................................... 607 1,402
------------- -------------
Net Investment Income........................................... 18,797 42,135
------------- -------------
REALIZED GAINS (LOSSES) FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from investment transactions........ (76) 8
------------- -------------
Net increase in net assets resulting from operations............ $ 18,721 $ 42,143
------------- -------------
------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
10
<PAGE> 888
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
TREASURY ONLY MONEY GOVERNMENT MONEY
MARKET FUND MARKET FUND
------------------------ ------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income................................ $ 18,797 $ 12,746 $ 42,135 $ 38,264
Net realized gains (losses) from investment
transactions....................................... (76) 29 8 (66)
----------- ----------- ----------- -----------
Change in net assets resulting from operations........... 18,721 12,775 42,143 38,198
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income........................... (18,797) (12,746) (42,135) (38,264)
In excess of net realized gains from investment
transactions....................................... (21) -- -- --
----------- ----------- ----------- -----------
Change in net assets from shareholder distributions...... (18,818) (12,746) (42,135) (38,264)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued.......................... 1,135,597 894,833 2,638,822 2,818,461
Dividends reinvested................................. 2,487 1,574 10,663 12,982
Cost of shares redeemed.............................. (1,010,723) (825,464) (2,514,579) (2,802,931)
----------- ----------- ----------- -----------
Change in net assets from share transactions............. 127,361 70,943 134,906 28,512
----------- ----------- ----------- -----------
Change in Net Assets..................................... 127,264 70,972 134,914 28,446
NET ASSETS:
Beginning of period.................................. 288,697 217,725 720,699 692,253
----------- ----------- ----------- -----------
End of period........................................ $ 415,961 $ 288,697 $ 855,613 $ 720,699
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
SHARE TRANSACTIONS:
Issued............................................... 1,135,597 894,833 2,638,822 2,818,461
Reinvested........................................... 2,487 1,574 10,663 12,982
Redeemed............................................. (1,010,723) (825,464) (2,514,579) (2,802,931)
----------- ----------- ----------- -----------
Change in shares......................................... 127,361 70,943 134,906 28,512
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
----
11
<PAGE> 889
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1996
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-six active 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 Funds investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
- --------------------------------------------- --------------------------------------------------------------------
<S> <C>
Treasury Only Money Market Fund High current income with liquidity and stability of principal with
the added assurance of a Fund that does not purchase securities
that are subject to repurchase agreements.
Government Money Market Fund High current income with liquidity and stability of principal.
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. 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.
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.
CONTINUED
----
12
<PAGE> 890
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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
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 creditworthy 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
June 30, 1996, the following Funds had securities with the following
amortized cost on loan (amounts in thousands):
<TABLE>
<CAPTION>
MARKET VALUE
OF LOANED
SECURITIES
-------------
<S> <C>
Treasury Only Money Market Fund..................................... $ 90,881
Government Money Market Fund........................................ 31,663
</TABLE>
The loaned securities were fully collateralized by cash and U.S. Government
securities as of June 30, 1996.
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.
CONTINUED
----
13
<PAGE> 891
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
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 of net investment income and
net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
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 thirty-two 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, ADMINISTRATIVE AND DISTRIBUTION 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 a fee, computed daily and paid monthly, equal to
0.08% of the average daily net assets of each Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative 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 administrative 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 Administrator.
Such officers receive no compensation from the Funds for serving in
their respective roles.
The Adviser and Administrator have voluntarily agreed to waive a
portion of their fees and to reimburse the Funds for certain expenses.
For the year ended June 30, 1996, fees in the following amounts were
waived or reimbursed to the Funds (amounts in thousands):
<TABLE>
<CAPTION>
INVESTMENT ADVISORY
FEES WAIVED/
REIMBURSED
-------------------
<S> <C>
Government Money Market Fund....................................... $ 5
</TABLE>
CONTINUED
- ----
14
<PAGE> 892
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1996
5. FEDERAL TAX INFORMATION (UNAUDITED):
At June 30, 1996 the following Funds have capital loss carryforwards which
are available to offset future capital gains, if any (amounts in thousands):
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRES
- --------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Treasury Only Money Market Fund................................ $ 18 2004
Government Money Market Fund................................... 8 2002
Government Money Market Fund................................... 26 2003
Government Money Market Fund................................... 32 2004
</TABLE>
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal
year. The Treasury Only Money Market Fund will treat approximately $58,000
deferred losses as arising on the first day of the year ended June 30, 1997.
----
15
<PAGE> 893
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TREASURY ONLY MONEY MARKET FUND
--------------------------------------------
APRIL 16,
YEARS ENDED JUNE 30, 1993 TO
------------------------------- JUNE 30,
1996 1995 1994 1993 (A)
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD......................................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- -----------
Investment Activities
Net investment income....................................................... 0.052 0.051 0.032 0.006
--------- --------- --------- -----------
Distributions
Net investment income....................................................... (0.052) (0.051) (0.032) (0.006)
--------- --------- --------- -----------
NET ASSET VALUE,
END OF PERIOD............................................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- -----------
--------- --------- --------- -----------
Total Return.................................................................. 5.38% 5.22% 3.23% 2.96%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........................................... $ 415,961 $ 288,697 $ 217,725 $ 60,330
Ratio of expenses to average net assets..................................... 0.17% 0.20% 0.15% 0.07%(b)
Ratio of net investment income to average net assets........................ 5.23% 5.14% 3.23% 2.95%(b)
Ratio of expenses to average net assets*.................................... 0.17% 0.21% 0.22% 0.33%(b)
Ratio of net investment income to average net assets*....................... 5.23% 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>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
16
<PAGE> 894
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND
------------------------------------------
JUNE 14,
YEARS ENDED JUNE 30, 1993 TO
------------------------------- JUNE 30,
1996 1995 1994 1993 (A)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD......................................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- ---------
Investment Activities
Net investment income....................................................... 0.055 0.053 0.033 0.001
--------- --------- --------- ---------
Distributions
Net investment income....................................................... (0.055) (0.053) (0.033) (0.001)
--------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD............................................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- ---------
--------- --------- --------- ---------
Total Return.................................................................. 5.61% 5.41% 3.40% 3.28%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........................................... $ 855,613 $ 720,699 $ 692,253 $ 244,991
Ratio of expenses to average net assets..................................... 0.18% 0.21% 0.11% 0.07%(b)
Ratio of net investment income to average net assets........................ 5.46% 5.28% 3.41% 3.13%(b)
Ratio of expenses to average net assets*.................................... 0.18% 0.22% 0.20% 0.33%(b)
Ratio of net investment income to average net assets*....................... 5.46% 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>
SEE NOTES TO FINANCIAL STATEMENTS.
----
17
<PAGE> 895
- --------------------------------------------------------------------------------
Report of Independent Accountants
- -------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1996
To the Shareholders and Board of Trustees of
The One Group Family of Mutual Funds:
We have audited the accompanying statements of assets and liabilities of the
Treasury Only Money Market Fund and the Government Money Market Fund (two series
of The One Group Family of Mutual Funds), including the schedules of portfolio
investments, as of June 30, 1996, and the related statements of operations,
statements of changes in net assets and the financial highlights for each period
presented. These financial statements and financial highlights are the
responsibility of The One Group Family of Mutual Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury Only Money Market Fund and the Government Money Market Fund as of June
30, 1996, the results of their operations, the changes in their net assets and
the financial highlights for each period presented, in conformity with generally
accepted accounting principles.
Columbus, Ohio Coopers & Lybrand L.L.P.
August 19, 1996
- ----
18
<PAGE> 896
Registration Statement
of
The One Group(R)
on
Form N-lA
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
-- Financial Highlights
Included in Part B:
-- The One Group Funds Portfolio of Investments as of
June 30, 1996 (audited).
-- The One Group Funds Statement of Assets and
Liabilities as of June 30, 1996 (audited).
-- The One Group Funds Statements of Operations for
Fiscal Year Ended June 30, 1996 (audited).
-- The One Group Funds Statements of Changes in Net
Assets for Fiscal Year Ended June 30, 1996 (audited).
-- The One Group Funds Financial Highlights as of June
30, 1996 (audited).
-- The One Group Funds Notes to Financial Statements as
of June 30, 1996 (audited).
-- Reports dated August 19 and 27, 1996 of Coopers &
Lybrand L.L.P., independent accountants on The One
Group Funds financial statements.
-- The One Group Funds Portfolio of Investments as of
December 31, 1996 (unaudited).
-- The One Group Funds Statement of Assets and
Liabilities as of December 31, 1996 (unaudited).
-- The One Group Funds Statements of Operations for the
Period Ended December 31, 1996 (unaudited).
<PAGE> 897
-- The One Group Funds Statements of Changes in Net
Assets for the Period Ended December 31, 1996
(unaudited).
-- The One Group Funds Financial Highlights as of
December 31, 1996 (unaudited).
-- The One Group Funds Notes to Financial Statements as
of December 31, 1996 (unaudited).
All required financial statements are contained in
Part B hereof. All other financial statements and
schedules are inapplicable.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust is
incorporated by reference to Exhibit (1) to
Post-Effective Amendment No. 39 (filed August 16,
1996) to Registrant's Registration Statement on Form
N-1A.
(2) Code of Regulations as amended and restated July 26,
1990 is incorporated by reference to Exhibit (2) to
Post-Effective Amendment No. 39 (filed August 16,
1996) to Registrant's Registration Statement on Form
N-1A.
(3) None.
(4) None.
(5)(a) Investment Advisory Agreement dated January 11, 1993
between Registrant and Banc One Investment Advisors
Corporation is incorporated by reference to Exhibit
5(a) to Post-Effective Amendment No. 27 (filed March
l7, l993) to Registrant's Registration Statement on
Form N-1A.
(5)(b) Revised Schedule A to the Investment Advisory
Agreement between Registrant and Banc One Investment
Advisors Corporation is incorporated by reference to
Exhibit (5)(b) to Post-Effective Amendment No. 40
(filed August 29, 1996) to the Registrant's
Registration Statement on Form N-1A..
(5)(c) Sub-Investment Advisory Agreement dated October
1,1996 between Banc One Investment Advisors
Corporation and Independence International
Associates, Inc. is filed herewith
(6)(a) Distribution Agreement dated November 1, 1995 between
the Registrant and The One Group Services Company is
incorporated by reference to Exhibit (6)(a) to
Post-Effective Amendment No. 36 (filed November 24,
1995) to Registrant's Registration Statement on Form
N-1A.
(6)(b) Revised Schedules A-D to the Distribution Agreement
between the Registrant and The One Group Services
Company are incorporated by reference to Exhibit
(6)(b) to Post-Effective Amendment No. 40 (filed
August 29, 1996) to the Registrant's Registration
Statement on Form N-1A.
<PAGE> 898
(6)(c) Re-executed Distribution Agreement dated December 13, 1995
between Registrant and The One Group Services Company is
incorporated by reference to Exhibit (7)(c) to Registrant's
Registration Statement on Form N-14 (filed January 19, 1996).
(6)(e) Dealer's Agreement for The One Group(R) Funds dated November
11, 1995 between The One Group Services Company and Banc One
Securities Corporation is incorporated by reference to Exhibit
(7)(d) to Registrant's Registration Statement on Form N-14
(filed January 19, 1996).
(7) None.
(8)(a) Custodian Contract between Registrant and State Street Bank
and Trust Company is incorporated by reference to Exhibit (8)
to Post-Effective Amendment No. 12 (filed September 9, 1988)
to Registrant's Registration Statement on Form N-1A.
(8)(b) Sub-Custodian Agreement between State Street Bank and Trust
Company and Bank One Trust Company, NA is incorporated by
reference to Exhibit (8)(b) to Post-Effective Amendment No. 37
(filed June 13, 1996) to the Registrant's Registration
Statement on Form N-1A.
(9)(a) Management and Administration Agreement dated December 1, 1995
between the Registrant and The One Group Services Company is
incorporated by reference to Exhibit (13)(a) to Registrant's
Registration Statement on Form N-14 (filed January 19, 1996).
(9)(b) Revised Schedule A to the Management and Administration
Agreement between the Registrant and The One Group Services
Company is incorporated by reference to Exhibit (9)(b) to
Post-Effective Amendment No. 40 (filed August 29, 1996) to the
Registrant's Registration Statement on Form N-1A.
(9)(c) Transfer Agency and Service Agreement between the Registrant
and State Street Bank and Trust Company is incorporated by
reference to Exhibit (9)(b) to Post-Effective Amendment No. 12
(filed September 9, 1988) to Registrant's Registration
Statement on Form N-1A.
(9)(d) Fund Accounting Agreement dated December 1, 1995 between the
Registrant and The One Group Services Company is incorporated
by reference to Exhibit (13)(c) to Registrant's Registration
Statement on Form N-14 (filed January 19, 1996).
(9)(e) Revised Schedule A to the Fund Accounting Agreement between
the Registrant and The One Group Services Company is
incorporated by reference to Exhibit (9)(e) to Post-Effective
Amendment No. 40 (filed August 29, 1996) to the Registrant's
Registration Statement on Form N-1A.
(9)(f) Sub-Administration Agreement dated December 1, 1995 between
The One Group Services Company and Banc One Investment
Advisors Corporation is
<PAGE> 899
incorporated by reference to Exhibit (13)(d) to the
Registrant's Registration Statement on Form N-14 (filed
January 19, 1996).
(9)(g) Revised Schedule A to the Sub-Administration Agreement between
The One Group Services Company and Banc One Investment
Advisors is incorporated by reference to Exhibit (9)(g) to
Post-Effective Amendment No. 40 (filed August 29, 1996) to the
Registrant's Registration Statement on Form N-1A.
(9)(h) Agency Services and Delegation Agreement dated January 1, 1996
between the Registrant and BISYS Qualified Plan Services is
incorporated by reference to Exhibit (9)(g) to Post-Effective
Amendment No. 37 (filed June 13, 1996) to the Registrant's
Registration Statement on Form N-1A.
(9)(i) Shareholder Servicing Agreement is incorporated by reference
to Exhibit 9(h) to Post-Effective Amendment No. 37 (filed June
13, 1996) to the Registrant's Registration Statement on Form
N-1A.
(10) Opinion and consent of counsel is filed herewith.
(11)(a) Consent of Coopers & Lybrand L.L.P. is filed herewith.
(11)(b) Consent of KPMG Peat Marwick LLP is filed herewith.
(11)(c) Consent of Price Waterhouse, LLP is filed herewith.
(11)(d) Consent of Ropes & Gray is filed herewith.
(12) None.
(13) Purchase Agreement dated July 18, 1985, between Registrant and
Physicians Insurance Company of Ohio is incorporated by
reference to Exhibit (13) of the Registrant's Pre-Effective
Amendment No. 2 (filed July 18, 1985) to Registrant's
Registration Statement on Form N-1A.
(14) None.
(15)(a) Re-Executed Distribution and Shareholder Services Plan - Class
A and Service Class shares dated November 1, 1995, as amended
February 29, 1996, between the Registrant and The One Group
Services Company is incorporated by reference to Exhibit
(15)(a) to Post-Effective Amendment No. 37 (filed June 13,
1996) to the Registrant's Registration Statement on Form N-1A.
(15)(b) Revised Schedule A to the Re-Executed Distribution and
Shareholder Services Plan Class A and Service Class shares
between the Registrant and The One Group Services Company is
incorporated by reference to Exhibit (15)(b) to Post-Effective
Amendment No. 40 (filed August 29, 1996) to the Registrant's
Registration Statement on Form N-1A.
<PAGE> 900
(15)(c) Distribution and Shareholder Services Plan - Class B and Class
C Shares dated January 1, 1994, as amended February 20, 1997,
between the Registrant and The One Group Services Company is
filed herewith
(16) Schedules for computation of performance quotations for the
Funds provided in the Registration Statement in response to
Item 22 of Form N-1A are incorporated herein by reference to
Exhibit 16 to Post-Effective Amendment No. 31 (filed April 29,
1994) to the Registrant's Registration Statement on Form N-1A.
(17) Financial data schedules for:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
17.1 Prime Money Market Fiduciary 12/31/96
17.2 Prime Money Market Class A 12/31/96
17.3 U.S. Treasury Securities
Money Market Fiduciary 12/31/96
17.4 U.S. Treasury Securities
Money Market Class A 12/31/96
17.5 Municipal Money Market Fiduciary 12/31/96
17.6 Municipal Money Market Class A 12/31/96
17.7 Income Equity Fund Fiduciary 12/31/96
17.8 Income Equity Fund Class A 12/31/96
17.9 Income Equity Fund Class B 12/31/96
17.10 Income Bond Fiduciary 12/31/96
17.11 Income Bond Class A 12/31/96
17.12 Income Bond Class B 12/31/96
17.13 Intermediate Tax-Free Bond Fiduciary 12/31/96
17.14 Intermediate Tax-Free Bond Class A 12/31/96
17.15 Intermediate Tax-Free Bond Class B 12/31/96
17.16 Disciplined Value Fund Fiduciary 12/31/96
17.17 Disciplined Value Fund Class A 12/31/96
17.18 Disciplined Value Fund Class B 12/31/96
17.19 Growth Opportunities Fund Fiduciary 12/31/96
17.20 Growth Opportunities Fund Class A 12/31/96
17.21 Growth Opportunities Fund Class B 12/31/96
17.22 Limited Volatility Bond Fiduciary 12/31/96
17.23 Limited Volatility Bond Class A 12/31/96
17.24 Limited Volatility Bond Class B 12/31/96
17.25 Equity Index Fund Fiduciary 12/31/96
17.26 Equity Index Fund Class A 12/31/96
17.27 Equity Index Fund Class B 12/31/96
17.28 Large Company Value Fund Fiduciary 12/31/96
17.29 Large Company Value Fund Class A 12/31/96
17.30 Large Company Value Fund Class B 12/31/96
17.31 Ohio Municipal Bond Fiduciary 12/31/96
17.32 Ohio Municipal Bond Class A 12/31/96
17.33 Ohio Municipal Bond Class B 12/31/96
17.34 International Equity
Index Fund Fiduciary 12/31/96
</TABLE>
<PAGE> 901
<TABLE>
<CAPTION>
<S> <C> <C> <C>
17.35 International Equity
Index Fund Class A 12/31/96
17.36 International Equity
Index Fund Class B 12/31/96
17.37 Treasury Only Money
Market Fund -- 12/31/96
17.38 Government Money
Market Fund -- 12/31/96
17.39 Asset Allocation Fund Fiduciary 12/31/96
17.40 Asset Allocation Fund Class A 12/31/96
17.41 Asset Allocation Fund Class B 12/31/96
17.42 Government Bond Fiduciary 12/31/96
17.42 Government Bond Class A 12/31/96
17.42 Government Bond Class B 12/31/96
17.43 Government ARM Fiduciary 12/31/96
17.44 Government ARM Class A 12/31/96
17.45 Government ARM Class B 12/31/96
17.46 Municipal Income Fund Fiduciary 12/31/96
17.47 Municipal Income Fund Class A 12/31/96
17.48 Municipal Income Fund Class B 12/31/96
17.49 Ohio Municipal
Money Market Fiduciary 12/31/96
17.50 Ohio Municipal
Money Market Class A 12/31/96
17.51 Intermediate Bond Fiduciary 12/31/96
17.52 Intermediate Bond Class A 12/31/96
17.53 Intermediate Bond Class B 12/31/96
17.54 Large Company Growth
Fund Fiduciary 12/31/96
17.55 Large Company Growth
Fund Class A 12/31/96
17.56 Large Company Growth
Fund Class B 12/31/96
17.57 Kentucky Municipal Bond Fiduciary 12/31/96
17.58 Kentucky Municipal Bond Class A 12/31/96
17.59 Kentucky Municipal Bond Class B 12/31/96
17.60 Louisiana Municipal Bond Fiduciary 12/31/96
17.61 Louisiana Municipal Bond Class A 12/31/96
17.62 Louisiana Municipal Bond Class B 12/31/96
17.63 Value Growth Fiduciary 12/31/96
17.64 Value Growth Class A 12/31/96
17.65 Value Growth Class B 12/31/96
17.66 Gulf South Growth Fiduciary 12/31/96
17.67 Gulf South Growth Class A 12/31/96
17.68 Gulf South Growth Class B 12/31/96
</TABLE>
(18)(a) Multiple Class Plan for The One Group(R)adopted by the Board
of Trustees on May 22, 1995 as amended February 20, 1997 is
filed herewith.
<PAGE> 902
Item 25. Persons Controlled by or under Common Control with Registrant
As of the effective date of this Registration Statement there
are no persons controlled or under common control with the
Registrant.
Item 26. Number of Holders of Securities
As of April 9, 1997 the number of record holders of each
series of Fiduciary Class shares of the Registrant were as
follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Prime Money Market Fund 434
U.S. Treasury Securities 73
Money Market Fund
Municipal Money Market Fund 26
Income Equity Fund 207
Income Bond Fund 158
Growth Opportunities Fund 244
Disciplined Value Fund 149
Limited Volatility Bond Fund 145
International Equity Index Fund 108
Intermediate Tax-Free Bond Fund 24
Equity Index Fund 156
Large Company Value Fund 96
Ohio Municipal Bond Fund 20
Ohio Municipal 7
Money Market Fund
Kentucky Municipal Bond Fund 8
Texas Tax-Free Bond Fund 0
West Virginia Municipal Bond Fund 4
Asset Allocation Fund 73
</TABLE>
<PAGE> 903
<TABLE>
<CAPTION>
<S> <C>
Ultra Short-Term Income Fund 40
Government Bond Fund 117
Municipal Income Fund 33
Intermediate Bond Fund 84
Arizona Municipal Bond Fund 3
Large Company Growth Fund 211
Louisiana Municipal Bond Fund 7
Value Growth Fund 35
Gulf South Growth Fund 31
Income Fund 0
Investor Conservative Growth Fund 12
Investor Growth Fund 13
Investor Balanced Fund 12
Investor Fixed Income Fund 0
Investor Aggressive Growth Fund 0
Investor Growth & Income Fund 10
Treasury & Agency Fund 7
</TABLE>
As of April 9, 1997 the number of record holders of each series of Class A
Shares of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Prime Money Market Fund 18,396
U.S. Treasury Securities 69,025
Money Market Fund
Municipal Money Market Fund 1,252
Income Equity Fund 5,998
Income Bond Fund 686
</TABLE>
<PAGE> 904
<PAGE> 905
<TABLE>
<S> <C>
Growth Opportunities Fund 5,618
Disciplined Value Fund 3,232
Limited Volatility Bond Fund 1,204
International Equity Index Fund 1,683
Intermediate Tax-Free Bond Fund 148
Equity Index Fund 9,057
Large Company Value Fund 934
Ohio Municipal Bond Fund 406
Ohio Municipal 930
Money Market Fund
Kentucky Municipal Bond Fund 221
Texas Tax-Free Bond Fund 0
West Virginia Municipal Bond Fund 5
Asset Allocation Fund 2,595
Ultra Short-Term Income Fund 122
Government Bond Fund 2,091
Municipal Income Fund 701
Intermediate Bond Fund 1,011
Arizona Municipal Bond Fund 3
Large Company Growth Fund 12,427
Louisiana Municipal Bond Fund 1,290
Value Growth Fund 4,248
Gulf South Growth Fund 2,633
Income Fund 0
Investor Conservative Growth Fund 29
Investor Growth Fund 120
</TABLE>
<PAGE> 906
<TABLE>
<S> <C>
Investor Balanced Fund 42
Investor Fixed Income Fund 0
Investor Aggressive Growth Fund 0
Investor Growth & Income Fund 87
Treasury & Agency Fund 0
</TABLE>
As of April 9, 1997 the number of record holders of each series of Service Class
Shares of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Prime Money Market Fund 0
U.S. Treasury Securities 0
Money Market Fund
</TABLE>
As of April 9, 1997 the number of record holders of each series of Class B
Shares (CDSC) of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Prime Money Market Fund 30
U.S. Treasury Securities Money 11
Market Fund
Income Equity Fund 6,951
Income Bond Fund 856
Growth Opportunities Fund 6,793
Disciplined Value Fund 3,004
Limited Volatility Bond Fund 484
International Equity Index Fund 2,199
Intermediate Tax-Free Bond Fund 90
Equity Index Fund 16,712
</TABLE>
<PAGE> 907
<TABLE>
<S> <C>
Large Company Value Fund 1,404
Ohio Municipal Bond Fund 465
Kentucky Municipal Bond Fund 87
Texas Tax-Free Bond Fund 0
West Virginia Municipal Bond Fund 9
Asset Allocation Fund 3,864
Ultra Short-Term Income Fund 129
Government Bond Fund 1,057
Municipal Income Bond Fund 1,039
Intermediate Bond Fund 874
Arizona Municipal Bond Fund 2
Large Company Growth Fund 14,943
Louisiana Municipal Bond Fund 176
Value Growth Fund 1,444
Gulf South Growth Fund 913
Income Fund 0
Investor Conservative Growth Fund 57
Investor Growth Fund 277
Investor Balanced Fund 144
Investor Fixed Income Fund 0
Investor Aggressive Growth Fund 0
Investor Growth & Income Fund 193
Treasury & Agency Fund 0
</TABLE>
<PAGE> 908
As of April 9, 1997 the number of record holders of each of the Institutional
Money Market Funds of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Treasury Only Money Market Fund 12
Government Money Market Fund 11
Institutional Prime Money Market Fund 1
Treasury Money Market 0
Tax-Exempt Money Market 0
</TABLE>
As of April 9, 1997 the number of record holders of each series of Class C
Shares of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Investor Conservative Growth Fund 0
Investor Growth Fund 0
Investor Balanced Fund 0
Investor Fixed Income Fund 0
Investor Aggressive Growth Fund 0
Investor Growth & Income Fund 0
</TABLE>
<PAGE> 909
Item 27. Indemnification
Article IX, Section 9.2 of the Registrant's
Declaration of Trust, incorporated as Exhibit (1)
hereto, provides for the indemnification of
Registrant's trustees and officers. Indemnification
of the Group's principal underwriter, custodians,
investment advisers, administrator, and transfer
agents is provided for in the Group's respective
Agreements with those service providers as filed or
incorporated by reference as Exhibits hereto. As of
the effective date of this Registration Statement,
the Group has obtained from a major insurance carrier
a trustees and officers' liability policy covering
certain types of errors and omissions. In no event
will Registrant indemnify any of its trustees,
officers, employees, or agents against any liability
to which such person would otherwise be subject by
reason of his willful misfeasance, bad faith, or
gross negligence in the performance of his duties, or
by reason of his reckless disregard of the duties
involved in the conduct of his office or under his
agreement with Registrant. Registrant will comply
with Rule 484 under the Securities Act of 1933 and
Release 11330 under the Investment Company Act of
1940 in connection with any indemnification.
Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to
trustees, officers, and controlling persons of
Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission
such indemnification is against public policy as
expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of
Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee,
officer, or controlling person in connection with the
securities being registered, Registrant will, unless
in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether
such indemnification by it is against public policy
as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 28. Business and Other Connections of Investment Advisers
Banc One Investment Advisors Corporation ("Banc One
Advisors") performs investment advisory services for
all of the Funds of the Group. Boston International
Advisors, Inc. performs investment sub-advisory
services for the International Equity Index Fund.
Banc One Advisors is an indirect wholly-owned
subsidiary of BANC ONE CORPORATION, a bank holding
company incorporated in the state of Ohio. BANC ONE
CORPORATION now operates affiliate banking
organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas,
Utah, West Virginia and Wisconsin. In addition, BANC
ONE CORPORATION has several affiliates that engage in
data processing, venture capital, investment and
merchant banking, and other diversified services
including trust management, investment management,
brokerage, equipment leasing, mortgage banking,
consumer finance, and insurance.
<PAGE> 910
To the knowledge of Registrant, none of the directors
or officers of Banc One Advisors or Boston
International Advisors, Inc., except as set forth or
incorporated herein, is or has been, at any time
during the past two calendar years, engaged in any
other business, profession, vocation or employment of
a substantial nature. Set forth below are the names
and principal businesses of the directors of Banc One
Advisors and Boston International Advisors, Inc. who
are engaged in any other business, profession,
vocation or employment of a substantial nature.
<PAGE> 911
Banc One Advisors
<TABLE>
<CAPTION>
Position(s)
Held with Banc Principal
Name and Address One Advisors Occupation
- ---------------- -------------- ----------
<S> <C> <C>
Michael J. McMennamin Director Executive Vice President and Chief
Financial Officer BANC ONE
CORPORATION
Frederick L. Cullen Director Chairman and Chief Executive Officer, Bank
One, Columbus, NA and President and
Chief Operating Officer, Banc One Ohio
Corporation
David R. Meuse Director Chairman and Chief Executive Officer, Banc
One Capital Holdings Corporation
Garrett Jamison Director Senior Managing Director, Banc One
Investment Management and Trust Group
Geoff Von Kuhn Director Senior Managing Director, Banc One
Investment Management and Trust Group
Michael V. Wible Secretary Senior Attorney, BANC ONE CORPORATION
David J. Kundert Chairman and Chief Chairman and Chief Executive Officer, Banc
Executive Officer One Investment Management and Trust
Group
</TABLE>
The principal business address of the principal executive officer and directors
of Banc One Advisors is 1111 Polaris Parkway, P.O. Box 710211, Columbus, Ohio
43271-0211.
Independence International Associates, Inc.
Independence International Advisors, Inc. ("IIA") is the Sub-Investment
Advisor to the International Equity Index Fund. IIA, a corporation organized
under the laws of Massachusetts, provides investment advice to institutional and
investment company clients. Information regarding the firm's ownership and other
business connections of the officers and directors is listed on the Form ADV
filed by IIA with the SEC pursuant to the Investment Advisers Act of 1940 (SEC
File No. 801-28785), the text of which is hereby incorporated by reference.
Item 29. Principal Underwriters
(a) The One Group Services Company acts as administrator and
distributor for each of the Fund's Portfolios.
(b) The directors and officers of The One Group Services Company
are set forth below. The business address of each director or
officer is 3435 Stelzer Road, Columbus, Ohio 43219.
<PAGE> 912
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with The One Group with Registrant
- ------------------ Services Company ---------------
---------------------
<S> <C> <C>
Lynn J. Mangum Chairman and Chief None
Executive Officer
Robert J. McMullen Executive Vice President None
and Director
Dennis Sheehan Senior Vice President None
Kevin J. Dell Vice President/Secretary/ None
General Counsel
Michael D. Burns Vice President/Compliance Officer None
Annamaria Porcaro Assistant Secretary None
Robert Tuch Assistant Secretary None
Stephen G. Mintos Executive Vice President/ None
Chief Operating Officer
George Martinez Senior Vice President Secretary
Dale Smith Vice President/ None
Chief Financial Officer
John Gilliam Vice President None
Mark Dillon President President
Mark J. Ryberczyk Senior Vice President None
Mark S. Redman Vice President Vice President and
Treasurer
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records
(1) Banc One Investment Advisors Corporation, 1111
Polaris Parkway, P.O. Box 710211, Columbus, Ohio
43271-0211 (records relating to its functions as
Investment Adviser and Sub-Administrator).
(2) Independence International Advisors, Inc., 75 State
Street, Boston, MA 02109 (records relating to its
functions as Sub-Investment Adviser to the
International Equity Index Fund).
(3) The One Group Services Company, 3435 Stelzer Road,
Columbus, OH 43219 (records relating to its functions
as Distributor for all funds).
<PAGE> 913
(4) The One Group Services Company, 3435 Stelzer Road,
Columbus, OH 43219 (records relating to its functions
as Administrator for all funds).
(5) State Street Bank and Trust Company, 470 Atlantic
Avenue, Fifth Floor, Boston, MA 02205-9087 (records
relating to its functions as custodian and transfer
agent to all funds).
(6) Ropes & Gray, One Franklin Square, 1301 K Street,
N.W., Suite 800 East, Washington, D.C. 20005
(Declaration of Trust, Code of Regulations, and
Minute Books).
Item 31. Management Services
N/A.
Item 32. Undertakings
The Registrant undertakes to call a meeting of
Shareholders, at the request of at least 10% of the
Registrant's outstanding shares, for the purpose of voting
upon the question of removal of a trustee or trustees and
to assist in communications with other shareholders as
required by Section 16(c) of the Investment Company Act of
1940.
The Registrant undertakes to furnish to each person to
whom a prospectus for a particular fund is delivered a
copy of the Registrant's latest annual report to
shareholders relating to that fund upon request and
without charge.
<PAGE> 914
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certified that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(a) under the 1933 Act and has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Washington, D.C. on the 18th day of April, 1997.
The One Group(R)
(Registrant)
By: /s/ Mark Dillon
-----------------------------
*Mark Dillon
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Mark Dillon President April 18
- -----------------------------
* Mark Dillon
/s/ Peter C. Marshall Trustee April 18
- -----------------------------
*Peter C. Marshall
/s/ Charles I. Post Trustee April 18
- -----------------------------
*Charles I. Post
/s/ John S. Randall Trustee April 18
- -----------------------------
*John S. Randall
/s/ Frederick W. Ruebeck Trustee April 18
- -----------------------------
*Frederick W. Ruebeck
*By: /s/ Alan G. Priest
-----------------------------
Alan G. Priest
Attorney-in-Fact
<PAGE> 915
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(5)(c) Sub-Investment Advisory Agreement dated October 1, 1996
between Banc One Investment Advisors Corporation and
Independence International Associates, Inc.
(10) Opinion and Consent of Counsel.
(11)(a) Consent of Coopers & Lybrand, L.L.P.
(11)(b) Consent of KPMG Peat Marwick, LLP.
(11)(c) Consent of Price Waterhouse, LLP.
(11)(d) Consent of Ropes & Gray.
(15)(c) Amended Distribution and Shareholder Services Plan - Class B
and Class C Shares dated January 1, 1994, as amended February
20, 1997, between the Registrant and The One Group Services
Company.
(18)(a) Form of Multiple Class Plan for The One Group(R) adopted by
the Board of Trustees on May 22, 1995 as amended February 20,
1997 is filed herewith.
(17) Financial data schedules for:
<TABLE>
<S> <C> <C> <C>
27.1 Prime Money Market Fiduciary 12/31/96
27.2 Prime Money Market Class A 12/31/96
27.3 U.S. Treasury Securities
Money Market Fiduciary 12/31/96
27.4 U.S. Treasury Securities
Money Market Class A 12/31/96
27.5 Municipal Money Market Fiduciary 12/31/96
27.6 Municipal Money Market Class A 12/31/96
27.7 Income Equity Fund Fiduciary 12/31/96
27.8 Income Equity Fund Class A 12/31/96
27.9 Income Equity Fund Class B 12/31/96
27.10 Income Bond Fiduciary 12/31/96
27.11 Income Bond Class A 12/31/96
27.12 Income Bond Class B 12/31/96
27.13 Intermediate Tax-Free Bond Fiduciary 12/31/96
27.14 Intermediate Tax-Free Bond Class A 12/31/96
27.15 Intermediate Tax-Free Bond Class B 12/31/96
27.16 Disciplined Value Fund Fiduciary 12/31/96
27.17 Disciplined Value Fund Class A 12/31/96
27.18 Disciplined Value Fund Class B 12/31/96
27.19 Growth Opportunities Fund Fiduciary 12/31/96
27.20 Growth Opportunities Fund Class A 12/31/96
</TABLE>
<PAGE> 916
<PAGE> 917
<TABLE>
<S> <C> <C> <C>
27.21 Growth Opportunities Fund Class B 12/31/96
27.22 Limited Volatility Bond Fiduciary 12/31/96
27.23 Limited Volatility Bond Class A 12/31/96
27.24 Limited Volatility Bond Class B 12/31/96
27.25 Equity Index Fund Fiduciary 12/31/96
27.26 Equity Index Fund Class A 12/31/96
27.27 Equity Index Fund Class B 12/31/96
27.28 Large Company Value Fund Fiduciary 12/31/96
27.29 Large Company Value Fund Class A 12/31/96
27.30 Large Company Value Fund Class B 12/31/96
27.31 Ohio Municipal Bond Fiduciary 12/31/96
27.32 Ohio Municipal Bond Class A 12/31/96
27.33 Ohio Municipal Bond Class B 12/31/96
27.34 International Equity
Index Fund Fiduciary 12/31/96
27.35 International Equity
Index Fund Class A 12/31/96
27.36 International Equity
Index Fund Class B 12/31/96
27.37 Treasury Only Money
Market Fund -- 12/31/96
27.38 Government Money
Market Fund -- 12/31/96
27.39 Asset Allocation Fund Fiduciary 12/31/96
27.40 Asset Allocation Fund Class A 12/31/96
27.41 Asset Allocation Fund Class B 12/31/96
27.42 Government Bond Fiduciary 12/31/96
27.42 Government Bond Class A 12/31/96
27.42 Government Bond Class B 12/31/96
27.43 Government ARM Fiduciary 12/31/96
27.44 Government ARM Class A 12/31/96
27.45 Government ARM Class B 12/31/96
27.46 Municipal Income Fund Fiduciary 12/31/96
27.47 Municipal Income Fund Class A 12/31/96
27.48 Municipal Income Fund Class B 12/31/96
27.49 Ohio Municipal
27.50 Ohio Municipal
Money Market Class A 12/31/96
27.51 Intermediate Bond Fiduciary 12/31/96
27.52 Intermediate Bond Class A 12/31/96
27.53 Intermediate Bond Class B 12/31/96
27.54 Large Company Growth
Fund Fiduciary 12/31/96
27.55 Large Company Growth
Fund Class A 12/31/96
27.56 Large Company Growth
Fund Class B 12/31/96
27.57 Kentucky Municipal Bond Fiduciary 12/31/96
27.58 Kentucky Municipal Bond Class A 12/31/96
27.59 Kentucky Municipal Bond Class B 12/31/96
27.60 Louisiana Municipal Bond Fiduciary 12/31/96
</TABLE>
<PAGE> 918
<TABLE>
<S> <C> <C> <C>
27.61 Louisiana Municipal Bond Class A 12/31/96
27.62 Louisiana Municipal Bond Class B 12/31/96
27.63 Value Growth Fiduciary 12/31/96
27.64 Value Growth Class A 12/31/96
27.65 Value Growth Class B 12/31/96
27.66 Gulf South Growth Fiduciary 12/31/96
27.67 Gulf South Growth Class A 12/31/96
27.68 Gulf South Growth Class B 12/31/96
</TABLE>
<PAGE> 1
EXHIBIT (5)(c)
SUB-INVESTMENT ADVISORY AGREEMENT BETWEEN
BANC ONE INVESTMENT ADVISORS CORPORATION AND
INDEPENDENCE INTERNATIONAL ASSOCIATES, INC.
<PAGE> 2
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of October 1, 1996 by and between BANC ONE INVESTMENT
ADVISORS CORPORATION, a national banking association with its principal office
in Westerville, Ohio (hereinafter called the "Investment Adviser") and
INDEPENDENCE INTERNATIONAL ASSOCIATES, INC., an investment adviser with its
principal office in Boston, Massachusetts (hereinafter called the
"Sub-Adviser").
WHEREAS, the Investment Adviser serves as the Investment Adviser to The
One Group International Equity Index Fund (the "Fund") of The One Group (the
"Trust"), a Massachusetts business trust and an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Investment Adviser has entered into an investment
sub-advisory contract with the Sub-Adviser dated January 11, 1993, as amended by
an amendment dated February 11, 1993, under which the Sub-Adviser provides
investment sub-advisory services to the Fund (such investment sub-advisory
contract being hereinafter referred to as the "Existing Contract");
WHEREAS, the Board of Trustees of the Trust (the "Board") has been
advised that the Sub-Adviser and the holders of all of the outstanding voting
securities of the Sub-Adviser have negotiated the sale of all or a controlling
block of the Sub-Adviser's outstanding voting securities to Independence
Investment Associates, Inc. ("IIA");
WHEREAS, Section 2(a)(4) of the 1940 Act provides that the transfer of
all or a controlling block of the outstanding voting securities of the
Sub-Adviser to IIA would constitute an assignment of the Existing Contract, and,
as required by Section 15(a)(4) of the 1940 Act, the Existing Contract provides
for the automatic termination of such Existing Contract in the event of its
assignment; and
WHEREAS, following the termination of the Existing Contract, the
Investment Adviser desires to continue to retain the Sub-Adviser to furnish
investment advisory services and related services to it with regard to the Fund
and the Sub-Adviser is willing and believes it possesses legal authority to make
available such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Retention. The Investment Adviser hereby retains the
Sub-Adviser to provide certain sub-investment advisory services herein set forth
to it with regard to the Fund for the period and on the terms set forth in this
Agreement. The Sub-Adviser accepts such retention and agrees to furnish the
services herein set forth for the compensation herein provided.
2. Delivery of Documents. The Investment Adviser has furnished
the Sub-Adviser with copies properly certified or authenticated of each of the
following documents:
(a) the Trust's Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts on May 23,
1985, and all amendments thereto or restatements thereof (such
Declaration, as presently in effect and as it shall from time to time
be amended or restated, is herein called the "Declaration of Trust");
<PAGE> 3
(b) the Trust's Code of Regulations and amendments
thereto;
(c) resolutions of the Trust's Board of Trustees
authorizing the appointment of the Sub-Adviser and approving this
Agreement;
(d) the Trust's original Notification of Registration on
Form N-8A under the 1940 Act as filed with the Securities and Exchange
Commission (the "SEC") on February 20, 1985 and all amendments thereto;
(e) the Trust's current Registration Statement on Form
N-lA under the Securities Act of 1933, as amended ("1933 Act") and
under the 1940 Act as filed with the Securities and Exchange Commission
and all amendments thereto; and
(f) the Trust's most recent prospectus and Statement of
Additional Information relating to the Fund (such prospectus and
Statement of Additional Information, as presently in effect, and all
amendments and supplements thereto are herein collectively called the
"Prospectus").
The Investment Adviser will promptly furnish the Sub-Adviser with
copies of all amendments of or supplements to the foregoing documents.
3. Management. Subject always to the instructions and supervision
of the Investment Adviser, the Sub-Adviser will provide a continuous investment
program for the Fund, including investment research and management with respect
to all securities and investments and cash equivalents in the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Trust with respect to the
Fund and will place all purchase and sale orders on behalf of the Trust with
respect to the Fund. The Sub-Adviser will provide the services under this
Agreement in accordance with the Fund's investment objective, policies and
restrictions as stated in the Prospectus and resolutions of the Trust's Board of
Trustees. The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
(b) will comply in all material respects with all
applicable Rules and Regulations of the Securities and Exchange
Commission and in addition will conduct its activities under this
Agreement in accordance with any applicable regulations pertaining to
the investment advisory activities of the Sub-Adviser;
(c) will not make loans to any person to purchase or
carry units of beneficial interest ("Shares") in the Fund or make loans
to the Trust;
(d) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with any
broker or dealer. In placing orders with brokers and dealers, the
Sub-Adviser will attempt to obtain prompt execution of orders in an
effective manner at the most favorable price. Consistent with this
obligation, when the execution and price offered by two or more brokers
or dealers are comparable, the Sub-Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers
who provide the Sub-Adviser with research advice and other services. In
no instance will
- 2-
<PAGE> 4
portfolio securities be purchased from or sold to The One Group
Services Company, the Investment Adviser, the Sub-Adviser or any
affiliated person of either the Trust, The One Group Services Company,
the Investment Adviser, or the Sub-Adviser;
(e) will treat confidentially and as proprietary
information of the Trust all records and other information relative to
the Fund and prior, present or potential shareholders, and will not use
such records and information for any purpose other than performance of
its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt proceedings
for failure to comply when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust; and
(f) will maintain its policy and practice of conducting
its fiduciary functions independently. In making investment
recommendations for the Fund, the Sub-Adviser's personnel will not
inquire or take into consideration whether the issuers of securities
proposed for purchase or sale for the Fund's account are customers of
the Investment Adviser, the Sub-Adviser or the parents or subsidiaries
or affiliates of the Investment Adviser or Sub-Adviser. In dealing with
such customers, the Sub-Adviser and its parent, subsidiaries, and
affiliates will not inquire or take into consideration whether
securities of those customers are held by the Trust.
4. Services Not Exclusive. The investment advisory services
furnished by the Sub-Adviser hereunder are not to be deemed exclusive. Except to
the extent necessary to perform the Sub-Adviser's obligations under this
Agreement, nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or any subsidiary or affiliate of the Sub-Adviser, or any employee
of the Sub-Adviser, to engage in any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other person.
5. Books and Records. In compliance with the requirements of Rule
3la-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records which
it maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
3la-2 under the 1940 Act the records required to be maintained by Rule 3la-1
under the 1940 Act.
6. Expenses. During the term of this Agreement, the Sub-Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Trust. The Trust and the Investment
Adviser will be responsible for all of their respective expenses and
liabilities.
7. Compensation. (a) For the services provided and the expenses
assumed pursuant to this Agreement, the Investment Adviser will pay the
Sub-Adviser and the Sub-Adviser will accept as full compensation therefor a fee
computed daily and paid monthly in arrears on the first business day of each
month at one-twelfth of the applicable annual rate, determined as follows:
(1) For the period from the date hereof until the date on which
this Agreement is approved by the vote of a majority of the outstanding voting
securities of the Fund (the "Approval Date"):
-3-
<PAGE> 5
<TABLE>
<CAPTION>
Assets Annual Fee
------ ----------
<S> <C>
First $10 million .25%
Next $15 million .20%
Next $25 million .175%
Next $50 million .10%
Next $400 million .025%
Over $500 million .02%
</TABLE>
(2) From and after the Approval Date:
<TABLE>
<CAPTION>
Assets Annual Fee
------ ----------
<S> <C>
First $10 million .275%
Next $15 million .225%
Next $25 million .195%
Next $50 million .125%
Over $100 million .06%
</TABLE>
As used in this Section 7, "Assets" means the market value of assets in the Fund
at the end of each month. "Annual Fee" is expressed as a percentage of the
Fund's average daily net assets.
(b) In addition, for the period from the date hereof until the
Approval Date, if the Sub-Adviser is utilized to perform its obligations under
the Sub-Advisory Agreement with respect to the investment of assets of the Fund
in issuers domiciled in countries classified by the Sub-Adviser as "emerging
international markets," the Investment Adviser shall pay to the Sub-Adviser a
fee at the annual rate of $10,000, computed daily and paid monthly in arrears on
the first business day of each month at one-twelfth of such annual rate.
(c) That portion of the fees payable to the Sub-Adviser pursuant
to paragraph (a)(1) and (b) of this Section 7 will be maintained in an
interest-bearing escrow account, and amounts in such account (including interest
earned on such amounts) will be paid (1) to the Sub-Adviser only upon the
Approval Date, or (2) in the absence of such approval prior to the earlier of
(x) the date which is 120 days after the date hereof and (y) March 1, 1997 (such
earlier date being referred to herein as the "Expiration Date"), to the Fund.
(d) If the fee payable to the Sub-Adviser pursuant to this Section
7 begins to accrue before the end of any month or if this Agreement terminates
before the end of any month, the fee for the period from such date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated accordingly to the proportion which such
period bears to the full month in which such effectiveness or termination
occurs. For purposes of calculating fees, the value of the Trust's net assets
shall be computed in the manner specified in the Prospectus and the Trust's
Declaration of Trust for the computation of the value of the Trust's net assets
in connection with the determination of the net asset value of the Trust's
shares. Payment of said compensation shall be the sole responsibility of the
Investment Adviser and shall in no way be an obligation of the Fund or of the
Trust.
8. Limitation of Liability. The Sub-Adviser shall not be liable
for any error of judgment or mistake of law or fact or for any loss suffered by
the Trust or the Investment Adviser in
- 4 -
<PAGE> 6
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-Adviser in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
9. Duration and Termination. This Agreement will become effective
as of the date first written above, provided that it shall have been approved by
vote of a majority of the outstanding voting securities of the Fund, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect until September 30,
1998.
Thereafter, if not terminated, this Agreement shall continue in effect
for successive periods of twelve months each ending on September 30 of each
year, provided such continuance is specifically approved at least annually (a)
by the vote of a majority of those members of the Trust's Board of Trustees who
are not parties to this Agreement or interested persons of the Trust, the
Sub-Adviser, or the Investment Adviser, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the vote of a majority of the
Trust's Board of Trustees or by the vote of a majority of the outstanding voting
securities of the Fund. Notwithstanding the foregoing, this Agreement may be
terminated at any time on sixty days' written notice, without the payment of any
penalty, by the Trust (by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund), by the Investment
Adviser or by the Sub-Adviser. This Agreement will immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities", "interested persons" and "assignment" shall have
the same meaning of such terms in the 1940 Act.)
10. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by the
laws of the Commonwealth of Massachusetts.
The names "The One Group" and "Trustees of The One Group" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated as of May 23, 1985 to which reference is hereby made and a copy of
which is on file at the office of the Secretary of State of the Commonwealth of
Massachusetts and elsewhere as required by law, and to any and all amendments
thereto so filed or hereafter filed. The obligations of "The One Group" entered
into in the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, Shareholders or representatives of the Trust
personally, but bind only the assets of the Trust, and all persons dealing with
any series of Shares of the Trust must look solely to the assets of the Trust
belonging to such series for the enforcement of any claims against the Trust.
- 5 -
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
BANC ONE INVESTMENT ADVISORS CORPORATION
By: Mark A. Beeson
----------------------------------
Title: Senior Vice President & Chief
-------------------------------
Financial Officer
-----------------
INDEPENDENCE INTERNATIONAL ASSOCIATES, INC.
By: Lyle Davis
----------------------------------
Seal Title: President
--------------------------------
The One Group hereby acknowledges and
agrees to the provisions of paragraph 3(e)
of this Agreement.
THE ONE GROUP
By: Mark A. Dillon
---------------------------
Title: President
------------------------
- 6 -
<PAGE> 1
EXHIBIT (10)
OPINION AND CONSENT OF COUNSEL
<PAGE> 2
April 18, 1997
The One Group(R)
3435 Stelzer Road
Columbus, Ohio 43219
Ladies and Gentlemen:
You have informed us that you intend to file a Rule 485(a)
Post-Effective Amendment to your Registration Statement under the Investment
Company Act of 1940, as amended, with the Securities and Exchange Commission
(the "Commission") for the purpose of adding Class C shares to the Investor
Funds of The One Group(R), and changing the investment objective and permissible
investments of The One Group(R) Income Bond Fund.
We have examined your Amended and Restated Agreement and Declaration of
Trust, as further amended, as on file at the office of the Secretary of The
Commonwealth of Massachusetts. We are familiar with the actions taken by your
Trustees to authorize the issue and sale from time to time of your shares of
beneficial interest at not less than the public offering price of such shares
and have assumed that the Shares have been issued and sold in accordance with
such action. We have also examined a copy of your Code of Regulations and such
other documents as we have deemed necessary for the purposes of this opinion.
Based on the foregoing, we are of the opinion that the Shares being
registered have been duly authorized and when sold will be legally issued, fully
paid and non-assessable.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or its Trustees. The Declaration of Trust provides for indemnification out of
the property of the Trust for all loss and expense of any shareholder of the
Trust held personally liable solely by reason of his being or having been a
shareholder. Thus, the risk of a shareholder incurring financial loss on account
of being a shareholder is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
We consent to this opinion accompanying the Post-Effective Amendment
No. 41 when filed with the Commission.
Very truly yours,
Ropes & Gray
<PAGE> 1
EXHIBIT (11)(a)
CONSENT OF COOPERS & LYBRAND L.L.P.
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Post-Effective Amendment No. 41 to the
Registration Statement on Form N-1A (File No. 2-95973) of The One Group, of our
reports dated August 19, 1996 on our audits of the financial statements and
financial highlights of the U.S. Treasury Securities Money Market Fund, the
Prime Money Market Fund, the Municipal Money Market Fund, the Ohio Municipal
Money Market Fund, the Government ARM Fund, the Limited Volatility Bond Fund,
The Intermediate Bond Fund, the Government Bond Fund, the Income Bond Fund, the
Intermediate Tax-Free Bond Fund, the Municipal Income Fund, the Kentucky
Municipal Bond Fund, the Ohio Municipal Bond Fund, the Louisiana Municipal Bond
Fund, the Treasury Only Money Market Fund and the Government Money Market Fund
and our report dated August 27, 1996 on our audits of the financial statements
and financial highlights of the Asset Allocation Fund, the Income Equity Fund,
the Equity Index Fund, the Value Growth Fund, the Large Company Value Fund, the
Disciplined Value Fund, the Large Company Growth Fund, the Growth Opportunities
Fund, the Gulf South Growth Fund and the International Equity Index Fund,
constituting The One Group whose reports are included in the Annual Reports to
Shareholders for the year ended June 30, 1996 which are included in the
Registration Statement. We also consent to the reference to our Firm under the
caption "Financial Highlights", "Counsel and Independent Accountants" and
"Independent Accountants" in the Prospectus and "Experts" in the Statement of
Additional Information relating to The One Group in this Post-Effective
Amendment No. 41 to the Registration Statement on Form N-1A (File No. 2-95973)
Coopers & Lybrand L.L.P.
Columbus, Ohio
April 18, 1997
<PAGE> 1
EXHIBIT (11)(b)
CONSENT OF KPMG PEAT MARWICK LLP
<PAGE> 2
AUDITORS' CONSENT
The Board of Trustees of
The One Group
We consent to the reference to our firm under the heading "Experts" in the
Statement of Additional Information, which is included in the Form N-1A filed by
The One Group.
KPMG Peat Marwick LLP
Columbus, Ohio
April 18, 1997
<PAGE> 1
EXHIBIT (11)(c)
CONSENT OF PRICE WATERHOUSE, LLP
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to us under the heading "Experts" in the
Statement of Additional Information constituting part of this Post-Effective
Amendment No. 41 to the registration statement on Form N-1A of The One Group.
PRICE WATERHOUSE, LLP
New York, NY
April 17, 1997
<PAGE> 1
EXHIBIT (11)(d)
CONSENT OF ROPES & GRAY
<PAGE> 2
CONSENT OF COUNSEL
We hereby consent to the use of our name and the references to our firm
under the caption "Legal Counsel" included in or made a part of Post-Effective
Amendment No. 41 to the Registration Statement of The One Group(R) (Nos. 2-95973
and 811-4236) on Form N-1A under the Securities Act of 1933, as amended.
ROPES & GRAY
Washington, D.C.
April 18, 1997
<PAGE> 1
EXHIBIT (15)(c)
AMENDED DISTRIBUTION AND SHAREHOLDER SERVICES PLAN - CLASS B AND CLASS C
SHARES DATED JANUARY 1, 1994, AS AMENDED FEBRUARY 20
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DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
CLASS B SHARES AND CLASS C SHARES
January 1, 1994
As Amended on February 20, 1997
This constitutes a DISTRIBUTION AND SHAREHOLDER SERVICES PLAN (the
"Plan") of The One Group(R), a Massachusetts business trust (the "Trust"),
adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Plan is applicable to Class B Shares (or such
other designation as may be assigned to a class of shares sold subject to a
contingent deferred sales charge) of each of the Trust's investment portfolios
identified on Schedule A hereto, as such Schedule may be amended from time to
time (each a "Fund" and collectively the "Funds") and Class C Shares of each
Fund of the Trust identified on Schedule B hereto, as such Schedule may be
amended from time to time.
WHEREAS, it is desirable to enable the Trust to have flexibility in
meeting the investment and shareholder servicing needs of its future investors;
and
WHEREAS, the Board of Trustees of the Trust (the "Board of Trustees"),
mindful of the requirements imposed by Rule 12b-1 under the 1940 Act, has
determined to effect the Plan for the provision of distribution and shareholder
assistance with respect to the Class B Shares and Class C Shares of the Funds;
NOW, THEREFORE, the Trust and the Distributor hereby agree as follows:
1. A Fund shall pay to One Group(R) Services Company ("the
Distributor"), out of the assets attributable to such Fund's Class B Shares and
Class C Shares, distribution and shareholder servicing fees at an annual rate
aggregating 1.00% of the average daily net assets of a Fund's Class B Shares and
Class C Shares (the "Distribution Fee"). The Distributor may apply the
Distribution Fee toward the following: (i) compensation for its services or
expenses in connection with distribution assistance with respect to a Fund's
Class B Shares and Class C Shares; (ii) payments to financial institutions and
intermediaries (such as banks, savings and loan associations, insurance
companies, and investment counselors) as brokerage commissions in connection
with the sale of a Fund's Class B Shares and Class C Shares; and (iii) payments
to financial institutions and intermediaries (such as banks, savings and loan
associations, insurance companies, and investment counselors), broker-dealers,
and the Distributor's affiliates and subsidiaries as compensation for services
and/or reimbursement of expenses incurred in connection with distribution or
shareholder services with respect to a Fund's Class B Shares and Class C Shares.
The maximum amount of the Distribution Fee that may be payable by the Fund's
Class B Shares and Class C Shares, for the aforementioned services and expenses
other than services and/or reimbursement of expenses incurred in connection with
shareholder services with respect to a Fund's Class B Shares and Class C Shares
is .75% of the average daily net assets of a Fund's Class B Shares and Class C
Shares. The remaining portion of the Distribution Fee is payable by the Fund's
Class B Shares and Class C Shares only as
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compensation for services and/or reimbursement of expenses incurred in
connection with shareholder services with respect to a Fund's Class B Shares and
Class C Shares. As provided in the Distribution Agreement, the Distributor may
assign its right to receive the Distribution Fee to any entity in connection
with the sale of a Fund's Class B Shares and Class C Shares.
2. The Distribution Fee shall be accrued daily and payable
monthly, and shall be paid by a Fund to the Distributor irrespective of whether
such fee exceeds the amounts paid (or payable) by the Distributor pursuant to
the immediately preceding paragraph.
3. Any person authorized to direct the disposition of monies paid
or payable by a Fund pursuant to Part B of the Plan or any related agreement
shall provide to the Board of Trustees of the Trust, and the Board of Trustees
shall review, at least quarterly, a written report of the amounts so expended
and the purposes for which such expenditures were made.
4. All agreements with any person relating to implementation of
the Plan shall be in writing, and any agreement related to the Plan shall
provide:
A. That such agreement shall be subject to all conditions imposed
by the Securities and Exchange Commission with respect to such
agreement as a condition to granting exemptive relief from
Sections 18(f)(1), 18(g), and 18(i) of the 1940 Act and to
enable the Trust to divide each of its investment portfolios
into multiple classes of Shares;
B. That such agreement may be terminated with respect to a Fund
at any time, without payment of any penalty, by vote of a
majority of the Disinterested Trustees (as such term is
defined below), or by vote of a majority of the CDSC Class
Shares of such Fund subject to the agreement, on not more than
60 days' written notice; and
C. That such agreement shall terminate automatically in the event
of its assignment.
GENERAL PROVISIONS
1. This Plan shall be effective with regard to Class B Shares of
a Fund following approval by a vote of the initial shareholder of such Fund.
2. The Plan will be effective with respect to Class B Shares and
Class C Shares of a Fund only after approval by a vote of a majority of the
Board of Trustees, including a majority of trustees who are not "interested
persons" of the Trust (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on this Plan.
3. The Plan shall continue in effect with respect to Class B
Shares and Class C Shares of a Fund for a period of more than one year after it
takes effect only so long as such continuance is specifically approved at least
annually in the manner provided for approval in the immediately preceding
paragraph.
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4. The Plan may be terminated with respect to a Fund at any time
by vote of a majority of the Disinterested Trustees, or by vote of a majority of
the outstanding voting securities of such Fund with respect to such Fund's Class
B Shares and Class C Shares.
5. The Plan may not be amended to increase materially the amount
of the Distribution Fee with respect to the Class B Shares and Class C Shares of
a Fund without approval by a majority of the outstanding voting securities of
such Fund with respect to such Fund's Class B Shares and Class C Shares, and by
approval of the Board of Trustees in the manner provided in Paragraph 2 of the
general provisions. All material amendments to the Plan shall be approved by the
Board of Trustees in the manner provided in Paragraph 2 of the general
provisions.
6. Selection and nomination of trustees who are not interested
persons of the Trust shall be committed to the discretion of such disinterested
trustees, in accordance with Rule 12b-l(c) under the 1940 Act.
7. As used in the Plan, the terms "assignment," "interested
person," and "majority of the outstanding voting securities" shall have the
respective meanings specified in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission.
8. The names "The One Group(R)" and "Board of Trustees" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated May 23, 1985, to which reference is hereby made and a copy of which
is on file at the office of the Secretary of the Commonwealth of Massachusetts
and elsewhere as required by law, and to any and all amendments thereto so filed
or hereafter filed. The obligations of "The One Group(R)" entered into in the
name or on behalf thereof by any of the Trustees, representatives or agents are
made not individually, but in such capacities, and are not binding upon any of
the Trustees, Shareholders or representatives of the Trust personally, but bind
only the assets of the Trust, and all persons dealing with any series and/or
class of Shares of the Trust must look solely to the assets of the Trust
belonging to such series and/or class for the enforcement of any claims against
the Trust.
THE ONE GROUP(R) THE ONE GROUP(R) SERVICES COMPANY
By: Mark A. Dillon By: Mark Redman
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Title: President Title: Vice President
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Date: February 20, 1997 Date: February 20, 1997
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SCHEDULE A TO THE
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
CLASS B AND CLASS C SHARES
BETWEEN THE ONE GROUP(R) AND
ONE GROUP SERVICES COMPANY
Name of Fund
Income Equity Fund
Disciplined Value Fund
Growth Opportunities Fund
Equity Index Fund
Large Company Value Fund
Asset Allocation Fund
International Equity Index Fund
Large Company Growth Fund
Income Bond Fund
Limited Volatility Bond Fund
Intermediate Bond Fund
Government Bond Fund
Ultra Short-Term Income Fund
Intermediate Tax-Free Bond Fund
Municipal Income Fund
Ohio Municipal Bond Fund
Texas Tax-Free Bond Fund
West Virginia Municipal Bond Fund
Kentucky Municipal Bond Fund
Arizona Municipal Bond Fund
Louisiana Municipal Bond Fund
Value Growth Fund
Gulf South Growth Fund
Prime Money Market Fund
U.S. Treasury Securities Money Market Fund
Income Fund
Investor Conservative Growth Fund
Investor Growth Fund
Investor Balanced Fund
Investor Fixed-Income Fund
Investor Aggressive Growth Fund
Investor Growth and Income Fund
Treasury & Agency Fund
THE ONE GROUP(R) ONE GROUP SERVICES COMPANY
By: Mark A. Dillon By: Mark Redman
----------------------------------- ------------------------------
Title: President Title: Vice President
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Date: February 20, 1997 Date: February 20, 1997
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SCHEDULE B TO THE
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
CLASS B AND CLASS C SHARES
BETWEEN THE ONE GROUP(R) AND
ONE GROUP SERVICES COMPANY
Name of Fund
Investor Conservative Growth Fund
Investor Growth Fund
Investor Balanced Fund
Investor Fixed-Income Fund
Investor Aggressive Growth Fund
Investor Growth and Income Fund
THE ONE GROUP(R) ONE GROUP SERVICES COMPANY
By: Mark A. Dillon By: Mark Redman
---------------------------------- ------------------------------
Title: President Title: Vice President
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Date: February 20, 1997 Date: February 20, 1997
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EXHIBIT (18)(a)
REVISED MULTIPLE CLASS PLAN FOR THE ONE GROUP
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MULTIPLE CLASS PLAN FOR THE ONE GROUP
(AS AMENDED FEBRUARY 20, 1997)
The One Group (the "Trust") is an open-end investment company that
offers units of beneficial interest ("shares") in forty separate portfolios
("funds") and five different classes of certain of the funds. The five classes
are Class A, Class B, Class C, Fiduciary Class, and Service Class. The classes
provide for variations in distribution costs, voting rights, dividends, and per
share net asset value. The differences among the classes are discussed below.
Attached as Exhibit A, which may be amended from time to time, is a list of the
funds and the class of shares available in each fund.
A. Distribution and Shareholder Services
Class A, Class B and Class C shares are distributed to the general
public. Investors may purchase Class A, Class B and Class C shares of a fund by
completing and signing an account application form and mailing it, along with a
check (or other negotiable bank instrument or money order) to the Trust's
transfer agent and custodian. Subsequent purchases of shares may be made at any
time by mailing a check to the transfer agent.
Class A, Class B and Class C investors may make automatic monthly
investments in a fund from their bank, savings and loan or other depository
institution accounts. The Trust pays the costs associated with these transfers,
but reserves the right, upon thirty days' written notice, to impose reasonable
charges for this service.
Fiduciary Class shares are offered to institutional investors,
including affiliates of BANC ONE CORPORATION and any bank, depository
institution, insurance company, pension plan or other organization authorized to
act in a fiduciary, advisory, agency, custodial or similar capacity (each an
"Authorized Financial Organization"). Purchases of Fiduciary Class shares that
are offered to investors in certain retirement plans such as 401(k) and similar
plans, other than
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Individual Retirement Accounts, are purchased by a Shareholder Servicing Agent
on behalf of an investor.
Service Class shares are available only in the Prime Money Market and
U.S. Treasury Securities Money Market Funds. This class of shares is available
to broker-dealers, other financial intermediaries, banks and other depository
institutions. Service Class shares offer administrative and accounting (sweep
processing) services.
A purchase order will be effective as of the day received by the
distributor if the distributor receives the order before 4:00 p.m., eastern
time. However, an order may be canceled if the transfer agent does not receive
Federal funds before close of business on the next Business Day for Fiduciary
Class shares, and before the close of business on the fifth Business Day for
Class A, Class B and Class C shares.
B. Sales Load
Class A Shares
Class A shares are subject to a front-end sales charge. The front-end
sales charge is based on a percentage of the offering price and may vary based
on the amount of purchase.
Class A shares also are subject to a distribution and shareholder
services fee assessed pursuant to the distribution and shareholder services plan
(the "Plan"). As provided in the Plan, the Trust will pay the distributor a fee
based on the average daily net assets of Class A shares of the fund. A certain
percentage of the fee payable under the Plan may be used as compensation for
shareholder services by the distributor and/or financial institutions and
intermediaries. All such fees that may be paid under the Plan will be paid
pursuant to Rule 12b-1 of the 1940 Act. The distributor may apply these fees
toward: (i) compensation for its services in connection with distribution
assistance or provision of shareholder services; or (ii) payments to financial
institutions and intermediaries such as banks (including affiliates of the
Adviser), savings and loan
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associations, insurance companies, investment counselors, broker-dealers, and
the distributor's affiliates and subsidiaries, as compensation for services or
reimbursement of expenses incurred in connection with distribution assistance or
provision of shareholder services.
A shareholder of Class A shares may reduce the sales charge by
completing the Letter of Intent section of the account application form. The
Letter of Intent includes a provision for a sales charge adjustment depending on
the amount actually purchased within the 13-month period. In addition, pursuant
to a Letter of Intent, the Custodian will hold in escrow the difference between
the sales charge applicable to the amount initially purchased and the sales
charge paid at the time of investment, which is based on the amount covered by
the Letter of Intent.
No sales charge is imposed on Class A shares of the Fund: (i) issued
through reinvestment of dividends and capital gains distributions; (ii) acquired
through the exercise of exchange privileges where a comparable sales charge has
been paid for exchanged shares; (iii) purchased by officers, directors or
trustees, retirees and employees (and their spouses and immediate family
members) of the Trust, of BANC ONE CORPORATION and its subsidiaries and
affiliates, of the Distributor and its subsidiaries and affiliates, of the
Transfer Agent and Custodian and their subsidiaries and affiliates or of an
investment sub-adviser of a Fund of the Trust and such sub-adviser's
subsidiaries and affiliates; (iv) sold to affiliates of BANC ONE CORPORATION and
certain accounts (other than Individual Retirement Accounts) for which
Authorized Financial Organizations act in fiduciary, advisory, agency, custodial
or similar capacities, or purchased by investment advisers, financial planners
or other intermediaries who have a dealer arrangement with the Distributor, who
place trades for their own accounts or for the accounts of their clients and who
charge a management, consulting or other fee for their services, as well as
clients of such investment advisers, financial planners or other intermediaries
who place trades for their own accounts if the accounts are linked to the master
account of such investment adviser, financial planner or other intermediary; (v)
purchased with proceeds from the recent redemption of Fiduciary Class shares of
a Fund of the Trust or acquired in an exchange of Fiduciary Class shares of a
Fund for Class A shares of the same Fund; (vi) purchased with proceeds from the
recent redemption of shares of a mutual fund (other than a fund of the Trust)
for which a sales charge
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was paid; (vii) purchased in an Individual Retirement Account with the proceeds
of a distribution from an employee benefit plan, provided that, at the time of
distribution, the employee benefit plan had plan assets invested in a Fund of
the Trust; (viii) purchased with Trust assets; (ix) purchased in accounts as to
which a bank or broker-dealer charges an asset allocation fee, provided the bank
or broker-dealer has an agreement with the Distributor; (x) directly purchased
with the proceeds of a distribution on a bond for which a BANC ONE CORPORATION
affiliate bank or trust company is the Trustee or Paying Agent; or (ix)
purchased in connection with plans of reorganization of a Fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party.
Further, an initial purchase of shares in the amount of $1 million or
more is not subject to a front-end sales charge. However, if such shares are
redeemed prior to the first anniversary of purchase, the shareholder will be
subject to a contingent deferred sales charge ("Class A CDSC") on the initial
purchase in an amount not to exceed any promotional incentives or additional
compensation paid by the Distributor to registered representatives who have sold
or are expected to sell significant amounts of shares of the Funds.
An investor relying upon any of the categories of waivers of the sales
charge must qualify for such waiver in advance of the purchase with the
Distributor or the financial institution or intermediary through which shares
are purchased by the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii)
above applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. This waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi), and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice.
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Class B Shares
Class B shares are subject to a Contingent Deferred Sales Charge and a
distribution and shareholder services fee. If the Shareholder redeems Class B
shares prior to the sixth anniversary of purchase, the Shareholder will pay a
Contingent Deferred Sales Charge. The Contingent Deferred Sales Charge is
assessed on an amount equal to the lesser of the then current market value or
the cost of the shares being redeemed. Accordingly, no sales charge is imposed
on increases in net asset value above the initial purchase price. In addition,
no charge is assessed on shares derived from reinvestment of dividends or
capital gain distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies
depending on the number of years from the time of payment for the purchase of
Class B shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the purchase
of shares, all payments during a month are aggregated and deemed to have been
made on the first day of the month.
In determining whether a particular redemption is subject to a
Contingent Deferred Sales Charge, it is assumed that the redemption is first of
any Class A shares in the Shareholder's Fund account (unless the Shareholder
elects to have Class B shares redeemed first) or shares representing capital
appreciation, next of shares acquired pursuant to reinvestment of dividends and
capital gain distributions, and finally of other shares held by the Shareholder
for the longest period of time. This method should result in the lowest possible
sales charge.
Class B shares of the fund also are subject to an ongoing distribution
and shareholder service fee as provided in the Class B and Class C distribution
and shareholder services plan (the "Class B and Class C Plan") at an annual rate
based on a percentage of the fund's average daily net assets. This fee
arrangement will cause Class B shares to have a higher expense ratio and to pay
lower dividends than Class A shares. Class B shares convert automatically to
Class A shares after six years, commencing from the end of the calendar month in
which the purchase order was accepted.
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Proceeds from the Contingent Deferred Sales Charge and the distribution
and shareholder service fee under the Class B Plan are payable to the
distributor and financial intermediaries to defray the expenses of advance
brokerage commissions and expenses related to providing distribution-related and
shareholder services to the fund in connection with the sale of the Class B
shares, such as the payment of compensation to dealers and agents for selling
Class B shares. The combination of the Contingent Deferred Sales Charge and the
distribution and shareholder services fees facilitate the ability of the fund to
sell the Class B shares without a front-end sales charge.
The Contingent Deferred Sales Charge is waived on redemption of shares:
(i) for distributions that are made under a Systematic Withdrawal Plan of the
Trust and that are limited to no more than 10% of the account value annually,
determined in the first year as of the date the redemption request is received
by the Transfer Agent, and in subsequent years, as of the most recent
anniversary of that date; (ii) following the death or disability of a
shareholder or a participant or beneficiary of a qualifying retirement plan if
redemption is made within one year of such death or disability; or (iii) to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan to a
shareholder who has attained the age of 70 1/2. In addition, the following
circumstances are not deemed to result in a "redemption" of Class B shares for
purposes of the assessment of a Contingent Deferred Sales Charge, which is
therefore waived: (i) plans of reorganization of the fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or (ii)
exchanges for Class B shares of other funds of the Trust.
Class C Shares
Class C shares are subject to a Contingent Deferred Sales Charge and a
distribution and shareholder services fee. If the Shareholder redeems Class C
shares prior to the first anniversary of purchase, the Shareholder will pay a
Contingent Deferred Sales Charge. The Contingent Deferred Sales Charge is
assessed on an amount equal to the lesser of the then current market value or
the cost of the shares being redeemed. Accordingly, no sales charge is imposed
on
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increases in net asset value above the initial purchase price. In addition, no
charge is assessed on shares derived from reinvestment of dividends or capital
gain distributions.
Solely for purposes of determining the number of years from the time of
any payment for the purchase of shares, all payments during a month are
aggregated and deemed to have been made on the first day of the month.
In determining whether a particular redemption is subject to a
Contingent Deferred Sales Charge, it is assumed that the redemption is first of
any Class A shares in the Shareholder's Fund account (unless the Shareholder
elects to have Class C shares redeemed first) or shares representing capital
appreciation, next of shares acquired pursuant to reinvestment of dividends and
capital gain distributions, and finally of other shares held by the Shareholder
for the longest period of time. This method should result in the lowest possible
sales charge.
Class C shares of the fund also are subject to an ongoing distribution
and shareholder service fee as provided in the Class B and Class C distribution
and shareholder services plan (the "Class B and Class C Plan") at an annual rate
based on a percentage of the fund's average daily net assets. This fee
arrangement will cause Class C shares to have a higher expense ratio and to pay
lower dividends than Class A shares. Class C shares convert automatically to
Class A shares after six years, commencing from the end of the calendar month in
which the purchase order was accepted.
Proceeds from the Contingent Deferred Sales Charge and the distribution
and shareholder service fee under the Class C Plan are payable to the
distributor and financial intermediaries to defray the expenses of advance
brokerage commissions and expenses related to providing distribution-related and
shareholder services to the fund in connection with the sale of the Class C
shares, such as the payment of compensation to dealers and agents for selling
Class C shares. The combination of the Contingent Deferred Sales Charge and the
distribution and shareholder services fees facilitate the ability of the fund to
sell the Class C shares without a front-end sales charge.
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The Contingent Deferred Sales Charge is waived on redemption of shares:
(i) for distributions that are made under a Systematic Withdrawal Plan of the
Trust and that are limited to no more than 10% of the account value annually,
determined in the first year as of the date the redemption request is received
by the Transfer Agent, and in subsequent years, as of the most recent
anniversary of that date; (ii) following the death or disability of a
shareholder or a participant or beneficiary of a qualifying retirement plan if
redemption is made within one year of such death or disability; or (iii) to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan to a
shareholder who has attained the age of 70 1/2. In addition, the following
circumstances are not deemed to result in a "redemption" of Class C shares for
purposes of the assessment of a Contingent Deferred Sales Charge, which is
therefore waived: (i) plans of reorganization of the fund, such as mergers,
asset acquisitions and exchange offers to which the Fund is a party; or (ii)
exchanges for Class C shares of other funds of the Trust.
Fiduciary Class Shares
Fiduciary class shares are not subject to a sales charge at the time of
purchase or redemption, nor are they subject to a distribution or shareholder
services fee.
Service Class Shares
Service class shares are not subject to a sales charge at the time of
purchase or redemption. However, service class shares are subject to a
distribution and shareholder services fee based on a percentage of the fund's
average daily net assets.
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C. Exchange Rights
Class A and Fiduciary Class Shares
Fiduciary Class Shareholders of the Fund may exchange their shares for
Class A shares of the fund or for Class A shares or Fiduciary Class shares of
another fund of the Trust.
Class A Shareholders may exchange their shares for Fiduciary Class
shares of the fund or for Fiduciary Class or Class A shares of another fund of
the Trust if the shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the
shares of the fund or such other fund of the Trust may be legally sold. All
exchanges discussed herein are made at the net asset value of the exchanged
shares, except as provided below. The Trust does not impose a charge for
processing exchanges of shares. If a shareholder seeks to exchange Class A
shares of a fund that does not impose a sales charge for Class A shares of a
fund that does or the fund being exchanged into has a higher sales charge, the
Shareholder will be required to pay a sales charge in the amount equal to the
difference between the sales charge applicable to the fund into which the shares
are being exchanged and any sales charges previously paid for the exchanged
shares, including any sales charges incurred on any earlier exchanges of the
shares (unless such sales charge is otherwise waived). The exchange of Fiduciary
Class shares for Class A shares also will require payment of the sales charge
unless the sales charge is waived.
Class B Shares
Class B shareholders of the fund may exchange their shares for Class B
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
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exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the newly
acquired Class B shares, the newly acquired Class B shares shall be deemed to
have been issued on the date of receipt of the shareholder's order to purchase
the outstanding Class B shares of the fund from which the initial exchange was
made.
Class C Shares
Class C shareholders of the fund may exchange their shares for Class C
shares of any other fund of the Trust on the basis of the net asset value of the
exchanged Class C shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class C
shares. The newly acquired Class C shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class C shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class C shares, the
holding period for outstanding Class C shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
C shares. For purposes of calculating the holding period applicable to the newly
acquired Class C shares, the newly acquired Class C shares shall be deemed to
have been issued on the date of receipt of the shareholder's order to purchase
the outstanding Class C shares of the fund from which the initial exchange was
made.
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Service Class Shares
Service Class shareholders may not exchange their Service Class shares
for Class A, Class B, Class C, or Fiduciary Class shares, nor may Class A, Class
B, Class C, or Fiduciary Class shares be exchanged for Service Class shares.
Additional Information Regarding Exchanges
The Trust reserves the right to change the terms or conditions of the
exchange privilege discussed herein upon sixty days' written notice. An exchange
between classes of shares of the same fund is not considered a taxable event;
however, an exchange between funds of the Trust is considered a sale of shares
and usually results in a capital gain or loss for Federal income tax purposes.
D. Conversion Rights
Class B and Class C shares include all shares purchased pursuant to the
Contingent Deferred Sales Charge which have been outstanding for less than the
period ending six years after the end of the month in which the shares were
purchased. At the end of this period, Class B shares will automatically convert
to Class A shares and will be subject to the lower distribution and fees charged
to Class A shares. Such conversion will be on the basis of the relative net
asset values of the two classes, without the imposition of any sales charge, fee
or other charge. The conversion is not a taxable event to a shareholder.
For purposes of conversion to Class A shares, shares received as
dividends and other distributions paid on Class B shares in a shareholder's fund
account will be considered to be held in a separate sub-account. Each time any
Class B shares in a shareholder's fund account (other than those in the
sub-account) convert to Class A shares, a pro-rata portion of the Class B shares
in the sub-account will also convert to Class A shares.
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<PAGE> 13
If a shareholder effects one or more exchanges among Class B shares of
the funds of the Trust during the six-year period, the Trust will aggregate the
holding periods for the shares of each fund of the Trust for purposes of
calculating that six-year period. Because the per share net asset value of the
Class A shares may be higher than that of the Class B shares at the time of
conversion, a shareholder may receive fewer Class A shares than the number of
Class B shares converted, although the dollar value will be the same.
E. Voting Rights
Each share held entitles the shareholder of record to one vote. Each
fund of the Trust will vote separately on matters relating solely to that fund.
In addition, each class of a fund shall have exclusive voting rights on any
matter submitted to shareholders that relates solely to that class, and shall
have separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class. However,
all fund shareholders will have equal voting rights on matters that affect all
fund shareholders equally.
F. Expense Allocation
Each class shall pay the expenses associated with its different
distribution and shareholder services arrangement. Each class may, at the
Board's discretion, also pay a different share of other expenses, not including
advisory or custodial fees or other expenses related to the management of the
Trust's assets, if these expenses are actually incurred in a different amount by
that class, or if the class receives services of a different kind or to a
different degree than other classes. All other expenses will be allocated to
each class on the basis of the net asset value of that class in relation to the
net asset value of the Fund. However, money market funds operating in reliance
on Rule 2a-7, and other funds making daily distributions of their net investment
income, may allocate such other expenses to each share regardless of class, or
based on the relative net assets (settled shares).
- 12 -
<PAGE> 14
Expenses may be waived or reimbursed by a fund's advisor, underwriter
or any other service provider to the fund.
G. Redemptions
Shareholders may redeem their shares without charge (except Class B and
Class C shares, and Class A shares initially purchased in an amount of $1
million or more, as provided above) on any Business Day; shares may ordinarily
be redeemed by mail, by telephone or by wire. All redemption orders are effected
at the net asset value per share next determined for Class A shares, except for
Class A shares initially purchased in an amount of $1 million or more, which
will be reduced by any applicable Class A CDSC, and at net asset value per share
next determined reduced by any applicable Contingent Deferred Sales Charge for
Class B and Class C shares, after receipt of a valid request for redemption.
Pursuant to the Systematic Withdrawal Plan, Class B and Class C
Shareholders may elect to receive, or may designate another person to receive,
distributions provided that the distributions are limited to no more than 10% of
their account value annually, determined in the first year as of the date the
redemption request is received by the Transfer Agent, and in subsequent years,
as of the most recent anniversary of that date. In addition, Shareholders who
have attained the age of 70 1/2 may elect to receive distributions, to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan.
H. Dividends
Shareholders automatically receive all income dividends and capital
gain distributions in additional Class A, Class B, Class C, Service Class and
Fiduciary Class shares, as applicable, at the net asset value next determined
following the record date, unless the shareholder has elected to take such
payment in cash. Reinvested dividends and distributions receive the same tax
treatment as dividends and distributions paid in cash.
- 13 -
<PAGE> 15
Class B shares received as dividends and capital gains distributions at
the net asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares.
The amount of dividends payable on Fiduciary Class shares will be more
than the dividends payable on Class A, Class B, Class C, and Service Class
shares because of the distribution expenses charged to Class A, Class B, Class
C, and Service Class shares.
- 14 -
<PAGE> 16
EXHIBIT A
<TABLE>
<CAPTION>
NAME OF FUND CLASS OF SHARES
- ------------ ---------------
<S> <C>
U.S. Treasury Securities Class A, Class B, Fiduciary Class,
Money Market Fund Service Class
Prime Money Market Fund Class A, Class B, Fiduciary Class,
Service Class
Municipal Money Market Fund Class A, Fiduciary Class
Ohio Municipal Money Market Fund Class A, Fiduciary Class
Income Equity Fund Class A, Class B, Fiduciary Class
Disciplined Value Fund Class A, Class B, Fiduciary Class
Growth Opportunities Fund Class A, Class B, Fiduciary Class
International Equity Index Fund Class A, Class B, Fiduciary Class
Equity Index Fund Class A, Class B, Fiduciary Class
Large Company Value Fund Class A, Class B, Fiduciary Class
Large Company Growth Fund Class A, Class B, Fiduciary Class
Asset Allocation Fund Class A, Class B, Fiduciary Class
Value Growth Fund Class A, Class B, Fiduciary Class
Gulf South Growth Fund Class A, Class B, Fiduciary Class
Income Bond Fund Class A, Class B, Fiduciary Class
Limited Volatility Bond Fund Class A, Class B, Fiduciary Class
Intermediate Bond Fund Class A, Class B, Fiduciary Class
Government Bond Fund Class A, Class B, Fiduciary Class
Ultra-Short Term Fund Class A, Class B, Fiduciary Class
Louisiana Municipal Bond Fund Class A, Class B, Fiduciary Class
Income Fund Class A, Class B, Fiduciary Class
Municipal Income Fund Class A, Class B, Fiduciary Class
Intermediate Tax-Free Bond Fund Class A, Class B, Fiduciary Class
Ohio Municipal Bond Fund Class A, Class B, Fiduciary Class
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
<S> <C>
Texas Tax-Free Bond Fund Fiduciary Class
West Virginia Municipal Bond Fund Class A, Class B, Fiduciary Class
Kentucky Tax-Free Bond Fund Fiduciary Class
Arizona Municipal Bond Fund Class A, Class B, Fiduciary Class
Treasury Money Market Fund Fiduciary Class
Treasury Only Money Market Fund Fiduciary Class
Government Money Market Fund Fiduciary Class
Tax Exempt Money Market Fund Fiduciary Class
Institutional Prime Money Market Fund Fiduciary Class
Investor Aggressive Growth Fund Class A, Class B, Class C, Fiduciary Class
Investor Growth Fund Class A, Class B, Class C, Fiduciary Class
Investor Growth and Income Fund Class A, Class B, Class C, Fiduciary Class
Investor Conservative Growth Fund Class A, Class B, Class C, Fiduciary Class
Investor Balanced Fund Class A, Class B, Class C, Fiduciary Class
Investor Fixed Income Fund Class A, Class B, Class C, Fiduciary Class
Treasury & Agency Fund Class A, Class B, Fiduciary Class
</TABLE>
- ii -
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 011
<NAME> THE ONE GROUP PRIME MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2644464
<INVESTMENTS-AT-VALUE> 2644464
<RECEIVABLES> 6351
<ASSETS-OTHER> 240
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2651055
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12907
<TOTAL-LIABILITIES> 12907
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2638165
<SHARES-COMMON-STOCK> 2322253<F1>
<SHARES-COMMON-PRIOR> 2186562<F1>
<ACCUMULATED-NII-CURRENT> 7
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 24
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2638148
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 73594
<OTHER-INCOME> 9
<EXPENSES-NET> 6633
<NET-INVESTMENT-INCOME> 66970
<REALIZED-GAINS-CURRENT> 3
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 66973
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 59167<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 2195927<F1>
<NUMBER-OF-SHARES-REDEEMED> 2061141<F1>
<SHARES-REINVESTED> 884<F1>
<NET-CHANGE-IN-ASSETS> 136212
<ACCUMULATED-NII-PRIOR> 7
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 27
<GROSS-ADVISORY-FEES> 4681
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7828
<AVERAGE-NET-ASSETS> 2329590<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .025<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .025<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .47<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 012
<NAME> THE ONE GROUP PRIME MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2644464
<INVESTMENTS-AT-VALUE> 2644464
<RECEIVABLES> 6351
<ASSETS-OTHER> 240
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2651055
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12907
<TOTAL-LIABILITIES> 12907
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2638165
<SHARES-COMMON-STOCK> 315789<F1>
<SHARES-COMMON-PRIOR> 315373<F1>
<ACCUMULATED-NII-CURRENT> 7
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 24
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2638148
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 73594
<OTHER-INCOME> 9
<EXPENSES-NET> 6633
<NET-INVESTMENT-INCOME> 66970
<REALIZED-GAINS-CURRENT> 3
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 66973
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7802<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1036000<F1>
<NUMBER-OF-SHARES-REDEEMED> 1042215<F1>
<SHARES-REINVESTED> 6631<F1>
<NET-CHANGE-IN-ASSETS> 136212
<ACCUMULATED-NII-PRIOR> 7
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 27
<GROSS-ADVISORY-FEES> 4681
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7828
<AVERAGE-NET-ASSETS> 323237<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .024<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .024<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .72<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 013
<NAME> THE ONE GROUP PRIME MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2644464
<INVESTMENTS-AT-VALUE> 2644464
<RECEIVABLES> 6351
<ASSETS-OTHER> 240
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2651055
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12907
<TOTAL-LIABILITIES> 12907
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2638165
<SHARES-COMMON-STOCK> 123<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 7
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 24
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2638148
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 73594
<OTHER-INCOME> 9
<EXPENSES-NET> 6633
<NET-INVESTMENT-INCOME> 66970
<REALIZED-GAINS-CURRENT> 3
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 66973
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 233<F1>
<NUMBER-OF-SHARES-REDEEMED> 110<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 136212
<ACCUMULATED-NII-PRIOR> 7
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 27
<GROSS-ADVISORY-FEES> 4681
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7828
<AVERAGE-NET-ASSETS> 124<F1>
<PER-SHARE-NAV-BEGIN> 0.00<F1>
<PER-SHARE-NII> .006<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .006<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> 1.47<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 021
<NAME> THE ONE GROUP TREASURY MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2686997
<INVESTMENTS-AT-VALUE> 2686997
<RECEIVABLES> 7905
<ASSETS-OTHER> 421
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2695323
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11754
<TOTAL-LIABILITIES> 11754
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2683527
<SHARES-COMMON-STOCK> 2344903<F1>
<SHARES-COMMON-PRIOR> 1844578<F1>
<ACCUMULATED-NII-CURRENT> 43
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2683569
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 60584
<OTHER-INCOME> 127
<EXPENSES-NET> 5186
<NET-INVESTMENT-INCOME> 55525
<REALIZED-GAINS-CURRENT> 39
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 55564
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 49929<F1>
<DISTRIBUTIONS-OF-GAINS> 6<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 2798900<F1>
<NUMBER-OF-SHARES-REDEEMED> 2298838<F1>
<SHARES-REINVESTED> 263<F1>
<NET-CHANGE-IN-ASSETS> 728115
<ACCUMULATED-NII-PRIOR> 43
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 34
<GROSS-ADVISORY-FEES> 3955
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6651
<AVERAGE-NET-ASSETS> 2005180<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .025<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .025<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .43<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 022
<NAME> THE ONE GROUP TREASURY MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2686997
<INVESTMENTS-AT-VALUE> 2686997
<RECEIVABLES> 7905
<ASSETS-OTHER> 421
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2695323
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11754
<TOTAL-LIABILITIES> 11754
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2683527
<SHARES-COMMON-STOCK> 338586<F1>
<SHARES-COMMON-PRIOR> 110864<F1>
<ACCUMULATED-NII-CURRENT> 43
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2683569
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 60584
<OTHER-INCOME> 127
<EXPENSES-NET> 5186
<NET-INVESTMENT-INCOME> 55525
<REALIZED-GAINS-CURRENT> 39
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 55564
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5596<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 705621<F1>
<NUMBER-OF-SHARES-REDEEMED> 481040<F1>
<SHARES-REINVESTED> 3140<F1>
<NET-CHANGE-IN-ASSETS> 728115
<ACCUMULATED-NII-PRIOR> 43
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 34
<GROSS-ADVISORY-FEES> 3955
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6651
<AVERAGE-NET-ASSETS> 236285<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .024<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .024<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .69<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 023
<NAME> THE ONE GROUP TREASURY MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2686997
<INVESTMENTS-AT-VALUE> 2686997
<RECEIVABLES> 7905
<ASSETS-OTHER> 421
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2695323
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11754
<TOTAL-LIABILITIES> 11754
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2683527
<SHARES-COMMON-STOCK> 36<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 43
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2683569
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 60584
<OTHER-INCOME> 127
<EXPENSES-NET> 5186
<NET-INVESTMENT-INCOME> 55525
<REALIZED-GAINS-CURRENT> 39
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 55564
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 36<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 728115
<ACCUMULATED-NII-PRIOR> 43
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 34
<GROSS-ADVISORY-FEES> 3955
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6651
<AVERAGE-NET-ASSETS> 29<F1>
<PER-SHARE-NAV-BEGIN> 0.00<F1>
<PER-SHARE-NII> .004<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .004<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> 1.45<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 031
<NAME> THE ONE GROUP MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 505521
<INVESTMENTS-AT-VALUE> 505521
<RECEIVABLES> 3065
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<TOTAL-ASSETS> 508603
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4974
<TOTAL-LIABILITIES> 4974
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 503774
<SHARES-COMMON-STOCK> 461674<F1>
<SHARES-COMMON-PRIOR> 459924<F1>
<ACCUMULATED-NII-CURRENT> 0
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<DISTRIBUTIONS-OF-INCOME> 7469<F1>
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<NUMBER-OF-SHARES-SOLD> 547786<F1>
<NUMBER-OF-SHARES-REDEEMED> 546080<F1>
<SHARES-REINVESTED> 44<F1>
<NET-CHANGE-IN-ASSETS> (6898)
<ACCUMULATED-NII-PRIOR> 0
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<OVERDIST-NET-GAINS-PRIOR> 4
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<GROSS-EXPENSE> 1552
<AVERAGE-NET-ASSETS> 477425<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .015<F1>
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<PER-SHARE-DIVIDEND> .015<F1>
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<EXPENSE-RATIO> .43<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 032
<NAME> THE ONE GROUP MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 505521
<INVESTMENTS-AT-VALUE> 505521
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<TOTAL-ASSETS> 508603
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4974
<TOTAL-LIABILITIES> 4974
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 503774
<SHARES-COMMON-STOCK> 42100<F1>
<SHARES-COMMON-PRIOR> 50734<F1>
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<NET-INVESTMENT-INCOME> 8060
<REALIZED-GAINS-CURRENT> (14)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 8046
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<DISTRIBUTIONS-OF-INCOME> 591<F1>
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<NUMBER-OF-SHARES-SOLD> 114376<F1>
<NUMBER-OF-SHARES-REDEEMED> 123554<F1>
<SHARES-REINVESTED> 544<F1>
<NET-CHANGE-IN-ASSETS> (6898)
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 127
<OVERDIST-NET-GAINS-PRIOR> 4
<GROSS-ADVISORY-FEES> 915
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1552
<AVERAGE-NET-ASSETS> 41219<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .015<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .015<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .68<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 041
<NAME> THE ONE GROUP INCOME EQUITY FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 293385
<INVESTMENTS-AT-VALUE> 419357
<RECEIVABLES> 1636
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<TOTAL-ASSETS> 421096
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<OTHER-ITEMS-LIABILITIES> 1162
<TOTAL-LIABILITIES> 1162
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 283496
<SHARES-COMMON-STOCK> 17505<F1>
<SHARES-COMMON-PRIOR> 18230<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 3
<ACCUMULATED-NET-GAINS> 10469
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 125972
<NET-ASSETS> 419934
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<EXPENSES-NET> 2223
<NET-INVESTMENT-INCOME> 4083
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<APPREC-INCREASE-CURRENT> 9362
<NET-CHANGE-FROM-OPS> 31152
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<DISTRIBUTIONS-OF-INCOME> 3413<F1>
<DISTRIBUTIONS-OF-GAINS> 10511<F1>
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<NUMBER-OF-SHARES-SOLD> 980<F1>
<NUMBER-OF-SHARES-REDEEMED> 2104<F1>
<SHARES-REINVESTED> 399<F1>
<NET-CHANGE-IN-ASSETS> 24654
<ACCUMULATED-NII-PRIOR> 13
<ACCUMULATED-GAINS-PRIOR> 6440
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1501
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2248
<AVERAGE-NET-ASSETS> 316941<F1>
<PER-SHARE-NAV-BEGIN> 17.650<F1>
<PER-SHARE-NII> .190<F1>
<PER-SHARE-GAIN-APPREC> 1.200<F1>
<PER-SHARE-DIVIDEND> .190<F1>
<PER-SHARE-DISTRIBUTIONS> .610<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 18.240<F1>
<EXPENSE-RATIO> .970<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 042
<NAME> THE ONE GROUP INCOME EQUITY FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 293385
<INVESTMENTS-AT-VALUE> 419357
<RECEIVABLES> 1636
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<PAID-IN-CAPITAL-COMMON> 283496
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<SHARES-COMMON-PRIOR> 2510<F1>
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<NET-INVESTMENT-INCOME> 4083
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<APPREC-INCREASE-CURRENT> 9362
<NET-CHANGE-FROM-OPS> 31152
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<DISTRIBUTIONS-OF-GAINS> 1743<F1>
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<NUMBER-OF-SHARES-SOLD> 820<F1>
<NUMBER-OF-SHARES-REDEEMED> 435<F1>
<SHARES-REINVESTED> 117<F1>
<NET-CHANGE-IN-ASSETS> 24654
<ACCUMULATED-NII-PRIOR> 13
<ACCUMULATED-GAINS-PRIOR> 6440
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<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2248
<AVERAGE-NET-ASSETS> 48623<F1>
<PER-SHARE-NAV-BEGIN> 17.640<F1>
<PER-SHARE-NII> .170<F1>
<PER-SHARE-GAIN-APPREC> 1.200<F1>
<PER-SHARE-DIVIDEND> .170<F1>
<PER-SHARE-DISTRIBUTIONS> .610<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 18.230<F1>
<EXPENSE-RATIO> 1.23<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 043
<NAME> THE ONE GROUP INCOME EQUITY FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 293385
<INVESTMENTS-AT-VALUE> 419357
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 283496
<SHARES-COMMON-STOCK> 2506<F1>
<SHARES-COMMON-PRIOR> 1650<F1>
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<OVERDISTRIBUTION-NII> 3
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<EQUALIZATION> 0
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<NUMBER-OF-SHARES-REDEEMED> 108<F1>
<SHARES-REINVESTED> 89<F1>
<NET-CHANGE-IN-ASSETS> 24654
<ACCUMULATED-NII-PRIOR> 13
<ACCUMULATED-GAINS-PRIOR> 6440
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1501
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2248
<AVERAGE-NET-ASSETS> 36816<F1>
<PER-SHARE-NAV-BEGIN> 17.680<F1>
<PER-SHARE-NII> .100<F1>
<PER-SHARE-GAIN-APPREC> 1.190<F1>
<PER-SHARE-DIVIDEND> .100<F1>
<PER-SHARE-DISTRIBUTIONS> .610<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 18.260<F1>
<EXPENSE-RATIO> 1.98<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 051
<NAME> THE ONE GROUP INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 581509
<INVESTMENTS-AT-VALUE> 600942
<RECEIVABLES> 10809
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<TOTAL-ASSETS> 611785
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<OTHER-ITEMS-LIABILITIES> 5421
<TOTAL-LIABILITIES> 5421
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<PAID-IN-CAPITAL-COMMON> 638796
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<SHARES-COMMON-PRIOR> 55786<F1>
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 52261
<ACCUM-APPREC-OR-DEPREC> 19433
<NET-ASSETS> 606364
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<NET-INVESTMENT-INCOME> 19522
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<APPREC-INCREASE-CURRENT> 6103
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<NUMBER-OF-SHARES-REDEEMED> 6380<F1>
<SHARES-REINVESTED> 312<F1>
<NET-CHANGE-IN-ASSETS> 69888
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<OVERDIST-NET-GAINS-PRIOR> 54533
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<GROSS-EXPENSE> 2333
<AVERAGE-NET-ASSETS> 553193<F1>
<PER-SHARE-NAV-BEGIN> 9.33<F1>
<PER-SHARE-NII> .320<F1>
<PER-SHARE-GAIN-APPREC> .130<F1>
<PER-SHARE-DIVIDEND> .320<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.46<F1>
<EXPENSE-RATIO> .590<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 052
<NAME> THE ONE GROUP INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 581509
<INVESTMENTS-AT-VALUE> 600942
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<OTHER-ITEMS-LIABILITIES> 5421
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<SENIOR-EQUITY> 0
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<SHARES-COMMON-PRIOR> 1087<F1>
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<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 52261
<ACCUM-APPREC-OR-DEPREC> 19433
<NET-ASSETS> 606364
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<NET-INVESTMENT-INCOME> 19522
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<APPREC-INCREASE-CURRENT> 6103
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<NUMBER-OF-SHARES-REDEEMED> 167<F1>
<SHARES-REINVESTED> 32<F1>
<NET-CHANGE-IN-ASSETS> 69888
<ACCUMULATED-NII-PRIOR> 396
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 54533
<GROSS-ADVISORY-FEES> 1732
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2333
<AVERAGE-NET-ASSETS> 11667<F1>
<PER-SHARE-NAV-BEGIN> 9.32<F1>
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<PER-SHARE-GAIN-APPREC> .130<F1>
<PER-SHARE-DIVIDEND> .310<F1>
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<PER-SHARE-NAV-END> 9.45<F1>
<EXPENSE-RATIO> .840<F1>
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<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 053
<NAME> THE ONE GROUP INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
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<INVESTMENTS-AT-VALUE> 600942
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<SHARES-COMMON-PRIOR> 650<F1>
<ACCUMULATED-NII-CURRENT> 396
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 52261
<ACCUM-APPREC-OR-DEPREC> 19433
<NET-ASSETS> 606364
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<SHARES-REINVESTED> 15<F1>
<NET-CHANGE-IN-ASSETS> 69888
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<GROSS-EXPENSE> 2333
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<PER-SHARE-GAIN-APPREC> .140<F1>
<PER-SHARE-DIVIDEND> .280<F1>
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<PER-SHARE-NAV-END> 9.54<F1>
<EXPENSE-RATIO> 1.49<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 061
<NAME> THE ONE GROUP INTERMEDIATE TAX-FREE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
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<ACCUMULATED-NET-GAINS> 732
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<ACCUM-APPREC-OR-DEPREC> 7293
<NET-ASSETS> 254062
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<INTEREST-INCOME> 6572
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<EXPENSES-NET> 699
<NET-INVESTMENT-INCOME> 5915
<REALIZED-GAINS-CURRENT> 751
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<NUMBER-OF-SHARES-SOLD> 3795<F1>
<NUMBER-OF-SHARES-REDEEMED> 1667<F1>
<SHARES-REINVESTED> 24<F1>
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<GROSS-EXPENSE> 1033
<AVERAGE-NET-ASSETS> 234235<F1>
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<PER-SHARE-NII> .260<F1>
<PER-SHARE-GAIN-APPREC> .240<F1>
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<PER-SHARE-DISTRIBUTIONS> .020<F1>
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<PER-SHARE-NAV-END> 10.890<F1>
<EXPENSE-RATIO> .560<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 062
<NAME> THE ONE GROUP INTERMEDIATE TAX-FREE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 257214
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<INTEREST-INCOME> 6572
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<EXPENSES-NET> 699
<NET-INVESTMENT-INCOME> 5915
<REALIZED-GAINS-CURRENT> 751
<APPREC-INCREASE-CURRENT> 4467
<NET-CHANGE-FROM-OPS> 11133
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 150<F1>
<DISTRIBUTIONS-OF-GAINS> 11<F1>
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<NUMBER-OF-SHARES-SOLD> 4<F1>
<NUMBER-OF-SHARES-REDEEMED> 52<F1>
<SHARES-REINVESTED> 11<F1>
<NET-CHANGE-IN-ASSETS> 27800
<ACCUMULATED-NII-PRIOR> 233
<ACCUMULATED-GAINS-PRIOR> 410
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1033
<AVERAGE-NET-ASSETS> 6492<F1>
<PER-SHARE-NAV-BEGIN> 10.670<F1>
<PER-SHARE-NII> .250<F1>
<PER-SHARE-GAIN-APPREC> .230<F1>
<PER-SHARE-DIVIDEND> .250<F1>
<PER-SHARE-DISTRIBUTIONS> .020<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.880<F1>
<EXPENSE-RATIO> .790<F1>
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<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 063
<NAME> THE ONE GROUP INTERMEDIATE TAX-FREE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
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<SHARES-COMMON-PRIOR> 228<F1>
<ACCUMULATED-NII-CURRENT> 233
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<ACCUM-APPREC-OR-DEPREC> 7293
<NET-ASSETS> 254062
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<EXPENSES-NET> 699
<NET-INVESTMENT-INCOME> 5915
<REALIZED-GAINS-CURRENT> 751
<APPREC-INCREASE-CURRENT> 4467
<NET-CHANGE-FROM-OPS> 11133
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<DISTRIBUTIONS-OF-INCOME> 46<F1>
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<NUMBER-OF-SHARES-REDEEMED> 56<F1>
<SHARES-REINVESTED> 4<F1>
<NET-CHANGE-IN-ASSETS> 27800
<ACCUMULATED-NII-PRIOR> 233
<ACCUMULATED-GAINS-PRIOR> 410
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<GROSS-ADVISORY-FEES> 735
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1033
<AVERAGE-NET-ASSETS> 2278<F1>
<PER-SHARE-NAV-BEGIN> 10.680<F1>
<PER-SHARE-NII> .220<F1>
<PER-SHARE-GAIN-APPREC> .230<F1>
<PER-SHARE-DIVIDEND> .220<F1>
<PER-SHARE-DISTRIBUTIONS> .020<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.890<F1>
<EXPENSE-RATIO> 1.480<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 071
<NAME> THE ONE GROUP DISCIPLINED VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 463484
<INVESTMENTS-AT-VALUE> 532651
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<ACCUM-APPREC-OR-DEPREC> 69167
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<APPREC-INCREASE-CURRENT> 15176
<NET-CHANGE-FROM-OPS> 43912
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<DISTRIBUTIONS-OF-INCOME> 4513<F1>
<DISTRIBUTIONS-OF-GAINS> 53221<F1>
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<NUMBER-OF-SHARES-SOLD> 3666<F1>
<NUMBER-OF-SHARES-REDEEMED> 6474<F1>
<SHARES-REINVESTED> 1975<F1>
<NET-CHANGE-IN-ASSETS> (26855)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 41035
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2775
<AVERAGE-NET-ASSETS> 499602<F1>
<PER-SHARE-NAV-BEGIN> 14.690<F1>
<PER-SHARE-NII> .130<F1>
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<PER-SHARE-DISTRIBUTIONS> 1.610<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 14.170<F1>
<EXPENSE-RATIO> .980<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 072
<NAME> THE ONE GROUP DISCIPLINED VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
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<SHARES-COMMON-PRIOR> 1416<F1>
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<ACCUM-APPREC-OR-DEPREC> 69167
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<NUMBER-OF-SHARES-REDEEMED> 371<F1>
<SHARES-REINVESTED> 170<F1>
<NET-CHANGE-IN-ASSETS> (26855)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 41035
<OVERDISTRIB-NII-PRIOR> 45
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2775
<AVERAGE-NET-ASSETS> 21132<F1>
<PER-SHARE-NAV-BEGIN> 14.720<F1>
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<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 14.190<F1>
<EXPENSE-RATIO> 1.23<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 073
<NAME> THE ONE GROUP DISCIPLINED VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
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<INVESTMENTS-AT-COST> 463484
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<TOTAL-LIABILITIES> 2126
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<SHARES-COMMON-PRIOR> 1110<F1>
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<ACCUMULATED-NET-GAINS> 4668
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 69167
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<NET-INVESTMENT-INCOME> 4741
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<APPREC-INCREASE-CURRENT> 15176
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<DISTRIBUTIONS-OF-GAINS> 1855<F1>
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<NUMBER-OF-SHARES-REDEEMED> 76<F1>
<SHARES-REINVESTED> 135<F1>
<NET-CHANGE-IN-ASSETS> (26855)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 41035
<OVERDISTRIB-NII-PRIOR> 45
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
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<AVERAGE-NET-ASSETS> 16888<F1>
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<PER-SHARE-NII> .060<F1>
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<PER-SHARE-DIVIDEND> .060<F1>
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<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 14.160<F1>
<EXPENSE-RATIO> 1.980<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 081
<NAME> THE ONE GROUP GROWTH OPPORTUNITIES FUND
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> JUN-30-1997
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<OVERDISTRIBUTION-GAINS> 8325
<ACCUM-APPREC-OR-DEPREC> 39233
<NET-ASSETS> 585798
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<NET-INVESTMENT-INCOME> 8261
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<APPREC-INCREASE-CURRENT> 31069
<NET-CHANGE-FROM-OPS> 41583
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<DISTRIBUTIONS-OF-INCOME> 7722<F1>
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<SHARES-REINVESTED> 2790<F1>
<NET-CHANGE-IN-ASSETS> 12311
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<GROSS-EXPENSE> 3005
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<EXPENSE-RATIO> .970<F1>
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<FN>
<F1>Fiduciary Class
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 082
<NAME> THE ONE GROUP GROWTH OPPORTUNITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
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<PERIOD-START> JUL-01-1996
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<OVERDISTRIBUTION-GAINS> 8325
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<NET-INVESTMENT-INCOME> 8261
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<APPREC-INCREASE-CURRENT> 31069
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<NUMBER-OF-SHARES-REDEEMED> 2233<F1>
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<GROSS-EXPENSE> 3005
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<PER-SHARE-NAV-END> 16.870<F1>
<EXPENSE-RATIO> 1.22<F1>
<AVG-DEBT-OUTSTANDING> 0
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<FN>
<F1>Class A
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 083
<NAME> THE ONE GROUP GROWTH OPPORTUNITIES FUND
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<S> <C>
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<OVERDISTRIBUTION-GAINS> 8325
<ACCUM-APPREC-OR-DEPREC> 39233
<NET-ASSETS> 585798
<DIVIDEND-INCOME> 10228
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<NET-INVESTMENT-INCOME> 8261
<REALIZED-GAINS-CURRENT> 2253
<APPREC-INCREASE-CURRENT> 31069
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<ACCUMULATED-GAINS-PRIOR> 80677
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2187
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3005
<AVERAGE-NET-ASSETS> 16778<F1>
<PER-SHARE-NAV-BEGIN> 18.430<F1>
<PER-SHARE-NII> .170<F1>
<PER-SHARE-GAIN-APPREC> 1.030<F1>
<PER-SHARE-DIVIDEND> .240<F1>
<PER-SHARE-DISTRIBUTIONS> 2.920<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 16.470<F1>
<EXPENSE-RATIO> 1.98<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 101
<NAME> THE ONE GROUP LIMITED VOLATILITY BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 606745
<INVESTMENTS-AT-VALUE> 609450
<RECEIVABLES> 10522
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<TOTAL-ASSETS> 620028
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4773
<TOTAL-LIABILITIES> 4773
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 619682
<SHARES-COMMON-STOCK> 56206<F1>
<SHARES-COMMON-PRIOR> 58043<F1>
<ACCUMULATED-NII-CURRENT> 0
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<OVERDISTRIBUTION-GAINS> 7011
<ACCUM-APPREC-OR-DEPREC> 2705
<NET-ASSETS> 615255
<DIVIDEND-INCOME> 32
<INTEREST-INCOME> 20168
<OTHER-INCOME> 90
<EXPENSES-NET> 1634
<NET-INVESTMENT-INCOME> 18656
<REALIZED-GAINS-CURRENT> (186)
<APPREC-INCREASE-CURRENT> 3760
<NET-CHANGE-FROM-OPS> 22230
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 17909<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
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<NUMBER-OF-SHARES-SOLD> 6184<F1>
<NUMBER-OF-SHARES-REDEEMED> 8169<F1>
<SHARES-REINVESTED> 148<F1>
<NET-CHANGE-IN-ASSETS> (15927)
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 121
<OVERDIST-NET-GAINS-PRIOR> 6825
<GROSS-ADVISORY-FEES> 1876
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2585
<AVERAGE-NET-ASSETS> 593836<F1>
<PER-SHARE-NAV-BEGIN> 10.42<F1>
<PER-SHARE-NII> .320<F1>
<PER-SHARE-GAIN-APPREC> .06<F1>
<PER-SHARE-DIVIDEND> .320<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
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<PER-SHARE-NAV-END> 10.48<F1>
<EXPENSE-RATIO> .510<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 102
<NAME> THE ONE GROUP LIMITED VOLATILITY BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 606745
<INVESTMENTS-AT-VALUE> 609450
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<PAID-IN-CAPITAL-COMMON> 619682
<SHARES-COMMON-STOCK> 2001<F1>
<SHARES-COMMON-PRIOR> 2050<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 121
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<OVERDISTRIBUTION-GAINS> 7011
<ACCUM-APPREC-OR-DEPREC> 2705
<NET-ASSETS> 615255
<DIVIDEND-INCOME> 32
<INTEREST-INCOME> 20168
<OTHER-INCOME> 90
<EXPENSES-NET> 1634
<NET-INVESTMENT-INCOME> 18656
<REALIZED-GAINS-CURRENT> (186)
<APPREC-INCREASE-CURRENT> 3760
<NET-CHANGE-FROM-OPS> 22230
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 618<F1>
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<NUMBER-OF-SHARES-SOLD> 273<F1>
<NUMBER-OF-SHARES-REDEEMED> 366<F1>
<SHARES-REINVESTED> 44<F1>
<NET-CHANGE-IN-ASSETS> (15927)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 121
<OVERDIST-NET-GAINS-PRIOR> 6825
<GROSS-ADVISORY-FEES> 1876
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2585
<AVERAGE-NET-ASSETS> 21371<F1>
<PER-SHARE-NAV-BEGIN> 10.41<F1>
<PER-SHARE-NII> .300<F1>
<PER-SHARE-GAIN-APPREC> .07<F1>
<PER-SHARE-DIVIDEND> .300<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.48<F1>
<EXPENSE-RATIO> .760<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 103
<NAME> THE ONE GROUP LIMITED VOLATILITY BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 606745
<INVESTMENTS-AT-VALUE> 609450
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<TOTAL-ASSETS> 620028
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4773
<TOTAL-LIABILITIES> 4773
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 619682
<SHARES-COMMON-STOCK> 480<F1>
<SHARES-COMMON-PRIOR> 469<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 121
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 7011
<ACCUM-APPREC-OR-DEPREC> 2705
<NET-ASSETS> 615255
<DIVIDEND-INCOME> 32
<INTEREST-INCOME> 20168
<OTHER-INCOME> 90
<EXPENSES-NET> 1634
<NET-INVESTMENT-INCOME> 18656
<REALIZED-GAINS-CURRENT> (186)
<APPREC-INCREASE-CURRENT> 3760
<NET-CHANGE-FROM-OPS> 22230
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 129<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
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<NUMBER-OF-SHARES-REDEEMED> 48<F1>
<SHARES-REINVESTED> 11<F1>
<NET-CHANGE-IN-ASSETS> (15927)
<ACCUMULATED-NII-PRIOR> 0
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<OVERDIST-NET-GAINS-PRIOR> 6825
<GROSS-ADVISORY-FEES> 1876
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2585
<AVERAGE-NET-ASSETS> 5037<F1>
<PER-SHARE-NAV-BEGIN> 10.49<F1>
<PER-SHARE-NII> .270<F1>
<PER-SHARE-GAIN-APPREC> .06<F1>
<PER-SHARE-DIVIDEND> .270<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.55<F1>
<EXPENSE-RATIO> 1.41<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 111
<NAME> THE ONE GROUP EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 405033
<INVESTMENTS-AT-VALUE> 536303
<RECEIVABLES> 1566
<ASSETS-OTHER> 65
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<OTHER-ITEMS-LIABILITIES> 1731
<TOTAL-LIABILITIES> 1731
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 404537
<SHARES-COMMON-STOCK> 21851<F1>
<SHARES-COMMON-PRIOR> 19269<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 394
<ACCUMULATED-NET-GAINS> 1332
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130728
<NET-ASSETS> 536203
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<EXPENSES-NET> 1003
<NET-INVESTMENT-INCOME> 4438
<REALIZED-GAINS-CURRENT> 3219
<APPREC-INCREASE-CURRENT> 44523
<NET-CHANGE-FROM-OPS> 52180
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3682<F1>
<DISTRIBUTIONS-OF-GAINS> 3288<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 5987<F1>
<NUMBER-OF-SHARES-REDEEMED> 3596<F1>
<SHARES-REINVESTED> 191<F1>
<NET-CHANGE-IN-ASSETS> 144421
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2450
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<GROSS-ADVISORY-FEES> 696
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1647
<AVERAGE-NET-ASSETS> 359058<F1>
<PER-SHARE-NAV-BEGIN> 16.660<F1>
<PER-SHARE-NII> .180<F1>
<PER-SHARE-GAIN-APPREC> 1.740<F1>
<PER-SHARE-DIVIDEND> .180<F1>
<PER-SHARE-DISTRIBUTIONS> .150<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 18.250<F1>
<EXPENSE-RATIO> .280<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 112
<NAME> THE ONE GROUP EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 405033
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<PAID-IN-CAPITAL-COMMON> 404537
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<SHARES-COMMON-PRIOR> 1931<F1>
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<ACCUMULATED-NET-GAINS> 1332
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130728
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<DIVIDEND-INCOME> 4818
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<NET-INVESTMENT-INCOME> 4438
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<NET-CHANGE-FROM-OPS> 52180
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<NUMBER-OF-SHARES-SOLD> 2173<F1>
<NUMBER-OF-SHARES-REDEEMED> 1177<F1>
<SHARES-REINVESTED> 42<F1>
<NET-CHANGE-IN-ASSETS> 144421
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2450
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 696
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1647
<AVERAGE-NET-ASSETS> 42687<F1>
<PER-SHARE-NAV-BEGIN> 16.670<F1>
<PER-SHARE-NII> .150<F1>
<PER-SHARE-GAIN-APPREC> 1.730<F1>
<PER-SHARE-DIVIDEND> .150<F1>
<PER-SHARE-DISTRIBUTIONS> .150<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 18.250<F1>
<EXPENSE-RATIO> .530<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 113
<NAME> THE ONE GROUP EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 405033
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130728
<NET-ASSETS> 536203
<DIVIDEND-INCOME> 4818
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<NET-INVESTMENT-INCOME> 4438
<REALIZED-GAINS-CURRENT> 3219
<APPREC-INCREASE-CURRENT> 44523
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<DISTRIBUTIONS-OF-GAINS> 629<F1>
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<SHARES-REINVESTED> 52<F1>
<NET-CHANGE-IN-ASSETS> 144421
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 696
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1647
<AVERAGE-NET-ASSETS> 58353<F1>
<PER-SHARE-NAV-BEGIN> 16.680<F1>
<PER-SHARE-NII> .090<F1>
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<PER-SHARE-DIVIDEND> .100<F1>
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<PER-SHARE-NAV-END> 18.260<F1>
<EXPENSE-RATIO> 1.280<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 121
<NAME> THE ONE GROUP LARGE COMPANY VALUE FUND
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<S> <C>
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<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
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<TOTAL-LIABILITIES> 2375
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<PAID-IN-CAPITAL-COMMON> 577653
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<SHARES-COMMON-PRIOR> 45543<F1>
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<OVERDISTRIBUTION-GAINS> 6111
<ACCUM-APPREC-OR-DEPREC> 56480
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<NET-INVESTMENT-INCOME> 6196
<REALIZED-GAINS-CURRENT> (4647)
<APPREC-INCREASE-CURRENT> 60686
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<SHARES-REINVESTED> 1915<F1>
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<GROSS-EXPENSE> 2947
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<PER-SHARE-NAV-END> 12.980<F1>
<EXPENSE-RATIO> .960<F1>
<AVG-DEBT-OUTSTANDING> 0
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<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 122
<NAME> THE ONE GROUP LARGE COMPANY VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
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<INVESTMENTS-AT-COST> 570741
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<OVERDISTRIBUTION-NII> 91
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<ACCUM-APPREC-OR-DEPREC> 56480
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<NET-INVESTMENT-INCOME> 6196
<REALIZED-GAINS-CURRENT> (4647)
<APPREC-INCREASE-CURRENT> 60686
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<PER-SHARE-GAIN-APPREC> 1.220<F1>
<PER-SHARE-DIVIDEND> .120<F1>
<PER-SHARE-DISTRIBUTIONS> 1.060<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 13.020<F1>
<EXPENSE-RATIO> 1.210<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 123
<NAME> THE ONE GROUP LARGE COMPANY VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 570741
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<TOTAL-LIABILITIES> 2375
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<PAID-IN-CAPITAL-COMMON> 577653
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<OTHER-INCOME> 110
<EXPENSES-NET> 2942
<NET-INVESTMENT-INCOME> 6196
<REALIZED-GAINS-CURRENT> (4647)
<APPREC-INCREASE-CURRENT> 60686
<NET-CHANGE-FROM-OPS> 62235
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 30<F1>
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<NUMBER-OF-SHARES-SOLD> 97<F1>
<NUMBER-OF-SHARES-REDEEMED> 23<F1>
<SHARES-REINVESTED> 33<F1>
<NET-CHANGE-IN-ASSETS> 29889
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 47238
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2947
<AVERAGE-NET-ASSETS> 4765<F1>
<PER-SHARE-NAV-BEGIN> 12.980<F1>
<PER-SHARE-NII> .070<F1>
<PER-SHARE-GAIN-APPREC> 1.210<F1>
<PER-SHARE-DIVIDEND> .080<F1>
<PER-SHARE-DISTRIBUTIONS> 1.060<F1>
<RETURNS-OF-CAPITAL> .000<F1>
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<EXPENSE-RATIO> 1.960<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 131
<NAME> THE ONE GROUP OHIO MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 106236
<INVESTMENTS-AT-VALUE> 112468
<RECEIVABLES> 1370
<ASSETS-OTHER> 1
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<TOTAL-ASSETS> 113839
<PAYABLE-FOR-SECURITIES> 1038
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<OTHER-ITEMS-LIABILITIES> 815
<TOTAL-LIABILITIES> 1853
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 109750
<SHARES-COMMON-STOCK> 7719<F1>
<SHARES-COMMON-PRIOR> 7540<F1>
<ACCUMULATED-NII-CURRENT> 8
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4004
<ACCUM-APPREC-OR-DEPREC> 6232
<NET-ASSETS> 111986
<DIVIDEND-INCOME> 62
<INTEREST-INCOME> 3065
<OTHER-INCOME> 0
<EXPENSES-NET> 377
<NET-INVESTMENT-INCOME> 2750
<REALIZED-GAINS-CURRENT> (34)
<APPREC-INCREASE-CURRENT> 1948
<NET-CHANGE-FROM-OPS> 4664
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2117<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 894<F1>
<NUMBER-OF-SHARES-REDEEMED> 722<F1>
<SHARES-REINVESTED> 7<F1>
<NET-CHANGE-IN-ASSETS> 6014
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3966
<GROSS-ADVISORY-FEES> 328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 557
<AVERAGE-NET-ASSETS> 81444<F1>
<PER-SHARE-NAV-BEGIN> 10.69<F1>
<PER-SHARE-NII> .280<F1>
<PER-SHARE-GAIN-APPREC> .190<F1>
<PER-SHARE-DIVIDEND> .28<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.88<F1>
<EXPENSE-RATIO> .570<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 132
<NAME> THE ONE GROUP OHIO MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 106236
<INVESTMENTS-AT-VALUE> 112468
<RECEIVABLES> 1370
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<TOTAL-ASSETS> 113839
<PAYABLE-FOR-SECURITIES> 1038
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<OTHER-ITEMS-LIABILITIES> 815
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 109750
<SHARES-COMMON-STOCK> 1453<F1>
<SHARES-COMMON-PRIOR> 1540<F1>
<ACCUMULATED-NII-CURRENT> 8
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<OVERDISTRIBUTION-GAINS> 4004
<ACCUM-APPREC-OR-DEPREC> 6232
<NET-ASSETS> 111986
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<INTEREST-INCOME> 3065
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<EXPENSES-NET> 377
<NET-INVESTMENT-INCOME> 2750
<REALIZED-GAINS-CURRENT> (34)
<APPREC-INCREASE-CURRENT> 1948
<NET-CHANGE-FROM-OPS> 4664
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 405<F1>
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<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 191<F1>
<NUMBER-OF-SHARES-REDEEMED> 309<F1>
<SHARES-REINVESTED> 31<F1>
<NET-CHANGE-IN-ASSETS> 6014
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3966
<GROSS-ADVISORY-FEES> 328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 557
<AVERAGE-NET-ASSETS> 16389<F1>
<PER-SHARE-NAV-BEGIN> 10.72<F1>
<PER-SHARE-NII> .270<F1>
<PER-SHARE-GAIN-APPREC> .200<F1>
<PER-SHARE-DIVIDEND> .27<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.92<F1>
<EXPENSE-RATIO> .810<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS A SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 133
<NAME> THE ONE GROUP OHIO MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 106236
<INVESTMENTS-AT-VALUE> 112468
<RECEIVABLES> 1370
<ASSETS-OTHER> 1
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<OTHER-ITEMS-LIABILITIES> 815
<TOTAL-LIABILITIES> 1853
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 109750
<SHARES-COMMON-STOCK> 1102<F1>
<SHARES-COMMON-PRIOR> 820<F1>
<ACCUMULATED-NII-CURRENT> 8
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4004
<ACCUM-APPREC-OR-DEPREC> 6232
<NET-ASSETS> 111986
<DIVIDEND-INCOME> 62
<INTEREST-INCOME> 3065
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<EXPENSES-NET> 377
<NET-INVESTMENT-INCOME> 2750
<REALIZED-GAINS-CURRENT> (34)
<APPREC-INCREASE-CURRENT> 1948
<NET-CHANGE-FROM-OPS> 4664
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 228<F1>
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<NUMBER-OF-SHARES-SOLD> 313<F1>
<NUMBER-OF-SHARES-REDEEMED> 46<F1>
<SHARES-REINVESTED> 15<F1>
<NET-CHANGE-IN-ASSETS> 6014
<ACCUMULATED-NII-PRIOR> 8
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3966
<GROSS-ADVISORY-FEES> 328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 557
<AVERAGE-NET-ASSETS> 10572<F1>
<PER-SHARE-NAV-BEGIN> 10.79<F1>
<PER-SHARE-NII> .240<F1>
<PER-SHARE-GAIN-APPREC> .200<F1>
<PER-SHARE-DIVIDEND> .24<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.99<F1>
<EXPENSE-RATIO> 1.46<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 141
<NAME> THE ONE GROUP INTERNATIONAL EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 355353
<INVESTMENTS-AT-VALUE> 396447
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 356749
<SHARES-COMMON-STOCK> 25221<F1>
<SHARES-COMMON-PRIOR> 22921<F1>
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<ACCUM-APPREC-OR-DEPREC> 40939
<NET-ASSETS> 395418
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<INTEREST-INCOME> 4
<OTHER-INCOME> (332)
<EXPENSES-NET> 1645
<NET-INVESTMENT-INCOME> 812
<REALIZED-GAINS-CURRENT> 1157
<APPREC-INCREASE-CURRENT> 1611
<NET-CHANGE-FROM-OPS> 3580
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 3811<F1>
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<NUMBER-OF-SHARES-REDEEMED> 6185<F1>
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<NET-CHANGE-IN-ASSETS> 30983
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<ACCUMULATED-GAINS-PRIOR> 1893
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<GROSS-EXPENSE> 1650
<AVERAGE-NET-ASSETS> 361648<F1>
<PER-SHARE-NAV-BEGIN> 15.170<F1>
<PER-SHARE-NII> .030<F1>
<PER-SHARE-GAIN-APPREC> .070<F1>
<PER-SHARE-DIVIDEND> .140<F1>
<PER-SHARE-DISTRIBUTIONS> .150<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 14.980<F1>
<EXPENSE-RATIO> .840<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 142
<NAME> THE ONE GROUP INTERNATIONAL EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
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<INVESTMENTS-AT-COST> 355353
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<SHARES-COMMON-PRIOR> 712<F1>
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<ACCUM-APPREC-OR-DEPREC> 40939
<NET-ASSETS> 395418
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<EXPENSES-NET> 1645
<NET-INVESTMENT-INCOME> 812
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<APPREC-INCREASE-CURRENT> 1611
<NET-CHANGE-FROM-OPS> 3580
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<NUMBER-OF-SHARES-REDEEMED> 167<F1>
<SHARES-REINVESTED> 8<F1>
<NET-CHANGE-IN-ASSETS> 30983
<ACCUMULATED-NII-PRIOR> 1395
<ACCUMULATED-GAINS-PRIOR> 1893
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<GROSS-ADVISORY-FEES> 1053
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1650
<AVERAGE-NET-ASSETS> 10779<F1>
<PER-SHARE-NAV-BEGIN> 15.160<F1>
<PER-SHARE-NII> .020<F1>
<PER-SHARE-GAIN-APPREC> .050<F1>
<PER-SHARE-DIVIDEND> .080<F1>
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<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 15.000<F1>
<EXPENSE-RATIO> 1.090<F1>
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<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS A SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 143
<NAME> THE ONE GROUP INTERNATIONAL EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 355353
<INVESTMENTS-AT-VALUE> 396447
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<OVERDISTRIBUTION-GAINS> 944
<ACCUM-APPREC-OR-DEPREC> 40939
<NET-ASSETS> 395418
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<OTHER-INCOME> (332)
<EXPENSES-NET> 1645
<NET-INVESTMENT-INCOME> 812
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<APPREC-INCREASE-CURRENT> 1611
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<SHARES-REINVESTED> 5<F1>
<NET-CHANGE-IN-ASSETS> 30983
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<PER-SHARE-NAV-BEGIN> 14.790<F1>
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<PER-SHARE-DIVIDEND> .050<F1>
<PER-SHARE-DISTRIBUTIONS> .150<F1>
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<PER-SHARE-NAV-END> 14.590<F1>
<EXPENSE-RATIO> 1.840<F1>
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<FN>
<F1>CLASS B SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 151
<NAME> THE ONE GROUP TREASURY ONLY MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 161
<NAME> THE ONE GROUP GOVERNMENT MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
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<F1>Fiduciary Class
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<F1>Class A
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<NUMBER> 173
<NAME> THE ONE GROUP ASSET ALLOCATION FUND
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<F1>Class B
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<F1>Fiduciary Class
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<NUMBER> 182
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<F1>FIDUCIARY SHARES
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<OVERDISTRIBUTION-GAINS> 4048
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<EXPENSES-NET> 125
<NET-INVESTMENT-INCOME> 2194
<REALIZED-GAINS-CURRENT> (276)
<APPREC-INCREASE-CURRENT> 630
<NET-CHANGE-FROM-OPS> 2548
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 129<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
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<NUMBER-OF-SHARES-SOLD> 233<F1>
<NUMBER-OF-SHARES-REDEEMED> 113<F1>
<SHARES-REINVESTED> 11<F1>
<NET-CHANGE-IN-ASSETS> 17213
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 313
<OVERDIST-NET-GAINS-PRIOR> 3772
<GROSS-ADVISORY-FEES> 201
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 313
<AVERAGE-NET-ASSETS> 4464<F1>
<PER-SHARE-NAV-BEGIN> 9.78<F1>
<PER-SHARE-NII> .290<F1>
<PER-SHARE-GAIN-APPREC> .050<F1>
<PER-SHARE-DIVIDEND> .290<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.83<F1>
<EXPENSE-RATIO> .570<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS A SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 193
<NAME> THE ONE GROUP ULTRA SHORT-TERM INCOME FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 84711
<INVESTMENTS-AT-VALUE> 84798
<RECEIVABLES> 926
<ASSETS-OTHER> 25
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<TOTAL-ASSETS> 85749
<PAYABLE-FOR-SECURITIES> 5348
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 799
<TOTAL-LIABILITIES> 6147
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 83821
<SHARES-COMMON-STOCK> 171<F1>
<SHARES-COMMON-PRIOR> 117<F1>
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<OVERDISTRIBUTION-GAINS> 4048
<ACCUM-APPREC-OR-DEPREC> 126
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<INTEREST-INCOME> 2319
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<EXPENSES-NET> 125
<NET-INVESTMENT-INCOME> 2194
<REALIZED-GAINS-CURRENT> (276)
<APPREC-INCREASE-CURRENT> 630
<NET-CHANGE-FROM-OPS> 2548
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 37<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
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<NUMBER-OF-SHARES-SOLD> 57<F1>
<NUMBER-OF-SHARES-REDEEMED> 5<F1>
<SHARES-REINVESTED> 2<F1>
<NET-CHANGE-IN-ASSETS> 17213
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 313
<OVERDIST-NET-GAINS-PRIOR> 3772
<GROSS-ADVISORY-FEES> 201
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 313
<AVERAGE-NET-ASSETS> 1321<F1>
<PER-SHARE-NAV-BEGIN> 9.76<F1>
<PER-SHARE-NII> .260<F1>
<PER-SHARE-GAIN-APPREC> .040<F1>
<PER-SHARE-DIVIDEND> .270<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.79<F1>
<EXPENSE-RATIO> 1.22<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS B SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 201
<NAME> THE ONE GROUP MUNICIPAL INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 341207
<INVESTMENTS-AT-VALUE> 345975
<RECEIVABLES> 6536
<ASSETS-OTHER> 14
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 352525
<PAYABLE-FOR-SECURITIES> 4902
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2251
<TOTAL-LIABILITIES> 7153
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 349422
<SHARES-COMMON-STOCK> 29347<F1>
<SHARES-COMMON-PRIOR> 24956<F1>
<ACCUMULATED-NII-CURRENT> 20
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8838
<ACCUM-APPREC-OR-DEPREC> 4768
<NET-ASSETS> 345372
<DIVIDEND-INCOME> 42
<INTEREST-INCOME> 9616
<OTHER-INCOME> 0
<EXPENSES-NET> 1074
<NET-INVESTMENT-INCOME> 8584
<REALIZED-GAINS-CURRENT> (759)
<APPREC-INCREASE-CURRENT> 4481
<NET-CHANGE-FROM-OPS> 12306
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7268<F1>
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<NUMBER-OF-SHARES-SOLD> 7050<F1>
<NUMBER-OF-SHARES-REDEEMED> 2677<F1>
<SHARES-REINVESTED> 18<F1>
<NET-CHANGE-IN-ASSETS> 55266
<ACCUMULATED-NII-PRIOR> 20
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 8079
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 722
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1287
<AVERAGE-NET-ASSETS> 264672<F1>
<PER-SHARE-NAV-BEGIN> 9.66<F1>
<PER-SHARE-NII> .270<F1>
<PER-SHARE-GAIN-APPREC> .12<F1>
<PER-SHARE-DIVIDEND> .27<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.780<F1>
<EXPENSE-RATIO> .570<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 202
<NAME> THE ONE GROUP MUNICIPAL INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 341207
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<RECEIVABLES> 6536
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<TOTAL-ASSETS> 352525
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<SHARES-COMMON-STOCK> 2995<F1>
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<ACCUMULATED-NII-CURRENT> 20
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<NET-INVESTMENT-INCOME> 8584
<REALIZED-GAINS-CURRENT> (759)
<APPREC-INCREASE-CURRENT> 4481
<NET-CHANGE-FROM-OPS> 12306
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 710<F1>
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<NUMBER-OF-SHARES-SOLD> 526<F1>
<NUMBER-OF-SHARES-REDEEMED> 247<F1>
<SHARES-REINVESTED> 54<F1>
<NET-CHANGE-IN-ASSETS> 8303
<ACCUMULATED-NII-PRIOR> 20
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 8079
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 722
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1287
<AVERAGE-NET-ASSETS> 27261<F1>
<PER-SHARE-NAV-BEGIN> 9.69<F1>
<PER-SHARE-NII> .260<F1>
<PER-SHARE-GAIN-APPREC> .12<F1>
<PER-SHARE-DIVIDEND> .26<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.81<F1>
<EXPENSE-RATIO> .82<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 203
<NAME> THE ONE GROUP MUNICIPAL INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 341207
<INVESTMENTS-AT-VALUE> 345975
<RECEIVABLES> 6536
<ASSETS-OTHER> 14
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 352525
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<TOTAL-LIABILITIES> 7153
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 349422
<SHARES-COMMON-STOCK> 2973<F1>
<SHARES-COMMON-PRIOR> 2403<F1>
<ACCUMULATED-NII-CURRENT> 20
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8838
<ACCUM-APPREC-OR-DEPREC> 4768
<NET-ASSETS> 345372
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<INTEREST-INCOME> 9616
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<EXPENSES-NET> 1074
<NET-INVESTMENT-INCOME> 8584
<REALIZED-GAINS-CURRENT> (759)
<APPREC-INCREASE-CURRENT> 4481
<NET-CHANGE-FROM-OPS> 12306
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 606<F1>
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<NUMBER-OF-SHARES-SOLD> 669<F1>
<NUMBER-OF-SHARES-REDEEMED> 141<F1>
<SHARES-REINVESTED> 42<F1>
<NET-CHANGE-IN-ASSETS> 8303
<ACCUMULATED-NII-PRIOR> 20
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 8079
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 722
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1287
<AVERAGE-NET-ASSETS> 26279<F1>
<PER-SHARE-NAV-BEGIN> 9.66<F1>
<PER-SHARE-NII> .220<F1>
<PER-SHARE-GAIN-APPREC> .11<F1>
<PER-SHARE-DIVIDEND> .22<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.77<F1>
<EXPENSE-RATIO> 1.47<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 211
<NAME> THE ONE GROUP OHIO MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 88833
<INVESTMENTS-AT-VALUE> 88833
<RECEIVABLES> 696
<ASSETS-OTHER> 4
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<TOTAL-ASSETS> 89533
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 89248
<SHARES-COMMON-STOCK> 52946<F1>
<SHARES-COMMON-PRIOR> 55946<F1>
<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 89189
<DIVIDEND-INCOME> 38
<INTEREST-INCOME> 1627
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<EXPENSES-NET> 244
<NET-INVESTMENT-INCOME> 1421
<REALIZED-GAINS-CURRENT> (8)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1413
<EQUALIZATION> 0
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<NUMBER-OF-SHARES-REDEEMED> 86421<F1>
<SHARES-REINVESTED> 46<F1>
<NET-CHANGE-IN-ASSETS> (7858)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 51
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 143
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 337
<AVERAGE-NET-ASSETS> 53072<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .016<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .016<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
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<PER-SHARE-NAV-END> 1.00<F1>
<EXPENSE-RATIO> .40<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 212
<NAME> THE ONE GROUP OHIO MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 88833
<INVESTMENTS-AT-VALUE> 88833
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<TOTAL-ASSETS> 89533
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<TOTAL-LIABILITIES> 344
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 89248
<SHARES-COMMON-STOCK> 36302<F1>
<SHARES-COMMON-PRIOR> 41152<F1>
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<OVERDISTRIBUTION-GAINS> 8
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 89189
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<INTEREST-INCOME> 1627
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<EXPENSES-NET> 244
<NET-INVESTMENT-INCOME> 1421
<REALIZED-GAINS-CURRENT> (8)
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<NET-CHANGE-FROM-OPS> 1413
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<NUMBER-OF-SHARES-SOLD> 125386<F1>
<NUMBER-OF-SHARES-REDEEMED> 130740<F1>
<SHARES-REINVESTED> 504<F1>
<NET-CHANGE-IN-ASSETS> (7858)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 51
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 143
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 337
<AVERAGE-NET-ASSETS> 41497<F1>
<PER-SHARE-NAV-BEGIN> 1.00<F1>
<PER-SHARE-NII> .014<F1>
<PER-SHARE-GAIN-APPREC> 0<F1>
<PER-SHARE-DIVIDEND> .014<F1>
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<EXPENSE-RATIO> .65<F1>
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<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 221
<NAME> THE ONE GROUP INTERMEDIATE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 302377
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 303755
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<SHARES-COMMON-PRIOR> 23457<F1>
<ACCUMULATED-NII-CURRENT> 94
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4665
<ACCUM-APPREC-OR-DEPREC> 1201
<NET-ASSETS> 300385
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<EXPENSES-NET> 788
<NET-INVESTMENT-INCOME> 9261
<REALIZED-GAINS-CURRENT> (297)
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<GROSS-EXPENSE> 1211
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<PER-SHARE-GAIN-APPREC> .120<F1>
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<PER-SHARE-NAV-END> 9.96<F1>
<EXPENSE-RATIO> .520<F1>
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<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>FIDUCIARY SHARES
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 222
<NAME> THE ONE GROUP INTERMEDIATE BOND FUND
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<S> <C>
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<FISCAL-YEAR-END> JUN-30-1997
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<EXPENSES-NET> 788
<NET-INVESTMENT-INCOME> 9261
<REALIZED-GAINS-CURRENT> (297)
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<DISTRIBUTIONS-OF-INCOME> 443<F1>
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<NUMBER-OF-SHARES-SOLD> 257<F1>
<NUMBER-OF-SHARES-REDEEMED> 230<F1>
<SHARES-REINVESTED> 32<F1>
<NET-CHANGE-IN-ASSETS> 49790
<ACCUMULATED-NII-PRIOR> 94
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<OVERDIST-NET-GAINS-PRIOR> 4368
<GROSS-ADVISORY-FEES> 855
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1211
<AVERAGE-NET-ASSETS> 13987<F1>
<PER-SHARE-NAV-BEGIN> 9.87<F1>
<PER-SHARE-NII> .310<F1>
<PER-SHARE-GAIN-APPREC> .120<F1>
<PER-SHARE-DIVIDEND> .310<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.99<F1>
<EXPENSE-RATIO> .770<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS A SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 223
<NAME> THE ONE GROUP INTERMEDIATE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 302377
<INVESTMENTS-AT-VALUE> 303608
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<TOTAL-LIABILITIES> 8686
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 303755
<SHARES-COMMON-STOCK> 775<F1>
<SHARES-COMMON-PRIOR> 618<F1>
<ACCUMULATED-NII-CURRENT> 94
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<OVERDISTRIBUTION-GAINS> 4665
<ACCUM-APPREC-OR-DEPREC> 1201
<NET-ASSETS> 300385
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<INTEREST-INCOME> 9982
<OTHER-INCOME> 67
<EXPENSES-NET> 788
<NET-INVESTMENT-INCOME> 9261
<REALIZED-GAINS-CURRENT> (297)
<APPREC-INCREASE-CURRENT> 3975
<NET-CHANGE-FROM-OPS> 12939
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 198<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
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<NUMBER-OF-SHARES-SOLD> 208<F1>
<NUMBER-OF-SHARES-REDEEMED> 65<F1>
<SHARES-REINVESTED> 14<F1>
<NET-CHANGE-IN-ASSETS> 49790
<ACCUMULATED-NII-PRIOR> 94
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 4368
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<GROSS-EXPENSE> 1211
<AVERAGE-NET-ASSETS> 6991<F1>
<PER-SHARE-NAV-BEGIN> 9.83<F1>
<PER-SHARE-NII> .280<F1>
<PER-SHARE-GAIN-APPREC> .130<F1>
<PER-SHARE-DIVIDEND> .280<F1>
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<PER-SHARE-NAV-END> 9.96<F1>
<EXPENSE-RATIO> 1.42<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS B SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 231
<NAME> THE ONE GROUP LARGE COMPANY GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 737976
<INVESTMENTS-AT-VALUE> 939777
<RECEIVABLES> 9130
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<TOTAL-ASSETS> 948998
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3395
<TOTAL-LIABILITIES> 8513
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 724561
<SHARES-COMMON-STOCK> 47951<F1>
<SHARES-COMMON-PRIOR> 48320<F1>
<ACCUMULATED-NII-CURRENT> 52
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14071
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 201801
<NET-ASSETS> 940485
<DIVIDEND-INCOME> 8098
<INTEREST-INCOME> 671
<OTHER-INCOME> 75
<EXPENSES-NET> 4879
<NET-INVESTMENT-INCOME> 3965
<REALIZED-GAINS-CURRENT> 35407
<APPREC-INCREASE-CURRENT> 42213
<NET-CHANGE-FROM-OPS> 81585
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3519<F1>
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<NUMBER-OF-SHARES-SOLD> 5586<F1>
<NUMBER-OF-SHARES-REDEEMED> 7366<F1>
<SHARES-REINVESTED> 1411<F1>
<NET-CHANGE-IN-ASSETS> 63124<F1>
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 24128
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<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4915
<AVERAGE-NET-ASSETS> 750674<F1>
<PER-SHARE-NAV-BEGIN> 15.440<F1>
<PER-SHARE-NII> .080<F1>
<PER-SHARE-GAIN-APPREC> 1.340<F1>
<PER-SHARE-DIVIDEND> .070<F1>
<PER-SHARE-DISTRIBUTIONS> .800<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 15.990<F1>
<EXPENSE-RATIO> .970<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 232
<NAME> THE ONE GROUP LARGE COMPANY GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 737976
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<RECEIVABLES> 9130
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<OTHER-ITEMS-LIABILITIES> 3395
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 724561
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<ACCUMULATED-NII-CURRENT> 52
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<ACCUMULATED-NET-GAINS> 14071
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 201801
<NET-ASSETS> 940485
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<NET-INVESTMENT-INCOME> 3965
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<APPREC-INCREASE-CURRENT> 42213
<NET-CHANGE-FROM-OPS> 81585
<EQUALIZATION> 0
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<NUMBER-OF-SHARES-REDEEMED> 491<F1>
<SHARES-REINVESTED> 274<F1>
<NET-CHANGE-IN-ASSETS> 63124
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<GROSS-ADVISORY-FEES> 3367
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<GROSS-EXPENSE> 4915
<AVERAGE-NET-ASSETS> 83183<F1>
<PER-SHARE-NAV-BEGIN> 15.830<F1>
<PER-SHARE-NII> .060<F1>
<PER-SHARE-GAIN-APPREC> 1.370<F1>
<PER-SHARE-DIVIDEND> .050<F1>
<PER-SHARE-DISTRIBUTIONS> .800<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 16.410<F1>
<EXPENSE-RATIO> 1.220<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS A SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 233
<NAME> THE ONE GROUP LARGE COMPANY GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 737976
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<RECEIVABLES> 9130
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<OTHER-ITEMS-LIABILITIES> 3395
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<ACCUMULATED-NII-CURRENT> 52
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<ACCUMULATED-NET-GAINS> 14071
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 201801
<NET-ASSETS> 940485
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<APPREC-INCREASE-CURRENT> 42213
<NET-CHANGE-FROM-OPS> 81585
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 23<F1>
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<NUMBER-OF-SHARES-SOLD> 1435<F1>
<NUMBER-OF-SHARES-REDEEMED> 196<F1>
<SHARES-REINVESTED> 232<F1>
<NET-CHANGE-IN-ASSETS> 63124
<ACCUMULATED-NII-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4915
<AVERAGE-NET-ASSETS> 68608<F1>
<PER-SHARE-NAV-BEGIN> 15.630<F1>
<PER-SHARE-NII> .000<F1>
<PER-SHARE-GAIN-APPREC> 1.350<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .800<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 16.180<F1>
<EXPENSE-RATIO> 1.980<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS B SHARES
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 241
<NAME> THE ONE GROUP KENTUCKY MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
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<INVESTMENTS-AT-VALUE> 42114
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<TOTAL-ASSETS> 42872
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43316
<SHARES-COMMON-STOCK> 3182<F1>
<SHARES-COMMON-PRIOR> 3018<F1>
<ACCUMULATED-NII-CURRENT> 0
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<ACCUM-APPREC-OR-DEPREC> 1032
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<INTEREST-INCOME> 1092
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<EXPENSES-NET> 144
<NET-INVESTMENT-INCOME> 972
<REALIZED-GAINS-CURRENT> (7)
<APPREC-INCREASE-CURRENT> 662
<NET-CHANGE-FROM-OPS> 1627
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<DISTRIBUTIONS-OF-INCOME> 752<F1>
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<SHARES-REINVESTED> 1<F1>
<NET-CHANGE-IN-ASSETS> 2591
<ACCUMULATED-NII-PRIOR> 0
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<OVERDIST-NET-GAINS-PRIOR> 1815
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<GROSS-EXPENSE> 208
<AVERAGE-NET-ASSETS> 32005<F1>
<PER-SHARE-NAV-BEGIN> 10.04<F1>
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<PER-SHARE-DISTRIBUTIONS> .000<F1>
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<PER-SHARE-NAV-END> 10.200<F1>
<EXPENSE-RATIO> .600<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 242
<NAME> THE ONE GROUP KENTUCKY MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
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<INVESTMENTS-AT-VALUE> 42114
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<SHARES-COMMON-PRIOR> 814<F1>
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<INTEREST-INCOME> 1092
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<REALIZED-GAINS-CURRENT> (7)
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<NUMBER-OF-SHARES-REDEEMED> 37<F1>
<SHARES-REINVESTED> 9<F1>
<NET-CHANGE-IN-ASSETS> 2591
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<GROSS-EXPENSE> 208
<AVERAGE-NET-ASSETS> 8109<F1>
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<PER-SHARE-GAIN-APPREC> .170<F1>
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 243
<NAME> THE ONE GROUP KENTUCKY MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
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<PAID-IN-CAPITAL-COMMON> 43316
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<SHARES-COMMON-PRIOR> 146<F1>
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<OVERDISTRIBUTION-GAINS> 1822
<ACCUM-APPREC-OR-DEPREC> 1032
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<REALIZED-GAINS-CURRENT> (7)
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<SHARES-REINVESTED> 2<F1>
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<GROSS-EXPENSE> 208
<AVERAGE-NET-ASSETS> 1791<F1>
<PER-SHARE-NAV-BEGIN> 10.04<F1>
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<EXPENSE-RATIO> .600<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 251
<NAME> THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
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<OVERDIST-NET-GAINS-PRIOR> 596
<GROSS-ADVISORY-FEES> 562
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 911
<AVERAGE-NET-ASSETS> 130989<F1>
<PER-SHARE-NAV-BEGIN> 9.930<F1>
<PER-SHARE-NII> .240<F1>
<PER-SHARE-GAIN-APPREC> .14<F1>
<PER-SHARE-DIVIDEND> .24<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.070<F1>
<EXPENSE-RATIO> .650<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 252
<NAME> THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 172389
<INVESTMENTS-AT-VALUE> 178318
<RECEIVABLES> 3176
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 181495
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 892
<TOTAL-LIABILITIES> 892
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 175405
<SHARES-COMMON-STOCK> 4993<F1>
<SHARES-COMMON-PRIOR> 5388<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 731
<ACCUM-APPREC-OR-DEPREC> 5929
<NET-ASSETS> 180603
<DIVIDEND-INCOME> 19
<INTEREST-INCOME> 5158
<OTHER-INCOME> 0
<EXPENSES-NET> 688
<NET-INVESTMENT-INCOME> 4489
<REALIZED-GAINS-CURRENT> (135)
<APPREC-INCREASE-CURRENT> 2803
<NET-CHANGE-FROM-OPS> 7157
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1200<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 173<F1>
<NUMBER-OF-SHARES-REDEEMED> 646<F1>
<SHARES-REINVESTED> 78<F1>
<NET-CHANGE-IN-ASSETS> 12140
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 596
<GROSS-ADVISORY-FEES> 562
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 911
<AVERAGE-NET-ASSETS> 51447<F1>
<PER-SHARE-NAV-BEGIN> 9.930<F1>
<PER-SHARE-NII> .230<F1>
<PER-SHARE-GAIN-APPREC> .14<F1>
<PER-SHARE-DIVIDEND> .23<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.070<F1>
<EXPENSE-RATIO> .900<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF FUNDS
<SERIES>
<NUMBER> 253
<NAME> THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 172389
<INVESTMENTS-AT-VALUE> 178318
<RECEIVABLES> 3176
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 181495
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 892
<TOTAL-LIABILITIES> 892
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 175405
<SHARES-COMMON-STOCK> 359<F1>
<SHARES-COMMON-PRIOR> 325<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 731
<ACCUM-APPREC-OR-DEPREC> 5929
<NET-ASSETS> 180603
<DIVIDEND-INCOME> 19
<INTEREST-INCOME> 5158
<OTHER-INCOME> 0
<EXPENSES-NET> 688
<NET-INVESTMENT-INCOME> 4489
<REALIZED-GAINS-CURRENT> (135)
<APPREC-INCREASE-CURRENT> 2803
<NET-CHANGE-FROM-OPS> 7157
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 69<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 47<F1>
<NUMBER-OF-SHARES-REDEEMED> 18<F1>
<SHARES-REINVESTED> 5<F1>
<NET-CHANGE-IN-ASSETS> 12140
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 596
<GROSS-ADVISORY-FEES> 562
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 911
<AVERAGE-NET-ASSETS> 3453<F1>
<PER-SHARE-NAV-BEGIN> 9.930<F1>
<PER-SHARE-NII> .200<F1>
<PER-SHARE-GAIN-APPREC> .14<F1>
<PER-SHARE-DIVIDEND> .20<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.070<F1>
<EXPENSE-RATIO> 1.55<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 261
<NAME> THE ONE GROUP GULF SOUTH GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 81453
<INVESTMENTS-AT-VALUE> 100215
<RECEIVABLES> 63
<ASSETS-OTHER> 17
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 100295
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 92
<TOTAL-LIABILITIES> 92
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 81128
<SHARES-COMMON-STOCK> 7980<F1>
<SHARES-COMMON-PRIOR> 7757<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 129
<ACCUMULATED-NET-GAINS> 442
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 18762
<NET-ASSETS> 100203
<DIVIDEND-INCOME> 273
<INTEREST-INCOME> 106
<OTHER-INCOME> 33
<EXPENSES-NET> 541
<NET-INVESTMENT-INCOME> (129)
<REALIZED-GAINS-CURRENT> 6229
<APPREC-INCREASE-CURRENT> (3378)
<NET-CHANGE-FROM-OPS> 2722
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 8358<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 282<F1>
<NUMBER-OF-SHARES-REDEEMED> 880<F1>
<SHARES-REINVESTED> 821<F1>
<NET-CHANGE-IN-ASSETS> (4069)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4708
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 374
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 608
<AVERAGE-NET-ASSETS> 79632<F1>
<PER-SHARE-NAV-BEGIN> 10.750<F1>
<PER-SHARE-NII> (.010)<F1>
<PER-SHARE-GAIN-APPREC> .240<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> 1.100<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.880<F1>
<EXPENSE-RATIO> 1.000<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 262
<NAME> THE ONE GROUP GULF SOUTH GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 81453
<INVESTMENTS-AT-VALUE> 100215
<RECEIVABLES> 63
<ASSETS-OTHER> 17
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 100295
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 92
<TOTAL-LIABILITIES> 92
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 81128
<SHARES-COMMON-STOCK> 1814<F1>
<SHARES-COMMON-PRIOR> 1710<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 129
<ACCUMULATED-NET-GAINS> 442
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 18762
<NET-ASSETS> 100203
<DIVIDEND-INCOME> 273
<INTEREST-INCOME> 106
<OTHER-INCOME> 33
<EXPENSES-NET> 541
<NET-INVESTMENT-INCOME> (129)
<REALIZED-GAINS-CURRENT> 6229
<APPREC-INCREASE-CURRENT> (3378)
<NET-CHANGE-FROM-OPS> 2722
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 1835<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 159<F1>
<NUMBER-OF-SHARES-REDEEMED> 245<F1>
<SHARES-REINVESTED> 190<F1>
<NET-CHANGE-IN-ASSETS> (4069)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4708
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 374
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 608
<AVERAGE-NET-ASSETS> 17703<F1>
<PER-SHARE-NAV-BEGIN> 10.730<F1>
<PER-SHARE-NII> (.020)<F1>
<PER-SHARE-GAIN-APPREC> .290<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> 1.100<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.900<F1>
<EXPENSE-RATIO> 1.250<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 263
<NAME> THE ONE GROUP GULF SOUTH GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 81453
<INVESTMENTS-AT-VALUE> 100215
<RECEIVABLES> 63
<ASSETS-OTHER> 17
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 100295
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 92
<TOTAL-LIABILITIES> 92
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 81128
<SHARES-COMMON-STOCK> 345<F1>
<SHARES-COMMON-PRIOR> 237<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 129
<ACCUMULATED-NET-GAINS> 442
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 18762
<NET-ASSETS> 100203
<DIVIDEND-INCOME> 273
<INTEREST-INCOME> 106
<OTHER-INCOME> 33
<EXPENSES-NET> 541
<NET-INVESTMENT-INCOME> (129)
<REALIZED-GAINS-CURRENT> 6229
<APPREC-INCREASE-CURRENT> (3378)
<NET-CHANGE-FROM-OPS> 2722
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 302<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 93<F1>
<NUMBER-OF-SHARES-REDEEMED> 16<F1>
<SHARES-REINVESTED> 31<F1>
<NET-CHANGE-IN-ASSETS> (4069)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4708
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 374
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 608
<AVERAGE-NET-ASSETS> 2946<F1>
<PER-SHARE-NAV-BEGIN> 10.720<F1>
<PER-SHARE-NII> (.050)<F1>
<PER-SHARE-GAIN-APPREC> .270<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> 1.100<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.840<F1>
<EXPENSE-RATIO> 2.000<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 271
<NAME> THE ONE GROUP VALUE GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 250906
<INVESTMENTS-AT-VALUE> 284984
<RECEIVABLES> 569
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 285566
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 881
<TOTAL-LIABILITIES> 881
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 245933
<SHARES-COMMON-STOCK> 24755<F1>
<SHARES-COMMON-PRIOR> 18398<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 10
<ACCUMULATED-NET-GAINS> 4965
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33797
<NET-ASSETS> 284685
<DIVIDEND-INCOME> 2287
<INTEREST-INCOME> 441
<OTHER-INCOME> 24
<EXPENSES-NET> 1301
<NET-INVESTMENT-INCOME> 1451
<REALIZED-GAINS-CURRENT> 15897
<APPREC-INCREASE-CURRENT> 8361
<NET-CHANGE-FROM-OPS> 25709
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1269<F1>
<DISTRIBUTIONS-OF-GAINS> 36353<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 4994<F1>
<NUMBER-OF-SHARES-REDEEMED> 1986<F1>
<SHARES-REINVESTED> 3349<F1>
<NET-CHANGE-IN-ASSETS> 52816
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 32307
<OVERDISTRIB-NII-PRIOR> 12
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 941
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1397
<AVERAGE-NET-ASSETS> 209919<F1>
<PER-SHARE-NAV-BEGIN> 10.390<F1>
<PER-SHARE-NII> .060<F1>
<PER-SHARE-GAIN-APPREC> 1.010<F1>
<PER-SHARE-DIVIDEND> .060<F1>
<PER-SHARE-DISTRIBUTIONS> 1.730<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.670<F1>
<EXPENSE-RATIO> .960<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 272
<NAME> THE ONE GROUP VALUE GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 250906
<INVESTMENTS-AT-VALUE> 284984
<RECEIVABLES> 569
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 285566
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 881
<TOTAL-LIABILITIES> 881
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 245933
<SHARES-COMMON-STOCK> 4017<F1>
<SHARES-COMMON-PRIOR> 3462<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 10
<ACCUMULATED-NET-GAINS> 4965
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33797
<NET-ASSETS> 284685
<DIVIDEND-INCOME> 2287
<INTEREST-INCOME> 441
<OTHER-INCOME> 24
<EXPENSES-NET> 1301
<NET-INVESTMENT-INCOME> 1451
<REALIZED-GAINS-CURRENT> 15897
<APPREC-INCREASE-CURRENT> 8361
<NET-CHANGE-FROM-OPS> 25709
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 173<F1>
<DISTRIBUTIONS-OF-GAINS> 5894<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 362<F1>
<NUMBER-OF-SHARES-REDEEMED> 408<F1>
<SHARES-REINVESTED> 601<F1>
<NET-CHANGE-IN-ASSETS> 52816
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 32307
<OVERDISTRIB-NII-PRIOR> 12
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 941
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1397
<AVERAGE-NET-ASSETS> 36540<F1>
<PER-SHARE-NAV-BEGIN> 10.390<F1>
<PER-SHARE-NII> .050<F1>
<PER-SHARE-GAIN-APPREC> 1.000<F1>
<PER-SHARE-DIVIDEND> .050<F1>
<PER-SHARE-DISTRIBUTIONS> 1.730<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.660<F1>
<EXPENSE-RATIO> 1.210<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS A SHARES
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 273
<NAME> THE ONE GROUP VALUE GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 250906
<INVESTMENTS-AT-VALUE> 284984
<RECEIVABLES> 569
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 285566
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 881
<TOTAL-LIABILITIES> 881
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 245933
<SHARES-COMMON-STOCK> 688<F1>
<SHARES-COMMON-PRIOR> 450<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 10
<ACCUMULATED-NET-GAINS> 4965
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33797
<NET-ASSETS> 284685
<DIVIDEND-INCOME> 2287
<INTEREST-INCOME> 441
<OTHER-INCOME> 24
<EXPENSES-NET> 1301
<NET-INVESTMENT-INCOME> 1451
<REALIZED-GAINS-CURRENT> 15897
<APPREC-INCREASE-CURRENT> 8361
<NET-CHANGE-FROM-OPS> 25709
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7<F1>
<DISTRIBUTIONS-OF-GAINS> 992<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 182<F1>
<NUMBER-OF-SHARES-REDEEMED> 47<F1>
<SHARES-REINVESTED> 103<F1>
<NET-CHANGE-IN-ASSETS> 52816
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 32307
<OVERDISTRIB-NII-PRIOR> 12
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 941
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1397
<AVERAGE-NET-ASSETS> 5669<F1>
<PER-SHARE-NAV-BEGIN> 10.390<F1>
<PER-SHARE-NII> .010<F1>
<PER-SHARE-GAIN-APPREC> .990<F1>
<PER-SHARE-DIVIDEND> .010<F1>
<PER-SHARE-DISTRIBUTIONS> 1.730<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.650<F1>
<EXPENSE-RATIO> 2.090<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>CLASS B SHARES
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 351
<NAME> THE ONE GROUP INVESTOR GROWTH FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 17336
<INVESTMENTS-AT-VALUE> 17239
<RECEIVABLES> 1196
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18435
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1198
<TOTAL-LIABILITIES> 1198
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17334
<SHARES-COMMON-STOCK> 1734<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (97)
<NET-ASSETS> 17237
<DIVIDEND-INCOME> 23
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2
<NET-INVESTMENT-INCOME> 21
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (97)
<NET-CHANGE-FROM-OPS> (76)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 21<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1736<F1>
<NUMBER-OF-SHARES-REDEEMED> 2<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 17237<F1>
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 14883<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.01<F1>
<PER-SHARE-GAIN-APPREC> (0.06)<F1>
<PER-SHARE-DIVIDEND> 0.01<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0.00<F1>
<PER-SHARE-NAV-END> 9.94<F1>
<EXPENSE-RATIO> 0.20<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 352
<NAME> THE ONE GROUP INVESTOR GROWTH FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 17336
<INVESTMENTS-AT-VALUE> 17239
<RECEIVABLES> 1196
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18435
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1198
<TOTAL-LIABILITIES> 1198
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17334
<SHARES-COMMON-STOCK> 0<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (97)
<NET-ASSETS> 17237
<DIVIDEND-INCOME> 23
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2
<NET-INVESTMENT-INCOME> 21
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (97)
<NET-CHANGE-FROM-OPS> (76)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 0<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 17237
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 0<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.01<F1>
<PER-SHARE-GAIN-APPREC> (0.05)<F1>
<PER-SHARE-DIVIDEND> 0.00<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0.00<F1>
<PER-SHARE-NAV-END> 9.96<F1>
<EXPENSE-RATIO> 0.45<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 353
<NAME> THE ONE GROUP INVESTOR GROWTH FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 17336
<INVESTMENTS-AT-VALUE> 17239
<RECEIVABLES> 1196
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18435
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1198
<TOTAL-LIABILITIES> 1198
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17334
<SHARES-COMMON-STOCK> 0<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (97)
<NET-ASSETS> 17237
<DIVIDEND-INCOME> 23
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2
<NET-INVESTMENT-INCOME> 21
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (97)
<NET-CHANGE-FROM-OPS> (76)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 0<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 17237
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 0<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.01<F1>
<PER-SHARE-GAIN-APPREC> (0.05)<F1>
<PER-SHARE-DIVIDEND> 0.00<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0.00<F1>
<PER-SHARE-NAV-END> 9.96<F1>
<EXPENSE-RATIO> 1.20<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 361
<NAME> THE ONE GROUP INVESTOR GROWTH & INCOME FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 19112
<INVESTMENTS-AT-VALUE> 19056
<RECEIVABLES> 62
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19118
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62
<TOTAL-LIABILITIES> 62
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19119
<SHARES-COMMON-STOCK> 1917<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 7
<ACCUM-APPREC-OR-DEPREC> (56)
<NET-ASSETS> 19056
<DIVIDEND-INCOME> 35
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2
<NET-INVESTMENT-INCOME> 33
<REALIZED-GAINS-CURRENT> (7)
<APPREC-INCREASE-CURRENT> (56)
<NET-CHANGE-FROM-OPS> (30)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 33<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1958<F1>
<NUMBER-OF-SHARES-REDEEMED> 41<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 19056
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 16848<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.02<F1>
<PER-SHARE-GAIN-APPREC> (0.06)<F1>
<PER-SHARE-DIVIDEND> 0.02<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.94<F1>
<EXPENSE-RATIO> 0.16<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 362
<NAME> THE ONE GROUP INVESTOR GROWTH & INCOME FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 19112
<INVESTMENTS-AT-VALUE> 19056
<RECEIVABLES> 62
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19118
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62
<TOTAL-LIABILITIES> 62
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19119
<SHARES-COMMON-STOCK> 0<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 7
<ACCUM-APPREC-OR-DEPREC> (56)
<NET-ASSETS> 19056
<DIVIDEND-INCOME> 35
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2
<NET-INVESTMENT-INCOME> 33
<REALIZED-GAINS-CURRENT> (7)
<APPREC-INCREASE-CURRENT> (56)
<NET-CHANGE-FROM-OPS> (30)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 0<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 19056
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 0<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.01<F1>
<PER-SHARE-GAIN-APPREC> (0.07)<F1>
<PER-SHARE-DIVIDEND> 0.00<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.94<F1>
<EXPENSE-RATIO> 0.41<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 363
<NAME> THE ONE GROUP INVESTOR GROWTH & INCOME FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 19112
<INVESTMENTS-AT-VALUE> 19056
<RECEIVABLES> 62
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19118
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62
<TOTAL-LIABILITIES> 62
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19119
<SHARES-COMMON-STOCK> 0<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 7
<ACCUM-APPREC-OR-DEPREC> (56)
<NET-ASSETS> 19056
<DIVIDEND-INCOME> 35
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2
<NET-INVESTMENT-INCOME> 33
<REALIZED-GAINS-CURRENT> (7)
<APPREC-INCREASE-CURRENT> (56)
<NET-CHANGE-FROM-OPS> (30)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 0<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 19056
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 0<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.01<F1>
<PER-SHARE-GAIN-APPREC> (0.07)<F1>
<PER-SHARE-DIVIDEND> 0.00<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.94<F1>
<EXPENSE-RATIO> 1.16<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUTAL FUNDS
<SERIES>
<NUMBER> 391
<NAME> THE ONE GROUP INVESTOR CONSERVATIVE GROWTH FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 9203
<INVESTMENTS-AT-VALUE> 9140
<RECEIVABLES> 29
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9169
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28
<TOTAL-LIABILITIES> 28
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9204
<SHARES-COMMON-STOCK> 920<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (63)
<NET-ASSETS> 9141
<DIVIDEND-INCOME> 27
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> 26
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (63)
<NET-CHANGE-FROM-OPS> (37)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 26<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 923<F1>
<NUMBER-OF-SHARES-REDEEMED> 3<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 9141
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1
<AVERAGE-NET-ASSETS> 8549<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.03<F1>
<PER-SHARE-GAIN-APPREC> (0.06)<F1>
<PER-SHARE-DIVIDEND> 0.03<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.94<F1>
<EXPENSE-RATIO> 0.16<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUTAL FUNDS
<SERIES>
<NUMBER> 392
<NAME> THE ONE GROUP INVESTOR CONSERVATIVE GROWTH FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 9203
<INVESTMENTS-AT-VALUE> 9140
<RECEIVABLES> 29
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9169
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28
<TOTAL-LIABILITIES> 28
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9204
<SHARES-COMMON-STOCK> 0<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (63)
<NET-ASSETS> 9141
<DIVIDEND-INCOME> 27
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> 26
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<APPREC-INCREASE-CURRENT> (63)
<NET-CHANGE-FROM-OPS> (37)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
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<NUMBER-OF-SHARES-SOLD> 0<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 9141
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1
<AVERAGE-NET-ASSETS> 0<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.00<F1>
<PER-SHARE-GAIN-APPREC> (0.07)<F1>
<PER-SHARE-DIVIDEND> 0.00<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.93<F1>
<EXPENSE-RATIO> 0.41<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUTAL FUNDS
<SERIES>
<NUMBER> 393
<NAME> THE ONE GROUP INVESTOR CONSERVATIVE GROWTH FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 9203
<INVESTMENTS-AT-VALUE> 9140
<RECEIVABLES> 29
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9169
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28
<TOTAL-LIABILITIES> 28
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9204
<SHARES-COMMON-STOCK> 0<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (63)
<NET-ASSETS> 9141
<DIVIDEND-INCOME> 27
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> 26
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (63)
<NET-CHANGE-FROM-OPS> (37)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 0<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 9141
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1
<AVERAGE-NET-ASSETS> 0<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.00<F1>
<PER-SHARE-GAIN-APPREC> (0.07)<F1>
<PER-SHARE-DIVIDEND> 0.00<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.93<F1>
<EXPENSE-RATIO> 1.16<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUTAL FUNDS
<SERIES>
<NUMBER> 401
<NAME> THE ONE GROUP INVESTOR BALANCED FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 43465
<INVESTMENTS-AT-VALUE> 43219
<RECEIVABLES> 6412
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49631
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6411
<TOTAL-LIABILITIES> 6411
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43466
<SHARES-COMMON-STOCK> 4350<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (246)
<NET-ASSETS> 43220
<DIVIDEND-INCOME> 92
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 3
<NET-INVESTMENT-INCOME> 89
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (246)
<NET-CHANGE-FROM-OPS> (157)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 89<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 4373<F1>
<NUMBER-OF-SHARES-REDEEMED> 23<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 43220
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3
<AVERAGE-NET-ASSETS> 34467<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.02<F1>
<PER-SHARE-GAIN-APPREC> (0.06)<F1>
<PER-SHARE-DIVIDEND> 0.02<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.94<F1>
<EXPENSE-RATIO> 0.14<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUTAL FUNDS
<SERIES>
<NUMBER> 402
<NAME> THE ONE GROUP INVESTOR BALANCED FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 43465
<INVESTMENTS-AT-VALUE> 43219
<RECEIVABLES> 6412
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49631
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6411
<TOTAL-LIABILITIES> 6411
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43466
<SHARES-COMMON-STOCK> 0<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (246)
<NET-ASSETS> 43220
<DIVIDEND-INCOME> 92
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 3
<NET-INVESTMENT-INCOME> 89
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (246)
<NET-CHANGE-FROM-OPS> (157)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 0<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 43220
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3
<AVERAGE-NET-ASSETS> 0<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.01<F1>
<PER-SHARE-GAIN-APPREC> (0.06)<F1>
<PER-SHARE-DIVIDEND> 0.00<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.95<F1>
<EXPENSE-RATIO> 0.39<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUTAL FUNDS
<SERIES>
<NUMBER> 403
<NAME> THE ONE GROUP INVESTOR BALANCED FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 43465
<INVESTMENTS-AT-VALUE> 43219
<RECEIVABLES> 6412
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49631
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6411
<TOTAL-LIABILITIES> 6411
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43466
<SHARES-COMMON-STOCK> 0<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (246)
<NET-ASSETS> 43220
<DIVIDEND-INCOME> 92
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 3
<NET-INVESTMENT-INCOME> 89
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (246)
<NET-CHANGE-FROM-OPS> (157)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 0<F1>
<NUMBER-OF-SHARES-REDEEMED> 0<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> 43220
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3
<AVERAGE-NET-ASSETS> 0<F1>
<PER-SHARE-NAV-BEGIN> 10.00<F1>
<PER-SHARE-NII> 0.01<F1>
<PER-SHARE-GAIN-APPREC> (0.06)<F1>
<PER-SHARE-DIVIDEND> 0.00<F1>
<PER-SHARE-DISTRIBUTIONS> 0.00<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.95<F1>
<EXPENSE-RATIO> 1.14<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B
</TABLE>
