<PAGE> 1
The One(R)
Investor
Program(SM)
Annual Report
For the Period ended June 30, 1997
The One Group Investor Growth Fund
The One Group Investor Growth & Income Fund
The One Group Investor Balanced Fund
The One Group Investor Conservative Growth Fund
[THE ONE GROUP FAMILY OF MUTUAL FUNDS LOGO]
<PAGE> 2
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Important Customer Information. Investment Products:
* are not deposits or obligations of or guaranteed by,
BANC ONE CORPORATION or any of its affiliates,
* are not insured by the FDIC, and
----
* are subject to investment risks, including possible FDIC
loss of the principal amount invested. LOGO
----
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Table of Contents
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THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
Report From Your Investment Advisor........................................ 2
Portfolio Performance Review............................................... 4
Schedules of Portfolio Investments......................................... 10
Statements of Assets and Liabilities....................................... 14
Statements of Operations................................................... 15
Statements of Changes in Net Assets........................................ 16
Notes to Financial Statements.............................................. 17
Financial Highlights....................................................... 22
Report of Independent Accountants.......................................... 34
1
<PAGE> 4
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Report From Your Investment Advisor
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THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
We are pleased to present this annual report for The One Group Family of Mutual
Funds. On the following pages you will find an overview of the financial markets
for the period from July 1, 1996 to June 30, 1997 and your fund's performance
for the period from commencment of operations through June 30, 1997.
DEAR VALUED SHAREHOLDERS:
Thank you for continuing to place your confidence in The One Group Family of
Mutual Funds. In the funds' semiannual report, we advised you to stay focused on
your financial goals and not to let short-term volatility interfere with your
long-term investment strategy. At that time, stock returns were abnormally
strong, and bond returns were unusually weak.
Since then, the bond market has recovered nicely, and the stock market continues
to soar--even after falling nearly 10% between March 12 and April 14. In fact,
by early May, the stock market had regained what it had lost and was well on its
way to new heights. Looking forward, investors should be prepared for continued
volatility as the market reacts to earnings reports, moves by the Federal
Reserve, and the continuous stream of economic data coming from Washington.
REINFORCING OUR PHILOSOPHY
Once again, I want to reiterate our philosophy that it's time, not timing, that
best serves investors. By maintaining a long-term perspective and riding out the
inevitable volatility in the markets, your investments may realize their full
potential. For those who stay on track with their investment plans, short-term
performance fluctuations may not matter in the long run.
The financial media will be filled with opinions about the expected short-term
course of the markets, and these opinions will swing between euphoria and gloom.
But the fundamentals supporting the financial markets--a growing economy, rising
corporate profits, low inflation--remain favorable, and long-term investors
should be rewarded by staying the course.
INVESTING MADE EASY
Along with maintaining a long-term perspective, we believe that investment
success is dependent on two other strategies:
- - ASSET ALLOCATION, or spreading your money among stocks, bonds and money market
investments according to your goals, time frame and risk tolerance in order
create a well-rounded investment plan.
- - DIVERSIFICATION, or investing in a variety of securities within each asset
class to enhance your return potential and limit your overall risk profile.
Over the past year, The One Group made it easier for you to take advantage of
these strategies by introducing THE ONE GROUP INVESTOR FUNDS. These funds make
it simple and convenient for you to enjoy asset allocation and diversification
from one investment (versus structuring an asset allocation portfolio by
purchasing multiple funds). Each Investor fund seeks a particular investment
goal and, accordingly, invests in an assortment of funds from The One Group
family. You simply choose the Investor Fund suited to your goals.
INFORMATION ON DEMAND
Along with making investing easy, we want to make it simple for you to obtain
the information you need when you want it. Now, in addition to offering fund
prices, fund performance information and fund manager biographies, The One Group
web site (WWW.ONEGROUP.COM) provides on-line fund prospectuses.
In addition, the site offers an interactive portfolio-building tool that you can
use to design a customized portfolio. Future plans for the site include
interactive retirement and college planning calculators as well as account
access, which will enable you to obtain information on your account and place
orders to buy or exchange shares between funds.
LOOK FOR GUIDANCE
Perhaps one of the simplest ways to make investing easy is to seek guidance from
an experienced investment advisor. Achieving long-term investment success
depends on your investment plan and how your investment strategies are put to
work. It's the full-time responsibility of a professional investment advisor to
monitor the investment markets and evaluate the assortment of investment
opportunities in today's marketplace. Your investment advisor will help you
develop an effective investment plan and then implement and monitor that plan
for you.
2
<PAGE> 5
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Report From Your Investment Advisor, continued
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THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
Once again, I appreciate the trust and confidence that you have placed in The
One Group Family of Mutual Funds. All of the professionals at The One Group
value your ongoing support and strive to help you achieve your financial goals
with investment solutions that are designed to meet your individual needs.
Sincerely,
/s/ DAVID J. KUNDERT
- --------------------
David J. Kundert
President and CEO,
Banc One Investment Advisors Corporation,
Investment Advisor to The One Group
David J. Kundert photo
For a prospectus with more complete information on The One Group Investor Funds,
including management fees and expenses, please contact The One Group at
1-800-480-4111. Please read the prospectus carefully before investing.
3
<PAGE> 6
The One Group Investor Funds
Portfolio Performance Review
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THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE
For the period from December 10, 1996 (the funds' inception date), to June 30,
1997, The One Group Investor Funds posted the following total returns for their
respective Fiduciary share class:
- - The One Group Investor Growth Fund, 13.50%.
- - The One Group Investor Growth and Income Fund, 10.87%.
- - The One Group Investor Balanced Fund, 8.48%.
- - The One Group Investor Conservative Growth Fund, 6.00%.
For information on other share classes and performance comparisons to indexes,
please see pages 6-9.
BOND MARKET OVERVIEW
Thanks to a low inflationary environment, stability returned to the bond market
during the first half of 1997. A single, 0.25% Federal Reserve interest rate
hike on March 25, 1997, helped push rates up slightly for the period.
Nevertheless, rates moved in a fairly tight range during the period, which left
little room for price changes on bonds. As such, generating a strong yield,
rather than realizing price appreciation, was the key to good returns.
Our efforts within our fixed-income funds centered on maintaining a low-risk
profile and selecting the sectors with the greatest yield advantage. Because our
bond investments maintained neutral, or average, durations, the fixed-income
risk profiles of our funds remained relatively low. (Duration is a measure of a
bond fund's price sensitivity to interest rate changes. The higher the duration,
the greater the risk of price changes due to interest rate shifts.) Furthermore,
by focusing on investments in the mortgage-backed and corporate sectors, our
funds captured the yield advantage that these securities offered compared to
Treasury securities.
STOCK MARKET OVERVIEW
The stock market's performance was extremely strong during the period.
Exceptional earnings growth, low inflation and a good economy continued to drive
the market.
Looking back to earlier in the period, though, it appeared that the stock
market's extraordinary, record-breaking run was coming to an end. This seemed
more evident when the Federal Reserve raised interest rates in late March,
sending the stock market (as measured by the Dow Jones Industrial Average)
spiraling downward. Within a month, stocks had lost about 10% of their value.
For shareholders who refused to let short-term returns distract from their
long-term asset allocation strategy, this activity was merely a temporary
setback. By mid-May, the stock market had regained its losses, and it hasn't
looked back since then, demonstrating the importance of time, not timing, in
dealing with market volatility.
For more than three years, large-capitalization growth stocks have led the stock
market surge. These companies have enjoyed the strongest earnings growth and
continue to show better-than-expected profitability due primarily to their
multinational exposure. However, late in the second quarter of 1997, stocks of
small and mid-size companies began closing in on their larger counterparts,
offering returns that were more in line with those of larger stocks.
ASSET ALLOCATION STRATEGY
Each of the Investor Funds maintained a relatively strong exposure to equity
funds (depending on each fund's overall investment objective and allocation
parameters) during the period. In addition, each Fund's allocation toward the
bond market was slightly greater than what we consider to be average exposure.
We implemented this strategy based on our ongoing research efforts, which showed
that stocks, on a valuation basis, were more expensive than bonds. We felt that
this presented some additional risk for stocks. At the same time, though,
earnings momentum remained strong. We therefore made only a slight shift toward
fixed-income securities in order to gain some downside protection from the high
valuation levels in the stock market. The average asset allocations during the
period were as follows:
- - The One Group Investor Growth Fund: 86% equities; 13% fixed-income securities;
1% cash and equivalents
- - The One Group Investor Growth and Income Fund: 67% equities; 32% fixed-income
securities; 1% cash and equivalents
4
<PAGE> 7
The One Group Investor Funds
Portfolio Performance Review, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
- - The One Group Investor Balanced Fund: 47% equities; 52% fixed-income
securities; 1% cash and equivalents
- - The One Group Investor Conservative Growth Fund: 27% equities; 71%
fixed-income securities; 2% cash and equivalents
As it turned out, stock values continued to soar, with all of the variables that
influence stock market performance--good economic growth, low inflation, low
interest rates--falling perfectly into place during the period. The
low-inflation, stable-interest-rate environment helped produce respectable
performance in the bond market, but bond returns paled in comparison to stock
returns.
With good equity exposure, each of the Investor Funds participated in the
ongoing stock market rally and posted attractive overall returns.
All of the Investor Funds maintained diversified equity portfolios, with
exposure to our four core equity styles--large-capitalization growth,
large-capitalization value, medium-capitalization growth and
medium-capitalization value. This ongoing approach helps limit risk while
offering potential return advantages from different types of stocks.
On the fixed-income side, the Funds primarily were invested in funds that held a
mix of mortgage-backed securities and corporate bonds, which offered yield
advantages over Treasury securities. We expect to maintain this focus over the
long term, as our research indicates that mixing corporate and mortgage-backed
securities appears to offer the best return potential over time.
While we do manage the Funds' exposure to changes in interest rates, we also
purposely limit the degree to which we alter duration. These risk-controlling
guidelines help protect us from making ill-timed "bets" on the magnitude and
direction of possible interest rate movements. Instead, we try to position the
Funds' bond investments to earn a good rate of interest income with only mild
price fluctuations over time.
OUTLOOK
Looking ahead, we believe that fixed-income and equity securities should
continue to benefit from a good economy, low inflation and low interest rates.
While corporate earnings may not be as strong as they have been over the last
few years, we think they should continue to grow, which should lend support to
the stock market. We believe that interest rates should remain fairly stable,
and because interest rate movements influence bond prices (when rates go up,
bond prices generally go down, and vice versa), we believe there will be little
opportunity for price volatility to influence fixed-income returns. As such,
yield should comprise the majority of the total return on fixed-income
investments.
Given the extraordinary equity gains of the last six months, it is not realistic
to expect this pace to continue. Going forward, we think that the equity market
will be a bit more selective, which would make individual security selection
more important. The favoritism the market has shown toward large-capitalization
growth stocks may be fading as investors expand into other areas of the market.
The Investor Funds should benefit from this trend because of their exposure to a
diverse mix of investments from different styles.
We currently don't anticipate making any significant changes to our asset
allocation strategies. We will continue to monitor the economic climate for
signs of inflationary pressures and the valuation levels in the financial
markets. In addition, we constantly review the three asset classes--equities,
fixed-income securities and cash--to determine which mix looks the most
attractive on a risk-adjusted basis.
LOGO
Richard R. Jandrain III
Senior Managing Director of Equity Securities
Director, Asset Allocation Committee
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
5
<PAGE> 8
The One Group Investor Growth Fund
Portfolio Performance Review, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Fiduciary 13.50%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
Measurement Period ---------------------------
(Fiscal Year Covered) S&P 1500 Lipper Mix Fiduciary
--------------------- -------- ---------- ---------
<S> <C> <C> <C>
12/96 $10,000 $10,000 $10,000
6/97 11,945 10,680 11,350
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Class A 12.84%
Class A* 7.76%
</TABLE>
* Reflects 4.50% Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
Measurement Period ---------------------------
(Fiscal Year Covered) S&P 1500 Lipper Mix Class A* Class A
--------------------- -------- ---------- -------- -------
<S> <C> <C> <C> <C>
12/96 $10,000 $10,000 $ 9,550 $10,000
6/97 11,945 10,680 10,776 11,284
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Class B 13.88%
Class B** 8.88%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
Measurement Period ---------------------------
(Fiscal Year Covered) S&P 1500 Lipper Mix Class B** Class B
--------------------- -------- ---------- --------- -------
<S> <C> <C> <C> <C>
12/96 $10,000 $10,000 $10,000 $10,000
6/97 11,945 10,680 10,888 11,388
</TABLE>
The performance data quoted represents past performance and is not an indication
of future results. Investment return and NAV will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than the original
cost. The total return set forth may reflect the waiver of a portion of the
fund's fees for certain periods since the inception date, without the waiver,
total return would have been lower.
The performance of the Investor Growth Fund is measured against the S&P 1500
Index, an unmanaged index generally representative of the performance of large
and small companies in the US stock market. Investors are unable to purchase the
index directly, although they can invest in the underlying securities. The
performance of the index does not reflect the deduction of expenses associated
with a mutual fund, such as investment management. By contrast, the performance
of the fund reflects the deduction of these value-added services as well as the
deduction of sales charges on Class A Shares and applicable contingent deferred
sales charges on Class B Shares.
The Lipper Mix for all the classes consists of the average monthly returns of
the Lipper General Equity Funds Universe (75%), the Lipper International Funds
Universe (10%), and the Lipper Intermediate US Government Bond Funds Universe
(15%). The Lipper Universes consist of the equally weighted average monthly
return of all the funds within the category.
6
<PAGE> 9
The One Group Investor Growth & Income Fund
Portfolio Performance Review, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Fiduciary 10.87%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
Measurement Period ---------------------------
(Fiscal Year Covered) S&P 1500 Lipper Mix Fiduciary
--------------------- -------- ---------- ---------
<S> <C> <C> <C>
12/96 $10,000 $10,000 $10,000
6/97 11,945 10,535 11,087
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Class A 11.50%
Class A* 6.48%
</TABLE>
* Reflects 4.50% Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
Measurement Period ---------------------------
(Fiscal Year Covered) S&P 1500 Lipper Mix Class A* Class A
--------------------- -------- ---------- -------- -------
<S> <C> <C> <C> <C>
12/96 $10,000 $10,000 $ 9,550 $10,000
6/97 11,945 10,535 10,648 11,150
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Class B 11.02%
Class B** 6.02%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
Measurement Period ---------------------------
(Fiscal Year Covered) S&P 1500 Lipper Mix Class B** Class B
--------------------- -------- ---------- --------- -------
<S> <C> <C> <C> <C>
12/96 $10,000 $10,000 $10,000 $10,000
6/97 11,945 10,535 10,602 11,102
</TABLE>
The performance data quoted represents past performance and is not an indication
of future results. Investment return and NAV will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than the original
cost. The total return set forth may reflect the waiver of a portion of the
fund's fees for certain periods since the inception date, without the waiver,
total return would have been lower.
The performance of the Investor Growth & Income Fund is measured against the S&P
1500 Index, an unmanaged index generally representative of the performance of
large and small companies in the US stock market. Investors are unable to
purchase the index directly, although they can invest in the underlying
securities. The performance of the index does not reflect the deduction of
expenses associated with a mutual fund, such as investment management. By
contrast, the performance of the fund reflects the deduction of these
value-added services as well as the deduction of sales charges on Class A Shares
and applicable contingent deferred sales charges on Class B Shares.
The Lipper Mix for all the classes consists of the average monthly returns of
the Lipper General Equity Funds Universe (60%), the Lipper International Funds
Universe (5%), and the Lipper Intermediate US Government Bond Funds Universe
(35%). The Lipper Universes consist of the equally weighted average monthly
return of all the funds within the category.
7
<PAGE> 10
The One Group Investor Balanced Fund
Portfolio Performance Review, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Fiduciary 8.48%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
Lehman Brothers
Measurement Period Intermediate
(Fiscal Year Covered) Aggregate Bond Lipper Mix Fiduciary
--------------------- -------------- ---------- ---------
<S> <C> <C> <C>
12/96 $10,000 $10,000 $10,000
6/97 10,323 10,390 10,848
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Class A 8.41%
Class A* 3.53%
</TABLE>
* Reflects 4.50% Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
Lehman Brothers
Measurement Period Intermediate
(Fiscal Year Covered) Bond Lipper Mix Class A* Class A
--------------------- ---- ---------- -------- -------
<S> <C> <C> <C> <C>
12/96 $10,000 $10,000 $ 9,550 $10,000
6/97 10,323 10,390 10,353 10,841
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Class B 8.22%
Class B** 3.22%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
Lehman Brothers
Measurement Period Intermediate
(Fiscal Year Covered) Bond Lipper Mix Class B** Class B
--------------------- ---- ---------- --------- -------
<S> <C> <C> <C> <C>
12/96 $10,000 $10,000 $10,000 $10,000
6/97 10,333 10,390 10,312 10,822
</TABLE>
The performance data quoted represents past performance and is not an indication
of future results. Investment return and NAV will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than the original
cost. The total return set forth may reflect the waiver of a portion of the
fund's fees for certain periods since the inception date, without the waiver,
total return would have been lower.
The performance of the Investor Balanced Fund is measured against the Lehman
Brothers Aggregate Bond Index, an unmanaged index comprised of US Government,
mortgage, corporate and asset-backed securities with maturities of one to ten
years. Investors are unable to purchase the index directly, although they can
invest in the underlying securities. The performance of the index does not
reflect the deduction of expenses associated with a mutual fund, such as
investment management. By contrast, the performance of the fund reflects the
deduction of these value-added services as well as the deduction of sales
charges on Class A Shares and applicable contingent deferred sales charges on
Class B Shares.
The Lipper Mix for all the classes consists of the average monthly returns of
the Lipper General Equity Funds Universe (40%), the Lipper International Funds
Universe (5%), and the Lipper Intermediate US Government Bond Funds Universe
(55%). The Lipper Universes consist of the equally weighted average monthly
return of all the funds within the category.
8
<PAGE> 11
The One Group Investor Conservative Growth Fund
Portfolio Performance Review, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Fiduciary 6.00%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
Lehman Brothers
Measurement Period Intermediate
(Fiscal Year Covered) Aggregate Bond Lipper Mix Fiduciary
--------------------- -------------- ---------- ---------
<S> <C> <C> <C>
12/96 $10,000 $10,000 $10,000
6/97 10,323 10,243 10.600
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Class A 5.46%
Class A* 0.72%
</TABLE>
* Reflects 4.50% Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
Lehman Brothers
Measurement Period Intermediate
(Fiscal Year Covered) Bond Lipper Mix Class A* Class A
--------------------- ---- ---------- -------- -------
<S> <C> <C> <C> <C>
12/96 $10,000 $10,000 $ 9,550 $10,000
6/97 10,323 10,243 10,072 10,546
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
12/10/96
--------
<S> <C>
Class B 5.30%
Class B** 0.30%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
LEHMAN BROTHERS
MEASUREMENT PERIOD INTERMEDIATE
(FISCAL YEAR COVERED) BOND LIPPER MIX CLASS B** CLASS B
--------------------- ---- ---------- --------- -------
<S> <C> <C> <C> <C>
12/96 $10,000 $10,000 $10,000 $10,000
6/97 10,323 10,243 10,030 10,530
</TABLE>
The performance data quoted represents past performance and is not an indication
of future results. Investment return and NAV will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than the original
cost. The total return set forth may reflect the waiver of a portion of the
fund's fees for certain periods since the inception date, without the waiver,
total return would have been lower.
The performance of the Investor Conservative Growth Fund is measured against the
Lehman Brothers Intermediate Aggregate Bond Index, an unmanaged index comprised
of US Government, mortgage, corporate and asset-backed securities with
maturities of one to ten years. Investors are unable to purchase the index
directly, although they can invest in the underlying securities. The performance
of the index does not reflect the deduction of expenses associated with a mutual
fund, such as investment management. By contrast, the performance of the fund
reflects the deduction of these value-added services as well as the deduction of
sales charges on Class A Shares and applicable contingent deferred sales charges
on Class B Shares.
The Lipper Mix for all the classes consists of the average monthly returns of
the Lipper General Equity Funds Universe (20%), the Lipper International Funds
Universe (5%), and the Lipper Intermediate US Government Bond Funds Universe
(75%). The Lipper Universes consist of the equally weighted average monthly
return of all the funds within the category.
9
<PAGE> 12
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Investor Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1997
(Amounts in Thousands)
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ---------------------------------------- -------
<C> <S> <C>
INVESTMENT COMPANIES (99.5%):
380 The One Group Disciplined Value Fund
Fiduciary Class......................... $ 5,946
205 The One Group Government Bond Fund
Fiduciary Class......................... 1,985
320 The One Group Growth Opportunities Fund
Fiduciary Class......................... 6,228
84 The One Group Gulf South Growth Fund
Fiduciary Class......................... 916
168 The One Group Income Bond Fund Fiduciary
Class................................... 1,583
120 The One Group Intermediate Bond Fund
Fiduciary Class......................... 1,186
236 The One Group International Equity Index
Fund Fiduciary Class.................... 3,993
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ---------------------------------------- -------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
345 The One Group Large Company Growth Fund
Fiduciary Class......................... $ 6,704
430 The One Group Large Company Value Fund
Fiduciary Class......................... 6,365
75 The One Group Limited Volatility Fund
Fiduciary Class......................... 789
392 The One Group Prime Money Market Fund
Fiduciary Class......................... 392
616 The One Group Value Growth Fund
Fiduciary Class......................... 7,093
-------
Total Investment Companies 43,180
-------
Total (Cost--$39,084) (a) $43,180
=======
</TABLE>
- ------------
Percentages indicated are based on net assets of $43,408.
(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 $4. Cost for federal income tax purposes differs from value by
net unrealized appreciation of securities as follows (amounts in thousands):
<TABLE>
<S> <C>
Unrealized appreciation......................... $4,129
Unrealized depreciation......................... (37)
------
Net unrealized appreciation..................... $4,092
======
</TABLE>
See notes to financial statements.
10
<PAGE> 13
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Investor Growth & Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1997
(Amounts in Thousands)
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ---------------------------------------- -------
<C> <S> <C>
INVESTMENT COMPANIES (99.4%):
398 The One Group Disciplined Value Fund
Fiduciary Class......................... $ 6,237
656 The One Group Government Bond Fund
Fiduciary Class......................... 6,361
336 The One Group Growth Opportunities Fund
Fiduciary Class......................... 6,533
561 The One Group Income Bond Fund Fiduciary
Class................................... 5,284
319 The One Group Intermediate Bond Fund
Fiduciary Class......................... 3,166
245 The One Group International Equity Index
Fund Fiduciary Class.................... 4,146
368 The One Group Large Company Growth Fund
Fiduciary Class......................... 7,161
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ---------------------------------------- -------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
459 The One Group Large Company Value Fund
Fiduciary Class......................... $ 6,797
201 The One Group Limited Volatility Fund
Fiduciary Class......................... 2,107
523 The One Group Prime Money Market Fund
Fiduciary Class......................... 523
106 The One Group Ultra Short-Term Income
Fund Fiduciary Class.................... 1,051
617 The One Group Value Growth Fund
Fiduciary Class......................... 7,100
-------
Total Investment Companies 56,466
-------
Total (Cost--$52,633) (a) $56,466
=======
</TABLE>
- ------------
Percentages indicated are based on net assets of $56,818.
(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 $102. Cost for federal income tax purposes differs from value
by net unrealized appreciation of securities as follows (amounts in
thousands):
<TABLE>
<S> <C>
Unrealized appreciation......................... $3,841
Unrealized depreciation......................... (110)
------
Net unrealized appreciation..................... $3,731
======
</TABLE>
See notes to financial statements.
11
<PAGE> 14
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Investor Conservative Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1997
(Amounts in Thousands)
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ---------------------------------------- -------
<C> <S> <C>
INVESTMENT COMPANIES (99.7%):
13 The One Group Disciplined Value Fund
Fiduciary Class......................... $ 197
514 The One Group Government Bond Fund
Fiduciary Class......................... 4,986
11 The One Group Growth Opportunities Fund
Fiduciary Class......................... 207
410 The One Group Income Bond Fund Fiduciary
Class................................... 3,864
37 The One Group Income Equity Fund
Fiduciary Class......................... 813
241 The One Group Intermediate Bond Fund
Fiduciary Class......................... 2,389
49 The One Group International Equity Index
Fund Fiduciary Class.................... 825
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ---------------------------------------- -------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
53 The One Group Large Company Growth Fund
Fiduciary Class......................... $ 1,039
67 The One Group Large Company Value Fund
Fiduciary Class......................... 986
140 The One Group Limited Volatility Fund
Fiduciary Class......................... 1,468
365 The One Group Prime Money Market Fund
Fiduciary Class......................... 365
74 The One Group Ultra Short-Term Income
Fund Fiduciary Class.................... 732
90 The One Group Value Growth Fund
Fiduciary Class......................... 1,030
-------
Total Investment Companies 18,901
-------
Total (Cost--$18,440) (a) $18,901
=======
</TABLE>
- ------------
Percentages indicated are based on net assets of $18,953.
(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 $30. Cost for federal income tax purposes differs from value
by net unrealized appreciation of securities as follows (amounts in
thousands):
<TABLE>
<S> <C>
Unrealized appreciation......................... $ 498
Unrealized depreciation......................... (67)
------
Net unrealized appreciation..................... $ 431
======
</TABLE>
See notes to financial statements.
12
<PAGE> 15
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Investor Balanced Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1997
(Amounts in Thousands)
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ---------------------------------------- -------
<C> <S> <C>
INVESTMENT COMPANIES (99.9%):
314 The One Group Disciplined Value Fund
Fiduciary Class......................... $ 4,910
1,500 The One Group Government Bond Fund
Fiduciary Class......................... 14,533
264 The One Group Growth Opportunities Fund
Fiduciary Class......................... 5,143
1,214 The One Group Income Bond Fund Fiduciary
Class................................... 11,438
768 The One Group Intermediate Bond Fund
Fiduciary Class......................... 7,616
253 The One Group International Equity Index
Fund Fiduciary Class.................... 4,274
399 The One Group Large Company Growth Fund
Fiduciary Class......................... 7,749
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ---------------------------------------- -------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
497 The One Group Large Company Value Fund
Fiduciary Class......................... $ 7,357
436 The One Group Limited Volatility Fund
Fiduciary Class......................... 4,562
755 The One Group Prime Money Market Fund
Fiduciary Class......................... 755
307 The One Group Ultra Short-Term Income
Fund Fiduciary Class.................... 3,035
742 The One Group Value Growth Fund
Fiduciary Class......................... 8,539
-------
Total Investment Companies 79,911
-------
Total (Cost--$75,431) (a) $79,911
=======
</TABLE>
- ------------
Percentages indicated are based on net assets of $80,003.
(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 $23. Cost for federal income tax purposes differs from value
by net unrealized appreciation of securities as follows (amounts in
thousands):
<TABLE>
<S> <C>
Unrealized appreciation......................... $4,694
Unrealized depreciation......................... (237)
------
Net unrealized appreciation..................... $4,457
======
</TABLE>
See notes to financial statements.
13
<PAGE> 16
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1997
<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 $39,084; $52,633;
$18,440; and $75,431; respectively).......... $43,180 $ 56,466 $18,901 $79,911
Cash........................................... 57 62 -- 30
Dividends receivable........................... 83 150 76 273
Receivable for capital shares issued........... 183 312 63 95
Receivable from Administrator.................. 12 11 11 11
Prepaid expenses and other assets.............. -- 2 6 4
------------- ------- ----------- -------------
TOTAL ASSETS................................... 43,515 57,003 19,057 80,324
------------- ------- ----------- -------------
LIABILITIES:
Cash overdraft................................. -- -- 1 --
Dividends payable.............................. 70 137 72 260
Payable for capital shares redeemed............ -- 7 -- 1
Accrued expenses and other payables:
Investment advisory fees................... -- -- -- 1
12b-1 fees................................. 7 7 2 4
Other...................................... 30 34 29 55
------------- ------- ----------- -------------
TOTAL LIABILITIES.............................. 107 185 104 321
------------- ------- ----------- -------------
NET ASSETS:
Capital........................................ 39,371 53,072 18,483 75,590
Accumulated undistributed net realized
gains/(losses) from investment
transactions................................. (59) (87) 9 (67)
Unrealized appreciation (depreciation) from
investments.................................. 4,096 3,833 461 4,480
------------- ------- ----------- -------------
NET ASSETS..................................... $43,408 $ 56,818 $18,953 $80,003
============= ======== =========== =============
NET ASSETS:
Fiduciary.................................. $31,318 $ 43,660 $15,038 $72,155
Class A.................................... 4,439 4,262 1,299 2,176
Class B.................................... 7,651 8,896 2,616 5,672
------------- ------- ----------- -------------
Total...................................... $43,408 $ 56,818 $18,953 $80,003
============= ======== =========== =============
OUTSTANDING UNITS OF BENEFICIAL INTEREST
(SHARES):
Fiduciary.................................. 2,784 3,996 1,455 6,790
Class A.................................... 396 387 126 204
Class B.................................... 675 808 253 533
------------- ------- ----------- -------------
Total...................................... 3,855 5,191 1,834 7,527
============= ======== =========== =============
Net Asset Value:
Fiduciary
Offering and redemption price per
share................................ $ 11.25 $ 10.93 $ 10.33 $ 10.63
============= ======== =========== =============
Class A
Redemption price per share............. $ 11.21 $ 11.02 $ 10.32 $ 10.66
============= ======== =========== =============
Maximum sales charge................... 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)................................ $ 11.74 11.54 $ 10.81 $ 11.16
============= ======== =========== =============
Class B
Offering price per share (a)........... $ 11.34 $ 11.00 $ 10.33 $ 10.65
============= ======== =========== =============
</TABLE>
- ------------
(a) Redemption price per Class B share varies based on length of time shares are
held.
See notes to financial statements.
14
<PAGE> 17
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
(Amounts in Thousands)
INVESTOR
INVESTOR INVESTOR GROWTH CONSERVATIVE INVESTOR
GROWTH FUND & INCOME FUND GROWTH FUND BALANCED FUND
------------- ---------------- -------------- -------------
DECEMBER 10, DECEMBER 10, DECEMBER 10, DECEMBER 10,
1996 THROUGH 1996 THROUGH 1996 THROUGH 1996 THROUGH
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997(a) 1997(a) 1997(a) 1997(a)
------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Distribution income................. $ 302 $ 616 $352 $ 1,261
------------- ------- ------ -------------
EXPENSES:
Investment advisory fees............ 8 10 3 16
Administration fees................. 16 20 7 31
12b-1 fees (Class A)................ 2 3 1 1
12b-1 fees (Class B)................ 14 17 5 12
Custodian and accounting fees....... 14 14 13 17
Legal and audit fees................ 4 2 4 4
Transfer agent fees................. 12 14 16 16
Registration and filing fees........ 43 44 42 42
Printing costs...................... 15 20 7 30
Other............................... 17 17 16 20
------------- ------- ------ -------------
Total expenses before
waivers/reimbursements............ 145 161 114 189
Less waivers/reimbursements......... (99) (101) (95) (115)
------------- ------- ------ -------------
NET EXPENSES........................ 46 60 19 74
------------- ------- ------ -------------
Net Investment Income............... 256 556 333 1,187
------------- ------- ------ -------------
REALIZED/UNREALIZED LOSSES FROM
INVESTMENTS:
Net realized gains/(losses) from
investment transactions........... (59) (87) 9 (67)
Net change in unrealized
appreciation (depreciation) from
investments....................... 4,096 3,833 461 4,480
------------- ------- ------ -------------
Net realized/unrealized gains from
investments....................... 4,037 3,746 470 4,413
------------- ------- ------ -------------
Change in net assets resulting from
operations........................ $ 4,293 $4,302 $803 $ 5,600
============= =========== ========= =============
</TABLE>
- ------------
(a) Period from commencement of operations.
See notes to financial statements.
15
<PAGE> 18
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
INVESTOR
INVESTOR INVESTOR GROWTH CONSERVATIVE INVESTOR
GROWTH FUND & INCOME FUND GROWTH FUND BALANCED FUND
------------- ---------------- ------------- -------------
DECEMBER 10, DECEMBER 10, DECEMBER 10, DECEMBER 10,
1996 THROUGH 1996 THROUGH 1996 THROUGH 1996 THROUGH
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997(a) 1997(a) 1997(a) 1997(a)
------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 256 $ 556 $ 333 $ 1,187
Net realized gains/(losses) from
investment transactions....... (59) (87) 9 (67)
Net change in unrealized
appreciation (depreciation)
from investments.............. 4,096 3,833 461 4,480
------------- ---------------- ------------- -------------
Change in net assets resulting from
operations......................... 4,293 4,302 803 5,600
------------- ---------------- ------------- -------------
DISTRIBUTIONS TO FIDUCIARY
SHAREHOLDERS:
From net investment income...... (227) (494) (296) (1,132)
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment income...... (14) (24) (14) (15)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment income...... (15) (38) (23) (40)
------------- ---------------- ------------- -------------
Change in net assets from shareholder
distributions...................... (256) (556) (333) (1,187)
------------- ---------------- ------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 41,705 58,244 21,496 78,898
Dividends reinvested............ 25 49 41 49
Cost of shares redeemed......... (2,359) (5,221) (3,054) (3,357)
------------- ---------------- ------------- -------------
Change in net assets from share
transactions....................... 39,371 53,072 18,483 75,590
------------- ---------------- ------------- -------------
Change in Net Assets................. 43,408 56,818 18,953 80,003
NET ASSETS:
Beginning of period............. -- -- -- --
------------- ---------------- ------------- -------------
End of period................... $43,408 $ 56,818 $18,953 $80,003
============= ================ ============= =============
SHARE TRANSACTIONS:
Issued.......................... 4,079 5,697 2,132 7,850
Reinvested...................... 3 4 5 5
Redeemed........................ (227) (510) (303) (328)
------------- ---------------- ------------- -------------
Change in shares..................... 3,855 5,191 1,834 7,527
============= ================ ============= =============
</TABLE>
- ------------
(a) Period from commencement of operations.
See notes to financial statements.
16
<PAGE> 19
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997
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 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, Class B and
Class C 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 and Class C 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.
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 income and capital appreciation by investing
primarily in a diversified group of The One Group mutual
funds which invest primarily in equity and fixed income
securities.
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 (the "Underlying Funds") are
valued at the closing net asset value per share of each Underlying Fund
on the day of valuation. Short-term investments maturing in 60 days or
less are valued at amortized cost, which approximates market value.
SECURITY TRANSACTIONS AND RELATED INCOME
Purchases and sales of the underlying funds are accounted for on a trade
date basis. Net realized gains or losses on sales of the underlying funds
are determined on the specific identification cost method. Other income
and expenses are recognized on the accrual basis. Distributions from the
underlying funds and dividends to the Funds' shareholders are recorded on
the ex-dividend date.
Continued
17
<PAGE> 20
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1997
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.
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. The Trust is registered to offer forty
series and five classes of shares: Fiduciary, Class A, Class B, Class C and
Service. Currently, the Trust consists of thirty three active funds, and not
all funds can offer all classes of shares. During the year ended June 30,
1997, there were no shareholders in Class C or the Service Class of the
Funds. 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 from December 10, 1996 (commencement of
operations) through June 30, 1997:
Continued
18
<PAGE> 21
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1997
<TABLE>
<CAPTION>
(Amounts in Thousands)
INVESTOR INVESTOR
INVESTOR GROWTH & CONSERVATIVE INVESTOR
GROWTH FUND INCOME FUND GROWTH FUND BALANCED FUND
------------ ------------ ------------ -------------
DECEMBER 10, DECEMBER 10, DECEMBER 10, DECEMBER 10,
1996 THROUGH 1996 THROUGH 1996 THROUGH 1996 THROUGH
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997(a) 1997(a) 1997(a) 1997(a)
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued..................... $ 30,381 $ 45,181 $ 17,645 $71,345
Dividends reinvested............................ 11 13 18 15
Cost of shares redeemed......................... (2,252) (4,561) (2,999) (3,309)
------------ ------------ ------------ -------------
Change in net assets from Fiduciary share
transactions.................................. $ 28,140 $ 40,633 $ 14,664 $68,051
============ ============ ============ =============
CLASS A SHARES:
Proceeds from shares issued..................... $ 4,125 $ 4,604 $ 1,283 $ 2,092
Dividends reinvested............................ 7 14 8 9
Cost of shares redeemed......................... (19) (606) (29) --
------------ ------------ ------------ -------------
Change in net assets from Class A share
transactions.................................. $ 4,113 $ 4,012 $ 1,262 $ 2,101
============ ============ ============ =============
CLASS B SHARES:
Proceeds from shares issued..................... $ 7,199 $ 8,459 $ 2,568 $ 5,461
Dividends reinvested............................ 7 22 15 25
Cost of shares redeemed......................... (88) (54) (26) (48)
------------ ------------ ------------ -------------
Change in net assets from Class B share
transactions.................................. $ 7,118 $ 8,427 $ 2,557 $ 5,438
============ ============ ============ =============
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued.......................................... 3,000 4,443 1,750 7,112
Reinvested...................................... 1 1 2 2
Redeemed........................................ (217) (448) (297) (324)
------------ ------------ ------------ -------------
Change in Fiduciary Shares...................... 2,784 3,996 1,455 6,790
============ ============ ============ =============
CLASS A SHARES:
Issued.......................................... 397 443 128 203
Reinvested...................................... 1 1 1 1
Redeemed........................................ (2) (57) (3) --
------------ ------------ ------------ -------------
Change in Class A Shares........................ 396 387 126 204
============ ============ ============ =============
CLASS B SHARES:
Issued.......................................... 682 811 254 535
Reinvested...................................... 1 2 2 2
Redeemed........................................ (8) (5) (3) (4)
------------ ------------ ------------ -------------
Change in Class B Shares........................ 675 808 253 533
============ ============ ============ =============
</TABLE>
- ------------
(a) Period from commencement of operations.
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION AGREEMENTS:
The Trust and Banc One Investment Advisors Corporation (the "Advisor") are
parties to an investment advisory agreement under which the Advisor is
entitled to receive an annual fee, computed daily and paid monthly, equal
Continued
19
<PAGE> 22
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1997
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 each Fund's average daily net assets, 0.075% of
each Fund's average daily net assets between $500 million and $1 billion, and
0.05% of each Fund's average daily net assets when Fund assets exceed $1
billion. 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 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, Class C 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 and Class C 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 Advisor), 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 June 30, 1997, the Distributor received $1,185,022 from commissions
earned on sales of Class A Shares and redemptions of Class B Shares, of
which, the Distributor re-allowed $1,181,695 to affiliated broker-dealers of
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 Advisor, 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, 1997, fees in the following amounts
were waived and reimbursed from the funds (amounts in thousands):
<TABLE>
<CAPTION>
INVESTMENT 12B-1 FEES FEES
ADVISORY FEES ADMINISTRATION WAIVED REIMBURSED BY
WAIVED FEES WAIVED CLASS A ADMINISTRATOR
------------- --------------- ---------- -------------
<S> <C> <C> <C> <C>
Investor Growth Fund................. $ 6 $16 $ 1 $76
Investor Growth & Income Fund........ 8 20 1 72
Investor Conservative Growth Fund.... 2 7 --* 86
Investor Balanced Fund............... 13 31 --* 71
</TABLE>
* Amount less than $1,000.
Continued
20
<PAGE> 23
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 1997
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, 1997 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
PURCHASES SALES
--------- ------
<S> <C> <C>
Investor Growth Fund.................................... $43,799 $5,047
Investor Growth & Income Fund........................... 58,388 6,429
Investor Conservative Growth Fund....................... 21,221 3,432
Investor Balanced Fund.................................. 81,364 6,622
</TABLE>
6. FEDERAL TAX INFORMATION (UNAUDITED):
Capital losses incurred after October 31 within the Fund's fiscal year 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 ending June 30, 1998 (amounts in thousands):
<TABLE>
<CAPTION>
FUND AMOUNT
---- ------
<S> <C>
Investor Growth Fund.............................................. $ 55
Investor Balanced Fund............................................ 44
</TABLE>
ELIGIBLE DISTRIBUTIONS:
The Trust designates the following percentage of distributions eligible for
the dividends received deductions for corporations.
<TABLE>
<CAPTION>
FUND PERCENTAGE
---- ----------
<S> <C>
Investor Growth Fund........................................... 66.75%
Investor Growth & Income Fund.................................. 52.15%
Investor Conservative Growth Fund.............................. 34.78%
Investor Balanced Fund......................................... 45.62%
</TABLE>
Continued
21
<PAGE> 24
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
GROWTH
FUND
------------
FIDUCIARY
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $ 10.00
------------
Investment Activities
Net investment income............................................................... 0.09
Net realized and unrealized gains (losses) from investments......................... 1.25
------------
Total from Investment Activities................................................. 1.34
------------
Distributions
From net investment income.......................................................... (0.09)
------------
Total Distributions.............................................................. (0.09)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $ 11.25
============
Total Return.......................................................................... 13.50%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $ 31,318
Ratio of expenses to average net assets............................................. 0.20%(c)
Ratio of net investment income to average net assets................................ 1.70%(c)
Ratio of expenses to average net assets*............................................ 0.77%(c)
Ratio of net investment income to average net assets*............................... 1.13%(c)
Portfolio turnover (d).............................................................. 18.49%
</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> 25
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
GROWTH
FUND
------------
CLASS A
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $10.00
------------
Investment Activities
Net investment income............................................................... 0.07
Net realized and unrealized gains (losses) from investments......................... 1.21
------------
Total from Investment Activities................................................. 1.28
------------
Distributions
From net investment income.......................................................... (0.07)
------------
Total Distributions.............................................................. (0.07)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $11.21
============
Total Return (Excludes Sales Charge).................................................. 12.84%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $4,439
Ratio of expenses to average net assets............................................. 0.46%(c)
Ratio of net investment income to average net assets................................ 1.82%(c)
Ratio of expenses to average net assets*............................................ 1.62%(c)
Ratio of net investment income to average net assets*............................... 0.66%(c)
Portfolio turnover (d).............................................................. 18.49%
</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.
23
<PAGE> 26
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
GROWTH
FUND
------------
CLASS B
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $10.00
------------
Investment Activities
Net investment income............................................................... 0.04
Net realized and unrealized gains (losses) from investments......................... 1.34
------------
Total from Investment Activities................................................. 1.38
------------
Distributions
From net investment income.......................................................... (0.04)
------------
Total Distributions.............................................................. (0.04)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $11.34
============
Total Return (Excludes Sales Charge).................................................. 13.88%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $7,651
Ratio of expenses to average net assets............................................. 1.20%(c)
Ratio of net investment income to average net assets................................ 0.97%(c)
Ratio of expenses to average net assets*............................................ 2.18%(c)
Ratio of net investment income to average net assets*............................... (0.01%)(c)
Portfolio turnover (d).............................................................. 18.49%
</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.
24
<PAGE> 27
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
GROWTH
& INCOME
FUND
------------
FIDUCIARY
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997 (a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $ 10.00
------------
Investment Activities
Net investment income............................................................... 0.15
Net realized and unrealized gains from investments.................................. 0.93
------------
Total from Investment Activities................................................. 1.08
------------
Distributions
From net investment income.......................................................... (0.15)
------------
Total Distributions.............................................................. (0.15)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $ 10.93
============
Total Return.......................................................................... 10.87%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $ 43,660
Ratio of expenses to average net assets............................................. 0.20%(c)
Ratio of net investment income to average net assets................................ 2.78%(c)
Ratio of expenses to average net assets *........................................... 0.66%(c)
Ratio of net investment income to average net assets*............................... 2.32%(c)
Portfolio turnover(d)............................................................... 18.07%
</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.
25
<PAGE> 28
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
GROWTH
& INCOME
FUND
------------
CLASS A
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997 (a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $10.00
------------
Investment Activities
Net investment income............................................................... 0.12
Net realized and unrealized gains from investments.................................. 1.02
------------
Total from Investment Activities................................................. 1.14
------------
Distributions
From net investment income.......................................................... (0.12)
------------
Total Distributions.............................................................. (0.12)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $11.02
============
Total Return (Excludes Sales Charge).................................................. 11.50%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $4,262
Ratio of expenses to average net assets............................................. 0.46%(c)
Ratio of net investment income to average net assets................................ 2.67%(c)
Ratio of expenses to average net assets*............................................ 1.26%(c)
Ratio of net investment income to average net assets*............................... 1.87%(c)
Portfolio turnover(d)............................................................... 18.07%
</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.
26
<PAGE> 29
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
GROWTH
& INCOME
FUND
------------
CLASS B
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997 (a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $10.00
------------
Investment Activities
Net investment income............................................................... 0.09
Net realized and unrealized gains (losses) from investments......................... 1.00
------------
Total from Investment Activities................................................. 1.09
------------
Distributions
From net investment income.......................................................... (0.09)
------------
Total Distributions.............................................................. (0.09)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $11.00
============
Total Return (Excludes Sales Charge).................................................. 11.02%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $8,896
Ratio of expenses to average net assets............................................. 1.21%(c)
Ratio of net investment income to average net assets................................ 1.94%(c)
Ratio of expenses to average net assets*............................................ 1.89%(c)
Ratio of net investment income to average net assets*............................... 1.26%(c)
Portfolio turnover(d)............................................................... 18.07%
</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.
27
<PAGE> 30
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
CONSERVATIVE
GROWTH FUND
------------
FIDUCIARY
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $ 10.00
------------
Investment Activities
Net investment income............................................................... 0.26
Net realized and unrealized gains (losses) from investments......................... 0.33
------------
Total from Investment Activities................................................. 0.59
------------
Distributions
From net investment income.......................................................... (0.26)
------------
Total Distributions.............................................................. (0.26)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $ 10.33
============
Total Return.......................................................................... 6.00%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $ 15,038
Ratio of expenses to average net assets............................................. 0.20%(c)
Ratio of net investment income to average net assets................................ 4.92%(c)
Ratio of expenses to average net assets*............................................ 1.46%(c)
Ratio of net investment income to average net assets*............................... 3.66%(c)
Portfolio turnover (d).............................................................. 28.46%
</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.
28
<PAGE> 31
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
CONSERVATIVE
GROWTH FUND
------------
CLASS A
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $10.00
------------
Investment Activities
Net investment income............................................................... 0.22
Net realized and unrealized gains (losses) from investments......................... 0.32
------------
Total from Investment Activities................................................. 0.54
------------
Distributions
From net investment income.......................................................... (0.22)
------------
Total Distributions.............................................................. (0.22)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $10.32
============
Total Return (Excludes Sales Charge).................................................. 5.46%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $1,299
Ratio of expenses to average net assets............................................. 0.47%(c)
Ratio of net investment income to average net assets................................ 4.76%(c)
Ratio of expenses to average net assets*............................................ 3.05%(c)
Ratio of net investment income to average net assets*............................... 2.18%(c)
Portfolio turnover (d).............................................................. 28.46%
</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.
29
<PAGE> 32
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
CONSERVATIVE
GROWTH FUND
------------
CLASS B
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $10.00
------------
Investment Activities
Net investment income............................................................... 0.19
Net realized and unrealized gains (losses) from investments......................... 0.33
------------
Total from Investment Activities................................................. 0.52
------------
Distributions
From net investment income.......................................................... (0.19)
------------
Total Distributions.............................................................. (0.19)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $10.33
============
Total Return (Excludes Sales Charge).................................................. 5.30%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $2,616
Ratio of expenses to average net assets............................................. 1.21%(c)
Ratio of net investment income to average net assets................................ 4.06%(c)
Ratio of expenses to average net assets*............................................ 3.52%(c)
Ratio of net investment income to average net assets*............................... 1.75%(c)
Portfolio turnover (d).............................................................. 28.46%
</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.
30
<PAGE> 33
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
BALANCED
FUND
------------
FIDUCIARY
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $ 10.00
------------
Investment Activities
Net investment income............................................................... 0.21
Net realized and unrealized gains from investments.................................. 0.63
------------
Total from Investment Activities................................................. 0.84
------------
Distributions
From net investment income.......................................................... (0.21)
------------
Total Distributions.............................................................. (0.21)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $ 10.63
============
Total Return.......................................................................... 8.48%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $ 72,155
Ratio of expenses to average net assets............................................. 0.20%(c)
Ratio of net investment income to average net assets................................ 3.84%(c)
Ratio of expenses to average net assets*............................................ 0.56%(c)
Ratio of net investment income to average net assets*............................... 3.48%(c)
Portfolio turnover (d).............................................................. 12.20%
</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) 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.
31
<PAGE> 34
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
BALANCED
FUND
------------
CLASS A
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $10.00
------------
Investment Activities
Net investment income............................................................... 0.17
Net realized and unrealized gains from investments.................................. 0.66
------------
Total from Investment Activities................................................. 0.83
------------
Distributions
From net investment income.......................................................... (0.17)
------------
Total Distributions.............................................................. (0.17)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $10.66
============
Total Return (Excludes Sales Charge).................................................. 8.41%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $2,176
Ratio of expenses to average net assets............................................. 0.47%(c)
Ratio of net investment income to average net assets................................ 3.78%(c)
Ratio of expenses to average net assets*............................................ 1.12%(c)
Ratio of net investment income to average net assets*............................... 3.13%(c)
Portfolio turnover (d).............................................................. 12.20%
</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) 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.
32
<PAGE> 35
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR
BALANCED
FUND
------------
CLASS B
------------
DECEMBER 10,
1996 THROUGH
JUNE 30,
1997(a)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................................................................. $10.00
------------
Investment Activities
Net investment income............................................................... 0.16
Net realized and unrealized gains from investments.................................. 0.65
------------
Total from Investment Activities................................................. 0.81
------------
Distributions
From net investment income.......................................................... (0.16)
------------
Total Distributions.............................................................. (0.16)
------------
NET ASSET VALUE,
END OF PERIOD....................................................................... $10.65
============
Total Return (Excludes Sales Charge).................................................. 8.22%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)................................................... $5,672
Ratio of expenses to average net assets............................................. 1.22%(c)
Ratio of net investment income to average net assets................................ 2.93%(c)
Ratio of expenses to average net assets*............................................ 1.73%(c)
Ratio of net investment income to average net assets*............................... 2.42%(c)
Portfolio turnover (d).............................................................. 12.20%
</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) 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.
33
<PAGE> 36
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
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
Investor Growth Fund, the Investor Growth & Income Fund, the Investor
Conservative Growth Fund and the Investor Balanced Fund (four series of The One
Group Family of Mutual Funds), including the schedules of portfolio investments,
as of June 30, 1997, and the related statements of operations, statements of
changes in net assets and the financial highlights for the period then ended.
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 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, 1997 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
Investor Growth Fund, the Investor Growth & Income Fund, the Investor
Conservative Growth Fund and the Investor Balanced Fund as of June 30, 1997, the
results of their operations, the changes in their net assets and the financial
highlights for the period then ended, in conformity with generally accepted
accounting principles.
Columbus, Ohio Coopers & Lybrand L.L.P.
August 22, 1997
34
<PAGE> 37
Important Customer Information.
Please Read:
Shares of The One Group:
* are not deposits or obligations
of, or guaranteed by, BANC ONE
CORPORATION or its affiliates
* are not insured or guaranteed by the
FDIC or by any other governmental
agency or government-sponsored
agency of the federal government
or any state
* are subject to investment risks,
including possible loss of the
principal amount invested.
Banc One Investment Advisors
Corporation, a registered investment
advisor and an indirect subsidiary of
BANC ONE CORPORATION, serves
as an investment advisor to The One
Group, for which it receives advisory
fees. The One Group is distributed by
The One Group Services Company,
3435 Stelzer Road, Columbus,
Ohio 43219, which is not affiliated
with BANC ONE CORPORATION and
is not a bank. Contact us at our web
site address: www.onegroup.com or
e-mail us at [email protected].
For more complete information on
any of The One Group Funds, including
management fees and expenses,
you may obtain a prospectus from
The One Group Services Company.
Read the prospectus carefully
before investing.
BANC ONE
INVESTMENT [LOGO]
ADVISORS
CORPORATION
TOG-F-036-AN(8/97)
