<PAGE>
As filed with the Securities and Exchange Commission on
May 29, 1998
Registration No. 2-95973
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
Form N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/ / PRE-EFFECTIVE AMENDMENT NO. _____ / / POST-EFFECTIVE AMENDMENT NO. ____
(Check appropriate box or boxes)
_____________
THE ONE GROUP-Registered Trademark-
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road
Columbus, Ohio 43219
(Address of Principal Executive Offices)
_____________
MARK S. REDMAN
3435 Stelzer Road
Columbus, Ohio 43219
(Name and address of Agent for Service)
_____________
Copy to:
ALAN G. PRIEST, ESQUIRE MICHAEL V. WIBLE, ESQUIRE
Ropes & Gray BANC ONE CORPORATION
1301 K Street, N.W. 100 East Broad Street
Suite 800 East 18th Floor
Washington, D.C. 20005 Columbus, OH 43271-0158
Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement becomes effective.
It is proposed that this filing will become effective on June 28, 1998
pursuant to Rule 488.
An indefinite amount of the Registrant's securities has been registered
under the Securities Act of 1933 pursuant to Rule 24f-2 under The Investment
Company Act of 1940. In reliance upon such rule, no filing fee is being paid at
this time. A Rule 24f-2 notice for the Registrant for the year ended June 30,
1997 was filed on August 29, 1997.
<PAGE>
THE ONE GROUP-Registered Trademark-
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Form N-1A Item Caption in Combined Prospectus/Proxy Statement
- -------------- ----------------------------------------------
<S> <C>
1 Cross-Reference Sheet; Front Cover
2 Table of Contents
3 Synopsis and Risk Factors
4 Proposal (1) -- Approval of Agreement and Plan of
Reorganization; Introduction; Information about the Proposed
Transaction; Terms of the Proposed Transaction; Federal Tax
Opinions; Comparison of Shareholder Rights; Existing and Pro
Forma Capitalization
5 Front Cover -- Incorporated by reference to specified
documents; One Group-Registered Trademark- Funds; Financial
Statements; Information filed with the Securities and
Exchange Commission; Management Discussion of Fund
Performance
6 Front Cover -- Incorporated by Reference to Specified
Documents; Marquis Funds; Financial Statements; Information
filed with the Securities and Exchange Commission
7 Information About the Proposed Transaction; Voting
Information
8 Interest of Certain Persons in the Transaction
9 Not Applicable
10,11 Cover Page
12 Cover Page -- Incorporated by reference to specified
documents
13 Cover Page -- Incorporated by reference to specified
documents
14 Pro Forma Financial Statements
</TABLE>
Part C
- ------
The information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
MARQUIS FUNDS
2 OLIVER STREET
BOSTON, MASSACHUSETTS 02109
June 29, 1998
To the Shareholders:
Enclosed you will find several documents furnished to you in connection
with a special meeting of the shareholders of Marquis Funds (the "Trust")
Institutional Money Market Fund ("Marquis Institutional"), Treasury Securities
Money Market Fund ("Marquis Treasury Securities"), Tax-Exempt Money Market Fund
("Marquis Tax-Exempt"), Government Securities Fund ("Marquis Government"),
Strategic Income Bond Fund ("Marquis Strategic Income"), Louisiana Tax-Free
Income Fund ("Marquis Louisiana"), Balanced Fund ("Marquis Balanced"), Value
Equity Fund ("Marquis Value"), Growth Equity Fund ("Marquis Growth"), Small Cap
Equity Fund ("Marquis Small Cap"), and International Equity Fund ("Marquis
International"), (collectively, the "Marquis Funds"). The meeting will be held
at the offices of SEI Investments Company at One Freedom Valley Road, Oaks,
Pennsylvania, 19456 on Thursday, July 30, 1998 at 10:00 a.m. Eastern time. We
hope this material will receive your immediate attention and that, if you cannot
attend the meeting in person, you will vote your proxy promptly.
The Trustees of the Trust are recommending that shareholders of each
Marquis Fund approve a reorganization in which Marquis Institutional, Marquis
Treasury Securities, Marquis Tax-Exempt, Marquis Government, Marquis Strategic
Income, Marquis Louisiana, Marquis Balanced, Marquis Value, Marquis Growth,
Marquis Small Cap, and Marquis International will transfer all of their assets
to The One Group Treasury Only Money Market Fund, The One Group U.S. Treasury
Securities Money Market Fund, The One Group Municipal Money Market Fund, The One
Group Government Bond Fund, The One Group Income Bond Fund, The One Group
Louisiana Municipal Bond Fund, The One Group Asset Allocation Fund, The One
Group Disciplined Value Fund, The One Group Growth Opportunities Fund, The One
Group Small Capitalization Fund, and The One Group International Equity Index
Fund (collectively, the "One Group Funds"), respectively, in return for Class A,
Class B, and Fiduciary Class shares of the corresponding One Group Funds. At the
same time, the One Group Funds will assume all of the liabilities of the Marquis
Funds. After the transfer, shares of the One Group Funds will be distributed to
the corresponding Marquis Funds' shareholders and the Marquis Funds will be
liquidated.
As a result of these transactions, shares of your Marquis Fund would, in
effect, be exchanged at net asset value and on a tax-free basis for shares of a
corresponding One Group Fund. If you own shares of the Marquis Funds and are a
financial organization authorized to act in a fiduciary, advisory, custodial or
similar capacity, or you own Trust Class shares, you will receive One Group
Fiduciary Class Shares. If you otherwise own Marquis Class A, Retail Class or
Cash Sweep Class shares, you will receive One Group Class A Shares.
Shareholders holding Marquis Class B Shares will receive One Group Class B
shares. If you are invested in Marquis Institutional, you will receive shares
of One Group Treasury Only Money Market Fund.
We believe that the proposed transaction offers shareholders of Marquis
Funds the opportunity to pursue similar investment objectives in a more
efficient manner and with greater economies of scale.
THE TRUSTEES BELIEVE THAT THE PROPOSED COMBINATION OF MARQUIS
INSTITUTIONAL, MARQUIS TREASURY SECURITIES, MARQUIS TAX-EXEMPT, MARQUIS
GOVERNMENT, MARQUIS STRATEGIC INCOME, MARQUIS LOUISIANA, MARQUIS BALANCED,
MARQUIS VALUE, MARQUIS GROWTH, MARQUIS SMALL CAP, AND MARQUIS INTERNATIONAL WITH
THE ONE GROUP TREASURY ONLY MONEY MARKET FUND, THE ONE GROUP U.S. TREASURY
SECURITIES MONEY MARKET FUND, THE ONE GROUP MUNICIPAL MONEY MARKET FUND, THE ONE
GROUP GOVERNMENT BOND FUND, THE ONE GROUP INCOME BOND FUND, THE ONE GROUP
LOUISIANA BOND FUND, THE ONE GROUP ASSET ALLOCATION FUND, THE ONE GROUP VALUE
GROWTH FUND, ONE GROUP GROWTH OPPORTUNITIES FUND, THE ONE GROUP SMALL
CAPITALIZATION FUND, AND THE ONE
<PAGE>
GROUP INTERNATIONAL INDEX FUND, RESPECTIVELY, IS IN THE BEST INTERESTS OF THE
MARQUIS FUNDS AND THEIR SHAREHOLDERS AND RECOMMEND THAT YOU VOTE IN FAVOR OF
SUCH PROPOSAL.
The Notice of Special Meeting of Shareholders, the accompanying Combined
Prospectus/Proxy Statement, Prospectuses for the One Group Funds, Prospectuses
for the Marquis Funds, and the form of proxy are enclosed. Please read these
documents carefully. If you are unable to attend the meeting in person, we urge
you to sign, date, and return the proxy card so that your shares may be voted in
accordance with your instructions.
Sincerely
/s/ Mark E. Nagle
-------------
Mark E. Nagle
President
<PAGE>
MARQUIS FUNDS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Marquis Funds
NOTICE IS HEREBY GIVEN of a Special Meeting of Shareholders (Special
Meeting and any adjournment thereof, the "Meeting") of Marquis Funds (the
"Trust") Institutional Money Market Fund, Treasury Securities Money Market
Fund, Tax-Exempt Money Market Fund, Government Securities Fund, Strategic Income
Bond Fund, Louisiana Tax-Free Income Fund, Balanced Fund, Value Equity Fund,
Growth Equity Fund, Small Cap Equity Fund, and International Equity Fund,
(collectively the "Marquis Funds"). The meeting will be held at the offices of
SEI Investments Company at One Freedom Valley Road, Oaks, Pennsylvania, 19456 on
Thursday, July 30, 1998 at 10:00 a.m. Eastern time, for the following purpose:
1. To approve an Agreement and Plan of Reorganization pursuant
to which Institutional Money Market Fund, Treasury
Securities Money Market Fund, Tax-Exempt Money Market Fund,
Government Securities Equity Fund, Strategic Income Fund,
Louisiana Tax-Free Income Fund, Balanced Fund, Value Equity
Fund, Growth Equity Fund, Small Cap Fund, and International
Equity Fund will transfer all of their assets to The One
Group Treasury Only Money Market Fund, The One Group U.S.
Treasury Securities Money Market Fund, The One Group
Municipal Money Market Fund, The One Group Government Bond
Fund, The One Group Income Bond Fund, The One Group
Louisiana Municipal Bond Fund, The One Group Asset
Allocation Fund, The One Group Disciplined Value Fund, The
One Group Growth Opportunities Fund, The One Group Small
Capitalization Fund, and The One Group International Equity
Index Fund (collectively the "One Group Funds"),
respectively, in return for Class A, Class B, and Fiduciary
Class shares of the corresponding One Group Funds. At the
same time, the One Group Funds will assume all of the
liabilities of the Marquis Funds. After the transfer, shares
of the One Group Funds will be distributed to the
corresponding Marquis Funds' shareholders tax-free in
liquidation of the Marquis Funds.
2. To transact any other business as properly comes before the
Meeting.
The proposed transaction is described in the attached Combined
Prospectus/Proxy Statement. A copy of the Agreement and Plan of Reorganization
is attached as Exhibit A to the Prospectus/Proxy Statement.
Pursuant to instructions of the Board of Trustees of the Trust, the
close of business on May 18, 1998, has been designated as the record date for
determination of shareholders entitled to notice of, and to vote at, the
Meeting.
Each shareholder who does not expect to attend in person is requested to
date, execute, sign, and promptly return the enclosed form of proxy.
By Order of the Trustees
/s/John H. Grady, Jr.
John H. Grady, Jr.
SECRETARY
Boston, Massachusetts
June 29, 1998
Your prompt attention to the enclosed form of proxy will help avoid
the expense of additional mailings.
<PAGE>
COMBINED PROSPECTUS/PROXY STATEMENT
June 29, 1998
The One Group-Registered Trademark- Marquis Funds
3435 Stelzer Road 2 Oliver Street
Columbus, OH 43219 Boston, MA 02019
Tel. No. 1-800-480-4111 Tel. No. 1-800-471-1144
COMBINED PROSPECTUS/PROXY STATEMENT
This Combined Prospectus/Proxy Statement is furnished in connection with
the solicitation of proxies from the shareholders of the following Marquis
Funds:
Institutional Money Market Fund ("Marquis Institutional")
Treasury Securities Money Market Fund ("Marquis Treasury Securities")
Tax-Exempt Money Market Fund ("Marquis Tax-Exempt")
Government Securities Fund ("Marquis Government")
Strategic Income Fund ("Marquis Strategic Income")
Louisiana Tax-Free Income Fund ("Marquis Louisiana")
Balanced Fund ("Marquis Balanced")
Value Equity Fund ("Marquis Value")
Growth Equity Fund ("Marquis Growth")
Small Cap Fund ("Marquis Small Cap")
International Equity Fund ("Marquis International")
The proxies will be used at a special meeting of shareholders
("Meeting") to approve an Agreement and Plan of Reorganization ("Agreement")
between Marquis Funds (the "Trust") and The One Group dated as of May 18, 1998,
a copy of which is attached as Exhibit A, and the completion of the transactions
(collectively, the "Transaction") contemplated in the Agreement. The Agreement
provides for the transfer of all the assets and liabilities of each Marquis Fund
to corresponding One Group Funds in exchange for shares of the One Group Funds
as follows:
<TABLE>
<CAPTION>
<S> <C>
Shareholders of Will Receive Shares of
- --------------- ----------------------
Marquis Institutional Money Market Fund The One Group Treasury Only Money Market Fund
Marquis Treasury Securities Money Market Fund The One Group U.S. Treasury Securities Money Market Fund
Marquis Tax-Exempt Money Market Fund The One Group Municipal Money Market Fund
Marquis Government Securities Fund The One Group Government Bond Fund
Marquis Strategic Income Fund The One Group Income Bond Fund
Marquis Louisiana Tax-Free Income Fund The One Group Louisiana Municipal Bond Fund
Marquis Balanced Fund The One Group Asset Allocation Fund
Marquis Value Equity Fund The One Group Disciplined Value Fund
Marquis Growth Equity Fund The One Group Growth Opportunities Fund
Marquis Small Cap Fund The One Group Small Capitalization Fund
Marquis International Equity Fund The One Group International Equity Index Fund
</TABLE>
Following the transfer of assets, shares of each One Group Fund will be
distributed to shareholders of each corresponding Marquis Fund. The Marquis
Funds will then be dissolved and liquidated. As a result of the transactions,
you will receive on a tax-free basis, a number of full and fractional shares of
the corresponding One Group Fund equal at the date of the exchange to the value
of your share of the net assets of each Marquis Fund in which you were invested.
If you own Class A shares of the Marquis Funds and are a financial
organization authorized to act in a fiduciary, advisory, custodial or similar
capacity, or you own Trust Class shares, you will receive One Group Fiduciary
Class
4
<PAGE>
Shares. If you otherwise own Marquis Class A, Retail Class or Cash Sweep Class
shares, you will receive One Group Class A Shares. Shareholders holding Marquis
Class B Shares will receive One Group Class B shares. If you are invested in
Marquis Institutional, you will receive shares of One Group Treasury Only Money
Market Fund. Both Marquis Institutional and The One Group Treasury Only
Money Market Fund have only one class of shares.
Both the Trust and The One Group are open-end management investment
companies made up of multiple series. Each series is operated as a separate
fund. The Trust consists of eleven such funds, while The One Group contains
forty funds, thirty-three of which are currently offered to investors.
This Combined Prospectus/Proxy Statement explains concisely what you
should know before investing in The One Group Treasury Only Money Market Fund
("One Group Treasury Only"), The One Group U.S. Treasury Securities Money Market
Fund ("One Group Treasury Securities"), The One Group Municipal Money Market
Fund ("One Group Municipal"), The One Group Government Bond Fund ("One Group
Government"), The One Group Income Bond Fund ("One Group Income"), The One Group
Louisiana Municipal Bond Fund ("One Group Louisiana"), The One Group Asset
Allocation Fund ("One Group Asset Allocation"), The One Group Disciplined Value
Fund ("One Group Value"), The One Group Growth Opportunities Fund ("One Group
Growth"), The One Group Small Capitalization Fund ("One Group Small
Capitalization"), and The One Group International Equity Index Fund ("One Group
International Index"). Please read it carefully and keep it for future
reference.
This Combined Prospectus/Proxy Statement is accompanied by current
prospectuses for each of The One Group Funds, which are dated November 1, 1997,
as well as the February 1, 1998 prospectuses for the Marquis Funds. These
prospectuses are incorporated into this Combined Prospectus/Proxy Statement by
reference. The current Statement of Additional Information of The One Group,
dated November 1, 1997, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. The Statement of Additional
Information of The One Group may be obtained, without charge, by writing to The
One Group Services Company, 3435 Stelzer Road, Columbus, OH 43219 or by calling
1-800-480-4111 during business hours. The current Statement of Additional
Information of Marquis Funds, dated February 1, 1998, has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. The
Statement of Additional Information of Marquis Funds can be obtained without
charge by calling 1-800-471-1144. In addition, a Statement of Additional
Information dated June 29, 1998 relating to the reorganization of the Marquis
Funds described in this Combined Prospectus/Proxy Statement, has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
Such Statement of Additional Information may be obtained, without charge, by
writing or calling The One Group Services Company at the address or telephone
number provided above.
PLEASE REMEMBER THAT SHARES OF THE ONE GROUP FUNDS:
- - ARE NOT DEPOSITS OR OBLIGATIONS, OR GUARANTEED BY BANC ONE CORPORATION
OR ITS AFFILIATES;
- - ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR BY ANY FEDERAL OR STATE GOVERNMENTAL AGENCY;
- - INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE AMOUNT
INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
5
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS COMBINED PROSPECTUS/PROXY STATEMENT IN
CONNECTION WITH THE OFFER MADE BY THIS COMBINED PROSPECTUS/PROXY STATEMENT AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE ONE GROUP. THIS COMBINED PROSPECTUS/PROXY
STATEMENT DOES NOT CONSTITUTE AN OFFERING BY THE ONE GROUP IN ANY JURISDICTION
IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Proposal (1) Approval of the Agreement and Plan of Reorganization. .
Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPARISON OF CURRENT FEES
COMPARISON OF INVESTMENT OBJECTIVES
COMPARISON OF INVESTMENT POLICIES
COMPARISON OF SHAREHOLDER POLICIES
FEDERAL INCOME TAX CONSEQUENCES
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Discussion of Fund Performance. . . . . . . . . . . . . .
Information About the Proposed Transaction . . . . . . . . . . . . .
INTRODUCTION
TERMS OF THE PROPOSED REORGANIZATION
FEDERAL TAX OPINIONS
FEES AND EXPENSES OF THE REORGANIZATION
COMPARISON OF SHAREHOLDER RIGHTS
EXISTING AND PRO FORMA CAPITALIZATION
Voting Information . . . . . . . . . . . . . . . . . . . . . . . . .
Interests of Certain Persons in the Transaction. . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . .
Information filed with the Securities and Exchange Commission. . . .
Plan of Reorganization . . . . . . . . . . . . . . . . . . . . . . . Exhibit
</TABLE>
6
<PAGE>
PROPOSAL (1): APPROVAL OF THE REORGANIZATION OF THE MARQUIS FUNDS
On May 18, 1998, the Board of Trustees ("Trustees") of the Trust
approved an Agreement and Plan of Reorganization pursuant to which Marquis
Institutional, Marquis Treasury Securities, Marquis Tax-Exempt, Marquis
Government, Marquis Strategic Income, Marquis Louisiana, Marquis Balanced,
Marquis Value, Marquis Growth, Marquis Small Cap, and Marquis International will
transfer all of their assets to One Group Treasury Only, One Group U.S. Treasury
Securities, One Group Municipal, One Group Government, One Group Income, One
Group Louisiana, One Group Asset Allocation, One Group Value, One Group Growth,
One Group Small Capitalization, and One Group International Index (collectively
the "One Group Funds"), respectively, in return for Class A, Class B, and
Fiduciary Class shares of the corresponding One Group Funds. At the same time,
the One Group Funds will assume all of the liabilities of the Marquis Funds.
Following the transfer of assets, shares of each One Group Fund will be
distributed to shareholders of each corresponding Marquis Fund. The Marquis
Funds will then be dissolved and liquidated. As a result of the transactions,
you will receive on a tax-free basis, a number of full and fractional shares of
the corresponding One Group Fund equal at the date of the exchange to the value
of your share of the net assets of each Marquis Fund in which you were invested.
If you own Class A shares of the Marquis Funds and are a financial
organization authorized to act in a fiduciary, advisory, custodial or similar
capacity, or you own Trust Class shares, you will receive One Group Fiduciary
Class Shares. If you otherwise own Marquis Class A, Retail Class or Cash
Sweep Class shares, you will receive One Group Class A Shares. Shareholders
holding Marquis Class B Shares will receive One Group Class B shares. If you
are invested in Marquis Institutional on that date, you will receive shares
of One Group Treasury Only. Both Marquis Institutional and One Group
Treasury Only have only one class of shares.
The Trustees have concluded that participation in the proposed
transaction is in the best interests of the Marquis Funds and their
shareholders. The Trustees have further concluded that the economic interests of
shareholders of the Marquis Funds will not be diluted as a result of the
proposed transaction. In reaching this conclusion, the Trustees considered,
among other things:
1. The similarity of the investment objectives and policies of
The One Group Funds with those of the Marquis Funds.
2. The performance of The One Group Funds as compared to the
Marquis Funds.
3. The enhanced range of investment options available to
investors in The One Group. The One Group currently offers
33 different funds.
4. The tax-free nature of the transaction.
5. The investment and market leverage that The One Group will
achieve as a result of the reorganization. Shareholders may
benefit from the resulting economies of scale.
6. The expense ratios of the Marquis Funds and The One Group
Funds.
7. The fact that the sales load currently charged Class B
shareholders will not change.
For a more complete discussion of the factors affecting the Board's
decision, please see page 87.
7
<PAGE>
SYNOPSIS
This Synopsis is designed to allow you to compare the current fees,
investment objectives, policies and restrictions, and shareholder policies of
each Marquis Fund with those of the corresponding One Group Fund. This section
is only a synopsis. For more complete information, please read the prospectus
for each fund.
COMPARISON OF CURRENT FEES
The following tables show the current fees for the Marquis Funds
followed by those currently charged by the corresponding One Group Fund. If the
reorganization is approved, you would pay the fees shown for the One Group Fund
that corresponds to your current Marquis Fund and share class. If you own Class
B shares of Marquis Funds, the Contingent Deferred Sales Charge currently
applicable to those shares (including the period of time you have held those
shares) will be applied to the One Group shares you receive in the
reorganization. This means that the sales charge applicable to your current
Class B shares will not change.
MARQUIS INSTITUTIONAL MONEY MARKET FUND
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waivers) (1) .04%
12b-1 Fees None
Other Expenses .21%
Total Operating Expenses (after fee waivers) (1) .25%
</TABLE>
(1) THE ADVISOR HAS VOLUNTARILY AGREED TO WAIVE ITS ADVISORY FEE OR
REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO KEEP "TOTAL OPERATING
EXPENSES" FOR THE FUND FROM EXCEEDING .25%. THE ADVISOR RESERVES THE
RIGHT TO TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE DISCRETION.
ABSENT SUCH WAIVER, MANAGEMENT FEES FOR THE FUND WOULD BE .15% AND TOTAL
OPERATING EXPENSES FOR THE FUND WOULD BE .36%.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in shares of
the Fund assuming: (1) 5% annual return and (2) redemption at the end of each
time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
$3 $8 $14 $32
</TABLE>
8
<PAGE>
THE ONE GROUP TREASURY ONLY MONEY MARKET FUND
<TABLE>
SHAREHOLDER TRANSACTION EXPENSES(1)
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) None
ANNUAL OPERATING EXPENSES(2)
(as a percentage of average daily net assets)
Investment Advisory Fees .08%
Other Expenses .10%
Total Fund Operating Expenses .18%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM REDEMPTION AMOUNTS PAID BY
WIRE.
(2) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) 5% annual return; and (2) redemption at the end of each time
period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
$2 $6 $10 $23
</TABLE>
9
<PAGE>
MARQUIS TREASURY SECURITIES MONEY MARKET FUND
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CASH
RETAIL CLASS SWEEP CLASS TRUST CLASS
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases None None None
Maximum Sales Load Imposed on Reinvested Dividends None None None
Maximum Contingent Deferred Sales Charge None None None
Wire Redemption Fee $25 $25 None
Exchange Fee None None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees .30% .30% .30%
12b-1 Fees (after fee waivers) (1) .20% .50% None
Other Expenses (after fee waivers) .20% .20% .20%
Total Operating Expenses (after fee waivers) (2) .70% 1.00% .50%
</TABLE>
(1) THE ADVISOR AND ADMINISTRATOR HAVE VOLUNTARILY AGREED TO WAIVE THEIR
FEES AND THE DISTRIBUTOR HAS VOLUNTARILY AGREED TO WAIVE 12b-1 FEES TO
THE EXTENT NECESSARY TO KEEP "TOTAL OPERATING EXPENSES" FOR THE RETAIL
CLASS AND CASH SWEEP CLASS SHARES FROM EXCEEDING 0.70% AND 1.00%,
RESPECTIVELY. THE ADVISOR, ADMINISTRATOR AND THE DISTRIBUTOR RESERVE
THE RIGHT TO TERMINATE THEIR WAIVERS AT ANY TIME IN THEIR SOLE
DISCRETION. ABSENT SUCH WAIVERS, 12b-1 FEES FOR THE RETAIL CLASS SHARES
OF THE FUND WOULD BE 0.25% AND FOR CASH SWEEP SHARES OF THE FUND WOULD
BE .75%
(2) ABSENT THE ADVISOR'S, ADMINISTRATOR'S AND THE DISTRIBUTOR'S VOLUNTARY
FEE WAIVERS, TOTAL OPERATING EXPENSES FOR RETAIL CLASS SHARES WOULD BE
0.75% AND FOR CASH SWEEP CLASS SHARES WOULD BE 1.25%.
EXAMPLE
You would pay the following expenses on a $1,000 investment in the Fund
assuming (1) 5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Retail Class $ 7 $22 $39 $ 87
Cash Sweep Class $10 $32 $55 $122
Trust Class $5 $16 $28 $63
</TABLE>
10
<PAGE>
THE ONE GROUP U.S. TREASURY SECURITIES MONEY MARKET FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a
percentage of offering price) None None None None
Maximum Contingent Deferred
Sales Charge (as a
percentage of original
purchase price or redemption
proceeds, as applicable) None 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(2)
(as a percentage of average
daily net assets)
Investment Advisory Fees
(after fee waiver)(3) .30% .30% .30% .30%
12b-1 Fees(4) .25% 1.00% 1.00% None
Other Expenses .21% .21% .21% .21%
Total Fund Operating Expenses
(after fee waivers)(5) .76% 1.51% 1.51% .51%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM REDEMPTION AMOUNTS PAID BY
WIRE.
(2) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(3) WITHOUT A FEE WAIVER, INVESTMENT ADVISORY FEES WOULD BE .35% FOR ALL
CLASSES OF SHARES.
(4) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED UNDER THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS.
(5) TOTAL OPERATING EXPENSES HAVE BEEN REVISED TO REFLECT FEE WAIVERS.
WITHOUT A VOLUNTARY REDUCTION OF INVESTMENT ADVISORY AND 12b-1 FEES,
TOTAL OPERATING EXPENSES WOULD BE .81% FOR CLASS A SHARES, 1.56% FOR
CLASS B SHARES, 1.56% FOR CLASS C SHARES, AND .56% FOR FIDUCIARY CLASS
SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 8 $ 24 $ 42 $ 94
Class A (without fee waiver) $ 8 $ 26 $ 45 $100
Class B $ 65 $ 78 $102 $160
Class B (without fee waiver) $ 66 $ 79 $105 $165
Class C $ 25 $ 48 $ 82 $180
Class C (without fee waiver) $ 26 $ 49 $ 85 $186
Fiduciary Class $ 5 $ 16 $ 29 $ 64
Fiduciary Class (without fee waiver) $ 6 $ 18 $ 31 $ 70
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 8 $ 24 $ 42 $ 94
Class A (without fee waiver) $ 8 $ 26 $ 45 $100
Class B $ 15 $ 48 $ 82 $160
Class B (without fee waiver) $ 16 $ 49 $ 85 $165
Class C $ 15 $ 48 $ 82 $180
Class C (without fee waiver) $ 16 $ 49 $ 85 $186
Fiduciary Class $ 5 $ 16 $ 29 $ 64
Fiduciary Class (without fee waiver) $ 6 $ 18 $ 31 $ 70
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
11
<PAGE>
MARQUIS TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES RETAIL CLASS CASH SWEEP CLASS
<S> <C> <C>
Maximum Sales Load Imposed on Purchases None None
Maximum Sales Load Imposed on Reinvested Dividends None None
Maximum Contingent Deferred Sales Charge None None
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waivers) (1) .44% .44%
12b-1 Fees (after fee waivers) (1) .00% .60%
Other Expenses (after fee waivers) (1) .21% .21%
Total Operating Expenses (after fee waivers) (2) .65% 1.25%
</TABLE>
(1) THE ADVISOR AND ADMINISTRATOR HAVE VOLUNTARILY AGREED TO WAIVE THEIR
FEES AND THE DISTRIBUTOR HAS VOLUNTARILY AGREED TO WAIVE 12b-1 FEES TO
THE EXTENT NECESSARY TO KEEP "TOTAL OPERATING EXPENSES" FOR THE RETAIL
CLASS SHARES FROM EXCEEDING 0.65%. THE ADVISOR, ADMINISTRATOR AND THE
DISTRIBUTOR RESERVE THE RIGHT TO TERMINATE THEIR WAIVERS AT ANY TIME IN
THEIR SOLE DISCRETION. ABSENT SUCH WAIVERS, MANAGEMENT FEES WOULD BE
0.45%, OTHER EXPENSES WOULD BE 0.25% AND THE 12b-1 FEE FOR THE RETAIL
CLASS AND CASH SWEEP CLASS SHARES OF THE FUND WOULD BE 0.25% AND .75%,
RESPECTIVELY.
(2) ABSENT THE ADVISOR'S, ADMINISTRATOR'S AND THE DISTRIBUTOR'S VOLUNTARY
FEE WAIVERS, TOTAL OPERATING EXPENSES FOR RETAIL CLASS SHARES OF THE TAX
EXEMPT FUND WOULD BE 0.95% AND FOR CASH SWEEP CLASS SHARES WOULD BE
1.45%.
EXAMPLE
You would pay the following expenses on a $1,000 investment in the Fund
assuming (1) 5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Retail Class $ 7 $21 $36 $ 81
Cash Sweep Class $13 $40 $69 $151
</TABLE>
12
<PAGE>
THE ONE GROUP MUNICIPAL MONEY MARKET FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS C CLASS
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase
price or redemption proceeds, as
applicable) None 1.00% None
Redemption Fees None None None
Exchange Fees None None None
ANNUAL OPERATING EXPENSES(2)
(as a percentage of average daily
net assets)
Investment Advisory Fees (after fee
waiver)(3) .25% .25% .25%
12b-1 Fees(4) .25% 1.00% None
Other Expenses .25% .25% .25%
Total Fund Operating Expenses (after
fee waiver)(5) .75% 1.50% .50%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM REDEMPTION AMOUNTS PAID BY
WIRE.
(2) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(3) WITHOUT A FEE WAIVER, INVESTMENT ADVISORY FEES WOULD BE .35% FOR ALL
CLASSES OF SHARES.
(4) DUE TO 12b-1 FEES, LONG-TERM CLASS A AND CLASS C SHAREHOLDERS MAY PAY
MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED UNDER THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS.
(5) TOTAL OPERATING EXPENSES HAVE BEEN REVISED TO REFLECT FEE WAIVERS.
WITHOUT A VOLUNTARY REDUCTION OF INVESTMENT ADVISORY FEES, TOTAL
OPERATING EXPENSES WOULD BE .85% FOR CLASS A SHARES, 1.60% FOR CLASS C
SHARES AND .60% FOR FIDUCIARY CLASS SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 8 $ 24 $ 42 $ 93
Class A (without fee waiver) $ 9 $ 27 $ 47 $105
Class C $ 25 $ 47 $ 82 $179
Class C (without fee waiver) $ 26 $ 50 $ 87 $190
Fiduciary Class $ 5 $ 16 $ 28 $ 63
Fiduciary Class (without fee waiver) $ 6 $ 19 $ 33 $ 75
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 8 $ 24 $ 42 $ 93
Class A (without fee waiver) $ 9 $ 27 $ 47 $105
Class C $ 15 $ 47 $ 82 $179
Class C (without fee waiver) $ 16 $ 50 $ 87 $190
Fiduciary Class $ 5 $ 16 $ 28 $ 63
Fiduciary Class (without fee waiver) $ 6 $ 19 $ 33 $ 75
</TABLE>
13
<PAGE>
MARQUIS GOVERNMENT SECURITIES
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 3.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
*Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) None 3.50%
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waivers) (1) .51% .51%
12b-1 Fees None .75%
Other Expenses (after expense reimbursements) (1) .19% .19%
Total Operating Expenses (after fee waivers) (2) .70% 1.45%
</TABLE>
(1) THE ADVISOR HAS VOLUNTARILY AGREED TO WAIVE ITS FEE, AND THE
ADMINISTRATOR HAS VOLUNTARILY AGREED TO REIMBURSE OTHER EXPENSES, TO THE
EXTENT NECESSARY TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING .70%
FOR CLASS A SHARES AND 1.45% FOR CLASS B SHARES. ABSENT SUCH WAIVERS,
MANAGEMENT FEES WOULD BE .55%. ABSENT EXPENSE REIMBURSEMENTS, OTHER
EXPENSES WOULD BE .21%.
(2) ABSENT THE ADVISOR'S VOLUNTARY FEE WAIVER AND THE ADMINISTRATOR'S
VOLUNTARY FEE REIMBURSEMENT, TOTAL OPERATING EXPENSES FOR CLASS A SHARES
WOULD BE .76% AND FOR CLASS B SHARES WOULD BE 1.51%.
* A REDEMPTION CHARGE OF 1.00% WILL BE ASSESSED AGAINST THE PROCEEDS OF
ANY REDEMPTION REQUEST RELATING TO CLASS A SHARES OF THE FUNDS THAT WERE
PURCHASED WITHOUT A SALES CHARGE IN RELIANCE UPON THE WAIVER ACCORDED TO
PURCHASES IN THE AMOUNT OF $1 MILLION OR MORE, BUT ONLY WHERE SUCH
REDEMPTION REQUEST IS MADE WITHIN 1 YEAR OF THE DATE THE SHARES WERE
PURCHASED.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $42 $57 $73 $119
Class B $50 $66 $84 $125
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $42 $57 $73 $119
Class B $15 $46 $79 $125
</TABLE>
14
<PAGE>
THE ONE GROUP GOVERNMENT BOND FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption proceeds,
as applicable) None(2) 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily
net assets)
Investment Advisory Fees .45% .45% .45% .45%
12b-1 Fees (after fee waiver)(4) .25% .90% .90% None
Other Expenses .24% .24% .24% .24%
Total Fund Operating Expenses (after
fee waivers)(5) .94% 1.59% 1.59% .69%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM REDEMPTION AMOUNTS PAID BY
WIRE.
(2) EXCEPT FOR PURCHASES OF $1 MILLION OR MORE. PLEASE SEE "SALES CHARGES."
(3) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(4) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS.
WITHOUT THE VOLUNTARY WAIVER OF FEES, 12b-1 FEES WOULD BE .35% FOR
CLASS A SHARES AND 1.00% FOR CLASS B AND CLASS C SHARES.
(5) WITHOUT THE VOLUNTARY REDUCTION OF INVESTMENT ADVISORY AND 12b-1 FEES,
TOTAL OPERATING EXPENSES WOULD BE 1.04% FOR CLASS A SHARES, AND 1.69% FOR
CLASS B AND CLASS C SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $54 $74 $ 95 $155
Class A (without fee waivers) $55 $77 $100 $166
Class B $66 $80 $107 $172
Class B (without fee waivers) $67 $83 $112 $183
Class C $26 $50 $ 87 $189
Class C (without fee waivers) $27 $53 $ 92 $200
Fiduciary Class $ 7 $22 $ 38 $ 86
Fiduciary Class (without fee waiver) $ 7 $22 $ 38 $ 86
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $54 $74 $ 95 $155
Class A (without fee waivers) $55 $77 $100 $168
Class B $16 $50 $ 87 $172
Class B (without fee waivers) $17 $53 $ 92 $183
Class C $16 $50 $ 87 $189
Class C (without fee waivers) $17 $53 $ 92 $200
Fiduciary Class $ 7 $22 $ 38 $ 86
Fiduciary Class (without fee waiver) $ 7 $22 $ 38 $ 86
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
15
<PAGE>
MARQUIS STRATEGIC INCOME BOND FUND
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 3.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
*Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) None 3.50%
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waivers) (1) .31% .31%
12b-1 Fees None .75%
Other Expenses (after expense
reimbursements) (1) .59% .59%
Total Operating Expenses (after
fee waivers) (2) .90% 1.65%
</TABLE>
(1) THE ADVISOR HAS VOLUNTARILY AGREED TO WAIVE ITS FEE, AND THE
ADMINISTRATOR HAS VOLUNTARILY AGREED TO REIMBURSE OTHER EXPENSES, TO THE
EXTENT NECESSARY TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING .90%
FOR CLASS A SHARES AND 1.65% FOR CLASS B SHARES. ABSENT SUCH WAIVERS,
MANAGEMENT FEES WOULD BE .74%. ABSENT EXPENSE REIMBURSEMENTS, OTHER
EXPENSES WOULD BE .69%.
(2) ABSENT THE ADVISOR'S VOLUNTARY FEE WAIVER AND THE ADMINISTRATOR'S
VOLUNTARY FEE REIMBURSEMENT, TOTAL OPERATING EXPENSES FOR CLASS A SHARES
WOULD BE 1.43% AND FOR CLASS B SHARES WOULD BE 2.13%..
* A redemption charge of 1.00% will be assessed against the proceeds of
any redemption request relating to Class A shares of the Funds that were
purchased without a sales charge in reliance upon the waiver accorded to
purchases in the amount of $1 million or more, but only where such
redemption request is made within 1 year of the date the shares were
purchased.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $44 $63 N/A N/A
Class B $52 $72 N/A N/A
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $44 $63 N/A N/A
Class B $17 $52 N/A N/A
</TABLE>
16
<PAGE>
THE ONE GROUP INCOME BOND FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase
price or redemption proceeds, as
applicable) None(2) 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily net
assets)
Investment Advisory Fees (after fee
waiver)(4) .40% .40% .40% .40%
12b-1 Fees (after fee waiver)(5) .25% .90% .90% None
Other Expenses .22% .22% .22% .22%
Total Fund Operating Expenses
(after fee waiver)(6) .87% 1.52% 1.52% .62%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM REDEMPTION AMOUNTS PAID BY
WIRE.
(2) EXCEPT FOR PURCHASES OF $1 MILLION OR MORE. PLEASE SEE "SALES CHARGES."
(3) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(4) WITHOUT THE FEE WAIVER, INVESTMENT ADVISORY FEES WOULD BE .60% FOR ALL
CLASSES OF SHARES.
(5) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS. WITHOUT THE VOLUNTARY WAIVER OF FEES, 12b-1 FEES WOULD BE .35%
FOR CLASS A SHARES AND 1.00% FOR CLASS B AND CLASS C SHARES.
(6) WITHOUT THE VOLUNTARY REDUCTION OF INVESTMENT ADVISORY AND 12b-1 FEES,
TOTAL OPERATING EXPENSES WOULD BE 1.17% FOR CLASS A SHARES, 1.82% FOR
CLASS B SHARES, 1.82% FOR CLASS C SHARES AND .82% FOR FIDUCIARY CLASS
SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $53 $72 $ 91 $147
Class A (without fee waivers) $56 $80 $106 $181
Class B $65 $78 $103 $164
Class B (without fee waivers) $68 $87 $119 $197
Class C $25 $48 $ 83 $181
Class C (without fee waivers) $28 $57 $ 99 $214
Fiduciary Class $ 6 $20 $ 35 $ 77
Fiduciary Class (without fee waiver) $ 8 $26 $ 46 $101
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $53 $72 $ 91 $147
Class A (without fee waivers) $56 $80 $106 $181
Class B $15 $48 $ 83 $164
Class B (without fee waivers) $18 $57 $ 99 $197
Class C $15 $48 $ 83 $181
Class C (without fee waivers) $18 $57 $ 99 $214
Fiduciary Class $ 6 $20 $ 35 $ 77
Fiduciary Class (without fee waiver) $ 8 $26 $ 46 $101
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
17
<PAGE>
MARQUIS LOUISIANA TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 3.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
*Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) None 3.50%
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees .35% .35%
12b-1 Fees None .75%
Other Expenses .30% .30%
Total Operating Expenses .65% 1.40%
</TABLE>
* A redemption charge of 1.00% will be assessed against the proceeds of
any redemption request relating to Class A shares of the Funds that were
purchased without a sales charge in reliance upon the waiver accorded to
purchases in the amount of $1 million or more, but only where such
redemption request is made within 1 year of the date the shares were
purchased.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $41 $55 $70 $113
Class B $49 $64 $82 $119
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $41 $55 $70 $113
Class B $14 $44 $77 $119
</TABLE>
18
<PAGE>
THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable) None(2) 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average
daily net assets)
Investment Advisory Fees (after fee waiver)(4) .40% .40% .40% .40%
12b-1 Fees (after fee waiver)(5) .25% .90% .90% None
Other Expenses .32% .32% .32% .32%
Total Fund Operating Expenses
(after fee waivers)(6) .97% 1.62% 1.62% .72%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM REDEMPTION AMOUNTS PAID BY
WIRE.
(2) EXCEPT FOR PURCHASES OF $1 MILLION OR MORE. PLEASE SEE "SALES CHARGES."
(3) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(4) WITHOUT THE FEE WAIVER, INVESTMENT ADVISORY FEES WOULD BE .60% FOR ALL
CLASSES OF SHARES.
(5) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS. WITHOUT THE VOLUNTARY WAIVER OF FEES, 12b-1 FEES WOULD BE .35%
FOR CLASS A SHARES AND 1.00% FOR CLASS B AND CLASS C SHARES.
(6) WITHOUT THE VOLUNTARY REDUCTION OF INVESTMENT ADVISORY AND 12b-1 FEES,
TOTAL OPERATING EXPENSES WOULD BE 1.27% FOR CLASS A SHARES, 1.92% FOR
CLASS B SHARES, 1.92% FOR CLASS C SHARES AND .92% FOR FIDUCIARY CLASS
SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $54 $75 $ 96 $159
Class A (without fee waivers) $57 $83 $112 $191
Class B $66 $81 $108 $175
Class B (without fee waivers) $69 $90 $124 $207
Class C $26 $51 $ 88 $192
Class C (without fee waivers) $29 $60 $104 $224
Fiduciary Class $ 7 $23 $ 40 $ 89
Fiduciary Class (without fee waiver) $ 9 $29 $ 51 $113
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $54 $75 $ 96 $159
Class A (without fee waivers) $57 $83 $112 $191
Class B $16 $51 $ 88 $175
Class B (without fee waivers) $19 $60 $104 $207
Class C $16 $51 $ 88 $192
Class C (without fee waivers) $19 $60 $104 $224
Fiduciary Class $ 7 $23 $ 40 $ 89
Fiduciary Class (without fee waiver) $ 9 $29 $ 51 $113
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
19
<PAGE>
MARQUIS BALANCED FUND
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 3.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
*Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) None 3.50%
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waivers) (1) .71% .71%
12b-1 Fees None .75%
Other Expenses (after expense reimbursements) (1) .19% .19%
Total Operating Expenses (after fee waivers) (2) .90% 1.65%
</TABLE>
(1) THE ADVISOR HAS VOLUNTARILY AGREED TO WAIVE ITS FEE, AND THE
ADMINISTRATOR HAS VOLUNTARILY AGREED TO REIMBURSE OTHER EXPENSES, TO THE
EXTENT NECESSARY TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING .90%
FOR CLASS A SHARES AND 1.65% FOR CLASS B SHARES. ABSENT SUCH WAIVERS,
MANAGEMENT FEES WOULD BE .74%. ABSENT EXPENSE REIMBURSEMENTS, OTHER
EXPENSES WOULD BE .22%.
(2) ABSENT THE ADVISOR'S VOLUNTARY FEE WAIVER AND THE ADMINISTRATOR'S
VOLUNTARY FEE REIMBURSEMENT, TOTAL OPERATING EXPENSES FOR CLASS A SHARES
WOULD BE .96% AND FOR CLASS B SHARES WOULD BE 1.71%..
* A redemption charge of 1.00% will be assessed against the proceeds of
any redemption request relating to Class A shares of the Funds that were
purchased without a sales charge in reliance upon the waiver accorded to
purchases in the amount of $1 million or more, but only where such
redemption request is made within 1 year of the date the shares were
purchased.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $44 $63 $83 $142
Class B $52 $72 $95 $147
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $44 $63 $83 $142
Class B $17 $52 $90 $147
</TABLE>
20
<PAGE>
THE ONE GROUP ASSET ALLOCATION
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption proceeds,
as applicable) None(2) 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily
net assets)
Investment Advisory Fees (after fee
waiver)(4) .55% .55% .55% .55%
12b-1 Fees (after fee waiver)(5) .25% 1.00% 1.00% None
Other Expenses .40% .40% .40% .40%
Total Fund Operating Expenses
(after fee waivers)(6) 1.20% 1.95% 1.95% .95%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM THE REDEMPTION AMOUNTS PAID
BY WIRE.
(2) EXCEPT FOR PURCHASES OF $1 MILLION OR MORE. PLEASE SEE "SALES CHARGES."
(3) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(4) WITHOUT THE FEE WAIVER, INVESTMENT ADVISORY FEES WOULD BE .65% FOR ALL
CLASSES OF SHARES.
(5) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS. WITHOUT THE VOLUNTARY WAIVER, 12b-1 FEES WOULD BE .35% FOR
CLASS A SHARES.
(6) TOTAL OPERATING EXPENSES HAVE BEEN REVISED TO REFLECT FEE WAIVERS.
WITHOUT THE VOLUNTARY REDUCTION OF INVESTMENT ADVISORY AND 12b-1 FEES,
TOTAL OPERATING EXPENSES WOULD BE 1.40% FOR CLASS A SHARES, 2.05% FOR
CLASS B SHARES, 2.05% FOR CLASS C SHARES AND 1.05% FOR FIDUCIARY CLASS
SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 57 $ 81 $108 $184
Class A (without fee waivers) $ 59 $ 87 $118 $205
Class B $ 70 $ 91 $125 $208
Class B (without fee waiver) $ 71 $ 94 $130 $221
Class C $ 30 $ 61 $105 $227
Class C (without fee waiver) $ 31 $ 64 $110 $238
Fiduciary Class $ 10 $ 30 $ 53 $117
Fiduciary Class (without fee waiver) $ 11 $ 33 $ 58 $128
</TABLE>
Assuming no redemption the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 57 $ 81 $108 $184
Class A (without fee waivers) $ 59 $ 87 $118 $205
Class B $ 20 $ 61 $105 $208
Class B (without fee waiver) $ 21 $ 64 $110 $221
Class C $ 20 $ 61 $105 $227
Class C (without fee waiver) $ 21 $ 64 $110 $238
Fiduciary Class $ 10 $ 30 $ 53 $117
Fiduciary Class (without fee waiver) $ 11 $ 33 $ 58 $128
</TABLE>
/Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
21
<PAGE>
MARQUIS VALUE EQUITY FUND
<TABLE>
<CAPTION>
Shareholder Transaction Expenses CLASS A CLASS B
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 3.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
*Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) None 3.50%
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waivers) (1) .74% .74%
12b-1 Fees None .75%
Other Expenses (after expense reimbursements) (1) .26% .26%
Total Operating Expenses (after fee waivers) (2) 1.00% 1.75%
</TABLE>
(1) THE ADVISOR HAS VOLUNTARILY AGREED TO WAIVE ITS FEE, AND THE
ADMINISTRATOR HAS VOLUNTARILY AGREED TO REIMBURSE OTHER EXPENSES, TO THE
EXTENT NECESSARY TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.00%
FOR CLASS A SHARES AND 1.75% FOR CLASS B SHARES. ABSENT EXPENSE
REIMBURSEMENTS, OTHER EXPENSES WOULD BE .26%.
(2) ABSENT THE ADVISOR'S VOLUNTARY FEE WAIVER AND THE ADMINISTRATOR'S
VOLUNTARY FEE REIMBURSEMENT, TOTAL OPERATING EXPENSES FOR CLASS A SHARES
WOULD BE 1.00% AND FOR CLASS B SHARES WOULD BE 1.75%.
* A redemption charge of 1.00% will be assessed against the proceeds of
any redemption request relating to Class A shares of the Funds that were
purchased without a sales charge in reliance upon the waiver accorded to
purchases in the amount of $1 million or more, but only where such
redemption request is made within 1 year of the date the shares were
purchased.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $45 $66 $ 88 $153
Class B $53 $75 $100 $159
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $45 $66 $ 88 $153
Class B $18 $55 $ 95 $159
</TABLE>
22
<PAGE>
THE ONE GROUP DISCIPLINED VALUE FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price
or redemption proceeds, as applicable) None(2) 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily net assets)
Investment Advisory Fees .74% .74% .74% .74%
12b-1 Fees (after fee waiver)(4) .25% 1.00% 1.00% None
Other Expenses .26% .26% .26% .26%
Total Fund Operating Expenses
(after fee waiver)(5) 1.25% 2.00% 2.00% 1.00%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM THE REDEMPTION AMOUNTS PAID
BY WIRE.
(2) EXCEPT FOR PURCHASES OF $1 MILLION OR MORE. PLEASE SEE "SALES CHARGES."
(3) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(4) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS. WITHOUT THE VOLUNTARY WAIVER, 12b-1 FEES WOULD BE .35% FOR
CLASS A SHARES.
(5) WITHOUT THE VOLUNTARY REDUCTION OF 12b-1 FEES, TOTAL OPERATING EXPENSES
WOULD BE 1.35% FOR CLASS A SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 57 $ 83 $111 $189
Class A (without fee waiver) $ 58 $ 86 $116 $200
Class B $ 70 $ 93 $128 $213
Class C $ 30 $ 63 $108 $233
Fiduciary Class $ 10 $ 32 $ 55 $122
</TABLE>
Assuming no redemption at the end of the period, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 57 $ 83 $111 $189
Class A (without fee waiver) $ 58 $ 86 $116 $200
Class B $ 20 $ 63 $108 $213
Class C $ 20 $ 63 $108 $233
Fiduciary Class $ 10 $ 32 $ 55 $122
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
23
<PAGE>
MARQUIS GROWTH EQUITY FUND
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 3.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
*Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) None 3.50%
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waivers) (1) .72% .72%
12b-1 Fees None .75%
Other Expenses (after expense reimbursements) (1) .28% .28%
Total Operating Expenses (after fee waivers) (2) 1.00% 1.75%
</TABLE>
(1) THE ADVISOR HAS VOLUNTARILY AGREED TO WAIVE ITS FEE, AND THE
ADMINISTRATOR HAS VOLUNTARILY AGREED TO REIMBURSE OTHER EXPENSES, TO THE
EXTENT NECESSARY TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.00%
FOR CLASS A SHARES AND 1.75% FOR CLASS B SHARES. ABSENT SUCH WAIVERS,
MANAGEMENT FEES WOULD BE .74%. ABSENT EXPENSE REIMBURSEMENTS, OTHER
EXPENSES WOULD BE .30%.
(2) ABSENT THE ADVISOR'S VOLUNTARY FEE WAIVER AND THE ADMINISTRATOR'S
VOLUNTARY FEE REIMBURSEMENT, TOTAL OPERATING EXPENSES FOR CLASS A SHARES
WOULD BE 1.04% AND FOR CLASS B SHARES WOULD BE 1.79%.
* A redemption charge of 1.00% will be assessed against the proceeds of
any redemption request relating to Class A shares of the Funds that were
purchased without a sales charge in reliance upon the waiver accorded to
purchases in the amount of $1 million or more, but only where such
redemption request is made within 1 year of the date the shares were
purchased.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $45 $66 $ 88 $153
Class B $53 $75 $100 $159
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $45 $66 $ 88 $153
Class B $18 $55 $ 95 $159
</TABLE>
24
<PAGE>
THE ONE GROUP GROWTH OPPORTUNITIES FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price
or redemption proceeds, as applicable) None(2) 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily net assets)
Investment Advisory Fees .74% .74% .74% .74%
12b-1 Fees (after fee waiver)(4) .25% 1.00% 1.00% None
Other Expenses .26% .26% .26% .26%
Total Fund Operating Expenses
(after fee waiver)(5) 1.25% 2.00% 2.00% 1.00%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM THE REDEMPTION AMOUNTS PAID
BY WIRE.
(2) EXCEPT FOR PURCHASES OF $1 MILLION OR MORE. PLEASE SEE "SALES CHARGES."
(3) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(4) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS. WITHOUT THE VOLUNTARY WAIVER, 12b-1 FEES WOULD BE .35% FOR
CLASS A SHARES.
(5) WITHOUT THE VOLUNTARY REDUCTION OF 12b-1 FEES, TOTAL OPERATING EXPENSES
WOULD BE 1.35% FOR CLASS A SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 57 $ 83 $111 $189
Class A (without fee waiver) $ 58 $ 86 $116 $200
Class B $ 70 $ 93 $128 $213
Class C $ 30 $ 63 $108 $233
Fiduciary Class $ 10 $ 32 $ 55 $122
</TABLE>
Assuming no redemption at the end of the period, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 57 $ 83 $111 $189
Class A (without fee waiver) $ 58 $ 86 $116 $200
Class B $ 20 $ 63 $108 $213
Class C $ 20 $ 63 $108 $233
Fiduciary Class $ 10 $ 32 $ 55 $122
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
25
<PAGE>
MARQUIS SMALL CAP EQUITY FUND
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 3.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
*Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) None 3.50%
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waivers) (1) 1.19% 1.19%
12b-1 Fees None .75%
Other Expenses (after fee reimbursements) (1)(2) .11% .11%
Total Operating Expenses after fee waivers) (1)(3) 1.30% 2.05%
</TABLE>
(1) MANAGEMENT FEES INCLUDE FEES AT THE "MASTER" LEVEL OF 1.00% AND FEES AT
THE "FEEDER" LEVEL OF .19%. THE ADVISOR HAS VOLUNTARILY AGREED TO WAIVE
ITS FEE, AND THE ADMINISTRATOR HAS VOLUNTARILY AGREED TO REIMBURSE OTHER
EXPENSES, TO THE EXTENT NECESSARY TO KEEP THE TOTAL OPERATING EXPENSES
AT THE FEEDER LEVEL FROM EXCEEDING .20%. ABSENT SUCH WAIVER, MANAGEMENT
FEES AT THE FEEDER LEVEL WOULD BE .40%. ABSENT SUCH REIMBURSEMENTS,
OTHER EXPENSES AT THE FEEDER LEVEL WOULD BE 2.46%.
(2) OTHER EXPENSES INCLUDE EXPENSES AT THE "MASTER" LEVEL OF .10%, AND
EXPENSES AT THE "FEEDER" LEVEL OF .01%. THE DISTRIBUTOR HAS WAIVED, ON
A VOLUNTARY BASIS, ALL OR A PORTION OF ITS SHAREHOLDER SERVICING FEE AT
THE MASTER LEVEL WITH RESPECT TO THE PORTFOLIOS, AND THE OTHER EXPENSES
SHOWN REFLECT THIS WAIVER. ABSENT SUCH WAIVERS, OTHER EXPENSES AT THE
MASTER LEVEL WOULD BE .32%.
(3) ABSENT THE MASTER FUND ADVISOR'S VOLUNTARY FEE WAIVERS, THE ADVISOR'S
VOLUNTARY FEE WAIVERS AND THE ADMINISTRATOR'S VOLUNTARY REIMBURSEMENTS,
TOTAL OPERATING EXPENSES WOULD BE 4.18% FOR CLASS A SHARES AND 4.93% FOR
CLASS B SHARES.
* A redemption charge of 1.00% will be assessed against the proceeds of
any redemption request relating to Class A shares of the Funds that were
purchased without a sales charge in reliance upon the waiver accorded to
purchases in the amount of $1 million or more, but only where such
redemption request is made within 1 year of the date the shares were
purchased.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $48 $75 N/A N/A
Class B $56 $84 N/A N/A
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $48 $75 N/A N/A
Class B $21 $64 N/A N/A
</TABLE>
26
<PAGE>
THE ONE GROUP SMALL CAPITALIZATION FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price
or redemption proceeds, as applicable) None(2) 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily net assets)
Investment Advisory Fees .74% .74% .74% .74%
12b-1 Fees (after fee waiver)(4) .25% 1.00% 1.00% None
Other Expenses .32% .32% .32% .32%
Total Fund Operating Expenses
(after fee waiver)(5) 1.31% 2.06% 2.06% 1.06%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM REDEMPTION AMOUNTS PAID BY
WIRE.
(2) EXCEPT FOR PURCHASES OF $1 MILLION OR MORE. PLEASE SEE "SALES CHARGES."
(3) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(4) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS. WITHOUT THE VOLUNTARY WAIVER, 12b-1 FEES WOULD BE .35% FOR
CLASS A SHARES.
(5) WITHOUT THE VOLUNTARY REDUCTION OF 12b-1 FEES, TOTAL OPERATING EXPENSES
WOULD BE 1.41% FOR CLASS A SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 58 $ 85 $114 $196
Class A (without fee waiver) $ 59 $ 88 $119 $206
Class B $ 71 $ 95 $131 $220
Class C $ 31 $ 65 $111 $239
Fiduciary Class $ 11 $ 34 $ 58 $129
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 58 $ 85 $114 $196
Class A (without fee waiver) $ 59 $ 88 $119 $206
Class B $ 21 $ 65 $111 $220
Class C $ 21 $ 65 $111 $239
Fiduciary Class $ 11 $ 34 $ 58 $129
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
27
<PAGE>
MARQUIS INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 3.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
*Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) None 3.50%
Wire Redemption Fee $25 $25
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fees (after fee waivers) (1) 1.05% 1.05%
12b-1 Fees None .75%
Other Expenses (after fee reimbursements) (1)(2) .50% .50%
Total Operating Expenses after fee waivers) (1)(3) 1.55% 2.30%
</TABLE>
(1) MANAGEMENT FEES INCLUDE FEES AT THE "MASTER" LEVEL OF .86%, AND FEES AT
THE "FEEDER" LEVEL OF .19%. THE ADVISOR HAS VOLUNTARILY AGREED TO WAIVE
ITS FEE, AND THE ADMINISTRATOR HAS VOLUNTARILY AGREED TO REIMBURSE OTHER
EXPENSES, TO THE EXTENT NECESSARY TO KEEP THE TOTAL OPERATING EXPENSES
AT THE FEEDER LEVEL FROM EXCEEDING .27%. ABSENT SUCH WAIVER, MANAGEMENT
FEES AT THE FEEDER LEVEL WOULD BE .40%. ABSENT SUCH REIMBURSEMENTS,
OTHER EXPENSES AT THE FEEDER LEVEL WOULD BE 1.81 %. ABSENT THE MASTER
FUND ADVISOR'S VOLUNTARY FEE WAIVERS, MANAGEMENT FEES AT THE MASTER
LEVEL WOULD BE .96%.
(2) OTHER EXPENSES INCLUDE EXPENSES AT THE "MASTER" LEVEL OF .42% AND
EXPENSES AT THE "FEEDER" LEVEL OF .08%. THE DISTRIBUTOR HAS WAIVED, ON
A VOLUNTARY BASIS, ALL OR A PORTION OF ITS SHAREHOLDER SERVICING FEE AT
THE MASTER LEVEL WITH RESPECT TO THE PORTFOLIOS, AND THE OTHER EXPENSES
SHOWN REFLECT THIS WAIVER. THE DISTRIBUTOR RESERVES THE RIGHT TO
TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE DISCRETION. ABSENT SUCH
WAIVERS, OTHER EXPENSES AT THE MASTER LEVEL WOULD BE .42%.
(3) ABSENT THE MASTER FUND ADVISOR'S VOLUNTARY FEE WAIVERS, THE ADVISOR'S
VOLUNTARY FEE WAIVERS AND THE ADMINISTRATOR'S VOLUNTARY REIMBURSEMENTS,
TOTAL OPERATING EXPENSES WOULD BE 3.59% FOR CLASS A SHARES AND 4.34% FOR
CLASS B SHARES.
* A redemption charge of 1.00% will be assessed against the proceeds of
any redemption request relating to Class A shares of the Funds that were
purchased without a sales charge in reliance upon the waiver accorded to
purchases in the amount of $1 million or more, but only where such
redemption request is made within 1 year of the date the shares were
purchased.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $50 $82 N/A N/A
Class B $58 $92 N/A N/A
</TABLE>
Assuming no redemption at the end of each time period, the dollar amounts in the
above example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $50 $82 N/A N/A
Class B $23 $72 N/A N/A
</TABLE>
28
<PAGE>
THE ONE GROUP INTERNATIONAL EQUITY INDEX FUND
<TABLE>
<CAPTION>
FIDUCIARY
SHAREHOLDER TRANSACTION EXPENSES(1) CLASS A CLASS B CLASS C CLASS
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price
or redemption proceeds, as applicable) None(2) 5.00% 1.00% None
Redemption Fees None None None None
Exchange Fees None None None None
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily net assets)
Investment Advisory Fees .55% .55% .55% .55%
12b-1 Fees (after fee waiver)(4) .25% 1.00% 1.00% None
Other Expenses .41% .41% .41% .41%
Total Fund Operating Expenses
(after fee waiver)(5) 1.21% 1.96% 1.96% .96%
</TABLE>
(1) IF YOU BUY OR SELL SHARES THROUGH A SHAREHOLDER SERVICING AGENT, YOU MAY
BE CHARGED SEPARATE TRANSACTION FEES BY THE SHAREHOLDER SERVICING AGENT.
IN ADDITION, A $7.00 CHARGE IS DEDUCTED FROM THE REDEMPTION AMOUNTS PAID
BY WIRE.
(2) EXCEPT FOR PURCHASES OF $1 MILLION OR MORE. PLEASE SEE "SALES CHARGES."
(3) EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.
(4) DUE TO 12b-1 FEES, LONG-TERM CLASS A, CLASS B AND CLASS C SHAREHOLDERS
MAY PAY MORE THAN THE EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES
PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS. WITHOUT THE VOLUNTARY WAIVER, 12b-1 FEES WOULD BE .35% FOR
CLASS A SHARES.
(5) WITHOUT THE VOLUNTARY REDUCTION OF 12b-1 FEES, TOTAL OPERATING EXPENSES
WOULD BE 1.31% FOR CLASS A SHARES.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the Fund,
assuming: (1) payment of the maximum sales charge; (2) 5% annual return; and
(3) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 57 $ 82 $109 $185
Class A (without fee waiver) $ 58 $ 85 $114 $196
Class B $ 70 $ 92 $126 $209
Class C $ 30 $ 62 $106 $229
Fiduciary Class $ 10 $ 31 $ 53 $118
</TABLE>
Assuming no redemption at the end of the period, the dollar amounts in the above
example would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 57 $ 82 $109 $185
Class A (without fee waiver) $ 58 $ 85 $114 $196
Class B $ 20 $ 62 $106 $209
Class C $ 20 $ 62 $106 $229
Fiduciary Class $ 10 $ 31 $ 53 $118
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 years" examples above reflect this conversion.
THE EXAMPLES SHOWN ON PAGES 2-30 ARE DESIGNED TO ASSIST YOU IN UNDERSTANDING
THE VARIOUS COSTS AND EXPENSES THAT MAY BE DIRECTLY OR INDIRECTLY PAID BY
INVESTORS IN A FUND. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION
OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
29
<PAGE>
COMPARISON OF INVESTMENT OBJECTIVES
This section will help you compare the investment objective and policies of
each Marquis Fund with that of the corresponding One Group Fund. Please be
aware that this is only a brief discussion. More complete information can be
found in The One Group and Marquis Funds prospectuses which you received along
with this Combined Prospectus/Proxy Statement.
Each Marquis Fund and its corresponding One Group Fund pursue similar
investment objectives and hold substantially similar securities, either directly
or through a "master/feeder" arrangement. As a result, the proposed
reorganization of Marquis Funds will not result in significant portfolio
turnover or transaction expenses due to The One Group's disposal of incompatible
securities. Banc One Investment Advisors Corporation ("Banc One Investment
Advisors") serves as investment advisor to both Marquis Funds and The One Group.
MARQUIS INSTITUTIONAL AND ONE GROUP TREASURY ONLY
Marquis Institutional seeks to preserve principal value and maintain a high
degree of liquidity while providing current income by investing exclusively in
obligations issued by the U.S. Treasury and in repurchase agreements involving
such obligations.
Similarly, One Group Treasury Only seeks high current income with liquidity
and stability of principal. However, One Group Treasury Only does not purchase
securities that are subject to repurchase agreements.
Each Fund seeks to maintain a stable net asset value of $1.00 per share,
although there is no assurance that the Funds will be able to achieve this
objective. In addition, each Fund's portfolio securities are valued under the
amortized cost method in compliance with regulations of the SEC. Consequently,
both Marquis Institutional and One Group Treasury Only invest only in U.S.
dollar-denominated securities, maintain an average maturity on a dollar-weighted
basis of 90 days or less, and acquire only "eligible securities" that present
minimal credit risk and have a maturity of 397 days or less. Each Fund is
offered exclusively to institutional investors.
MARQUIS TREASURY SECURITIES AND ONE GROUP TREASURY SECURITIES
Marquis Treasury Securities seeks to preserve principal value and maintain
a high degree of liquidity while providing current income by investing
exclusively in obligations issued by the U.S. Treasury and in repurchase
agreements involving such obligations.
The investment objective of One Group Treasury Securities is to seek
current income with liquidity and stability of principal. The Fund will invest
exclusively in short-term U.S. Treasury obligations, including repurchase
agreements collateralized by such obligations.
Each Fund seeks to maintain a stable net asset value of $1.00 per share,
although there is no assurance that the Funds will be able to achieve this
objective. In addition, each Fund's portfolio securities are valued under the
amortized cost method in compliance with regulations of the SEC. Consequently,
both Marquis Institutional and One Group Treasury Only invest only in U.S.
dollar-denominated securities, maintain an average maturity on a dollar-weighted
basis of 90 days or less, and acquire only "eligible securities" that present
minimal credit risk and have a maturity of 397 days or less.
MARQUIS TAX-EXEMPT AND ONE GROUP MUNICIPAL
Marquis Tax-Exempt seeks to preserve principal value and maintain a high
degree of liquidity while providing current income exempt from Federal income
taxes by investing, under normal market conditions, at least 80% of its net
assets in eligible securities issued by or on behalf of the states, territories,
and possessions of the United States and the District of Columbia and their
political subdivisions, agencies, and instrumentalities, the interest on which
is exempt from Federal income tax. At least 80% of the Fund's assets will be
invested in municipal securities the interest on which is
30
<PAGE>
not treated as a preference item for purposes of the federal alternative
minimum tax for individual shareholders. All tax-exempt interest dividends
will, however, be included in determining the Federal alternative minimum
taxable income of corporations. Marquis Tax-Exempt may invest up to 20% of
its net assets in the aggregate in taxable money market instruments.
Likewise, One Group Municipal seeks as high a level of current interest
income exempt from Federal income tax as is consistent with capital
preservation and stability of principal. As a matter of fundamental policy,
One Group Municipal invests at least 80% of its total assets in municipal
securities. These are securities issued by or on behalf of the states,
territories, and possessions of the United States and the District of
Columbia and their political subdivisions, agencies, and instrumentalities,
the interest on which is exempt from Federal income tax. These municipal
securities produce interest that, in the opinion of bond counsel for the
issuer, is exempt from Federal income tax. However, the Fund may invest as
much as 100% of its assets in municipal securities that produce tax-exempt
dividends that may result in liability for Federal alternative minimum tax
and for state and local taxes for both individual and corporate shareholders.
All tax exempt interest dividends will, however, be included in determining
the Federal alternative minimum taxable income of corporations. If you are
subject to the Federal alternative minimum tax, please read the section of
The One Group Municipal Money Market Fund prospectus entitled "Tax Treatment
of Shareholders". The Fund also may invest up to 20% of its total assets in
other types of securities, such as taxable money market instruments,
including repurchase agreements.
MARQUIS GOVERNMENT AND ONE GROUP GOVERNMENT
Marquis Government seeks current income consistent with relative stability
of capital by investing primarily in U.S. Government securities. Under normal
conditions, at least 65% of the Fund's total assets will be invested in
obligations issued or guaranteed as to principal and interest by the U.S.
Government or its agencies and instrumentalities. The Fund normally will
maintain a dollar-weighted average portfolio maturity of three to ten years,
however, under certain circumstances this average weighted maturity may fall
below three years.
One Group Government seeks a high level of current income with liquidity
and safety of principal. The Fund limits its investments to securities issued
by the U.S. Government and its agencies and instrumentalities or related to
securities issued by the U.S. Government and its agencies and instrumentalities.
At least 65% of the Fund's total assets will be invested in debt instruments
with principal and interest guaranteed by the U.S. Government or its agencies
and instrumentalities, some of which may be subject to repurchase agreements,
and other securities representing an interest in or secured by mortgages that
are issued or guaranteed by certain U.S. government agencies or
instrumentalities. The Fund's average weighted remaining maturity will
ordinarily range between three and fifteen years, taking into account expected
prepayment of principal on certain investments. However, the Fund's average
weighted remaining maturity may be outside this range if warranted by market
conditions.
MARQUIS STRATEGIC AND ONE GROUP INCOME
Marquis Strategic seeks to provide current income by investing primarily in
investment grade fixed income securities. Under normal conditions, the Fund
will invest at least 65% of its net assets in investment grade fixed income
securities. The Fund generally emphasizes U.S. Government securities and
investment grade debt securities of U.S. issuers. Marquis Strategic also may
purchase obligations issued by the Canadian government. Normally, the Fund
will maintain a dollar-weighted average portfolio maturity of greater than ten
years; however, under certain circumstances, this average maturity may fall
below ten years.
One Group Income seeks a high level of current income by investing
primarily in a diversified portfolio of high, medium and low grade debt
securities. The Fund invests at least 70% of its total assets in debt
securities of all types rated as investment grade at the time of investment or,
if unrated, determined to be of comparable quality by Banc One Investment
Advisors. In addition, up to 30% of the Fund's total assets may be invested in
convertible securities, preferred stock, loan participations and debt securities
rated below investment grade or, if unrated, determined by Banc One Investment
Advisors to be of comparable quality. Securities rated below investment grade
are called "high yield bonds," "non-investment grade bonds" and "junk bonds".
Securities rated below investment grade are considered to be speculative and
high risk. Even though it may invest in debt securities in all rating
categories, the Fund will not invest more than 20% of its total assets in
securities rated below the fifth rating category. Marquis Strategic Income only
invests in investment grade securities, which are securities rated in the top
four ratng categories. The Fund's average
31
<PAGE>
weighted maturity will normally range between five and twenty years, although
the Fund may shorten its weighted average maturity to as little as two years if
deemed appropriate for temporary defensive purposes. As a matter of fundamental
policy, at least 65% of the Fund's total assets will consist of bonds.
MARQUIS LOUISIANA AND ONE GROUP LOUISIANA
The investment objective of Marquis Louisiana is to provide a level of
current income consistent with relative stability of capital. The Fund
invests at least 80% of its net assets in investment grade fixed income
securities, the interest on which is exempt from federal income tax and is
not a preference item for purposes of the alternative minimum tax for
individuals. Under normal conditions, at least 65% of the Fund's total
assets will be invested in municipal securities the interest on which is
exempt from Louisiana personal income tax. The Fund may invest up to 20% of
its total assets in municipal securities the interest of which may result in
a liability for Federal alternative minimum tax for individuals and other
taxable investments, including money market securities. All tax-exempt
interest dividends will be included in determining the Federal alternative
minimum tax liability of corporations. Normally, the Fund will maintain a
dollar-weighted average portfolio maturity of seven to fifteen years;
however, under certain circumstances this average weighted maturity may fall
below seven years. The Fund is non-diversified.
Similarly, One Group Louisiana is a non-diversified fund that seeks
current income both consistent with preservation of capital and exempt from
both Federal income tax and Louisiana personal income tax. As a matter of
fundamental policy at least 80% of the Fund's net assets will consist of
investment grade municipal securities issued by or on behalf of the State of
Louisiana and its political subdivisions, agencies and instrumentalities, the
interests on which is exempt from both Federal income tax and Louisiana
personal income tax. Unlike Marquis Louisiana, One Group Louisiana may hold
up to 100% of its assets in municipal securities that produce tax-exempt
interest dividends that may result in liability for Federal alternative
minimum tax and for state and local taxes for both individuals and corporate
shareholders. The Fund may hold up to 20% of its total assets in cash or cash
equivalents, municipal securities of other states, U.S. Government securities
and short-term taxable investments. The Fund's average weighted maturity
normally will be between five and twenty years, although the Fund may invest
in securities of any maturity.
Shareholders of One Group Louisiana who are subject to the Federal
alternative minimum tax may have all or a portion of their income from the Fund
subject to Federal income tax. If you are subject to the Federal alternative
minimum tax, please read the section in the One Group Louisiana Municipal Bond
Fund prospectus entitled "Tax Treatment of Shareholders." In addition,
corporate shareholders of both Marquis Louisiana and One Group Louisiana will be
required to take the interest on municipal securities into account in
determining their alternative minimum taxable income.
MARQUIS BALANCED AND ONE GROUP ASSET ALLOCATION
Marquis Balanced seeks to provide capital appreciation and current income
through the regular payment of dividends and interest by investing in a
combination of equity, fixed income and money market instruments. Under normal
conditions, the Fund will invest between 30% and 75% of its total assets in
equity securities, including common and preferred stock and between 25% and 75%
of its total assets in fixed income securities. At least 25% of the Fund's
assets will be in fixed income senior securities. The Fund may invest in
equity securities of foreign issuers traded in the United States, including
American Depositary Receipts. The Fund also may invest in money market
securities.
Likewise, One Group Asset Allocation seeks to provide total return while
preserving capital by investing in a combination of stocks, fixed income
securities and money market instruments. The Fund normally will invest between
40% and 75% of its total assets in all types of equity securities, including the
stock of both large and small capitalization companies, as well as growth and
value securities. Up to 20% of the equities held by the Fund may be foreign
securities, including American Depositary Receipts. Between 25% and 60% of the
Fund's total assets will be invested in fixed income securities, including
bonds, notes, and other debt securities. The balance of the Fund's total assets
will be invested in money market instruments.
Banc One Investment Advisors will regularly review a Fund's asset
allocations and vary them over time to favor investments which they believe will
provide the most favorable total return. In making asset allocation decisions,
Banc
32
<PAGE>
One Investment Advisors will evaluate projections of risk, market and economic
conditions, volatility, yields and expected return. Because One Group Asset
Allocation seeks total return over the long term, Banc One Investment Advisors
will not attempt to time the market. Rather, asset allocation shifts will be
made gradually over time.
MARQUIS VALUE AND ONE GROUP VALUE
Marquis Value seeks to provide long-term capital appreciation by investing
primarily in equity securities which have a low current valuation relative to
various measures of intrinsic value. The Fund invests primarily in equity
securities of established companies with equity market capitalizations in excess
of $300 million which Banc One Investment Advisors believes to have potential
for capital appreciation. Banc One Investment Advisors selects companies based
on the soundness of the issuer and an analysis of various fundamental financial
characteristics, including earnings yield, book value, cash flow, anticipated
future growth of dividends and earnings estimates.
Although capital appreciation is the primary purpose for investing in a
security, Marquis Value will focus on companies that pay current dividends.
The Fund invests at least 65% of its total assets in common stocks, debt
securities convertible to common stock, warrants and preferred stocks. A
portion of the Fund's assets will be held in cash equivalents.
One Group Value seeks capital appreciation with the secondary goal of
achieving current income by investing primarily in equity securities. The Fund
invests primarily in the equity securities of companies with below-market
average price-to-earnings and price-to-book value ratios. The Fund considers the
issuer's soundness and earnings prospects. If Banc One Investment Advisors
determines that a company's fundamentals are declining or that the company's
ability to pay dividends has been impaired, it likely will eliminate the Fund's
holding of the company's stock. The Fund normally invests at least 80% of its
total assets in equity securities, including common stocks, debt securities, and
preferred stocks that are convertible into common stocks. A portion of the
Fund's assets will be held in cash equivalents.
MARQUIS GROWTH AND ONE GROUP GROWTH
Marquis Growth seeks to provide long-term capital appreciation by investing
primarily in companies whose sales and earnings are expected to grow at an above
average rate. The Fund invests primarily in equity securities of established
companies with equity market capitalizations in excess of $300 million which
Banc One Investment Advisors believes to have potential for long-term capital
appreciation and growth. Banc One Investment Advisors initiates purchase and
sale decisions based on such growth and profitability measures as return on
equity, earnings growth, sales growth, and expected return.
Capital appreciation is the primary purpose of Marquis Growth. Current
dividend income is a secondary consideration. The Fund invests at least 65% of
its total assets in common stocks, warrants, rights to purchase common stocks,
debt securities convertible to common stock, and preferred stocks. A portion of
the Fund's assets will be held in cash equivalents.
One Group Growth seeks growth of capital and secondarily, current income,
by investing primarily in equity securities. The Fund invests in securities
that have the potential to produce above-average growth per share over a
one-to-three year period. Typically, the Fund acquires shares of established
companies with a history of above-average growth, as well as those companies
expected to enter periods of above average growth. Not all the securities
purchased by the Fund will pay dividends. The Fund also invests in smaller
companies in emerging growth industries.
One Group Growth normally invests at least 80% of its total assets in
equity securities, including common stocks and debt securities and preferred
stocks that are convertible to common stock. A portion of the Fund's assets
will be held in cash equivalents.
MARQUIS SMALL CAP AND ONE GROUP SMALL CAP
33
<PAGE>
Marquis Small Cap seeks to provide long-term capital appreciation by
investing up to 100% of its assets in the Small Cap Growth Portfolio of SEI
Institutional Managed Trust ("Portfolio"), which in turn invests at least 65% of
its total assets in equity securities of smaller growth companies (i.e.,
companies with equity market capitalization of less than $1 billion at the time
of purchase) which, in the opinion of the Portfolio's sub-advisors, are in an
early stage or transitional point in their development and have demonstrated or
have the potential for above average growth. Any remaining assets may be
invested in the equity securities of more established companies that the
sub-advisors believe may offer strong capital appreciation due to their relative
market position, anticipated growth, changes in management or other similar
opportunities. Equity securities include common stocks, preferred stocks,
convertible securities, warrants and rights to subscribe to common stocks.
One Group Small Cap seeks long-term capital growth primarily by
investing directly in a portfolio of equity securities of small
capitalization and emerging growth companies. The Fund invests at least 65%
of its total assets in common stocks, debt securities, preferred stocks,
convertible securities, warrants, and other equity securities of small
capitalization companies. Generally, Banc One Investment Advisors selects a
portfolio of companies with a market capitalization equivalent to the median
market capitalization of the S&P Small-Cap 600 Index, although the Fund may
occasionally hold securities of companies with larger capitalizations if
doing so contributes to the Fund's investment objective. Up to 35% of its
total assets may be invested in U.S. Government Securities, other investment
grade fixed income securities, cash, and cash equivalents.
MARQUIS INTERNATIONAL AND ONE GROUP INTERNATIONAL INDEX
Marquis International seeks to provide long-term capital appreciation by
investing up to 100% of its assets in the International Equity Portfolio of SEI
Investment Trust ("Portfolio"), which in turn invests at least 65% of its assets
in equity securities of at least three countries other than the United States.
Securities of non-U.S. issuers purchased by the Portfolio will typically be
listed on recognized foreign exchanges but also may be purchased
over-the-counter, or in the form of sponsored or unsponsored depositary
receipts. The Portfolio expects its investments to emphasize large,
intermediate and small capitalization companies. The Portfolio expects to be
fully invested in its primary investments, but may invest up to 35% of its total
assets in U.S. or non-U.S. cash reserves, money market instruments, swaps,
options, and futures contracts.
Unlike Marquis International, One Group International Index is an index
fund. This means that it is not actively managed. Rather, One Group
International Index seeks to provide investment results that correspond to the
aggregate price and dividend performance of the securities on the MSCI EAFE GDP
Index. The Fund attempts to track the capital performance and dividend income
of the Index by investing in a representative portion of the stocks which match
as closely as possible the characteristics of the stocks which comprise the
Index. The Fund also will invest in stock index futures. The Fund will attempt
to achieve a correlation between the performance of its portfolio and that of
the MSCI EAFE GDP Index of at least 0.90, without taking into account expenses.
Perfect correlation would be 1.00.
One Group International Index normally invests at least 65% of its total
assets directly in foreign equity securities, consisting of common stocks
(including American Depositary Receipts) and preferred stocks, securities
convertible to common stock (provided they are traded on an exchange or
over-the-counter), warrants and receipts. No more than 10% of the Fund's assets
will be held in cash or cash equivalents. The Fund may invest up to 10% of its
net assets in securities of emerging international markets such as Mexico, Chile
and Brazil, either directly through local exchanges, through publicly traded
closed-end country funds, or through "passive foreign investment companies." A
substantial portion of the Fund's assets will be denominated in foreign
currencies.
COMPARISON OF INVESTMENT POLICIES
Both the Marquis Funds and the One Group Funds have adopted certain
fundamental investment policies. This means that they cannot be changed without
the consent of a majority of the outstanding shares of each Marquis Fund and
34
<PAGE>
each One Group Fund. Substantially all of the fundamental investment
policies of each Marquis Fund and each One Group Fund are identical. The
following percentages apply at the time of purchase of a security.
EQUITY FUNDS AND TAXABLE BOND FUNDS
As a matter of fundamental policy, Marquis Government, Marquis Strategic
Income, Marquis Balanced, Marquis Value, Marquis Growth, Marquis Small Cap,
Marquis International, One Group Government, One Group Income, One Group Asset
Allocation, One Group Disciplined, One Group Small Cap, One Group Growth and One
Group International Index may not:
1. Purchase an issuer's securities if as a result more than 5% of its total
assets would be invested in the securities of that issuer or the Fund would
own more than 10% of the outstanding voting securities of that issuer.
This does not include securities issued or guaranteed by the United States,
its agencies or instrumentalities, and repurchase agreements involving
these securities. This restriction applies with respect to 75% of a Fund's
total assets. For purposes of these limitations, a security is considered
to be issued by the government entity whose assets and revenues guarantee
or back the security. With respect to private activity bonds or industrial
development bonds backed only by the assets and revenues of a
non-governmental user, such user would be considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets
of a Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply to investments in the
obligations issued or guaranteed by the U.S. government or its agencies and
instrumentalities and repurchase agreements involving such securities. For
the Marquis Funds, this limitation does not apply to tax exempt securities
issued by governments or political subdivisions of governments. For
purposes of this limitation (i) utilities will be divided according to
their services (for example, gas, gas transmission, electric and telephone
will each be considered a separate industry); and (ii) wholly-owned finance
companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of their
parents. For the Marquis Funds, (i) supranational entities will be
considered to be a separate industry and (ii) asset-backed securities
secured by distinct types of assets, such as truck and auto loan leases,
credit card receivables and home equity loans, will each be considered a
separate industry.
3. Make loans, except that a Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending.
TAX-EXEMPT AND MUNICIPAL BOND FUNDS
Marquis Louisiana and One Group Louisiana will not:
1. Purchase securities of any issuer (except securities issued or guaranteed
by the United States, its agencies or instrumentalities, and, if consistent
with a Fund's investment objective and policies, repurchase agreements
involving such securities) if as a result more than 25% of the total assets
of a Fund would be invested in the securities of such issuer. This
restriction applies to 50% of a Fund's assets. With respect to the
remaining 50% of its total assets, a Fund may not purchase the securities
of any issuer if as a result more than 5% of the total assets of the Fund
would be invested in the securities of such Issuer. For purposes of these
limitations, a security is considered to be issued by the government entity
whose assets and revenues guarantee or back the security. With respect to
private activity bonds or industrial development bonds backed only by the
assets and revenues of a non-governmental user, such user would be
considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets
of a Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply (I) to investments in the
obligations issued or guaranteed by the
35
<PAGE>
U.S. government or its agencies and instrumentalities and repurchase
agreements involving such securities, and (ii) to tax exempt securities
issued by governments or political subdivisions of governments. For
purposes of this limitation (I) utilities will be divided according to
their services (for example, gas, gas transmission, electric and telephone
will each be considered a separate industry); and (ii) wholly-owned finance
companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of their
parents. For the Marquis Funds, (I) supranational entities will be
considered to be a separate industry and (ii) asset-backed securities
secured by distinct types of assets, such as truck and auto loan leases,
credit card receivables and home equity loans, will each be considered a
separate industry.
3. Make loans, except that a Fund may (I) purchase or hold debt instruments
in accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending.
MONEY MARKET FUNDS
Marquis Treasury Securities, Marquis Tax-Exempt, One Group Treasury
Securities, and One Group Municipal will use their best efforts to maintain a
constant net asset value of $1.00 per share, although there is no guarantee that
the Funds will be able to do so. In addition, none of the Funds will:
1. Purchase securities of any issuer (except securities issued or guaranteed
by the United States, its agencies or instrumentalities, and, if consistent
with the Fund's investment objective and policies, repurchase agreements
involving such securities) if as a result more than 5% of the total assets
of a Fund would be invested in the securities of such issuer or a Fund
would own more than 10% of the outstanding voting securities of such
issuer, provided, however, that a Fund may invest up to 25% of its total
assets without regard to this restriction as permitted by applicable law.
For purposes of these limitations, a security is considered to be issued by
the government entity whose assets and revenues guarantee or back the
security. With respect to private activity bonds or industrial development
bonds backed only by the assets and revenues of a nongovernmental user,
such user would be considered the issuer. This restriction applies with
respect to 75% of the total assets of Marquis Tax-Exempt, One Group
Treasury Securities, and One Group Municipal.
2. Purchase any securities that would cause more than 25% of the total assets
of a Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply (I) to investments in the
obligations issued or guaranteed by the U.S. government or its agencies and
instrumentalities and repurchase agreements involving such securities, and
(ii) to tax exempt securities issued by governments or political
subdivisions of governments. For purposes of this limitation (I) utilities
will be divided according to their services (for example, gas, gas
transmission, electric and telephone will each be considered a separate
industry); and (ii) wholly-owned finance companies will be considered to be
in the industries of their parents if their activities are primarily
related to financing the activities of their parents.
3. Make loans, except that a Fund may (I) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending. Marquis
Treasury Securities may not engage in securities lending.
One Group Treasury Securities will invest only in U.S. Treasury obligations
and repurchase agreements collateralized by such obligations.
INSTITUTIONAL MONEY MARKET FUNDS
Marquis Institutional and One Group Treasury Only will use their best
efforts to maintain a constant net asset value of $1.00 per share, although
there is no guarantee that the Funds will be able to do so. In addition,
neither of the Funds will:
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1. Purchase securities of any issuer (except securities issued or guaranteed
by the United States, its agencies or instrumentalities and, if consistent
with such Fund's investment objective and policies, repurchase agreements
involving such securities) if as a result more than 5% of the total assets
of the Fund would be invested in the securities of such issuer or the Fund
would own more than 10% of the outstanding voting securities of such
issuer; provided, however, that a Fund may invest up to 25% of its total
assets without regard to this restriction as permitted by applicable law.
For purposes of these limitations, a security is considered to be issued by
the government entity whose assets and revenues guarantee or back the
security. With respect to private activity bonds or industrial development
bonds backed only by the assets and revenues of a non-governmental user,
such user would be considered the issuer.
2. Make loans, except that a Fund may (I) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements (except for One Group Treasury Only); and (iii)
engage in securities lending.
Marquis Institutional will not:
1. Purchase any securities that would cause more than 25% of the total assets
of the Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply to investments in the
obligations issued or guaranteed by the U.S. government or its agencies and
instrumentalities and repurchase agreements involving such securities,
In addition, One Group Treasury Only:
1. Will not purchase securities while borrowings (including reverse repurchase
agreements) exceed 5% of the respective Fund's assets.
2. Will not borrow money or issue senior securities, except that the Funds may
borrow from banks for temporary purposes in amounts not exceeding 10% of
their total assets at the time of the borrowing.
3. Will not mortgage, pledge or hypothecate any assets, except in connection
with borrowing specified in 2 above and in amounts not in excess of the
lesser of the dollar amount borrowed or 10% of the value of the respective
Fund's total assets at the time of its borrowing.
4. Will not purchase securities other than U.S. Treasury bills, notes and
other U.S. obligations issued or guaranteed by the U.S. Treasury.
5. Will not invest in any securities subject to repurchase agreements.
INVESTMENT POLICIES FOR ALL FUNDS
None of the Marquis Funds or the One Group Funds may:
1. Purchase securities on margin, sell securities short, or participate in a
joint or joint and several basis in any securities trading account, except,
the Marquis Funds and One Group Louisiana, may obtain short-term credits as
necessary for clearance of purchases of portfolio securities.
2. Underwrite the securities of other issuers except to the extent that a Fund
may be deemed to be an underwriter under certain securities laws in the
disposition of "restricted securities."
3. Purchase or sell commodities or commodity contracts (including futures
contracts), except that for bona fide hedging and other permissible
purposes: (I) Marquis Funds and One Group Funds (except Marquis
Institutional, Marquis Treasury Securities, Marquis Tax-Exempt, One Group
Treasury Only, One Group
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<PAGE>
Treasury Securities and One Group Municipal) may purchase or sell financial
futures contracts and may purchase call or put options on financial futures
contracts, and (ii) One Group International Index may purchase or sell
foreign currency futures contracts and foreign currency forward contacts,
and may purchase put or call options on foreign currency futures contracts
and on foreign currencies on appropriate U.S. exchanges, and may purchase
or sell foreign currency on a spot basis.
4. Invest in any issuer for purposes of exercising control or management.
5. Purchase securities of other investment companies except as permitted by
the 1940 Act and rules, regulations and applicable exemptive relief
thereunder.
6. Purchase or sell real estate. Each One Group Fund, other than One Group
Treasury Only, One Group Treasury Securities and One Group Municipal,
however, may purchase securities secured by real estate or interests
therein. Marquis Government, Marquis Strategic Income and Marquis
Louisiana may invest in mortgage-backed securities. In addition, each
Marquis Fund and each One Group Fund, other than One Group Treasury Only,
One Group Treasury Securities and One Group Municipal, may invest in
securities issued by companies investing in real estate or interests
therein.
7. Borrow money or issue senior securities, except that each Fund may borrow
from banks or enter into reverse repurchase agreements for temporary
purposes in amounts up to 10% of the value of its total assets at the time
of such borrowing; or mortgage, pledge, or hypothecate any assets, except
in connection with any such borrowing and in amounts not in excess of the
lesser of the dollar amounts borrowed or 10% of the value of the Fund's
total assets at the time of its borrowing. The One Group Funds will not
purchase securities while its borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding.
In addition, the One Group Funds may not purchase participation or other
direct interests in oil, gas or mineral exploration or development programs
(although investments by all of the One Group Funds other than One Group
Treasury Securities and One Group Treasury Only Money Market in marketable
securities of companies engaged in such activities are not hereby precluded).
This is a non-fundamental policy for Marquis Funds.
The following investment restrictions are non-fundamental. This means that
they can be changed without the consent of a majority of the outstanding shares
of each Marquis Fund or each One Group Fund.
Neither the Marquis Funds nor the One Group Funds may:
1. Invest in illiquid securities in an amount exceeding, in the aggregate 15%
of the Fund's net assets (10% of net assets for a Fund that is a Money
Market Fund). An illiquid security is a security which cannot be disposed
of promptly (within seven days) and in the usual course of business without
a loss, and includes repurchase agreements maturing in excess of seven
days, time deposits with a withdrawal penalty, non-negotiable instruments
and instruments for which no market exists.
The One Group Funds may not acquire the securities of registered open-end
investment companies or registered unit investment trusts in reliance on Section
12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.
COMPARISON OF SHAREHOLDER POLICIES
The following is a summary comparison of the major shareholder policies and
procedures of Marquis Funds and The One Group. As you will see, the Funds have
adopted substantially similar policies and procedures.
HOW DO THE FUNDS' PURCHASE PROCEDURES DIFFER?
38
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Shares of both the Marquis Funds and the One Group Funds are sold on a
continuous basis. Shares of the Marquis Funds currently may be purchased
directly from the shareholder servicing and transfer agent, DST Systems, Inc.,
or from an authorized sub-transfer agent by mail, by wire or through an
automatic investment plan. Shares also may be purchased through certain
authorized broker/dealers.
Likewise, shares of the One Group Funds may be purchased directly from
their distributor, the One Group Services Company by mail, telephone or wire.
In addition, One Group shares also may be purchased through investment advisors,
brokers, financial planners, banks, insurance companies, retirement or 401(k)
plan sponsors, or other intermediaries.
ARE THE FUNDS OPEN ON THE SAME DAYS?
Purchases and redemptions of shares of Marquis Funds and the One Group
Funds may be made on any day that the New York Stock Exchange is open for
trading ("Business Days"). However, Marquis Institutional, One Group Treasury
Only, Maquis Treasury Securities, One Group Treasury Securities, Marquis
Tax-Exempt and One Group Municipal are not open for business on Columbus Day and
Veterans Day.
HOW DO THE FUNDS' MINIMUM INVESTMENT AMOUNTS COMPARE?
The minimum initial investment in either class of any Marquis Fund is
$2,500 ($500 minimum for Individual Retirement Accounts and employees of Banc
One Investment Advisors and its affiliates; however, the distributor may waive
the minimum investment at its discretion.) Subsequent purchases of shares must
be at least $100 except for purchases through the automatic investment plan and
payroll deductions, which must be at least $50.
The minimum initial and subsequent investments in the One Group Funds are
$1,000 and $100, respectively ($100 and $25, respectively, for employees of BANC
ONE CORPORATION and its affiliates). Initial and subsequent investment minimums
may be waived at the distributor's discretion. Investors may purchase up to a
maximum of $250,000 of Class B shares per individual purchase order.
DO THE FUNDS OFFER THE SAME CLASSES OF SHARES?
The One Group Funds currently offer four classes of shares: Class A, Class B,
Class C, and Fiduciary Class.
- - Class A, Class B and Class C shares are offered to the general public.
- - Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodial or similar capacities.
- - The section entitled "How To Do Business With The One Group" in the One
Group Prospectuses accompanying this Combined Prospectus/ Proxy Statement
will provide more information.
The Marquis Funds offers five classes of shares: Class A, Class B, Retail
Class, Cash Sweep and Trust Class.
- - Class A shares are offered to the general public and to investors for whom
affiliates of BANC ONE CORPORATION serve in a fiduciary, agency or
custodial capacity. Class B shares are offered to the general public.
- - Retail Class is offered to the general public, but is available only in
Marquis Treasury Securities and Marquis Tax-Exempt.
- - Trust Class shares are have a minimum intitial investment amount of $1
million, but are offered only in Marquis Treasury Securities and Marquis
Tax-Exempt.
- - Cash Sweep Class is offered only in Marquis Treasury Securities.
HOW DO SALES CHARGES COMPARE?
Marquis Funds and The One Group Funds have similar sales charge structures.
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<PAGE>
- - One Group Class A shares assess a 4.5% up-front sales charge. Marquis
Class A shares charge an up-front fee of 3.5% of the offering price.
- - Class A shares of One Group Treasury Securities and Class A shares of One
Group Municipal shares are sold without any sales charge, as are Trust,
Retail and Cash Sweep shares of Marquis Treasury Securities and Marquis
Tax-Exempt.
- - Both One Group Class B shares and Marquis Class B shares are offered
without any up-front sales charge, but both do assess a Contingent Deferred
Sales Charge ("CDSC") if you redeem shares according to the following
schedules:
<TABLE>
<CAPTION>
THE ONE GROUP
CDSC AS A % OF DOLLAR
YEARS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
-------------------- ------------------------
<S> <C>
0-1 5.00%
1-2 4.00%
2-3 3.00%
3-4 3.00%
4-5 2.00%
5-6 1.00%
more than 6 0.00%
<CAPTION>
MARQUIS FUNDS
CDSC AS A % OF DOLLAR
YEARS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
-------------------- ------------------------
<S> <C>
0-1 3.50%
1-2 2.75%
2-3 2.00%
3-4 1.25%
4-5 0.50%
more than 5 0.00%
</TABLE>
- - One Group Class C shares are offered without any up-front sales charge, but
do assess a Contingent Deferred Sales Charge ("CDSC") if you redeem shares
according to the following schedule:
<TABLE>
<CAPTION>
CDSC AS A % OF DOLLAR
YEARS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
-------------------- ------------------------
<S> <C>
0-1 1.00%
After first year none
</TABLE>
WILL I PAY A SALES CHARGE IN THE REORGANIZATION?
You will not pay a sales charge in connection with the Reorganization.
- - One Group Fiduciary Class shares do not assess any sales charges.
- - Marquis Institutional and One Group Treasury Only do not assess a sales
charge.
- - No sales charge will be imposed on any Class A shares of the One Group
Funds distributed in the reorganization.
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<PAGE>
- - If you own Class B shares of Marquis Funds, the CDSC currently applicable
to those shares (including the period of time you have held those shares)
will be applied to the One Group shares you receive in the Reorganization.
This means that your CDSC will not change with respect to those shares.
- - For additional information regarding sales charges for the One Group Funds
and the Marquis Funds see the section entitled "COMPARISON OF CURRENT
EXPENSES" in this Combined Prospectus/Proxy Statement.
HOW DO EXCHANGE PRIVILEGES COMPARE?
Marquis Funds and The One Group have adopted similar, but slightly different,
exchange policies.
Marquis Fund shareholders enjoy the following exchange privileges:
- - Class A shares may be exchanged for Class A shares of any other Marquis
Fund or for Retail Class shares of Marquis Treasury Securities and Marquis
Tax-Exempt.
- - Class B shares may be exchanged for Class B shares of any other Marquis
Fund.
- - Retail Class shares of Marquis Treasury Securities and Marquis Tax-Exempt
may be exchanged for Class A or Class B shares of any other Marquis Funds.
- - Trust Class shares of Marquis Treasury Securities may be exchanged for
Class A shares of any other Marquis Fund.
- - Cash Sweep shares of Marquis Treasury Securities and Marquis Tax-Exempt may
be exchanged for Class A or Class B shares of other Marquis Funds.
- - Exchanges are processed the same business day they are received, provided
they are received by 4:00 p.m., Eastern time/3:00 p.m., Central time.
One Group shareholders may make the following exchanges:
- - Class A shares of a Fund may be exchanged for Fiduciary Class shares of
that Fund or for Class A or Fiduciary Class shares of another Fund of The
One Group, BUT ONLY IF you are eligible to purchase those shares.
- - Fiduciary Class shares of a Fund may be exchanged for Class A shares of
that Fund or for Class A or Fiduciary Class shares of another Fund of The
One Group.
- - Class B shares of a Fund may be exchanged for Class B shares of another
Fund of The One Group.
- - Class C shares of a Fund may be exchanged for Class C shares of another
Fund of The One Group.
- - Exchanges are processed the same business day they are received, provided
they are received by 4:00 p.m., Eastern time/3:00 p.m., Central time.
- - The One Group does not charge a fee for this privilege.
DO THE FUNDS ASSESS A SALES CHARGE ON AN EXCHANGE?
Marquis Funds generally do not assess a sales charge on exchanges. However:
- - You will pay a sales charge on exchanges from Retail Class shares of
Marquis Treasury Securities and Marquis Tax-Exempt to Class A or Class B
shares of any other Marquis Fund unless you qualify for a sales load
waiver.
- - You will pay a sales charge if you exchange Trust Class shares of Marquis
Treasury Securities acquired with cash for Class A shares of any other
Marquis Fund unless you qualify for a sales load waiver.
- - You will pay a sales charge on exchanges from Cash Sweep shares of Marquis
Treasury Securities and Marquis Tax-Exempt to Class A or Class B shares of
any other Marquis Fund, unless you qualify for a sales charge waiver.
- - For information on sales charge waivers, please see the section in the
prospectus for Marquis Funds entitled "WAIVER OF SALES CHARGES".
Generally, you will not pay a sales charge on an exchange between One Group
Funds. However:
- - You will pay a sales charge if you own Fiduciary Class shares of a Fund and
you want to exchange those shares for Class A shares, unless you qualify
for a sales charge waiver.
- - You will pay a sales charge if you bought Class A shares of a Fund:
41
<PAGE>
1. That does not charge a sales charge and you want to exchange those
shares for shares of a Fund that does, in which case you would pay the
sales charge applicable to the Fund into which you are exchanging.
2. That charged a lower sales charge than the Fund into which you are
exchanging, in which case you would pay the difference between that
Fund's sales charge and all other sales charges you have already paid.
- - If you exchange Class B or Class C shares of a Fund, you will not pay a
sales charge at the time of the exchange, however:
1. Your new Class B or Class C shares will be subject to the higher CDSC
of either the Fund from which you exchanged, the Fund into which you
exchanged, or any Fund from which you previously exchanged.
2. The current holding period for your exchanged Class B or Class C
shares is carried over to your new shares.
- - For information on sales charge waivers, please see the section in the
prospectus for The One Group entitled "SALES CHARGE REDUCTIONS AND
WAIVERS."
HOW DO THE FUNDS AUTOMATIC CONVERSION FEATURES COMPARE?
Both Marquis Funds Class B shares and One Group Class B shares automatically
convert to Class A shares after a period of time.
Marquis Class B shares convert to Class A shares after five years (measured from
the end of the month in which the shares were purchased). One Group Class B
shares convert to Class A shares after eight years, also measured from the end
of the month in which the shares were purchased. Any One Group Class B shares
you receive in the reorganization will still convert to Class A shares after
five years (rather than the eight years normally applicable to One Group
shares). In both the Marquis Funds and the One Group Funds:
- - Your shares after the conversion will be subject to the lower distribution
and shareholder servicing fees charged on Class A shares.
- - You will not be assessed any sales charges or fees for conversion of
shares, nor will you be subject to any tax.
- - Conversions are on the basis of the relative net asset values of the two
classes.
- - For more information, see the section entitled "Conversion Feature" in
both the Marquis Funds and The One Group Prospectuses accompanying this
Combined Prospectus/Proxy Statement.
HOW DO REDEMPTION PROCEDURES COMPARE?
Both the Marquis Funds and the One Group Funds permit shareholders to redeem
their shares without charge (except for the CDSC assessed Class B shares) on any
Business Day;
- - Shares may ordinarily be redeemed by mail, telephone or wire. Marquis
Funds assess a $25 charge for wiring redemption fees. One Group
shareholders pay a $7.00 wire redemption fee.
- - All redemption orders are effected at the net asset value per share next
determined for Marquis and One Group Class A shares, One Group Fiduciary
Class shares, Marquis Retail, Trust and Cash Sweep shares.
- - Redemption orders for Marquis and One Group Class B share are effected at
net asset value per share next determined reduced by any applicable CDSC,
after receipt of a valid request for redemption.
- - Both the Marquis Funds and the One Group Funds pay shareholders for shares
redeemed within seven days after receipt of the request for redemption.
However, One Group Treasury Securities and One Group Municipal will attempt
to honor requests for next day payment, if the request is received before:
(I) 12:00 noon Eastern time for One Group Municipal, and
(ii) 2:00 p.m. Eastern time for One Group Treasury Securities.
- - For additional information on redemption procedures, see the section
entitled "REDEMPTION OF SHARES" in the Marquis Funds Prospectus and
"REDEEMING FUND SHARES" in the One Group Prospectuses, both accompanying
this Combined Prospectus/Proxy Statement.
42
<PAGE>
DO BOTH FUNDS PROVIDE FOR SYSTEMATIC WITHDRAWALS?
Yes, both the Marquis Funds and the One Group Funds allow you to redeem shares
on a systematic basis, and both Marquis Funds and the One Group Funds allow you
to receive monthly, quarterly, or annual payments of $100 or more. However,
there are some differences:
- - Marquis Funds also allow for semi-annual payments.
- - In order to redeem on a systematic basis, The One Group requires a minimum
account balance of $10,000. The minimum account balance required by
Marquis Funds is $5,000.
- - If you own Class B shares of a One Group Fund, you or your designee may
receive systematic payments provided the payments are limited to no more
than 10% of your account value annually. This is because The One Group
permits a shareholder to withdraw up to 10% of their account value each
year without paying the normal CDSC. If you were permitted to
systematically withdraw in excess of 10% of your account value annually,
you would be subject to a CDSC.
- - Marquis Funds does not impose a limit on Class B systematic withdrawals.
However, the entire amount of the systematic withdrawal is subject to the
applicable CDSC.
- - One Group Treasury Securities and One Group Municipal permit systematic
withdrawals for all share classes. Systematic withdrawals are not
permitted for Trust Class shareholder of Marquis Treasury Securities.
Neither Marquis Institutional nor One Group Treasury Only permit systematic
withdrawals.
DO THE FUNDS DECLARE AND DISTRIBUTE DIVIDENDS THE SAME WAY?
No. For the equity funds:
- - Marquis Balanced, Marquis Value, Marquis Growth, Marquis Small Cap and
Marquis International declare and pay dividends quarterly.
- - One Group Asset Allocation. One Group Value, One Group Growth, One Group
Small Cap and One Group International Index generally declare dividends on
the last business day of each month. Dividends are distributed on the
first business day of the next month.
- - Capital gains, if any, for each Marquis Fund and each One Group Fund are
distributed at least annually.
For the bond funds:
- - One Group Government, One Group Income, and One Group Louisiana generally
declare dividends on each business day. Dividends are distributed on the
first business day of each month.
- - Marquis Government, Marquis Strategic Income, and Marquis Louisiana declare
and pay dividends monthly.
- - Capital gains, if any, for each Marquis Fund and each One Group Fund are
distributed at least annually.
For the money market funds:
- - One Group Treasury Only, One Group Treasury Securities, One Group
Municipal, Marquis Institutional, Marquis Treasury Only, and Marquis
Tax-Exempt declare dividends on each business day. Dividends are
distributed on the first business day of each month.
- - Capital gains, if any, for each Marquis Fund and each One Group Fund are
distributed at least annually.
Both the Marquis Funds and the One Group Funds pay dividends and
distributions on a per-share basis. In addition, shareholders in both the
Marquis Funds and the One Group Funds automatically receive all income
dividends and capital gain distributions in additional shares of the same
Fund and class, unless they have elected to take such payment in cash.
ARE FUND SHARES PRICED THE SAME WAY?
Yes. Both the Marquis Funds and the One Group Funds determine net asset value
per share by dividing the total market value of a Fund's investments and other
assets allocable to a class (minus class expenses) by the number of outstanding
43
<PAGE>
shares in that class. A Fund's net asset value changes every day. The Marquis
Funds and the One Group Funds calculate net asset value at different times
during the day.
- - Net asset value is calculated each business day at 4:00 p.m. Eastern
time/3:00 Central time for the following funds:
Marquis Government One Group Government
Marquis Strategic Income One Group Income
Marquis Louisiana One Group Louisiana
Marquis Balanced One Group Asset Allocation
Marquis Value One Group Value
Marquis Growth One Group Growth
Marquis Small Cap One Group Small Cap
Marquis International One Group International Index
- - Net asset value is calculated each business day at 12:00 noon Eastern
time/11:00 a.m. Central time and 4:00 p.m. Eastern time/3:00 p.m. Central
time, for the following funds:
Marquis Tax-Exempt One Group Municipal
Marquis Treasury Securities
Marquis Institutional
- - Net asset value is calculated each business day at 2:00 p.m. Eastern
time/1:00 p.m. Central time and 4:00 p.m. Eastern time/3:00 p.m. Central
time, for the following funds:
One Group Treasury Securities
One Group Treasury Only
Both Marquis Money Market and One Group Money Market value securities based on
the amortized cost method of valuation pursuant to Rule 2a-7 under the
Investment Company Act of 1940.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of this transaction is subject to the condition that the One Group
Funds and the Marquis Funds receive an opinion of Ropes & Gray, counsel to The
One Group, to the effect that the transaction will not result in the recognition
of gain or loss for Federal income tax purposes by the Funds under Sections 361
and 1032 of the Internal Revenue Code of 1986, as amended, (the "Code") or the
Marquis Fund shareholders under Section 354 of the Code. For more
information, see page 109.
RISK FACTORS
This section will help you understand the main risks of investing in the
One Group Funds. Because of the similarities in investment objectives and
policies, the Marquis Funds and the One Group Funds (for purposes of this
discussion only, collectively, the "Funds") are subject to substantially similar
investment risks. The following discussion identifies the broad risks inherent
in investing in the Funds. For more specific risks relating to specific
securities purchased by the Funds, please read the sections entitled "INVESTMENT
PRACTICES" and "INVESTMENT RISKS" in The One Group prospectuses, and
"DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS" in the Marquis Funds
prospectuses.
EQUITY SECURITIES: Marquis Balanced, Marquis Value, Marquis Growth, Marquis
Small Cap, Marquis International, One Group Asset Allocation, One Group
Disciplined, One Group Growth, One Group Small Cap and One Group International
Index invest in equity securities, which may increase or decrease in value. As
a result, the value of your investment in a Fund may increase or decrease in
value.
44
<PAGE>
SMALL CAPITALIZATION COMPANIES: Marquis Small Cap and One Group Small Cap invest
in small capitalization companies. Investments in smaller, younger companies
may be riskier than investments in larger, more established companies. These
companies may be more vulnerable to changes in economic conditions, specific
industry conditions, market fluctuations, and other factors effecting the
profitability of other companies. Because economic events may have a greater
impact on smaller companies, there may be a greater and more frequent
fluctuation in their stock price. This may cause frequent and unexpected
increases or decreases in the value of your investment.
FIXED INCOME SECURITIES: Marquis Institutional, Marquis Treasury Securities,
Marquis Tax-Exempt, Marquis Strategic Income, Marquis Government, Marquis
Louisiana, Marquis Balanced, One Group Treasury Only, One Group Treasury
Securities, One Group Municipal, One Group Income, One Group Government, One
Group Louisiana, and One Group Asset Allocation invest in fixed income
securities. Investments in fixed income securities (for example, bonds) will
increase or decrease in value based on changes in interest rates. If rates
increase, the value of a Fund's investments generally declines. On the other
hand, if rates fall, the value of the investments generally increases. The
value of your investment in a Fund will increase and decrease as the value of a
Fund's investments increase and decrease. While securities with longer duration
and maturities tend to produce higher yields, they also are subject to greater
fluctuations in value when interest rates change. Usually changes in the value
of fixed income securities will not affect cash income generated, but may affect
the value of your investment.
NON-DIVERSIFIED FUNDS: Both Marquis Louisiana and One Group Louisiana are
"non-diversified" funds. This means that the Funds may invest a more
significant portion of their assets in the securities of a single issuer than
can a "diversified" fund. In addition, the Funds' investments are concentrated
geographically. These concentrations increase the risk of loss to the Funds if
an issuer fails to make interest or principal payments or if the market value of
a security declines.
STATE SPECIFIC MUNICIPAL SECURITIES: Because Marquis Louisiana and One Group
Louisiana concentrate their investments in Louisiana, certain factors may have
a disproportionate negative effect on the Funds' investments. These factors may
include certain economic conditions, constitutional amendments, legislative
measures, executive orders, administrative regulations and voter initiatives.
The Louisiana economy is heavily dependent on a single industry, in this case
energy (oil and gas). Louisiana continues to recover from the oil price
declines of the mid-1980's, although its debt burden is well above that of other
states, while wealth and income indicators are below the national average.
Louisiana posts unemployment rates above the national average.
INDEX FUNDS: Unlike Marquis International, One Group International Index is an
index fund. An index fund's investment objective is to track the performance of
a specified index. Therefore, securities may be purchased, retained and sold by
an index fund at times when an actively managed fund would not do so. As a
result, you can expect greater risk of loss (and a correspondingly greater
prospect of gain) from changes in the value of securities that are heavily
weighted in the index than would be the case if the funds were not fully
invested in such securities. Because of this, an index fund's share price can
be volatile and you should be prepared to handle sudden, and sometimes
substantial, fluctuations in the value of your investment.
INTERNATIONAL FUNDS: Investments in foreign securities involve risks
different from investments in U.S. securities. These include the risk of
losses attributable to unfavorable governmental or political actions, seizure
of foreign deposits, changes in tax or trade statutes, and governmental
collapse and war. Investments in foreign securities also involve the risk
associated with higher transaction costs, delayed settlements, currency
controls and adverse economic developments. This also includes the risk that
fluctuations in the exchange rates between the U.S. dollar and foreign
currencies may negatively affect an investment. Adverse changes in exchange
rates may erode or reverse any gains produced by foreign currency denominated
investments and may widen any losses. Exchange rate volatility also may
affect the ability of an issuer to repay U.S. dollar denominated debt,
thereby increasing credit risk. Because of these risk factors, the share
price of both Marquis International and One Group International Equity Index
Fund can be volatile, and you should be prepared to sustain sudden, and
sometimes substantial, fluctuations in the value of your investment.
45
<PAGE>
LOWER RATED SECURITIES: One Group Income may invest in debt securities rated in
the lowest investment grade category. Securities in this rating category are
considered to have speculative characteristics. Changes in economic conditions
or other circumstances may have a greater effect on the ability of issuers of
these securities to make principal and interest payments than they do on issuers
of higher grade securities.
HIGH YIELD/JUNK BONDS: One Group Income also may invest up to 30% of its
total assets in debt securities rated below investment grade. These
securities are regarded as predominately speculative. Marquis Strategic
Income does not invest in securities rated below investment grade. Lower
rated securities generally provide a higher yield than higher rated debt
securities of similar maturity, but are subject to a greater degree of risk
that the issuer may not be able to make principal and interest payments.
Issuers of these securities may not be as strong financially as those issuing
higher rated securities. Such high yield issuers may include smaller, less
creditworthy companies or highly indebted firms.
The market value of high yield securities may fluctuate more than the market
value of higher rated securities, since high yield securities tend to reflect
short-term corporate and market developments to a greater extent than higher
rated securities. Thus, periods of economic uncertainty and change can result
in the increased volatility of market prices of high yield bonds and of the
investment company's net asset value. Additional risks of high yield securities
include limited liquidity and secondary market support. As a result, the prices
of high yield securities may decline rapidly in the event that a significant
number of holders decide to sell. Issuers of high yield securities also are
more vulnerable to real or perceived economic changes, political changes or
adverse developments specific to the issuer. A projection of an economic
downturn, for example, could cause the price of these securities to decline
because a recession could lessen the ability of a highly leveraged company to
make principal and interest payments on its debt securities. In the event of a
default, One Group Income would experience a decrease in income and a decline in
the market value of its investments. In addition, a long-term track record on
bond default rates, such as that for investment grade corporate bonds, does not
exist for the high yield market. It may be that future default rates on
high-yield bonds will be more widespread and higher than in the past, especially
during periods of deteriorating economic conditions.
Finally, the market prices of debt securities generally fluctuate with changes
in interest rates so that One Group Income's net asset value can be expected to
decrease as long-term interest rates rise and to increase as long-term rates
fall. The market prices of high yield securities structured as zero coupon or
pay-in-kind securities are generally affected to a greater extent by interest
rate changes and tend to be more volatile than securities which pay interest
periodically.
Credit quality in the high yield bond market can change suddenly and
unexpectedly, and even recently-issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, One
Group Income will not rely solely on ratings issued by established credit rating
agencies, but will use such ratings in conjunction with Banc One Investment
Advisors' independent and ongoing review of credit quality.
Because investments in lower rated securities involve greater investment risk,
achievement of One Group Income's investment objectives may be more dependent on
Banc One Investment Advisor's credit analysis than would be the case if One
Group Income were investing in higher rated securities. One Group Income may
seek to hedge investments through transactions in options, futures contracts and
related options. One Group Income also may use swap agreements to further
manage exposure to lower rated securities.
DERIVATIVES: Some of the Funds invest in securities that are considered to be
derivatives. These securities may be more volatile than other investments.
These include:
- - Each Marquis Fund and each One Group Fund may purchase options, futures
contracts, and options on futures contracts.
- - Marquis Balaced, One Group Assets Allocation, Marquis Value, Marquis
Growth, Marquis Stategic Income, One Group Income, Marquis International
may hold warrants.
- - Marquis Government, One Group Government, Marquis Balanced, One Group Asset
Allocation, Marquis Startegic Income, One Group Income, One Group Louisiana
and One Group Municipal may invest in
46
<PAGE>
mortgage-backed securities, including collateralized mortgage obligations
and Real Estate Mortgage Investment Conduits (CMOs and REMICs) and stripped
mortgage-backed securities (IOs and POs).
- - Marquis Government, Marquis Balanced, One Group Asset Allocation, Marquis
Startegic Income, One Group Income, One Group Louisiana and One Group
Municipal may purchase asset-backed securities.
- - Marquis International and One Group International Index may invest in swap,
cap and floor transactions.
In addition to the derivatives listed above, One Group Income, One Group Asset
Allocation, One Group Disciplined, One Group Growth, One Group Small Cap and One
Group Asset Allocation invest in the following derivatives.
- - new financial products
- - structured instruments
Only One Group International Index invests in currency forwards.
Derivatives may be riskier than traditional investments.
The above discussion is qualified in its entirety by the disclosure in the One
Group Funds and Marquis Funds Prospectuses accompanying this Combined
Prospectus/Proxy Statement.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
This section includes a discussion by the management of The One Group and
Marquis Funds about each fund's performance.
TREASURY SECURITIES
MONEY MARKET FUNd
For the twelve months ended September 30, 1997, the Treasury Securities Money
Market Fund generated a total return of 5.04% for Trust shares and 4.83% for
Retail shares from which a 12b-1 charge has been deducted. From inception on
February 26, 1997, the Cash Sweep Class of the Treasury Securities Money Market
Fund generated a total return on an annualized basis of 4.46%. This compares to
a 4.84% return for the IBC/Donoghue U.S. Treasury and Repo Index. The Fund's net
assets increased from $1.049 billion to $1.364 billion over the fiscal year.
For much of the year, the Fund's largest sector weighting consisted of
overnight repurchase agreements collateralized by U.S. Treasury securities. This
strategy was designed to take advantage of a pattern in the yield curve that
offered little reward for venturing out into longer maturities. In addition, it
provides shareholders with an adequate degree of liquidity.
Looking ahead, we do not foresee a near-term slowdown in economic growth that
would cause the Federal Reserve Board to lower interest rates. On the contrary,
we feel there remains a possibility that money market rates could stay stable or
rise. Should this occur, we believe we are well positioned to take advantage of
higher rates by converting our cash assets into longer-term instruments.
TAX EXEMPT
MONEY MARKET FUND
47
<PAGE>
For the twelve months ended September 30, 1997, the Tax Exempt Money Market Fund
generated a total return of 3.12%. This compares to a 3.08% return for the
IBC/Donoghue Tax-Free Index. The Fund's net assets increased from $66.2 million
to $76.7 million over the fiscal year.
Short-term interest rates were stable during most of the fiscal year, except for
a quarter-percent hike by the Federal Reserve Board ("the Fed") in March 1997.
Other fundamental factors in the short-term municipal securities market remained
favorable as well, including steady demand coupled with a declining supply.
In this environment, the Fund was able to follow up on its strong performance of
1996 with another excellent year.
Looking ahead, we see a continuation of current conditions, as moderate economic
growth and low inflation add up to an ideal environment for stability in the
short-term municipal markets. However, any imbalance in such factors as
employment, consumer and producer prices, or consumer sentiment could spur the
Fed to push short-term rates higher.
GOVERNMENT SECURITIES FUND
For the twelve months ended September 30, 1997, the Government Securities Fund
generated a total return of 8.22% for Class A shares without a sales load, 4.46%
for Class A shares from which a sales charge has been deducted, and 3.90% for
Class B shares from which a sales charge has been deducted. This compares to a
7.83% return for the Lehman Intermediate Government Bond Index.
The Fund's holdings, which consist primarily of obligations issued or guaranteed
as to principal and interest by the U.S. Government and its agencies or
instrumentalities, ended the fiscal year with an average weighted maturity of
6.0 years, and a weighted average duration of 3.7 years.
The Fund's strong performance for the fiscal year was attributable to a
favorable economic environment, along with portfolio strategies that enhanced
yields.
The domestic economy continued to benefit from low inflation, despite moderate
economic growth and the lowest unemployment levels in decades. As a result, the
Federal Reserve Board found little cause to increase interest rates. Outside of
a modest hike in short-term rates in March 1997, bonds enjoyed a relatively
stable environment for most of the fiscal year.
Throughout the year, the Fund maintained its strategy of overweighing the
non-callable sector of the government market, with Treasury and agency
securities representing over half of the portfolio. The balance of the portfolio
was composed primarily of mortgage-backed instruments and collateralized
mortgage obligations, which provided incremental yield without compromising
quality. The short-term portion of the portfolio was held to only about 4%
during most of the period.
Looking ahead, we see a continuation of the favorable economic trends that have
prevailed over the past year. Long-term interest rates are declining worldwide,
while the domestic economy continues to experience moderate growth with low
inflation. We believe that good values are plentiful in the government bond
markets and that real rates are attractive relative to historical norms.
In light of these conditions, we plan to continue our strategy of pursuing high
quality and above-average yields. We will view any cyclical upswings in yields
as buying opportunities.
<TABLE>
<CAPTION>
Average Average Average
One Annual Annual Annual
Year 3 Year 5 Year 10 Year
Return Return Return Return
------ ------ ------ ------
<S> <C> <C> <C> <C>
Class A
- -------
WITHOUT LOAD 8.22% 7.69% 5.50% 7.93%
WITH LOAD 4.46 6.42 4.75 7.54
48
<PAGE>
Class B
- -------
WITHOUT LOAD 7.40 6.87 4.89 7.61
WITH LOAD 3.90 6.28 4.81 7.61
</TABLE>
For the period ended September 30, 1997.
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning October 1, 1993. Class B shares were offered
beginning October 22, 1993. Performance of the Class A shares reflects the
maximum front end sales charge of 3.50%. Performance of the Class B shares
reflects the maximum contingent deferred sales charge of 1.25% for the four-year
holding period. The performance quoted includes past performance of the common
trust fund managed by First National Bank of Commerce, adjusted for fees and
expenses, for the periods prior to the inception of the Government Securities
Fund. The common trust fund was not registered under the 1940 Act and therefore
was not subject to certain investment restrictions which may have adversely
affected performance. The performance of the Lehman Intermediate Government Bond
Index and the Lipper Intermediate U.S. Government Average does not include
annual operating expenses which are experienced by the Fund.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE GOVERNMENT SECURITIES FUND
VERSUS THE LEHMAN INTERMEDIATE GOVERNMENT BOND
INDEX AND THE LIPPER INTERMEDIATE U.S. GOVERNMENT AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Government Government Lehman Intermediate Lipper Intermediate
Securities Securities Fund, Government Bond U.S. Government
Fund w/load Index Average
9/87 10000 9650 10000 10000
9/88 11095 10707 11062 11140
9/89 11990 11571 12127 12185
9/90 12852 12403 13168 13076
9/91 14660 14146 14956 14925
9/92 16401 15827 16818 16699
9/93 17897 17270 18105 18068
9/94 17602 16986 17833 17400
9/95 19510 18827 19727 19345
9/96 20309 19599 20733 20088
9/97 21439 20689 22356 21729
[LINE GRAPH OMITTED]
CLASS B
Government Government Lehman Intermediate Lipper Intermediate
Securities Securities Fund, Government Bond U.S. Government
Fund w/load Index Average
9/87 10000 10000 10000 10000
9/88 11095 11095 11062 11140
9/89 11990 11990 12127 12185
9/90 12852 12852 13168 13076
9/91 14660 14660 14956 14925
9/92 16401 16401 16818 16699
9/93 17457 17457 18105 18068
9/94 17059 17059 17833 17400
9/95 18782 18782 19727 19345
9/96 19389 19389 20733 20088
9/97 20824 20824 22356 21729
STRATEGIC INCOME BOND FUND
From its inception on January 31, 1997, the Strategic Income Bond Fund generated
a total return on an annualized basis of 8.26% for Class A shares without a
sales load, 2.77% for Class A shares from which a sales charge has been
deducted, and 2.33% for Class B shares from which a sales charge has been
deducted. This compares to a 9.74% return for the Lehman Aggregate Bond Index
and 9.70% for the Salomon Broad Bond Index. The Fund's net assets reached $16.0
million by the end of the fiscal year.
During fiscal 1997, the Fund increased its weighting in high-quality corporate
bonds, which at year-end represented nearly two-thirds of the total portfolio.
The balance of the portfolio was composed primarily of Federal agency
mortgage-backed instruments. This approach allowed us to capture the higher
yields currently available in corporate issues.
Looking ahead, we believe that the current interest rate environment offers good
opportunities for fixed income investors, with our forecasts showing stable
interest rates for the near-term future.
However, we remain concerned that an unforeseen event, such as the economy
running at full capacity -- and any inflationary side effects of this scenario
- -- or an upward spike in oil prices, could have an adverse impact on the fixed
income markets.
49
<PAGE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE STRATEGIC
INCOME BOND FUND VERSUS THE SALOMON BROAD BOND INDEX, AND THE LIPPER CORPORATE
DEBT BBB RATED AVERAGE, AND THE LEHMAN AGGREGATE BOND INDEX
[LINE GRAPH OMITTED]
CLASS A
Strategic Strategic Salomon Lipper Lehman
Income Income Broad Corporate Aggregate
Bond Bond Fund Bond Debt BBB Bond
Fund w/load Index Rated Average Index
1/97 10000 9650 10000 10000 10000
2/97 9935 9587 10011 10046 10025
3/97 9765 9423 9910 9900 9914
4/97 9927 9580 10052 10041 10062
5/97 10009 9658 10146 10149 10158
6/97 10146 9791 10267 10294 10279
7/97 10506 10138 10545 10638 10556
8/97 10363 10000 10454 10505 10467
9/97 10550 10180 10608 10682 10622
[LINE GRAPH OMITTED]
CLASS B
Strategic Strategic Salomon Lipper Lehman
Income Income Broad Corporate Aggregate
Bond Bond Fund Bond Debt BBB Bond
Fund w/load Index Rated Average Index
1/97 10000 10000 10000 10000 10000
2/97 9939 9939 10011 10046 10025
3/97 9766 9766 9910 9900 9914
4/97 9913 9913 10052 10041 10062
5/97 10000 10000 10146 10149 10158
6/97 10120 10120 10267 10294 10279
7/97 10473 10473 10545 10638 10556
8/97 10335 10335 10454 10505 10467
9/97 10504 10154 10608 10682 10622
<TABLE>
<CAPTION>
Annualized Inception Cumulative Inception
to Date to Date
<S> <C> <C>
Class A
- -------
WITHOUT LOAD 8.26% 5.50%
WITH LOAD 2.77 1.83
Class B
- -------
WITHOUT LOAD 7.57 5.04
WITH LOAD 2.33 1.54
</TABLE>
For the period ended September 30, 1997.
Past performance of the Fund is not predictive of future performance. Class A
and B shares were offered beginning January 31, 1997. Performance of the Class A
shares reflects the maximum front end sales charge of 3.50%. Performance of the
Class B shares reflects the maximum contingent deferred sales charge of 3.50%
for the one-year holding period. The performance of the Salomon Broad Bond
Index, the Lipper Corporate Debt BBB Rated Average, and the Lehman Aggregate
Bond Index does not include annual operating expenses which are experienced by
the Fund.
LOUISIANA TAX-FREE INCOME FUND
For the twelve months ended September 30, 1997, the Louisiana Tax-Free Income
Fund generated a total return of 7.77% for Class A shares without a sales load,
3.95% for Class A shares from which a sales charge has been deducted, and 3.49%
for Class B shares from which a sales charge has been deducted. This compares to
a 7.22% return for the Lipper Intermediate Municipal Fund Index and a 9.03%
return for the Lehman Municipal Bond Index. The Fund's net assets increased from
$21.6 million to $39.6 million over the fiscal year.
The Fund's holdings, consisting primarily of securities which are exempt from
federal and state income tax to Louisiana residents, ended the fiscal year with
an average weighted maturity of 8.5 years, an average duration of 6.4 years, and
a weighted average quality rating of AAA.
50
<PAGE>
Throughout the fiscal year, the Fund benefited from a stable interest rate
environment, as economic growth and inflation remained low. These conditions set
the stage for a period in which the fund was able to deliver its full coupon
yields, as well as some modest capital gains.
For most of the year, the Fund was overweighted in the highest quality sectors
of the Louisiana bond market. This somewhat defensive posture was designed to
shield against any fallout from the recent closing of a major casino in New
Orleans. Ultimately, however, increased tax revenues from the ongoing boom in
the energy industry have far outweighed the casino-related losses.
Looking ahead, we remain positive about the future of Louisiana-based municipal
issues, as the state's economy continues to grow and supply/demand factors point
to relatively stable prices. However, we plan to maintain our bias toward the
highest quality issues. We will stay alert to signs of inflationary pressures
that could impact total returns.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE
LOUISIANA TAX-FREE INCOME FUND VERSUS THE LIPPER INTERMEDIATE MUNICIPAL
FUND INDEX, THE LEHMAN MUNICIPAL BOND INDEX,
AND THE LEHMAN 10-YEAR MUNICIPAL BOND INDEX
[LINE GRAPH OMITTED]
CLASS A
Louisiana Louisiana Lipper Lehman Lehman
Tax-Free Tax-Free Income Intermediate Municipal 10-Year
Income Fund Municipal Bond Municipal
Fund w/load Fund Index Index Bond Index
10/93 10000 9650 10000 10000 10000
3/94 9564 9229 9707 9566 9592
9/94 9719 9379 9861 9738 9801
3/95 10138 9784 10251 10276 10314
9/95 10597 10226 10723 10827 10958
3/96 10823 10445 10954 11138 11228
9/96 11071 10684 11192 11482 11488
3/97 11317 10921 11420 11747 11812
9/97 11932 11514 11998 12519 12580
[LINE GRAPH OMITTED]
CLASS B
Louisiana Louisiana Lipper Lehman Lehman
Tax-Free Tax-Free Income Intermediate Municipal 10-Year
Income Fund Municipal Bond Municipal
Fund w/load Fund Index Index Bond Index
10/93 10000 10000 10000 10000 10000
3/94 9642 9642 9769 9650 9671
9/94 9753 9753 9925 9824 9882
3/95 10136 10136 10317 10367 10399
9/95 10554 10554 10792 10923 11049
3/96 10741 10741 11024 11237 11321
9/96 10934 10934 11264 11584 11583
3/97 11147 11147 11493 11851 11910
9/97 11698 11573 12075 12630 12684
<TABLE>
<CAPTION>
Average Annual Average Annual
One Year 3 Year Return Inception
Return Return o Date
<S> <C> <C> <C>
Class A
- -------
WITHOUT LOAD 7.77% 7.07% 4.55%
WITH LOAD 3.95 5.81 3.63
<CAPTION>
Class B
- -------
WITHOUT LOAD 6.99 6.25 4.23
WITH LOAD 3.49 5.65 3.94
</TABLE>
For the period ended September 30, 1997.
51
<PAGE>
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning October 1, 1993. Class B shares were offered
beginning October 22, 1993. Performance of the Class A shares reflects the
maximum front end sales charge of 3.50%. Performance of the Class B shares
reflects the maximum contingent deferred sales charge of 1.25% for the four-year
holding period. The performance of the Lipper Intermediate Municipal Fund Index,
the Lehman Municipal Bond Index, and the Lehman 10-Year Municipal Bond Index
does not include annual operating expenses which are experienced by the Fund.
BALANCED FUND
For the twelve months ended September 30, 1997, the Balanced Fund generated a
total return of 26.10% for Class A shares without a sales load, 21.69% for Class
A shares from which a sales charge has been deducted, and 21.69% for Class B
shares from which a sales charge has been deducted. This compares to a 24.03%
return for the Lipper Balanced Funds Average, a 40.43% return for the S&P 500
Composite Index, and a 7.83% return for the Lehman Intermediate Government Bond
Index. The Fund's net assets increased from $116.4 million to $138.9 million
over the fiscal year.
During the year, the Fund shifted to a somewhat more aggressive position,
increasing its proportion of stocks to about 55% of the portfolio, while bond
holdings represented about 40% and cash about 5%. This ratio reflected our
increasing confidence in the economy, which continued to demonstrate a
surprising combination of moderate growth and low inflation. The Fund's
proportions proved to be justified, as stocks outperformed bonds by a
significant margin.
The bond portion of the Fund produced solid gains through a combination of
coupon yields and capital appreciation. Bonds benefited from a relatively stable
environment in which rates actually declined somewhat over the course of the
fiscal year.
The Fund continued to emphasize intermediate-term government bonds for their
relative safety and stability. In addition, we increased the proportion of
mortgage-backed securities in order to take advantage of incremental yield
opportunities. Mortgage-backed instruments were favored over corporate bonds,
due to the fact that they offered a superior risk/return profile in the market
at that time.
The stock portion of the Balanced Fund, which pursues a strategy that combines
value and growth issues, with a value emphasis, also produced positive results
as the value and growth sectors exchanged leadership positions during the course
of the year.
The stock portfolio maintained a relatively defensive posture, with a bias
toward issues in the banking, consumer nondurables, and energy industries, where
price-earnings ratios tend to be below average. Among the better performers in
the portfolio were Parker-Hannifin, Tech Data Corp, SLM Holding Corp, and
Compaq.
Looking ahead, we believe the Balanced Fund remains well positioned for the
current environment, which offers the potential for strong returns from both
bonds and stocks. We anticipate a continuation of the favorable economic
climate, as global competition serves to prevent sharp price increases, while
productivity improvements help to boost corporate profits.
Still, we remain alert to the possibility of inflationary pressures which could
lead the Federal Reserve Board to hike interest rates. Therefore, we do not
currently anticipate any major changes in the Fund's proportions or in its
underlying investment strategies.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE
BALANCED FUND VERSUS THE WILSHIRE MID-CAP VALUE INDEX, THE S&P 500 COMPOSITE
INDEX, THE LEHMAN INTERMEDIATE GOVERNMENT BOND INDEX AND THE LIPPER BALANCED
FUNDS AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Wilshire Lehman Lipper
Balanced Mid-Cap S&P 500 Intermediate Balanced
Balanced Fund Value Composite Government Funds
Fund w/load Index Index Bond Index Average
10/93 10000 9650 10000 10000 10000 10000
3/94 9752 9411 9605 9646 9807 9712
9/94 9859 9514 9870 10159 9827 9882
3/95 10365 10002 10342 11145 10227 10396
9/95 11593 11188 12469 13176 10871 11767
3/96 12272 11843 13611 14718 11158 12579
9/96 12649 12207 13823 15853 11426 13224
3/97 13303 12838 15146 17635 11686 13946
9/97 15950 15393 18888 22264 12321 16396
[LINE GRAPH OMITTED]
CLASS B
Wilshire Lehman Lipper
Balanced Mid-Cap S&P 500 Intermediate Balanced
Balanced Fund Value Composite Government Funds
Fund w/load Index Index Bond Index Average
10/93 10000 10000 10000 10000 10000 10000
3/94 9726 9726 9605 9646 9807 9712
9/94 9788 9788 9870 10159 9827 9882
3/95 10250 10250 10342 11145 10227 10396
9/95 11428 11428 12469 13176 10871 11767
3/96 12052 12052 13611 14718 11158 12579
9/96 12376 12376 13823 15853 11426 13224
3/97 12969 12969 15146 17635 11686 13946
9/97 15494 15369 18888 22264 12321 16396
52
<PAGE>
<TABLE>
<CAPTION>
Average Annual Average Annual
One Year 3 Year Return Inception
Return Return to Date
<S> <C> <C> <C>
Class A
- -------
WITHOUT LOAD 26.10% 17.40% 12.50%
WITH LOAD 21.69 16.00 11.51
Class B
- -------
WITHOUT LOAD 25.19 16.54 11.76
WITH LOAD 21.69 16.05 11.53
</TABLE>
For the period ended September 30, 1997.
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning October 1, 1993. Class B shares were offered
beginning October 22, 1993. Performance of the Class A shares reflects the
maximum front end sales charge of 3.50%. Performance of the Class B shares
reflects the maximum contingent deferred sales charge of 1.25% for the four-year
holding period. The performance of the Wilshire Mid-Cap Value Index, the S&P 500
Composite Index, the Lehman Intermediate Government Bond Index, and the Lipper
Balanced Funds Average does not include annual operating expenses which are
experienced by the Fund.
VALUE EQUITY FUND
For the twelve months ended September 30, 1997, the Value Equity Fund generated
a total return of 45.27% for Class A shares without a sales load, 40.17% for
Class A shares from which a sales charge has been deducted, and 40.81% for Class
B shares from which a sales charge has been deducted. This compares to a 36.64%
return for the Wilshire Mid-Cap Value Index and a 40.43% return for the S&P 500
Composite Index. The Fund's net assets increased from $97.5 million to $144.1
million over the fiscal year.
The Fund's strong performance is attributable to a resurgence in the "value"
sector of the market and to portfolio decisions made throughout the year.
For the first half of fiscal 1997, the markets were dominated by a small group
of large multinational companies represented in the upper echelon of the S&P 500
Composite Index. However, as the increasingly high
53
<PAGE>
valuations of these issues began to raise eyebrows among even the most
optimistic investors, market sentiment shifted somewhat toward stocks with more
reasonable multiples, particularly in the long-dormant small and mid-cap
sectors.
Throughout the year, the Fund maintained its relatively defensive posture,
emphasizing large- and mid-cap issues whose price-earnings ratios were well
below the market average. One goal of this strategy is to protect the portfolio
against the full impact of any downturns in the market. And when put to the test
in March 1997 by a ten percent drop in the overall market, our strategy did in
fact result in a lesser decline.
The portfolio continued to be heavily weighted in a variety of industries where
multiples tend to remain lower, such as banking, consumer nondurables, selective
technology companies, and energy/minerals. However, we have deliberately avoided
any attempt to focus on broad sectors of the market, preferring to select issues
based on their individual merits.
Among the strongest performers in our portfolio during the past twelve months
were SCI Systems, Transocean Offshore, BankAmerica, and Cummins Engine.
Looking ahead, we plan to continue our emphasis on undervalued stocks that offer
above-average growth prospects and the chance for positive earnings surprises.
We believe that these issues will continue to offer a favorable combination of
capital appreciation potential and below-average risk.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE VALUE EQUITY FUND VERSUS THE WILSHIRE MID-CAP VALUE INDEX,
THE S&P 500 COMPOSITE INDEX, AND THE LIPPER EQUITY INCOME AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Value Wilshire S&P Lipper
Value Equity Mid-Cap 500 Equity
Equity Fund, Value Composite Income
Fund w/load Index Index Average
9/87 10000 9650 10000 10000 10000
9/88 8865 8555 10068 8760 9624
9/89 10844 10464 12730 11646 12026
9/90 9862 9517 9476 10571 10470
9/91 12669 12226 14086 13858 13427
9/92 13068 12611 16888 15395 14930
9/93 15650 15103 21625 17387 17612
9/94 15395 14857 21126 18029 17959
9/95 19264 18590 26688 23383 21588
9/96 21842 21077 29589 28135 25289
9/97 31730 30619 40431 39510 33925
[LINE GRAPH OMITTED]
CLASS B
Value Wilshire S&P Lipper
Value Equity Mid-Cap 500 Equity
Equity Fund, Value Composite Income
Fund w/load Index Index Average
9/87 10000 10000 10000 10000 10000
9/88 8865 8865 10068 8760 9624
9/89 10844 10844 12730 11646 12026
9/90 9862 9862 9476 10571 10470
9/91 12669 12669 14086 13858 13427
9/92 13068 13068 16888 15395 14930
9/93 15650 15650 21625 17387 17612
9/94 15305 15305 21126 18029 17959
9/95 19004 19004 26688 23383 21588
9/96 21377 21377 29589 28135 25289
9/97 30850 30850 40431 39510 33925
<TABLE>
<CAPTION>
Average Average Average
One Year Annual 3 Annual 5 Annual 10
Return Year Return Year Return Year Return
<S> <C> <C> <C> <C>
54
<PAGE>
Class A
- -------
WITHOUT LOAD 45.27% 27.26% 19.41% 12.24%
WITH LOAD 40.17 25.76 18.59 11.83
Class B
- -------
WITHOUT LOAD 44.31 26.32 18.74 11.92
WITH LOAD 40.81 25.90 18.69 11.92
</TABLE>
For the period ended September 30, 1997.
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning October 1, 1993. Class B shares were offered
beginning October 22, 1993. Performance of the Class A shares reflects the
maximum front end sales charge of 3.50%. Performance of the Class B shares
reflects the maximum contingent deferred sales charge of 1.25% for the four-year
holding period. The performance quoted includes past performance of the common
trust fund managed by FNBC adjusted for fees and expenses. The common trust fund
was not registered under the 1940 Act and therefore was not subject to certain
investment restrictions which may have adversely affected performance. The
performance of the Wilshire Mid-Cap Value Index, the S&P 500 Composite Index,
and the Lipper Equity Income Average does not include annual operating expenses
which are experienced by the Fund.
GROWTH EQUITY FUND
For the twelve months ended September 30, 1997, the Growth Equity Fund generated
a total return of 31.25% for Class A shares without a sales load, 26.64% for
Class A shares from which a sales charge has been deducted, and 26.91% for Class
B shares from which a sales charge has been deducted. This compares to a 41.48%
return for the S&P 500/BARRA Growth Index and a 25.95% return for the Wilshire
Mid-Cap Growth Index. While the Fund has characteristics in common with both
indices, it more closely reflects the capitalization levels of the Wilshire
Mid-Cap Growth Index. The Fund's net assets increased from $18.5 million to
$33.4 million over the fiscal year.
Coming off a very strong fiscal 1996, the Fund continued to benefit from a surge
in enthusiasm for growth-oriented companies. Along with the overall stock
market, this sector has benefited from the favorable combination of moderate
economic growth, low inflation, and strong inflows of investor funds. Moreover,
growth companies have enjoyed special attention as the source of products and
services that boost productivity, making today's economic environment possible.
With significant holdings in the technology sector, as well as in healthcare,
manufacturing, and consumer nondurables, the Fund participated fully in this
ongoing rally.
Among the best performers in the portfolio for the fiscal year were computer
issues such as Compaq Corporation, Dell Computer, and Gateway 2000, as well as
healthcare leaders such as Eli Lilly, Merck, and Schering-Plough. Looking ahead,
we are concerned that the level of optimism about the economy in general and
growth stocks in particular may be reaching the level of excess.
Therefore, we continue to manage the Growth Equity Fund in a conservative
manner. We have trimmed our technology holdings in recent months and continue to
avoid those issues whose prices reflect overconfidence in the future. And while
we believe there are still many opportunities available to growth-oriented
investors, we are keenly aware of the risks that are inherent in today's
superheated market.
55
<PAGE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE GROWTH EQUITY
FUND VERSUS THE WILSHIRE MID-CAP GROWTH INDEX, THE S&P 500/BARRA GROWTH INDEX,
AND THE LIPPER GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Growth Wilshire S&P 500/ Lipper
Growth Equity Mid-Cap BARRA Growth
Equity Fund Growth Growth Funds
Fund w/load Index Index Average
3/96 10000 9650 10000 10000 10000
6/96 10496 10129 10315 10701 10456
9/96 10966 10583 10599 11078 10765
12/96 11368 10970 10736 11883 11340
3/97 11165 10755 10176 12308 11207
6/97 13034 12578 11790 14804 12985
9/97 14393 13889 13351 15674 14363
[LINE GRAPH OMITTED]
CLASS B
Growth Wilshire S&P 500/ Lipper
Growth Equity Mid-Cap BARRA Growth
Equity Fund Growth Growth Funds
Fund w/load Index Index Average
4/96 10000 10000 10000 10000 10000
6/96 10232 10232 9738 10498 10128
9/96 10658 10658 10005 10867 10427
12/96 11037 11037 10135 11657 10984
3/97 10825 10825 9607 12073 10856
6/97 12609 12609 11130 14522 12577
9/97 13898 13898 12604 15376 13912
<TABLE>
<CAPTION>
One Year Average Annual Return
Return Inception to Date
<S> <C> <C>
Class A
- -------
WITHOUT LOAD 31.25% 26.43%
WITH LOAD 26.64 23.61
Class B
- -------
WITHOUT LOAD 30.41 27.04
WITH LOAD 26.91 25.34
</TABLE>
For the period ended September 30, 1997.
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning March 1, 1996. Class B shares were offered
beginning April 19, 1996. Performance of the Class A shares reflects the maximum
front end sales charge of 3.50%. Performance of the Class B shares reflects the
maximum contingent deferred sales charge of 2.00% for the three-year holding
period. The performance of the Wilshire Mid-Cap Growth Index, the S&P 500/BARRA
Growth Index and the Lipper Growth Funds Average does not include annual
operating expenses which are experienced by the Fund.
SMALL CAP EQUITY FUND
For the twelve months ended September 30, 1997, the Small Cap Equity Fund
generated a return of 20.60% for Class A shares without a sales load, 16.35% for
Class A shares from which a sales charge has been deducted, and
56
<PAGE>
16.45% for Class B shares from which a sales charge has been deducted. This
compares to a 23.36% return for the Russell 2000 Growth Index for the same
period. The Fund's net assets reached $4.3 million by the end of the fiscal
year.
Small cap growth stocks generally underperformed for much of the fiscal year, as
large-cap issues continued to dominate the equity markets. However, as the final
quarter approached, the small cap sector began to gain momentum and appeared to
be poised for a sustainable revival.
The Marquis Small Cap Equity Fund currently invests substantially all of its
assets in the SEI Institutional Managed Trust Small Cap Growth Portfolio.
Against this backdrop, the Portfolio was hampered somewhat by weakness in
individual technology and pharmaceutical issues. However, favorable stock
selection in the producer goods and energy sectors helped to compensate for
these weaknesses.
Among the portfolio's best performers for the year were Cliffs Drilling and
Patterson Energy in the oil services sector, Imperial Credit Industries and
Astoria Financial Corp. in the financial services sector, and Medaphys in the
healthcare sector.
Looking ahead, we see strong signs of continued strength in small-cap issues,
and are pleased to note that growth stocks have begun to close the gap on the
value stocks, which had been in the lead during much of fiscal 1997. In light of
these positive trends, we plan to maintain sector weightings and market
capitalization levels that are fundamentally the same as those of the Russell
2000 Growth Index. We believe that this strategy will allow investors to add a
representative sampling of the small-cap growth sector to their overall
portfolios.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE SMALL CAP EQUITY FUND VERSUS THE
RUSSELL 2000 GROWTH INDEX AND THE LIPPER SMALL CAP FUNDS AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Small Small Cap Russell Lipper
Cap Equity 2000 Small Cap
Equity Fund, Growth Funds
Fund w/load Index Average
4/92 10000 9650 10000 10000
9/92 10664 10291 9522 9895
3/93 12496 12059 10937 11734
9/93 14663 14150 12301 13161
3/94 14574 14064 12110 13121
9/94 14663 14150 12408 13441
3/95 15921 15364 12992 14193
9/95 20731 20005 15904 17328
3/96 22273 21493 17067 18764
9/96 26180 25263 17910 20586
3/97 22135 21360 16074 19656
9/97 31573 30468 22092 26828
[LINE GRAPH OMITTED]
CLASS B
Small Small Cap Russell Lipper
Cap Equity 2000 Small Cap
Equity Fund, Growth Funds
Fund w/load Index Average
4/92 10000 10000 10000 10000
9/92 10610 10610 9522 9895
3/93 12389 12389 10937 11734
9/93 14490 14490 12301 13161
3/94 14357 14357 12110 13121
9/94 14377 14377 12408 13441
3/95 15540 15540 12992 14193
9/95 20171 20171 15904 17328
3/96 21604 21604 17067 18764
9/96 25263 25263 17910 20586
3/97 21309 21309 16074 19656
9/97 30272 30272 22092 26828
<TABLE>
<CAPTION>
Average
Average Average Annual Return
One Year Annual 3 Annual 5 Inception
Return Year Return Year Return to Date
<S> <C> <C> <C> <C>
Class A
- -------
57
<PAGE>
WITHOUT LOAD 20.60% 29.13% 24.24% 23.50%
WITH LOAD 16.35 27.63 23.39 22.71
Class B
- -------
WITHOUT LOAD 19.82 28.17 23.33 22.59
WITH LOAD 16.32 27.76 23.29 22.59
</TABLE>
For the period ended September 30, 1997.
Past performance of the Fund is not predictive of future performance. Class A
and B shares were offered beginning February 3, 1997. Performance of the Class A
shares reflects the maximum front end sales charge of 3.50%. Class B shares
reflect the maximum contingent deferred sales charge of 3.50% for the one-year
holding period. The performance quoted for the Marquis Small Cap Equity Fund
represents information relating to the SEI Institutional Managed Trust Small Cap
Growth Portfolio. The Marquis Small Cap Equity Fund invests substantially all of
its assets in the SEI Institutional Managed Trust Small Cap Growth Portfolio.
The performance information contained herein has been adjusted to reflect the
actual fees and expenses of the Marquis Small Cap Equity Fund, whose fees and
expenses are higher than those of the SEI Institutional Managed Trust Small Cap
Growth Portfolio. The SEI Institutional Managed Trust Small Cap Growth Portfolio
shares were offered beginning April 20, 1992. The performance of the Russell
2000 Growth Index and the Lipper Small Cap Funds Average does not include annual
operating expenses which are experienced by the Fund.
INTERNATIONAL EQUITY FUND
For the twelve months ended September 30, 1997, the International Equity Fund
generated a return of 9.71% for Class A shares without a sales load, 5.84% for
Class A shares from which a sales charge has been deducted, and 5.52% for Class
B shares from which a sales charge has been deducted. This compares to a 12.19%
return for the MSCI EAFE Index for the same period. The Fund's net assets
reached $3.8 million by the end of the fiscal year.
The Marquis International Equity Fund invests substantially all of its assets in
the SEI International Trust International Equity Portfolio. A robust economy in
the United Kingdom, along with modest gains in France and Germany, led to strong
performance for the Portfolio's European holdings. This stood in sharp contrast
to the Asian markets, which continued to suffer from ongoing economic malaise in
Japan and currency crises in the emerging markets of Malaysia and Thailand.
The Portfolio's performance was also dampened somewhat by its small-cap
holdings, which comprise roughly 20% of the portfolio, at a time when the
small-cap sector has been out of favor in both Europe and Asia.
Looking ahead, we believe that the recent setbacks in Asia and the global
small-cap sector will be temporary in nature, and represent normal cycles in a
global investment strategy. Further, we remain optimistic that the worldwide
economic expansion will continue to provide significant opportunities for
investors who seek diversification beyond U.S. borders.
<TABLE>
<CAPTION>
Average Average Average
Annual Annual Annual Return
One Year 3 Year 5 Year Inception
Return Return Return to Date
<S> <C> <C> <C> <C>
Class A
- -------
WITHOUT LOAD 9.71% 7.68% 9.76% 5.06%
WITH LOAD 5.84 6.40 8.99 4.58
Class B
- -------
WITHOUT LOAD 9.02 6.87 8.93 4.25
WITH LOAD 5.52 6.32 8.86 4.25
</TABLE>
For the period ended September 30, 1997.
Past performance of the Fund is not predictive of future performance. Class A
and B shares were offered beginning February 3, 1997. Performance of the Class A
shares reflects the maximum front end sales charge of 3.50%. Class B shares
reflect the maximum contingent
58
<PAGE>
deferred sales charge of 3.50% for the one-year holding period. The performance
quoted for the Marquis International Equity Fund represents information relating
to the SEI International Trust International Equity Portfolio. The Marquis
International Equity Fund invests substantially all its assets in the SEI
International Trust International Equity Portfolio. The performance information
contained herein has been adjusted to reflect the actual fees and expenses of
the Marquis International Equity Fund, whose fees and expenses are higher than
those of the SEI INTERNATIONAL Trust International Equity Portfolio. The SEI
International Trust International Equity Portfolio shares were offered beginning
December 20, 1989. The performance of the MSCI EAFE Index and Lipper
International Funds Average does not include annual operating expenses which are
experienced by the Fund.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE INTERNATIONAL EQUITY FUND VERSUS THE
MSCI EAFE INDEX AND THE LIPPER INTERNATIONAL FUNDS AVERAGE
[LINE GRAPH OMITTED]
CLASS A
International Lipper
International Equity MSCI International
Equity Fund EAFE Funds
Fund w/load Index Average
12/89 10000 9650 10000 10000
9/90 8336 8045 6927 8455
9/91 9376 9048 8443 9872
9/92 9165 8844 7842 9726
9/93 11028 10642 9908 11931
9/94 11693 11284 10883 13522
9/95 12156 11731 11514 13965
9/96 13309 12843 12507 15320
9/97 14601 14090 14032 18168
[LINE GRAPH OMITTED]
CLASS B
International Lipper
International Equity MSCI International
Equity Fund EAFE Funds
Fund w/load Index Average
12/89 10000 10000 10000 10000
9/90 8286 8286 6927 8455
9/91 9248 9248 8443 9872
9/92 8969 8969 7842 9726
9/93 10715 10715 9908 11931
9/94 11269 11269 10883 13522
9/95 11617 11617 11514 13965
9/96 12619 12619 12507 15320
9/97 13756 13756 14032 18168
59
<PAGE>
The One Group Asset Allocation Fund
PORTFOLIO PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE AND STRATEGY
For the year ended June 30, 1997, The One Group Asset Allocation Fund Fiduciary
share class posted a total return of 20.16%. (For information on other share
classes and performance comparisons to indexes, please see page 6.)
Our research at the beginning of the fiscal year showed that stock valuations,
relative to bond valuations, were fairly high, but corporate earnings momentum,
or profitability, remained strong. As a result, we shifted the Fund's asset mix
slightly, to 54% stocks and 46% bonds, compared to 60% stocks and 40% bonds
during the previous fiscal year.
Relatively stable interest rates and solid earnings growth were the primary
forces at work in the bond and stock markets during the year. Without much
change in interest rates, there was little room for price appreciation in the
bond market, so returns consisted primarily of interest income. In the stock
market, strong corporate earnings helped push stocks to new heights.
EQUITY
The strong performance in the Fund's stock portfolio was due to our bottom-up
stock selection philosophy. Rather than emphasizing certain market sectors or
trying to time the market's moves, we research, evaluate and select stocks on an
individual basis to build a highly diversified portfolio. Because of this
approach, our stock portfolio represents a mix of four key equity
styles--large-capitalization growth, large-capitalization value,
medium-capitalization growth and medium-capitalization value.
We remained fully invested, focusing on stocks with an appealing combination of
good valuations and improving fundamentals.
FIXED INCOME
In the Fund's bond portfolio, our primary strategy was to maintain a neutral
duration posture of 4.1 years. (Duration is a measure of a Fund's price
sensitivity to interest rate changes. A longer duration indicates greater
sensitivity; a shorter duration indicates less.) We felt that the market was
fairly valued, and we didn't want to alter the portfolio's interest rate risk.
In addition, we maintained diversity among government, agency mortgage-backed
and corporate securities. Exposure to corporate and mortgage-backed securities
helped the Fund's performance, as these sectors outperformed government
securities on a relative basis. At the end of the fiscal year, 37% of the Fund's
bond portfolio was invested in government securities, 31% in mortgage-backed
securities and 32% in corporate and asset-backed securities.
Credit quality within the Fund's bond portfolio remained high, with 76% of the
portfolio's securities AAA-rated, 5% AA-rated, 14% A-rated and 6% BBB-rated. The
overall credit-quality rating of the bond portfolio was AAA-.
NOTABLE STOCK HOLDINGS
The equity portfolio benefited from particularly good stock selection in the
following sectors: technology (Intel, up 94%), health technology (Bristol
Meyers, up 85%), and energy, (Tosco, up 81%).
Three of the Fund's top 10 stock holdings changed during the year--AT&T, Royal
Dutch and Coca-Cola were replaced by Bristol Meyers, at 0.9% of assets on June
30, 1997; IBM, 0.9%; and Federal National Mortgage Association, 0.8%. The
remaining top 10 as of the end of the year included General Electric, 1.5% of
assets; Microsoft, 1.4%; Merck, 1.2%, Intel, 1.1%; Philip Morris, 1.1%; Exxon,
1.0%; and Wal-Mart, 1.0%.
OUTLOOK
We believe that equity and fixed-income securities will continue to benefit from
a strong economy, low inflation and low interest rates. In the stock market, we
expect returns to remain attractive, but we also think they will become more
subdued as we expect corporate earnings momentum to slow down. In addition, the
favoritism the market has shown toward large-capitalization growth stocks may be
fading, which would bode well for other areas of the stock market. In the bond
market, we expect yield fluctuations to be moderate and corporate credit
fundamentals to remain healthy. As such, we expect to maintain the Fund's
positions in the corporate and mortgage sectors.
Because stocks still appear fully valued compared to bonds, we expect to
maintain the Fund's current asset
60
<PAGE>
The One Group Asset Allocation Fund
PORTFOLIO PERFORMANCE REVIEW, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
allocation mix (54% stocks and 46% bonds) and investment strategies in the
coming months. Of course, we will continue to monitor the valuation levels in
the financial markets and to watch for signs of inflationary pressures, as any
changes may warrant a shift in our strategy.
/s/ MICHAEL D. WEINER
Michael D. Weiner
Fund Manager
/s/ RICHARD R. JANDRAIN III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
/s/ SCOTT GRIMSHAW
Scott Grimshaw
Fund Manager
/s/ GARY J. MADICH
Gary J. Madich, CFA
Senior Managing Director of Fixed-Income Securities
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
61
<PAGE>
The One Group Asset Allocation Fund
PORTFOLIO PERFORMANCE REVIEW, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
Since
Inception
1 Year (4/5/93)
------ --------
<S> <C> <C>
Fiduciary 20.16% 11.81%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
MEASUREMENT PERIOD ---------------------------
(FISCAL YEAR COVERED) S&P 500 S&P/LIPPER MIX FIDUCIARY
--------------------- ------- -------------- ---------
<S> <C> <C> <C>
4/93 $10,000 $10,000 $10,000
6/93 10,298 10,241 10,129
6/94 10,442 10,260 10,027
6/95 13,165 12,218 11,636
6/96 16,588 14,245 13,356
6/97 22,343 17,395 16,048
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
Since
Inception
1 Year (4/2/93)
------ ---------
<S> <C> <C>
Class A 19.85% 11.52%
Class A* 14.46% 10.31%
</TABLE>
* Reflects 4.50% Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
MEASUREMENT PERIOD ---------------------------
(FISCAL YEAR COVERED) S&P 500 S&P/LIPPER MIX CLASS A* CLASS A
--------------------- ------- -------------- -------- -------
<S> <C> <C> <C> <C>
4/93 $10,000 $10,000 $ 9,550 $10,000
6/93 10,298 10,241 9,668 10,124
6/94 10,442 10,260 9,553 10,003
6/95 13,165 12,218 11,057 11,580
6/96 16,588 14,245 12,657 13,257
6/97 22,343 17,395 15,166 15,888
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
Since
Inception
1 Year (1/14/94)
------ ---------
<S> <C> <C>
Class B 18.90% 11.59%
Class B** 14.90% 10.93%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge
<TABLE>
<CAPTION> VALUE OF $10,000 INVESTMENT
MEASUREMENT PERIOD ---------------------------
(FISCAL YEAR COVERED) S&P 500 S&P/LIPPER MIX CLASS B** CLASS B
--------------------- ------- -------------- ---------- -------
<S> <C> <C> <C> <C>
1/94 $10,000 $10,000 $ 1,000 $10,000
6/94 9,344 9,410 9,402 9,402
6/95 11,779 11,206 10,803 10,803
6/96 14,842 13,065 12,292 12,292
6/97 19,992 15,995 14,316 14,616
</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 Asset Allocation Fund is measured against the S&P 500
Index, an unmanaged index generally representative of the performance of large
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 S&P/Lipper Mix for all the classes is a blended index consisting of 60% of
the average monthly returns of the S&P 1500 Index from January 1, 1995 (index
inception date) until present and of the S&P 500 Index from April 1993 through
December 1995. The final 40% consists of the Lipper Intermediate US Government
Bond Funds Index.
62
<PAGE>
The One Group Disciplined Value Fund
PORTFOLIO PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE AND STRATEGY
The One Group Disciplined Value Fund Fiduciary share class had a total return of
20.56% for the year ended June 30, 1997. (For information on other share classes
and performance comparisons to indexes, please see page 16.)
Our goal for the Fund over the last year was to maintain a diversified portfolio
with exposure to a variety of economic sectors. Throughout the period, the stock
market was very concerned about the direction of interest rates. So, in order to
avoid some of the price volatility associated with potential changes in interest
rates, we broadly diversified the Fund's portfolio. Within this framework, we
emphasized individual stock selection and continued to rebalance the portfolio
in order to improve its structure and upgrade its holdings as market conditions
changed.
The Fund's largest sector weightings included electric utilities, banks and
industrial commodities. Securities from these sectors represented more than
one-third of the Fund's holdings. Within the electric utilities sector, many
problems surfaced due to regulatory issues and increased competition. As a
result, the Fund's investments in electric utilities stocks held back the Fund's
performance earlier in the year. After we reduced the Fund's investment in this
sector, however, overall portfolio performance improved.
The greatest positive influence on portfolio performance came from the energy
sector, where we took advantage of favorable price movements. We were able to
purchase energy stocks at attractive prices and then sell them when their prices
had appreciated to our targeted levels. The largest negative influence came from
the capital equipment sector, where some individual stock holdings showed poor
performance.
NOTABLE STOCK HOLDINGS
Outstanding performance from several individual stocks boosted the Fund's
return. These exemplary stocks included Teradyne, which increased 119% in value
due to an upturn from a cyclical low in the semiconductor capital equipment
industry; Smith Foods, which increased 85% on a takeover by Fred Meyer
Corporation; Lattice Semiconductor, which was up more than 55% due to continued
strong growth in programmable logic devices; and Edison International, which
increased 40% due to decreasing regulatory concerns.
The Fund's return suffered somewhat from the poor performance of certain stocks:
Nellcor declined more than 30% due to management's difficulties in implementing
a new MIS (management information system); Illinova declined more than 30% due
to heightened regulatory concerns in the electric utilities industry; and Octel
Communications lost 20% due to pricing pressures.
Profit-taking was the underlying motivation for changes in the Fund's top 10
holdings. For example, Seagate Technologies, Washington Post and Bear Stearns
were all trimmed or eliminated as the stocks reached their price targets. We
then established new holdings in similar industries at more attractive valuation
levels. The Fund's top 10 holdings on June 30, 1997, included Regions Financial
Corp., at 1.8% of Fund assets; SouthTrust Corp., 1.8%; CMS Energy Corp., 1.5%;
Provident Companies Inc., 1.5%; McKesson Corp., 1.5%; Nextel Communications,
1.3%; Molex, Inc., 1.3%; Summit Bancorp, 1.2%; Teradyne, Inc., 1.3%; and PMI
Group Inc., 1.2%.
OUTLOOK
Looking ahead, strong economic growth may force the Federal Reserve to tighten
monetary policy. As we've seen in the past, higher interest rates can create
severe volatility in the stock market. We will maintain our current strategy of
broad sector diversification and individual stock selection to help protect the
Fund from a possible interest rate hike. Within each sector, we will continue to
look for the best values--those with low price/earnings and price/book
ratios--among medium-capitalization stocks.
/s/ RICHARD R. JANDRAIN III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
63
<PAGE>
The One Group Disciplined Value 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
1 Year 5 Year (3/2/89)
------ ------ ---------
<S> <C> <C> <C>
Fiduciary 20.56% 14.70 12.51%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
S&P/BARRA
MEASUREMENT PERIOD MIDCAP
(FISCAL YEAR COVERED) 400 VALUE FIDUCIARY
--------------------- --------- ---------
<S> <C> <C>
3/89 $10,000 $10,000
6/89 10,883 10,989
6/90 12,677 11,372
6/91 13,666 11,572
6/92 16,450 13,451
6/93 20,284 15,278
6/94 20,388 15,895
6/95 24,523 18,443
6/96 30,137 22,150
6/97 37,343 26,704
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (2/18/92)
------ ------ ---------
<S> <C> <C> <C>
Class A 20.21% 14.45% 13.65%
Class A* 14.82% 13.40% 12.68%
</TABLE>
* Reflects 4.50% Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
S&P/BARRA
MEASUREMENT PERIOD MIDCAP
(FISCAL YEAR COVERED) 400 VALUE CLASS A* CLASS A
--------------------- --------- -------- -------
<S> <C> <C> <C>
2/92 $10,000 $ 9,550 $10,000
6/92 9,732 9,666 10,121
6/93 11,999 10,948 11,464
6/94 12,061 11,418 11,956
6/95 14,507 13,179 13,801
6/96 17,828 15,788 16,534
6/97 22,091 18,977 19,875
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (1/14/94)
------ ------ ---------
<S> <C> <C> <C>
Class B 19.19% NA 13.45%
Class B** 15.19% NA 12.81%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
S&P/BARRA
MEASUREMENT PERIOD MIDCAP
(FISCAL YEAR COVERED) 400 VALUE CLASS B** CLASS B
--------------------- --------- --------- -------
<S> <C> <C> <C>
1/94 $10,000 $10,000 $10,000
6/94 9,467 9,500 9,500
6/95 11,387 10,918 10,918
6/96 13,994 12,985 12,985
6/97 17,340 15,176 15,476
</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 Disciplined Value Fund is measured against the S&P/BARRA
Midcap 400 Value Index, an unmanaged index representing the performance of the
lowest price to book securities in the S&P Midcap 400 Index. 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 S&P/BARRA Midcap 400 Value Index consists of the average monthly returns of
the S&P 500 Index for periods prior to June 1991. Thereafter, the data are from
the S&P/BARRA Midcap 400 Value Index which corresponds with the initiation of
the S&P/BARRA Midcap 400 Value Index on June 30, 1991.
64
<PAGE>
The One Group Growth Opportunities Fund
PORTFOLIO PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE AND STRATEGY
The One Group Growth Opportunities Fund Fiduciary share class posted a total
return of 22.75% for the year ended June 30, 1997. (For information on other
share classes and performance comparisons to the indexes, please see page 20.)
Medium-capitalization growth stocks continued to benefit from a strong economy,
low inflation, solid corporate earnings, relatively low interest rates and
worldwide political stability.
The Fund's strong performance primarily can be attributed to rising markets and
good stock selection. We evaluate stocks on an individual basis, searching for
those with appealing fundamentals. We do not select stocks based on general
economic or market trends. As a result, we were able to uncover companies in
high-growth industries that offer good business models and strategies and
competitive advantages.
The Fund continued to favor stocks in the technology sector, which offered
strong performance due to a growth rate that surpassed that of the overall
economy. We also emphasized stocks from the communications technology and
financial industries, which have offered solid earnings growth at compelling
valuations.
NOTABLE STOCK HOLDINGS
The stocks of three companies showed particularly strong performance: Dell
Computer Corporation, up 360%; Advanced Fiber, up 112%; and Charles Schwab &
Co., up 64%. Each of these companies is in a high-growth area of its respective
sector, and management has successfully executed each company's strategy. Each
has exceeded earnings projections, and earnings continue to be revised upward.
On the other hand, poor performance from Medaphis, a health services company
that was down significantly for the 12-month period, hurt the Fund's return. The
company suffered from major earnings disappointments and downward revisions
after purchasing too many firms and losing control of its acquisition
strategies.
Once a stock reaches what we believe to be its full value, we usually sell it.
Also, we may increase our position in certain issues during market sell-offs. As
a result, price changes on the Fund's stocks cause the portfolio's top 10
holdings to change from time to time. On June 30, 1997, the top 10 holdings
included Progressive Corp., at 2.4% of Fund assets; Coca Cola Enterprises, 2.3%;
Franklin Resources, 2.1%; AES Corp., 2.0%; Advanced Fiber Corp, 1.8%, Just for
Feet, 1.7%; 3 Com Corp., 1.7%; AFLAC Inc., 1.6%; BMC Software Inc., 1.5%; and
Oxford Health, 1.5%.
OUTLOOK
In the months ahead, the technology sector should remain the "backbone" of the
Fund. Furthermore, we expect to see a shift in market sentiment, as small- and
mid-capitalization stocks gain greater favor with investors. We believe that the
smaller market indexes may in the coming months start outperforming the larger
indexes--a situation that hasn't occurred in more than three years. Given this
scenario, the Fund has the potential to continue providing an attractive total
return.
/s/ ASHI S. PARIKH
Ashi S. Parikh
Fund Manager
/s/ RICHARD R. JANDRAIN III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
65
<PAGE>
The One Group Growth Opportunities 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
1 Year 5 Year (3/2/89)
------ ------ ---------
<S> <C> <C> <C>
Fiduciary 22.75% 17.29% 16.89%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
S&P/BARRA
MEASUREMENT PERIOD MIDCAP
(FISCAL YEAR COVERED) 400 VALUE FIDUCIARY
--------------------- --------- ---------
<S> <C> <C>
3/89 $10,000 $10,000
6/89 10,604 10,822
6/90 10,720 13,077
6/91 10,635 14,364
6/92 12,290 16,543
6/93 14,903 20,076
6/94 14,620 20,044
6/95 18,183 24,002
6/96 21,703 29,915
6/97 26,785 36,721
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (2/18/92)
------ ------ ---------
<S> <C> <C> <C>
Class A 22.52% 17.12% 13.24%
Class A* 17.03% 16.05% 12.28%
</TABLE>
* Reflects 4.50% Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
S&P/BARRA
MEASUREMENT PERIOD MIDCAP
(FISCAL YEAR COVERED) 400 VALUE CLASS A* CLASS A
--------------------- --------- -------- -------
<S> <C> <C> <C>
2/92 $10,000 $ 9,550 $10,000
6/92 8,904 8,448 8,847
6/93 10,798 10,282 10,766
6/94 10,592 10,229 10,710
6/95 13,173 12,224 12,799
6/96 15,724 15,196 15,912
6/97 19,406 18,618 19,495
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (1/14/94)
------ ------ ---------
<S> <C> <C> <C>
Class B 21.73% NA 14.96%
Class B** 17.73% NA 14.34%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
S&P/BARRA
MEASUREMENT PERIOD MIDCAP
(FISCAL YEAR COVERED) 400 VALUE CLASS B** CLASS B
--------------------- --------- --------- -------
<S> <C> <C> <C>
1/94 $10,000 $10,000 $10,000
6/94 8,611 9,093 9,093
6/95 10,709 10,772 10,772
6/96 12,783 13,307 13,307
6/97 15,776 15,898 16,198
</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 Growth Opportunities Fund is measured against the
S&P/BARRA Midcap 400 Growth Index, an unmanaged index representing the
performance of the highest price to book securities in the S&P Midcap 400 Index.
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 S&P/BARRA Midcap 400 Growth Index for the Fiduciary Class Shares consists of
the average monthly returns of the Russell 2000 Index for periods prior to June,
1991. Thereafter, the data are from the S&P/BARRA Midcap 400 Growth Index which
corresponds with the initiation of the S&P/BARRA Midcap 400 Growth Index on June
30, 1991.
66
<PAGE>
The One Group Gulf South Growth Fund
PORTFOLIO PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE AND STRATEGY
For the year ended June 30, 1997, The One Group Gulf South Growth Fund Fiduciary
share class posted a total return of 13.44%. (For information on other share
classes and performance comparisons to indexes, please see page 22.)
Compared to large-capitalization growth stocks, smaller-capitalization growth
stocks remained out of favor with investors over the last year.
Large-capitalization stocks, due to their liquidity and earnings predictability,
have outperformed their smaller-capitalization brethren for the third year in a
row.
Our primary strategies during the year were to maintain an average market
capitalization of $500 million or less and enhance the portfolio's
diversification. The Fund's assets were divided among 17 sectors that span a
broad range of industries. The only sector that we significantly emphasized was
energy. In particular, our own fundamental research and increased drilling
activity in the Gulf of Mexico led us to many attractively priced oil stocks.
Although the Fund's sector weights changed little during the year, the
individual industries and stocks comprising those industries did change. We
reduced many of the Fund's positions through the normal selling of companies
that failed to perform to expectations. We also reduced some holdings due to
profit-taking. Furthermore, we scaled back each of the top 10 holdings so that
no holding represented more than 2% of total Fund assets.
NOTABLE STOCK HOLDINGS
Of the top 10 holdings on June 30, 1997, four were financial stocks--Triad
Guaranty at 1.7% of assets; CCB Financial, 1.5%; First Financial Holdings, 1.3%;
and Protective Life, 1.3%. The remaining stocks in the top 10 included DeKalb
Genetics at 1.6% of assets; Stewart Enterprises, 1.5%; Tech Data, 1.5%;
Omnicare, 1.3%; Maverick Tube Corp., 1.2%; and Newpark Resources, Inc., 1.2%.
The acceleration of activity in the Gulf of Mexico's oil patch led to strong
performance for several of the Fund's oil service companies. For example,
Maverick Tube was up more than 200%; Trico Marine and Patterson Energy were up
more than 100%; Pride Petroleum was up 50%; and Stone Energy was up 40%.
The Fund suffered a significant loss from Medaphis, a health services company
that experienced severe losses and declined 71% during the year. In the retail
sector, Garden Ridge, down 68%, was a major disappointment as earnings did not
meet expectations.
OUTLOOK
Looking ahead, it appears as though small-capitalization stocks may be on the
verge of regaining investor favor. Although the market continues to demand
liquidity, which is provided by large-capitalization stocks, the valuations in
small-company stocks are becoming more compelling on a price/earnings to growth
relationship.
/s/ DONALD E. ALLRED
Donald E. Allred
Fund Manager
/s/ RICHARD R. JANDRAIN III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
67
<PAGE>
The One Group Gulf South 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
1 Year 5 Year (7/1/91)
------ ------ ---------
<S> <C> <C> <C>
Fiduciary 13.44% 15.06% 16.06%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 600 FIDUCIARY
--------------------- ------- ---------
<S> <C> <C>
6/91 $10,000 $10,000
6/92 11,710 12,122
6/93 15,046 15,309
6/94 15,326 15,874
6/95 18,447 17,772
6/96 23,246 21,551
6/97 28,287 24,448
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (7/1/91)
------ ------ ---------
<S> <C> <C> <C>
Class A 13.52% 14.99% 16.00%
Class A* 8.38% 13.93% 15.11%
</TABLE>
* Reflects 4.50% Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 600 CLASS A* CLASS A
--------------------- ------- -------- -------
<S> <C> <C> <C>
6/91 $10,000 $ 9,550 $10,000
6/92 11,710 11,577 12,122
6/93 15,046 14,620 15,309
6/94 15,326 15,159 15,877
6/95 18,447 16,972 17,772
6/96 23,246 20,502 21,468
6/97 28,287 23,275 24,371
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (9/12/94)
------ ------ ---------
<S> <C> <C> <C>
Class B 12.74% NA 13.68%
Class B** 8.74% NA 12.83%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 600 CLASS B** CLASS B
--------------------- ------- --------- -------
<S> <C> <C> <C>
12/94 $10,000 $10,000 $10,000
6/95 11,470 10,594 10,594
6/96 14,454 12,702 12,702
6/97 17,589 14,020 14,320
</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 above-quoted performance data includes the performance of the Paragon Gulf
South Growth Fund for the period prior to the commencement of operations of The
One Group Gulf South Growth Fund on March 26, 1996. Performance for the
Fiduciary Shares is based on Class A Share performance adjusted to reflect the
absence of sales charges.
The performance of the Gulf South Growth Fund is measured against the S&P 600
Index, an unmanaged index generally representative of the performance of 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.
68
<PAGE>
The One Group International Equity Index Fund
PORTFOLIO PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE AND STRATEGY
For the year ended June 30, 1997, The One Group International Equity Index Fund
Fiduciary share class provided a total return of 14.64%. (For information on
other share classes and a performance comparison to the index, please see page
24.)
As it is designed to do, the Fund's performance closely matched that of the
Morgan Stanley Capital International Europe, Australia, Far East/Gross Domestic
Product (EAFE/GDP) Index. For the one-year period, the EAFE/GDP Index provided a
return of 14.57%.
We were able to slightly outperform the EAFE/GDP Index despite the fact that the
Fund has fees and expenses and the index does not. What particularly helped the
Fund overcome these factors was the Fund's investment in the emerging markets,
including Mexico, Brazil, Turkey and Thailand.
The Fund invests in a portfolio that consists of 90% EAFE/GDP and 10% emerging
markets. (The Fund owned 600 stocks in the developed international markets and
270 stocks in the emerging markets.) We invest the Fund's assets according to
how the 20 developed countries that comprise the EAFE/GDP are weighted in the
Index, and we equally weight the 13 emerging market countries. During the last
year, the emerging market component outperformed the EAFE/GDP Index, returning
17.27%.
While the Fund's one-year return was attractive, it would have been greater but
for the strength of the U.S. dollar during the period. In other words,
purchasing a U.S. dollar in most foreign countries required a greater amount of
local currency at the end of the fiscal year than it did at the beginning. As a
result, the Fund's foreign-denominated investments were worth less when
translated to U.S. dollars.
NOTABLE COUNTRY RETURNS
The Japanese stock market, where we invested the largest percentage of Fund
assets--between 23% and 29%--was down 9% for the year. In spite of this poor
performance, the Fund still provided a good return, as strong results from many
other countries helped offset the decline in the Japanese market.
The stock markets in several developed countries offered excellent returns
during the period. For example, in Finland, the market was up 54%; Spain, up
49%; The Netherlands, up 38%; Sweden, up 38%; and the United Kingdom, up 35%.
Emerging market countries offering outstanding performance included Brazil,
whose stock market was up 72%; Turkey, up 60%; Portugal, up 48%; Greece, up 47%;
and Mexico, up 31%.
OUTLOOK
Looking ahead, we believe that international economic activity will likely
remain strong. Stock market performance in Japan should improve, European
markets generally appear attractive, and many elements of the emerging markets
appear favorable.
/s/ NORMAN MELTZ
Norman Meltz
Independence International Associates Inc.
Fund Sub-Advisor
/s/ RICHARD R. JANDRAIN III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
69
<PAGE>
The One Group International Equity Index 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
1 Year (10/28/92)
------ ----------
<S> <C> <C>
Fiduciary 14.64% 13.57%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
MEASUREMENT PERIOD MORGAN STANLEY
(FISCAL YEAR COVERED) EAFE/GDP FIDUCIARY
--------------------- -------------- ---------
<S> <C> <C>
10/92 $10,000 $10,000
6/93 12,292 11,812
6/94 14,582 13,636
6/95 15,141 14,209
6/96 17,054 15,803
6/97 19,539 18,116
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year (4/23/93)
------ ---------
<S> <C> <C>
Class A 14.31% 10.43%
Class A* 9.18% 9.18%
</TABLE>
* Reflects 4.50% Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
MEASUREMENT PERIOD MORGAN STANLEY
(FISCAL YEAR COVERED) EAFE/GDP CLASS A* CLASS A
--------------------- -------------- -------- -------
<S> <C> <C> <C>
4/93 $10,000 $ 9,550 $10,000
6/93 9,989 9,510 9,958
6/94 11,850 10,953 11,469
6/95 12,304 11,374 11,913
6/96 13,859 12,641 13,248
6/97 15,878 14,448 15,144
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year (1/14/94)
------ ---------
<S> <C> <C>
Class B 13.37% 8.54%
Class B** 9.37% 7.84%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
MEASUREMENT PERIOD MORGAN STANLEY
(FISCAL YEAR COVERED) EAFE/GDP CLASS B** CLASS B
--------------------- -------------- --------- -------
<S> <C> <C> <C>
1/94 $10,000 $10,000 $10,000
6/94 10,046 10,323 10,323
6/95 10,431 10,650 10,650
6/96 11,750 11,712 11,712
6/97 13,461 12,978 13,278
</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.
International investing involves increased risk and volatility.
The performance of the International Equity Index Fund is measured against the
Morgan Stanley EAFE/GDP Index, an unmanaged index generally representative of
the performance of international stock markets. 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.
70
<PAGE>
The One Group Government Bond Fund
Portfolio Performance Review
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE
For the year ended June 30, 1997, The One Group Government Bond Fund Fiduciary
share class posted a total return of 8.10%. (For information on other share
classes and performance comparisons to indexes, please see page 11.)
While interest rates showed a slight overall decline from the beginning of the
fiscal year to the end, in between there were periods of modest volatility. The
five-year Treasury Note, for example, started the fiscal year yielding 6.55% and
ended it yielding 6.50%. However, between these two points, the yield went as
high as 6.80% and as low as 5.80%. The Fund's 30-day SEC yield (Fiduciary share
class) remained attractive at 6.24% on June 30, 1997, compared to 6.46% on June
30, 1996.
The Fund's total return is a reflection of our increased emphasis on yield
rather than price appreciation. Yields from mortgage-backed securities continued
to be the major source of total return during the fiscal year. 1996 was a good
year for the production of new mortgage securities across most classes, but as
rates rose in 1997, mortgage activity from new home purchases and refinances
slowed down. Overall, though, the mortgage-backed securities market outperformed
Treasuries and maintained a high degree of liquidity, proving to be the driving
force behind the Fund's strong performance.
STRATEGIES AND TACTICS
In addition to generating a high yield from mortgage-backed securities, another
component of the Fund's investment strategy was maintaining a neutral duration.
(Duration is a measure of a fund's price sensitivity to interest rate changes. A
longer duration indicates greater sensitivity; a shorter duration indicates
less.) For most of the year the Fund's duration remained in the 5.0-year to
5.25-year range, slightly higher than it was in the previous year but still
within our neutral target.
Maintaining the Fund's duration within a neutral range helped limit the effects
of interest rate movements during the year. Specifically, when interest rates
rise, bond prices fall, and funds with shorter durations tend to outperfom those
with longer durations.
OUTLOOK
During the next 12 months, economic activity and Federal Reserve policy will
have the greatest impact on the Fund's performance. If strong economic growth
continues, the Federal Reserve is likely to initiate further rate hikes, which
would have an adverse effect on total returns. We expect rates to increase
modestly during the remainder of 1997 and then decline somewhat in 1998.
We will continue to emphasize yield, rather than price appreciation, as the
primary component of total return. As such, we expect to maintain a neutral
duration, and we plan to continue emphasizing mortgage-backed securities over
Treasuries. However, we will monitor the interest rate forecasts and restructure
the portfolio if significant interest rate volatility appears likely. In this
type of environment, mortgage-backed securities would be expected to
underperform Treasuries, so we would adjust the Fund's sector weightings
accordingly.
/s/ THOMAS E. DONNE, CFA
- -------------------------
Thomas E. Donne, CFA
Fund Manager
/s/ MICHAEL J. SAIS, CFA
- -------------------------
Michael J. Sais, CFA
Fund Co-Manager
/s/ GARY J. MADICH, CFA
- -------------------------
Gary J. Madich, CFA
Senior Managing Director of Fixed-Income Securities
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
71
<PAGE>
The One Group Government Bond 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
1 Year (2/8/93)
------ --------
<S> <C> <C>
Fiduciary 8.10% 5.52%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
SALOMON BROTHERS LIPPER US
MEASUREMENT PERIOD 3-7 YEAR GOVERNMENT BOND
(FISCAL YEAR COVERED) TREASURY INDEX FUNDS INDEX FIDUCIARY
--------------------- -------------- ----------- ---------
<S> <C> <C> <C>
2/93 $10,000 $10,000 $10,000
6/93 10,275 10,289 10,351
6/94 10,174 9,973 10,068
6/95 11,275 11,028 11,281
6/96 11,790 11,440 11,710
6/97 12,623 12,256 12,800
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year (3/5/93)
------ --------
<S> <C> <C>
Class A 7.83% 4.91%
Class A* 2.98% 3.80%
</TABLE>
* Reflects 4.50% Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
SALOMON BROTHERS LIPPER US
MEASUREMENT PERIOD 3-7 YEAR GOVERNMENT BOND
(FISCAL YEAR COVERED) TREASURY INDEX FUNDS INDEX CLASS A* CLASS A
--------------------- -------------- ----------- -------- -------
<S> <C> <C> <C> <C>
3/93 $10,000 $10,000 $ 9,550 $10,000
6/93 10,237 10,252 9,713 10,171
6/94 10,136 9,937 9,406 9,849
6/95 11,233 10,989 10,519 11,015
6/96 11,746 11,399 10,896 11,410
6/97 12,576 12,212 11,749 12,350
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year (1/14/94)
------ ---------
<S> <C> <C>
Class B 7.14% 4.52%
Class B** 3.14% 3.77%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
SALOMON BROTHERS LIPPER US
MEASUREMENT PERIOD 3-7 YEAR GOVERNMENT BOND
(FISCAL YEAR COVERED) TREASURY INDEX FUNDS INDEX CLASS B** CLASS B
--------------------- -------------- ----------- --------- -------
<S> <C> <C> <C> <C>
1/94 $10,000 $10,000 $10,000 $10,000
6/94 9,560 9,377 9,501 9,501
6/95 10,595 10,369 10,566 10,566
6/96 11,079 10,757 10,877 10,877
6/97 11,862 11,524 11,364 11,654
</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 Government Bond Fund is measured against the Salomon
Brothers 3 to 7 Year Treasury Index, an unmanaged index comprised of US
Government agency and Treasury securities and agency mortgaged-backed
securities. 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 US Government Bond Funds Index consists of the equally weighted
average monthly return of the largest funds within the universe of all funds in
the category.
72
<PAGE>
The One Group Income Bond Fund
Portfolio Performance Review
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE
For the year ended June 30, 1997, The One Group Income Bond Fund Fiduciary share
class posted a total return of 8.10%. (For information on other share classes
and performance comparisons to indexes, please see page 13.)
As interest rates in general declined slightly during the year, the Fund's
30-day SEC yield was down from 6.91% on June 30, 1996, to 6.70% on June 30, 1997
(Fiduciary share class). Nevertheless, the Fund's yield remained attractive
primarily due to a slightly larger commitment to Yankee bonds, which are
dollar-denominated securities from foreign issuers. These bonds typically offer
higher yields than comparably-rated U.S.-issued securities.
In addition to Yankee bonds, the Fund focused on corporate bonds and mortgage
pass-through securities, which also offered good yields. Also, yield spreads
(the yield difference between corporate bonds and Treasury bonds) decreased
during the year, causing prices on corporate bonds to rise. The resulting price
appreciation combined with the attractive yields provided by all three sectors
contributed to the Fund's strong total return.
STRATEGIES AND TACTICS
A primary strategy for the year was to maintain an average duration exposure of
about 4.7 years, while improving yield. (Duration is a measure of a fund's price
sensitivity to interest rate changes. A longer duration indicates greater
sensitivity; a shorter duration indicates less.) We purposely avoid making
significant changes to the Fund's duration, as we believe it is risky to "make
bets" on interest rate movements. Instead, we try to maintain a neutral duration
and position the Fund to earn a relatively good rate of interest income.
This strategy worked well during the fiscal year, as the Fund was able to
generate incremental return without taking on additional interest rate risk. In
addition, the Fund enjoyed better price appreciation than generally was
experienced in the bond market because of the Fund's greater exposure to the
corporate bond sector. As interest rates declined, prices among corporate bonds
appreciated more than others.
The Fund maintained a good quality profile during the fiscal year, with 44% of
the Fund's assets invested in securities rated AAA, 5% in those rated AA, 23% in
A-rated, and 28% in BBB- or non-rated securities. The Fund's overall quality
rating was A at the end of the year.
On April 10, 1997, shareholders at a special meeting approved a change in the
Fund's investment policy. (The shareholder votes were cast as follows:
58,519,425 in favor; 7,899,515 opposed; and 3,180,663 abstained.) In addition to
investment-grade securities (those rated from AAA to BBB), the Fund now is able
to invest up to 30% of its assets in securities rated BB or B. Our research
shows that these securities, coupled with the steady cash flow distribution of
investment-grade bonds, historically have produced good returns and relatively
stable price trends in a variety of market conditions. Of course, while offering
higher yields, lower-grade securities also contain greater risks. We plan to
gradually introduce these securities to the Fund and to continue maintaining an
overall credit-quality rating of A.
OUTLOOK
Looking toward the upcoming months, we don't expect to see too many changes in
the economic or market environments. We believe that the economy should continue
to grow at a decent pace, inflation should remain low and interest rates should
remain fairly stable. Furthermore, the U.S. budget deficit is expected to
decline.
This scenario should bode well for corporate bonds. We believe that corporate
spreads should decline only slightly relative to Treasuries, so the primary
component of total return again should be yield rather than price appreciation.
The Fund will continue to seek a higher-than-average yield.
/s/ ROGER CRAIG
- ------------------------
Roger Craig
Fund Manager
/s/ GARY J. MADICH, CFA
- ------------------------
Gary J. Madich, CFA
Senior Managing Director of Fixed-Income Securities
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
73
<PAGE>
The One Group Income Bond 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
(7/2/87)
1 Year 5 Year 10 Year
------ ------ -------
<S> <C> <C> <C>
Fiduciary 8.10% 6.37% 7.23%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
LIPPER
INERTMEDIATE
INVESTMENT GRADE
MEASUREMENT PERIOD LEHMAN BROTHERS BOND FUNDS
(FISCAL YEAR COVERED) AGGREGATE BOND INDEX INDEX FIDUCIARY
--------------------- -------------------- ----- ---------
<S> <C> <C> <C>
7/87 $10,000 $10,000 $10,000
6/88 10,814 10,673 10,406
6/89 12,135 11,746 11,168
6/90 13,088 12,414 11,882
6/91 14,488 13,482 12,974
6/92 16,522 15,362 14,770
6/93 18,469 17,169 16,340
6/94 18,229 16,940 15,977
6/95 20,516 18,821 17,781
6/96 21,545 19,737 18,603
6/97 23,301 21,240 20,110
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (2/18/92)
------ ------ ---------
<S> <C> <C> <C>
Class A 7.85% 6.14% 6.42%
Class A* 2.99% 5.16% 5.51%
</TABLE>
* Reflects 4.50% Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
LIPPER
INTERMEDIATE
INVESTMENT GRADE
MEASUREMENT PERIOD LEHMAN BROTHERS BOND FUNDS
(FISCAL YEAR COVERED) AGGREGATE BOND INDEX INDEX CLASS A* CLASS A
--------------------- -------------------- ----- -------- -------
<S> <C> <C> <C> <C>
2/92 $10,000 $10,000 $ 9,550 $10,000
6/92 10,345 10,356 9,901 10,368
6/93 11,564 11,574 10,948 11,464
6/94 11,413 11,420 10,693 11,197
6/95 12,845 12,688 11,859 12,418
6/96 13,490 13,305 12,365 12,947
6/97 14,589 14,319 13,335 13,964
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (1/14/94)
------ ------ ---------
<S> <C> <C> <C>
Class B 7.15% NA 4.48%
Class B** 3.15% NA 3.73%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
LIPPER
INTERMEDIATE
INVESTMENT GRADE
MEASUREMENT PERIOD LEHMAN BROTHERS BOND FUNDS
(FISCAL YEAR COVERED) AGGREGATE BOND INDEX INDEX CLASS B** CLASS B
--------------------- -------------------- ----- --------- -------
<S> <C> <C> <C> <C>
1/94 $10,000 $10,000 $10,000 $10,000
6/94 9,485 9,488 9,471 9,471
6/95 10,675 10,542 10,478 10,478
6/96 11,211 11,055 10,860 10,860
6/97 12,124 11,897 11,351 11,637
</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 Income Bond Fund is measured against the Lehman Brothers
Aggregate Bond Index, an unmanaged index comprised of US Government, mortgage,
corporate and asset-backed securities. 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 Intermediate Investment Grade Bond Funds Index consists of the
equally weighted average monthly return of the largest funds within the universe
of all funds in the category.
74
<PAGE>
The One Group Louisiana Municipal Bond Fund
Portfolio Performance Review
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE
The One Group Louisiana Municipal Bond Fund Fiduciary share class posted a total
return of 6.81% for the year ended June 30, 1997. (For information on other
share classes and performance comparisons to indexes, please see page 16.)
Tax-exempt rates were in the process of falling just prior to the start of the
fiscal year. Rates quickly fell 25 basis points (one basis point equals 1/100th
of a percent) in early July, and then proceeded to trade up and down in a range
over the next 11 months, eventually falling another 25 basis points. This helped
push the Fund's SEC yield lower, at a rate that equaled the general decline in
yield on securities in the 10- to 15-year maturity sector.
The 30-day SEC yield on the Fund's Fiduciary share class was 4.16% on June 30,
1997, compared to 4.58% on June 30, 1996. (For investors in the 39.6% federal
income tax bracket and the 6.0% Louisiana state bracket, the June 30 yield
translates into a 7.32% tax-equivalent yield.)
The Fund's total return was comprised primarily of interest income. With
high-quality, intermediate-term municipal securities trading in a narrow
interest rate range during the year, there were only modest price improvements
and thus the majority of total return came from interest income.
The major factor contributing to the Fund's performance was the timing of our
duration adjustments. (Duration is a measure of a fund's price sensitivity to
interest rate changes. A longer duration indicates greater sensitivity; a
shorter duration indicates less.) Initially, we maintained a shorter duration as
rates were rising. Then, as rates moved lower in the latter part of 1996, we
extended duration. During periods of rising interest rates, bond prices fall and
funds with shorter durations typically experience less price volatility. On the
other hand, when rates decline, bond prices rise and funds with longer durations
typically experience greater price appreciation.
Overall, duration was up from 4.63 years on June 30, 1996, to 5.1 years on June
30, 1997. This action helped put the Fund's duration more in line with that of
the Fund's peers.
In addition, we sold some weaker holdings, which improved the Fund's income
level and its overall performance.
STRATEGIES AND TACTICS
The Fund focused on investments in high-quality, full coupon (at par or a slight
premium price), intermediate-term bonds with good call structures. Structure is
an important consideration for the Fund's investments because the supply of
potential investments can be small. Rather than emphasize a particular strategy
or market sector, we focus on securities with good call structures--meaning that
there is little difference between the call date and the maturity date. Bonds
with these characteristics should provide slightly higher income and better
price performance during periods of interest-rate volatility.
In addition, we employ a "buy and hold" strategy rather than actively trading
the Fund. This is primarily due to the fact that this is a single-state fund,
and the ability to find good securities can be limited at times.
The Fund's average quality improved over the year, with more than 80% of the
portfolio rated AA or better on June 30, 1997, up from 70% a year ago. The
average quality of the portfolio on June 30, 1997, was AA. This good
credit-quality rating primarily was due to the fact that most bonds were
escrowed or insured.
75
<PAGE>
The One Group Louisiana Municipal Bond Fund
Portfolio Performance Review, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
OUTLOOK
We believe that the current market climate, including modest interest rate
volatility, should continue over the upcoming months. This suggests that
interest income will remain the leading force in the fixed-income market for the
near term.
Looking ahead, though, there is concern among investors that the expanding
economy and a tight labor market eventually may lead to higher inflation. Fears
regarding the Federal Reserve's reaction to this scenario have caused us to take
a cautious approach toward extending the portfolio's duration.
/s/ DAVID M. SIVINSKI, CFA
David M. Sivinski, CFA
Fund Manager
/s/ GARY J. MADICH, CFA
Gary J. Madich, CFA
Senior Managing Director of Fixed-Income Securities
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
76
<PAGE>
The One Group Louisiana Municipal Bond 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
1 Year 5 Year (12/29/89)
------ ------ ---------
<S> <C> <C> <C>
Fiduciary 6.81% 5.96% 6.83%
</TABLE>
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
LIPPER
LEHMAN BROTHERS INTERMEDIATE
MEASUREMENT PERIOD 7 YEAR MUNICIPAL MUNICIPAL BOND
(FISCAL YEAR COVERED) BOND FUNDS INDEX FIDUCIARY
- --------------------- ----------------- -------------- ---------
<S> <C> <C> <C>
12/89 $10,000 $10,000 $10,000
6/90 10,274 10,248 10,339
6/91 11,187 11,098 11,182
6/92 12,410 12,239 12,295
6/93 13,743 13,450 13,550
6/94 13,917 13,584 13,685
6/95 15,062 14,503 14,584
6/96 15,896 15,244 15,375
6/97 17,013 16,225 16,422
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Year (12/29/89)
------ ------ ---------
<S> <C> <C> <C>
Class A 6.55% 5.89% 6.79%
Class A* 1.73% 4.93% 6.13%
</TABLE>
* Reflects 4.50% Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
LIPPER
LEHMAN BROTHERS INTERMEDIATE
MEASUREMENT PERIOD 7 YEAR MUNICIPAL MUNICIPAL BOND
(FISCAL YEAR COVERED) BOND FUNDS INDEX CLASS A* CLASS A
- --------------------- ---------------- -------------- -------- -------
<S> <C> <C> <C> <C>
12/89 $10,000 $10,000 $ 9,550 $10,000
6/90 10,274 10,248 9,873 10,339
6/91 11,187 11,098 10,679 11,182
6/92 12,410 12,239 11,742 12,295
6/93 13,743 13,450 12,940 13,550
6/94 13,917 13,584 13,069 13,685
6/95 15,062 14,503 13,928 14,584
6/96 15,896 15,244 14,673 15,365
6/97 17,013 16,225 15,634 16,371
</TABLE>
AVERAGE ANNUAL
TOTAL RETURN AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Since
Inception
1 Year (9/16/94)
------ ---------
<S> <C> <C>
Class B 5.87% 5.51%
Class B** 1.87% 4.51%
</TABLE>
** Reflects Applicable Contingent Deferred Sales Charge.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTMENT
---------------------------
LIPPER
LEHMAN BROTHERS INTERMEDIATE
MEASUREMENT PERIOD 7 YEAR MUNICIPAL MUNICIPAL BOND
(FISCAL YEAR COVERED) BOND FUNDS INDEX CLASS B** CLASS B
- --------------------- ---------------- -------------- --------- -------
<S> <C> <C> <C> <C>
9/94 $10,000 $10,000 $10,000 $10,000
6/95 10,824 10,735 10,482 10,482
6/96 11,424 11,283 10,970 10,970
6/97 12,226 12,010 11,314 11,614
</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 fund's income may be subject to the federal alternative minimum tax.
The above-quoted performance data includes the performance of the Paragon
Louisiana Tax-Free Fund for the period prior to the commencement of operations
of The One Group Louisiana Municipal Bond Fund on March 26, 1996. Performance
for the Fiduciary Shares is based on Class A Share performance adjusted to
reflect the absence of sales charges.
The performance of the Louisiana Municipal Bond Fund is measured against the
Lehman Brothers 7 Year Municipal Bond Index, an unmanaged index comprised of
investment grade municipal bonds with maturities close to seven 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 Intermediate Municipal Bond Funds Index consists of the equally
weighted average monthly return of the largest funds within the universe of all
funds in the category.
77
<PAGE>
The One Group U.S. Treasury Securities Money Market Fund
Portfolio Performance Review
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE
The seven-day yield on The One Group U.S. Treasury Securities Money Market Fund
Fiduciary share class was 5.03% on June 30, 1997, up from 4.98% on June 30,
1996.
The Fund's yield reflects the slight increase in interest rates brought on by
the Federal Reserve's only monetary policy adjustment during the fiscal year--a
0.25% federal funds rate hike on March 25, 1997. Interim rate movements were
fairly moderate, and they reflected market participants' changing views on
economic strength and whether that strength would lead to inflationary pressures
requiring Federal Reserve action.
STRATEGIES AND TACTICS
Our primary strategy during the period was to maintain a "barbell" maturity
structure, meaning that we focused on securities at the extremes of the
short-term maturity range. As such, the Fund emphasized securities with
maturities between six months and one year along with overnight repurchase
agreements.
The money market yield curve during the fiscal year remained fairly steep,
meaning that securities with longer maturities paid relatively higher yields.
The Fund's "longer" securities--those maturing in six months to one
year--enabled the Fund to take advantage of this steepness, which helped
increase the Fund's yield. At the same time, the repurchase agreements, which
matured overnight, allowed the Fund to retain a high level of liquidity.
This strategy led to an average maturity of 30 days on June 30, 1997, enabling
the Fund to maintain its "AAA" average quality rating--the best possible--from
Standard & Poor's and Moody's Investors Service. This rating indicates that the
Fund's securities are of the highest quality and offer the lowest credit risk.
In order to receive this rating, a fund must have an average maturity no greater
than 60 days.
OUTLOOK
Economic activity and how it influences the Federal Reserve's policies will have
a direct effect on the Fund over the next year. Over the near term, the Federal
Reserve may make another move to slow down the economy and take a proactive
stance against inflation. This outlook warrants the continued use of a barbell
strategy to quickly take advantage of any higher rates caused by more
tightening. If it becomes apparent that the Fed has finished its rate hikes for
awhile, we would reduce our position in repurchase agreements and invest more
heavily in money market securities with longer maturities.
LOGO
Andrew T. Linton
Fund Manager
LOGO
Gary J. Madich, CFA
Senior Managing Director of Fixed-Income Securities
<TABLE>
<CAPTION>
AVERAGE ANNUAL
CLASS OF SHARES 7 DAY YIELD 1 YEAR TOTAL RETURN 5 YEARS SINCE
INCEPTION
<S> <C> <C> <C> <C> <C>
Fiduciary 5.03 5.07 4.27 5.51
Class A 4.78 4.81 4.01 3.95
</TABLE>
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
78
<PAGE>
The One Group Municipal Money Market Fund
Portfolio Performance Review
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE
The seven-day yield on The One Group Municipal Money Market Fund Fiduciary share
class was 3.63% on June 30, 1997, compared to 3.00% on June 30, 1996. (For
investors in the 39.6% federal income tax bracket, the June 30, 1997, tax-free
yield translates to a tax-equivalent yield of 6.08%.)
During the past year, short-term tax-exempt rates moved within a wide trading
range of 2.75% to 4.75%. This interest rate volatility was attributed primarily
to irregular and seasonal shifts in the supply and demand for short-term issues.
When the volume or supply of eligible issues was not able to keep pace with the
demand from short-term buyers, interest rates moved downward near the lower end
of the trading range.
These periods of market strength were apparent during January and July, as heavy
cash flows into the market exceeded the limited supply. Conversely, during April
and December, when the available market supply surpassed demand, rates moved
upward significantly to attract buyers. As these technical factors of the
short-term tax-exempt market operated against the backdrop of economic growth
and possible inflationary pressures, interest rates moved moderately upward
throughout the year.
STRATEGIES AND TACTICS
Due to the technical nature of the short-term tax-exempt market, our ongoing
investment strategy is to focus on selecting the appropriate mix of
variable-rate and fixed-rate securities to react to and take advantage of
changing market conditions. For the most part, we favored the variable-rate
sector over the fixed-rate sector to take advantage of the moderate upward shift
in interest rates evident during the year. Because variable-rate issues tend to
reset more frequently to changing market conditions, they offered more
attractive yields.
Throughout the year, the yield curve also shifted in an abrupt fashion. To help
compensate for unexpected changes in the yield curve, we maintained the Fund's
average maturity within a range of 35 days to 60 days, which was generally less
than the industry average. The Fund ended the year with an average maturity of
37 days, compared to 55 days on June 30, 1996.
OUTLOOK
We believe that the near-term outlook for the short-term tax-exempt market
continues to look favorable. As long as economic growth continues and inflation
remains under control, we don't anticipate making any changes in our ongoing
investment strategy. Furthermore, the Fund currently is positioned to take
advantage of ever-changing market conditions to seek to provide an attractive
and competitive return for our shareholders.
LOGO
Thomas W.Cary
Fund Manager
LOGO
Gary J. Madich, CFA
Senior Managing Director of Fixed-Income Securities
<TABLE>
<CAPTION>
AVERAGE ANNUAL
CLASS OF SHARES 7 DAY YIELD 1 YEAR TOTAL RETURN 5 YEARS SINCE
INCEPTION
<S> <C> <C> <C> <C> <C>
Fiduciary 3.63 3.19 2.82 3.89
Class A 3.38 2.97 2.59 2.56
</TABLE>
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
79
<PAGE>
The One Group Treasury Only Money Market Fund
Portfolio Performance Review
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS JUNE 30, 1997
PERFORMANCE
The seven-day yield on The One Group Treasury Only Money Market Fund was 5.12%
on June 30, 1997, up from 5.00% on June 30, 1996.
The Fund's yield reflects the slight increase in interest rates brought on by
the Federal Reserve's only monetary policy adjustment during the fiscal year--a
0.25% federal funds rate hike on March 25, 1997. Interim rate movements were
fairly moderate, and they reflected market participants' changing views on
economic strength and whether that strength would lead to inflationary pressures
requiring Federal Reserve action.
STRATEGIES AND TACTICS
The portfolio continued to benefit from a "barbell" maturity structure, a common
technique that involves investing in securities at the long and short ends of a
particular maturity range instead of those with intermediate maturities.
This strategy led to an average maturity of 49 days on June 30, 1997, enabling
the Fund to maintain its "AAA" average quality rating--the best possible--from
Standard & Poor's and Moody's Investors Service. This rating indicates that the
Fund's securities are of the highest quality and offer the lowest risk. In order
to receive this rating, a fund must have an average maturity no greater than 60
days.
OUTLOOK
Economic activity and how it influences the Federal Reserve's policies will have
a direct effect on the Fund over the next year. Over the near term, the Federal
Reserve may make another move to slow down the economy and take a proactive
stance against inflation. As investors factor this potential rate hike into the
market, the yield curve should steepen, meaning securities with longer
maturities would offer higher yields. If this happens, we would extend the
Fund's average weighted maturity to take advantage of a steeper yield curve.
Andrew T. Linton Signature
Andrew T. Linton
Fund Manager
Gary J. Madich Signature
Gary J. Madich, CFA
Senior Managing Director of Fixed-Income Securities
<TABLE>
<CAPTION>
AVERAGE ANNUAL
7 DAY YIELD 1 YEAR TOTAL RETURN 5 YEARS SINCE INCEPTION
<S> <C> <C> <C> <C>
5.12 5.24 NA 4.67
</TABLE>
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
80
<PAGE>
INFORMATION ABOUT THE PROPOSED TRANSACTION
INTRODUCTION
This Combined Prospectus/Proxy Statement is furnished in connection with
the solicitation of proxies from the shareholders of Marquis Institutional,
Marquis Treasury Securities, Marquis Tax-Exempt, Marquis Government, Marquis
Strategic Income, Marquis Louisiana, Marquis Balanced, Marquis Value, Marquis
Growth, Marquis Small Cap and Marquis International by and on behalf of the
Trustees of Marquis Funds for use at a Meeting to approve the reorganization
of the Marquis Funds. The Meeting will be held at the offices of SEI
Investments Company at One Freedom Valley Road, Oaks, Pennsylvania on
Thursday, July 30, 1998. This Combined Prospectus/Proxy Statement and the
enclosed form of proxy are being mailed to shareholders of the Marquis Funds
on or about July 3, 1998.
Any shareholder may revoke a proxy once the proxy is given. The shareholder
revoking such proxy must either submit to the appropriate Marquis Fund a
subsequently dated proxy, deliver to the appropriate Marquis Fund a written
notice of revocation, or otherwise give written notice of revocation in person
at the Meeting. All properly executed proxies received in time for the Meeting
will be voted as specified in the proxy, or, if no specification is made, FOR
the proposal (set forth in Item (1) of the Notice of Special Meeting of
Shareholders).
Only shareholders of record on May 18, 1998 will be entitled to notice of
and to vote at the Meeting. Each share as of the close of business on May 18,
1998, is entitled to one vote.
The Trustees of Marquis Funds know of no matters other than those set forth
herein to be brought before the Meeting. If, however, any other matters properly
come before the Meeting, it is the Trustees' intention that proxies will be
voted on such matters in accordance with the judgment of the persons named in
the enclosed form of proxy.
TERMS OF THE PROPOSED REORGANIZATION
Shareholders of Marquis Institutional, Marquis Treasury Securities, Marquis
Tax-Exempt, Marquis Government, Marquis Strategic Income, Marquis Louisiana,
Marquis Balanced, Marquis Value, Marquis Growth, Marquis Small Cap and Marquis
International are being asked to approve or disapprove of an Agreement and Plan
of Reorganization involving the Marquis Funds and the One Group Funds.
According to the Agreement and Plan of Reorganization, Marquis Institutional,
Marquis Treasury Securities, Marquis Tax-Exempt, Marquis Government, Marquis
Strategic Income, Marquis Louisiana, Marquis Balanced, Marquis Value, Marquis
Growth, Marquis Small Cap and Marquis International would be merged with and
into One Group Treasury Only, One Group Treasury Securities, One Group
Tax-Exempt, One Group Government, One Group Income, One Group Louisiana, One
Group Balanced, One Group Value, One Group Growth, One Group Small Cap and One
Group International Index, respectively, on or about August 10, 1998 (the
"Exchange Date"). On the Exchange Date, the Marquis Funds will transfer all of
their assets and liabilities to the corresponding One Group Funds in exchange
for shares of the corresponding One Group Fund having an aggregate net asset
value equal to the aggregate value of the net assets acquired from the
corresponding Marquis Fund. The assets and liabilities of the Marquis Funds and
The One Group Funds will be valued as of the close of trading on the New York
Stock Exchange on the business day next preceding the Exchange Date. The
following discussion is qualified in its entirety by the full text of the
Agreement and Plan of Reorganization which is attached as Exhibit A to this
Combined Prospectus/Proxy Statement.
Following the transfer, the Marquis Funds will be dissolved and shares of
the respective One Group Funds received by the corresponding Marquis Fund will
be distributed to Marquis Fund shareholders in liquidation of the Marquis Funds.
As a result of the proposed transaction, a Marquis Institutional, Marquis
Treasury Securities, Marquis Tax-Exempt, Marquis Government, Marquis Strategic
Income, Marquis Louisiana, Marquis Balanced, Marquis Value, Marquis Growth,
Marquis Small Cap and Marquis International shareholder will receive, on a
tax-free basis, a number of full and fractional shares equal in value at the
date of the exchange to the value of the net
81
<PAGE>
assets of the respective Marquis Fund transferred to One Group Treasury Only,
One Group Treasury Securities, One Group Tax-Exempt, One Group Government, One
Group Income, One Group Louisiana, One Group Balanced, One Group Value, One
Group Growth, One Group Small Cap and One Group International Index
respectively, attributable to the shareholder. If you own Class A shares of the
Marquis Fund and are a financial organization authorized to act in a fiduciary,
advisory, agency, custodial or similar capacity, or you own Trust Class shares,
you will receive One Group Fiduciary Class shares. If you otherwise own Marquis
Class A, Retail Class or Sweep Class shares, you will receive One Group Class A
shares. Shareholders holding Marquis Class B shares will receive One Group
Class B shares. If you are invested in Marquis Institutional, you will receive
shares of One Group Treasury Only Fund.
Marquis Funds, on behalf of each of the Marquis Funds, will pay to the
respective One Group Funds any interest and cash dividends received by the
corresponding Marquis Fund after the Exchange Date with respect to the
investments transferred to the respective One Group Fund. In addition, Marquis
Funds, on behalf of each of the Marquis Funds, will transfer to the respective
One Group Fund any rights, stock dividends or other securities received by the
corresponding Marquis Fund after the Exchange Date as stock dividends or other
distributions with respect to the investments transferred. Such rights, stock
dividends and other securities shall be deemed included in the assets
transferred to the One Group Funds at the Exchange Date and shall not be
separately valued, in which case any such distribution that remains unpaid as of
the Exchange Date shall be included in the determination of the value of the
assets of the respective Marquis Funds acquired by the corresponding One Group
Funds.
At a meeting on May 18, 1998, the Trustees of Marquis Funds unanimously
approved the Agreement and Plan of Reorganization and determined that the
reorganization of the Marquis Funds and the One Group Funds would be in the best
interests of each Fund. The Trustees further determined that the interests of
existing shareholders of each Fund would not be diluted upon effectuation of the
reorganization. Consequently, the Trustees recommend approval of the Agreement
and Plan of Reorganization for the following reasons:
1. ENHANCED RANGE OF INVESTMENT OPTIONS
Investors in The One Group enjoy a wide array of investment options and
strategies. The One Group currently consists of thirty-three (33) operational
funds, including ten different equity funds, each with a distinct style or
strategy. In addition, The One Group offers seven municipal bond funds, each
focusing on a different state or strategy, as well as six money market funds,
six taxable bond funds and four fund of funds. This range of strategies permits
an investor in The One Group to participate at any point in time in the styles
currently prevalent in the market. Shareholders are free to make exchanges
between each of these funds (excluding The One Group Institutional Money Market
Funds). Thus, if the Agreement and Plan of Reorganization is approved, you will
have increased investment options and greater flexibility to change investments.
2. TAX-FREE CONVERSION OF MARQUIS FUNDS SHARES
If you were to redeem your investment in the Marquis Funds in order to invest in
a One Group Fund or another investment product, you would recognize gain or loss
for Federal income tax purposes upon the redemption of those shares. By
contrast, the proposed reorganization of each Marquis Fund will permit
shareholders of the Marquis Funds to exchange their investment in the Marquis
Funds for an investment in the One Group Funds without recognition of gain or
loss for Federal income tax purposes. After the reorganization, as a shareholder
of an open-end fund, you will continue to be free to redeem any or all of your
shares at net asset value (other than Class B shares) at any time. At that
time, a taxable gain or loss would be recognized.
3. INVESTMENT LEVERAGE AND MARKET PRESENCE
The merger is expected to result in greater investment leverage and market
presence for The One Group. If the Agreement and Plan of Reorganization is
approved, The One Group would have approximately $28 billion in assets under
management. Fund investment opportunities increase as assets increase.
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<PAGE>
In addition, you could benefit from any resulting economies of scale
attributable to the larger asset size of the One Group Funds.
4. PERFORMANCE
The total returns of the One Group Funds are competitive with, and in most cases
superior to, those of the Marquis Funds. For information regarding the total
returns of each of the Funds in question, see "Financial Highlights" in the One
Group and Marquis Funds Prospectuses accompanying this Combined Prospectus/Proxy
Statement. Of course, past performance does not predict future results.
<TABLE>
<CAPTION>
Marquis Institutional The One Group Treasury
Money Market Fund Only Money Market Fund
--------------------- ----------------------
<S> <C> <C>
YTD Ending 3/31/98 1.31% 1.30%
1 Year Annualized 12/31/97 5.35% 5.28%
3 Year Annualized - 12/31/97 NA 5.39%
5 Year Annualized - 12/31/97 NA NA
Average Net Assets 12/31/97 ($MM) $66 $555
Total Fund Net Assets 12/31/97 ($MM) $55 $769
<CAPTION>
Marquis Treasury Securities The One Group U.S. Treasury
Money Market Fund Securities Money Market Fund
--------------------------- ----------------------------
Retail Trust Cash Sweep Class A Fiduciary
------ ----- ---------- ------- ---------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 1.25% 1.20% 1.13% 1.20% 1.26%
1 Year Annualized - 12/31/97 4.90% 5.10% NA 4.87% 5.14%
3 Year Annualized - 12/31/97 4.98% 5.18% NA 5.02% 5.28%
5 Year Annualized - 12/31/97 NA NA NA 4.24% 4.50%
Average Net Assets 12/31/97 ($MM) $598 $560 $ 86 $553 $2,321
Total Fund Net Assets - 12/31/97 $635 $599 $186 $841 $2,681
<CAPTION>
Marquis Tax-Exempt The One Group
Money Market Fund Municipal Money Market Fund
------------------ ---------------------------
Retail Class A Fiduciary
------ ------- ---------
<S> <C> <C> <C>
YTD Ending 3/31/98 0.70% 0.68% 0.74%
1 Year Annualized - 12/31/97 3.17% 3.05% 3.31%
3 Year Annualized - 12/31/97 NA 3.10% 3.35%
5 Year Annualized - 12/31/97 NA 2.70% 2.93%
Average Net Assets 12/31/97 ($MM) $ 91 $67 $489
Total Fund Net Assets - 12/31/97 $126 $96 $500
<CAPTION>
Marquis Government The One Group
Securities Fund Government Bond Fund
------------------ --------------------
Class A Class B Class A Fiduciary Class B
------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 1.58% 1.28% 1.54% 1.60% 1.39%
1 Year Annualized - 12/31/97 7.96% 7.25% 9.49% 9.76% 8.80%
3 Year Annualized - 12/31/97 8.53% 7.73% 9.68% 9.97% 9.00%
5 Year Annualized - 12/31/97 NA NA NA NA NA
Average Net Assets 12/31/97 ($MM) $151 $ 1 $35 $727 $ 12
Total Fund Net Assets - 12/31/97 $147 $ 1 $32 $810 $ 15
<CAPTION>
Marquis Strategic The One Group
Income Fund Income Bond Fund
----------- ----------------
83
<PAGE>
Class A Class B Class A Fiduciary Class B
------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 1.16% 0.98% 1.62% 1.58% 1.46%
1 Year Annualized - 12/31/97 NA NA 7.05% 7.31% 6.26%
3 Year Annualized - 12/31/97 NA NA 9.01% 9.27% 8.33%
5 Year Annualized - 12/31/97 NA NA 6.04% 6.31% NA
Average Net Assets 12/31/97 ($MM) $ 14 $ 1 $ 14 $738 $ 11
Total Fund Net Assets - 12/31/97 $ 16 < $ 1 $ 15 $816 $ 14
<CAPTION>
Marquis Louisiana The One Group Louisiana
Tax-Free Income Fund Municipal Bond Fund
---------------------- -------------------
Class A Class B Class A Fiduciary Class B
------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 0.81% 0.53% 0.94% 0.90% 0.68%
1 Year Annualized - 12/31/97 7.31% 6.54% 7.04% 7.41% 6.46%
3 Year Annualized - 12/31/97 8.45% 7.65% 7.70% 7.90% 7.03%
5 Year Annualized - 12/31/97 NA NA 5.93% 6.05% NA
Average Net Assets 12/31/97 ($MM) $ 32 $ 1 $ 50 $113 $ 4
Total Fund Net Assets - 12/31/97 $ 40 $ 2 $ 49 $103 $ 4
<CAPTION>
Marquis Balanced Fund The One Group Asset Allocation Fund
--------------------- -----------------------------------
Class A Class B Class A Fiduciary Class B
------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 7.18% 6.87% 7.92% 7.99% 7.78%
1 Year Annualized - 12/31/97 21.65% 20.78% 22.26% 22.58% 21.41%
3 Year Annualized - 12/31/97 18.02% 17.16% 19.67% 20.01% 18.84%
5 Year Annualized - 12/31/97 NA NA NA NA NA
Average Net Assets 12/31/97 ($MM) $126 $ 3 $ 30 $ 94 $45
Total Fund Net Assets - 12/31/97 $133 $ 4 $ 39 $ 95 $70
<CAPTION>
Marquis Value The One Group
Equity Fund Disciplined Value Fund
-------------------- ----------------------
Class A Class B Class A Fiduciary Class B
------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 10.27% 10.12% 8.39% 9.54% 8.22%
1 Year Annualized - 12/31/97 37.10% 36.04% 34.88% 35.10% 33.83%
3 Year Annualized - 12/31/97 28.44% 27.52% 25.32% 25.65% 24.39%
5 Year Annualized - 12/31/97 NA NA 17.16% 17.39% NA
Average Net Assets 12/31/97 ($MM) $119 $ 8 $25 $552 $20
Total Fund Net Assets - 12/31/97 $132 $ 10 $29 $591 $25
<CAPTION>
Marquis The One Group
Growth Equity Fund Growth Opportunities Fund
--------------------- -------------------------
Class A Class B Class A Fiduciary Class B
------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 11.31% 11.08% 13.63% 13.68% 13.39%
1 Year Annualized - 12/31/97 27.33% 26.45% 29.78% 30.08% 28.67%
3 Year Annualized - 12/31/97 NA NA 25.69% 26.01% 24.78%
5 Year Annualized - 12/31/97 NA NA 16.47% 16.78% NA
Average Net Assets 12/31/97 ($MM) $29 $ 1 $46 $623 $40
Total Fund Net Assets - 12/31/97 $37 $ 2 $63 $734 $62
<CAPTION>
The One Group Small
84
<PAGE>
Marquis Small Cap
Equity Fund Small Capitalization Fund
---------------------- --------------------------
Class A Class B Class A Fiduciary Class B
------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 11.67% 11.46% 11.39% 11.46% 11.20%
1 Year Annualized - 12/31/97 11.27% 10.54% 28.41% 28.78% 27.47%
3 Year Annualized - 12/31/97 22.72% 21.82% 21.90% 22.06% 20.98%
5 Year Annualized - 12/31/97 16.23% 15.37% 12.52% 12.61% NA
Average Net Assets 12/31/97 ($MM) $ 3 < $ 1 $18 $82 $ 4
Total Fund Net Assets - 12/31/97 $ 4 < $ 1 $18 $87 $ 5
<CAPTION>
Marquis International The One Group
Equity Fund International Equity Index Fund
-------------------- --------------------------------
Class A Class B Class A Fiduciary Class B
------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
YTD Ending 3/31/98 15.47% 15.32% 15.36% 15.36% 15.11%
1 Year Annualized - 12/31/97 (2.66%) (3.33%) 5.44% 5.68% 4.70%
3 Year Annualized - 12/31/97 5.53% 4.73% 7.26% 7.48% 6.31%
5 Year Annualized - 12/31/97 7.49% 6.66% NA 10.83% NA
Average Net Assets 12/31/97 ($MM) $ 2 < $ 1 $13 $423 $ 11
Total Fund Net Assets - 12/31/97 $ 2 < $ 1 $16 $442 $ 11
</TABLE>
Please keep in mind, if you are a financial organization authorized to act in
a fiduciary, custodial, advisory or similar capacity and owned Class A shares
of the Marquis Funds, or you own Trust Class Shares, you will receive
Fiduciary Class shares of The One Group.
5. MANAGEMENT FEES
Following the merger of the Marquis Funds with the One Group Funds, investment
advisory fees will, for the most part, be reduced. Below is a comparison of the
current investment advisory fee paid by each of the Marquis Funds and the fee
that will be assessed following the merger:
<TABLE>
<CAPTION>
Current (1) Proposed (2)
------- --------
<S> <C> <S> <C>
Marquis Institutional .04% One Group Treasury Only .08%
Marquis Treasury Securities .30% One Group Treasury Securities .30%
Marquis Tax-Exempt .44% One Group Municipal .25%
Marquis Government .51% One Group Government .45%
Marquis Strategic Income .31% One Group Income .40%
Marquis Louisiana .35% One Group Louisiana .40%
Marquis Balanced .71% One Group Asset Allocation .55%
Marquis Value .74% One Group Value .74%
Marquis Growth .72% One Group Growth .74%
Marquis Small Cap 1.19% One Group Small Cap .74%
Marquis International 1.05% One Group International .55%
</TABLE>
- ---------------------------
(1) Absent waivers, Management Fees would be .15% for Marquis
Institutional, .45% for Marquis Tax-Exempt, .55% for Marquis
Government, .74% for Marquis Strategic Income, .35% for Marquis
Louisiana, .74% for Marquis Balanced, 1.40% for Marquis Small Cap,
and 1.36% for Marquis International.
(2) Absent waivers, Management Fees would be .35% for One Group Treasury
Securities, .35% for One Group Municipal, .60% for One Group Income,
.60% for One Group Louisiana, .65% for One Group Asset Allocation.
85
<PAGE>
Although the Management Fees for One Group Treasury Only, One Group Income, One
Group Louisiana and One Group Growth are slightly higher than those paid by the
corresponding Marquis Funds, the level of fees prior to voluntary waiver of fees
is generally lower for the One Group Funds. There is no guarantee that Banc One
Investment Advisors will continue to waiver a portion of the Management Fees
that it charges the Marquis Funds.
While the Management Fees for those four funds may be slightly higher, Banc One
Investment Advisors possesses superior investment management resources that
enable the One Group Funds to achieve and sustain a high level of performance.
In order to develop and maintain a money market expertise, Banc One Investment
Advisors invested a substantial amount of resources in attracting and retaining
qualified investment professionals, as well as system support. Significant
investments also have been made to develop a dynamic equity research group that
has fifteen dedicated analysts that follow eleven major market sectors and 37
specific industries. In addition, a highly efficient and effective trading
operation exists which ultimately benefits the Funds through securities trades
executed at costs lower than industry standards.
FEDERAL TAX OPINIONS
As part of the reorganization, The One Group will have received an opinion of
Ropes & Gray, counsel to The One Group addressed to The One Group and each
One Group Fund and to Marquis Portfolio and each Marquis Fund, in a form
reasonably satisfactory to The One Group and Marquis Funds and dated the
Exchange Date, to the effect that for Federal income tax purposes (i) the
reorganization will be a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code") and each of the
One Group Funds and the Marquis Funds will be a "party to a reorganization"
within the meaning of Section 368(b); (ii) under Section 361 of the Code, no
gain or loss will be recognized by any Marquis Fund upon the transfer of its
assets to the corresponding One Group Fund in exchange for shares of such One
Group Fund and the assumption by such One Group Fund of the liabilities of
the Marquis Fund; (iii) under Section 354 of the Code, no gain or loss will
be recognized by the shareholders of any Marquis Fund upon the exchange of
their shares for shares of the corresponding One Group Fund; (iv) under
Section 358 of the Code, the basis of the shares a Marquis Fund shareholder
receives in connection with the transaction will be the same as the basis of
his or her Marquis Fund shares exchanged therefor; (v) under Section 1223(1)
of the Code, a Marquis shareholder's holding period for his or her shares
will be determined by including the period for which he or she held the
Marquis Fund shares exchanged therefor, provided that he or she held such
Marquis Fund shares as capital assets; (vi) under Section 1032 of the Code,
no gain or loss will be recognized by any One Group Fund upon the receipt of
the assets of the corresponding Marquis Fund in exchange for shares and the
assumption by the One Group Fund of the liabilities of the corresponding
Marquis Fund; (vii) under Section 362 of the Code, the basis in the hands of
the One Group Fund of the assets of the corresponding Marquis Fund
transferred to the One Group Fund will be the same as the basis of the assets
in the hands of the corresponding Marquis Fund immediately prior to the
transfer; and (viii) under Section 1223(2) of the Code, the holding periods
of the Marquis Fund's assets in the hands of the corresponding One Group Fund
will include the periods during which such assets were held by the Marquis
Funds.
FEES AND EXPENSES OF THE REORGANIZATION
All fees and expenses, including accounting expenses, portfolio transfer taxes
(if any) or other similar expenses incurred in connection with the consummation
by One Group and Marquis Funds of the transactions contemplated by this
Agreement and Plan of Reorganization will be paid by the party directly
incurring such fees and expenses, except that the costs of proxy materials and
proxy solicitation, including legal expenses, will be borne by The One Group;
PROVIDED HOWEVER, that such expenses will in any event be paid by the party
directly incurring such expenses if and to the extent that the payment by the
other party of such expenses would result in the disqualification of any One
Group or Marquis Fund, as the case may be, as a "regulated investment company"
within the meaning of Section 851 of the Code.
86
<PAGE>
COMPARISON OF SHAREHOLDER RIGHTS
Both the One Group Funds and the Marquis Funds are series of open-end management
investment companies. As shown above, each Fund has substantially similar
purchase and redemption procedures, sales charge structure, exchange and
conversion privileges, and voting rights.
EXISTING AND PRO FORMA CAPITALIZATION
The following tables set forth as of December 31, 1997, (I) the capitalization
of the Marquis Funds and the One Group Funds and (ii) the pro forma
capitalization of the Marquis Funds and the One Group Funds as adjusted giving
effect to the proposed acquisition of assets at net asset value:
<TABLE>
<CAPTION>
The One Group The Marquis Funds Proforma Combined
Net Assets Net Assets Net Assets
12/31/97 12/31/97
<S> <C> <C> <C>
Municipal Money Market Fund 596,488,477.06 126,250,090.92 722,738,567.98
Treasury Only Money Market Fund 768,616,544.09 54,714,216.21 823,330,760.30
U.S. Treasury Securities Money Market Fund 3,521,750,412.00 1,420,509,488.58 4,942,259,900.58
Government Bond Fund 856,655,495.86 148,429,107.42 1,005,084,603.28
Income Bond Fund 844,256,516.13 16,097,233.37 860,353,749.50
Louisiana Municipal Bond Fund 155,949,852.52 42,278,783.52 198,228,636.04
Small Capitalization Fund 110,282,705.76 4,602,313.97 114,885,019.73
Assets Allocation Fund 203,458,349.47 136,972,926.18 340,431,275.65
International Equity Index Fund 468,551,463.80 2,699,244.31 471,250,708.11
Disciplined Value Fund 645,995,074.65 142,130,160.72 788,125,235.37
Growth Opportunities Fund 858,524,541.12 38,600,655.09 897,125,196.21
</TABLE>
VOTING INFORMATION
A proxy may be revoked at any time at or before the meeting by submitting to the
appropriate Marquis Fund a subsequently dated proxy, delivering a written notice
of revocation to the appropriate Marquis Fund at the offices of SEI Investments
Company, One Freedom Valley Road, Oaks, Pennsylvania 19456, or as otherwise
described in the "Introduction" above. Unless revoked, all valid proxies will be
voted in accordance with the instructions thereon or, in the absence of
instructions, will be voted FOR approval of the Agreement and Plan of
Reorganization. The transaction contemplated by the Agreement and Plan of
Reorganization will be consummated only if approved by the affirmative vote of a
majority of all votes attributable to the voting securities of each class of
each Marquis Fund voting separately as a class. In the event the shareholders do
not approve the reorganization, the Marquis Trustees will consider possible
alternative arrangements in the best interests of the Marquis Funds and their
shareholders. Shares of the Marquis Funds are redeemable for cash at net asset
value on Monday through Friday, except Federal holidays and Good Friday. See
"Redemption Procedures" in the One Group and Marquis Prospectuses accompanying
this Combined Prospectus/Proxy Statement.
In the event that a quorum for a particular Marquis Fund is not present at the
Meeting, or in the event that a quorum is present at the Meeting but
insufficient votes from a particular Marquis Fund have been received to approve
the Agreement and Plan of Reorganization and the transactions contemplated
therein, the persons named as proxies may propose one or more adjournments of
the Meeting with respect to that Marquis Fund in order to permit further proxy
solicitations. A majority of those shares of the Marquis Fund that are
affected by the adjournment that are represented at the Meeting in person or by
proxy must vote for the adjournment. If a quorum is present, the persons
87
<PAGE>
named as proxies will vote those proxies which they are entitled to vote FOR the
Agreement and Plan of Reorganization, for the adjournment, and will vote those
proxies required to be voted AGAINST such proposals against any adjournment. A
shareholder vote may be taken with respect to one or more Marquis Funds prior to
any adjournment if sufficient votes have been received for approval with respect
to any such Marquis Fund.
Proxies are being solicited primarily by mail, but also may be made by
telephone, telegraph or personal interview conducted by certain officers or
employees of Marquis Funds or SEI Investments Company. Shareholders of record
on the close of business on May 18, 1998 (the "Record Date"), will be entitled
to vote at the Meeting or any adjournment thereof. The holders of a majority of
votes attributable to the outstanding voting shares of each Marquis Fund
represented in person or by proxy at the Meeting will constitute a quorum for
the Meeting; however, the affirmative vote of the lesser of (a) 67% or more of
the votes attributable to all voting securities of each class of each Marquis
Fund present at such Meeting if holders of more than 50% of the votes
attributable to all voting securities of each class of each Marquis Fund are
present or represented by proxy or (b) more than 50% of the votes attributable
to the outstanding voting securities of each class of each Marquis Fund is
necessary to approve the reorganization. Shareholders are entitled to one vote
per share and a proportionate fractional vote for any fractional share.
Votes cast by proxy or in person at the Meeting will be counted by the Inspector
of Election appointed by Marquis Funds. The Inspector of Election will count the
total number of votes cast FOR approval of the proposal for purposes of
determining whether sufficient affirmative votes have been cast. The Inspector
of Election will count shares represented by proxies that reflect abstentions as
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum; however, the Inspector of Election will
not count "broker non-votes" (I.E., shares held by brokers or nominees as to
which (I) instructions have not been received from the beneficial owners or the
persons entitled to vote and (ii) the broker or nominee does not have the
discretionary voting power on a particular matter) as shares that are present
and entitled to vote on the matter for purposes of determining the presence of a
quorum. For purposes of determining whether an issue has been approved,
abstentions have the effect of a negative vote on the proposal, and broker
non-votes are treated as "against" votes in those instances where approval of an
issue requires a certain percentage of all votes outstanding, but are given no
effect in those instances where approval of an issue requires a certain
percentage of the votes constituting the quorum for such issue.
As of May 18, 1998, as shown on the books of Marquis Funds, there were issued
and outstanding 1,521,821,673.357 shares of beneficial interest of the Marquis
Funds allocated among the Funds and classes as follows:
<TABLE>
<S> <C>
MARQUIS INSTITUTIONAL
a. Institutional 107,052,951.010
MARQUIS TREASURY SECURITIES
a. Retail Class 660,020,895.570
b. Trust Class 466,724,488.280
c. Cash Sweep Class 181,308,422.190
MARQUIS TAX-EXEMPT
a. Retail Class 114,760,760.170
MARQUIS GOVERNMENT
a. Class A Shares 14,855,387.087
b. Class B Shares 127,018.143
MARQUIS STRATEGIC INCOME
a. Class A Shares 1,620,887.081
b. Class B Shares 58,929.640
</TABLE>
88
<PAGE>
<TABLE>
<S> <C>
MARQUIS LOUISIANA
a. Class A Shares 4,966,265.443
b. Class B Shares 196,788.867
MARQUIS BALANCED
a. Class A Shares 11,085,256.811
b. Class B Shares 376,700.205
MARQUIS GROWTH
a. Class A Shares 2,413,303.618
b. Class B Shares 135,410.068
MARQUIS SMALL CAP
a. Class A Shares 367,724.100
b. Class B Shares 47,120.594
MARQUIS INTERNATIONAL
a. Class A Shares 162,873.279
b. Class B Shares 29,789.378
</TABLE>
As of May 18, 1998, the officers and Trustees of Marquis Funds as a
group beneficially owned less than 1% of the outstanding Class A and Class B
shares of the Marquis Funds. As of May 18, 1998, to the best of the knowledge
of Marquis Funds the following owned beneficially 5% or more of the
outstanding Class A, Class B, Trust Class, Retail Class and Cash Sweep Class
shares of the following Marquis Funds:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS FUND/CLASS OWNERSHIP TYPE OF OWNERSHIP
- ---------------- ---------- --------- -----------------
<S> <C> <C> <C>
ENBECEE Company Strategic Income Bond Fund 44.71% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Strategic Income Bond Fund 42.31% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
NFSC FEBO #093-992380 Strategic Income Bond Fund 5.27% Beneficial
FNBC CUST Class A
IRA of Saul A. Mintz
P.O. Box 6058
Monroe, LA 71211-6058
NFSC FEBO #093-802328 Strategic Income Bond Fund 10.71% Record
James J. Martin, Jr. Class B
2031 Dupard Street
Mandeville, LA 70448-3713
NFSC FEBO #093-940542 Strategic Income Bond Fund 9.85% Beneficial
FNBC CUST Class B
IRA of D. W. Dendy
124 Oak Circle
Monroe, LA 71203-2722
NFSC FEBO #093-761036 Strategic Income Bond Fund 9.80% Beneficial
FNBC CUST Class B
IRA of Bobbie H. Brister
738 Wallace Dean Road
West Monroe, LA 71291-7751
NFSC FEBO #OG9-809195 Strategic Income Bond Fund 9.04% Beneficial
CNB CUST FBO Class B
Charles W. Herbert, Jr. IRA
1528 Oakdale Drive
Baton Rouge, LA 70810-3107
NFSC FEBO #093-760544 Strategic Income Bond Fund 8.76% Record
James W. McLemore & Class B
Marguerete D. McLemore
204 Fair Avenue
Winnsboro, LA 71295-2118
NFSC FEBO #093-760536 Strategic Income Bond Fund 8.64% Record
David G. McLemore & Class B
Deborah C. McLemore
204 Fair Avenue
Winnsboro, LA 71295-2118
NFSC FEBO #093-696749 Strategic Income Bond Fund 7.14% Beneficial
First NBC CUST Class B
IRA of Walter A. Robelot, Sr.
2537 Mississippi Avenue
Metairie, LA 70003-5441
NFSC FEBO #093-465933 Strategic Income Bond Fund 6.79% Record
Joseph R. Wozniak Class B
1322 North Lopez
New Orleans, LA 70119-3126
ENBECEE Company Treasury Securities Money 99.97% Record
c/o FNBC Market Fund
Trust Group Services Trust Class
P.O. Box 61837
New Orleans, LA 70161-1837
National Financial Services Corp Treasury Securities Money 54.39% Beneficial
for the Exclusive Benefit of Market Fund
our Customers Retail Class
P.O. Box 3752
Church Street Station
New York, NY 10008-3752
ENBECEE Company Treasury Securities Money 45.57% Record
Attn: Cash Sweep Market Fund
P.O. Box 61837 Retail Class
New Orleans, LA 70161-1837
ENBECEE Company Treasury Securities Money 100.00% Record
Attn: Cash Sweep Market Fund
P.O. Box 61837 Cash Sweep Class
New Orleans, LA 70161-1837
ENBECEE Company Government Securities Fund 52.92% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Government Securities Fund 45.06% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
NFSC FEBO #OG9-849944 Government Securities Fund 19.28% Beneficial
CNB CUST Class B
IRA Ben L. Day
19664 Perkins Road East
Baton Rouge, LA 70810-6012
NFSC FEBO #093-934364 Government Securities Fund 10.51% Beneficial
FNBC CUST Class B
IRA of Josephine W. Sciartilli
6901 Veterans Boulevard No. 33
Metairie, LA 70003
NFSC FEBO #093-654426 Government Securities Fund 9.46% Record
Don S. Carlos Class B
629 Verret
Houma, LA 70360-4653
NFSC FEBO #093-522996 Government Securities Fund 7.10% Record
Noelie M. Gatipon Class B
8241 Birch Street
New Orleans, LA 70118
ENBECEE Company Louisiana Tax-Free Income 29.00% Record
c/o FNBC Fund
Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
NFSC FEBO #093-878510 Louisiana Tax-Free Income 20.44% Record
Salvador A. Mangano Fund
Mabel B. Mangano Class B
P.O. Box 35
Violet, LA 70092-0035
NFSC FEBO #093-219223 Louisiana Tax-Free Income 10.05% Record
W. Shiles McCord Fund
3737 Essen Lane #61 Class B
Baton Rouge, LA 70809-2169
NFSC FEBO #OG9-497215 Louisiana Tax-Free Income 7.09% Record
Mr. Jack F. Worthy Fund
1340 Chevelle Drive Class B
Baton Rouge, LA 70806-7811
NFSC FEBO #OG9-647438 Louisiana Tax-Free Income 6.96% Record
Richard J. Dodson Fund
Securities Account Class B
628 North Boulevard
Baton Rouge, LA 70802-5721
ENBECEE Company Balanced Fund 91.26% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Balanced Fund 5.89% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Value Equity Fund 47.99% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Value Equity Fund 40.71% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Institutional Money Market 100.00% Record
Attn: Trust Services Fund
Cash Sweep
P.O. Box 61837
New Orleans, LA 70161-1837
National Financial Services Tax Exempt Money Market 48.95% Beneficial
Corp for the Exclusive Fund
Benefit of our Customers Retail Class
P.O. Box 3752
Church Street Station
New York, NY 10008-3752
ENBECEE Company Tax Exempt Money Market 41.73% Record
c/o FNBC Fund
Trust Group Services Retail Class
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Tax Exempt Money Market 9.31% Record
Attn: Cash Sweep Fund
P.O. Box 61837 Retail Class
New Orleans, LA 70161-1837
ENBECEE Company Growth Equity Fund 62.72% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Growth Equity Fund 29.39% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
NFSC FEBO #093-771376 Growth Equity Fund 6.42% Record
Harold J. Lamy Class B
5815 Canal Boulevard
New Orleans, LA 70124-2816
ENBECEE Company International Equity Fund 67.25% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company International Equity Fund 15.96% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
NFSC FEBO #093-761036 International Equity Fund 7.14% Beneficial
FNBC CUST Class B
IRA of Bobbie H. Brister
738 Wallace Dean Road
West Monroe, LA 71291-7751
NFSC FEBO #093-762237 International Equity Fund 5.68% Record
Dominic Licali & Class B
Marsha K. Licali
150 Normandy Drive
Folson, LA 70437-5500
ENBECEE Company Small Cap Equity Fund 51.08% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Small Cap Equity Fund 24.41% Record
c/o FNBC Class A
Trust Group Services
P.O. Box 61837
New Orleans, LA 70161-1837
NFSC FEBO #BFG-735124 Small Cap Equity Fund 6.46% Record
Tri-State Oil Inc. Class B
P.O. Box 220
Belle Chase, LA 70037-0220
NFSC FEBO #093-891770 Small Cap Equity Fund 5.39% Record
Neal F. Pendleton Class B
105 Copperwood Crossing
Lafayette, LA 70508-8006
NFSC FEBO #093-761036 Small Cap Equity Fund 5.12% Beneficial
FNBC CUST Class B
IRA of Bobbie H. Brister
738 Wallace Dean Road
West Monroe, LA 71291-7751
</TABLE>
89
<PAGE>
In addition, as of May 18, 1998, the following persons were the beneficial
owners of more than 25% of the outstanding shares of the following class of
shares of the following funds:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS FUND/CLASS OWNERSHIP TYPE OF OWNERSHIP
- ---------------- ---------- --------- -----------------
<S> <C> <C> <C>
ENBECEE Company Strategic Income Bond Fund 44.71% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Strategic Income Bond Fund 42.31% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Treasury Securities Money 99.97% Record
c/o FNBC Trust Group Services Market Fund
P.O. Box 61837 Trust Class
New Orleans, LA 70161-1837
National Financial Services Corp. Treasury Securities Money 54.39% Beneficial
For the Exclusive Benefit of our Market Fund
Customers Retail Class
P.O. Box 3752
Church Street Station
New York, NY 10008-3752
ENBECEE Company Treasury Securities Money 45.57% Record
Attn: Cash Sweep Market Fund
P.O. Box 61837 Retail Class
New Orleans, LA 70161-1837
ENBECEE Company Treasury Securities Money 100.00% Record
Attn: Cash Sweep Market Fund
P.O. Box 61837 Cash Sweep Class
New Orleans, LA 70161-1837
ENBECEE Company Government Securities Fund 52.92% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Government Securities Fund 45.06% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Louisiana Tax-Free Income 29.00% Record
c/o FNBC Trust Group Services Fund
P.O. Box 61837 Class A
New Orleans, LA 70161-1837
ENBECEE Company Balanced Fund 91.26% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Value Equity Fund 47.99% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Value Equity Fund 40.71% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Institutional Money Market 100.00% Record
Attn: Trust Services Fund
Cash Sweep
P.O. Box 61837
New Orleans, LA 10008-3752
National Financial Services Corp. Tax Exempt Money Market 48.95% Beneficial
For the Exclusive Benefit of our Fund
Customers Retail Class
P.O. Box 3752
Church Street Station
New York, NY 10008-3752
ENBECEE Company Tax Exempt Money Market 41.73% Record
c/o FNBC Trust Group Services Fund
P.O. Box 61837 Retail Class
New Orleans, LA 70161-1837
ENBECEE Company Growth Equity Fund 62.72% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Growth Equity Fund 29.39% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company International Equity Fund 67.25% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
ENBECEE Company Small Cap Equity Fund 51.08% Record
c/o FNBC Trust Group Services Class A
P.O. Box 61837
New Orleans, LA 70161-1837
</TABLE>
First NBC may be deemed to be a "controlling person" of Class A, Retail
Class and Trust Class shares of the Funds under the Investment Company Act of
1940. However, First NBC will cast votes attributable to any shares for which
it serves as fiduciary in the same proportion as votes cast by other
Shareholders.
The votes of the shareholders of the One Group Funds are not being
solicited, since their approval or consent is not necessary for the approval
of the Agreement and Plan of Reorganization. However, the vote required for
approval of the proposal, including the treatment of abstention and "broker
nonvotes" would be the same as that of the Marquis Funds. Also, whole shares
of One Group Funds would be entitled to one vote and fractional shares would
be entitled to a proportionate fractional vote. As of May 18, 1998, as shown
on the books of The One Group, there were issued and outstanding
5,559,677,537 shares of beneficial interest of the One Group Funds allocated
between the Funds and classes as follows.
<TABLE>
<CAPTION>
<S> <C>
ONE GROUP TREASURY ONLY
a. Institutional 676,760,350
-------------------------------------------------------
ONE GROUP TREASURY SECURITIES
a. Class A Shares 863,245,224
b. Class B Shares 176,217
c. Class C Shares 1,159
d. Fiduciary Class 3,097,326,895
e. Service Class 0
-------------------------------------------------------
ONE GROUP MUNICIPAL
a. Class A Shares 102,059,027
b. Class B Shares 0
c. Class C 0
d. Fiduciary Class 471,056,102
-------------------------------------------------------
ONE GROUP GOVERNMENT
a. Class A Shares 3,175,130
b. Class B Shares 1,900,025
c. Class C Shares 0
d. Fiduciary Class 83,348,814
-------------------------------------------------------
ONE GROUP INCOME
a. Class A Shares 1,509,406
b. Class B Shares 1,600,183
c. Class C Shares 0
d. Fiduciary Class 92,822,441
-------------------------------------------------------
ONE GROUP LOUISIANA
a. Class A Shares 4,630,366
b. Class B Shares 480,255
90
<PAGE>
c. Class C Shares 0
d. Fiduciary Class 9,184,367
-------------------------------------------------------
ONE GROUP ASSET ALLOCATION
a. Class A Shares 3,526,228
b. Class B Shares 7,635,125
c. Class C Shares 0
d. Fiduciary Class 7,642,026
-------------------------------------------------------
ONE GROUP VALUE
a. Class A Shares 1,770,663
b. Class B Shares 1,752,340
c. Class C Shares 0
d. Fiduciary Class 36,885,759
-------------------------------------------------------
ONE GROUP GROWTH
a. Class A Shares 4,154,692
b. Class B Shares 4,027,589
c. Class C Shares 19,664
d. Fiduciary Class 38,288,065
-------------------------------------------------------
ONE GROUP SMALL CAP
a. Class A Shares 1,755,953
b. Class B Shares 633,953
c. Class C Shares 5,469
d. Fiduciary Class 9,342,159
-------------------------------------------------------
ONE GROUP INTERNATIONAL INDEX
a. Class A Shares 1,281,521
b. Class B Shares 750,325
c. Class C Shares 3,478
d. Fiduciary Class 30,926,566
</TABLE>
As of May 18, 1998, the officers and Trustees of The One Group as a
group beneficially owned less than 1% of the outstanding shares of Class A,
Class B, Class C, Fiduciary Class and Service Class shares of The One Group
Funds. As of May 18, 1998, to the best of the knowledge of The One Group the
following owned beneficially 5% or more of the outstanding Class A, Class B,
Class C, Fiduciary Class and Service Class shares of The One Group Funds:
5% SHAREHOLDERS
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Disciplined Value Fund 55.32% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Disciplined Value Fund 32.87% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Strafe & Co FBO Disciplined Value Fund 15.41% Beneficial
Banc One Corporation Fiduciary
100 E. Broad Street
Columbus, OH 43215-3607
Dean Witter For The Benefit Of Small Capitalization Fund 36.25% Record
Linda Sue Trizila & Class C
PO Box 250 Church Street Station
New York NY 10008-0250
State Street Bank & Trust Co Small Capitalization Fund 11.53% Record
Cust For The IRA Of Class C
Linda L Cole
14 Penguin Ct
Woodlands TX 77380-1827
Dean Witter For The Benefit Of Small Capitalization Fund 7.60% Record
Wells Pickney & McHugh Class C
PO Box 250 Church Street Station
New York NY 10008-0250
Dean Witter For The Benefit Of Small Capitalization Fund 7.42% Record
Robert Kennedy And Class C
Annemarie Kennedy Reisinger JTT
Church St Station - PO Box 250
New York NY 10013-0250
Dean Witter Reynolds Cust For Small Capitalization Fund 5.99% Record
Laurence R Simon Class C
IRA STD/Rollover DTD 06/10/97
Church St Station - PO Box 250
New York NY 10013-0250
State Street Bank & Trust Co Small Capitalization Fund 5.65% Record
Cust For The IRA Of Class C
Linda Stephens
9057 E State Rd 46
Bloomington IN 47401-9241
Strafe & Co. Small Capitalization Fund 69.82% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co Small Capitalization Fund 12.84% Record
Database 2 - Attn One Group/Cash Fiduciary
235 W Schrock Road
Westerville OH 43081-2874
The One Group Investor Growth Fund Small Capitalization Fund 6.63% Record
C/O Mark S Redman Fiduciary
The One Group Services Company
3435 Stelzer Rd
Columbus OH 43219-6004
Banc One Securities Corp FBO Growth Opportunities Fund 13.84% Record
The One Investment Solution Class A
733 Greencrest Dr
Westerville OH 43081-4903
Northern Trust Company TTEE Growth Opportunities Fund 9.26% Record
Ohio Masanic Home Benevolent Endowment Class A
PO Box 92956
Chicago, IL 60675-2956
Banc One Securities Corp FBO Growth Opportunities Fund 45.46% Record
The One Investment Solution Class C
733 Greencrest Dr
Columbus, OH 43081-4903
Dean Witter Reynolds Cust For Growth Opportunities Fund 10.93% Record
Frederick J Peterson Class C
IRA Rollover Dated 09/23/96
Church St Station - PO Box 250
New York NY 10013-0250
Dean Witter For The Benefit Of Growth Opportunities Fund 5.63% Record
United Drywall & Painting Inc Class C
PO Box 250 Church Street Station
New York NY 10008-0250
Dean Witter For The Benefit Of Growth Opportunities Fund 5.63% Record
Linda Sue Trizila & Class C
PO Box 250 Church Street Station
New York NY 10008-0250
Dean Witter For The Benefit Of Growth Opportunities Fund 5.44% Record
Rosa L Peattie Class C
374 Venus Drive
Church St Station - PO Box 250
New York NY 10013-0250
Strafe & Co /Cash Div Cash Growth Opportunities Fund 55.06% Record
C/O Bank One Trust Co Fiduciary
Attn Mutual Fund 0393
100 E Broad St
Columbus OH 43215-3607
Clark & Company Growth Opportunities Fund 30.48% Record
Database 2 - Attn One Group/Cash Fiduciary
235 W Schrock Road
Westerville OH 43081-2874
Strafe & Co FBO Growth Opportunities Fund 10.11% Beneficial
Banc One Corporation Fiduciary
100 E Broad Street
Columbus, OH 43215
Dean Witter for the Benefit of Income Bond Fund 9.48% Record
Alpert Corp. Money Purchase Plan Class A
Steven Kurtz TTEE
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Gila River Health Care Corporation Income Bond Fund 6.58% Beneficial
Attn Finance Class A
PO Box 38
Sacaton AZ 85247-0038
Strafe & Co. Income Bond Fund 59.95% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Income Bond Fund 30.15% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Strafe & Co. Louisiana Municipal Bond Fund 97.78% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Northern Trust Company TTEE International Equity Index Fund 23.65% Record
Ohio Masanic Home Benevolent Class A
Endowment
PO Box 92956
Chicago IL 60675-2956
Firstar Trust Co TTEE International Equity Index Fund 13.59% Record
FBO Milwaukee Foundation - Equit Class A
PO Box 1787
Milwaukee WI 53201-1787
Dean Witter For The Benefit Of International Equity Index Fund 31.63% Record
John S Wagner & Class C
PO Box 250 Church St Station
New York, NY 10008-0250
Banc One Securities Corp FBO International Equity Index Fund 31.26% Record
The One Investment Solution Class C
733 Greencrest Dr
Westerville OH 43081-4903
UMB Bank Cust FBO International Equity Index Fund 11.17% Record
Darlene Y Young IRA Class C
718 Sycamore Ave SPC 200
Vista CA 92083-7952
Dean Witter For The Benefit Of International Equity Index Fund 8.57% Record
Wells Pickney & McHugh Class C
PO Box 250 Church Street Station
New York NY 10008-0250
Dean Witter Reynolds Cust For International Equity Index Fund 6.68% Record
Laurence R Simon Class C
IRA STD/Rollover DTD 06/10/97
Church St Station - PO Box 250
New York NY 10013-0250
Strafe & Co. International Equity Index Fund 57.18% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. International Equity Index Fund 30.90% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Strafe & Co FBO International Equity Index Fund 15.64% Beneficial
Banc One Corporation Fiduciary
100 E Broad Street
Columbus, OH 43215
BISYS Fund Services, Inc. U.S. Treasury Securities 41.20% Record
FBO Bank One Corporate Sweep Money Market
First and Market Bldg., Ste. 300 Class A
Pittsburgh, PA 15222
BISYS Fund Services Pittsburgh U.S. Treasury Securities 23.75% Record
FBO Bank One TX Sweep Customers Money Market
First and Market Bldg., Ste. 300 Class A
Pittsburgh, PA 15222
Dean Witter FBO U.S. Treasury Securities 29.99% Record
Banc One Securities Money Market
PO Box 250 Class A
Church Street Station
New York, NY 10013-0250
State Street Bank & Trust Co U.S. Treasury Securities 32.96% Record
Cust for the IRA of Money Market
Roland J Bourgeois Class B
692C W Wickenburg Way
Wickenburg AZ 85390-2268
State Street Bank & Trust Co U.S. Treasury Securities 20.66% Record
Cust for the IRA of Money Market
Edward Hillman III Class B
121 S. Walnut Street
Troy, OH 45373-3530
State Street Bank & Trust Co U.S. Treasury Securities 6.65% Record
Cust for the IRA of Money Market
Joe D Bolding Class B
803 Holly Circle
Allen, TX 75002-5216
Dean Witter For the Benefit of U.S. Treasury Securities 6.56% Record
Yo Suzuki Money Market
2031 Grandview Ave Apt B Class B
Boulder CO 80302-6552
State Street Bank & Trust Co. U.S. Treasury Securities 5.85% Record
Cust for the Rollover IRA of Money Market Fund
Pamela A Bell Class B
1692 Leighton Dr
Reynoldsburg OH 43068-8111
State Street Bank & Tr U.S. Treasury Securities 5.84% Record
SEP IRA Jeffrey S Lux Money Market
2220 Justice St Class B
Monroe LA 71201-3620
The One Group Services Company U.S. Treasury Securities 86.96% Record
C/O Fund Administration Money Market
3435 Stelzer Road Class C
Columbus, OH 43219-6004
Strafe & Co. (N) U.S. Treasury Securities 68.34% Record
Bank One Ohio Trust Co., NA Money Market
Department 0393 S.T.I.F. Fiduciary
Columbus, Ohio 43271
Bank One Trust Company NA U.S. Treasury Securities 17.71% Record
Omnibus-Corporate Cash Sweep Acct. Money Market
Attn: Cash Management DB3 Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Clark & Co. U.S. Treasury Securities 13.64% Record
Database 2 - Attn: One Group/Cash Mgmt Money Market
235 W. Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co FBO U.S. Treasury Securities 9.86% Beneficial
Mrs. Baird's Bakeries Inc. Money Market
100 E. Broad Street Fiduciary
Columbus, OH 43215
Dean Witter FBO Municipal Money Market Fund 66.74% Record
Banc One Securities Class A
PO Box 250
Church Street Station
New York, NY 10013-0250
BISYS Fund Services, Inc. Municipal Money Market Fund 30.86% Record
FBO Bank One Corporate Sweep Class A
First & Market Building Suite 300
Pittsburgh, PA 15222
Strafe & Co. (D) Municipal Money Market Fund 59.25% Record
Bank One Ohio Trust Co., NA Fiduciary
Department 0393 S.T.I.F
Columbus, Ohio 43271
Clark & Co. Municipal Money Market Fund 35.91% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Strafe & Co. Government Bond Fund 60.10% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Government Bond Fund 29.75% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Clark & Co. Asset Allocation Fund 46.72% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Strafe & Co Asset Allocation Fund 34.10% Record
Attn Mutual Funds 0393 Fiduciary
100 E Broad Street
Columbus, OH 43215-3607
Strafe & Co Asset Allocation Fund 7.75% Beneficial
OFDA (MT2) Fiduciary
100 E Broad Street
Columbus OH 43215
Strafe & Co. Treasury Only Money Market Fund 52.71% Record
Bank One Trust Co.
Attn: Mutual Funds
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Treasury Only Money Market Fund 26.20% Record
235 W. Schrock Road
Westerville, Ohio 43081-2874
BISYS Fund Services, Inc. Treasury Only Money Market Fund 12.38% Record
FBO Bank One Corporate Sweep
First and Market Bldg-Suite 300
Pittsburg, PA 15222
Bank One Texas NA Treasury Only Money Market Fund 6.16% Record
1717 Main Street
Dallas, TX 75201-4605
</TABLE>
In addition, as of May 18, 1998, the following persons were the
beneficial owners of more than 25% of the outstanding shares of the following
class of shares of the following funds:
25% SHAREHOLDERS
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Disciplined Value Fund 55.32% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Disciplined Value Fund 32.87% Record
Database 2 - Attn: One Group/ Fiduciary
Cash Mgmt
235 W. Schrock Road
Westerville, Ohio 43081-2874
Dean Witter For The Benefit Of Small Capitalization Fund 36.25% Record
Linda Sue Trizila & Class C
PO Box 250 Church Street Station
New York NY 10008-0250
Strafe & Co. Small Capitalization Fund 69.82% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Banc One Securities Corp FBO Growth Opportunities Fund 45.46% Record
The One Investment Solution Class C
733 Greencrest Dr
Columbus, OH 43081-4903
Strafe & Co/Cash Div Cash Growth Opportunities Fund 55.06% Record
C/O Bank One Trust Co Fiduciary
Attn Mutual Fund 0393
100 E Broad St
Columbus OH 43215-3607
Clark & Company Growth Opportunities Fund 30.48% Record
Database 2 - Attn One Group/Cash Fiduciary
235 W Schrock Road
Westerville OH 43081-2874
Strafe & Co. Income Bond Fund 59.95% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Income Bond Fund 30.15% Record
Database 2 - Attn: One Group/ Fiduciary
Cash Mgmt
235 W. Schrock Road
Westerville, Ohio 43081-2874
Strafe & Co. Louisiana Municipal Bond Fund 97.78% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Dean Witter For The Benefit Of International 31.63% Record
John S Wagner & Equity Index Fund
PO Box 250 Church St Station Class C
New York, NY 10008-0250
Banc One Securities Corp FBO International 31.26% Record
The One Investment Solution Equity Index Fund
733 Greencrest Dr Class C
Westerville OH 43081-4903
Strafe & Co. International Equity Index Fund 57.18% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. International Equity Index Fund 30.90% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
BISYS Fund Services, Inc. U.S. Treasury Securities 41.20% Record
FBO Bank One Corporate Sweep Money Market
First and Market Bldg., Ste. 300 Class A
Pittsburgh, PA 15222
Dean Witter FBO U.S. Treasury Securities 29.99% Record
Banc One Securities Money Market
PO Box 250 Class A
Church Street Station
New York, NY 10013-0250
State Street Bank & Trust Co U.S. Treasury Securities 32.96% Record
Cust for the IRA of Money Market
Roland J Bourgeois Class B
692C W Wickenburg Way
Wickenburg AZ 85390-2268
The One Group Services Company U.S. Treasury Securities 86.96% Record
C/O Fund Administration Money Market
3435 Stelzer Road Class C
Columbus, OH 43219-6004
Strafe & Co. (N) U.S. Treasury Securities 68.34% Record
Bank One Ohio Trust Co., NA Money Market
Department 0393 S.T.I.F. Fiduciary
Columbus, Ohio 43271
Dean Witter FBO Municipal Money Market Fund 66.74% Record
Banc One Securities Class A
PO Box 250
Church Street Station
New York, NY 10013-0250
BISYS Fund Services, Inc. Municipal Money Market Fund 30.86% Record
FBO Bank One Corporate Sweep Class A
First & Market Building Suite 300
Pittsburgh, PA 15222
Strafe & Co. (D) Municipal Money Market Fund 59.25% Record
Bank One Ohio Trust Co., NA Fiduciary
Department 0393 S.T.I.F
Columbus, Ohio 43271
Clark & Co. Municipal Money Market Fund 35.91% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Strafe & Co. Government Bond Fund 60.10% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Government Bond Fund 29.75% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Clark & Co. Asset Allocation Fund 46.72% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Strafe & Co Asset Allocation Fund 34.10% Record
Attn Mutual Funds 0393 Fiduciary
100 E Broad Street
Columbus, OH 43215-3607
Strafe & Co. Treasury Only Money Market Fund 52.71% Record
Bank One Trust Co.
Attn: Mutual Funds
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Treasury Only Money Market Fund 26.20% Record
235 W. Schrock Road
Westerville, Ohio 43081-2874
</TABLE>
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INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION
Banc One Investment Advisors may be deemed to have an interest in the
reorganization because it provides investment advisory services to the One Group
Funds and the Marquis Funds pursuant to an advisory agreement with The One Group
and Marquis Funds. Future growth of assets of The One Group can be expected to
increase the total amount of fees payable to Banc One Investment Advisors and to
reduce the amount of fees required to be waived to maintain total fees of the
Funds at agreed upon levels.
FINANCIAL STATEMENTS
The audited financial statements of the Marquis Funds as of September 30,
1997, have been incorporated by reference into this Prospectus/Proxy Statement
in reliance on the reports of Arthur Andersen LLP, independent accountants,
given on the authority of such firm as an expert in accounting and auditing.
Unaudited financial statements for the Marquis Funds for the period ended March
31, 1998, are contained in the Marquis Funds Semi-Annual Report filed with the
Securities and Exchange Commission and incorporated by reference into the
Statement of Additional Information relating to this Prospectus/Proxy Statement.
The audited financial statements of the One Group Funds as of June 30, 1997,
have been incorporated by reference into this Prospectus/Proxy Statement in
reliance on the reports of Coopers & Lybrand, L.L.P., independent accountants,
given on authority of such firm as an expert in accounting and auditing.
Unaudited financial statements for the period ended December 31, 1997 are
contained in The One Group Semi-Annual Reports filed with the Securities and
Exchange Commission and are incorporated by reference into the Statement of
Additional Information relating to this Prospectus/Proxy Statement.
Unaudited pro forma combined financial statements of the Marquis Funds and the
One Group Funds for the twelve month period ending December 31, 1997 are
included in the Statement of Additional Information. Because the Agreement and
Plan of Reorganization provides that the One Group Funds will be the surviving
funds following the reorganization and because the One Group Funds' investment
objectives and policies will remain unchanged, the pro forma combined financial
statements reflect the transfer of the assets and liabilities of each Marquis
Fund to the corresponding One Group Fund as contemplated by the Agreement and
Plan of Reorganization.
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMEND
APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION.
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INFORMATION FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
This Combined Prospectus/Proxy Statement and the related Statement of
Additional Information do not contain all of the information set forth in the
registration statements and the exhibits relating thereto which The One Group
has filed with the Securities and Exchange Commission ("SEC") under the
Securities Act of 1933 and the Investment Company Act of 1940, to which
reference is hereby made. The file number for The One Group Prospectuses and the
related Statement of Additional Information which are incorporated herein by
reference is Registration No. 2-95973. The file number for the Marquis Funds
Prospectus and the related Statement of Additional Information which are
incorporated herein by reference is Registration No. 33-31334.
The One Group and Marquis Funds are subject to the informational requirements of
the Securities Exchange Act of 1934 and in accordance therewith file reports and
other information with the SEC. Proxy material, reports, proxy and information
statements, registration statements and other information filed by The One Group
and Marquis Funds can be inspected and copied at the SEC's public reference
facilities located at 450 Fifth Street, N.W. Washington, D.C. 20549. Copies of
such filings may be available at the following SEC regional offices: 90
Devonshire Street, Suite 700, Boston, MA 02109; 500 West Madison Street, Suite
1400, Chicago, IL 60611; and 601 Walnut Street, Suite 1005E, Philadelphia, PA
19106. Copies of such materials can also be obtained by mail from the Public
Reference Branch, Office of Consumer Affairs and Informational Services, SEC,
Washington, D.C. 20549 at prescribed rates.
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
94
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of
May 21, 1998 by and between The One Group-Registered Trademark-, a Massachusetts
business trust, ("One Group") and Marquis Funds, a Massachusetts business trust
("Marquis"). The capitalized terms used herein shall have the meaning ascribed
to them in this Agreement.
I. PLAN OF REORGANIZATION
(a) Marquis will sell, assign, convey, transfer and deliver to One Group,
and One Group will acquire, on the Exchange Date all of the properties and
assets existing at the Valuation Time in Marquis' Institutional Money Market
Fund ("Marquis Institutional"), Marquis' Treasury Securities Money Market Fund
("Marquis Treasury Securities"), Marquis' Tax-Exempt Money Market Fund ("Marquis
Tax-Exempt"), Marquis' Government Securities Fund ("Marquis Government"),
Marquis' Strategic Income Bond Fund ("Marquis Strategic Income"), Marquis'
Louisiana Tax-Free Income Fund ("Marquis Louisiana"), Marquis' Balanced Fund
("Marquis Balanced"), Marquis' Value Equity Fund ("Marquis Value"), Marquis'
Growth Equity Fund ("Marquis Growth"), Marquis' Small Cap Equity Fund ("Marquis
Small Cap"), and Marquis' International Equity Fund ("Marquis International"),
(Marquis Institutional, Marquis Treasury Securities, Marquis Tax-Exempt, Marquis
Government, Marquis Strategic Income, Marquis Louisiana, Marquis Balanced,
Marquis Value, Marquis Growth, Marquis Small Cap and Marquis International, each
is a "Marquis Fund" and are collectively the "Marquis Funds"), such acquisition
to be made by The One Group Treasury Only Money Market Fund ("One Group Treasury
Only"), The One Group U.S. Treasury Securities Money Market Fund ("One Group
Treasury Securities"), The One Group Municipal Money Market Fund ("One Group
Municipal"), One Group Government Bond Fund ("One Group
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<PAGE>
Government"), The One Group Income Bond Fund ("One Group Income"), The One Group
Louisiana Municipal Bond Fund ("One Group Louisiana"), The One Group Asset
Allocation Fund ("One Group Asset Allocation"), The One Group Disciplined Value
Fund ("One Group Value"), The One Group Growth Opportunities Fund ("One Group
Growth"), The One Group Small Capitalization Fund ("One Group Small
Capitalization"), and The One Group International Equity Index Fund ("One Group
International Index") (One Group Treasury Only, One Group Treasury Securities,
One Group Municipal, One Group Government, One Group Income, One Group
Louisiana, One Group Asset Allocation, One Group Value, One Group Growth, One
Group Small Capitalization and One Group International Index, each is a "One
Group Fund" and are collectively the "One Group Funds"), respectively, of One
Group. For purposes of this Agreement the respective Marquis Funds correspond
to the One Group Funds as follows: Marquis Institutional corresponds to One
Group Treasury Only; Marquis Treasury Securities corresponds to One Group
Treasury Securities; Marquis Tax-Exempt corresponds to One Group Municipal;
Marquis Government corresponds to One Group Government; Marquis Strategic Income
corresponds to One Group Income; Marquis Louisiana corresponds to One Group
Louisiana; Marquis Balanced corresponds to One Group Asset Allocation; Marquis
Value corresponds to One Group Value; Marquis Growth corresponds to One Group
Growth; Marquis Small Cap corresponds to One Group Small Capitalization; and
Marquis International corresponds to One Group International Index. In
consideration therefor, each One Group Fund shall, on the Exchange Date, assume
all of the liabilities of the corresponding Marquis Fund in exchange for a
number of full and fractional One Group Class A, Fiduciary Class or Class B
shares of the corresponding One Group Fund (collectively, "Shares") having an
aggregate net asset value equal to the value of all of the assets of
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<PAGE>
each Marquis Fund transferred to the corresponding One Group Fund on such date
less the value of all of the liabilities of each Marquis Fund assumed by the
corresponding One Group Fund on that date. It is intended that each
reorganization described in this Agreement shall be a tax-free reorganization
under the Internal Revenue Code of 1986, as amended (the "Code").
(b) Upon consummation of the transactions described in paragraph (a) of
this Agreement, each Marquis Fund shall distribute in complete liquidation to
its respective shareholders of record as of the Exchange Date the Shares
received by it, each shareholder being entitled to receive that number of Shares
equal to the proportion which the number of shares of beneficial interest of the
applicable class of the Marquis Fund held by such shareholder bears to the
number of such shares of such class of the Marquis Fund outstanding on such
date. If the Marquis shareholder of record is a financial organization
authorized to act in a fiduciary, advisory, custodial or similar capacity, or
holds Trust Class shares, that shareholder will receive One Group Fiduciary
Class Shares. All other Marquis Class A, Retail Class and Cash Sweep Class
shareholders will receive One Group Class A Shares. Shareholders of record
holding Marquis Class B Shares will receive One Group Class B shares.
II. AGREEMENT
One Group and Marquis represent, warrant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF MARQUIS. Marquis and each Marquis
Fund jointly and severally represent and warrant to and agree with One Group and
each One Group Fund that:
(a) Marquis is a business trust duly established and validly existing
under the laws of the Commonwealth of Massachusetts and has power to own all of
its properties and assets and to carry out its obligations under this Agreement.
Marquis and each Marquis Fund is not required to qualify
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<PAGE>
as a foreign association in any jurisdiction. Marquis and each Marquis Fund has
all necessary federal, state and local authorizations to carry on its business
as now being conducted and to fulfill the terms of this Agreement, except as set
forth in Section 1(l).
(b) Marquis is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company, and such
registration has not been revoked or rescinded and is in full force and effect.
Each Marquis Fund has elected to qualify and has qualified as a regulated
investment company under Part 1 of Subchapter M of the Code, as of and since its
first taxable year, and qualifies and intends to continue to qualify as a
regulated investment company for its taxable year ending upon its liquidation.
Each Marquis Fund has been a regulated investment company under such sections of
the Code at all times since its inception.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of portfolio investments
(indicating their market values) for each Marquis Fund at and for the year ended
September 30, 1997, such statements and schedules having been audited by Arthur
Anderson, LLP, independent accountants to Marquis, have been furnished to One
Group. Unaudited statements of net assets, statement of operations, statement
of changes in net assets, and schedules of portfolio investments for the period
ended March 31, 1998 also have been provided to One Group.
(d) The prospectuses of each Marquis Fund dated February 1, 1998
(collectively, the "Marquis Prospectuses") and the Statement of Additional
Information for the Marquis Funds dated February 1, 1998 and on file with the
Securities and Exchange Commission (the "Commission"), which have been
previously furnished to One Group, did not as of their dates and do not as of
the
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date hereof contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of Marquis or any Marquis Fund, threatened against
Marquis or any Marquis Fund which assert liability on the part of Marquis or any
Marquis Fund.
(f) There are no material contracts outstanding to which Marquis or any
Marquis Fund is a party, other than as disclosed in the Marquis Prospectuses and
the corresponding Statement of Additional Information, or in the Registration
Statement and the Proxy Statement as defined herein.
(g) Neither Marquis nor any Marquis Fund has any known liabilities of a
material nature, contingent or otherwise, other than those shown as belonging to
it on its statement of assets and liabilities as of March 31, 1998, and those
incurred in the ordinary course of Marquis's business as an investment company
since that date. Prior to the Exchange Date, Marquis will advise One Group of
all known material liabilities, contingent or otherwise, incurred by it and each
Marquis Fund subsequent to March 31, 1998, whether or not incurred in the
ordinary course of business.
(h) As used in this Agreement, the term "Investments" shall mean each
Marquis Fund's investments shown on the schedule of its portfolio investments as
of September 30, 1997 and March 31, 1998, referred to in Section 1(c) hereof, as
supplemented with such changes as Marquis or each Marquis Fund shall make after
March 31, 1998, which changes have been disclosed to One Group, and changes made
on and after the date of this Agreement after advising One Group of such
proposed changes, and changes resulting from stock dividends, stock split-ups,
mergers and similar corporate actions.
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(i) Each Marquis Fund has filed or will file all federal and state tax
returns which, to the knowledge of Marquis's officers, are required to be filed
by each Marquis Fund and has paid or will pay all federal and state taxes shown
to be due on said returns or on any assessments received by each Marquis Fund.
All tax liabilities of each Marquis Fund have been adequately provided for on
its books, and no tax deficiency or liability of any Marquis Fund has been
asserted, and no question with respect thereto has been raised, by the Internal
Revenue Service or by any state or local tax authority for taxes in excess of
those already paid.
(j) As of both the Valuation Time and the Exchange Date and except for
shareholder approval as described in Section 8(a) and otherwise as described in
Section 1(1), Marquis on behalf of each Marquis Fund will have full right, power
and authority to sell, assign, transfer and deliver the Investments and any
other assets and liabilities of each Marquis Fund to be transferred to the
corresponding One Group Fund pursuant to this Agreement. At the Exchange Date,
subject only to the delivery of the Investments and any such other assets and
liabilities as contemplated by this Agreement, One Group will, on behalf of each
One Group Fund, acquire the Investments and any such other assets subject to no
encumbrances, liens or security interests in favor of any third party creditor
of Marquis or a Marquis Fund and, except as described in Section 1(k), without
any restrictions upon the transfer thereof.
(k) No registration under the Securities Act of 1933, as amended (the
"1933 Act"), of any of the Investments would be required if they were, as of the
time of such transfer, the subject of a public distribution by either of Marquis
or One Group, except as previously disclosed to One Group by Marquis in writing.
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(l) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by Marquis or any
Marquis Fund of the transactions contemplated by this Agreement, except such as
may be required under the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the 1940 Act, state securities or blue sky laws (which
term as used herein shall include the laws of the District of Columbia and of
Puerto Rico) or the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"H-S-R Act").
(m) The registration statement (the "Registration Statement") filed with
the Commission by One Group on Form N-14 relating to the Shares issuable
hereunder, and the proxy statement of Marquis included therein (the "Proxy
Statement"), on the effective date of the Registration Statement and insofar as
they relate to Marquis and the Marquis Funds, (i) will comply in all material
respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act and
the rules and regulations thereunder and (ii) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
at the time of the shareholders' meeting referred to in Section 8(a) below and
on the Exchange Date, the prospectus contained in the Registration Statement of
which the Proxy Statement is a part (the "Prospectus"), as amended or
supplemented by any amendments or supplements filed with the Commission by One
Group, insofar as it relates to Marquis and the Marquis Funds, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the representations and warranties in this
subsection shall apply only to statements of fact relating to Marquis and any
Marquis Fund contained in the Registration Statement, the Prospectus or the
Proxy Statement, or omissions to state in any thereof a material fact relating
to Marquis or any Marquis
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Fund, as such Registration Statement, Prospectus and Proxy Statement shall be
furnished to Marquis in definitive form as soon as practicable following
effectiveness of the Registration Statement and before any public distribution
of the Prospectus or Proxy Statement.
(n) All of the issued and outstanding shares of beneficial interest of
each Marquis Fund have been offered for sale and sold in conformity with all
applicable federal and state securities laws.
(o) Each of the Marquis Funds is qualified, and will at all times through
the Exchange Date qualify for taxation as a "regulated investment company" under
Sections 851 and 852 of the Code.
(p) At the Exchange Date, each of the Marquis Funds, as One Group may
reasonably direct via written instructions, will have sold such of its assets,
if any, as necessary to assure that, after giving effect to the acquisition of
the assets pursuant to this Agreement, each of the One Group Funds (other than
One Group Louisiana) will remain a "diversified company" within the meaning of
Section 5(b) (l) of the 1940 Act and in compliance with such other mandatory
investment restrictions as are set forth in the One Group Prospectuses
previously furnished to Marquis.
2. REPRESENTATIONS AND WARRANTIES OF ONE GROUP. One Group and each One
Group Fund jointly and severally represent and warrant to and agree with Marquis
and each Marquis Fund that:
(a) One Group is a business trust duly established and validly existing
under the laws of The Commonwealth of Massachusetts and has power to carry on
its business as it is now being conducted and to carry out this Agreement. One
Group and each One Group Fund is not required to qualify as a foreign
association in any jurisdiction. One Group and each One Group Fund has all
necessary federal, state and local authorizations to own all of its properties
and assets and to carry on its
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business as now being conducted and to fulfill the terms of this Agreement,
except as set forth in Section 2(i).
(b) One Group is registered under the 1940 Act as an open-end management
investment company, and such registration has not been revoked or rescinded and
is in full force and effect. Each One Group Fund has elected to qualify and has
qualified as a regulated investment company under Part 1 of Subchapter M of the
Code, as of and since its first taxable year, and qualifies and intends to
continue to qualify as a regulated investment company for its taxable year
ending June 30, 1998. Each One Group Fund has been a regulated investment
company under such sections of the Code at all times since its inception.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of portfolio investments
(indicating their market values) for each One Group Fund for the year ended June
30, 1997, such statements and schedules having been audited by Coopers &
Lybrand, independent accountants to One Group, have been furnished to Marquis.
Unaudited statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of portfolio investments
(indicating their market values) for each One Group Fund as of December 31, 1997
have also been furnished to Marquis. Such statements of assets and liabilities
and schedules fairly present the financial position of the One Group Funds as of
their respective dates, and said statements of operations and changes in net
assets fairly reflect the results of its operations and changes in financial
position for the periods covered thereby in conformity with generally accepted
accounting principles.
(d) The prospectuses of each One Group Fund dated November 1, 1997,
(collectively, the "One Group Prospectuses"), and the Statement of Additional
Information for the One Group Funds,
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dated November 1, 1997, and on file with the Commission, which have been
previously furnished to Marquis, did not as of their dates and do not as of the
date hereof contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of One Group or any One Group Fund, threatened
against One Group or any One Group Fund which assert liability on the part of
One Group or any One Group Fund.
(f) There are no material contracts outstanding to which One Group or any
One Group Fund is a party, other than as disclosed in the One Group Prospectuses
and the corresponding Statement of Additional Information or in the Registration
Statement and the Proxy Statement.
(g) Neither One Group nor any One Group Fund has any known liabilities of
a material nature, contingent or otherwise, other than those shown on its
statement of assets and liabilities as of December 31, 1997 referred to above
and those incurred in the ordinary course of the business of One Group as an
investment company or any One Group Fund since such date. Prior to the Exchange
Date, One Group will advise Marquis of all known material liabilities,
contingent or otherwise, incurred by it and each One Group Fund subsequent to
December 31, 1997, whether or not incurred in the ordinary course of business.
(h) Each One Group Fund has filed or will file all federal and state tax
returns which, to the knowledge of One Group's officers, are required to be
filed by each One Group Fund and has paid or will pay all federal and state
taxes shown to be due on said returns or on any assessments received by each One
Group Fund. All tax liabilities of each One Group Fund have been adequately
provided for on its books, and no tax deficiency or liability of any One Group
Fund has been asserted, and no
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question with respect thereto has been raised, by the Internal Revenue Service
or by any state or local tax authority for taxes in excess of those already
paid.
(i) No consent, approval, authorization or order of any governmental
authority is required for the consummation by One Group or any One Group Fund of
the transactions contemplated by this Agreement, except such as may be required
under the 1933 Act, the 1934 Act, the 1940 Act, state securities or Blue Sky
laws or the H-S-R Act.
(j) As of both the Valuation Time and the Exchange Date and otherwise as
described in Section 2 (i), One Group on behalf of each One Group Fund will have
full right, power and authority to purchase the Investments and any other assets
and assume the liabilities of each Marquis Fund to be transferred to the
corresponding One Group Fund pursuant to this Agreement.
(k) The Registration Statement, the Prospectus and the Proxy Statement, on
the effective date of the Registration Statement and insofar as they relate to
One Group and the One Group Funds: (i) will comply in all material respects with
the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder and (ii) will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at the time of the
shareholders' meeting referred to in Section 8(a) and at the Exchange Date, the
Prospectus, as amended or supplemented by any amendments or supplements filed
with the Commission by One Group or any One Group Fund, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that none of the representations and warranties in this
subsection shall apply to statements in or omissions from the Registration
Statement, the Prospectus or the Proxy Statement made in reliance upon and in
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conformity with information furnished by Marquis or any Marquis Fund for use in
the Registration Statement, the Prospectus or the Proxy Statement.
(l) Shares to be issued to each Marquis Fund have been duly authorized
and, when issued and delivered pursuant to this Agreement and the Prospectus,
will be legally and validly issued and will be fully paid and nonassessable by
One Group and no shareholder of One Group will have any preemptive right of
subscription or purchase in respect thereof.
(m) The issuance of Shares pursuant to this Agreement will be in
compliance with all applicable federal and state securities laws.
(n) Each One Group Fund is qualified and will at all times through the
Exchange Date qualify for taxation as a "regulated investment company" under
Sections 851 and 852 of the Code.
3. REORGANIZATION. (a) Subject to the requisite shareholder approval as
described in Section 8(a) and to the other terms and conditions contained herein
(including each Marquis Fund's obligation to distribute to its respective
shareholders all of its investment company taxable income and net capital gain
as described in Section 9(k) hereof ), Marquis and each Marquis Fund agree to
sell, assign, convey, transfer and deliver to the corresponding One Group Fund,
and One Group and each One Group Fund agree to acquire from the corresponding
Marquis Fund, on the Exchange Date all of the Investments and all of the cash
and other assets of each Marquis Fund in exchange for that number of Shares of
the corresponding One Group Fund provided for in Section 4 and the assumption by
the corresponding One Group Fund of all the liabilities of the Marquis Fund.
Pursuant to this Agreement, each Marquis Fund will, as soon as practicable after
the Exchange Date, distribute in liquidation all of the Shares received by it to
its shareholders in exchange for their shares of beneficial interest of such
Marquis Fund.
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(b) Marquis, on behalf of each Marquis Fund, will pay or cause to be paid
to the corresponding One Group Fund any interest and cash dividends received by
it on or after the Exchange Date with respect to the Investments transferred to
the One Group Funds hereunder. Marquis, on behalf of each Marquis Fund, will
transfer to the corresponding One Group Fund any rights, stock dividends or
other securities received by Marquis or any Marquis Fund after the Exchange Date
as stock dividends or other distributions on or with respect to the Investments
transferred, which rights, stock dividends and other securities shall be deemed
included in the assets transferred to each One Group Fund at the Exchange Date
and shall not be separately valued, in which case any such distribution that
remains unpaid as of the Exchange Date shall be included in the determination of
the value of the assets of the Marquis Fund acquired by the corresponding One
Group Fund.
4. EXCHANGE DATE; VALUATION TIME. On the Exchange Date, One Group will
deliver to Marquis a number of Shares having an aggregate net asset value equal
to the value of the assets of the corresponding Marquis Fund acquired by each
One Group Fund, less the value of the liabilities of such Marquis Fund assumed,
determined as hereafter provided in this Section 4.
(a) Subject to Section 4(d) hereof, the value of each Marquis Fund's net
assets will be computed as of the Valuation Time using the valuation procedures
for the corresponding One Group Fund as set forth in the One Group Prospectus
for the particular One Group Fund
(b) Subject to Section 4(d) hereof, the net asset value of a share of each
One Group Fund will be determined to the nearest full cent as of the Valuation
Time, using the valuation procedures set forth in the One Group Prospectus for
the particular One Group Fund.
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(c) Subject to Section 4(d), the Valuation Time shall be 4:00 p.m. Eastern
Standard time on August 7, 1998 or such earlier or later day as may be mutually
agreed upon in writing by the parties hereto (the "Valuation Time").
(d) No formula will be used to adjust the net asset value of any Marquis
Fund or One Group Fund to take into account differences in realized and
unrealized gains and losses.
(e) Each One Group Fund shall issue its Shares to the corresponding
Marquis Fund on one share deposit receipt registered in the name of the
corresponding Marquis Fund. Each Marquis Fund shall distribute in liquidation
the Shares received by it hereunder pro rata to its shareholders of each class
of shares by redelivering such share deposit receipt to One Group's transfer
agent which will as soon as practicable set up open accounts for each Marquis
Fund shareholder in accordance with written instructions furnished by Marquis.
(f) Each One Group Fund shall assume all liabilities of the corresponding
Marquis Fund, whether accrued or contingent, in connection with the acquisition
of assets and subsequent dissolution of the corresponding Marquis Fund or
otherwise, except that recourse for assumed liabilities relating to a particular
Marquis Fund will be limited to the corresponding One Group Fund.
5. EXPENSES, FEES, ETC. (a) Subject to subsections 5(b) through 5(e),
all fees and expenses, including accounting expenses, portfolio transfer
taxes (if any) or other similar expenses incurred in connection with the
consummation by One Group and Marquis of the transactions contemplated by
this Agreement will be paid by the party directly incurring such fees and
expenses, except that the costs of proxy materials and proxy solicitation,
including the costs of drafting, filing, printing and mailing the proxy, the
retention of proxy solicitors, and legal and tax opinions, will be borne by
Banc One Investment Advisors Corporation; PROVIDED, HOWEVER, that such
expenses will in any event be paid by the party directly
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incurring such expenses if and to the extent that the payment by the other
party of such expenses would result in the disqualification of any One Group
Fund or any Marquis Fund, as the case may be, as a "regulated investment
company" within the meaning of Section 851 of the Code.
(b) In the event the transactions contemplated by this Agreement are not
consummated by reason of Marquis being either unwilling or unable to go forward
(other than by reason of the nonfulfillment or failure of any condition to
Marquis's obligations referred to in Section 8(a) or Section 10) Marquis shall
pay directly all reasonable fees and expenses incurred by One Group in
connection with such transactions, including, without limitation, legal,
accounting and filing fees.
(c) In the event the transactions contemplated by this Agreement are not
consummated by reason of One Group being either unwilling or unable to go
forward (other than by reason of the nonfulfillment or failure of any condition
to One Group's obligations referred to in Section 8(a) or Section 9), One Group
shall pay directly all reasonable fees and expenses incurred by Marquis in
connection with such transactions, including without limitation legal,
accounting and filing fees.
(d) In the event the transactions contemplated by this Agreement are not
consummated for any reason other than (i) One Group or Marquis being either
unwilling or unable to go forward or (ii) the nonfulfillment or failure of any
condition to Marquis or One Group's obligations referred to in Section 8(a),
Section 9 or Section 10 of this Agreement, then each of Marquis and One Group
shall bear the expenses it has actually incurred in connection with such
transactions.
(e) Notwithstanding any other provisions of this Agreement, if for any
reason the transactions contemplated by this Agreement are not consummated, no
party shall be liable to the other party for any damages resulting therefrom,
including without limitation consequential damages, except as specifically set
forth above.
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6. PERMITTED ASSETS. One Group agrees to advise Marquis promptly if at
any time prior to the Exchange Date the assets of any Marquis Fund include any
assets that the corresponding One Group Fund is not permitted, or reasonably
believes to be unsuitable for it, to acquire, including without limitation any
security that, prior to its acquisition by any Marquis Fund, One Group has
informed Marquis is unsuitable for the corresponding One Group Fund to acquire.
7. EXCHANGE DATE. Delivery of the assets of the Marquis Funds to be
transferred, assumption of the liabilities of the Marquis Funds to be assumed,
and the delivery of Shares to be issued shall be made at the offices of Banc One
Investment Advisors Corporation at 9:00 am. on August 10, 1998, or at such
other time and date agreed to by Marquis and One Group, the date and time upon
which such delivery is to take place being referred to herein as the "Exchange
Date."
8. SPECIAL MEETING OF SHAREHOLDERS; DISSOLUTION. (a) Marquis agrees to
call a special meeting of the shareholders of each Marquis Fund as soon as is
practicable after the effective date of the Registration Statement for the
purpose of considering the sale of all of the assets of each Marquis Fund to and
the assumption of all of the liabilities of each Marquis Fund by the
corresponding One Group Fund as herein provided, adopting this Agreement, and
authorizing the liquidation and dissolution of any Marquis Fund, and, except as
set forth in Section 13, it shall be a condition to the obligations of each of
the parties hereto that the holders of the shares of beneficial interest of each
Marquis Fund, and each class of shares of each Marquis Fund if such is required
under the 1940 Act, shall have approved this Agreement and the transactions
contemplated herein in the manner required by law and Marquis's Declaration of
Trust at such a meeting on or before the Valuation Time.
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(b) Marquis and each Marquis Fund agree that the liquidation and
dissolution of each Marquis Fund will be effected in the manner provided in
Marquis's Declaration of Trust in accordance with applicable law, and that it
will not make any distributions of any Shares to the shareholders of a Marquis
Fund without first paying or adequately providing for the payment of all of such
Marquis Fund's known debts, obligations and liabilities.
(c) Each of One Group and Marquis will cooperate with the other, and each
will furnish to the other the information relating to itself required by the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations thereunder
to be set forth in the Registration Statement, including the Prospectus and the
Proxy Statement.
9. CONDITIONS TO ONE GROUP'S OBLIGATIONS. The obligations of One Group
and each One Group Fund hereunder shall be subject to the following conditions:
(a) That this Agreement shall have been adopted and the transactions
contemplated hereby, including the liquidation and dissolution of the Marquis
Funds, shall have been approved as set forth in Section 8(a).
(b) Marquis shall have furnished to One Group a statement of each Marquis
Fund's assets and liabilities, with values determined as provided in Section 4
of this Agreement, together with a list of Investments with their respective tax
costs, all as of the Valuation Time, certified on Marquis's behalf by its
President (or any Vice President) and Treasurer, and a certificate of both such
officers, dated the Exchange Date, to the effect that as of the Valuation Time
and as of the Exchange Date there has been no material adverse change in the
financial position of any Marquis Fund since March 31, 1998, other than changes
in the Investments since that date or changes in the market value
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of the Investments, or changes due to net redemptions of shares of the Marquis
Funds, dividends paid or losses from operations.
(c) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of Marquis and each Marquis Fund made in this
Agreement are true and correct in all material respects as if made at and as of
such dates, Marquis and each Marquis Fund has complied with this Agreement and
satisfied all the conditions on its part to be performed or satisfied at or
prior to each of such dates, and Marquis shall have furnished to One Group a
statement, dated the Exchange Date, signed by Marquis's President (or any Vice
President) and Treasurer certifying those facts as of such dates.
(d) Marquis shall have delivered to One Group a letter from SEI
Investments Company dated the Exchange Date stating that such firm prepared
the federal and state income tax returns of each Marquis Fund for the year
ended September 30, 1997.
(e) There shall not be any material litigation pending with respect to the
matters contemplated by this Agreement.
(f) One Group shall have received an opinion of Morgan, Lewis & Bockius
LLP, in form reasonably satisfactory to One Group and dated the Exchange Date,
to the effect that (i) Marquis is a business trust duly established and validly
existing under the laws of the Commonwealth of Massachusetts, and neither
Marquis nor any Marquis Fund is, to the knowledge of such counsel, required to
qualify to do business as a foreign association in any jurisdiction, (ii) this
Agreement has been duly authorized, executed, and delivered by Marquis and,
assuming that the Registration Statement, the Prospectus and the Proxy Statement
comply with the 1933 Act, the 1934 Act and the 1940 Act and assuming due
authorization, execution and delivery of this Agreement by One Group,
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is a valid and binding obligation of Marquis subject to applicable bankruptcy,
insolvency, fraudulent conveyance and similar laws or court decisions regarding
enforcement of creditor's rights generally, (iii) Marquis and each Marquis Fund
has power to sell, assign, convey, transfer and deliver the Investments and
other assets contemplated hereby and, upon consummation of the transactions
contemplated hereby in accordance with the terms of this Agreement, Marquis and
each Marquis Fund will have duly sold, assigned, conveyed, transferred and
delivered such Investments and other assets to One Group, (iv) the execution and
delivery of this Agreement did not, and the consummation of the transactions
contemplated hereby will not, violate Marquis's Declaration of Trust, or Bylaws,
as amended, or any provision of any agreement known to such counsel to which
Marquis or any Marquis Fund is a party or by which it is bound, it being
understood that with respect to investment restrictions as contained in
Marquis's Declaration of Trust, or Bylaws, or then-current prospectus or
statement of additional information of each Marquis Fund, such counsel may rely
upon a certificate of an officer of Marquis whose responsibility it is to advise
Marquis with respect to such matters and (v) to the best of counsel's knowledge
after reasonable inquiry, no consent, approval, authorization or order of any
court or governmental authority is required for the consummation by Marquis or
any Marquis Fund of the transactions contemplated herein, except (a) such as
have been obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as
may be required under state securities or blue sky laws and the H-S-R Act, and
it being understood that such opinion shall not be deemed to apply to One
Group's compliance obligations under the 1933 Act, 1934 Act, 1940 Act, state
securities or blue sky laws and H-S-R Act, and (b) where the failure to obtain
any such consent, approval, authorization or order would not have a material
adverse effect. For purposes of analysis regarding the 1940 Act, Morgan, Lewis
& Bockius LLP may assume as fact that the Marquis Funds
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and the One Group Funds may be considered affiliated persons or affiliated
persons of an affiliated person solely by reason of having a common investment
adviser.
(g) One Group shall have received an opinion of Ropes & Gray, counsel to
One Group addressed to The One Group and each One Group Fund, in form reasonably
satisfactory to One Group and dated the Exchange Date, to the effect that for
Federal income tax purposes (i) no gain or loss will be recognized by any
Marquis Fund upon the transfer of the assets to the corresponding One Group Fund
in exchange for Shares and the assumption by such One Group Fund of the
liabilities of the Marquis Fund or upon the distribution of Shares by the
Marquis Fund to its shareholders in liquidation; (ii) no gain or loss will be
recognized by the shareholders of any Marquis Fund upon the exchange of their
shares for Shares; (iii) the basis of the Shares a Marquis shareholder receives
in connection with the transaction will be the same as the basis of his or her
Marquis Fund shares exchanged therefor; (iv) a Marquis shareholder's holding
period for his or her Shares will be determined by including the period for
which he or she held the Marquis Fund shares exchanged therefor, provided that
he or she held such Marquis Fund shares as capital assets; (v) no gain or loss
will be recognized by any One Group Fund upon the receipt of the assets of the
corresponding Marquis Fund in exchange for Shares and the assumption by the One
Group Fund of the liabilities of the corresponding Marquis Fund; (vi) the basis
in the hands of the One Group Fund of the assets of the corresponding Marquis
Fund transferred to the One Group Fund in the transaction will be the same as
the basis of the assets in the hands of the corresponding Marquis Fund
immediately prior to the transfer; and (vii) the holding periods of the assets
of the corresponding Marquis Fund in the hands of the One Group Fund will
include the periods for which such assets were held by the corresponding Marquis
Fund.
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(h) The assets of each Marquis Fund to be acquired by the corresponding
One Group Fund will include no assets which the corresponding One Group Fund, by
reason of limitations contained in its Declaration of Trust or of investment
restrictions disclosed in the One Group Prospectuses in effect on the Exchange
Date, may not properly acquire.
(i) The Registration Statement shall have become effective under the 1933
Act and applicable blue sky provisions, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of One Group
contemplated by the Commission and or any state regulatory authority.
(j) All proceedings taken by Marquis in connection with the transactions
contemplated by this Agreement and all documents incidental thereto reasonably
shall be satisfactory in form and substance to One Group and Ropes & Gray.
(k) Prior to the Exchange Date, each Marquis Fund shall have declared a
dividend or dividends which, together with all previous such dividends, shall
have the effect of distributing to its shareholders all of its investment
company taxable income for its taxable year ended September 30, 1997 and the
short taxable year beginning on October 1, 1997 and ending on the Exchange Date
(computed without regard to any deduction for dividends paid), and all of its
net capital gain realized in its taxable year ended September 30, 1997 and the
short taxable year beginning on October 1, 1997 and ending on the Exchange Date
(after reduction for any capital loss carryover).
(l) Marquis shall have furnished to One Group a certificate, signed by the
President (or any Vice President) and the Treasurer of Marquis, as to the tax
cost to One Group of the securities delivered to One Group pursuant to this
Agreement, together with any such other evidence as to such tax cost as One
Group may reasonably request.
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(m) Marquis's custodian shall have delivered to One Group a certificate
identifying all of the assets of each Marquis Fund held by such custodian as of
the Valuation Time.
(n) Marquis's transfer agent shall have provided to One Group (i) the
originals or true copies of all of the records of each Marquis Fund in the
possession of such transfer agent as of the Exchange Date, (ii) a certificate
setting forth the number of shares of each class of Marquis Fund outstanding as
of the Valuation Time and (iii) the name and address of each holder of record of
any such shares of each Marquis Fund and the number of shares of each class held
of record by each such shareholder.
(o) All of the issued and outstanding shares of beneficial interest of
each Marquis Fund shall have been offered for sale and sold in conformity with
all applicable federal or state securities or blue sky laws and, to the extent
that any audit of the records of Marquis or any Marquis Fund or its transfer
agent by One Group or its agents shall have revealed otherwise, either (i)
Marquis and each Marquis Fund shall have taken all actions that in the
reasonable opinion of One Group or Ropes & Gray are necessary to remedy any
prior failure on the part of Marquis to have offered for sale and sold such
shares in conformity with such laws or (ii) Marquis shall have furnished (or
caused to be furnished) surety, or deposited (or caused to be deposited) assets
in escrow, for the benefit of One Group in amounts sufficient and upon terms
satisfactory, in the opinion of One Group or its counsel, to indemnify One Group
against any expense, loss, claim, damage or liability whatsoever that may be
asserted or threatened by reason of such failure on the part of Marquis to have
offered and sold such shares in conformity with such laws.
(p) Marquis shall have duly executed and delivered to One Group bills of
sale, assignments, certificates and other instruments of transfer ("Transfer
Documents") as One Group may deem
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necessary or desirable to transfer all of Marquis's and each Marquis Fund's
entire right, title and interest in and to the Investments and all other assets
of each Marquis Fund.
10. CONDITIONS TO MARQUIS'S OBLIGATIONS. The obligations of Marquis and
each Marquis Fund hereunder shall be subject to the following conditions:
(a) This Agreement shall have been adopted and the transactions
contemplated hereby, including the liquidation and dissolution of the Marquis
Funds, shall have been approved as described in Section 8(a).
(b) One Group shall have furnished to Marquis a Statement of each One
Group Fund's net assets, together with a list of portfolio holdings with values
determined as provided in Section 4, all as of the Valuation Time, certified on
One Group's behalf by its President (or any Vice President) and Treasurer (or
any Assistant Treasurer), and a certificate of both such officers, dated the
Exchange Date, to the effect that as of the Valuation Time and as of the
Exchange Date there has been no material adverse change in the financial
position of any One Group Fund since December 31, 1997, other than changes in
its portfolio securities since that date, changes in the market value of its
portfolio securities, changes due to net redemptions, dividends paid or losses
from operations.
(c) One Group shall have executed and delivered to Marquis an Assumption
of Liabilities Certificate and other instruments as Marquis may deem necessary
and desirable dated as of the Exchange Date pursuant to which each One Group
Fund will assume all of the liabilities of the corresponding Marquis Fund
existing at the Valuation Time in connection with the transactions contemplated
by this Agreement.
(d) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of One Group and each One Group Fund made in this
Agreement are true and correct in all material
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respects as if made at and as of such dates, One Group and each One Group Fund
has complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied at or prior to each of such dates, and One
Group shall have furnished to Marquis a statement, dated the Exchange Date,
signed by One Group's President (or any Vice President) and Treasurer certifying
those facts as of such dates.
(e) There shall not be any material litigation pending with respect to the
matters contemplated by this Agreement.
(f) Marquis shall have received an opinion of Ropes & Gray, in form
reasonably satisfactory to Marquis and dated the Exchange Date, to the effect
that (i) One Group is a business trust and validly existing in conformity with
the laws of The Commonwealth of Massachusetts, and, (to the knowledge of such
counsel), neither One Group nor any One Group Fund is required to qualify to do
business as a foreign association in any jurisdiction, (ii) the Shares to be
delivered to Marquis as provided for by this Agreement are duly authorized and
upon such delivery will be validly issued and will be fully paid and
nonassessable by One Group and no shareholder of One Group has any preemptive
right to subscription or purchase in respect thereof, (iii) this Agreement has
been duly authorized, executed and delivered by One Group and, assuming that the
Prospectus, the Registration Statement and the Proxy Statement comply with the
1933 Act, the 1934 Act and the 1940 Act and assuming due authorization,
execution and delivery of this Agreement by Marquis, is a valid and binding
obligation of One Group, subject to applicable bankruptcy, insolvency,
fraudulant conveyance and similar laws or court decisions regarding the
enforcement of credit rights generally, (iv) One Group and each One Group Fund
has the power to acquire and assume all of the liabilities of Marquis and the
Marquis Funds and, upon consumation of the transactions contemplated hereby
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in accordance with the terms of this Agreement, One Group and each respective
One Group Fund shall have duly aquired and assumed such liabilities, and (v) the
execution and delivery of this Agreement did not, and the consummation of the
transactions contemplated hereby will not, violate One Group's Declaration of
Trust, as amended, or Code of Regulations, or any provision of any agreement
known to such counsel to which One Group or any One Group Fund is a party or by
which it is bound, it being understood that with respect to investment
restrictions as contained in One Group's Declaration of Trust, as amended, Code
of Regulations or then-current prospectus or statement of additional information
of each One Group Fund, such counsel may rely upon a certificate of an officer
of One Group whose responsibility it is to advise One Group with respect to such
matters, (vi) no consent, approval, authorization or order of any court or
governmental authority is required for the consummation by One Group or any One
Group Fund of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be
required under state securities or blue sky laws and the H-S-R Act and it being
understood that such opinion shall not be deemed to apply to Marquis's
compliance obligations under the 1933 Act, 1934 Act, 1940 Act, state securities
or blue sky laws and the H-S-R Act; and (vii) the Registration Statement has
become effective under the 1933 Act, and to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act.
(g) Marquis shall have received an opinion of Ropes & Gray addressed to
Marquis, and each Marquis Fund, and in a form reasonably satisfactory to Marquis
and dated the Exchange Date, with respect to the matters specified in Section
9(g) of this Agreement.
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(h) All proceedings taken by One Group in connection with the transactions
contemplated by this Agreement and all documents incidental thereto reasonably
shall be satisfactory in form and substance to Marquis and Morgan, Lewis &
Bockius LLP.
(i) The Registration Statement shall have become effective under the 1933
Act and applicable blue sky provisions, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of Marquis,
contemplated by the Commission or any state regulatory authority.
11. INDEMNIFICATION. (a) The Marquis Funds will indemnify and hold
harmless One Group, its trustees and its officers (for purposes of this
subsection, the "Indemnified Parties") against any and all expenses, losses,
claims, damages and liabilities at any time imposed upon or reasonably incurred
by any one or more of the Indemnified Parties in connection with, arising out
of, or resulting from any claim, action, suit or proceeding in which any one or
more of the Indemnified Parties may be involved or with which any one or more of
the Indemnified Parties may be threatened by reason of any untrue statement or
alleged untrue statement of a material fact relating to Marquis or any Marquis
Fund contained in the Registration Statement, the Prospectus or the Proxy
Statement or any amendment or supplement to any of the foregoing, or arising out
of or based upon the omission or alleged omission to state in any of the
foregoing a material fact relating to Marquis or any Marquis Fund required to be
stated therein or necessary to make the statements relating to Marquis or any
Marquis Fund therein not misleading, including, without limitation, any amounts
paid by any one or more of the Indemnified Parties in a reasonable compromise or
settlement of any such claim, action, suit or proceeding or threatened claim,
action, suit or proceeding made with the prior consent of Marquis. The
Indemnified Parties will notify Marquis in writing within ten days after the
receipt
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by any one or more of the Indemnified Parties of any notice of legal process or
any suit brought against or claim made against any Indemnified Party as to any
matters covered by this Section 11(a). Marquis shall be entitled to participate
at its own expense in the defense of any claim, action, suit or proceeding
covered by this Section 11(a), or, if it so elects, to assume at its expense by
counsel satisfactory to the Indemnified Parties the defense of any such claim,
action, suit or proceeding, and if Marquis elects to assume such defense, the
Indemnified Parties shall be entitled to participate in the defense of any such
claim, action, suit or proceeding at their expense. The Marquis Funds'
obligation under this Section 11(a) to indemnify and hold harmless the
Indemnified Parties shall constitute a guarantee of payment so that the Marquis
Funds will pay in the first instance any expenses, losses, claims, damages and
liabilities required to be paid by it under this Section 11(a) without the
necessity of the Indemnified Parties first paying the same.
(b) The One Group Funds will indemnify and hold harmless Marquis, its
trustees and its officers (for purposes of this subsection, the "Indemnified
Parties") against any and all expenses, losses, claims, damages and liabilities
at any time imposed upon or reasonably incurred by any one or more of the
Indemnified Parties in connection with, arising out of, or resulting from any
claim, action, suit or proceeding in which any one or more of the Indemnified
Parties may be involved or with which any one or more of the Indemnified Parties
may be threatened by reason of any untrue statement or alleged untrue statement
of a material fact relating to One Group or any One Group Fund contained in the
Registration Statement, the Prospectus or the Proxy Statement, or any amendment
or supplement to any of the foregoing, or arising out of or based upon the
omission or alleged omission to state in any of the foregoing a material fact
relating to One Group or any One Group Fund required to be stated therein or
necessary to make the statements relating to One Group
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or any One Group Fund therein not misleading, including, without limitation, any
amounts paid by any one or more of the Indemnified Parties in a reasonable
compromise or settlement of any such claim, action, suit or proceeding, or
threatened claim, action, suit or proceeding made with the prior consent of One
Group. The Indemnified Parties will notify One Group in writing within ten days
after the receipt by any one or more of the Indemnified Parties of any notice of
legal process or any suit brought against or claim made against any Indemnified
Party as to any matters covered by this Section 11(b). One Group shall be
entitled to participate at its own expense in the defense of any claim, action,
suit or proceeding covered by this Section 11(b), or, if it so elects, to assume
at its expense by counsel satisfactory to the Indemnified Parties the defense of
any such claim, action, suit or proceeding, and, if One Group elects to assume
such defense, the Indemnified Parties shall be entitled to participate in the
defense of any such claim, action, suit or proceeding at their own expense. The
One Group Funds' obligation under this Section 11(b) to indemnify and hold
harmless the Indemnified Parties shall constitute a guarantee of payment so that
the One Group Funds will pay in the first instance any expenses, losses, claims,
damages and liabilities required to be paid by it under this Section 11(b)
without the necessity of the Indemnified Parties first paying the same.
12. NO BROKER, ETC. Each of One Group and Marquis represents that there
is no person who has dealt with it who by reason of such dealings is entitled to
any broker's or finder's or other similar fee or commission arising out of the
transactions contemplated by this Agreement.
13. TERMINATION. One Group and Marquis may, by mutual consent of their
respective trustees, terminate this Agreement, and One Group or Marquis, after
consultation with counsel and by consent of their respective trustees or an
officer authorized by such trustees, may waive any condition to their respective
obligations hereunder. If the transactions contemplated by this
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Agreement have not been substantially completed by October 30, 1998, this
Agreement shall automatically terminate on that date unless a later date is
agreed to by One Group and Marquis.
Notwithstanding any other provision in this Agreement, in the event
shareholder approval of this Agreement and the transactions contemplated by this
Agreement is obtained with respect to only one or more Marquis Funds but not all
of the Marquis Funds, One Group and Marquis agree to consummate those
transactions with respect to those Marquis Funds whose shareholders have
approved this Agreement and those transactions.
In the event that shareholder approval of this Agreement and the
transactions contemplated by this Agreement is required, but is obtained with
respect to only one class of shares of a Marquis Fund, the transaction with
respect to that Marquis Fund will not be consummated unless and until
shareholder approval is obtained with respect to both classes.
14. RULE 145. Pursuant to Rule 145 under the 1933 Act, One Group will, in
connection with the issuance of any Shares to any person who at the time of the
transaction contemplated hereby is deemed to be an affiliate of a party to the
transaction pursuant to Rule 145 (c), cause to be affixed upon the certificates
issued to such person (if any) a legend as follows:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT
TO THE ONE GROUP OR ITS PRINCIPAL UNDERWRITER UNLESS (i) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (ii) IN THE OPINION OF COUNSEL
REASONABLY
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SATISFACTORY TO THE ONE GROUP SUCH REGISTRATION IS NOT REQUIRED."
and, further, One Group will issue stop transfer instructions to One Group's
transfer agent with respect to such shares. Marquis will provide One Group on
the Exchange Date with the name of any shareholder of the Marquis Funds who is
to the knowledge of Marquis an affiliate of Marquis on such date.
15. COVENANTS, ETC. DEEMED MATERIAL. All covenants, agreements,
representations and warranties made under this Agreement and any certificates
delivered pursuant to this Agreement shall be deemed to have been material and
relied upon by each of the parties, notwithstanding any investigation made by
them or on their behalf.
16. SOLE AGREEMENT; AMENDMENTS. This Agreement supersedes all previous
correspondence and oral communications between the parties regarding the subject
matter hereof, constitutes the only understanding with respect to such subject
matter, may not be changed except by a letter of agreement signed by each party
hereto, and shall be construed in accordance with and governed by the laws of
The Commonwealth of Massachusetts provided, however, that no such amendment may
have the effect of changing the provisions for determining the number or value
of shares to be paid to the Marquis Fund's shareholders under Sections I(b) and
II(4)(b) this Agreement to the material detriment of such shareholder's without
their further approval.
17. AGREEMENT AND DECLARATION OF TRUST. The names "Marquis Funds" and
"Trustees of Marquis Funds" refer respectively to Marquis and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust, to which reference is hereby made and a copy of which is
on file at the office of the Secretary of The Commonwealth of Massachusetts
124
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and elsewhere as required by law, and to any and all amendments thereto so filed
or hereafter filed. The obligations of "Marquis Funds" entered into in the name
or on behalf thereof by any of the Trustees, officers, employees or agents are
made not individually, but in such capacities, and are not binding upon any of
the Trustees, officers, employees, agents or shareholders of Marquis personally,
but bind only the assets of Marquis, and all persons dealing with any of the
series or funds of Marquis, such as Marquis Funds, must look solely to the
assets of Marquis belonging to such series or funds for the enforcement of any
claims against Marquis.
The names "The One Group" and "Trustees of The One Group" refer
respectively to One Group and the Trustees, as trustees but not individually or
personally, acting from time to time under a Declaration of Trust dated May 23,
1985 to which reference is hereby made and a copy of which is on file at the
office of the Secretary of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "The One Group" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders or representatives of One Group personally, but bind only
the assets of One Group, and all persons dealilng with any series or fund of One
Group, such as the One Group Funds, must look solely to the assets of One Group
belonging to such series for the enforcement of any claims against One Group.
125
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This Agreement may be executed in any number of counter-parts, each of
which, when executed and delivered, shall be deemed to be an original.
MARQUIS FUNDS
By: /s/ Mark E. Nagle
----------------------------
THE ONE GROUP
By: /s/ Mark S. Redman
82717
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MARQUIS FUNDS INSTITUTIONAL MONEY MARKET FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each
of them with full power of substitution as proxies of the undersigned, to
vote, as designated below, at the Special Meeting of Shareholders of Marquis
Funds Institutional Money Market Fund ("Marquis Institutional") on July 30,
1998 at 10:00 a.m., Eastern time, at SEI Investments, One Freedom Valley
Drive, Oaks, PA 19456 and at any adjournments thereof, all of the shares of
beneficial interest in Marquis Institutional which the undersigned would be
entitled to vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Institutional will be transferred
to The One Group Treasury Only Money Market Fund ("One Group Treasury Only") in
return for of One Group Treasury Only, followed by the dissolution and
liquidation of Marquis Institutional, and the distribution of shares of One
Group Treasury Only to the shareholders of Marquis Institutional.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
127
<PAGE>
MARQUIS TREASURY SECURITIES MONEY MARKET FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
RETAIL CLASS SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of the Marquis
Funds Treasury Securities Money Market Fund ("Marquis Treasury Securities")
on July 30, 1998 at 10:00 a.m., Eastern time, at SEI Investments, One Freedom
Valley Drive, Oaks, PA 19456 and at any adjournments thereof, all of the
shares of beneficial interest in Paragon Money Market which the undersigned
would be entitled to vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Treasury Securities will be
transferred to The One Group U.S. Treasury Securities Money Market Fund ("One
Group Money Market") in return for Class A shares of One Group Money Market,
followed by the dissolution and liquidation of Marquis Treasury Securities, and
the distribution of shares of One Group Money Market to the shareholders of
Marquis Treasury Securities.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
128
<PAGE>
MARQUIS TREASURY SECURITIES MONEY MARKET FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
TRUST SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote, as
designated below, at the Special Meeting of Shareholders of the Marquis Funds
Treasury Securities Money Market Fund ("Marquis Treasury Securities") on July
30, 1998 at 10:00 a.m., Eastern time, at SEI Investments, One Freedom Valley
Drive, Oaks, PA 19456 and at any adjournments thereof, all of the
shares of beneficial interest in Marquis Treasury Securities which the
undersigned would be entitled to vote upon the following matter if personally
present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Treasury Securities will be
transferred to The One Group U.S. Treasury Securities Money Market Fund ("One
Group Money Market") in return for Fiduciary class shares of One Group Money
Market, followed by the dissolution and liquidation of Marquis Treasury
Securities, and the distribution of shares of One Group Money Market to the
shareholders of Marquis Treasury Securities.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
129
<PAGE>
MARQUIS TREASURY SECURITIES MONEY MARKET FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CASH SWEEP SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of the Marquis
Funds Treasury Securities Money Market Fund ("Marquis Treasury Securities")
on July 30, 1998 at 10:00 a.m., Eastern time, at SEI Investments, One Freedom
Valley Drive, Oaks, PA 19456 and at any adjournments thereof, all of the
shares of beneficial interest in Marquis Treasury Securities which the
undersigned would be entitled to vote upon the following matter if personally
present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Treasury Securities will be
transferred to The One Group U.S. Treasury Securities Money Market Fund ("One
Group Money Market") in return for Class A shares of One Group Money Market,
followed by the dissolution and liquidation of Marquis Treasury Securities, and
the distribution of shares of One Group Money Market to the shareholders of
Marquis Treasury Securities.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
130
<PAGE>
131
<PAGE>
MARQUIS TAX-EXEMPT MONEY MARKET FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
RETAIL SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of the Marquis
Funds Tax-Exempt Money Market Fund ("Marquis Tax-Exempt") on July 30, 1998 at
10:00 a.m., Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks,
PA 19456 and at any adjournments thereof, all of the shares of beneficial
interest in Marquis Tax-Exempt which the undersigned would be entitled to
vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Tax-Exempt will be transferred to
The One Group Municipal Money Market Fund ("One Group Municipal") in return for
Class A shares of One Group Municipal, followed by the dissolution and
liquidation of Marquis Tax-Exempt, and the distribution of shares of One Group
Municipal to the shareholders of Marquis Tax-Exempt.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
132
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MARQUIS FUNDS GOVERNMENT SECURITIES FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS A SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Government Securities Fund ("Marquis Government") on July 30, 1998 at 10:00
a.m., Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks, PA
19456 and at any adjournments thereof, all of the shares of beneficial
interest in Marquis Government which the undersigned would be entitled to
vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Government will be transferred to
The One Group Government Bond Fund ("One Group Government") in return for
Class A and Fiduciary class shares of One Group Government, followed by the
dissolution and liquidation of Marquis Government, and the distribution of
shares of One Group Government to the shareholders of Marquis Government.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
133
<PAGE>
MARQUIS FUNDS GOVERNMENT SECURITIES FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS B SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Government Securities Fund ("Marquis Government") on July 30, 1998 at 10:00
a.m., Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks, PA
19456 and at any adjournments thereof, all of the shares of beneficial
interest in Marquis Government which the undersigned would be entitled to
vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Government will be transferred to
The One Group Government Bond Fund ("One Group Government") in return for
Class B shares of One Group Government, followed by the dissolution and
liquidation of Marquis Government, and the distribution of shares of One Group
Government to the shareholders of Marquis Government.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
134
<PAGE>
MARQUIS FUNDS STRATEGIC INCOME FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS A SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Strategic Income Fund ("Marquis Strategic Income") on July 30, 1998 at 10:00
a.m., Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks, PA
19456 and at any adjournments thereof, all of the shares of beneficial
interest in Marquis Strategic Income which the undersigned would be entitled
to vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Strategic Income will be
transferred to The One Group Income Bond Fund ("One Group Income") in return for
Class A and Fiduciary class shares of One Group Income, followed by the
dissolution and liquidation of Marquis Strategic Income, and the distribution of
shares of One Group Income to the shareholders of Marquis Strategic Income.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
135
<PAGE>
MARQUIS FUNDS STRATEGIC INCOME FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS B SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Strategic Income Fund ("Marquis Strategic Income") on July 30, 1998 at 10:00
a.m., Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks, PA
19456 and at any adjournments thereof, all of the shares of beneficial
interest in Marquis Strategic Income which the undersigned would be entitled
to vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Strategic Income will be
transferred to The One Group Income Bond Fund ("One Group Income") in return for
Class B shares of One Group Income, followed by the dissolution and liquidation
of Marquis Strategic Income, and the distribution of shares of One Group Bond to
the shareholders of Marquis Strategic Income.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
136
<PAGE>
MARQUIS FUNDS BALANCED FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS A SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Balanced Fund ("Marquis Balanced") on July 30, 1998 at 10:00 a.m., Eastern
time, at SEI Investments, One Freedom Valley Drive, Oaks, PA 19456 and at
any adjournments thereof, all of the shares of beneficial interest in Marquis
Balanced which the undersigned would be entitled to vote upon the following
matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Balanced will be transferred to The
One Group Asset Allocation Fund ("One Group Asset Allocation") in return for
Class A and Fiduciary class shares of One Group Asset Allocation, followed by
the dissolution and liquidation of Marquis Balanced, and the distribution of
shares of One Group Asset Allocation to the shareholders of Marquis Balanced.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated: _______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
137
<PAGE>
MARQUIS FUNDS BALANCED FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS B SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Balanced Fund ("Marquis Balanced") on July 30, 1998 at 10:00 a.m., Eastern
time, at SEI Investments, One Freedom Valley Drive, Oaks, PA 19456 and at
any adjournments thereof, all of the shares of beneficial interest in Marquis
Balanced which the undersigned would be entitled to vote upon the following
matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Balanced will be transferred to The
One Group Asset Allocation Fund ("One Group Asset Allocation") in return for
Class B shares of One Group Asset Allocation, followed by the dissolution and
liquidation of Marquis Balanced, and the distribution of shares of One Group
Asset Allocation to the shareholders of Marquis Balanced.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
138
<PAGE>
MARQUIS FUNDS LOUISIANA TAX-EXEMPT INCOME FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS A SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Louisiana Tax-Exempt Income Fund ("Marquis Louisiana") on July 30, 1998 at
10:00 a.m., Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks,
PA 19456 and at any adjournments thereof, all of the shares of beneficial
interest in Marquis Louisiana which the undersigned would be entitled to vote
upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Louisiana will be transferred to
The One Group Louisiana Municipal Bond Fund ("One Group Louisiana") in return
for Class A and Fiduciary class shares of One Group Louisiana, followed by the
dissolution and liquidation of Marquis Louisiana, and the distribution of shares
of One Group Louisiana to the shareholders of Marquis Louisiana.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
139
<PAGE>
MARQUIS FUNDS LOUISIANA TAX-EXEMPT INCOME FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS B SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis
Louisiana Tax-Exempt Income Fund ("Marquis Louisiana") on July 30, 1998 at
10:00 a.m., Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks,
PA 19456 and at any adjournments thereof, all of the shares of beneficial
interest in Marquis Louisiana which the undersigned would be entitled to vote
upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Louisiana will be transferred to
The One Group Louisiana Municipal Bond Fund ("One Group Louisiana") in return
for Class B shares of One Group Louisiana, followed by the dissolution and
liquidation of Marquis Louisiana, and the distribution of shares of One Group
Louisiana to the shareholders of Marquis Louisiana.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
140
<PAGE>
MARQUIS FUNDS VALUE EQUITY FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS A SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Value Equity Fund ("Marquis Value") on July 30, 1998 at 10:00 a.m., Eastern
time, at SEI Investments, One Freedom Valley Drive, Oaks, PA 19456 and at
any adjournments thereof, all of the shares of beneficial interest in Marquis
Value which the undersigned would be entitled to vote upon the following
matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Value will be transferred to The
One Group Disciplined Value Fund ("One Group Value") in return for Class A and
Fiduciary class shares of One Group Value, followed by the dissolution and
liquidation of Marquis Value, and the distribution of shares of One Group Value
to the shareholders of Marquis Value.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
141
<PAGE>
MARQUIS FUNDS VALUE EQUITY FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS B SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Value Equity Fund ("Marquis Value") on July 30, 1998 at 10:00 a.m., Eastern
time, at SEI Investments, One Freedom Valley Drive, Oaks, PA 19456 and at
any adjournments thereof, all of the shares of beneficial interest in Marquis
Value which the undersigned would be entitled to vote upon the following
matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Value will be transferred to The
One Group Disciplined Value Fund ("One Group Value") in return for Class B
shares of One Group Value, followed by the dissolution and liquidation of
Marquis Value, and the distribution of shares of One Group Value to the
shareholders of Marquis Value.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
142
<PAGE>
MARQUIS FUNDS GROWTH EQUITY FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS A SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Growth Equity Fund ("Marquis Growth") on July 30, 1998 at 10:00 a.m., Eastern
time, at SEI Investments, One Freedom Valley Drive, Oaks, PA 19456 and at
any adjournments thereof, all of the shares of beneficial interest in Marquis
Growth which the undersigned would be entitled to vote upon the following
matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Growth will be transferred to The
One Group Growth Opportunities Fund ("One Group Growth") in return for Class A
and Fiduciary class shares of One Group Growth, followed by the dissolution and
liquidation of Marquis Growth, and the distribution of shares of One Group
Growth to the shareholders of Marquis Growth.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
143
<PAGE>
MARQUIS FUNDS GROWTH EQUITY FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS B SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of Marquis Funds
Growth Equity Fund ("Marquis Growth") on July 30, 1998 at 10:00 a.m., Eastern
time, at SEI Investments, One Freedom Valley Drive, Oaks, PA 19456 and at
any adjournments thereof, all of the shares of beneficial interest in Marquis
Growth which the undersigned would be entitled to vote upon the following
matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Growth will be transferred to The
One Group Growth Opportunities Fund ("One Group Growth") in return for Class B
shares of One Group Growth, followed by the dissolution and liquidation of
Marquis Growth, and the distribution of shares of One Group Growth to the
shareholders of Marquis Growth.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
144
<PAGE>
MARQUIS FUNDS SMALL CAP FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS A SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of the Marquis
Funds Small Cap Fund ("Marquis Small Cap") on July 30, 1998 at 10:00 a.m.,
Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks, PA 19456
and at any adjournments thereof, all of the shares of beneficial interest in
Marquis Small Cap which the undersigned would be entitled to vote upon the
following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Small Cap will be transferred to
The One Group Small Capitalization Fund ("One Group Small Capitalization") in
return for Class A and Fiduciary class shares of One Group Small Capitalization,
followed by the dissolution and liquidation of Marquis Small Cap, and the
distribution of shares of One Group Small Capitalization to the shareholders of
Marquis Small Cap.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
145
<PAGE>
MARQUIS FUNDS SMALL CAP FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS B SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of the Marquis
Funds Small Cap Fund ("Marquis Small Cap") on July 30, 1998 at 10:00 a.m.,
Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks, PA 19456
and at any adjournments thereof, all of the shares of beneficial interest in
Marquis Small Cap which the undersigned would be entitled to vote upon the
following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis Small Cap will be transferred to
The One Group Small Capitalization Fund ("One Group Small Capitalization") in
return for Class B shares of One Group Small Capitalization, followed by the
dissolution and liquidation of Marquis Small Cap, and the distribution of shares
of One Group Small Capitalization to the shareholders of Marquis Small Cap.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
146
<PAGE>
MARQUIS FUNDS INTERNATIONAL EQUITY FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS A SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of the Marquis
Funds International Equity Fund ("Marquis International") on July 30, 1998 at
10:00 a.m., Eastern time, at SEI Investments, One Freedom Valley Drive, Oaks,
PA 19456 and at any adjournments thereof, all of the shares of beneficial
interest in Marquis International which the undersigned would be entitled to
vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis International will be transferred
to The One Group International Equity Index Fund ("One Group International
Index") in return for Class A and Fiduciary class shares of One Group
International Index, followed by the dissolution and liquidation of Marquis
Internaitonal, and the distribution of shares of One Group International Index
to the shareholders of Marquis International.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
147
<PAGE>
MARQUIS FUNDS INTERNATIONAL EQUITY FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS,
JULY 30, 1998
CLASS B SHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF MARQUIS FUNDS.
The undersigned hereby appoints Kathryn Stanton and Michelle Beaudry, each of
them with full power of substitution as proxies of the undersigned, to vote,
as designated below, at the Special Meeting of Shareholders of the Marquis
Funds International Equity Index ("Marquis International") on July 30, 1998
at 10:00 a.m., Eastern time, at SEI Investments, One Freedom Valley Drive,
Oaks, PA 19456 and at any adjournments thereof, all of the shares of
beneficial interest in Marquis International which the undersigned would be
entitled to vote upon the following matter if personally present.
1. Approval of an Agreement and Plan of Reorganization pursuant to which
all of the assets and liabilities of Marquis International will be transferred
to The One Group International Equity Index Fund ("One Group International
Index") in return for Class B shares of One Group International Index, followed
by the dissolution and liquidation of Marquis International, and the
distribution of shares of One Group International Index to the shareholders of
Marquis International.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Signature of Shareholder(s)
Signature of Shareholder(s)
Dated:_______________, 1998.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
148
<PAGE>
THE ONE GROUP
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information contains information which may be of
interest to investors but which is not included in the Combined Prospectus/Proxy
(the "Prospectus") of The One Group dated June ____, 1998 relating to the
transfer of the assets and liabilities of Marquis Institutional, Marquis
Treasury Securities, Marquis Tax-Exempt, Marquis Government, Marquis Strategic
Income, Marquis Louisiana, Marquis Balanced, Marquis Value, Marquis Growth,
Marquis Small Cap and Marquis International to One Group Treasury Only, One
Group Treasury Securities, One Group Municipal, One Group Government, One Group
Income, One Group Louisiana, One Group Asset Allocation, One Group Value, One
Group Growth, One Group Small Capitalization and One Group International Index.
This Statement of Additional Information is not a prospectus and is authorized
for distribution only when it accompanies or follows delivery of the Prospectus.
This Statement of Additional Information should be read in conjunction with the
Prospectus. A copy of the Prospectus may be obtained, without charge, by
writing The One Group Services Company, 3435 Stelzer Road, Columbus, Ohio 43219,
or by calling 1-800-554-3882.
The Statement of Additional Information for The One Group dated November 1, 1997
has been filed with the Securities and Exchange Commission and is incorporated
herein by reference. The Statement of Additional Information for Marquis Funds
dated February 1, 1998 has been filed with the Securities and Exchange
Commission and is incorporated herein by reference.
Unaudited financial statements for Marquis Institutional, Marquis Treasury
Securities, Marquis Tax-Exempt, Marquis Government, Marquis Strategic Income,
Marquis Louisiana, Marquis Balanced, Marquis Value, Marquis Growth, Marquis
Small Cap and Marquis International for the period ended March 31, 1998, are
contained in the Marquis Funds Semi-Annual Report, which was filed with the
Securities and Exchange Commission and is incorporated herein by reference.
Unaudited financial statements for One Group Treasury Only, One Group Municipal,
One Group Government, One Group Income, One Group Louisiana, One Group Asset
Allocation, One Group Discipline, One Group Growth, One Group Small
Capitalization and One Group International Index for the period ended December
31, 1997, are contained in The One Group Semi-Annual Report, which was filed
with the Securities and Exchange Commission and is incorporated herein by
reference.
THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS JUNE ____, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
----
Financial Statements of the Combined Funds on a pro-forma basis for the periods
ended December 31, 1997 Marquis Institutional, Marquis Treasury Securities,
Marquis Tax-Exempt, Marquis Government, Marquis Louisiana, Marquis Balanced,
Marquis Value and Marquis Growth to One Group Treasury Only, One Group Treasury
Securities, One Group Municipal, One Group Government, One Group Louisiana, One
Group Asset Allocation, One Group Discipline and One Group Growth.
<PAGE>
THE ONE GROUP U.S TREASURY SECURITIES MONEY MARKET FUND / MARQUIS TREASURY
SECURITIES MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
- ---------- ----------- ------------- --------------------------------------------------- -------------- ------------- -----------
<S><C>
U.S. TREASURY OBLIGATIONS (16.6%)
U.S. Treasury Bills (11.3%)
175,000 175,000 1/22/98 174,479 174,479
60,000 55,000 115,000 3/5/98 (b) 59,420 54,484 113,904
150,000 150,000 3/26/98 148,202 148,202
25,000 25,000 6/25/98 24,348 24,348
100,000 100,000 11/12/98 95,398 95,398
--------- --------- ---------
Total U.S. Treasury Bills 233,899 322,432 556,331
--------- --------- ---------
U.S. TREASURY NOTES (5.3%)
120,000 120,000 5.25%, 7/31/98 119,759 119,759
95,000 95,000 6.13%, 8/31/98 95,232 95,232
50,000 50,000 5.88%, 10/31/98 50,113 50,113
--------- ---------
Total U.S. Treasury Notes 265,104 265,104
--------- ---------
REPURCHASE AGREEMENTS (83.6%)
175,000 175,000 Aubrey G. Lanston & Co., 6.50%, 1/2/98
(Collateralized by $169,891 various U.S.
Treasury Securities, 5.88% - 6.63%,
11/15/05 - 2/15/27, market value - $179,385) 175,000 175,000
60,000 60,000 Aubrey G. Lanston & Co., 6.50%, 1/2/98
(Collateralized by $61,224 various U.S.
Treasury Notes, 5.00% - 6.38%,
1/31/99 - 4/30/99, market value - $62,285) 60,000 60,000
175,000 175,000 Barclays De Zoette Wedd, 6.63%, 1/2/98
(Collateralized by $202,633 various U.S.
Treasury Securities, 0.00% - 12.38%,
7/31/98 - 2/15/26, market value - $178,501) 175,000 175,000
160,000 160,000 CIBC Wood Gundy, 6.50%, 1/2/98
(Collateralized by $121,298 various U.S
Treasury Securities, 7.25% - 12.00%,
8/15/13 - 8/15/22, market value - $163,604) 160,000 160,000
70,085 70,085 Deutsche Morgan Grenfell, 5.18%, 1/2/98
(Collateralized by $81,458 various
U.S. Treasury Securities, 0.00% - 10.75%,
5/15/98 - 5/15/23, market value - $71,487) 70,085 70,085
299,317 299,317 Deutsche Morgan Grenfell, 6.80%, 1/2/98
(Collateralized by $291,824 various
U.S.Treasury Securities, 0.00% - 12.50%,
8/15/98 - 5/15/21, market value - $305,303) 299,317 299,317
250,000 250,000 Deutsche Morgan Grenfell, 7.30%, 1/5/98
(Collateralized by $243,743 various
U.S. Treasury Securities, 0.00% - 12.50%,
8/15/98 - 5/15/21, market value - $255,000) 250,000 250,000
170,000 170,000 Donaldson, Lufkin & Jenrette, 6.50%, 1/2/98
(Collateralized by $143,145
various U.S. Treasury Securities,
5.63% - 10.38%, 2/15/99 - 2/15/19,
market value - $173,400) 170,000 170,000
165,000 165,000 Dresdner Securities, 5.00%, 1/2/98
(Collateralized by $140,996 various U.S.
Treasury Securities, 6.25% - 8.13%,
8/15/21 - 8/15/25, market value -$167,391) 165,000 165,000
865,000 865,000 Goldman Sachs, 6.53%, 1/2/98 (Collateralized by
$799,232 various U.S. Treasury Securities,
0.00% - 13.13%, 1/2/98 - 11/15/27,
market value - $882,300) 865,000 865,000
175,000 175,000 HSBC Securities, 6.55%, 1/2/98 (Collateralized by
$307,505 various U.S. Treasury Securities,
0.00% - 11.75%, 6/30/02 - 2/15/27,
market value - $178,504) 175,000 175,000
60,000 60,000 HSBC Securities, 6.60%, 1/2/98 (Collateralized
by $159,600 various U.S Treasury Strips, 0.00%,
11/15/01 - 8/15/20, market value - $61,212 60,000 60,000
175,000 175,000 J.P. Morgan Securities, 6.30%, 1/2/98 (Collateralized
by $169,587 various U.S. Treasury Securities,
5.63% - 7.25%, 12/31/99 - 8/15/26,
market value - $178,501) 175,000 175,000
11,674 11,674 J.P. Morgan Securities, 6.40%, 1/2/98
(Collateralized by $9,449 various U.S.
Treasury Securities, 7.25% - 9.88%,
8/15/04 - 11/15/15, market value - $11,908) 11,674 11,674
310,000 310,000 J.P. Morgan Securities, 6.60%, 1/2/98 (Collateralized
by $595,513 various U.S. Treasury Strips, 0.00 %,
5/15/98 - 11/15/21, market value - $316,363) 310,000 310,000
175,000 175,000 Lehman Brothers Holding, Inc., 6.40%, 1/2/98
(Collateralized by $377,778 various U.S.
Treasury Securities, 0.00%,
11/15/98 - 2/15/23, market value - $178,503) 175,000 175,000
300,000 300,000 Lehman Brothers Holding, Inc., 6.57%, 1/2/98
(Collateralized by $588,235 various U.S. Treasury
Strips, 0.00%, 2/15/09, market value - $306,717) 300,000 300,000
58,411 58,411 Merrill Lynch, 6.45%, 1/2/98 (Collateralized by
$45,297 U.S Treasury Bonds, 8.13% - 9.13%,
8/15/17 - 2/15/20, market value - $59,582 58,411 58,411
160,000 160,000 Morgan Stanley, 6.20%, 1/2/98 (Collateralized by
$158,825 U.S Treasury Notes, 6.75% - 7.50%,
6/30/99 - 11/15/01, market value - $163,282 160,000 160,000
70,085 70,085 Morgan Stanley, 6.50%,1/2/98 (Collateralized by
$71,601 various U.S. Treasury Securities,
5.50% - 6.13%, 11/30/98 - 11/15/27,
market value - $71,515) 70,085 70,085
58,411 58,411 Nomura Securities, 6.58%, 1/2/98 (Collateralized by
$56,529 various U.S. Treasury Securities,
0.00% - 7.50%, 1/22/98 - 2/15/20,
market value - $59,579) 58,411 58,411
60,000 60,000 Prudential Securities, 6.60%, 1/2/98
(Collateralized by $54,965 various U.S.
Treasury Notes, 6.88%, 5/15/06 - 8/15/25,
market value - $61,207) 60,000 60,000
70,085 70,085 UBS Securities, 6.70%, 1/2/98 (Collateralized by
$238,542 U.S. Treasury Strips, 0.00 %,
5/15/13 - 8/15/22, market value - $71,487) 70,085 70,085
60,000 60,000 Wachovia, 6.00%, 1/2/98 (Collateralized by $61,515
various U.S. Treasury
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP U.S TREASURY SECURITIES MONEY MARKET FUND / MARQUIS TREASURY
SECURITIES MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
- ---------- ----------- ------------- --------------------------------------------------- -------------- ------------- -----------
<S><C>
Securities, 0.00% - 8.00%, 3/26/98 - 8/15/99,
market value - $61,217) 60,000 60,000
--------- --------- ---------
Total Repurchase Agreements 1,188,751 2,944,317 4,133,068
--------- --------- ---------
Total (Cost $4,954,503)(a) 1,422,650 3,531,853 4,954,503
--------- --------- ---------
--------- --------- ---------
</TABLE>
_________
Percentages indicated are based on net assets of $4,942,249.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
(b) With respect to the One Group Fund only, a portion of this security was
loaned as of December 31, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP MUNICIPAL MONEY FUND / MARQUIS TAX EXEMPT MONEY MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
---------- -------- -------- ----------------------------------------------------- --------- --------- ---------
<S><C>
DAILY DEMAND NOTES (8.4%):
Alabama (1.0%):
4,100 4,100 Phenix City, IDR for Mead, AMT, 5.10%, 3/1/31, LOC:
Bayerische Landesbank* 4,100 4,100
3,000 3,000 Phenix City, IDR for Mead, Series 93-A, AMT, 5.10%,
6/1/28, LOC: Toronto Domimion Bank* 3,000 3,000
-------
7,100 7,100
------- -------
District of Columbia (0.4%):
2,700 2,700 General Fund Recovery, Series B-3, 5.00%, 6/1/03* 2,700 2,700
------- -------
Georgia (0.2%):
700 700 Burke County Pollution Control Authority, Georgia
Power Company Project, 5.05%, 9/1/25* 700 700
200 200 Effingham County Pollution Control Development
Authority, Savannah Electric & Power Co. Project,
5.05%, 4/1/37* 200 200
500 500 Hospital Finance Authority, 4.95%, 3/1/01* 500 500
------- -------
1,400 1,400
------- -------
Illinois (0.5%):
3,400 3,400 Health Facilities Authority Revenue, Central Dupage
- Healthcorp Project, 5.10%, 11/1/20, LOC: Rabobank* 3,400 3,400
------- -------
Indiana (0.0%):
200 200 Rockport Pollution Control Revenue Refunding, AEP
Generating Co., Project B, 5.10%, 7/1/25* 200 200
------- -------
Iowa (0.0%):
100 100 State Higher Education Loan Authority Revenue,
Educational Facility, Palmer Chiropractor Project,
5.35%, 4/1/27* 100 100
------- -------
Michigan (1.1%):
5,700 5,700 Cornell Township Economic Development Corp., Mead
Escanaba Paper, 5.00%, 11/1/16, LOC: Swiss Bank* 5,700 5,700
2,600 2,600 University of Michigan, Hospital Revenues, Series
92A, 5.10%, 12/1/19* 2,600 2,600
------- -------
8,300 8,300
------- -------
Missouri (0.3%):
2,000 2,000 Development Finance Board, Union Station Project
1997 B, 4.50%, 12/1/03, LOC: CIBC* 2,000 2,000
------- -------
Ohio (0.5%):
800 800 State Air Quality Development Authority, Cincinnati
Gas & Electric, 4.50%, 12/1/15, LOC: J.P. Morgan* 800 800
1,600 1,600 State Air Quality Development Authority, Cincinnati
Gas & Electric, 4.50%, 12/1/15, LOC: Union Bank of
Switzerland* 1,600 1,600
1,000 1,000 Twinsburg, IDR, United Stationers Project, AMT,
5.35%, 12/1/11, LOC: PNC Bank* 1,000 1,000
------- -------
3,400 3,400
------- -------
Oregon (0.3%):
2,500 2,500 Port of Portland, PCR, Reynolds Metals, 5.00%,
12/1/09, LOC: Bank of Nova Scotia* 2,500 2,500
------- -------
Pennsylvania (0.0%):
300 300 Schuylkill County Resource Recovery Revenue
Authority, Northeastern Power Company Project,
Series A, 5.10%, 12/1/22* 300 300
------- -------
Texas (2.1%):
11,400 11,400 Matagorda County, IDR, Houston Light & Power, 4.95%,
11/1/28, AMBAC 11,400 11,400
3,500 3,500 North Central Health Facility Development Corp.
Revenue, Presbyterian Medical Center, Series D,
5.00%, 12/1/15, MBIA* 3,500 3,500
------- -------
14,900 14,900
------- -------
Utah (0.1%):
800 800 West Valley City Industrial Development Revenue
Authority, Johnson Matthey Inc. Project, 5.00%,
11/1/11* 800 800
------- -------
Washington (0.5%):
1,250 1,250 Health Care Facilities, Fred Hutchinson, Series A,
5.10%, 1/1/18, LOC: Morgan Guaranty* 1,250 1,250
2,110 2,110 Health Care Facilities, Fred Hutchinson, Series B,
5.10%, 1/1/18, LOC: Morgan Guaranty* 2,110 2,110
------- -------
3,360 3,360
------- -------
Wyoming (1.4%):
6,200 6,200 Sublette County, PCR, 5.10%, 7/1/17, GTY: Exxon* 6,200 6,200
4,300 4,300 Sweetwater County, PCR, Refunding, Idaho Power Co.,
Project C, 5.10%, 7/15/26* 4,300 4,300
4,300 6,200 10,500
------- ------- -------
Total Daily Demand Notes 9,800 51,160 60,960
------- ------- -------
MONTHLY DEMAND NOTES (3.1%):
Hawaii (0.2%):
1,560 1,560 State Department of Budget & Finance, Kuakini
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP MUNICIPAL MONEY FUND / MARQUIS TAX EXEMPT MONEY MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
---------- -------- -------- ----------------------------------------------------- --------- --------- ---------
<S><C>
Medical Center Project, 3.80%, 7/1/04* 1,560 1,560
------- -------
Indiana (2.0%):
14,800 14,800 Gary Environmental Improvement Revenue, U.S.
Steel Corp. Project, 4.05%, 7/15/02, LOC: Bank
of Nova Scotia* 14,800 14,800
------- -------
Missouri (0.3%):
2,065 2,065 Osage Beach, Industrial Development Authority,
Health Care Realty, 4.05%, 1/1/11* 2,065 2,065
------- -------
Ohio (0.2%):
1,300 1,300 Columbus Electrical Systems Revenue, 3.70%, 9/1/09* 1,300 1,300
------- -------
Tennessee (0.3%):
360 360 Franklin County Health & Education Facilities
Revenue, 3.80%, 9/1/10* 360 360
1,800 1,800 Knox County Industrial Development Board,
Weisgarber Partners, 3.95%, 12/1/14* 1,800 1,800
------- -------
2,160 2,160
------- -------
West Virginia (0.1%):
800 800 Wood County Industrial Devlopment Revenue
Authority, AGA Gas Inc. Project, 3.90%, 10/1/98* 800 800
------- -------
Total Monthly Demand Notes
7,885 14,800 22,685
------- ------- -------
MUNICIPAL NOTES (18.7%):
California (2.5%):
3,250 15,000 18,250 State Revenue Anticipation Notes, 4.50%, 6/30/98 3,261 15,048 18,309
------- ------- -------
Colorado (1.4%):
10,000 10,000 State General Fund, Series A, 4.50%, 6/26/98 10,031 10,031
------- -------
Idaho (0.3%):
2,500 2,500 State Tansportation, GO, 4.63%, 6/30/98 2,509 2,509
------- -------
Illinois (0.1%):
295 295 Elgin, GO, Series A, 7.13%, 1/1/98 295 295
750 750 Kendall and Kane Counties, Community School
Districts Number 115, Yorkville Tax Anticipation
Notes, 4.40%, 1/21/98 750 750
------- -------
1,045 1,045
------- -------
Indiana (1.0%):
1,000 1,000 Benton, Community School Corp., Tax Anticipation
Warrants, 4.25%, 12/31/98 1,002 1,002
819 819 Bond Bank, Advance Funding Notes, 4.00% 1/21/98 819 819
885 885 Hammond Local Public Improvement, Advance Funding
Program Notes, Series A-1, 3.75%, 7/9/98 885 885
1,000 1,000 Perry Township, Multiple School Building
Corporation Revenue, 4.00%, 6/25/98 1,000 1,000
250 250 Purdue University, Student Fee Revenue, 6.10%,
7/1/98 253 253
2,000 2,000 Residential Apartments, 1 Portfolio Cert. Trust
1996, Series A, 4.30%, 12/1/02 2,000 2,000
1,500 1,500 State Advance Funding Notes, 3.90% 2/2/98 1,500 1,500
------- -------
7,459 7,459
------- -------
Kansas (0.1%):
940 940 Shawnee County, Tax Anticipation, Notes Series 1,
4.25%, 2/1/98 940 940
------- -------
Louisiana (0.1%):
501 501 State Recovery District Sales Tax, 4.25%, 7/1/98 501 501
------- -------
Maine (0.2%):
1,600 1,600 Health and Higher Education Facilities, New
England Incorporated Series C, 3.70%, 12/1/25* 1,600 1,600
------- -------
Massachusetts (0.6%):
800 800 Brockton GO, Revenue Anticipation Notes, 4.50%,
6/30/98 801 801
1,200 1,200 Fall River, Anticipation Notes, 4.25%, 6/15/98 1,201 1,201
1,000 1,000 Holyoke, Anticipation Notes, 4.25%, 3/6/98 1,001 1,001
1,000 1,000 New England Education Loan Marketing Corporation
Refunding, Student Loans Series C, 4.75%, 7/1/98 1,003 1,003
------- -------
4,006 4,006
------- -------
Michigan (2.9%):
105 105 Grand Rapids, Water Supply Revenue, Series 1988,
7.88%, 1/1/18, Callabe 1/1/98 @ 102 107 107
370 370 Kent Hospital Finance Authority, 6.50% 1/1/98 370 370
20,000 20,000 State Note, GO, 4.50%, 9/30/98 20,108 20,108
------- ------- -------
477 20,108 20,585
------- ------- -------
New Jersey (0.1%):
1,000 1,000 Ventnor City, Anticipation Notes, Series A,
4.25%, 4/30/98 1,000 1,000
------- -------
New Mexico (1.4%):
10,000 10,000 State Tax & Revenue Anticipation Notes, 4.50%,
6/30/98 10,031 10,031
------- -------
New York (0.5%):
500 500 Freeport, Tax and Revenue Anticipation Notes,
4.25%, 6/29/98 500 500
500 500 Lindenhurst, Tax and Revenue Anticipation Notes,
4.25%, 6/24/98 501 501
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
THE ONE GROUP MUNICIPAL MONEY FUND / MARQUIS TAX EXEMPT MONEY MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
---------- -------- -------- ----------------------------------------------------- --------- --------- ---------
<S><C>
700 700 Nassau County, Revenue Anticipation Notes, 4.25%,
10/31/98 701 701
1,000 1,000 North Hempstead, Anticipation Notes, Series A,
4.00% 1/29/98 1,000 1,000
750 750 North Hempstead, Anticipation Notes, Series C,
4.38% 5/6/98 750 750
------- -------
3,452 3,452
------- -------
North Dakota (0.1%):
215 215 Grand Forks Sales Tax Revenue, Aurora Project,
Series A, 3.80%, 6/15/98 215 215
------- -------
Ohio (0.1%):
1,000 1,000 Warren Anticipation Notes, Series 2, 4.70%,
1/13/98 1,000 1,000
------- -------
Pennsylvania (0.2%):
1,000 1,000 Norristown, Tax and Revenue Anticpation Notes,
4.05%, 12/31/98 1,000 1,000
750 750 Philadelphia School District Authority, Tax &
Revenue Anticipation Notes, 4.50%, 6/30/98 752 752
------- -------
1,752 1,752
------- -------
South Carolina (0.1%):
500 500 State Institution, Go, Series B, 7.00%, 4/1/98 504 504
------- -------
Tennessee (0.1%):
505 505 Germantown Refunding, 3.80%, 1/1/98 505 505
500 500 Nashville & Davidson County, Metro Government
Water and Sewer Revenue, 5.70%, 4/1/98 502 502
------- -------
1,007 1,007
------- -------
Texas (1.6%):
200 200 Bexar County Detention Facilities, GO, 7.25%,
6/15/98 203 203
290 290 San Antonio River Authority Import Revenue,
6.55%, 7/1/98 294 294
825 825 School District Limited Tax Obligation, Texas
Association of School Boards, Series D, 4.00%,
2/15/98 825 825
10,000 10,000 State Tax & Revenue Anticipation Notes, Series
97A, 4.75%, 8/31/98 10,058 10,058
------- ------- -------
1,322 10,058 11,380
------- ------- -------
Wisconsin (5.2%):
475 475 Clinton Community School District, Tax and
Revenue Anticipation Note, 4.19%, 8/31/98 475 475
500 500 Cudahy School District, Tax and Revenue
Anticipation Note, 4.19%, 9/29/98 500 500
775 775 Fox Point and Bayside Joint School District,
Unlimited Tax, GO, 4.20%, 4/10/98 775 775
11,405 11,405 Green Bay, Area Public School District, 3.84%,
2/2/98 11,405 11,405
1,000 1,000 Janesville Promissary Notes, 4.70%, 6/1/98 1,003 1,003
380 380 Janesville Unlimited Tax, GO, Water Utility
Improvements, 4.80%, 6/1/98 381 381
1,350 1,350 Menasha JT School District, 4.25% 10/13/98 1,352 1,352
315 315 Middletown Cross Plains Area School District,
4.88%, 4/1/98 316 316
1,000 1,000 Oregon School District, Tax and Revenue
Anticipation Notes, 4.22%, 9/16/98 1,001 1,001
20,000 20,000 State Operating Notes, 4.50%, 6/15/98 20,059 20,059
------- ------- -------
5,803 31,464 37,267
------- ------- -------
Wyoming (0.1%):
265 265 University of Wyoming, Revenue Refunding,
4.00%, 6/1/98 265 265
------- -------
Total Municipal Notes 35,609 99,249 134,858
------- ------- -------
PUT BONDS (3.4%):
Arizona (0.8%):
6,000 6,000 Cochise County, PCR, Arizona Electric Power Corp.,
Series A, AMT, 3.80%, 9/1/24 6,000 6,000
------- -------
Missouri (0.6%):
4,175 4,175 State Environmental Improvement & Energy, Union
Electric Co., Series B, 3.95%, 6/1/14, LOC:
Union Bank of Switzerland 4,175 4,175
------- -------
North Dakota (0.3%):
2,100 2,100 Mercer County, Solid Waste Disposal Revenue,
National Rural Utility Power Project, Series U,
3.80%, 12/1/18 2,100 2,100
------- -------
Ohio (1.5%):
380 380 Bellevue, Revenue Bonds, Bellevue Hospital
Project, 3.85%, 3/1/17* 380 380
11,000 11,000 Housing Finance Agency, Series 1997 A-2, ATM,
3.65%, 3/2/98, GIC: AIG 11,000 11,000
------- ------- -------
380 11,000 11,380
------- ------- -------
Pennsylvania (0.2%):
1,200 1,200 State Higher Education Facility Authority, Thomas
Jefferson University, Series B, 3.80%, 2/18/98 1,200 1,200
------- -------
Total Put Bonds 1,580 23,275 24,855
------- ------- -------
SEMI ANNUAL DEMAND NOTES (0.4%):
Florida (0.1%):
530 530 Orange County Industrial Development Authority,
Orlando Hawaiian Motel Company, 3.90%, 10/1/15* 530 530
------- -------
Michigan (0.1%):
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP MUNICIPAL MONEY FUND / MARQUIS TAX EXEMPT MONEY MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
---------- -------- -------- ----------------------------------------------------- --------- --------- ---------
<S><C>
620 620 Oakland County, Economic Development Corp.,
Limited Obligation Revenue, Corners Shopping
Center, 3.65%, 8/1/15* 620 620
------- -------
Minnesota (0.1%):
325 325 Hutchinson Economic Development Authority
Revenue, Diversified Developer Project, 3.85%,
8/15/06, Callable 2/16/98 @ 100 325 325
------- -------
Ohio (0.0%):
260 260 Clermont County, Economic Development Revenue,
Eastmark Center Association Project, 3.80%,
12/1/09* 260 260
------- -------
South Carolina (0.1%):
1,000 1,000 Charleston Center Mortgage Authority,
Adjustable Rate Certificate Project, 3.75%,
3/1/02 1,000 1,000
------- -------
Texas (0.0%):
125 125 Corpus Christi, Industrial Development Authority,
Air Inventory Co. Project, 3.90%, 8/1/11* 125 125
------- -------
Wyoming (0.0%):
250 250 Cheyenne County, Revenue Refunding, Holiday Inn
Project, 3.90%, 10/1/10* 250 250
------- -------
Total Semi Annual Demand Notes 3,110 3,110
------- -------
TAX FREE COMMERCIAL PAPER (6.7%):
Alabama (2.0%):
5,000 5,000 Phenix IDR, Mead Paper, AMT, 3.75%, 1/26/98,
LOC: ABN AMRO 5,000 5,000
5,000 5,000 Phenix IDR, Mead Paper, AMT, 3.80%, 2/2/98,
LOC: ABN AMRO 5,000 5,000
4,000 4,000 Phenix IDR, Mead Paper, AMT, 3.80%, 2/2/98,
LOC: ABN AMRO 4,000 4,000
------- -------
14,000 14,000
------- -------
Arizona (0.3%):
2,000 2,000 Mesa Municipal Development Corp., 3.70%, 1/15/98,
LOC: West Deutsche Landesbank 2,000 2,000
------- -------
Illinois (0.1%):
1,000 1,000 Education Facilities Authority, 3.75%, 4/7/98 1,000 1,000
------- -------
Michigan (1.0%):
7,500 7,500 State Builders Authority Revenue, 3.75%, 3/2/98,
LOC: CIBC 7,500 7,500
------- -------
Ohio (1.2%):
5,100 5,100 Air Quality Development Authority, CEI, 3.80%,
1/14/98, FGIC 5,100 5,100
3,500 3,500 Water Development Authority, CEI, 3.75%, 2/2/98, FGIC 3,500 3,500
------- -------
8,600 8,600
------- -------
Pennsylvania (0.8%):
6,100 6,100 Delaware IDR, Philadelphia Electric, 3.70%,
1/21/98, FGIC 6,100 6,100
------- -------
Texas (0.7%):
5,000 5,000 Brazos River Utilities, AMT, 3.80%, 2/6/98, LOC:
Union Bank of Switzerland 5,000 5,000
------- -------
West Virginia (0.6%):
4,500 4,500 State Public Authority Energy Revenue, Morgantown
Assoc. Project, AMT, 3.90%, 2/9/98, LOC: Swiss Bank 4,500 4,500
------- -------
Total Tax Free Commercial Paper 1,000 47,700 48,700
------- ------- -------
WEEKLY DEMAND NOTES (59.4%)::
Alabama (0.2%):
1,095 1,095 State Housing Finance Authority, Multifamily
Residential Development Series B, 3.95%, 12/1/14* 1,095 1,095
------- -------
Alaska (0.8%):
5,900 5,900 Anchorage, Higher Education Revenue, Alaska
Pacific University, 3.75%, 7/1/17, LOC:
Seattle-First National Bank* 5,900 5,900
------- -------
Arizona (0.1%):
500 500 Tuscon Industrial Development Authorithy,
Tuscon City Center Parking Garage Project, 4.28%,
6/1/15* 500 500
------- -------
Arkansas (1.5%):
8,100 8,100 Clark County, Solid Waste Disposal Revenue,
Reynolds Metals Co. Project, AMT, 3.95%, 8/1/22,
LOC: Trust Co. Bank* 8,100 8,100
2,900 2,900 Clark County, Solid Waste Disposal, AMT, 3.95%,
8/1/22, LOC: SunTrust Bank 2,900 2,900
------- -------
11,000 11,000
------- -------
Colorado (2.3%):
3,000 3,000 Housing Finance Authority, Pool I, Series B,
Coventry Village, 3.85%, 10/15/16, FNMA* 3,000 3,000
2,150 2,150 Housing Financing Authority, Cambray Park
Project, 4.25%, 5/1/15* 2,150 2,150
1,500 1,500 Smith Creek Metropolitan District Authority,
4.20%, 10/1/35* 1,500 1,500
2,500 2,500 Student Obligation Bond Authority, 90-A, AMT,
3.75%, 9/1/24, SLMA* 2,500 2,500
5,600 5,600 Student Obligation Bond Authority, AMT, 3.75%,
7/1/20, SLMA* 5,600 5,600
1,860 1,860 Woodstream Housing Financial Authority, 4.25%,
6/1/05* 1,860 1,860
------- ------- -------
5,510 11,100 16,610
------- ------- -------
District of Columbia (1.3%):
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP MUNICIPAL MONEY FUND / MARQUIS TAX EXEMPT MONEY MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
---------- -------- -------- ----------------------------------------------------- --------- --------- ---------
<S><C>
9,705 9,705 Metro Washington D.C. Airports Authority
Trust Receipts, 4.30%, 10/1/16, LIQ: Societe
General* 9,705 9,705
------- -------
Florida (2.4%):
1,425 1,425 Brevard County Housing Finance Authority
Revenue, Park Village & Malobar Lakes Project,
3.85%, 12/1/10* 1,425 1,425
825 825 Lee County Industrial Development Authority,
Christ Mission-Shell Point Villiage, 4.07%,
4/1/10* 825 825
2,450 2,450 Putnam County Pollution Control Revenue,
Seminole Electric H-2, 3.85%, 3/15/14* 2,450 2,450
10,000 10,000 State Housing Finance Authority, Woodlands Apt.
Project 85S, 3.65%, 12/1/17, LOC: Citibank* 10,000 10,000
430 430 State Multi-Family Housing Finance Authority,
Lakeside Project, Series B, 4.28%, 8/1/06* 430 430
2,395 2,395 State, Gulf Coast University, 4.15%, 8/1/27* 2,395 2,395
------- ------- -------
7,525 10,000 17,525
------- ------- -------
Georgia (4.8%):
700 700 De Kalb County Industrial Development Authority,
4.40%, 2/1/03* 700 700
13,000 13,000 De Kalb Private Hospital Authority Revenue,
Egleston Children's Hospital, Series A, 3.70%,
3/1/24, LOC: SunTrust Bank* 13,000 13,000
3,735 3,735 Gwinnett County Housing Authority, Herrington
Woods Apts., Series 96A, AMT,4.31%, 9/15/26,
LOC: KeyBank* 3,735 3,735
2,500 2,500 Marietta Multi-Family Revenue Authority, Franklin
Walk Apartments Project, 3.80%, 8/1/08* 2,500 2,500
15,000 15,000 Municipal Electric Authority, 3.85%, 1/1/26,
LOC: ABN-AMRO* 15,000 15,000
------- ------- -------
3,200 31,735 34,935
------- ------- -------
Hawaii (0.1%):
State Multifamily Housing Authority, Tropicana
1,000 1,000 West Project, Series A, 3.80%, 8/1/10 1,000 1,000
------- -------
Idaho (0.2%):
1,025 1,025 Nez Perce County Pollution Control Revenue,
4.05%, 2/1/14* 1,025 1,025
------- -------
Illinois (8.4%):
11,300 11,300 Chicago O'Hare International Airport Revenue,
Second Lien, Series B, AMT, 3.75%, 1/1/18, LOC:
Societe Generale* 11,300 11,300
5,200 5,200 Development Finance Authority Revenue, Aurora
Central Catholic High School, 4.00%, 4/1/24, LOC:
Nothern Trust* 5,200 5,200
1,000 1,000 Development Finance Authority Revenue, Casa Central
Padres Project, 4.23%, 8/1/26* 1,000 1,000
3,000 3,000 Development Finance Authority Revenue, Catholic
Charities Housing Project, Series B, 4.05%, 1/1/28* 3,000 3,000
3,700 3,700 Development Finance Authority Revenue,
Presbyterian Home Lake Forrest Place Project,
4.00%, 9/1/31, LOC: LaSalle National Bank* 3,700 3,700
4,500 4,500 Development Finance Authority Revenue, Roosevelt
University Project, 4.00%, 4/1/25, LOC: American
National Bank* 4,500 4,500
5,900 5,900 Development Finance Authority Revenue, Special
Facility, Little City Foundation, 4.00%, 2/1/19,
LOC: LaSalle National Bank* 5,900 5,900
1,625 1,625 Development Finance Authority Revenue, St. Pauls,
House Project, 4.00%, 2/1/25, LOC: LaSalle
National Bank* 1,625 1,625
1,300 1,300 Development Financial Authority Revenue, Series
84, 4.29%, 12/1/09* 1,300 1,300
1,000 1,000 Development Financial Authority Revenue, Village
of Oak Park Residence, 4.10%, 9/1/26* 1,000 1,000
1,700 1,700 Health Facility Authority Revenue, Advocate Health
Care Project, Series B, 3.80%, 8/15/22* 1,700 1,700
1,700 1,700 Health Facility Authority Revenue, Central Health &
Community Project, Series C, 4.00%, 10/1/15* 1,700 1,700
1,500 1,500 Health Facility Authority Revenue, Pekin Memorial
Hospital Project, 4.20%, 8/15/17* 1,500 1,500
3,000 3,000 Health Facility Authority Revenue, Washington &
Jane Smith Home, 3.85%, 7/1/26, LOC: Comerica Bank* 3,000 3,000
7,640 7,640 Jacksonville Industrial Project Revenue, AGI, Inc.
Project, AMT, 4.25%, 2/1/26, LOC: Bank of America* 7,640 7,640
1,230 1,230 Lombard IDR, Chicago Roll Co. Project, 4.45%,
2/1/10, LOC: American National Bank* 1,230 1,230
200 200 McCook, Revenue, St. Andrew Society Project Ser.
1996 A, 4.10%, 12/1/21 200 200
600 2,000 2,600 Orland Hills, Mulit-Family Mortgage Revenue, 88th
Avenue Project, 4.00%, 12/1/04, LOC: LaSalle
National Bank* 600 2,000 2,600
2,500 2,500 Regional Transportation Authority Trust Receipts,
4.25%, 6/1/25, LIQ: Societe Generale* 2,500 2,500
------- ------- -------
12,000 48,595 60,595
------- ------- -------
Indiana (7.2%):
2,400 2,400 Fort Wayne Hospital Authority, Parkview Memorial
Hospital, Series B, 3.65%, 1/1/16* 2,400 2,400
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP MUNICIPAL MONEY FUND / MARQUIS TAX EXEMPT MONEY MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
---------- -------- -------- ----------------------------------------------------- --------- --------- ---------
<S><C>
14,600 14,600 Health Facility Financing Authority,
Rehabilitation Hospital, Inc., 3.70%,
11/1/20, LOC: National Bank of Detroit* 14,600 14,600
2,300 2,300 Health Facility Financing Authority Revenue,
Capital Access Designated Pool, 3.75%, 12/1/02,
LOC: Comercia Bank* 2,300 2,300
2,000 2,000 Health Facility Funding Revenue, Community
Hartsfield Village Project, Series B, 4.00%,
8/15/27* 2,000 2,000
5,400 5,400 Hospital Equipment Financing Authority, Revenue
Insured, Series A, 3.75%, 12/1/15, MBIA 5,400 5,400
5,600 5,600 Indianapolis Economic Development Revenue,
Children's Museum Project, 4.15%, 10/1/25,
LOC: National Bank of Detroit* 5,600 5,600
3,450 3,450 Jasper Economic Development Revenue, Best Chairs,
Inc. Project, AMT, 4.40%, 3/1/19, LOC: PNC Bank* 3,450 3,450
16,200 16,200 Rockport, PCR, Indiana & Michigan Electric Co.,
Series A, 3.85%, 8/1/14, LOC: Swiss Bank* 16,200 16,200
------- ------- -------
4,400 47,550 51,950
------- ------- -------
Kentucky (0.7%):
490 490 Calloway County Fire Revenue Bond, 4.22%,
12/1/31* 490 490
455 455 Covington Industrial Building Revenue Authority,
Atkins & Pearce Inc. Project, 4.20%, 4/1/05* 455 455
750 750 Louisville Industrial Development Revenue,
Zeochem Project, 4.00%, 9/1/01* 750 750
3,500 3,500 Mayfield, League of Cities Lease Finance Program
96, 3.90%, 7/1/26, LOC: PNC Bank* 3,500 3,500
------- ------- -------
1,695 3,500 5,195
------- ------- -------
Louisiana (0.7%):
2,300 2,300 New Orleans Industrial Development Board,
Spectrum Control Technology Project, 4.25%,
3/1/07* 2,300 2,300
2,700 2,700 Public Facilities, Sisters of Charity, 3.70%,
7/1/23* 2,700 2,700
------- -------
5,000 5,000
------- -------
Michigan (5.0%):
19,500 19,500 Higher Education Student Loan, Series B, AMT,
3.75%, 10/1/13, AMBAC* 19,500 19,500
800 800 Jackson County, Economic Development Corp.
Ltd, Thrifty Leoni Inc. Project, 4.28%, 12/1/14* 800 800
1,560 1,560 State Strategic Fund, Limited Obligation, Wayne
Disposal Oakland 1,560 1,560
Project, AMT, 4.00%, 3/1/05, LOC: Credit Suisse-
First Boston*
13,940 13,940 Wayne County Airport Revenue (Detroit Airport),
Series B, AMT, 3.75%, 12/1/16, LOC: Bayerische
Landesbank* 13,940 13,940
------- ------- -------
800 35,000 35,800
------- ------- -------
Minnesota (0.2%):
1,530 1,530 Roseville Multifamily Housing Revenue, Rosepointe
II Project, 4.25%, 10/1/27* 1,530 1,530
------- -------
Missouri (0.4%):
1,965 1,965 Kansas City Industrial Development Hospital
Authority Revenue, Baptist Health System
Project, Series A, 4.00%, 8/1/18* 1,965 1,965
965 965 Saint Louis Industrial Revenue, Kinder Care,
Series C, 3.90%, 2/1/01* 965 965
------- -------
2,930 2,930
------- -------
Nebraska (0.1%):
1,020 1,020 Hamilton County Industrial Development Revenue,
The Iams Co. Project, 4.25%, 7/1/05, Callable
2/1/98 @ 100* 1,020 1,020
------- -------
Nevada (5.4%):
11,200 11,200 Clark County, IDR, Nevada Power Co. Project,
Series A, 3.95%, 10/1/30, LOC: Barclays Bank* 11,200 11,200
5,000 5,000 Clark County, Limited Tax GO, 1996 Las Vegas
Convention Trust Receipts, 4.25%, 7/1/26, FSA,
LIQ: Societe Generale* 5,000 5,000
2,215 2,215 Clark County, PCR, Nevada Power Co. Project,
Series C, 3.85%, 10/1/30, LOC: Barclays Bank* 2,215 2,215
375 375 Henderson Public Improvement Trust Mutlifamily
Housing Revenue Authority, Pueblo II Project,
Series B, 4.35%, 8/1/26 375 375
9,300 9,300 Lancaster County, Hospital Authority, Bryan
Memorial Hospital, 3.65%, 6/1/12, MBIA* 9,300 9,300
11,000 11,000 Muninipal Securities Trust Receipts, SGB 31,
GO, 4.25%, 3/1/23, LIQ: Societe Generale* 11,000 11,000
------- ------- -------
375 38,715 39,090
------- ------- -------
North Carolina (0.2%):
1,525 1,525 Beaufort County, Industrial Facility & Pollution
Control Authority, Texasgulf Inc. Project,
4.25%, 12/1/00 1,525 1,525
------- -------
Ohio (3.9%):
3,500 3,500 Franklin County Hospital Revenue, Holy Cross
Health Systems, 4.15%, 6/1/16, LIQ: Morgan
Guaranty* 3,500 3,500
800 800 Loraine County Hospital Revenue Authority,
Elyria United Methodist Project, Series B,
4.00%, 6/1/12* 800 800
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP MUNICIPAL MONEY FUND / MARQUIS TAX EXEMPT MONEY MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
---------- -------- -------- ----------------------------------------------------- --------- --------- ---------
<S><C>
7,900 7,900 State Air Quality Development Authority
Revenue, JMG Funding Ltd. Partnership,
Series A, AMT, 3.90%, 4/1/28, LOC: Societe
Generale* 7,900 7,900
5,300 5,300 State Air Quality Development Authority,
JMG Funding Ltd. Partnership, AMT, 3.90%,
4/1/29, LOC: Societe Generale* 5,300 5,300
2,800 2,800 State Air Quality Development Revenue Bond,
Timken Co. Project, AMT, 3.70%, 6/1/01, LOC:
Credit Suisse* 2,800 2,800
2,000 2,000 State Water Development Authority, Timken Co.
Project, 3.70%, 6/1/01, LOC: Credit Suisse* 2,000 2,000
5,500 5,500 State Water Development Authority Revenue, Timken
Co. Project, 3.70%, 5/1/07, LOC: Wachovia Bank* 5,500 5,500
------- ------- -------
800 27,000 27,800
------- ------- -------
Oklahoma (0.1%)::
1,000 1,000 Muskogee Industrial Trust Revenue, Warmack-
Muskogee Ltd., 4.20%, 12/1/15* 1,000 1,000
------- -------
Oregon (0.2%):
1,200 1,200 Hillsboro, Graduate Institute, 4.25%, 8/1/11* 1,200 1,200
------- -------
Pennsylvania (3.4%):
100 100 Bucks County Industrial Development Authority,
Edgecomb Metals Project, 4.15%, 10/1/09 100 100
1,500 1,500 Chester County, Health & Education Facilities
Authority, Barclay Friends Project, Series A,
3.70%, 8/1/25* 1,500 1,500
1,100 1,100 Clarion County, Industrial Development
Authority, Meritcare Inc. Project, Series A,
4.25%, 12/1/12* 1,100 1,100
5,000 5,000 Dauphin County, General Authority, Pooled
Finance, Project II, 3.90%, 9/1/32* 5,000 5,000
100 100 Emmaus General Revenue Authority, 4.00%, 12/1/28* 100 100
5,400 5,400 Montgomery County, Higher Education and Health
Revenue Authority, Series A, 4.00%, 6/1/21* 5,400 5,400
10,115 10,115 New Castle Area Jameson Hospital, 3.85%, 7/1/26,
FSA* 10,115 10,115
1,000 1,000 Schuylkill County Industrial Development Authority,
Gilberton Power Project, 3.70%, 12/1/02* 1,000 1,000
------- ------- -------
14,200 10,115 24,315
------- ------- -------
South Carolina (0.2%):
1,700 1,700 Cherokee County, Industrial Revenue, Oshkosh
Truck Corp. Project, AMT, 4.20%, 8/1/19, LOC:
Bank of Nova Scotia* 1,700 1,700
------- -------
Tennessee (0.7%):
1,000 1,000 Jefferson County Industrial Development, Ball
Corp. Project, 4.40%, 4/1/98, LOC: PNC Bank* 1,000 1,000
3,800 3,800 Oak Ridge Industrial Development Board,
Economic Development Revenue, Limited
Obligation, 3.90%, 5/1/09, LOC: ABN AMRO* 3,800 3,800
------- ------- -------
1,000 3,800 4,800
------- ------- -------
Texas (5.3%):
14,100 14,100 Capital Health Facilities Development Corp.,
Island on Lake Travis Ltd. Project, AMT, 3.75%,
12/1/16, LOC: Credit Suisse* 14,100 14,100
4,000 4,000 Lower Colorado River Authority, Texas Electricity
Revenue, 3.65%, 1/1/13, MBIA* 4,000 4,000
12,000 12,000 Panhandle Plains Higher Education Inc., Student
Loan Revenue, Series A, AMT, 3.75% 6/1/21, SMLA* 12,000 12,000
8,400 8,400 Panhandle Plains Higher Education Inc., Student
Loan Revenue, Series A, AMT, 3.75%, 6/1/23, SLMA* 8,400 8,400
------- -------
38,500 38,500
------- -------
Utah (1.8%):
1,200 1,200 Salt Lake City Airport Revenue, Sub Series A,
AMT 3.75%, 6/1/98, LOC: Credit Suisse* 1,200 1,200
1,800 1,800 Salt Lake City Revenue Authority, Pooled Project,
3.65%, 1/1/20* 1,800 1,800
10,000 10,000 University Revenues, Auxiliary & Campus Facilities,
Series A, 3.85%, 4/1/27, LOC: Bank of Nova Scotia* 10,000 10,000
------- ------- -------
1,800 11,200 13,000
------- ------- -------
Washington (0.9%):
3,925 3,925 Pierce County, NN Banking Co., AMT, 4.30%, 7/1/03,
LOC: U.S. Bank of Washington* 3,925 3,925
2,500 2,500 State GO, Municipal Securities, Trust Receipts,
4.25%, 7/1/16, LIQ: Societe Generale* 2,500 2,500
------- -------
6,425 6,425
------- -------
West Virginia (0.9%):
2,300 2,300 Marion County Community Solid Waste Disposal
Facility Revenue, Grant Town, AMT, 3.80%,
10/1/17, LOC: National Westminister* 2,300 2,300
4,500 4,500 Marion County Community Solid Waste Disposal
Facility Revenue, Grant Town, AMT, 3.75%,
10/1/17, LOC: National Westminister* 4,500 4,500
------- -------
6,800 6,800
------- -------
Total Weekly Demand Notes 71,130 358,340 429,470
------- ------- -------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP MUNICIPAL MONEY FUND / MARQUIS TAX EXEMPT MONEY MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
---------- -------- -------- ----------------------------------------------------- --------- --------- ---------
<S><C>
Total (Cost $724,638) (a) 130,114 594,524 724,638
------- ------- -------
------- ------- -------
</TABLE>
_______________
Percentages indicated are based on net assets of $722,731.
(a) Cost and value for frderal income tax and financial reporting purposes are
the same.
* Variable rate securities having liquidity agreements. The interest rate,
which will change periodically, is based upon an index of of market rates.
The rate reflected on the Schedule of Portfolio Investments is the rate in
effect at December 31, 1997.
AMBAC Insured by AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
BAN Bond Anticipation Notes
FGIC Insured by Financial Guaranty Insurance Corp.
FSA Insured by Financial Security Assurance
GIC Guaranteed Investment Contract
GNMA Government National Mortgage Association
GO Gereral Obligation
GTY Guaranty
FNMA Federal National Mortgage Association
IDR Industrial Development Revenue
LIQ Liquidity Agreement
LOC Letter of Credit
MBIA Insured by Municipal Bond Insurance Association
PCR Pollution Control Revenue
SLMA Student Loan Marketing Association
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GOVERNMENT BOND FUND / MARQUIS GOVERNMENT SECURITIES FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- ----------- --------- --------- --------------------------------------------------- -------- ---------- -----------
<S><C>
CORPORATE OBLIGATIONS (0.2%):
600 600 Anheuser Busch Co., Inc., 8.75%, 12/1/99 630 630
500 500 General Foods Corp., 6.00%, 6/15/01 495 495
500 500 Lehman Brothers Holdings, Inc., 6.38%, 6/1/98 501 501
500 500 Pepsico, Inc., 7.63%, 12/18/98 506 506
--------- ---------
Total Corporate Obligations 2,132 2,132
--------- ---------
U.S. GOVERNMENT AGENCY MORTGAGES (66.7%):
Federal Home Loan Mortgage Corp. (27.6%):
10 10 7.00%, 4/1/00, Pool #253036 10 10
8,480 8,480 6.00%, 4/15/01, Gold Balloon, Pool # G50347 8,430 8,430
4,086 4,086 7.50%, 11/15/01, Pool #1318-JB, CMO 4,168 4,168
1,925 1,925 6.70%, 5/15/05, Pool #1233-F, CMO 1,939 1,939
673 673 9.00%, 11/1/05, Pool # B0-0203 703 703
920 920 9.00%, 5/1/06, Series # B0-0282 961 961
1,000 1,000 7.00%, 10/15/06, Series 1150, Class I 1,004 1,004
3,425 3,425 7.00%, 9/15/07, Series 1457-PJ, CMO 3,420 3,420
4,850 4,850 6.50%, 4/15/08, Pool #1489-I, CMO 4,851 4,851
5,181 5,181 7.50%, 4/1/09, Gold Pool #E00315 5,346 5,346
16,500 16,500 6.50%, 9/15/09, Series 1838 G, CMO 16,546 16,546
4,152 4,152 8.50%, 1/1/10, Gold Pool #G10305 4,312 4,312
30,000 30,000 6.50%, 7/1/12 30,188 30,188
4 4 9.50%, 4/1/16, Pool #170161 5 5
271 271 9.00%, 10/1/17, Gold Pool #A00756 290 290
201 201 9.00%, 4/1/18, Gold Pool #A01143 216 216
503 503 7.75%, 1/15/20, Pool #1136-F, CMO 503 503
62 62 9.00%, 10/1/20, Gold Pool #A01134 66 66
66 66 9.00%, 1/1/21, Gold Pool #A00948 71 71
500 500 7.25%, 2/15/21, Series 1464, CMO 510 510
59 59 9.00%, 4/1/21, Gold Pool #D04193 63 63
99 99 9.00%, 6/1/21, Gold Pool #A01017 106 106
103 103 9.00%, 7/1/21, Gold Pool #A01093 111 111
68 68 9.00%, 9/1/21, Gold Pool #D32271 72 72
53 53 9.00%, 11/1/21, Gold Pool #C00078 57 57
102 102 9.00%, 11/1/21, Gold Pool #D11191 109 109
108 108 9.00%, 11/1/21, Gold Pool #D11866 115 115
216 216 9.00%, 5/1/22, Gold Pool #D19203 231 231
76 76 9.00%, 5/1/22, Gold Pool #D19142 81 81
900 900 7.00%, 8/25/22, Series 13, Class PL 916 916
10,000 10,000 5.50%, 9/15/22, Series 1367 - K 9,124 9,124
5,200 5,200 6.50%, 11/15/22, Pool #1152 5,129 5,129
3,845 3,845 7.00%, 4/15/23, Pool #348645 3,896 3,896
6,680 6,680 10.00%, 10/15/23, Series 1591 E, CMO 7,593 7,593
8,837 8,837 6.00%, 10/15/23, Series 1785A 8,522 8,522
17,851 17,851 5.00%, 11/15/23, Series 1686 PG, CMO 16,979 16,979
4,432 4,432 8.50%, 5/1/24, Gold Pool #G00229 4,676 4,676
3,985 3,985 8.50%, 7/1/24, Gold Pool #C00354 4,175 4,175
6,916 6,916 7.50%, 9/1/24, Gold Pool #D56307 7,108 7,108
6,616 6,616 8.00%, 11/1/24, Gold Pool #C00376 6,870 6,870
2,873 2,873 7.50%, 5/1/25, Gold Pool #D59996 2,952 2,952
5,051 5,051 7.50%, 6/1/25, Gold Pool #C80321 5,192 5,192
4,001 4,001 7.50%, 8/1/25, Gold Pool #C00414 4,111 4,111
3,996 3,996 7.50%, 8/1/25, Gold Pool #C80334 4,106 4,106
4,348 4,348 7.00%, 8/1/25, Gold Pool #C00418 4,404 4,404
4,080 4,080 8.00%, 9/1/25, Gold Pool #D63705 4,233 4,233
4,270 4,270 7.00%, 9/1/25, Gold Pool #D63303 4,324 4,324
8,267 8,267 7.50%, 10/1/25, Gold Pool #C80349 8,489 8,489
9,011 9,011 6.50%, 2/1/26, Gold Pool #D68098 8,929 8,929
9,188 9,188 6.50%, 3/1/26, Gold Pool #G00453 9,105 9,105
11,884 11,884 7.00%, 4/1/26, Gold Pool #D69810 12,017 12,017
11,144 11,144 7.00%, 4/1/26, Gold Pool #D69811 11,269 11,269
4,796 4,796 6.50%, 6/1/26, Pool #250575 4,744 4,744
10,000 10,000 6.50%, 10/17/26, Series 1985, Class PL 9,815 9,815
- - 7.00%, 3/1/27, Pool #D78691 (c) - -
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GOVERNMENT BOND FUND / MARQUIS GOVERNMENT SECURITIES FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- ----------- --------- --------- --------------------------------------------------- -------- ---------- -----------
<S><C>
- - 7.00%, 4/1/27, Pool #C00512 (c) - -
14,983 14,983 6.50%, 11/1/27, Pool # C00568 14,810 14,810
9,900 9,900 7.00%, 12/1/27 9,974 9,974
--------- --------- ---------
21,689 256,257 277,946
--------- --------- ---------
Federal National Mortgage Assoc. (19.8%):
98 98 8.50%, 3/1/98, Pool #050418 101 101
8 8 8.50%, 3/1/98, Pool #115590 8 8
9,333 9,333 6.00%, 3/1/01, Pool #50783 9,222 9,222
174 174 7.00%, 9/1/02, Pool #250355 176 176
8,275 8,275 7.00%, 4/1/03, Pool #303876 8,386 8,386
1,282 1,282 7.50%, 5/1/03, Pool #347175 1,307 1,307
2,617 2,617 7.50%, 7/1/03, Pool #250656 2,669 2,669
61 61 6.50%, 4/1/04, Pool #85019 60 60
100 100 8.00%, 5/25/05, Series 1992-146 D, REMIC 105 105
6,703 6,703 7.00%, 7/17/05, Series 97-26 GD 6,844 6,844
150 150 6.25%, 2/25/07, Series 1993-129 Class E, REMIC 151 151
10,000 10,000 6.70%, 6/19/07 10,477 10,477
2,000 2,000 7.35%, 6/25/07, Pool 1993-11-N 2,010 2,010
2,892 2,892 7.00%, 9/1/07, Pool #185265 2,935 2,935
3,769 3,769 7.00%, 4/1/08, Pool #211750 3,824 3,824
1,000 1,000 6.25%, 1/25/09 989 989
8,000 8,000 6.00%, 6/25/09, Series 1994-86 PJ, CMO 7,802 7,802
3,620 3,620 7.00%, 7/1/10, Pool #250326 3,694 3,694
2,351 2,351 6.50%, 12/1/10, Pool #332301 2,362 2,362
13,132 13,132 6.00%, 3/1/11, Pool #340683 12,985 12,985
943 943 6.25%, 2/25/13, Series 1993-2 PC, CMO 939 939
3,596 3,596 6.35%, 8/25/13, Series 1993-225B VG, CMO 3,581 3,581
3,815 3,815 7.50%, 6/1/14, Pool #250081 3,918 3,918
3,156 3,156 7.50%, 7/1/14, Pool #250082 3,241 3,241
146 146 10.00%, 10/1/16, Pool #70110 159 159
7,109 7,109 10.00%, 9/1/17, Pool #303969 7,720 7,720
357 357 10.00%, 10/1/19, Pool #231675 389 389
10,000 10,000 7.00%, 5/25/20, Pool #1990-57 10,103 10,103
252 252 10.00%, 7/1/20, Pool #050318 274 274
5,584 5,584 6.50%, 5/25/21, Series 1992-205 K, CMO 5,539 5,539
5,000 5,000 7.00%, 9/25/21, Series G92-64 K, CMO 5,057 5,057
567 567 10.00%, 11/1/21, Pool #208374 618 618
528 528 10.00%, 11/1/21, Pool #208372 576 576
150 5,000 5,150 6.55%, 12/25/21, Pool #1993-137 PH, CMO 151 5,025 5,176
1,000 1,000 7.25%, 5/25/22, Series G93-9, Class K 1,007 1,007
800 800 7.50%, 7/25/22, Series G92-35, CMO 816 816
51 51 6.25%, 10/25/22, Pool #G92-61-B, REMIC 51 51
10,785 10,785 6.50%, 2/17/23, Series #G94-12 C, CMO 10,424 10,424
5,000 5,000 6.50%, 5/25/23, Series 1994-110 H, CMO 4,973 4,973
9,094 9,094 6.35%, 12/25/23, Series 1994-43 PJ, CMO 8,844 8,844
5,042 5,042 7.00%, 1/25/24, Series 1994-62 PJ, CMO 5,094 5,094
7,998 7,998 7.00%, 2/1/24, Pool #190257 8,085 8,085
3,114 3,114 9.00%, 12/1/24, Pool #353898 3,313 3,313
3,832 3,832 7.50%, 6/1/25, Pool #312899 3,935 3,935
4,294 4,294 7.00%, 8/1/25, Pool #315500 4,339 4,339
825 825 7.50%, 9/1/25, Pool #324749 846 846
3,656 3,656 7.50%, 9/1/25, Pool #322899 3,751 3,751
20,000 20,000 6.50%, 12/1/27, Pool #406732 19,744 19,744
--------- --------- ---------
6,737 191,882 198,619
--------- --------- ---------
Government National Mortgage Assoc. (19.3%):
2 2 10.50%, 6/15/98, Pool #068842 2 2
11 11 10.00%, 9/15/00, Pool #138814 12 12
8 8 10.00%, 12/15/00, Pool #136214 8 8
34 34 8.50%, 6/15/01, Pool #166491 35 35
4 4 8.50%, 7/15/01, Pool #161997 4 4
48 48 9.50%, 9/15/01, Pool #180786 51 51
5 5 9.00%, 9/15/01, Pool #174330 5 5
66 66 9.00%, 9/15/01, Pool #166928 69 69
16 16 9.50%, 11/15/01, Pool #182995 17 17
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GOVERNMENT BOND FUND / MARQUIS GOVERNMENT SECURITIES FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- ----------- --------- --------- --------------------------------------------------- -------- ---------- -----------
<S><C>
63 63 8.50%, 11/15/01, Pool #179383 65 65
68 68 9.00%, 12/15/01, Pool #187723 72 72
44 44 8.50%, 12/15/01, Pool #199837 46 46
69 69 8.00%, 3/15/02, Pool #205933 72 72
9 9 9.00%, 7/15/02, Pool #227176 10 10
155 155 9.00%, 5/15/03, Pool #154134 163 163
117 117 9.00%, 6/15/05, Pool #283904 123 123
43 43 9.00%, 8/15/05, Pool #291836 45 45
24 24 9.00%, 9/15/05, Pool #295227 26 26
53 53 9.00%, 9/15/05, Pool #292898 55 55
62 62 8.00%, 7/15/06, Pool #11337 65 65
31 31 7.50%, 7/15/07, Pool #17316 32 32
76 76 8.00%, 8/15/07, Pool #18677 80 80
66 66 8.00%, 8/15/07, Pool #18539 69 69
291 291 7.50%, 12/15/07, Pool #338189 300 300
1,121 1,121 6.50%, 7/15/08, Pool #349693 1,126 1,126
55 55 9.00%, 11/15/08, Pool #27932 59 59
109 109 6.50%, 3/15/09, Pool #367398 109 109
94 94 9.00%, 4/15/09, Pool #30352 101 101
16 16 9.00%, 5/15/09, Pool #32214 18 18
2,696 2,696 6.50%, 5/15/09, Pool #366779 2,709 2,709
6 6 9.50%, 7/15/09, Pool #34487 7 7
146 146 9.50%, 9/15/09, Pool #34878 159 159
37 37 9.50%, 10/15/09, Pool #36804 41 41
31 31 11.00%, 11/15/09, Pool #37615 34 34
1 1 12.00%, 4/15/15, Pool #125262 2 2
13 13 11.00%, 6/15/15, Pool #130125 14 14
76 76 9.00%, 5/15/16, Pool #149877 82 82
84 84 9.00%, 6/15/16, Pool #166130 91 91
15 15 9.00%, 6/15/16, Pool #157147 16 16
12 12 9.50%, 7/15/16, Pool #166772 14 14
166 166 9.00%, 7/15/16, Pool #151273 177 177
172 172 9.00%, 7/15/16, Pool #144968 184 184
88 88 9.00%, 7/15/16, Pool #167475 94 94
96 96 9.00%, 7/15/16, Pool #158921 105 105
75 75 9.50%, 8/15/16, Pool #177531 82 82
130 130 9.00%, 9/15/16, Pool #179044 142 142
289 289 9.00%, 9/15/16, Pool #169908 309 309
89 89 9.00%, 10/15/16, Pool #173089 95 95
149 149 9.00%, 11/15/16, Pool #156478 160 160
83 83 9.00%, 11/15/16, Pool #183868 89 89
22 22 9.50%, 1/15/17, Pool #185619 23 23
26 26 9.00%, 2/15/17, Pool #201757 27 27
343 343 9.00%, 2/15/17, Pool #195058 373 373
256 256 9.00%, 6/15/17, Pool #219079 278 278
43 43 9.50%, 8/15/17, Pool #224015 46 46
77 77 9.50%, 8/15/17, Pool #218841 84 84
411 411 9.50%, 8/15/17, Pool #201217 444 444
23 23 9.00%, 8/15/17, Pool #225825 25 25
103 103 9.00%, 6/15/18, Pool #238161 112 112
66 66 9.50%, 8/15/18, Pool #248390 72 72
19 19 9.00%, 10/15/18, Pool #253188 21 21
119 119 9.50%, 12/15/18, Pool #263400 130 130
159 159 10.00%, 4/15/19, Pool #257047 173 173
34 34 10.00%, 5/15/19, Pool #269607 37 37
5 5 10.00%, 6/15/19, Pool #271525 6 6
3 3 9.00%, 10/15/19, Pool #267676 3 3
59 59 9.00%, 11/15/19, Pool #162768 64 64
353 353 9.50%, 12/15/19, Pool #281696 382 382
65 65 9.00%, 1/15/20, Pool #283138 71 71
71 71 9.00%, 2/15/20, Pool #276157 77 77
123 123 9.00%, 3/15/20, Pool #285283 134 134
55 55 9.50%, 9/15/20, Pool #292918 60 60
79 79 9.50%, 12/15/20, Pool #291865 86 86
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GOVERNMENT BOND FUND / MARQUIS GOVERNMENT SECURITIES FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- ----------- --------- --------- --------------------------------------------------- -------- ---------- -----------
<S><C>
243 243 9.00%, 6/15/21, Pool #307120 264 264
14,334 14,334 9.00%, 8/15/21, Pool #306081 15,521 15,521
4,205 4,205 9.00%, 12/15/21, Pool #780284 4,512 4,512
32 32 7.50%, 2/15/22, Pool #324025 33 33
544 544 8.00%, 7/15/22, Pool #321560 568 568
713 713 7.50%, 8/15/22, Pool #337141 735 735
34 34 7.00%, 10/15/22, Pool #337175 35 35
193 193 7.00%, 11/15/22, Pool #323008 196 196
33 33 7.00%, 12/15/22, Pool #339969 33 33
40 40 7.00%, 1/15/23, Pool #321675 41 41
474 474 7.00%, 1/15/23, Pool #332022 480 480
391 391 7.00%, 1/15/23, Pool #342248 396 396
376 376 7.00%, 1/15/23, Pool #341536 381 381
235 235 7.00%, 1/15/23, Pool #346214 238 238
51 51 7.00%, 3/15/23, Pool #350110 52 52
698 698 7.00%, 5/15/23, Pool #351041 708 708
58 58 7.00%, 5/15/23, Pool #338005 59 59
765 765 7.00%, 5/15/23, Pool #346572 775 775
734 734 7.00%, 5/15/23, Pool #342348 744 744
620 620 7.00%, 5/15/23, Pool #221604 629 629
322 322 6.50%, 5/15/23, Pool #343208 321 321
3,791 3,791 7.50%, 6/15/23, Pool #358801 3,884 3,884
53 53 6.50%, 6/15/23, Pool #349788 53 53
76 76 6.50%, 6/15/23, Pool #346624 76 76
53 53 6.50%, 6/15/23, Pool #358250 52 52
378 378 6.50%, 6/15/23, Pool #348677 377 377
242 242 7.00%, 7/15/23, Pool #325977 246 246
544 544 7.00%, 7/15/23, Pool #360697 551 551
436 436 7.00%, 7/15/23, Pool #360889 442 442
344 344 7.00%, 7/15/23, Pool #353569 349 349
809 809 7.00%, 7/15/23, Pool #346673 820 820
433 433 7.00%, 7/15/23, Pool #358382 439 439
811 811 7.00%, 7/15/23, Pool #362982 822 822
30 30 7.00%, 7/15/23, Pool #354538 30 30
174 174 7.00%, 7/15/23, Pool #357782 176 176
23 23 7.00%, 7/15/23, Pool #350709 23 23
267 267 6.50%, 7/15/23, Pool #322200 266 266
310 310 6.50%, 8/15/23, Pool #344505 309 309
444 444 6.50%, 8/15/23, Pool #353137 443 443
174 174 6.50%, 8/15/23, Pool #359027 173 173
152 152 6.50%, 8/15/23, Pool #360713 152 152
591 591 6.50%, 8/15/23, Pool #356717 589 589
286 286 6.50%, 8/15/23, Pool #360738 285 285
764 764 6.50%, 9/15/23, Pool #345375 762 762
50 50 6.50%, 9/15/23, Pool #339041 50 50
3,615 3,615 8.00%, 10/15/23, Pool #354681 3,766 3,766
214 214 6.50%, 10/15/23, Pool #345391 213 213
392 392 6.00%, 10/15/23, Pool #345389 382 382
454 454 6.00%, 10/15/23, Pool #364717 442 442
34 34 6.00%, 10/15/23, Pool #370006 33 33
611 611 6.50%, 11/15/23, Pool #369356 609 609
19 19 6.50%, 11/15/23, Pool #370927 19 19
33 33 6.50%, 12/15/23, Pool #370289 33 33
603 603 6.50%, 12/15/23, Pool #369830 602 602
101 101 6.50%, 12/15/23, Pool #365740 101 101
954 954 6.50%, 12/15/23, Pool #349265 951 951
140 140 6.50%, 12/15/23, Pool #349944 140 140
650 650 6.50%, 1/15/24, Pool #379127 648 648
343 343 6.50%, 2/15/24, Pool #389200 342 342
1,177 1,177 6.50%, 2/15/24, Pool #362341 1,173 1,173
345 345 6.50%, 2/15/24, Pool #371999 344 344
21,202 21,202 6.50%, 2/15/24, Pool #354747 21,136 21,136
166 166 6.50%, 2/15/24, Pool #380818 166 166
282 282 6.50%, 2/15/24, Pool #370338 281 281
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GOVERNMENT BOND FUND / MARQUIS GOVERNMENT SECURITIES FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- ----------- --------- --------- --------------------------------------------------- -------- ---------- -----------
<S><C>
933 933 7.00%, 2/16/24, Series 1996-21, CMO 935 935
1,402 1,402 7.00%, 3/15/24, Pool #379328 1,413 1,413
688 688 7.00%, 3/15/24, Pool #391552 694 694
1,222 1,222 7.00%, 4/15/24, Pool #355128 1,232 1,232
1,724 1,724 7.00%, 4/15/24, Pool #379001 1,738 1,738
79 79 7.50%, 6/15/24, Pool #389827 82 82
524 524 7.50%, 6/15/24, Pool #388747 539 539
3,562 3,562 8.00%, 9/15/24, Pool #403212 3,711 3,711
377 377 8.00%, 9/15/24, Pool #393908 393 393
1,232 1,232 8.50%, 10/15/24, Pool # 407073 1,294 1,294
8,730 8,730 9.00% 11/15/24, Pool #780029 9,478 9,478
195 195 8.00%, 6/15/25, Pool # 385370 203 203
217 217 7.50%, 6/15/25, Pool #401860 222 222
2,000 2,000 8.00%, 7/15/25, Pool #377557 2,074 2,074
1,079 1,079 7.25%, 12/15/25, Pool #411361 1,100 1,100
4,657 4,657 7.00%, 1/15/26, Pool #417192 4,695 4,695
4,461 4,461 7.50%, 3/15/26, Pool #422308 4,583 4,583
142 142 7.50%, 3/15/26, Pool #381163 145 145
6,627 6,627 8.00% 5/15/26, Pool #416233 6,882 6,882
10,842 10,842 8.00%, 5/15/26, Pool #422690 11,260 11,260
9,463 9,463 8.00%, 7/15/26, Pool #412644 9,827 9,827
8,963 8,963 8.00%, 7/15/26, Pool #423877 9,308 9,308
231 231 8.00%, 8/15/26, Pool #436445 239 239
13,700 13,700 8.00%, 12/20/26, G2 Pool #2344 14,158 14,158
2,821 2,821 7.50%, 3/15/27, Pool #432398 2,891 2,891
4,893 4,893 6.50%, 7/20/27, Pool #80095 4,966 4,966
9,852 9,852 6.00%, 7/20/27, Pool #80094 9,975 9,975
10,000 10,000 7.00%, 12/15/27, Pool # 449494 10,087 10,087
--------- --------- ---------
26,873 166,895 193,768
--------- --------- ---------
Total U.S. Government Agency Mortgages 55,299 615,034 670,333
--------- --------- ---------
U.S. GOVERNMENT AGENCY SECURITIES (13.6%):
Federal Agricultural Mortgage Corp. (0.1%):
500 500 7.56%, 5/28/02 531 531
--------- ---------
Federal Farm Credit Bank (0.6%):
250 250 7.51%, 2/13/98 250 250
255 255 8.65%, 10/1/99 267 267
5,000 5,000 6.88%, 5/1/00 5,116 5,116
--------- --------- ---------
517 5,116 5,633
--------- --------- ---------
Federal Home Loan Bank (2.4%):
2,000 2,000 9.25%, 11/25/98 2,054 2,054
2,000 2,000 9.30%, 1/25/99 2,073 2,073
3,000 3,000 8.60%, 6/25/99 3,119 3,119
500 500 5.37%, 11/3/00 494 494
10,000 10,000 5.91%, 12/23/02 10,003 10,003
5,000 5,000 6.27%, 1/14/04 (b) 4,977 4,977
500 500 7.50%, 8/10/04 540 540
--------- --------- ---------
1,034 22,226 23,260
--------- --------- ---------
Federal Home Loan Mortgage Corp. (0.9%):
2,000 2,000 6.44%, 1/28/00 2,025 2,025
4,500 4,500 7.13%, 11/18/02 4,719 4,719
135 135 6.30%, 3/15/03 135 135
250 250 6.28%, 7/15/03 249 249
250 250 7.93%, 1/20/05 276 276
37 37 7.25%, 5/1/07, Pool #185801 38 38
680 680 9.00%, 8/1/09, Pool #279063 706 706
1,004 1,004 9.00%, 12/1/09, Pool #256360 1,067 1,067
--------- --------- ---------
2,471 6,744 9,215
--------- --------- ---------
Federal National Mortgage Assoc. (4.8%):
1,175 1,175 9.15%, 4/10/98 1,186 1,186
255 255 9.55%, 3/10/99 266 266
4,000 4,000 8.70%, 6/10/99 4,157 4,157
3,000 3,000 8.90%, 6/12/00 3,204 3,204
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GOVERNMENT BOND FUND / MARQUIS GOVERNMENT SECURITIES FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- ----------- --------- --------- --------------------------------------------------- -------- ---------- -----------
<S><C>
3,000 3,000 6.20%, 11/12/03 2,979 2,979
15,000 15,000 7.16%, 5/11/05 15,973 15,973
5000 10,000 15,000 5.88%, 2/2/06 (b) 4,944 9,902 14,846
5,000 5,000 6.67%, 2/6/06, Callable 2/6/98 @ 100 4,981 4,981
--------- --------- ---------
6,396 41,196 47,592
--------- --------- ---------
FICO STRIPS (0.2%):
180 180 10/5/05 113 113
334 334 12/27/05 207 207
500 500 10/6/06 295 295
1,000 1,000 11/11/06 587 587
500 500 12/27/06 291 291
--------- ---------
1,493 1,493
--------- ---------
Resolution Funding Corp. (1.9%):
50,000 50,000 Principal STRIPS, 7/15/20 (b) 12,436 12,436
15,000 15,000 Principal STRIPS, 10/15/20 3,674 3,674
15,000 15,000 Principal STRIPS, 4/15/28 2,431 2,431
5,000 5,000 Principal STRIPS, 4/15/30 719 719
--------- ---------
19,260 19,260
--------- ---------
Small Business Administration (0.0%):
7 7 9.35%, 7/1/98, Series 1988-10-C 7 7
--------- ---------
Tennessee Valley Authority (2.9%):
400 400 6.25%, 8/1/99 401 401
3,000 3,000 8.38%, 10/1/99 3,116 3,116
25,000 25,000 6.24%, 7/15/45, Putable on 7/15/01 @ 100 25,874 25,874
--------- --------- ---------
3,517 25,874 29,391
--------- --------- ---------
Total U.S. Government Agency Securities 15,966 120,416 136,382
--------- --------- ---------
U.S. TREASURY OBLIGATIONS (17.7%):
Treasury LINCS (0.2%):
2,500 2,500 6.00%, 8/15/09 2,434 2,434
--------- ---------
U.S. Treasury Bonds (4.5%):
1,000 1,000 9.38%, 2/15/06 1,229 1,229
25,000 25,000 8.13%, 8/15/19 (b) 31,278 31,278
2,500 2,500 7.13%, 2/15/23 2,854 2,854
10,000 10,000 6.13%, 11/15/27 (b) 10,285 10,285
--------- --------- ---------
4,083 41,563 45,646
--------- --------- ---------
U.S. Treasury Notes (11.0%):
1,800 1,800 5.13%, 4/30/98 1,798 1,798
1,550 1,550 9.00%, 5/15/98 1,570 1,570
200 200 6.13%, 5/15/98 200 200
2,650 2,650 5.13%, 6/30/98 2,648 2,648
100 100 8.25%, 7/15/98 101 101
2,500 2,500 9.25% 08/15/98 2,555 2,555
50 50 8.88%, 11/15/98 51 51
3,000 3,000 5.63%, 11/30/98 3,000 3,000
1,500 1,500 6.38%, 1/15/99 1,512 1,512
100 100 8.00%, 8/15/99 104 104
3,000 3,000 7.13%, 9/30/99 3,071 3,071
1,500 1,500 6.00%, 10/15/99 1,509 1,509
1,400 1,400 7.88%, 11/15/99 1,454 1,454
150 150 6.38%, 1/15/00 152 152
2,850 2,850 8.50%, 2/15/00 3,008 3,008
650 650 5.50%, 4/15/00 648 648
1,350 1,350 6.75%, 4/30/00 1,381 1,381
1,500 1,500 6.25%, 5/31/00 1,519 1,519
4,500 4,500 6.13%, 7/31/00 4,547 4,547
2,775 2,775 8.75%, 8/15/00 2,977 2,977
7,500 7,500 6.00%, 8/15/00 7,553 7,553
2,800 2,800 6.25%, 4/30/01(b) 2,845 2,845
1,000 1,000 7.88%, 8/15/01 1,069 1,069
5425 500 5,925 6.38%, 8/15/02 5,564 513 6,077
15,000 15,000 5.63%, 12/31/02 14,945 14,945
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GOVERNMENT BOND FUND / MARQUIS GOVERNMENT SECURITIES FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- ----------- --------- --------- --------------------------------------------------- -------- ---------- -----------
<S><C>
150 250 400 6.25%, 2/15/03 (b) 153 255 408
2,150 2,150 5.75%, 8/15/03 2,151 2,151
1,500 1,500 5.88%, 2/15/04 1,513 1,513
3000 2,500 5,500 6.50%, 8/15/05 (b) 3,129 2,609 5,738
12,500 12,500 5.63%, 2/15/06 12,359 12,359
20,700 20,700 6.50%, 10/15/06 (b) 21,686 21,686
--------- --------- ---------
58,780 51,369 110,149
--------- --------- ---------
U.S. Treasury STRIPS (2.0%):
25,000 25,000 7/15/20 6,218 6,218
5,000 5,000 2/15/25 (b) 3,855 3,855
50,000 50,000 2/15/25 (b) 9,956 9,956
20,029 20,029
--------- --------- ---------
Total U.S. Treasury Obligations 65,297 112,961 178,258
--------- --------- ---------
INVESTMENT COMPANIES (0.4%):
1,919 1,919 SEI Liquid Asset Trust, Treasury Portfolio 1,919 1,919
2,238 2,238 SEI Liquid Asset Trust, Government Portfolio 2,238 2,238
--------- ---------
Total Investment Companies 4,157 4,157
--------- ---------
REPURCHASE AGREEMENTS (5.0%):
46,298 46,298 Prudential Securities, 6.80%, 1/2/98 (Collateralized
by $48,271 various U.S. Government Agency Securities,
6.19% - 7.04%, 6/1/07 - 10/1/24, market value $47,687) 46,298 46,298
4,337 4,337 UBS Securities, 6.50%, 1/2/98 (Collateralized by
$5,076 various U.S. Government Agency Securities,
6.50% - 7.50%, 1/1/11 - 12/01/27,
market value - $4,424) 4,337 4,337
--------- --------- ---------
Total Repurchase Agreements 4,337 46,298 50,635
--------- --------- ---------
Total (Cost $1,012,053) (a) 147,188 894,709 1,041,897
--------- --------- ---------
--------- --------- ---------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $1,005,082.
(a) Represents cost for financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows
(amounts in thousands) :
<TABLE>
<S> <C>
Unrealized appreciation . . . . . . . . . . . . . . . $30,898
Unrealized depreciation . . . . . . . . . . . . . . (1,054)
Net unrealized appreciation. . . . . . . . . . . . . $29,844
</TABLE>
(b) With respect to the One Group Fund only, a portion of
this security was loaned as of December 31, 1997.
(c) Amount is less than $1,000.
CMO Collateralized Mortgage Obligation
REMIC Real Estate Mortgage Investment Conduit
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND / MARQUIS LOUSIANA TAX - FREE
INCOME FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- -------- --------- --------- --------------------------------------------------------- --------- ---------- ---------
<S><C>
MUNICIPAL BONDS (97.9%):
Louisiana (97.9%):
150 150 Alexandria, Utilities Revenue, Series B, 4.65%, 5/1/04 153 153
100 100 Alexandria, Utilities Revenue, 5.25%, 5/1/11, FGIC 103 103
150 150 Ascension Parish, Parish Wide School District, GO, 4.90%,
3/1/09, AMBAC 153 153
1,165 1,165 Ascension Parish, Gravity Drain, Sales & Use Tax, 5.40%,
12/1/07,
Callable 12/1/06 @100, FGIC 1,248 1,248
1,230 1,230 Ascension Parish, Gravity Drain, Sales & Use Tax, 5.50%,
12/1/08,
Callable 12/1/06 @ 100, FGIC 1,320 1,320
2,500 2,500 Bastrop Industrial Development Board, Pollution Control
Revenue,
International Paper Co. Project, 6.90%, 3/1/07, Callable
3/1/02 @ 102 2,764 2,764
700 700 Baton Rouge, Public Improvements Sales & Use Tax, 6.85%,
8/1/00,
Callable 8/1/99 @ 102, AMBAC 743 743
800 800 Baton Rouge, Public Improvements Sales & Use Tax, 6.90%,
8/1/01,
Callable 8/1/99 @ 102, AMBAC 851 851
2,000 2,000 Baton Rouge, Public Improvements Sales & Use Tax, 6.00%,
8/1/04,
Callable 8/1/01 @ 101.5, FSA 2,146 2,146
765 765 Baton Rouge, Public Improvements Sales & Use Tax, 6.38%,
8/1/09,
Callable 8/1/01 @ 101.5, FSA 830 830
200 200 Baton Rouge, Sales & Use Tax Revenue, 6.00%, 8/1/08, FSA 214 214
700 700 Bossier City, Public Improvements Sales & Use Tax Revenue,
5.05%,11/01/11, Callable 11/1/07 @ 100, FGIC 715 715
805 805 Bossier City, Public Improvements Sales & Use Tax Revenue,
Series ST, 6.20%, 11/1/07, Callable 11/1/01 @ 102, AMBAC 876 876
400 400 Bossier City, Public Improvements Sales & Use Tax, Series
ST-1989, 6.88%, 11/1/06, Callable 11/1/99 @ 101.5, FGIC 427 427
400 400 Bossier City, Public Improvements Sales & Use Tax, Series
ST-1989, 6.88%, 11/1/07, Callable 11/1/99 @ 101.5, FGIC 427 427
550 550 Bossier City, Public Improvements Sales & Use Tax, Series
ST-1989, 6.88%, 11/1/08, Callable 11/1/99 @ 101.5, FGIC 586 586
500 500 Bossier City, Utility Revenue, 4.80%, 10/1/05, FGIC 515 515
350 350 Caddo Parish, GO, 5.00%, 2/1/05, MBIA 364 364
1,415 1,415 Caddo Parish, GO, 5.25%, 2/1/06, Callable 2/1/05
@ 100, MBIA 1,492 1,492
750 750 Caddo Parish, GO, 5.25%, 2/1/08, Callable 2/1/05
@ 100, MBIA 783 783
470 470 Caddo Parish Industrial Developement Board, Wal-Mart
Stores, Inc.
Project, 5.95%, 11/1/07, Callable 5/1/98 @ 101.5 479 479
500 500 Calcasieu Parish, School District #22, Ward 3,
Series A, GO,
7.10%, 2/1/01, Callable 2/1/99 @ 100, BIG 517 517
1,500 1,500 De Soto Parish, Pollution Control Revenue,
International Paper
Co. Project, Series A, 5.05%, 12/1/02 1,570 1,570
75 75 East Baton Rouge, Mortgage Financing Authority, Series B,
4.35%, 10/1/00 76 76
85 85 East Baton Rouge, Mortgage Financing Authority, Series B,
5.30%,10/1/14 85 85
650 650 East Baton Rouge Parish, Sales & Use Tax Revenue, 4.80%,
2/1/06,FGIC 669 669
340 340 East Baton Rouge Parish, Sales & Use Tax Revenue, 4.80%,
2/1/09,FGIC 345 345
500 500 East Baton Rouge Parish, Sales & Use Tax Revenue, 5.90%,
2/1/16,FGIC 536 536
500 500 East Baton Rouge Parish, Sales & Use Tax, 7.10%, 2/1/00,
Callable 2/1/99 @ 101.5, MBIA 525 525
500 500 East Baton Rouge Parish, Sales & Use Tax, 5.80%, 2/1/07,
Callable 2/1/05 @ 101.5, FGIC 547 547
845 845 East Baton Rouge Parish, Sales & Use Tax, 5.80%, 2/1/08,
Callable 2/1/05 @ 101.5, FGIC 921 921
910 910 East Baton Rouge Parish, Sales & Use Tax, 5.80%, 2/1/09,
Callable 2/1/05 @ 101.5, FGIC 990 990
2,280 2,280 East Baton Rouge Parish, Series A, 8.00%, 2/1/02, FGIC 2,608 2,608
1,085 1,085 East Baton Rouge Parish, Series ST, 5.15%, 2/1/05,
Callable 2/1/03 1,133 1,133
1,000 1,000 East Baton Rouge Parish, Series ST, 5.10%, 2/1/07,
Callable 2/1/06 @101.5, FGIC 1,050 1,050
1,280 1,280 East Baton Rouge, Mortgage Financial Authority, 5.45%
10/1/03, Callable 10/1/20 @ 100, GNMA 1,323 1,323
115 115 Ernest N. Morial Exhibition Hall Special Tax, 4.70%,
7/15/05, MBIA 118 118
515 515 Ernest N. Morial Exhibition Hall Special Tax, 4.90%,
7/15/07, MBIA 533 533
225 225 Gretna, Refunding - Sales Tax Revenue, 5.20%, 6/1/06,
AMBAC 232 232
1,560 1,560 Houma, Utilities Revenue, 6.13%, 1/1/07, Callable 1/1/02
@ 102, FGIC 1,692 1,692
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND / MARQUIS LOUSIANA TAX - FREE
INCOME FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- -------- ---------- --------- -------------------------------------------------------- --------- ---------- ---------
<S><C>
820 820 Housing Finance Agency, Mortgage Revenue, Single Family,
Series B, 6.00%, 6/1/15 857 857
490 490 Housing Finance Agency, Mortgage Revenue, Series D-2,
AMT, 6.10%, 12/1/11, Callable 12/1/06 @ 102 524 524
575 575 Housing Finance Agency, Mortgage Revenue, Single Family
A-1, 5.70%, 6/1/15, Callable 6/1/05 @ 102 595 595
1,185 1,185 Iberia Home Mortgage Authority, Single Family Mortgage
Revenue, 7.38%, 1/1/11, Callable 7/1/03 @ 103 1,288 1,288
250 250 Iberville School District #5, 5.75%, 10/1/03, FSA 269 269
250 250 Jefferson Parish, Ad Valorem Property Tax, GO, Series A,
5.25%, 9/1/05, FGIC 264 264
400 400 Jefferson Parish, Construction Waterworks, Revenue,
District #2, 7.25%, 1/15/00, Callable 1/15/98 @ 100, 407 407
1,680 1,680 Jefferson Parish, Drain Sales Tax Revenue, 6.50%,
11/1/06, Callable 11/1/01 @ 100, AMBAC 1,822 1,822
290 290 Jefferson Parish, Home Mortgage Authority, Single Family
Mortgage Revenue, Sub-Series B, 4.50%, 6/1/13, Callable
12/1/03 @ 102 293 293
300 300 Jefferson Parish, Hospital Services, District #1, 5.10%,
1/1/05, FGIC 313 313
100 100 Jefferson Parish, Hospital Services, District #1, 5.30%,
12/1/07, FGIC 105 105
130 130 Jefferson Parish, Sales & Use Tax Revenue, 5.00%, 2/1/08,
AMBAC 134 134
700 700 Jefferson Parish, Sales & Use Tax Revenue, 5.00%, 2/1/13,
AMBAC 704 704
500 500 Jefferson Parish, School Board Sales & Use Tax Revenue,
6.05%, 2/1/02, MBIA 537 537
1,100 1,100 Jefferson Parish, School Board Sales & Use Tax Revenue,
6.15%, 2/1/03, Callable 2/1/02 @ 102, MBIA 1,200 1,200
300 5,760 6,060 Jefferson Parish, School Board Sales & Use Tax Revenue,
6.25%, 2/1/08, MBIA 327 6,279 6,606
4,670 4,670 Jefferson, Sales Tax District Special, Tax Revenue,
Series A, 6.75%, 12/1/06, Callable 12/1/02 @ 100, FGIC 5,176 5,176
100 755 855 Kenner, Sales Tax Revenue, 5.75%, 6/1/06, Callable 6/1/02
@103, FGIC 108 813 921
1,525 1,525 La Fourche Parish, School District # 1 Parish Wide, GO,
5.00%, 2/1/13, Callable 2/1/08 @ 100, FSA 1,536 1,536
1,000 1,000 Lafayette Parish, GO, 7.80%, 3/1/01, Callable 3/1/98
@ 102, FGIC 1,026 1,026
505 505 Lafayette Parish, Public Improvement Sales Tax Revenue,
Series A, 4.90%, 3/1/03, FGIC 520 520
300 300 Lafayette Parish, Public Improvement Sales Tax Revenue,
4.63%, 5/1/05, FGIC 305 305
200 200 Lafayette Parish, Public Improvement Sales Tax Revenue,
5.50%, 3/1/07, FGIC 212 212
250 250 Lafayette Parish, Public Power Authority, 5.00%, 11/1/06,
AMBAC 259 259
510 510 Lafayette Parish, Public Power Authority, 5.30%, 11/01/07,
AMBAC 531 531
250 250 Lafayette Parish, Public Power Authority, 5.25%, 11/1/09,
AMBAC 259 259
575 575 Lafayette Parish, School Board Sales Tax Revenue, 4.88%,
4/1/04, FSA 592 592
275 275 Lafayette Parish, Utilities Revenue, 4.10%, 11/1/99, AMBAC 276 276
125 125 Lafayette Parish, Utilities Revenue, 4.70%, 11/1/04, AMBAC 128 128
750 750 Lafourche Parish, Hospital Service, District #3, Hospital
Revenue, 5.50%, 10/1/04, Callable 10/1/03 @ 102 784 784
650 650 Lafourche Parish, Water District #1, Water Revenue, 5.63%,
1/1/01 676 676
500 500 Lincoln Parish, School District #1, GO, Ruston, 6.20%,
3/1/03, Callable 3/1/01 @ 100, MBIA 530 530
1,465 1,465 Lincoln Parish, School District #1, GO, Ruston, 6.40%,
3/1/05, Callable 3/1/01 @ 100, MBIA 1,562 1,562
150 150 Louisiana State University Agricultural & Mechanical
College, 5.40%, 7/1/05, FGIC 159 159
250 250 Louisiana State University Agricultural & Mechanical
College, 5.50%, 7/1/06, FGIC 268 268
580 1,000 1,580 Louisiana State University Agricultural & Mechanical
College, 6.00%, 7/1/07, Callable 7/1/06 @ 102, MBIA 650 1,121 1,771
500 500 Louisiana State University Agricultural & Mechanical
College, 5.75%, 7/1/14, FGIC 531 531
1,120 1,120 Louisiana State University Agricultural & Mechanical
College, University Revenues, 5.50%, 7/1/13,
Callable 7/1/06 @ 102, MBIA 1,182 1,182
100 100 Mandeville Water Utility Improvements, Ad Valorem
Property Tax, 5.15%, 2/1/10 102 102
1,220 1,220 Monroe Parish, Special School District, GO, 8.00%,
3/1/01, MBIA 1,363 1,363
1,300 1,300 Monroe Parish, Special School District, GO, 7.00%,
3/1/02, MBIA 1,442 1,442
1,390 1,390 Monroe Parish, Special School District, GO, 7.00%,
3/1/03, MBIA 1,570 1,570
1,230 1,230 Monroe Parish, Special School District, GO, 5.35%,
3/1/05, FGIC 1,309 1,309
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND / MARQUIS LOUSIANA TAX - FREE
INCOME FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- -------- --------- --------- --------------------------------------------------------- --------- ---------- ---------
<S><C>
1,320 1,320 Monroe Parish, Special School District, GO, 5.35%,
3/1/06, Callable 3/1/05 @ 100, FGIC 1,400 1,400
500 500 Monroe Parish, Special School District, GO, 5.35%,
3/1/09, Callable 3/1/05 @ 100, FGIC 523 523
190 190 Natchitoches Parish, School District #7, GO, 4.90%,
3/1/07, FSA 194 194
1,000 1,000 New Orleans Audubon Park, Revenue, 5.00%, 4/1/12,
Callable 4/1/07@ 101, MBIA 1,004 1,004
350 350 New Orleans GO, 5.85%, 11/1/09, Callable 11/1/05 @ 100,
FGIC 378 378
500 500 New Orleans Home Mortgage Special Obligation, 6.25%,
1/15/11 562 562
1,215 1,215 New Orleans Sewer Service Revenue, 6.25%, 6/1/07, FGIC 1,383 1,383
1,000 1,000 New Orleans Sewer Service Revenue, 5.25%, 6/1/11,
Callable 6/1/07 @ 101, FGIC 1,038 1,038
1,000 1,000 New Orleans, GO, 5.88%, 10/1/11, Callable 10/1/05 @ 101,
AMBAC 1,090 1,090
3,250 3,250 New Orleans, GO, 0.00%, 9/1/17, AMBAC 1,200 1,200
550 550 New Orleans, GO, Public Improvement, Revenue, 5.85%,
11/1/07, Callable 11/1/05 @ 100, FGIC 599 599
1,235 1,235 New Orleans, GO, Public Improvement, Series A, 5.00%,
12/01/13, Callable 12/1/07 @ 100, AMBAC 1,238 1,238
250 250 Orleans Parish School Board, Public School Capital
Refinancing, 5.00%, 12/1/05, MBIA 261 261
555 555 Orleans Parish School Board, Revenue Bond, Public School
Capital Refinancing, 6.00%, 6/1/09, MBIA 627 627
250 250 Orleans Parish School District, GO, 5.30%, 9/1/10, MBIA 259 259
1,000 1,000 Orleans Parish School District, GO, 5.13%, 9/1/13,
Callable 3/1/08 @ 100, MBIA 1,016 1,016
1,000 1,000 Ouachita Parish Hospital Service District #1, Glenwood
Regional Medical Center, 5.70%, 05/15/16, Callable
5/15/10 @ 100, FSA 1,066 1,066
2,525 2,525 Ouachita Parish Hospital Service District #1, Glenwood
Regional Medical Center, Health Care Revenue, 7.50%,
7/1/06, Callable 7/1/01 102 2,839 2,839
1,655 1,655 Ouachita Parish West School District, Series A, GO, 6.70%,
3/1/06, Callable 3/1/01 @ 102, FSA 1,811 1,811
2,000 2,000 Ouachita Parish West School District, Series A, Revenue,
6.50%, 3/1/03, Callable 3/1/01 @ 102, FSA 2,177 2,177
420 420 Plaquemine Parish, Sales & Use Tax, 6.70%, 12/1/08,
Callable 12/1/01 @ 102 457 457
410 410 Plaquemine Parish, Sales & Use Tax, 6.70%, 12/1/09,
Callable 12/1/01 @ 102 446 446
1,440 1,440 Plaquemines Parish, GO, 6.40%, 8/1/04, Callable 8/1/01
@ 102, AMBAC 1,570 1,570
605 605 Plaquemines Parish, School Board, Sales & Use Tax, 6.65%,
3/1/05, Callable 3/1/02 @ 102 667 667
2,180 2,180 Public Facilities Authority Revenue, Alton Ochsner Medical
Foundation, Series A, 6.30%, 5/15/04, Callable 5/15/02 @
102, MBIA 2,388 2,388
100 100 Public Facilities Authority Revenue, Alton Ochsner Medical
Foundation Project, Series A, 6.00%, 5/15/01, MBIA 106 106
100 100 Public Facilities Authority Revenue, Alton Ochsner Medical
Foundation, Series PJ-B, 6.00%, 5/15/17, MBIA 105 105
1,000 1,000 Public Facilities Authority Revenue, Alton Ochsner Medical
Project, Series B, 5.75%, 5/15/11, Callable 5/15/02 @ 100,
MBIA 1,048 1,048
500 500 Public Facilities Authority Revenue, Department of Public
Safety,
Department of Public Safety, 4.90%, 8/1/04, AMBAC 514 514
400 400 Public Facilities Authority Revenue, Department of Public
Safety,
5.00%, 8/1/05, AMBAC 414 414
1,000 1,000 Public Facilities Authority Revenue, Indexed Caps, 5.88%,
2/15/11, Callable 2/15/03 @ 102, FGIC 1,071 1,071
250 250 Public Facilities Authority Revenue, Jefferson Parish,
Eastbank Project, 4.85%, 8/1/06, FGIC 257 257
1,000 1,000 Public Facilities Authority Revenue, Lafayette General
Medical Center Project, Hospital Revenue,
6.05%, 10/1/04, Callable 10/1/02 @102, FSA 1,089 1,089
1,960 1,960 Public Facilities Authority Revenue, Loyola University
Project, 6.60%, 4/1/05, Callable 04/01/02 @ 102 2,164 2,164
1,000 1,000 Public Facilities Authority Revenue, Loyola University
Project, 4.90%,10/1/05, MBIA 1,035 1,035
2,525 2,525 Public Facilities Authority Revenue, Loyola University
Project, 5.63%, 10/1/10, Callable 10/1/07 @ 102, MBIA 2,749 2,749
500 500 Public Facilities Authority Revenue, Loyola University
Project, Series A, 7.20%, 10/1/00, Callable 10/1/99 @ 102 537 537
1,135 1,135 Public Facilities Authority Revenue, Mary Bird Perkins
Cancer Center, 5.50%, 1/1/04, FSA 1,206 1,206
5,000 5,000 Public Facilities Authority Revenue, Multi-Family,
Series A, 0.00%, 2/1/20, ETM 1,553 1,553
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND / MARQUIS LOUSIANA TAX - FREE
INCOME FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- -------- --------- --------- --------------------------------------------------------- --------- ---------- ---------
<S><C>
390 390 Public Facilities Authority Revenue, Our Lady of Lake
Regional Center, 5.90%, 12/1/06, MBIA 416 416
500 500 Public Facilities Authority Revenue, Our Lady of Lake
Regional Center, Series C, Health Care Revenue, 5.70%,
12/1/04, Callable 12/1/01 @ 102, MBIA 532 532
7,500 7,500 Public Facilities Authority Revenue, Series B, 0.00%,
12/1/19, ETM 2,350 2,350
110 110 Public Facilities Authority Revenue, Sisters of Mercy,
7.38%, 6/1/09, Callable 6/1/99 @ 102 117 117
120 120 Public Facilities Authority Revenue, Special Insurance
Assessment, 4.40%, 10/1/00 121 121
2,145 2,145 Public Facilities Authority Revenue, Tulane University,
6.25%, 7/15/06, Callable 7/15/01 @ 102 2,316 2,316
735 735 Public Facilities Authority Revenue, Tulane University,
5.55%, 10/1/07, Callable 10/1/06 @ 102, AMBAC 800 800
1,605 1,605 Public Facilities Authority Revenue, Tulane University,
5.75%, 10/1/09, Callable 10/1/06 @ 102, AMBAC 1,767 1,767
300 300 Public Facilities Authority Revenue, Tulane University,
Series A, 7.50%, 5/15/00, Callable 5/15/98 @ 102 310 310
225 225 Public Facilities Authority Revenue, Tulane University,
Series A-1, 5.80%, 2/15/04, Callable 2/15/03 @ 102, FGIC 243 243
500 500 Public Facilities Authority Revenue, Womens Hospital
Foundation, Health Care Revenue, 6.00%, 10/01/10, FSA 567 567
2,000 2,000 Public Facilities Authority Revenue, Xavier University,
5.13%, 9/1/12, Callable 9/1/07 @ 102, MBIA 2,051 2,051
1,500 1,500 Public Facilities Authority, Series A-1, 5.00%, 12/1/15,
AMBAC 1,527 1,527
1,235 1,235 Public Facilities Authority, Womans Hospital Foundation,
Health Care Revenue, 6.85%, 10/1/05, Callable 10/1/02
@ 102 1,390 1,390
730 730 Public Facilities Authority, Womans Hospital Foundation,
Health Care Revenue, 5.40%, 10/1/05, Callable 10/1/04
@ 102, FGIC 776 776
1,715 1,715 Public Facilities Authority, Womans Hospital Foundation,
Health Care Revenue, 5.50%, 10/1/06, Callable 10/1/04
@ 102, FGIC 1,840 1,840
250 250 Public Facitilies Authority Revenue, Series A, 5.10%,
3/1/01, FSA 258 258
1,475 1,475 Rapides Parish School District #11, Rigolette-Series1990,
GO, 6.95%, 02/01/02, Callable 2/1/00 @ 100, FGIC 1,559 1,559
500 500 Rapides Parish, Consolidated School District #62, GO,
7.25%, 4/1/00, Callable 4/1/99 @ 100, MBIA 521 521
200 200 Shreveport, Public Improvements, Ad Valorem Property
Tax, 4.75%, 12/1/09 200 200
480 480 Shreveport, GO, 6.20%, 3/1/02, Callable 3/1/01 @ 100,
AMBAC 509 509
500 500 Shreveport, GO, 6.70%, 2/1/03, Callable 2/1/00 @ 100,
AMBAC 527 527
480 480 Shreveport, GO, 5.90%, 2/1/07, Callable 2/1/03 @ 100 511 511
265 265 Shreveport, GO, 5.15%, 2/1/09, AMBAC 273 273
930 930 Shreveport, Water & Sewer Revenue, Series A, 7.75%,
12/1/02, FGIC
FGIC 1,078 1,078
500 500 Shreveport, Water & Sewer Revenue, Series A, 6.25%,
12/1/03, FGIC 553 553
200 200 Slidell, GO, 4.90%, 3/1/09, MBIA 204 204
400 400 Slidell, GO, 5.00%, 3/1/13, MBIA 402 402
100 100 Slidell, Sales & Use Tax Revenue, Public Improvement,
Series B, 5.20%, 10/1/05 105 105
200 200 Slidell, Sales & Use Tax Revenue, Public Improvement,
Series B, 5.40%, 10/1/07 211 211
1,000 1,000 South Port Community, Port Revenue, Cargill, Inc. Project,
5.85%, 4/1/17, Callable 4/1/97 @ 102 1,056 1,056
200 200 St. Bernard Parish, School Board Refunding, GO, 4.55%,
5/1/06, Callable 5/1/05 @ 100, MBIA 202 202
200 200 St. Bernard Parish, School Board Refunding, GO, 4.60%,
5/1/07, Callable 5/1/05 @100, MBIA 202 202
200 200 St. Bernard Parish, School Board Refunding, GO, 4.70%,
5/1/08, Callable 5/1/05 @100, MBIA 202 202
200 200 St. Bernard Parish, School Board Refunding, GO, 4.80%,
5/1/09, Callable 5/1/05 @100, MBIA 202 202
200 200 St. Bernard Parish, School Board Refunding, 4.90%,
5/1/10, Callable 5/1/05 @100, MBIA 202 202
500 500 St. Charles Parish, Public Improvement Sales Tax,
Series St-96, 5.00%, 12/1/06, Callable 11/1/05 @101, MBIA 522 522
750 750 St. Charles Parish, Public Improvements Sales Tax, 6.60%,
11/1/07, Callable 11/1/99 @ 102 795 795
2,350 2,350 St. Charles Parish, School District #1, GO, 6.45%, 3/1/06,
Callable 3/1/02 @ 100, AMBAC 2,543 2,543
85 85 St. James Parish, GO, Ad Valorem Property Tax, 4.80%,
3/1/05 87 87
75 75 St. James Parish, GO, Ad Valorem Property Tax, 5.20%,
3/1/08 77 77
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND / MARQUIS LOUSIANA TAX - FREE
INCOME FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- -------- --------- --------- --------------------------------------------------------- --------- ---------- ---------
<S><C>
870 870 St. John Baptist Parish, School District #1, GO, 6.25%,
3/1/05, Callable 3/1/02 @ 100, 928 928
250 250 St. Tammany Parish, School Board Sales & Use Tax, 5.75%,
4/1/03, FGIC 268 268
200 200 St. Tammany Parish, School District #12, 6.50%, 3/1/05,
Callable 3/1/01 @100, FGIC 214 214
250 250 St. Tammany Parish, Sales & Use Tax Revenue, 5.75%,
4/1/06, FGIC 267 267
1,815 1,815 St. Tammany Parish, Hospital Service, District #1,
Hospital Revenue, 6.30%, 7/1/07, Callable 7/1/02 @ 102 1,958 1,958
1,000 1,000 St. Tammany Parish, Sales & Use Tax Revenue, District #3,
Series A, 6.50%, 12/1/02, Callable 12/1/99 @ 102, FGIC 1,064 1,064
750 750 St. Tammany Parish, Sales & Use Tax, District #3,
Series A, 6.50%, 12/1/05, Callable 12/1/99 @ 102, FGIC 798 798
400 400 St. Tammany Parish, School District #12, GO, 6.50%,
3/1/04, Callable 3/1/01 @ 100, FGIC 428 428
1,665 1,665 Stadium & Exposition District, Hotel Occupancy, Tax &
Stadium Revenue, 5.65%, 7/1/07, Callable 7/1/04 @ 102,
FGIC 1,805 1,805
500 500 State Energy & Power Authority Revenue, 6.00%, 1/1/13,
FGIC 517 517
2,600 2,600 State Energy & Power Authority, Power Project Revenue,
Rodemacher Unit #2, 6.75%, 1/1/08, Callable 1/1/01
@ 102, FGIC 2,836 2,836
1,500 1,500 State Gas & Fuels Tax Revenue, Series A,, 7.25%,
11/15/04, Callable 11/15/99 @ 102 1,607 1,607
950 950 State GO, Series A, 6.00%, 5/15/99, MBIA 977 977
55 55 State GO, 6.25%, 8/1/99, MBIA 56 56
195 195 State GO, 6.25%, 8/1/99, MBIA 202 202
250 250 State GO, Series A, 6.25%, 8/1/99, MBIA 258 258
1,750 1,750 State GO, Series A, 5.50%, 4/15/02, FGIC 1,841 1,841
2,750 2,750 State GO, 7.10%, 9/1/03, Callable 9/1/00 @ 102, FSA 3,007 3,007
1,000 4,000 5,000 State GO, 6.00%, 8/1/04, FGIC 1,096 4,388 5,484
250 250 State GO, Series A, 6.00%, 8/1/04, FGIC 264 264
500 500 State GO, Series A, 5.50%, 5/15/05, MBIA 535 535
400 400 State GO, 5.38%, 8/1/05, MBIA 425 425
1,000 1,000 State GO, Series A, 6.00%, 5/1/07, Callable 5/1/04 @ 102,
AMBAC 1,098 1,098
750 750 State GO, Series A, 5.60%, 5/15/07, MBIA 813 813
250 250 State GO, 5.60%, 8/1/07, MBIA 271 271
1,000 1,000 State GO, 5.13%, 4/15/08, FGIC 1,043 1,043
250 250 State GO, Series A, 5.70%, 5/15/08, Callable 5/15/05
@ 100, MBIA 271 271
250 250 State GO, 5.60%, 8/1/08, MBIA 274 274
3,000 3,000 State GO, Series A, 6.50%, 4/15/06, FGIC 3,432 3,432
430 430 State GO, Series A, 6.00%, 5/1/08, Callable 5/1/04
@ 102, AMBAC 473 473
2,875 2,875 State GO, Series A, 5.80%, 8/1/10, MBIA 3,203 3,203
500 500 State GO, Series A, 6.10%, 5/1/11, Callable 5/1/04
@ 102, AMBAC 551 551
3,000 3,000 State GO, Series B, 5.63%, 8/1/13, MBIA 3,262 3,262
500 500 State Miscellaneous Taxes Refunding Bond, Series A,
5.70%, 8/1/08 552 552
1,130 1,130 State Mississippi River Bridge Authority Revenue, 6.63%,
11/1/06,
Callable 11/1/02 @ 102 1,262 1,262
500 500 State Offshore Terminal Authority, Deepwater Port
Revenue, 1st Stage, Series B, 6.10%, 9/1/02 534 534
1,325 1,325 State Offshore Terminal Authority, Deepwater Port
Revenue, 1st Stage, Series B, 6.25%, 9/1/04 1,445 1,445
1,435 1,435 Tangipahoa Parish, Consolidated School District #1,
GO, 6.15%,
12/1/07, Callable 12/1/02 @ 100 1,544 1,544
1,250 1,250 Tangipahoa Parish, Hospital Service District #1,
Hospital Revenue, 6.13%, 2/1/14, Callable 2/1/04
@ 102 , AMBAC 1,362 1,362
1,285 1,285 Terrebonne Parish, Hospital Service District #1,
Hospital Revenue, Terrebonne General Medical Center
Project, 7.40%, 4/1/03, Callable 4/1/98 @ 102, BIG 1,322 1,322
690 690 Terrebonne Parish, Waterworks District #1, Water R
evenue, 5.70%, 11/1/06, Callable 11/1/03 @ 102, FGIC 746 746
500 500 Terrebonne Parish, Waterworks District #1, Water
Revenue, 5.75%, 11/1/08, Callable 11/1/03 @ 102, FGIC 539 539
555 555 Vermilion Parish, Hospital Service, District #2,
Health Care Revenue, Series A, 6.35%, 5/1/00, MBIA 584 584
-------- --------- ---------
Total Municipal Bonds 37,543 156,509 194,052
-------- --------- ---------
INVESTMENT COMPANIES (1.8%):
1,722 1,722 SEI Tax Exempt Trust Institutional Tax Free Portfolio 1,722 1,722
1,675 1,675 SEI Tax Exempt Trust Tax Free Portfolio 1,675 1,675
224 224 The One Group Municipal Money Market Fund, Fiduciary
Class 224 224
-------- --------- ---------
Total Investment Companies 3,397 224 3,621
-------- --------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND / MARQUIS LOUSIANA TAX - FREE
INCOME FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- -------- --------- --------- --------------------------------------------------------- --------- ---------- ---------
<S><C>
REPURCHASE AGREEMENTS (0.5%):
1,000 1,000 UBS Securities, 6.50%, 1/2/98 (Collateralized by $1,020
U.S. Government Agency Securities, 0.00%, 3/22/01,
market value $1,023) 1,000 1,000
-------- ---------
Total Repurchase Agreements 1,000 1,000
-------- ---------
Total (Cost $188,048) (a) 41,940 156,733 198,673
-------- --------- ---------
-------- --------- ---------
</TABLE>
- ----------------------
Percentages indicated are based on net assets of $198,229.
(a) Represents cost for financial reporting purposes and
differs from value by net unrealized appreciation of securities
as follows (amounts in thousands) :
<TABLE>
<S> <C>
Unrealized appreciation. . . . . . . . . . . $10,628
Unrealized depreciation. . . . . . . . . . . (3)
Net unrealized appreciation . . . . . . . . $10,625
</TABLE>
AMBAC Insured by AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
BIG Insured by Bond Insurance Guarantee
ETM Escrowed to Maturity
FGIC Insured by Federal Guarantee Insurance Corp.
FSA Insured by Federal Security Assurance
GNMA Insured by Government National Mortgage Association
GO General Obligation
MBIA Insured by Municipal Bond Insurance Association
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP DISCIPLINED VALUE FUND / MARQUIS VALUE EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Proforma
Marquis One Group Combined Proforma
Shares or Shares or Shares or Marquis One Group Combined
Principal Principal Principal Market Market Market
Amount Amount Amount Security Description Value Value Value
------ ------ ------ ----------------------------------------------- ----- ----- -----
<S><C>
COMMON STOCKS (97.3%):
Banking (18.3%):
105 105 Charter One Financial, Inc. 6,631 6,631
139 139 Crestar Financial Corp. 7,923 7,923
77 77 First American Bank Corp. 5,950 5,950
180 180 First Security Corp. 7,538 7,538
111 111 First Tennessee National Corp. (c) 7,376 7,376
79 79 First Virginia Banks, Inc. 4,078 4,078
205 205 Firstar Corp. 8,700 8,700
180 180 Hibernia Corp., Class A 3,386 3,386
12 12 ING Groep N.V. - ADR (c) 520 520
169 169 Marshall & Ilsley Corp. 10,499 10,499
45 45 MBNA Corp. 1,229 1,229
195 195 Mercantile Bancorporation 11,992 11,992
138 138 Mercantile Bankshares Corp. 5,380 5,380
196 196 Old Kent Financial Corp. 7,767 7,767
34 34 PNC Bank Corp. 1,940 1,940
278 278 Provident Co., Inc. 10,738 10,738
168 168 Regions Financial Corp. 7,088 7,088
13 13 SLM Holding Corp. 1,743 1,743
183 183 Southtrust Corp. 11,603 11,603
34 34 State Street Corp. 1,978 1,978
269 269 Summit Bancorp 14,298 14,298
59 59 Union Planters Corp. (c) 4,008 4,008
25 25 Washington Mutual, Inc. 1,595 1,595
-------- -------- --------
1,743 142,217 143,960
-------- -------- --------
Business Equipment & Services (1.7%):
70 70 Enova Corp. 1,897 1,897
60 60 Jacobs Engineering Group, Inc. (b) 1,523 1,523
90 126 216 Office Depot, Inc. (b) 2,145 3,016 5,161
192 192 Olsten Corp. 2,880 2,880
63 63 Stewart Enterprises Corp. 2,937 2,937
-------- -------- --------
4,042 10,356 14,398
-------- -------- --------
Capital Goods (5.5%):
35 35 Aeroquip-Vickers, Inc. 1,712 1,712
38 38 Caterpillar, Inc. 1,855 1,855
22 22 Cummins Engine, Inc. 1,299 1,299
31 31 Deere & Co. 1,808 1,808
55 55 Flowserve Corp. 1,527 1,527
128 128 Harsco Corp. 5,511 5,511
35 35 Hubbell, Inc., Series B 1,726 1,726
36 36 Ingersoll Rand Co. 1,458 1,458
153 153 Mark IV Industries, Inc. 3,336 3,336
143 143 Molex, Inc. 4,588 4,588
42 42 Parker-Hannifin Corp. 1,942 1,942
87 87 Southdown, Inc. 5,133 5,133
84 84 Teleflex, Inc. 3,179 3,179
116 116 Trinity Industries 5,177 5,177
111 111 United State Filter Corp. (b)(c) 3,323 3,323
-------- -------- --------
10,074 33,500 43,574
-------- -------- --------
Consumer Durable (1.3%):
49 67 116 Arvin Industries, Inc. 1,637 2,242 3,879
40 40 Chrysler Corp. 1,400 1,400
41 41 Ford Motor Co. 1,996 1,996
55 55 Lear Corp.(b) 2,613 2,613
-------- -------- --------
5,033 4,854 9,888
-------- -------- --------
Consumer Non-Durable (6.0%):
52 52 Dean Foods Co. 3,094 3,094
49 49 Dexter Corp. 2,108 2,108
125 125 First Brands Corp. 3,367 3,367
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP DISCIPLINED VALUE FUND / MARQUIS VALUE EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Proforma
Marquis One Group Combined Proforma
Shares or Shares or Shares or Marquis One Group Combined
Principal Principal Principal Market Market Market
Amount Amount Amount Security Description Value Value Value
------ ------ ------ ----------------------------------------------- ----- ----- -----
<S><C>
82 82 Hormel Foods Corp. 2,686 2,686
102 102 IBP, Inc. 2,136 2,136
95 95 Intimate Brands, Inc. (c) 2,286 2,286
63 63 Lafarge Corp. 1,862 1,862
98 98 McCormick & Co., Inc. 2,744 2,744
73 73 Newell Co. 3,103 3,103
67 67 Payless Shoesource, Inc. (b) 4,497 4,497
60 60 Premark International, Inc. 1,730 1,730
38 38 Quaker Oats Co. 1,989 1,989
42 42 Russell Corp. 1,116 1,116
44 44 Supervalu, Inc. 1,859 1,859
345 345 Tyson Foods, Inc., Class A (c) 7,072 7,072
44 46 90 Universal Corp. 1,793 1,892 3,685
40 40 V.F. Corp. 1,838 1,838
-------- -------- --------
14,294 32,876 47,171
-------- -------- --------
Consumer Services (4.1%):
130 130 Belo (A.H.) Corp., Series A 7,302 7,302
100 100 Cendant Corp. (b) (c) 3,438 3,438
70 70 Circus Circus Entertainment (b)(c) 1,435 1,435
65 65 Hasbro, Inc. 2,048 2,048
107 107 International Game Technologies 2,702 2,702
46 46 King World Productions, Inc.(b) 2,657 2,657
143 143 MGM Grand, Inc. (b)(c) 5,157 5,157
15 15 Washington Post Co. 7,298 7,298
-------- -------- --------
2,657 29,378 32,035
-------- -------- --------
Energy (5.5%):
36 36 Ashland, Inc. 1,933 1,933
29 29 BJ Services Co. (b)(c) 2,086 2,086
22 22 British Petroleum Co. 1,732 1,732
22 22 Chevron Corp. 1,694 1,694
113 113 Mapco, Inc. 5,236 5,236
21 Mobil Corp. 1,502 1,502
43 43 Murphy Oil Corp. 2,330 2,330
70 Noble Drilling Corp. 2,153 2,153
42 42 Pioneer Natural Resources Co. 1,214 1,214
33 Texaco, Inc. 1,774 1,774
53 53 Tosco Corp. 2,004 2,004
84 129 Transocean Offshore, Inc. (c) 2,187 4,048 6,234
172 172 Ultramar Diamond Shamrock Corp. 5,482 5,482
50 USX-Marathon Group 1,688 1,688
73 Valero Energy Corp. 2,305 2,305
98 Weatherford Enterra, Inc.(b) 4,288 4,288
-------- -------- --------
12,729 30,926 43,655
-------- -------- --------
Financial Services (8.7%):
45 177 222 A.G. Edwards, Inc. 1,789 7,036 8,825
41 41 Ambac Financial Group Inc. 1,886 1,886
29 155 184 BankAmerica Corp. 2,088 7,363 9,450
49 49 Bear Stearns Co., Inc. (c) 2,308 2,308
16 16 Chase Manhattan Corp. 1,733 1,733
15 15 Citicorp 1,833 1,833
36 36 Conseco, Inc. 1,649 1,649
50 50 Equitable, Companies Inc. 2,478 2,478
37 37 Federal National Mortgage Assoc. 2,106 2,106
25 25 First Union Corp. 1,281 1,281
60 60 Gatx Corp. 4,354 4,354
14 14 J.P. Morgan & Co., Inc. 1,524 1,524
80 227 306 Paine Webber Group, Inc. 2,763 7,828 10,592
117 117 PMI Group, Inc. (c) 8,461 8,461
84 84 Reliance Group Holdings, Inc. 1,187 1,187
33 33 Reliastar Financial Corp. 1,359 1,359
65 65 The Money Store, Inc. (c) 1,365 1,365
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP DISCIPLINED VALUE FUND / MARQUIS VALUE EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Proforma
Marquis One Group Combined Proforma
Shares or Shares or Shares or Marquis One Group Combined
Principal Principal Principal Market Market Market
Amount Amount Amount Security Description Value Value Value
------ ------ ------ ----------------------------------------------- ----- ----- -----
<S><C>
50 50 Transatlantic Holdings, Inc. 3,604 3,604
50 50 Travelers Group, Inc. 2,667 2,667
-------- -------- --------
26,105 42,555 68,660
-------- -------- --------
Health Care (4.8%):
87 87 Allegiance Corp. 3,065 3,065
82 82 Apria Healthcare Group, Inc. (b) 1,102 1,102
21 21 ATLI Ultrasound, Inc. (b) 966 966
47 47 Bergen Brunswig Corp. 1,980 1,980
22 22 Cardinal Health, Inc. (c) 1,653 1,653
25 25 Eli Lilly & Co. 1,741 1,741
5 5 Genzyme Corp. (b) 33 33
160 160 Genzyme Corp. (b) (c) 4,440 4,440
40 40 HBO & Co. 1,920 1,920
79 79 McKesson Corp. 8,550 8,550
80 80 Medpartners, Inc. (b)(c) 1,790 1,790
233 233 Mylan Laboratories (c) 4,872 4,872
66 66 St. Jude Medical Center, Inc. (b) 2,013 2,013
62 62 Tenet Healthcare Corp.(b) 2,042 2,042
46 46 Watson Pharmaceuticals, Inc. (b) 1,492 1,492
-------- -------- --------
3,783 33,876 37,659
-------- -------- --------
Raw Materials (5.4%):
91 91 Alumax, Inc.(b) 3,094 3,094
43 43 B. F. Goodrich Co. (c) 1,782 1,782
109 109 Cabot Corp. 3,011 3,011
96 96 Crompton & Knowles Corp. (c) 2,544 2,544
17 17 Dow Chemical Co. 1,756 1,756
174 174 Ferro Corp. 4,219 4,219
23 23 Fuller (H. B.) Co. 1,114 1,114
98 98 Hanna (M.A.) Co. 2,481 2,481
76 76 Ispat International NV (c) 1,644 1,644
42 42 Lubrizol Corp. 1,543 1,543
102 102 Olin Corp. (c) 4,781 4,781
75 75 Schulman, Inc. 1,872 1,872
54 54 Sigma-Aldrich Corp. 2,147 2,147
46 46 USX - U.S. Steel Group, Inc. 1,428 1,428
22 19 41 Vulcan Materials Co. 2,222 1,981 4,203
99 99 Wellman, Inc. 1,931 1,931
72 72 Witco Corp. 2,939 2,939
-------- -------- --------
6,950 35,538 42,488
-------- -------- --------
Retail (4.6%):
62 62 Best Buy, Inc. (b) 2,286 2,286
60 60 CompUSA, Inc. (b) 1,860 1,860
132 132 Cracker Barrel 4,406 4,406
87 73 160 Fingerhut Companies, Inc. 1,865 1,560 3,425
81 81 Fred Meyer, Inc. (b)(c) 2,961 2,961
66 66 Hannaford Brothers Co. 2,863 2,863
70 70 Just For Feet, Inc. (b) 919 919
320 320 Officemax, Inc.(b) 4,560 4,560
96 96 Outback Steakhouse, Inc. (b)(c) 2,760 2,760
72 72 Ross Stores, Inc. 2,619 2,619
33 33 Sbarro, Inc. 863 863
66 66 TJX Co., Inc. 2,270 2,270
50 50 Toys R Us, Inc.(b) 1,572 1,572
138 138 U S Office Products Co. (b)(c) 2,708 2,708
-------- -------- --------
6,754 29,318 36,072
-------- -------- --------
Shelter (2.6%):
59 59 Bowater, Inc. 2,622 2,622
35 35 Centex Corp. 2,207 2,207
207 207 Clayton Homes, Inc. 3,726 3,726
36 36 Fleetwood Enterprises, Inc. 1,528 1,528
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP DISCIPLINED VALUE FUND / MARQUIS VALUE EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Proforma
Marquis One Group Combined Proforma
Shares or Shares or Shares or Marquis One Group Combined
Principal Principal Principal Market Market Market
Amount Amount Amount Security Description Value Value Value
------ ------ ------ ----------------------------------------------- ----- ----- -----
<S><C>
85 85 Kaufman & Broad Home Corp. 1,907 1,907
45 45 Leggett & Platt, Inc. 1,884 1,884
105 105 Pentair, Inc. 3,773 3,773
69 69 Rayonier, Inc. 2,928 2,928
-------- -------- --------
3,734 16,841 20,575
-------- -------- --------
Technology (6.5%):
68 68 American Power Conversion (b) 1,607 1,607
54 54 Applied Materials, Inc.(b) 1,621 1,621
163 163 Arrow Electronics, Inc.(b) 5,294 5,294
87 87 ATMEL Corp. (b) 1,615 1,615
36 36 Avnet, Inc. 2,343 2,343
46 46 Compaq Computer Corp. (b) 2,596 2,596
44 44 Computer Associates International, Inc. 2,309 2,309
310 310 Cypress Semiconductor Corp. (b) 2,635 2,635
19 19 Dell Computer Corp.(b) 1,596 1,596
60 60 EMC Corp.(b) 1,646 1,646
71 71 NCR Corp. (b)(c) 1,975 1,975
41 41 Novellus Systems, Inc. 1,328 1,328
100 100 Orbital Sciences Corp.(b) 2,989 2,989
50 50 Quantum Corp. (b) 998 998
62 62 Sci Systems, Inc. 2,683 2,683
117 117 Storage Technology Corp. (b)(c) 7,247 7,247
17 17 Stratus Computer, Inc.(b) 624 624
50 50 Tech Data Corp. 1,931 1,931
67 67 Teradyne, Inc.(b) 2,144 2,144
21 54 75 Thiokol Corp. 1,739 4,388 6,126
-------- -------- --------
15,204 36,101 51,305
-------- -------- --------
Transportation (2.4%):
44 44 Airborne Freight Corp. 2,704 2,704
17 17 ASA Holdings, Inc. 483 483
24 24 Burlington Northern Santa Fe Corp. 2,231 2,231
137 137 CNF Transportation, Inc. 5,257 5,257
26 26 Federal Express Corp. (b) 1,613 1,613
93 93 Kansas City Southern Industries 2,953 2,953
88 88 Southwest Airlines Co. 2,166 2,166
57 57 Yellow Corp. (b)(c) 1,432 1,432
-------- -------- --------
6,483 12,356 18,839
-------- -------- --------
Utilities (19.9%):
102 102 AES Corp.(b) 4,756 4,756
73 73 AGL Resources 1,500 1,500
307 307 Allegheny Energy, Inc. 9,977 9,977
70 70 American Water Works, Inc. (c) 1,912 1,912
52 52 Baltimore Gas & Electric Co. 1,754 1,754
170 170 Century Telephone Enterprises 8,468 8,468
102 102 Cinergy Corp. 3,908 3,908
253 253 CMS Energy Corp. 11,148 11,148
41 41 Consolidated Edison Co. of New York, Inc. 1,681 1,681
58 58 Duke Power Co., Inc. 3,217 3,217
60 60 Edison International 1,642 1,642
113 113 El Paso Natural Gas Co. 7,515 7,515
23 23 Florida Power & Light Group, Inc. 1,361 1,361
53 53 Florida Progress Corp. 2,080 2,080
40 85 125 General Public Utilities Corp. 1,685 3,581 5,266
207 207 L G & E Energy Corp. (c) 5,118 5,118
148 148 LCI International, Inc. (b)(c) 4,551 4,551
139 139 MCN Energy Group, Inc. (c) 5,612 5,612
200 200 Montana Power Co. 6,356 6,356
37 101 138 National Fuel Gas Co. 1,801 4,917 6,719
236 236 New Century Energies, Inc. 11,291 11,291
24 55 79 New England Electric Systems 1,039 2,351 3,390
201 201 New York State Electric & Gas Corp. 7,136 7,136
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP DISCIPLINED VALUE FUND / MARQUIS VALUE EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Proforma
Marquis One Group Combined Proforma
Shares or Shares or Shares or Marquis One Group Combined
Principal Principal Principal Market Market Market
Amount Amount Amount Security Description Value Value Value
------ ------ ------ ----------------------------------------------- ----- ----- -----
<S><C>
176 176 Nextel Communications, Inc., Class A (b) 4,563 4,563
49 NICOR, Inc. 2,071 2,071
103 103 Nipsco Industries, Inc. 5,092 5,092
27 Peoples Energy Corp. 1,043 1,043
199 199 Pinnacle West Capital Corp. 8,416 8,416
66 66 Potomiac Electric Power Co. 1,704 1,704
57 PP&L Resources, Inc. 1,364 1,364
74 74 Questar Corp. 3,302 3,302
84 84 Scana Corp. 2,515 2,515
75 Southern Co. 1,928 1,928
296 296 Teco Energy, Inc. 8,325 8,325
-------- -------- --------
17,583 139,097 156,681
-------- -------- --------
Total Common Stocks 137,168 629,791 766,959
-------- -------- --------
INVESTMENT COMPANIES (0.5%)
3,730 3,730 SEI Liquid Asset Trust Government Portfolio 3,730 3,730
-------- --------
Total Investment Companies 3,730 3,730
-------- --------
REPURCHASE AGREEMENT (3.4%):
15,355 15,355 Prudential Securities, 6.80%, 1/2/98 (Collateralized
U.S. Treasury Notes , 6.25%, 1/31/02, market value -
$15,663) 15,355 15,355
1,380 1,380 UBS Securities, 6.50%, 1/2/98 (Collaretalized
by $7,080 U.S. Treasury Strips, 0.00%, 11/15/24,
market value - $1,408) 1,380 1,380
-------- -------- --------
Total Repurchase Agreements 1,380 15,355 16,735
-------- -------- --------
Total (Cost $608,093) (a) 142,279 645,146 787,426
-------- -------- --------
-------- -------- --------
</TABLE>
- ------------------
Percentages indicated are based on net assets of $788,124.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows
(amounts in thousands):
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation . . . . . . . . $188,810
Unrealized depreciation . . . . . . . . (9,478)
Net unrealized appreciation . . . . . . $179,332
</TABLE>
(b) Non-income producing securities.
(c) With respect to the One Group fund only, a portion of this security was
loaned as of December 31, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GROWTH OPPORTUNITIES FUND / MARQUIS GROWTH EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- --------- -------- ---------- --------------------------------------------------- --------- --------- ---------
<S><C>
COMMON STOCKS (94.7%):
Business Equipment & Services (13.1%):
166 166 America Online, Inc. (b) (c) 14,796 14,796
170 170 Cintas Corp. 6,646 6,646
62 62 Corrections Corporation of America (b) (c) 2,298 2,298
7 7 Equifax, Inc. 241 241
101 101 Fiserv, Inc. (b) (c) 4,971 4,971
9 96 105 Herman Miller, Inc. 507 5,211 5,718
143 143 Manpower, Inc. 5,055 5,055
7 283 290 Omnicom Group, Inc. 314 11,984 12,298
255 255 Paychex, Inc. (c) 12,918 12,918
4 4 Pitney Bowes, Inc. 333 333
67 67 Pittston Co. 2,681 2,681
214 214 Reynolds & Reynolds Co. 3,940 3,940
4 392 396 Staples, Inc. (b) (c) 101 10,874 10,975
147 147 Sterling Commerce, Inc. (b) 5,667 5,667
19 19 Stewart Enterprises, Inc. 891 891
255 255 Sungard Data Systems, Inc. (b) (c) 7,896 7,896
402 402 U.S.A. Waste Services, Inc. (b) (c) 15,790 15,790
76 76 Viad Corp. 1,475 1,475
19 19 Viking Office Products (b) 412 412
81 81 Wallace Computer Services 3,153 3,153
---------- --------- ---------
1,496 116,658 118,154
---------- --------- ---------
Capital Goods (3.4%):
4 4 Aeroquip-Vickers, Inc. 217 217
70 70 Catellus Development Corp. (b) 1,400 1,400
4 108 112 Diebold, Inc. 217 5,446 5,663
4 6 10 Dover Corp. 154 223 377
95 95 Fastenal Co. (c) 3,618 3,618
76 76 Federal Signal Corp. 1,648 1,648
6 6 General Electric Co. 455 455
5 97 102 Hubbell, Inc., Class B 223 4,803 5,026
4 4 Illinois Tool Works, Inc. 252 252
7 7 Iomega Corp. 83 83
4 4 Kemet Corp. 84 84
7 7 Molex, Inc. 227 227
57 57 Precision Castparts Co. 3,450 3,450
3 3 Stanley Works 164 164
5 129 134 Sundstrand Corp. 265 6,478 6,743
4 4 Tyco International Ltd. 194 194
41 41 United States Filter Corp. (b) (c) 1,230 1,230
3 3 United Technologies Corp. 206 206
---------- --------- ---------
2,741 28,296 31,037
---------- --------- ---------
Consumer Durable (2.0%):
111 111 Danaher Corp. (c) 6,998 6,998
8 58 66 Federal Mogul Corp. (c) 327 2,341 2,668
3 283 286 Harley-Davidson, Inc. (c) 95 7,758 7,853
22 22 OEA, Inc. 624 624
---------- --------- ---------
422 17,721 18,143
---------- --------- ---------
Consumer Non-Durable (8.6%):
52 52 Beringer Wine Estates, Series B (b) (c) 1,957 1,957
2 2 Brown-Forman Corp., Class B 105 105
8 8 Campbell Soup Co. 491 491
2 2 Clorox Co. 158 158
4 690 694 Coca-Cola Enterprises (c) 126 24,524 24,650
5 5 Colgate Palmolive Co. 337 337
8 8 ConAgra Inc. 251 251
143 143 Dial Corp. 2,966 2,966
94 94 Dole Food, Inc. (c) 4,310 4,310
5 194 199 Flowers Industries, Inc. 105 3,993 4,098
10 129 139 General Nutrition Cos. (b) 356 4,389 4,745
6 6 H. J. Heinz Co. 299 299
5 5 Hershey Foods Corp. 290 290
3 3 Interpublic Group of Cos. Inc. 142 142
7 449 456 Interstate Bakeries Co. (c) 260 16,763 17,023
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GROWTH OPPORTUNITIES FUND / MARQUIS GROWTH EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- --------- -------- ---------- --------------------------------------------------- --------- --------- ---------
<S><C>
8 133 141 Jones Apparel Group, Inc. (b) 344 5,708 6,052
3 3 Kellogg Co. 169 169
41 41 Lancaster Colony Corp. 2,328 2,328
28 28 Nautica Enterprises, Inc. (b) 651 651
2 2 Newell Co. 85 85
3 3 Panamerican Beverage, Inc., Class A 112 112
4 4 PepsiCo., Inc. 151 151
3 3 Pioneer Hi-Bred International, Inc. 323 323
5 5 Quaker Oats Co. 274 274
2 2 Sysco Corp. 105 105
14 14 Tommy Hilfiger Corp. (b) 492 492
95 95 Unifi, Inc. 3,877 3,877
3 3 Wrigley (WM.) Junior Co. 265 265
---------- --------- ---------
4,748 71,958 76,706
---------- --------- ---------
Consumer Services (1.9%):
8 165 173 Callaway Golf Co. (c) 214 4,711 4,925
5 5 Carnival Corp., Class A 277 277
4 4 Gannett, Inc. 225 225
4 255 259 International Game Technologies 105 6,446 6,551
5 5 Marriott International, Inc. 346 346
3 3 McGraw Hill, Inc. 253 253
13 13 Meredith Corp. 471 471
5 45 50 Promus Hotel Corp. (b) 223 1,873 2,096
38 38 TCA Cable TV, Inc. 1,748 1,748
4 4 Time Warner, Inc. 221 221
3 3 Tribune Co. 156 156
1 1 Walt Disney Co. 142 142
---------- --------- ---------
2,633 14,778 17,411
---------- --------- ---------
Energy (7.2%):
2 2 BJ Services Co.(b) 163 163
9 252 261 Ensco International, Inc. (c) 293 8,435 8,728
5 5 Falcon Drilling Company, Inc. 187 187
317 317 Global Marine, Inc. (b) 7,774 7,774
9 9 Halliburton Co. 442 442
1 1 Houston Exploration Co. (b) 11 11
385 385 Intelect Communications, Inc. (b) (c) 1,971 1,971
12 12 Marine Drilling Company, Inc. 252 252
5 292 297 Nabors Industries, Inc. (b) (c) 152 9,188 9,340
11 11 Newfield Exploration Co. 261 261
232 232 Noble Drilling Corp. (b) (c) 7,102 7,102
8 8 Phillips Petroleum Co. 389 389
5 5 Schlumberger Ltd. 419 419
2 121 123 Smith International, Inc. (b) (c) 125 7,445 7,570
104 104 Tidewater, Inc. 5,739 5,739
278 278 Tosco Corp. (c) 10,527 10,527
6 6 Transocean Offshore, Inc. 291 291
116 116 Varco International, Inc. (b) 2,491 2,491
15 15 Weatherford Enterra, Inc. (b) 670 670
---------- --------- ---------
2,585 61,742 64,327
---------- --------- ---------
Financial Services (13.4%):
274 274 AFLAC, Inc. 13,990 13,990
3 3 Alliance Capital Management L.P. 105 105
3 3 American Express Co. 227 227
2 2 American International Group, Inc. 246 246
20 20 Associated Bancorp 1,102 1,102
152 152 Capital One Financial Corp. 8,247 8,247
2 2 Charles Schwab Corp. 97 97
86 86 Charter One Financial, Inc. 5,415 5,415
82 82 City National Corp. 3,029 3,029
73 73 ESG Re Ltd. 1,704 1,704
2 2 Federal National Mortgage Assoc. 105 105
1 1 Fifth Third Bancorp 103 103
39 39 First America Bank Corp. 2,985 2,985
97 97 First Security Corp. 4,058 4,058
1 10 11 First Tennessee National Corp. 99 667 766
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GROWTH OPPORTUNITIES FUND / MARQUIS GROWTH EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- --------- -------- ---------- --------------------------------------------------- --------- --------- ---------
<S><C>
24 24 Firstar Corp. 1,023 1,023
7 258 265 Franklin Resources, Inc. 587 22,447 23,034
16 16 Green Tree Financial Corp. (c) 406 406
20 20 Marshall & Ilsley Corp. 1,242 1,242
38 38 Mercantile Bancorporation 2,306 2,306
5 27 32 MGIC Investment Corp. 306 1,765 2,071
1 262 263 Northern Trust Corp. 102 18,254 18,356
47 47 Old Republic International Corp. 1,759 1,759
6 120 126 Price (T. Rowe) Associates 351 7,529 7,880
9 119 128 Robert Half International, Inc. (b) 358 4,768 5,126
3 3 SLM Holding Corp. 356 356
4 4 Star Banc Corp. 250 250
2 2 State Street Corp. 121 121
5 5 Summit Bancorp 266 266
4 42 46 SunAmerica, Inc. 163 1,779 1,942
8 8 Synovus Financial Corp. 259 259
176 176 TCF Financial Corp. 5,987 5,987
29 29 Union Planters Corp. 1,957 1,957
52 52 Wilmington Trust Corp. 3,243 3,243
---------- --------- ---------
3,835 115,928 119,763
---------- --------- ---------
Health Care (8.9%):
15 15 Biogen, Inc. (b) 5,595 5,595
4 18 22 Biomet, Inc. 103 461 564
4 4 Bristol Myers Squibb Co. 416 416
1 1 Cardinal Health, Inc. (c) 91 91
8 151 159 Centocor, Inc. (b) 256 5,027 5,283
311 311 Chiron Corp. (b) (c) 5,287 5,287
116 116 Dentsply International, Inc. 3,544 3,544
143 143 Foundation Health Systems, Series A (b) (c) 3,188 3,188
4 4 Guidant Corp. 269 269
6 6 HBO & Co. 288 288
88 88 Health Care & Retirement Corp. (b) 3,538 3,538
5 293 298 Health Management Associates, Inc. (b) 115 7,405 7,520
80 80 Healthcare Compare Corp. (b) 4,112 4,112
3 26 29 Healthsouth Corp. (b) (c) 97 717 814
105 105 Hillenbrand Industries, Inc. 5,349 5,349
14 14 Integrated Health Services 430 430
5 5 Johnson & Johnson 329 329
8 8 Lilly Eli And Co. 522 522
17 17 Medtronic, Inc. 868 868
4 4 Merck & Co., Inc. 461 461
175 175 Omnicare, Inc. (c) 5,422 5,422
97 97 Oxford Health Plans, Inc. (b) 1,515 1,515
4 4 Pharmacia & Upjohn, Inc. 139 139
95 95 Quorum Health Group, Inc. (b) 2,482 2,482
40 40 R. P. Scherer Corp. (b) 2,440 2,440
8 8 Schering Plough Corp. 510 510
2 2 Shared Medical Systems Corp. 129 129
183 183 Stryker Corp. (c) 6,832 6,832
4 98 102 Sybron International Corp. - Wisconsin (b) (c) 170 4,576 4,746
12 12 United Healthcare Corp. 593 593
50 50 Vencor, Inc. (b) 1,222 1,222
3 3 Warner Lambert Co. 335 335
141 141 Watson Pharmaceutical, Inc. (b) 4,580 4,580
---------- --------- ---------
4,230 75,183 79,413
---------- --------- ---------
Multi-Industry (0.6%):
40 40 Trammell Crow Co. 1,030 1,030
226 226 United Rentals, Inc. (b) (c) 4,365 4,365
--------- ---------
5,395 5,395
--------- ---------
Raw Materials (2.4%):
52 52 Betzdearborn, Inc. 3,187 3,187
76 76 Crompton & Knowles Corp. 2,025 2,025
57 57 Cytec Industries, Inc. (b) 2,694 2,694
6 6 Dupont (EI) de Nemours & Co. 360 360
85 85 IMC Global, Inc. (c) 2,784 2,784
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GROWTH OPPORTUNITIES FUND / MARQUIS GROWTH EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- --------- -------- ---------- --------------------------------------------------- --------- --------- ---------
<S><C>
103 103 Ispat International N.V.-New York (c) 2,232 2,232
126 126 Lyondell Petrochemical 3,347 3,347
3 3 Praxair, Inc. 124 124
95 95 Solutia, Inc. 2,535 2,535
58 58 Witco Corp. 2,359 2,359
---------- --------- ---------
484 21,163 21,647
---------- --------- ---------
Retail (10.7%):
3 58 61 Barnes & Noble, Inc. (b) 102 1,929 2,031
4 94 98 Bed Bath & Beyond, Inc. (b) (c) 171 3,634 3,805
180 180 Claire's Stores, Inc. 3,507 3,507
7 234 241 CompUSA, Inc. (b) 229 7,246 7,475
164 164 Consolidated Stores Co. (b) 7,194 7,194
2 2 Dayton Hudson Corp. 166 166
4 295 299 Dollar General Corp. 157 10,697 10,854
4 4 Dollar Tree Stores, Inc. 154 154
3 278 281 Family Dollar Stores, Inc. 99 8,159 8,258
7 7 Gap, Inc. 264 264
2 2 Hollywood Entertainment Corp. (b) (c) 170 170
3 17 20 Home Depot, Inc. 176 971 1,147
1,447 1,447 Just For Feet, Inc. (b) (c) 18,992 18,992
4 15 19 Kohl's Corp. (b) (c) 275 10,478 10,753
7 7 Kroger Co. 266 266
60 60 Lands End, Inc. (b) 2,104 2,104
87 87 Mac Frugal's Bargains (b) 3,574 3,574
57 57 Outback Steakhouse, Inc. (b) 1,647 1,647
4 4 Quality Centers 245 245
5 5 Ross Stores, Inc. 171 171
10 10 Servicemaster Co. 296 296
301 301 Starbucks Corp. (b) 11,543 11,543
2 2 Tandy Corp. 87 87
25 25 Tiffany & Co. (c) 902 902
10 10 TJX Co., Inc. 344 344
2 2 Wal-Mart Stores, Inc. 98 98
8 8 Walgreen Co. 259 259
---------- --------- ---------
3,559 92,747 96,306
---------- --------- ---------
Shelter (2.1%):
3 55 58 Hon Industries, Inc. 166 3,216 3,382
170 170 Leggett & Platt, Inc. 7,136 7,136
3 81 84 Sealed Air Corp. (b) (c) 191 4,977 5,168
168 168 Sunstone Hotel Investors, Inc. 2,901 2,901
---------- --------- ---------
357 18,230 18,587
---------- --------- ---------
Technology (16.2%):
7 7 3Com Corp. (b) 252 252
5 18 23 Adaptec, Inc. (b) 197 668 865
7 235 242 ADC Telecommunications, Inc. (b) 276 9,824 10,100
5 5 Adobe Systems, Inc. 209 209
151 151 Altera Corp. (b) (c) 5,005 5,005
3 220 223 American Power Conversion (b) 73 5,205 5,278
4 4 Amphenol Corp. Class A 224 224
301 301 Analog Devices, Inc. (b) (c) 8,329 8,329
5 5 Applied Materials, Inc. (b) 159 159
11 11 Ascend Communications, Inc. (b) 270 270
34 34 ATMEL Corp. (b) 633 633
5 5 Auto Desk, Inc. 200 200
3 3 Bay Networks, Inc. (b) 85 85
7 219 226 BMC Software, Inc. (b) 471 14,385 14,856
379 379 Cadence Design Systems, Inc. (b) 9,278 9,278
2 8 10 Cisco Systems, Inc. (b) 93 418 511
7 7 Cognex Corp. 178 178
8 8 Compaq Computer Corp. 452 452
5 5 Computer Associates International, Inc. 268 268
381 381 Compuware Corp. (b) 12,192 12,192
6 6 Cooper Cameron Corp. 357 357
6 6 Creative Technology Limited 126 126
4 154 158 Dell Computer Corp. (b) 345 12,902 13,247
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GROWTH OPPORTUNITIES FUND / MARQUIS GROWTH EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- --------- -------- ---------- --------------------------------------------------- --------- --------- ---------
<S><C>
7 7 Dresser Industries, Inc. 305 305
1 1 Electronic Arts, Inc. (b) (c) 53 53
8 8 Flowserve Corp. 218 218
2 2 Hewlett Packard Co. 129 129
5 5 Intel Corp. 323 323
91 91 Lexmark International Group, Inc. (b) 3,458 3,458
2 122 124 Linear Technology Corp. (c) 128 7,025 7,153
4 4 Lucent Technologies, Inc. 302 302
265 265 Maxim Integrated Products, Inc. (b) (c) 9,143 9,143
3 6 9 Microsoft Corp. (b) 377 724 1,101
95 95 Network Associates, Inc. 5,023 5,023
18 18 Newbridge Networks Corp. 633 633
22 22 Oracle Corp. (b) 485 485
13 13 Parametric Technology Corp. (b) 616 616
11 11 Peoplesoft Inc. 411 411
3 3 Perkin Elmer Corp. 220 220
1 1 Qualcomm, Inc. 74 74
88 88 Quantum Corp. (b) (c) 1,772 1,772
2 85 87 SCI Systems, Inc. (b) (c) 93 3,707 3,800
158 158 Solectron Corp. (b) 6,575 6,575
2 2 SPX Corp. 108 108
63 63 Structural Dynamics (b) 1,413 1,413
10 10 Sun Microsystems, Inc. (b) 383 383
85 85 Synopsys, Inc. (b) 3,396 3,396
6 13 19 Tellabs, Inc. (b) 307 703 1,010
190 190 Teradyne, Inc. (b) (c) 6,086 6,086
4 18 22 Thermo Instrument Systems, Inc. (b) 141 635 776
43 43 Varian Associates, Inc. 2,179 2,179
3 3 Vitesse Semiconductor 113 113
2 2 Xerox Corp. 149 149
136 136 Xilinx, Inc. (b) 4,783 4,783
---------- --------- ---------
6,788 138,476 145,264
---------- --------- ---------
Transportation (0.4%):
117 117 Illinois Central Corp. 3,975 3,975
--------- ---------
Utilities (3.8%):
191 191 360 Communications Co. (b) 3,846 3,846
329 329 AES Corp. (b) 15,330 15,330
2 2 Airtouch Communications, Inc. (b) 103 103
1 1 Ameritech Corp. 118 118
2 2 AT&T Corp. 106 106
3 3 Bell Atlantic Corp. 273 273
5 5 BellSouth Corp. 299 299
6 6 Cincinnati Bell, Inc. 192 192
1 1 Clear Channel Communications, Inc. 108 108
3 3 Ericsson L M Telephone Co. 113 113
192 192 LCI International, Inc. (b) 5,904 5,904
2 2 Northern Telecom Ltd. 208 208
115 115 Seagull Energy Corp. (b) 2,374 2,374
93 93 Southern New England Telecommunications, Inc. (c) 4,679 4,679
3 3 US West Communications Group 118 118
---------- --------- ---------
1,638 32,133 33,771
---------- --------- ---------
Total Common Stocks 35,516 814,383 849,899
---------- --------- ---------
INVESTMENT COMPANIES (0.2%):
750 750 SEI Liquid Asset Trust Government Portfolio 749 749
774 774 SEI Liquid Asset Trust Treasury Portfolio 774 774
---------- --------- ---------
Total Investment Companies 1,523 1,523
---------- --------- ---------
REPURCHASE AGREEMENTS (4.1%):
35 35 Prudential Securities, 6.80%, 1/2/98 (Collateralized
by $43,741 U.S. Government Agency Securities, 7.03%,
11/1/32, market value ($36,492) 35,429 35,429
2 2 UBS Securities, 6.50%, 1/2/98 (Collateralized by $1,595
U.S. Government Agency Securities, 0.00%, 3/22/01,
market value $1,600) 1,564 1,564
---------- --------- ---------
Total Repurchase Agreements 1,564 35,429 36,993
---------- --------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP GROWTH OPPORTUNITIES FUND / MARQUIS GROWTH EQUITY FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
- --------- -------- ---------- --------------------------------------------------- --------- --------- ---------
<S><C>
Total (Cost $731,936) (a) 38,603 849,812 888,415
---------- --------- ---------
---------- --------- ---------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $897,122.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows (amounts in
thousands):
<TABLE>
<S> <C>
Unrealized appreciation . . . . . . . . . $190,293
Unrealized depreciation. . . . . . . . . (33,814)
Net unrealized appreciation. . . . . . . . $156,479
</TABLE>
(b) Non-income producing securities.
(c) With respect to the One Group fund only, a portion of this security was
loaned as of December 31, 1997.
<PAGE>
THE ONE GROUP ASSET ALLOCATION FUND / MARQUIS BALANCED FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
--------- --------- --------- --------------------------------------------------- --------- ------------- -----------
<S><C>
ASSET BACKED SECURITIES (1.5%):
20 20 Advanta Credit Card Master Trust, 5.95%, 8/31/99 20 20
298 298 Advanta Mortgage Loan Trust, Series 1994-3, Class
A2, 7.60%, 7/25/10 302 302
600 600 Case Equipment Loan Trust, Series 1996-B, Class A3,
6.65%, 9/15/03 609 609
480 480 Greentree Financial Corp., Series 1996-3, Class A3,
6.70%, 5/15/27 486 486
800 800 Greentree Financial Corp., Series 1996-7, Class A4,
6.80%, 10/15/27 822 822
67 67 KeyCorp Auto Grantor Trust, Series 1995-A A, 5.80%,
7/15/00 67 67
500 500 Nationsbank Auto Owner Trust 1996-A A3,
6.38%, 7/15/00 502 502
525 525 Olympic Automobile Receivables Trust, 6.05%,
8/15/02 524 524
1,025 1,025 Olympic Automobile Receivables Trust, Series
1996-B, Class A4, 6.70%, 3/15/02 1,034 1,034
630 630 The Money Store Home Equity Trust, Series 1993-C,
5.18%, 7/15/06 624 624
181 181 The Money Store Home Equity Trust, Series 1994-B,
Class A2, 6.80%, 2/15/13 184 184
67 67 Union Federal Savings Bank Trust, Series 1994 A A,
5.08%, 5/15/00 67 67
--------- ----------
Total Asset Backed Securities 5,241 5,241
--------- ----------
COMMERCIAL PAPER (2.3%):
Financial Services (2.3%):
7,905 7,905 Merrill Lynch, 5.81%, 3/19/98 7,810 7,810
--------- ----------
Total Commercial Paper 7,810 7,810
--------- ----------
COMMON STOCKS (53.1%):
Business Equipment & Service (0.3%):
7 7 Jacobs Engineering Group, Inc. 178 178
20 20 Service Corp. International 720 720
--------- ----------
898 898
--------- ----------
Capital Goods (4.4%):
20 20 Caterpillar, Inc. 990 990
11 11 Cooper Industries, Inc. 544 544
14 14 Deere & Co. 805 805
14 14 Emerson Electric Co. 790 790
38 38 General Electric Co. 2,803 2,803
23 10 33 Harsco Corp. 984 431 1,415
6 6 Hubbell, Inc., Class B 306 306
12 12 Mark IV Industries, Inc. 271 271
25 25 Parker-Hannifin Corp. 1,159 1,159
6 6 Precision Castparts 338 338
32 32 SCI Systems, Inc. 1,411 1,411
19 19 Teleflex, Inc. 725 725
12 12 Thiokol Corp. 957 957
14 14 TRW, Inc. 726 726
26 26 Tyco International 1,167 1,167
21 21 Wolverine Tube, Inc. 645 645
---------- ---------- ----------
7,677 7,375 15,052
---------- ---------- ----------
Consumer Durable (2.0%):
19 19 Autozone, Inc. (c) 554 554
26 25 51 Chrysler Corp. 933 862 1,795
14 14 Cummins Engine, Inc. 827 827
26 26 Ford Motor Co. 1,283 1,283
11 11 Lear Corp. (b) 508 508
30 30 Maytag Corp. 1,119 1,119
42 42 Moore Corp., Ltd. 629 629
---------- ---------- ----------
4,791 1,924 6,715
---------- ---------- ----------
Consumer Non-Durable (4.5%):
31 31 Archer-Daniels-Midland Co. 670 670
21 21 Coca Cola Co. 1,419 1,419
19 19 ConAgra, Inc. 637 637
20 20 Crane Co. 846 846
6 6 Estee Lauder Companies, Class A 314 314
19 19 Intimate Brands, Inc. (c) 457 457
26 26 Lennar Corp. 552 552
14 14 McCormick & Co., Inc. 398 398
18 18 Newell Companies, Inc. 773 773
35 35 PepsiCo, Inc. 1,279 1,279
20 47 67 Philip Morris Co., Inc. 911 2,116 3,027
8 8 Proctor & Gamble Co. 615 615
21 13 34 Quaker Oats Co. 1,090 686 1,776
11 11 Revlon, Inc. (b) 395 395
22 22 RJR Nabisco Holdings Corp. 821 821
14 14 Vulcan Materials 1,424 1,424
---------- ---------- ----------
4,823 10,580 15,403
---------- ---------- ----------
Consumer Services (2.5%):
10 10 Belo (A.H.) Corp., Series A 561 561
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP ASSET ALLOCATION FUND / MARQUIS BALANCED FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
--------- --------- --------- --------------------------------------------------- --------- ------------- -----------
<S><C>
16 16 Callaway Golf Co. 457 457
21 21 Cendant Corp. (c) 729 729
18 18 Hasbro, Inc. 575 575
23 23 Hilton Hotels Corp. 687 687
28 28 IBP, Inc. 595 595
21 21 International Game Technology 530 530
20 20 Lone Star Steakhouse & Saloon 350 350
10 10 MGM Grand, Inc. (b) (c) 375 375
17 17 Tele-Communications, Inc. 479 479
9 9 Telecom-TCI Ventures Group, Series A 265 265
15 15 Time Warner, Inc. 923 923
3 3 Tricon Global Restaurants 97 97
16 16 V. F. Corp. 726 726
16 16 Viacom, Inc. 651 651
7 7 Walt Disney Co. 644 644
---------- ---------- ----------
2,658 5,986 8,644
---------- ---------- ----------
Energy (4.9%):
9 9 Ashland, Inc. 489 489
11 11 Atlantic Richfield Co. 857 857
12 12 British Petroleum, Public Limited Co. 953 953
8 8 Devon Energy Corp. 312 312
8 8 Dresser Industries, Inc. 319 319
31 31 Ensco International, Inc. 1,055 1,055
38 38 Exxon Corp. 2,323 2,323
12 16 28 Mobil Corp. 866 1,155 2,021
36 36 Noble Drilling Corp. 1,103 1,103
15 15 OGE Energy Corp. 842 842
18 18 Phillips Petroleum Co. 885 885
25 25 Royal Dutch Petroleum, NY Shares 1,349 1,349
20 20 Tosco Corp. (c) 764 764
50 50 Union Texas Petroleum Holdings 1,041 1,041
33 20 53 USX-Marathon Group 1,114 682 1,796
10 10 Weatherford Enterra, Inc. 455 455
---------- ---------- ----------
7,858 8,706 16,564
---------- ---------- ----------
Financial Services (9.4%):
5 5 Allstate Corp. 473 473
35 35 AMBAC Financial Group, Inc. 1,592 1,592
6 6 American Express Co. 500 500
9 9 American International Group, Inc. 941 941
38 38 Bear Stearns Co., Inc. 1,817 1,817
9 9 Charter One Financial, Inc. 587 587
9 9 Chase Manhattan Corp. 1,007 1,007
4 4 Cigna Corp. 675 675
6 6 Citicorp 809 809
22 22 Conseco, Inc. 992 992
32 11 43 Equitable Co., Inc. 1,609 537 2,146
22 22 Federal National Mortgage Assoc. 1,267 1,267
7 7 First American Bank Corp. 509 509
21 24 45 First Union Corp. (c) 1,097 1,189 2,286
15 15 Fleet Financial Group, Inc. 1,147 1,147
17 17 Greenpoint Financial Corp. 1,263 1,263
8 8 Hartford Financial Services Group 777 777
10 10 J.P. Morgan & Co., Inc. 1,118 1,118
16 16 Morgan Stanley Dean Witter Discover 952 952
21 21 Nationsbank 1,265 1,265
18 16 34 PNC Bank Corp. 1,015 902 1,917
10 10 Provident Co., Inc. 390 390
18 18 Providian Financial Corp. 831 831
13 13 Regions Financial Corp. 527 527
11 11 SLM Holding Corp. 1,475 1,475
14 14 Southtrust Corp. 856 856
10 10 State Street Corp. 570 570
7 7 TransAmerica Corp. 692 692
24 24 Travelers Group, Inc. 1,293 1,293
8 8 Washington Mutual, Inc. 491 491
3 3 Wells Fargo & Co. 916 916
---------- ---------- ----------
13,618 18,463 32,081
---------- ---------- ----------
Health Care (4.6%):
17 17 Abbott Labs 1,141 1,141
13 13 American Home Products Corp. 979 979
9 9 Amgen, Inc. (b) 498 498
12 12 Baxter International, Inc. 625 625
18 18 Bristol Myers Squibb Co. 1,722 1,722
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP ASSET ALLOCATION FUND / MARQUIS BALANCED FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
--------- --------- --------- --------------------------------------------------- --------- ------------- -----------
<S><C>
6 6 Cardinal Health, Inc. (c) 436 436
23 23 Eli Lilly & Co. 1,581 1,581
10 10 Guidant Corp. 647 647
25 25 HBO & Co. 1,201 1,201
15 15 Healthsouth Corp. 427 427
7 7 Johnson & Johnson 435 435
16 16 Lincare Holdings 895 895
13 13 Medpartners, Inc. 291 291
10 9 19 Merck & Co., Inc. 1,044 967 2,011
6 6 Pfizer, Inc. 447 447
16 16 Schering Plough Corp. 1,019 1,019
14 14 Tenet Healthcare Corp. 474 474
7 7 Warner-Lambert Co. 856 856
---------- ---------- ----------
4,159 11,526 15,685
---------- ---------- ----------
Raw Materials (2.4%):
9 9 Betzdearborn, Inc. 556 556
14 14 Crompton & Knowles Corp. 371 371
7 7 Dow Chemical Co. 711 711
18 14 32 Du Pont (EI) de Nemours & Co. 1,088 841 1,929
17 17 Ferro Corp. 417 417
23 23 Lubrizol Corp. 841 841
20 20 Morton International, Inc. 674 674
13 13 Nalco Chemical Co. 506 506
12 12 Olin Corp. 572 572
14 14 Praxair, Inc. 630 630
29 29 USX-U.S. Steel Group, Inc. 892 892
---------- ---------- ----------
3,532 4,567 8,099
---------- ---------- ----------
Retail (3.5%):
35 35 American Stores Co. 712 712
26 26 CompUSA, Inc. 800 800
16 14 30 Dayton Hudson Corp. 1,081 911 1,992
16 16 Gymboree 441 441
28 28 Just For Feet, Inc. (b) 364 364
23 23 Kroger Co. (b) 850 850
26 26 Limited Inc. 663 663
11 11 Nine West Group, Inc. 285 285
35 35 Officemax, Inc. (b) 504 504
9 9 Outback Steakhouse, Inc. (c) 270 270
34 34 Ross Stores, Inc. 1,246 1,246
40 40 TJX Co., Inc. (c) 1,389 1,389
10 10 Tommy Hilfiger Corp. 351 351
18 18 Toys R Us, Inc. (b) 556 556
40 40 Wal-Mart Stores, Inc. 1,558 1,558
---------- ---------- ----------
5,727 6,254 11,981
---------- ---------- ----------
Shelter (1.4%):
12 12 Armstrong World Industries, Inc 932 932
25 25 Kaufman & Broad Home Corp. 570 570
16 16 Kimberly Clark Corp. 764 764
11 11 Leggett & Platt, Inc. 457 457
9 9 Masco Corp. 468 468
12 12 Pentair, Inc. 435 435
32 32 Plum Creek Timber Co. 966 966
---------- ---------- ----------
1,898 2,694 4,592
---------- ---------- ----------
Technology (6.2%):
6 6 Altera Corp. (b) 186 186
18 18 Analog Devices, Inc. (b) (c) 485 485
17 17 Applied Materials, Inc. (b) 512 512
10 10 BMC Software, Inc. (b) 623 623
12 12 Boeing Co. 573 573
22 22 Cadence Design Systems, Inc. (c) 534 534
23 23 Cisco Systems, Inc. (b) 1,257 1,257
18 20 38 Compaq Computer Corp. (b) 988 1,134 2,122
21 21 Computer Associates International, Inc. 1,095 1,095
14 14 Dell Computer Corp. (b) 1,168 1,168
5 5 General Motors, Class H 166 166
12 12 Hewlett Packard Co. 750 750
28 28 Intel Corp. 1,946 1,946
17 17 International Business Machines 1,809 1,809
6 6 Lockheed Martin Corp. 591 591
8 8 Lucent Technologies, Inc. 623 623
20 20 Microsoft Corp. (b) 2,597 2,597
22 22 Novellus Systems, Inc. 707 707
16 16 Orbital Sciences Corp. (b) 467 467
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP ASSET ALLOCATION FUND / MARQUIS BALANCED FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
--------- --------- --------- --------------------------------------------------- --------- ------------- -----------
<S><C>
27 27 Quantum Corp. 549 549
3 3 Raytheon Co., Class A 125 125
23 23 Tech Data Corp. 894 894
21 21 Tektronix, Inc. 833 833
17 17 Teradyne, Inc. (b) 547 547
---------- ---------- ----------
5,578 15,581 21,159
---------- ---------- ----------
Transportation (0.8%):
9 9 British Airways, Public Limited Co. 862 862
27 27 Illinois Central Corp. 909 909
42 42 Werner Enterprises, Inc. 852 852
---------- ----------
2,623 2,623
---------- ----------
Utilities (6.2%):
14 14 AES Corp. (b) 653 653
13 13 Ameritech Corp. 1,022 1,022
18 18 Baltimore Gas & Electric 613 613
26 10 36 Century Telephone Enterprises 1,283 498 1,781
29 29 Consolidated Edison Co. Of New York, Inc. 1,193 1,193
14 14 Duke Energy Corp. 753 753
11 11 Florida Power & Light, Inc. 657 657
27 19 46 General Public Utilities Corp. 1,159 779 1,938
23 23 GTE Corp. 1,212 1,212
26 26 LCI International, Inc. (c) 803 803
10 10 MCN Corp. 392 392
6 6 National Fuel Gas Co. 278 278
19 19 New England Electric System 825 825
26 26 New York State Electric & Gas 919 919
26 26 NICOR, Inc. 1,103 1,103
18 18 Nipsco Industries, Inc. 905 905
20 20 Pacific Enterprises 737 737
11 19 30 SBC Communications, Inc. 791 1,428 2,219
27 27 Southern Co. 701 701
19 19 Sprint Corp. 1,102 1,102
16 16 Texas Utilities 677 677
26 26 Worldcom, Inc. (c) 793 793
---------- ---------- ----------
11,085 10,191 21,276
---------- ---------- ----------
Total Common Stocks 76,027 104,745 180,772
---------- ---------- ----------
CORPORATE BONDS (6.8%):
Banking, Finance & Insurance (4.3%):
1,000 1,000 Association Corp., 8.27%, 11/8/01 1,069 1,069
1,000 1,000 Bankamerica Corp., 8.13%, 2/1/02 1,063 1,063
500 500 Chrysler Financial Corp., 5.88%, 2/7/01 497 497
1,070 1,070 Circuit City Credit Card Master Trust, 6.38%,
8/15/05 1,077 1,077
1,000 1,000 First Hawaiian, Inc., 6.25%, 8/15/00 998 998
610 610 Ford Credit Auto Loan Master Trust, 5.50%,
2/15/03 603 603
500 500 Ford Motor Credit Corp., 8.38%, 1/15/00 522 522
250 250 General Motors Acceptance Corp., 7.00%, 3/1/00 254 254
1,250 1,250 General Motors Acceptance Corp., 8.25%, 2/24/04 1,361 1,361
1,000 1,000 Goldman Sachs Group, 7.20%, 3/1/07, 144 A 1,053 1,053
750 750 Huntington National Bank, 6.75%, 6/15/03 764 764
250 250 Lehman Brothers Holdings, Inc., 6.38%, 6/1/98 250 250
300 300 Lehman Brothers Holdings, Inc., 8.88%, 11/1/98 307 307
500 500 Lehman Brothers, Inc., 9.88%, 10/15/00 544 544
550 550 MBNA Master Credit Card, 5.40%, 3/15/99 546 546
800 800 McDonnell Douglas Corp., 9.30%, 9/11/02 834 834
307 307 McDonnell Douglas Corp., 6.45%, 12/5/02 309 309
750 750 Midland Bank PLC, 6.95%, 3/15/11 770 770
250 250 Nationsbank Texas, 6.75%, 8/15/00 254 254
1,000 1,000 Society National Bank, 6.75%, 6/15/03 1,019 1,019
500 500 Suntrust Banks, 7.38%, 7/1/02 519 519
---------- ----------
14,613 14,613
---------- ----------
Industrials (1.5%):
250 250 Anheuser Busch Co., 8.75%, 12/1/99 262 262
500 500 Campbell Soup Co., 5.63%, 9/15/03 487 487
250 250 Coca-Cola Co., 7.88%, 9/15/98 253 253
500 500 Dayton Hudson Corp., 7.25%, 9/1/04 520 520
200 200 Du Pont (EI) de Nemours & Co., 8.70%, 2/7/01 215 215
250 250 Ford Motor Co., 9.00%, 9/15/01 271 271
200 200 Illinois Tool Works, 7.50%, 12/1/98 202 202
500 500 J C Penney & Co., 5.38%, 11/15/98 496 496
250 250 Johnson & Johnson, 7.38%, 6/29/02 262 262
1,000 1,000 Occidental Petroleum, 9.25%, 8/1/19 1,249 1,249
750 750 Sears Roebuck Acceptance, 7.13%, 5/2/03 776 776
---------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP ASSET ALLOCATION FUND / MARQUIS BALANCED FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
--------- --------- --------- --------------------------------------------------- --------- ------------- -----------
<S><C>
4,993 4,993
---------- ----------
Transportation (0.1%):
500 500 Union Pacific Co., 7.60%, 5/1/05 533 533
Utilities (0.9%):
500 500 AT&T Corp., 6.00%, 8/1/00 (c) 497 497
750 750 AT&T Corp., 7.50%, 6/1/06 806 806
250 250 Duke Power Co., 7.00%, 7/1/00 255 255
250 250 Southern California Edison, 7.50%, 4/15/99 254 254
675 675 Virginia Electric & Power, 9.15%, 6/10/99 705 705
500 500 Virginia Electric & Power, 6.63%, 4/1/03 509 509
---------- ----------
3,026 3,026
---------- ----------
Total Corporate Bonds 23,165 23,165
---------- ----------
FEDERAL AGENCY DEBENTURES (0.6%):
Federal National Mortgage Assoc. (0.6%):
1,000 1,000 5.55%, 9/8/98 997 997
1,000 1,000 5.53%, 2/10/99 996 996
---------- ----------
Total Federal Agency Debentures 1,993 1,993
---------- ----------
U.S. GOVERNMENT AGENCY MORTGAGES (15.3%):
Federal Home Loan Mortgage Corp. (4.5%):
3 3 7.00%, 4/1/00, Pool #253036 3 3
1,815 1,815 7.00%, 1/25/03, Pool #G92-39-L 1,814 1,814
135 135 10.00%, 9/1/03, Pool #E30407 143 143
75 75 9.00%, 5/1/06, Pool #B0-0282 79 79
295 295 8.00%, 3/1/08, Pool #E45796 305 305
354 354 9.00%, 8/1/09, Pool #279063 368 368
943 943 7.00%, 1/1/12, Pool #E66116 957 957
313 313 10.50%, 10/1/20, Pool #D24679 347 347
1,486 1,486 6.50%, 11/15/22, Pool #1152 1,466 1,466
2,000 2,000 7.15%, 1/15/23, Pool #1517-I 2,030 2,030
765 765 8.00%, 4/1/25, Pool #C00401 795 795
837 837 8.00%, 5/1/25, Pool #D60455 870 870
457 457 7.00%, 2/1/26, Pool #D69343 463 463
680 680 6.50%, 2/1/26, Pool #D68616 673 673
947 947 6.50%, 2/1/26, Pool #D68124 938 938
487 487 7.00%, 3/1/26, Pool #D69430 492 492
913 913 7.50%, 5/1/26, Pool #C00460 937 937
806 806 8.50%, 7/1/26, Pool #C00472 842 842
957 957 7.00%, 10/1/26, Pool #D75494 967 967
1,000 1,000 7.50%, 12/1/27, Pool #C00542 1,024 1,024
---------- ---------- ----------
5,760 9,753 15,513
---------- ---------- ----------
Federal National Conventional Loan (0.3%):
380 380 8.00%, 6/1/24, Pool #250085 395 395
650 650 8.00%, 6/1/24, Pool #270402 674 674
1,069 1,069
Federal National Mortgage Assoc. (3.5%):
275 275 6.40%, 3/25/03 275 275
250 250 6.40%, 1/13/04 250 250
5,000 5,000 5.88%, 2/2/06 4,944 4,944
1,120 1,120 7.00%, 9/1/07, Pool# 185265 1,137 1,137
864 864 6.50%, 5/1/11, Pool #337195 865 865
892 892 7.00%, 7/1/25, Pool #317252 901 901
854 854 6.50%, 2/1/26, Pool #337115 846 846
844 844 7.50%, 5/1/26, Pool #344916 865 865
917 917 7.00%, 5/1/26, Pool #346269 926 926
866 866 7.50%, 11/1/26, Pool #363626 886 886
---------- ---------- ----------
6,081 5,814 11,895
---------- ---------- ----------
Government National Mortgage Assoc. (7.0%):
388 388 7.50%, 8/15/07, Pool #329613 399 399
419 419 7.00%, 7/15/08, Pool #326444 427 427
560 560 6.50%, 7/15/08, Pool #349693 563 563
54 54 6.50%, 3/15/09, Pool #367398 55 55
1,348 1,348 6.50%, 5/15/09, Pool #366779 1,355 1,355
709 709 5.50%, 4/20/11, Pool #2222 677 677
16 16 13.50%, 5/15/11, Pool #047241 19 19
3 3 12.50%, 10/15/13, Pool #070066 4 4
18 18 12.00%, 3/15/14, Pool #109220 21 21
13 13 13.50%, 9/15/14, Pool #119582 15 15
65 65 9.00%, 12/15/16, Pool # 203620 70 70
113 113 8.00%, 4/15/17, Pool #192100 118 118
105 105 10.00%, 7/15/18, Pool #248404 114 114
82 82 10.00%, 3/15/19, Pool #265770 89 89
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP ASSET ALLOCATION FUND / MARQUIS BALANCED FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
--------- --------- --------- --------------------------------------------------- --------- ------------- -----------
<S><C>
72 72 8.00%, 5/15/22, Pool #329176 75 75
88 88 6.50%, 1/15/24, Pool #376656 88 88
229 229 8.00%, 4/15/24, Pool #376038 239 239
1,132 1,132 7.00%, 4/15/24, Pool #355120 1,141 1,141
1,114 1,114 8.00%, 8/15/24, Pool #394024 1,161 1,161
1,698 1,698 7.50%, 6/15/25, Pool #401860 1,740 1,740
1,333 1,333 7.00%, 8/15/25, Pool #413007 1,349 1,349
6,889 6,889 7.00%, 2/15/26, Pool #426280 6,945 6,945
977 977 6.50%, 4/15/26, Pool #416192 967 967
962 962 6.50%, 4/15/26, Pool #424185 952 952
626 626 8.00%, 5/15/26, Pool #426783 649 649
702 702 7.50%, 5/15/26, Pool #408313 719 719
842 842 7.50%, 5/15/26, Pool #375345 864 864
985 985 7.00%, 5/15/26, Pool #375344 995 995
858 858 8.50%, 1/15/27, Pool #432266 901 901
1,000 1,000 7.50%, 12/15/27, Pool #455358 1,025 1,025
---------- ---------- ----------
14,325 9,411 23,736
---------- ---------- ----------
Total U.S. Government Agency Mortgages 26,166 26,047 52,213
---------- ---------- ----------
U.S. TREASURY OBLIGATIONS (17.5%):
U.S. Treasury Bills (0.1%):
55 55 1/22/98 (d) 55 55
95 95 2/5/98 (d) 95 95
40 40 2/19/98 (d) 40 40
115 115 2/26/98 (d) 114 114
55 55 3/12/98 (d) 54 54
---------- ----------
358 358
---------- ----------
U.S. Treasury Bonds (3.4%):
750 750 11.25%, 2/15/15 (c) 1,176 1,176
1,900 1,900 7.50%, 11/15/16 2,218 2,218
4,700 4,700 8.13%, 8/15/19 (c) 5,877 5,877
1,000 1,000 7.88%, 2/15/21 (c) 1,228 1,228
1,000 1,000 7.13%, 2/15/23 1,141 1,141
---------- ---------- ----------
1,141 10,499 11,640
---------- ---------- ----------
U.S. Treasury Notes (14.0%):
500 500 7.25%, 2/15/98 (c) 501 501
2,000 600 2,600 9.00%, 5/15/98 2,025 608 2,633
2,000 2,000 9.25%, 8/15/98 2,044 2,044
1,000 1,000 6.38%, 1/15/99 1,008 1,008
200 200 8.88%, 2/15/99 207 207
300 300 5.88%, 3/31/99 301 301
3,000 3,250 6,250 7.00%, 4/15/99 (c) 3,050 3,304 6,354
1,500 1,500 6.38%, 7/15/99 1,517 1,517
2,000 2,000 8.00%, 8/15/99 2,071 2,071
300 300 6.00%, 10/15/99 302 302
250 250 7.75%, 11/30/99 (c) 259 259
1,000 1,000 7.75%, 1/31/00 (c) 1,040 1,040
500 500 8.50%, 2/15/00 528 528
1,000 1,000 6.50%, 5/31/01 (c) 1,024 1,024
6,500 6,500 6.50%, 8/31/01 (c) 6,660 6,660
2,000 2,000 6.25%, 10/31/01 2,033 2,033
2,000 2,000 6.63%, 3/31/02 (c) 2,064 2,064
2,000 2,000 6.25%, 8/31/02 2,040 2,040
4,000 150 4,150 6.25%, 2/15/03 (c) 4,090 153 4,243
1,500 1,500 5.75%, 8/15/03 1,500 1,500
1,500 1,500 6.50%, 5/15/05 (c) 1,563 1,563
1,500 1,500 6.50%, 8/15/05 1,565 1,565
3,000 3,000 5.63%, 2/15/06 2,966 2,966
3,000 3,000 6.13%, 8/15/07 3,082 3,082
---------- ---------- ----------
29,519 17,986 47,505
---------- ---------- ----------
Total U.S. Treasury Obligations 30,660 28,843 59,503
---------- ---------- ----------
INVESTMENT COMPANIES (1.2%):
1,959 1,959 SEI Liquid Asset Trust, Treasury Portfolio 1,959 1,959
2,150 2,150 SEI Liquid Asset Trust, Government Portfolio 2,150 2,150
---------- ----------
Total Investment Companies 4,109 4,109
---------- ----------
REPURCHASE AGREEMENTS (1.4%):
4,876 4,876 Prudential Securities, 6.80%, 1/2/98
(Collateralized by $5,105 4,876 4,876
U.S. Treasury Bills, 6/25/98, market value $4,974) ---------- ----------
Total Repurchase Agreements 4,876 4,876
---------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP ASSET ALLOCATION FUND / MARQUIS BALANCED FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PROFORMA
MARQUIS ONE GROUP COMBINED PROFORMA
SHARES OR SHARES OR SHARES OR MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL MARKET MARKET MARKET
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION VALUE VALUE VALUE
--------- --------- --------- --------------------------------------------------- --------- ------------- -----------
<S><C>
Total (Cost $295,743) (a) 136,962 202,720 339,682
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
- --------------------
Percentages indicated are based on net assets of $340,430.
(a) Represents cost for federal income tax purposes and differs from
value by net unrealized appreciation of securities as follows
(amounts in thousands):
<TABLE>
<S> <C>
Unrealized appreciation. . . . . . . . . . . . $47,159
Unrealized depreciation . . . . . . . . . . . (3,220)
Net unrealized appreciation. . . . . . . . . . . $43,939
</TABLE>
(b) Non-income producing securities.
(c) With respect to the One Group Fund only, a portion of this security
was loaned as of December 31, 1997.
(d) Serves as collateral for futures contracts.
At December 31, 1997, the Portfolio's open futures contracts were as follows:
<TABLE>
<CAPTION>
OPENING MARKET
NUMBER POSITION VALUE
OF CONTRACTS CONTRACT TYPE (000) (000)
<S> <C> <C> <C>
34 S&P 500 March 1998 Futures $8,270 $8,322
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP TREASURY ONLY MONEY MARKET FUND / MARQUIS INSTITUTIONAL MONEY
MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
- ------------ ------------- ------------- ------------------------------------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS (94.1%):
U.S. Treasury Bills (26.0%):
125,412.00 125,412 1/22/98 (b) 125,033 125,033
15,000 15,000 1/22/98 14,955 14,955
4,490 4,490 2/5/98 4,467 4,467
2,489 2,489 2/12/98 2,473 2,473
5,000 5,000 3/5/98 4,953 4,953
1,800 1,800 3/5/98 1,783 1,783
52,500 52,500 3/26/98 51,861 51,861
8,940 8,940 11/12/98 8,528 8,528
-------- -------- --------
16,738 197,315 214,053
-------- -------- --------
U.S. Treasury Notes (68.1%):
100,000 100,000 7.88%, 1/15/98 100,090 100,090
125,000 125,000 5.63%, 1/31/98 124,993 124,993
189,177 189,177 7.25%, 2/17/98 189,546 189,546
75,000 75,000 5.13%, 2/28/98 74,950 74,950
1,065 1,065 7.88%, 4/15/98 1,072 1,072
50,000 50,000 7.88%, 4/30/98 (b) 50,060 50,060
5,000 5,000 5.25%, 7/31/98 4,990 4,990
15,000 15,000 6.13%, 8/31/98 15,039 15,039
-------- -------- --------
- 560,740 560,740
-------- -------- --------
Total U.S. Treasury Obligations 16,738 758,055 774,793
REPURCHASE AGREEMENTS (4.6%):
2,200 2,200 Aubrey G. Lanston & Co., 6.50%, 1/2/98
(collateralized by $2,100 U.S. Treasury
Notes, 7.50%, 11/15/01, market value -
$2,246) 2,200 2,200
1,575 1,575 Deutsche Morgan Grenfell, 6.70%, 1/2/98
(collateralized by $1,573 U.S. Treasury
Notes, 5.88%, 2/28/99, market value -
$1,608) 1,575 1,575
2,200 2,200 HSBC Securities, 6.60%, 1/2/98
(collateralized by $8,600 U.S. Treasury
Strips, 0.00%, 5/15/20, market value -
$8,316) 2,200 2,200
10,000 10,000 J.P. Morgan Securities, 6.60%, 1/2/98
(collateralized by $10,598 U.S. Treasury
Strips, 0.00%, 8/15/98, market value -
$10,238) 10,000 10,000
1,581 1,581 J.P. Morgan Securities, 6.40%, 1/2/98
(collateralized by $1,129 U.S. Treasury
Bonds, 9.88%, 11/15/15, market value -
$1,613) 1,581 1,581
10,000 10,000 Lehman Brothers Holding, Inc., 6.57%,
1/2/98 (collateralized by $13,675 U.S.
Treasury Strips, 0.00%, 2/15/03, market
value - $10,212) 10,000 10,000
1,575 1,575 Merrill Lynch, 6.45%, 1/2/98
(collateralized by $1,190 U.S. Treasury
Bonds, 8.88%, 6/15/17, market value -
$1,612) 1,575 1,575
1,576 1,576 Nomura Securities, 6.58%, 1/2/98
(collateralized by $1,612 U.S. Treasury
Bills, 0.00%, 1/22/98, market value -
$1,607) 1,576 1,576
1,575 1,575 Morgan Stanley, 5.18%, 1/2/98
(collateralized by $1,226 U.S. Treasury
Bonds, 8.75%, 5/15/17, market value -
$1,613) 1,575 1,575
2,200 2,200 Prudential Securities, Inc., 6.60%,
1/2/98 (collateralized by $1,965 U.S.
Treasury Notes, 6.88%, 8/15/25, market
value - $2,244) 2,200 2,200
1,575 1,575 UBS Securities, 6.50%, 1/2/98
(collateralized by $7,229 various U. S.
Treasury Securities, 0.00%, 8/15/22 -
11/15/22, market - value $1,607) 1,575 1,575
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE ONE GROUP TREASURY ONLY MONEY MARKET FUND / MARQUIS INSTITUTIONAL MONEY
MARKET FUND
PROFORMA COMBINED SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PROFORMA PROFORMA
MARQUIS ONE GROUP COMBINED MARQUIS ONE GROUP COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL AMORTIZED AMORTIZED AMORTIZED
AMOUNT AMOUNT AMOUNT SECURITY DESCRIPTION COST COST COST
- ------------ ------------- ------------- ------------------------------------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
2,200 2,200 Wachovia, 6.00%, 1/2/98 (collateralized
by $2,230 U.S. Treasury Notes, 5.75%,
11/15/00, market value - $2,248) 2,200 2,200
------- ------- -------
38,257 - 38,257
------- ------- -------
Total (Amortized Cost $813,050) (a) 54,995 758,055 813,050
------- ------- -------
------- ------- -------
</TABLE>
- -------------------
Percentages indicated are based on net assets of $823,330.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
(b) With respect to The One Group Fund only, a portion of this security was
loaned as of December 31, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
The One Group Family of Mutual Funds
Proforma Combined Statements of Assets and Liabilities
December 31, 1997
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
U.S. Treasury Marquis Treasury
Securities Securities
Money Market Money Market Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS:
Investments, at amortized cost $ 587,536 $ 233,899 $ $ 821,435
Repurchase agreements, at cost 2,944,317 1,188,751 4,133,068
------------- ------------- -------------
Total 3,531,853 1,422,650 4,954,503
Cash - - -
Interest receivable 5,657 6,133 11,790
Deferred organizational costs - 10 (10) -
Prepaid expenses and other assets 39 262 301
------------- ------------- ------------- -------------
TOTAL ASSETS 3,537,549 1,429,055 (10) 4,966,594
------------- ------------- ------------- -------------
LIABILITIES:
Cash overdraft 3 2,145 2,148
Income payable 14,322 5,635 19,957
Payable to brokers for investments purchased - - -
Accrued expenses and other payables:
Investment advisory fees 762 471 1,233
Administration fees 419 88 507
12b-1 fees 173 174 347
Other 120 33 153
------------- ------------- -------------
TOTAL LIABILITIES 15,799 8,546 24,345
------------- ------------- -------------
NET ASSETS:
Capital 3,521,483 1,420,484 (10) 4,941,957
Undistributed (distributions in excess of)
net investment income 43 - 43
Accumulated undistributed net realized
gains (losses) from investment transactions 224 25 249
------------- ------------- ------------- -------------
NET ASSETS $ 3,521,750 $ 1,420,509 $ (10) $ 4,942,249
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSETS
Fiduciary/Trust $ 2,680,843 $ 599,420 $ 14,469 $ 3,294,732 (b)(c)
Class A/Retail 840,788 635,301 171,309 1,647,398 (b)(c)(d)
Class B/Sweep Class 119 185,788 (185,788) 119 (d)
------------- ------------- ------------- -------------
Total $ 3,521,750 $ 1,420,509 $ (10) $ 4,942,249
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING UNITS OF BENEFICIAL INTEREST
Fiduciary/Trust 2,680,619 599,403 14,469 3,294,491
Class A 840,743 635,293 171,309 1,647,345
Class B 119 185,788 (185,788) 119
------------- ------------- ------------- -------------
Total 3,521,481 1,420,484 (10) 4,941,955
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Asset Value:
Offering and redemption price per share, all classes $ 1.00 $ 1.00 $ 1.00
------------- ------------- -------------
------------- ------------- -------------
<CAPTION>
Municipal Marquis
Money Tax-Exempt
Market Money Market Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS:
Investments, at amortized cost $ 594,524 $ 130,114 $ 724,638
Repurchase agreements, at cost - - -
------------- ------------- -------------
Total 594,524 130,114 724,638
Cash - 27 - (a)
Interest receivable 4,122 925 5,047
Deferred organizational costs
Prepaid expenses and other assets 33 20 53
------------- ------------- ------------- -------------
TOTAL ASSETS 598,679 131,086 729,738
------------- ------------- ------------- -------------
LIABILITIES:
Cash overdraft 234 - 207 (a)
Income payable 1,728 348 2,076
Payable to brokers for investments purchased - 4,387 4,387
Accrued expenses and other payables:
Investment advisory fees 129 72 201
Administration fees 79 12 91
12b-1 fees 21 - 21
Other - 24 24
------------- ------------- -------------
TOTAL LIABILITIES 2,191 4,843 7,007
------------- ------------- -------------
NET ASSETS:
Capital 596,622 126,243 722,865
Undistributed (distributions in excess of)
net investment income (130) - (130)
Accumulated undistributed net realized
gains (losses) from investment transactions (4) - (4)
------------- ------------- ------------- -------------
NET ASSETS $ 596,488 $ 126,243 $ 722,731
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSETS
Fiduciary/Trust 500,105 $ - $ 62,993 $ 563,098 (b)
Class A/Retail 96,383 126,243 (62,993) 159,633 (b)
Class B/Sweep Class - - -
------------- ------------- ------------- -------------
Total 596,488 $ 126,243 $ - $ 722,731
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING UNITS OF BENEFICIAL INTEREST
Fiduciary/Trust 500,226 - 62,993 563,219
Class A 96,396 126,243 (62,993) 159,646
Class B - - -
------------- ------------- ------------- -------------
Total 596,622 126,243 - 722,865
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Asset Value:
Offering and redemption price per share, all classes $ 1.00 $ 1.00 $ 1.00
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
(a) Cash balances are combined.
(b) These figures reflect the conversion of approximately 63% and 50% of
Marquis Retail Class shares to One Group Fiduciary shares respectively for
each fund.
(c) These figures reflect the conversion of approximately 65% of Marquis Trust
Class shares to One Group Class A shares.
(d) These figures reflect the conversion of all Marquis Sweep Class shares to
One Group Class A shares.
- --------------------------------------------------------------------------------
<PAGE>
The One Group Family of Mutual Funds
Proforma Combined Statements of Assets and Liabilities
December 31, 1997
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Marquis
Government Government
Bond Securities Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 848,412 $ 142,850 $ $ 991,262
Repurchase agreements, at cost 46,298 4,337 50,635
------------- ------------- -------------
Total (cost $1,012,053; $188,048, respectively) 894,710 147,187 1,041,897
Interest receivable 6,501 2,040 8,541
Receivable from brokers for investments sold - 32 32
Receivable for shares issued 78 3 81
Deferred organizational costs - 2 (2) -
Prepaid expenses and other assets 10 11 21
------------- ------------- ------------- -------------
TOTAL ASSETS 901,299 149,275 (2) 1,050,572
------------- ------------- ------------- -------------
LIABILITIES:
Cash overdraft - 20 20
Income payable 4,189 734 4,923
Payable to brokers for investments purchased 39,862 - 39,862
Payable for shares redeemed 3 - 3
Accrued expenses and other payables:
Investment advisory fees 317 65 382
Administration fees 87 17 104
12b-1 fees 18 1 19
Other 168 9 177
------------- ------------- -------------
TOTAL LIABILITIES 44,644 846 45,490
------------- ------------- -------------
NET ASSETS:
Capital 845,755 147,689 (2) 993,442
Undistributed (distributions in excess of)
net investment income (101) 22 (79)
Accumulated undistributed net realized gains (losses)
from investment transactions (17,278) (847) (18,125)
Net unrealized appreciation (depreciation) from
investments 28,279 1,565 29,844
------------- ------------- ------------- -------------
NET ASSETS $ 856,655 $ 148,429 $ (2) $ 1,005,082
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSETS
Fiduciary $ 809,738 $ - $ 144,434 $ 954,172 (a)
Class A 32,295 147,269 (144,436) 35,128 (a)
Class B 14,622 1,160 15,782
------------- ------------- ------------- -------------
Total $ 856,655 $ 148,429 $ (2) $ 1,005,082
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING UNITS OF BENEFICIAL INTEREST
Fiduciary 80,877 - 14,429 95,306 (a)(b)
Class A 3,225 14,677 (14,394) 3,508 (a)(b)
Class B 1,461 115 1 1,576 (b)
------------- ------------- ------------- -------------
Total 85,563 14,792 36 100,390
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Asset Value:
Fiduciary offering and redemption price per share $ 10.01 $ - $ 10.01
------------- ------------- -------------
------------- ------------- -------------
Class A
Redemption price per share $ 10.01 $ 10.03 $ 10.01
------------- ------------- -------------
------------- ------------- -------------
Maximum sales charge 4.50% 3.50% 4.50%
------------- ------------- -------------
------------- ------------- -------------
Maximum offering price per share (100%/(100%-maximum
sales charge) of net asset value adjusted to
nearest cent) $ 10.48 $ 10.39 $ 10.48
------------- ------------ -------------
------------- ------------ -------------
Class B offering price per share (c) $ 10.01 $ 10.09 $ 10.01
------------- ------------ -------------
------------- ------------ -------------
<CAPTION>
Marquis
Louisiana Louisiana
Municipal Bond Tax-Free Income Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 156,733 $ 41,940 $ 198,673
Repurchase agreements, at cost - - -
------------- ------------- -------------
Total (cost $1,012,053; $188,048, respectively) 156,733 41,940 198,673
Interest receivable 2,682 519 3,201
Receivable from brokers for investments sold - - -
Receivable for shares issued 1 - 1
Deferred organizational costs - - -
Prepaid expenses and other assets 35 13 48
------------- ------------- -------------
TOTAL ASSETS 159,451 42,472 201,923
------------- ------------- -------------
LIABILITIES:
Cash overdraft - - -
Income payable 624 154 778
Payable to brokers for investments purchased 2,734 - 2,734
Payable for shares redeemed - 11 11
Accrued expenses and other payables:
Investment advisory fees 80 16 96
Administration fees 23 5 28
12b-1 fees 18 1 19
Other 22 6 28
------------- ------------- -------------
TOTAL LIABILITIES 3,501 193 3,694
------------- ------------- -------------
NET ASSETS:
Capital 147,152 40,844 187,996
Undistributed (distributions in excess of)
net investment income - 5 5
Accumulated undistributed net realized gains (losses)
from investment transactions (343) (54) (397)
Net unrealized appreciation (depreciation) from
investments 9,141 1,484 10,625
------------- ------------- -------------
NET ASSETS $ 155,950 $ 42,279 $ 198,229
------------- ------------- -------------
------------- ------------- -------------
NET ASSETS
Fiduciary $ 102,802 $ - $ 12,947 $ 115,749 (a)
Class A 49,075 40,307 (12,947) 76,435 (a)
Class B 4,073 1,972 6,045
------------- ------------- ------------- -------------
Total $ 155,950 $ 42,279 $ - $ 198,229
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING UNITS OF BENEFICIAL INTEREST
Fiduciary 9,982 - 1,257 11,239 (a)(b)
Class A 4,767 3,942 (1,283) 7,426 (a)(b)
Class B 395 193 (2) 586 (b)
------------- ------------- ------------- -------------
Total 15,144 4,135 (28) 19,251
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Asset Value:
Fiduciary offering and redemption price per share $ 10.30 $ - $ 10.30
------------- ------------- -------------
------------- ------------- -------------
Class A
Redemption price per share $ 10.29 $ 10.23 $ 10.29
------------- ------------- -------------
------------- ------------- -------------
Maximum sales charge 4.50% 3.50% 4.50%
------------- ------------- -------------
------------- ------------- -------------
Maximum offering price per share (100%/(100%-maximum
sales charge) of net asset value adjusted to
nearest cent) $ 10.77 $ 10.60 $ 10.77
------------- ------------- -------------
------------- ------------- -------------
Class B offering price per share (c) $ 10.30 $ 10.23 $ 10.30
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
(a) These figures reflect the conversion of approximately 98% and 32% of
Marquis Class A shares to One Group Fiduciary shares respectively for
each fund.
(b) These figures reflect an adjustment to the number of shares based on the
assets of the Marquis Fund divided by the NAV of the One Group Fund.
(c) Redemption price per Class B varies based on length of time held.
- --------------------------------------------------------------------------------
<PAGE>
The One Group Family of Mutual Funds
Proforma Combined Statements of Assets and Liabilities
December 31, 1997
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Marquis
Disciplined Value
Value Equity Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 629,791 $ 140,899 $ 770,690
Repurchase agreements, at cost 15,355 1,380 16,735
Total (cost $608,093; $731,936, respectively) 645,146 142,279 787,425
Interest & dividends receivable 680 283 963
Receivable from brokers for investments sold 1,296 - 1,296
Receivable for shares issued 22 77 99
Prepaid expenses and other assets 8 8 16
------------- ------------- -------------
TOTAL ASSETS 647,152 142,647 789,799
------------- ------------- -------------
LIABILITIES:
Cash overdraft 3 6 9
Dividends payable 484 311 795
Payable for shares redeemed 10 20 30
Accrued expenses and other payables:
Investment advisory fees 392 138 530
Administration fees 91 3 94
12b-1 fees 27 6 33
Other 150 34 184
------------- ------------- -------------
TOTAL LIABILITIES 1,157 518 1,675
------------- ------------- -------------
NET ASSETS:
Capital 485,221 107,047 592,268
Undistributed (distributions in excess of)
net investment income (37) (3) (40)
Accumulated undistributed net realized gains (losses)
from investment transactions 11,635 4,929 16,564
Net unrealized appreciation (depreciation) from
investments 149,176 30,156 179,332
------------- ------------- -------------
NET ASSETS $ 645,995 $ 142,129 $ 788,124
------------- ------------- -------------
NET ASSETS
Fiduciary $ 591,390 $ - $ 116,876 $ 708,266 (a)
Class A 29,367 131,648 (116,876) 44,139 (a)
Class B 25,238 10,481 - 35,719
Class C - - - -
------------- ------------- ------------- -------------
Total $ 645,995 $ 142,129 $ - $ 788,124
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING UNITS OF BENEFICIAL INTEREST
Fiduciary 36,772 - 7,268 44,040 (a)(b)
Class A 1,822 8,556 (7,640) 2,738 (a)(b)
Class B 1,571 679 (26) 2,224 (b)
Class C - - - -
------------- ------------- ------------- -------------
Total 40,165 9,235 (398) 49,002
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Asset Value:
Fiduciary offering and redemption price per share $ 16.08 - $ 16.08
------------- ------------- -------------
------------- ------------- -------------
Class A
Redemption price per share $ 16.12 15.39 $ 16.12
------------- ------------- -------------
------------- ------------- -------------
Maximum sales charge 4.50% 3.50% 4.50%
------------- ------------- -------------
------------- ------------- -------------
Maximum offering price per share (100%/(100%-maximum
sales charge) of net asset value adjusted to
nearest cent) $ 16.88 15.95 $ 16.88
------------- ------------- -------------
------------- ------------- -------------
Class B offering price per share (d) $ 16.06 15.44 $ 16.06
------------- ------------- -------------
------------- ------------- -------------
Class C offering price per share (d) $ - - $ -
------------- ------------- -------------
------------- ------------- -------------
<CAPTION>
Marquis
Growth Growth
Opportunities Equity Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 814,383 $ 37,039 $ 851,422
Repurchase agreements, at cost 35,429 1,564 36,993
Total (cost $608,093; $731,936, respectively) 849,812 38,603 888,415
Interest & dividends receivable 454 47 501
Receivable from brokers for investments sold 23,944 - 23,944
Receivable for shares issued 449 19 468
Prepaid expenses and other assets 10 9 19
------------- ------------- -------------
TOTAL ASSETS 874,669 38,678 913,347
------------- ------------- -------------
LIABILITIES:
Cash overdraft 7 7 14
Dividends payable 15,098 31 15,129
Payable for shares redeemed 176 3 179
Accrued expenses and other payables:
Investment advisory fees 498 28 526
Administration fees 115 4 119
12b-1 fees 63 1 64
Other 187 7 194
------------- ------------- -------------
TOTAL LIABILITIES 16,144 81 16,225
------------- ------------- -------------
NET ASSETS:
Capital 722,544 30,825 753,369
Undistributed (distributions in excess of)
net investment income (2,006)) (1) (2,007)
Accumulated undistributed net realized gains (losses)
from investment transactions (10,711)) (8) (10,719)
Net unrealized appreciation (depreciation) from
investments 148,698 7,781 156,479
------------- ------------- -------------
NET ASSETS $ 858,525 $ 38,597 $ 897,122
------------- ------------- -------------
NET ASSETS
Fiduciary $ 733,898 $ - $ 33,822 $ 767,720 (a)
Class A 62,939 36,627 (33,822) 65,744 (a)
Class B 61,686 1,970 - 63,656
Class C 2 - - 2
------------- ------------- ------------- -------------
Total $ 858,525 $ 38,597 $ - $ 897,122
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING UNITS OF BENEFICIAL INTEREST
Fiduciary 37,762 - 1,740 39,502 (a)(b)
Class A 3,262 2,375 (2,230) 3,407 (a)(b)
Class B 3,317 128 (22) 3,423 (b)
Class C - (c) - - (c)
------------- ------------- ------------- -------------
Total 44,341 2,503 (512) 46,332
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Asset Value:
Fiduciary offering and redemption price per share $ 19.44 $ - $ 19.44
------------- ------------- -------------
------------- ------------- -------------
Class A
Redemption price per share $ 19.30 $ 15.42 $ 19.30
------------- ------------- -------------
------------- ------------- -------------
Maximum sales charge 4.50% 3.50% 4.50%
------------- ------------- -------------
------------- ------------- -------------
Maximum offering price per share (100%/(100%-maximum
sales charge) of net asset value adjusted to
nearest cent) $ 20.21 $ 15.98 $ 20.21
------------- ------------- -------------
------------- ------------- -------------
Class B offering price per share (d) $ 18.60 $ 15.34 $ 18.60
------------- ------------- -------------
------------- ------------- -------------
Class C offering price per share (d) $ 19.41 $ - $ 19.41
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
(a) These figures reflect the conversion of approximately 89% and 92% of
Marquis Class A shares to One Group Fiduciary shares respectively for
each fund.
(b) These figures reflect an adjustment to the number of shares based on the
assets of the Marquis Fund divided by the NAV of the One Group Fund.
(c) Amount is less than 1,000.
(d) Redemption price per Class B and Class C shares varies based on length of
time held.
- --------------------------------------------------------------------------------
<PAGE>
The One Group Family of Mutual Funds
Proforma Combined Statements of Assets and Liabilities
December 31, 1997
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Asset Marquis Asset
Allocation Balanced Allocation
Fund Fund Adjustments Fund
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 197,844 $ 136,962 $ $ 334,806
Repurchase agreements, at cost 4,876 - 4,876
------------- ------------ ------------
Total (cost $295,743; $54,995 respectively) 202,720 136,962 339,682
Cash 1 - 1
Interest & dividends receivable 1,329 1,066 2,395
Receivable from brokers for investments sold - 7 7
Receivable for shares issued 220 14 234
Deferred organizational costs - 1 (1)
Prepaid expenses and other assets 2 16 18
------------- ------------ ------------- ------------
TOTAL ASSETS 204,272 138,066 (1) 342,337
------------- ------------ ------------- ------------
LIABILITIES:
Cash Overdraft - - -
Dividends payable 523 977 1,500
Payable for shares redeemed 30 4 34
Net payable for variation margin on futures contracts 2 - 2
Accrued expenses and other payables:
Investment advisory fees 93 82 175
Administration fees 13 16 29
12b-1 fees 65 3 68
Other 88 11 99
------------- ------------ ------------
TOTAL LIABILITIES 814 1,093 1,907
------------- ------------ ------------
NET ASSETS:
Capital 178,352 115,478 (1) 293,829
Undistributed (distributions in excess of)
net investment income (15) 7 (8)
Accumulated undistributed net realized gains (losses)
from investment and futures transactions 2,026 592 2,618
Net unrealized appreciation (depreciation) from
investments and futures 23,095 20,896 43,991
------------- ------------ ------------- ------------
NET ASSETS $ 203,458 $ 136,973 (1) $ 340,430
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
NET ASSETS
Fiduciary/Institutional $ 94,794 $ - $ 128,762 $ 223,556 (a)
Class A 38,874 132,739 (128,763) 42,850 (a)
Class B 69,790 4,234 - 74,024
------------- ------------- ------------- -------------
Total $ 203,458 $ 136,973 $ (1) $ 340,430
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING UNITS OF BENEFICIAL INTEREST
Fiduciary/Institutional 7,531 - 10,227 17,758 (a)(b)
Class A 3,085 10,844 (10,528) 3,401 (a)(b)
Class B 5,517 344 (9) 5,852 (b)
------------- ------------- ------------- -------------
Total 16,133 11,188 (310) 27,011
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Asset Value:
Fiduciary/Institutional offering and
redemption price per share $ 12.59 $ - $ 12.59
------------- ------------- -------------
------------- ------------- -------------
Class A
Redemption price per share $ 12.60 $ 12.24 $ 12.60
------------- ------------- -------------
------------- ------------- -------------
Maximum sales charge 4.50% 3.50% 4.50%
------------- ------------- -------------
------------- ------------- -------------
Maximum offering price per share (100%/(100%-maximum
sales charge) of net asset value adjusted to
nearest cent) $ 13.19 $ 12.68 $ 13.19
------------- ------------- -------------
------------- ------------- -------------
Class B offering price per share (c) $ 12.65 $ 12.31 $ 12.65
------------- ------------- -------------
------------- ------------- -------------
<CAPTION>
Treasury Only Institutional Treasury Only
Money Market Money Market Money Market
Fund Fund Adjustments Fund
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 758,055 $ 54,995 $ 813,050
Repurchase agreements, at cost - - -
------------- ------------- -------------
Total (cost $295,743; $54,995 respectively) 758,055 54,995 813,050
Cash 1 - -
Interest & dividends receivable 13,971 269 14,240
Receivable from brokers for investments sold - - -
Receivable for shares issued - - -
Deferred organizational costs - 1 - 1
Prepaid expenses and other assets - 14 14
------------- ------------- -------------
TOTAL ASSETS 772,028 55,278 827,305
------------- ------------- -------------
LIABILITIES:
Cash Overdraft - 229 228
Dividends payable 3,315 271 3,586
Payable for shares redeemed - - -
Net payable for variation margin on futures contracts - - -
Accrued expenses and other payables:
Investment advisory fees 51 32 83
Administration fees 32 5 37
12b-1 fees - - -
Other 14 27 41
------------- ------------- -------------
TOTAL LIABILITIES 3,412 564 3,975
------------- ------------- -------------
NET ASSETS:
Capital 768,705 54,714 823,419
Undistributed (distributions in excess of)
net investment income - - -
Accumulated undistributed net realized gains (losses)
from investment and futures transactions (89) - (89)
Net unrealized appreciation (depreciation) from
investments and futures - - -
------------- ------------- -------------
NET ASSETS $ 768,616 $ 54,714 $ 823,330
------------- ------------- -------------
------------- ------------- -------------
NET ASSETS
Fiduciary/Institutional $ 768,616 $ 54,714 - $ 823,330
Class A - - - -
Class B - - - -
------------- ------------- ------------- -------------
Total $ 768,616 $ 54,714 - $ 823,330
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING UNITS OF BENEFICIAL INTEREST
Fiduciary/Institutional 768,703 54,714 - 823,417
Class A - - - -
Class B - - - -
------------- ------------- ------------- -------------
Total 768,703 54,714 - 823,417
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net Asset Value:
Fiduciary/Institutional offering and
redemption price per share $ 1.00 $ 1.00 $ 1.00
------------- ------------- -------------
------------- ------------- -------------
Class A
Redemption price per share $ - $ - $ -
------------- ------------- -------------
------------- ------------- -------------
Maximum sales charge - - -
------------- ------------- -------------
------------- ------------- -------------
Maximum offering price per share (100%/(100%-maximum
sales charge) of net asset value adjusted to
nearest cent) $ - $ - $ -
------------- ------------- -------------
------------- ------------- -------------
Class B offering price per share (c) $ - $ - $ -
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
(a) These figures reflect the conversion of approximately 97% of Marquis
Class A shares to One Group Fiduciary shares.
(b) These figures reflect an adjustment to the number of shares based on
the assets of the Marquis Fund divided by the NAV of the One Group Fund.
(c) Redemption price per Class B shares varies based on length of time held.
<PAGE>
The One Group Family of Mutual Funds
Proforma Combined Statements of Operations
For the Year Ended December 31, 1997
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
U.S. Treasury Marquis Treasury
Securities Securities
Money Market Money Market Proforma Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 158,642 $ 68,326 $ - $ 226,968
Dividend income - - - -
Income from securities lending 174 - - 174
------------- ------------- ------------- -------------
Total Income 158,816 68,326 - 227,142
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees 10,067 3,729 623 14,419
Administration fees 4,735 1,865 182 6,782
12b-1 fees (Retail Class) 1,692 1,400 671 3,763
12b-1 fees (Cash Sweep Class) 2 638 (638) 2
Custodian and accounting fees 226 186 (88) 324
Legal and audit fees 98 121 (79) 140
Organization costs - 34 (34) -
Trustees' fees and expenses 40 30 (13) 57
Transfer agent fees 999 69 363 1,431
Registration and filing fees 781 88 250 1,119
Printing costs 296 62 66 424
Other 233 31 70 334
------------- ------------- ------------- -------------
Total expenses before waivers 19,169 8,253 1,373 28,795
Less waivers (3,430) (489) (1,252) (5,171)
------------- ------------- ------------- -------------
NET EXPENSES 15,739 7,764 121 23,624
------------- ------------- ------------- -------------
Net Investment Income 143,077 60,562 (121) 203,518
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
REALIZED / UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains (losses) from investment transactions 224 5 - 229
------------- ------------- ------------- -------------
Change in net assets resulting from operations $ 143,301 $ 60,567 $ (121) $ 203,747
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
ANNUAL GROSS EXPENSE RATIO
<CAPTION>
Municipal Marquis
Money Tax-Exempt
Market Money Market Proforma Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 20,440 $ 3,434 $ - $ 23,874
Dividend income 150 - - 150
Income from securities lending - - - -
------------- ------------- ------------- -------------
Total Income 20,590 3,434 - 24,024
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees 1,950 408 (91) 2,267
Administration fees 916 136 13 1,065
12b-1 fees (Retail Class) 203 227 (91) 339
12b-1 fees (Cash Sweep Class) - - - -
Custodian and accounting fees 4 13 (12) 5
Legal and audit fees - 17 (17) -
Organization costs - 1 (1) -
Trustees' fees and expenses 4 2 (1) 5
Transfer agent fees 7 11 (10) 8
Registration and filing fees 166 - 27 193
Printing costs - 4 (4) -
Other - 6 (6) -
------------- ------------- ------------- -------------
Total expenses before waivers 3,250 825 (193) 3,882
Less waivers (632) (235) 115 (752)
------------- ------------- ------------- -------------
NET EXPENSES 2,618 590 (78) 3,130
------------- ------------- ------------- -------------
Net Investment Income 17,972 2,844 78 20,894
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
REALIZED / UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains (losses) from investment transactions 13 - - 13
------------- ------------- ------------- -------------
Change in net assets resulting from operations $ 17,985 $ 2,844 $ 78 $ 20,907
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
ANNUAL GROSS EXPENSE RATIO
</TABLE>
<PAGE>
The One Group Family of Mutual Funds
Proforma Combined Statements of Operations
For the Year Ended December 31, 1997
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Marquis
Government Government
Bond Securities Proforma Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 53,333 $ 9,486 $ - $ 62,819
Dividend income - - - -
Income from securities lending 67 - - 67
------------- ------------- ------------- -------------
Total Income 53,400 9,486 - 62,886
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees 3,481 836 (152) 4,165
Administration fees 1,274 228 22 1,524
12b-1 fees (Class A) 121 - 10 131
12b-1 fees (Class B) 122 6 3 131
Custodian and accounting fees 136 23 4 163
Legal and audit fees 27 16 (11) 32
Organization costs 4 6 (6) 4
Trustees' fees and expenses 16 3 - 19
Transfer agent fees 139 37 (10) 166
Registration and filing fees 151 - 30 181
Printing costs 81 9 7 97
Other 45 5 4 54
------------- ------------- ------------- -------------
Total expenses before waivers 5,597 1,169 (99) 6,667
Less waivers (618) (99) (17) (734)
------------- ------------- ------------- -------------
NET EXPENSES 4,979 1,070 (116) 5,933
------------- ------------- ------------- -------------
Net Investment Income 48,421 8,416 (114) 56,953
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
REALIZED / UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains (losses) from investment transactions 1,166 (20) - 1,146
Net change in unrealized appreciation (depreciation)
from investments 24,009 3,309 - 27,318
------------- ------------- ------------- -------------
Net realized/unrealized gains
(losses) from investments 25,175 3,289 - 28,464
------------- ------------- ------------- -------------
Change in net assets resulting from operations $ 73,596 $ 11,705 $ (114) $ 85,417
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
Marquis
Louisiana
Louisiana Tax-Free
Municipal Income Proforma Proforma
Bond Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 9,105 $ 1,624 $ - $ 10,729
Dividend income 22 - - 22
Income from securities lending - - - -
------------- ------------- ------------- -------------
Total Income 9,127 1,624 - 10,751
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees 995 120 79 1,194
Administration fees 273 50 5 328
12b-1 fees (Class A) 173 - 76 249
12b-1 fees (Class B) 38 8 2 48
Custodian and accounting fees 16 5 (2) 19
Legal and audit fees 5 2 (1) 6
Organization costs - - - -
Trustees' fees and expenses 2 - - 2
Transfer agent fees 53 30 (19) 64
Registration and filing fees 15 5 (2) 18
Printing costs 9 1 1 11
Other 1 1 (1) 1
------------- ------------- ------------- -------------
Total expenses before waivers 1,580 222 138 1,940
Less waivers (435) (9) (90) (534)
------------- ------------- ------------- -------------
NET EXPENSES 1,145 213 48 1,406
------------- ------------- ------------- -------------
Net Investment Income 7,982 1,411 (48) 9,345
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
REALIZED / UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains (losses) from investment transactions 388 - - 388
Net change in unrealized appreciation (depreciation)
from investments 3,213 1,168 - 4,381
------------- ------------- ------------- -------------
Net realized/unrealized gains
(losses) from investments 3,601 1,168 - 4,769
------------- ------------- ------------- -------------
Change in net assets resulting from operations $ 11,583 $ 2,579 $ (48) $ 14,114
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
The One Group Family of Mutual Funds
Proforma Combined Statements of Operations
For the Year Ended December 31, 1997
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Disciplined Marquis
Value Value Equity Proforma Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 564 $ 125 $ - $ 689
Dividend income 11,486 2,550 - 14,036
Income from securities lending 199 - - 199
------------- ------------- ------------- -------------
Total Income 12,249 2,675 - 14,924
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees 4,422 983 (47) 5,358
Administration fees 984 190 19 1,193
12b-1 fees (Class A) 86 - 47 133
12b-1 fees (Class B) 210 57 19 286
Custodian and accounting fees 84 19 (1) 102
Legal and audit fees 12 13 (10) 15
Organization costs - 8 (8) -
Trustees' fees and expenses 8 4 (2) 10
Transfer agent fees 148 38 (7) 179
Registration and filing fees 33 5 2 40
Printing costs 88 15 4 107
Other 19 2 2 23
------------- ------------- ------------- -------------
Total expenses before waivers 6,094 1,334 18 7,446
Less waivers (24) (14) 1 (37)
------------- ------------- ------------- -------------
NET EXPENSES 6,070 1,320 19 7,409
------------- ------------- ------------- -------------
Net Investment Income 6,179 1,355 (19) 7,515
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
REALIZED / UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains (losses) from investment transactions 103,933 19,767 - 123,700
Net change in unrealized appreciation (depreciation)
from investments 80,009 17,426 - 97,435
------------- ------------- ------------- -------------
Net realized/unrealized gains
(losses) from investments 183,942 37,193 - 221,135
------------- ------------- ------------- -------------
Change in net assets resulting from operations $ 190,121 $ 38,548 $ (19) $ 228,650
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
Growth Marquis
Opportunities Growth Equity Proforma Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 1,070 $ 147 $ - $ 1,217
Dividend income 3,237 287 - 3,524
Income from securities lending 745 - - 745
------------- ------------- ------------- -------------
Total Income 5,052 434 - 5,486
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees 5,248 224 (1) 5,471
Administration fees 1,167 45 5 1,217
12b-1 fees (Class A) 163 - 8 171
12b-1 fees (Class B) 401 9 3 413
Custodian and accounting fees 171 5 2 178
Legal and audit fees 20 3 (2) 21
Organization costs - 1 (1) -
Trustees' fees and expenses 10 - - 10
Transfer agent fees 334 25 (11) 348
Registration and filing fees 90 3 1 94
Printing costs 107 2 3 112
Other 26 1 - 27
------------- ------------- ------------- -------------
Total expenses before waivers 7,737 318 7 8,062
Less waivers (47) (8) 6 (49)
------------- ------------- ------------- -------------
NET EXPENSES 7,690 310 13 8,013
------------- ------------- ------------- -------------
Net Investment Income (2,638) 124 (13) (2,527)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
REALIZED / UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains (losses) from investment transactions 93,363 915 - 94,278
Net change in unrealized appreciation (depreciation)
from investments 94,327 5,752 - 100,079
------------- ------------- ------------- -------------
Net realized/unrealized gains
(losses) from investments 187,690 6,667 - 194,357
------------- ------------- ------------- -------------
Change in net assets resulting from operations $ 185,052 $ 6,791 $ (13) $ 191,830
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
The One Group Family of Mutual Funds
Proforma Combined Statements of Operations
For the Year Ended December 31, 1997
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Asset Marquis
Allocation Balanced Proforma Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 5,520 $ 3,534 $ - $ 9,054
Dividend income 1,442 1,459 - 2,901
Income from securities lending 50 - - 50
------------- ------------- ------------- -------------
Total Income 7,012 4,993 - 12,005
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees 1,107 956 (116) 1,947
Administration fees 280 194 19 493
12b-1 fees (Class A) 106 - 13 119
12b-1 fees (Class B) 454 24 9 487
Custodian and accounting fees 80 19 42 141
Legal and audit fees 5 9 (5) 9
Organization costs 1 4 (4) 1
Trustees' fees and expenses 2 2 - 4
Transfer agent fees 163 41 83 287
Registration and filing fees 46 3 32 81
Printing costs 28 6 15 49
Other 19 3 11 33
------------- ------------- ------------- -------------
Total expenses before waivers 2,291 1,261 99 3,651
Less waivers (355) (74) (177) (606)
------------- ------------- ------------- -------------
NET EXPENSES 1,936 1,187 (78) 3,045
------------- ------------- ------------- -------------
Net Investment Income 5,076 3,806 78 8,960
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
REALIZED / UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS AND FUTURES:
Net realized gains (losses) from investments,
and futures transactions 21,107 8,344 - 29,451
Net change in unrealized appreciation
(depreciation) from investments and futures 15,835 12,993 - 28,828
------------- ------------- ------------- -------------
Net realized/unrealized gains
(losses) from investments and futures 36,942 21,337 - 58,279
------------- ------------- ------------- -------------
Change in net assets resulting from operations $ 42,018 $ 25,143 $ 78 $ 67,239
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
Treasury Only Institutional
Money Market Money Market Proforma Proforma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 45,605 $ 3,614 $ - $ 49,219
Dividend income - - - -
Income from securities lending 252 - - 252
------------- ------------- ------------- -------------
Total Income 45,857 3,614 - 49,471
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees 445 99 (46) 498
Administration fees 277 66 (33) 310
12b-1 fees (Class A) - - - -
12b-1 fees (Class B) - - - -
Custodian and accounting fees 26 10 (7) 29
Legal and audit fees 8 4 (3) 9
Organization costs 4 - - 4
Trustees' fees and expenses 5 1 - 6
Transfer agent fees 8 14 (13) 9
Registration and filing fees 45 34 (29) 50
Printing costs 4 2 (2) 4
Other 19 1 2 22
------------- ------------- ------------- -------------
Total expenses before waivers 842 231 (131) 942
Less waivers - (66) 66 -
------------- ------------- ------------- -------------
NET EXPENSES 842 165 (65) 942
------------- ------------- ------------- -------------
Net Investment Income 45,015 3,449 65 48,529
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
REALIZED / UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS AND FUTURES:
Net realized gains (losses) from investments,
and futures transactions 4 - - 4
Net change in unrealized appreciation
(depreciation) from investments and futures - - - -
------------- ------------- ------------- -------------
Net realized/unrealized gains
(losses) from investments and futures 4 - - 4
------------- ------------- ------------- -------------
Change in net assets resulting from operations $ 45,019 $ 3,449 $ 65 $ 48,533
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS,
(Unaudited)
1. BASIS OF COMBINATION:
The unaudited Pro Forma Combining Statements of Assets and Liabilities,
Statements of Operations, and Schedules of Portfolio Investments reflect the
accounts of eight investment portfolios offered by The One Group: the U.S.
Treasury Securities Money Market Fund, the Municipal Money Market Fund, the
Government Bond Fund, the Louisiana Municipal Bond Fund, the Disciplined Value
Fund, the Growth Opportunities Fund, the Asset Allocation Fund and the Treasury
Only Money Market Fund (the "Surviving Funds") and eight investment portfolios
offered by Marquis Funds: the Treasury Securities Money Market Fund, the Tax-
Exempt Money Market Fund, the Government Securities Fund, the Louisiana Tax-Free
Income Fund, the Value Equity Fund, the Growth Equity Fund, the Balanced Fund
and the Institutional Money Market Fund (the "Transferor Funds"), (collectively,
"Funds") as if the proposed reorganization occurred as of and for the year ended
December 31, 1997. These statements have been derived from books and records
utilized in calculating daily net asset value at December 31, 1997.
The Plan of Reorganization provides that at the time the reorganization
becomes effective (the "Effective Time of the Reorganization"), all of the
assets and liabilities will be transferred as follows such that at and after the
Effective Time of Reorganization, the assets and liabilities of the Transferor
Fund will become the assets and liabilities of the Surviving Fund: the Treasury
Securities Money Market Fund will be transferred to the U.S. Treasury Securities
Money Market Fund, the Tax-Exempt Money Market Fund will be transferred to the
Municipal Money Market Fund, the Government Securities Fund will be transferred
to the Government Bond Fund, the Louisiana Tax-Free Income Fund will be
transferred to the Louisiana Municipal Bond Fund, the Value Equity Fund will be
transferred to the Disciplined Value Fund, the Growth Equity Fund will be
transferred to the Growth Opportunities Fund, the Balanced Fund will be
transferred to the Asset Allocation Fund and the Institutional Money Market Fund
will be transferred to the Treasury Only Money Market Fund. In exchange for the
transfer of assets and liabilities, the One Group will issue to the Transferor
Funds full and fractional shares of the corresponding Surviving Funds, and the
Transferor Funds will make a liquidating distribution of such shares to its
shareholders. The number of shares of the Surviving Funds so issued will be
equal in value to the full and fractional shares of the Transferor Funds that
are outstanding immediately prior to the Effective Time of the Reorganization.
At and after the Effective Time of the Reorganization, all debts, liabilities
and obligations of the Transferor Funds will attach to the Surviving Funds and
may thereafter be enforced against the Surviving Funds to the same extent as if
they had been incurred by it. The pro forma statements give effect to the
proposed transfer described above.
Under the purchase method of accounting for business combinations under
generally accepted accounting principles, the basis on the part of the Surviving
Funds, of the assets of the Transferor Funds will be the fair market value of
such assets on the closing date of the transaction. The Surviving Funds will
recognize no gain or loss for federal tax purposes on its issuance of shares in
the reorganization, and the basis to the Surviving Funds of the assets of the
Transferor Funds
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS, (Continued)
(Unaudited)
-----------
received pursuant to the reorganization will equal the fair market value of the
consideration furnished, and costs incurred, by the Surviving Funds in the
reorganization -- i.e., the sum of the liabilities assumed, the fair market
value of the Surviving Funds shares issued, and such costs. For accounting
purposes, the Surviving Funds are the survivor of this reorganization. The pro
forma statements reflect the combined results of operations of the Transferor
Funds and the Surviving Funds. However, should such reorganization be effected,
the statements of operations of the Surviving Funds will not be restated for
precombination period results of the corresponding Transferor Funds.
The Pro Forma Combining Statements of Assets and Liabilities, Statements of
Operations, and Schedules of Portfolio Investments should be read in conjunction
with the historical financial statements of the Funds incorporated by reference
in the Statement of Additional Information.
The Transferor Funds and the Surviving Funds are each separate portfolios
of the Marquis Funds and The One Group Funds respectively, which are registered
as open-end management companies under the Investment Company Act of 1940 (the
"1940 Act"). The Funds investment objectives are as follows:
FUNDS OBJECTIVE
The One Group U.S. Treasury Securities Current income with liquidity and
stability of Money Market Fund principal.
Marquis Treasury Securities Money Preserve principal value and maintain a
Market Fund high degree of liquidity while providing
current income.
The One Group Municipal Money Market As high a level of current interest
Fund income exempt from Federal income tax as
is consistent with capital capital
preservation and stability of principal.
Marquis Tax-Exempt Money Market Fund Preserve principal value and maintain a
high degree of liquidity while providing
current income exempt from Federal
income taxes.
(CONTINUED)
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS, (Continued)
(Unaudited)
-----------
The One Group Government Bond Fund A high level of current income with
liquidity and safety of principal.
Marquis Government Securities Fund Current income consistent with relative
stability of capital.
The One Group Louisiana Municipal Current income both consistent with the
Bond Fund preservation of principal and exempt
from Federal income tax and Louisiana
income tax.
Marquis Louisiana Tax-Free Income A level of current income consistent
Fund with relative stability of capital.
The One Group Disciplined Value Capital appreciation with the secondary
Fund goal of achieving current income by
investing primarily in equity
securities.
Marquis Value Equity Fund Long-term capital appreciation by
investing primarily in equity securities
which have a low currency valuation
relative to various measures of
intrinsic value.
The One Group Growth Opportunities Growth of capital and secondarily, Fund
current income by investing primarily in
equity securities.
Marquis Growth Equity Fund Long-term capital appreciation by
investing primarily in companies whose
sales and earnings are expected to grow
at an above average rate.
The One Group Asset Allocation To provide total return while preserving
capital.
Marquis Balanced Fund Capital appreciation and current income
through regular payments of dividends
and interest.
The One Group Treasury Only High current income with liquidity and
Money Market Fund stability of principal with the added
assurance of a fund that does not
purchase securities that are subject to
(CONTINUED)
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS, (Continued)
(Unaudited)
-----------
repurchase agreements.
Marquis Institutional Money Preserve principal value and maintain a
Market Fund high degree of liquidity while providing
current income.
SERVICE PROVIDERS:
Banc One Investment Advisors Corporation (the "Advisor"), will serve as
the combined Funds' investment advisor. The One Group Services Company (the
"Administrator"), a wholly owned subsidiary of The BISYS Group, Inc. (BISYS)
will serve as the administrator and distributor to the Funds.
ORGANIZATIONAL EXPENSES:
Organizational costs cannot be carried over when being merged with another
fund. Therefore, in the Statements of Assets and Liabilities, the
organizational costs were reclassified against capital for the Transferor Funds
rather than being carried forward.
TRANSFEROR FUNDS:
The Transferor Funds (except for the Treasury Securities Money Market Fund,
the Tax-Exempt Money Market Fund and the Institutional Money Market Fund) issue
two classes of shares: Class A Shares and Class B Shares. The Treasury
Securities Money Market Fund issues three classes of shares: Retail Class, Trust
Class and Cash Sweep Class. The Tax-Exempt Money Market Fund issues two classes
of shares: Retail Class and Cash Sweep Class. The Institutional Money Market
Fund issues one class of shares. As of December 31, 1997, there were no
shareholders in the Cash Sweep Class of the Tax-Exempt Money Market Fund. Each
class of shares has identical rights and privileges except with respect to fees
paid under shareholder servicing or distribution plans, expenses allocable
exclusively to each class of shares, voting rights on matters affecting a single
class of shares, and the exchange privilege of each class of shares. Class A
shares are subject to an initial sales charge. Class B shares are subject to a
contingent deferred sales charge (CDSC).
Under the terms of the investment advisory agreement, the Advisor is
entitled to receive fees computed at the annual rate of 0.74% of the average
daily net assets for the Value Equity Fund, the Balanced Fund and the Growth
Equity fund, 0.55% for the Government Securities Fund, 0.45% for
(CONTINUED)
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS, (Continued)
(Unaudited)
-----------
the Tax-Exempt Money Market Fund, 0.35% for the Louisiana Tax-Free Income Fund,
0.30% for the Treasury Securities Money Market Fund and 0.15% for the
Institutional Money Market Fund. Such fees are accrued daily and paid monthly.
For the year ended December 31, 1997, total investment advisory fees incurred by
the Funds were as follows:
<TABLE>
<CAPTION>
Total Fees Waiver
---------- ------
<S> <C> <C>
Treasury Securities Money Market 3,729 ---
Tax-Exempt Money Market 408 ---
Government Securities 836 59
Louisiana Tax-Free Income 120 ---
Value Equity 983 ---
Growth Equity 224 ---
Balanced 956 40
Institutional Money Market 99 66
</TABLE>
Under the terms of the administration agreement, the Administrator is
entitled to receive fees at an annual rate of 0.10% of the average daily net
assets for the Institutional Money Market Fund and 0.15% for the remaining
funds. Such fees are accrued daily and paid monthly. For the year ended
December 31, 1997, the Administrator's fees earned from the Funds were as
follows:
<TABLE>
<CAPTION>
Total Fees Waiver
---------- ------
<S> <C> <C>
Treasury Securities Money Market 1,865 114
Tax-Exempt Money Market 136 14
Government Securities 228 40
Louisiana Tax-Free Income 50 9
Value Equity 190 14
Growth Equity 45 8
Balanced 194 34
Institutional Money Market 66 --
</TABLE>
SURVIVING FUNDS:
(CONTINUED)
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS, (Continued)
(Unaudited)
-----------
The surviving funds (except for the U.S. Treasury Securities Money Market
Fund, the Municipal Money Market Fund and the Treasury Only Money Market Fund)
are authorized to issue four classes of shares: Fiduciary, Class A, Class B and
Class C. The U.S. Treasury Securities Money Market Fund is authorized to issue
five classes of shares: Fiduciary, Class A, Class B, Class C and Service Class.
Municipal Money Market Fund is authorized to issue three classes of shares:
Fiduciary, Class A and Class C. The Treasury Only Money Market Fund is
authorized to issue Fiduciary shares. As of December 31, 1997, there were no
shareholders in Class C of the Funds except for the Growth Opportunities Fund or
in the Service Class. Each class of shares has identical rights and privileges
except with respect to fees paid under shareholder servicing or distribution
plans, expenses allocable exclusively to each class of shares, voting rights on
matters affecting a single class of shares, and the exchange privilege of each
class of shares. Class A shares are subject to an initial sales charge upon
purchase. Class B shares and Class C shares are subject to a contingent
deferred sales change (CDSC).
Under the terms of the investment advisory agreement, the Advisor is
entitled to receive fees computed at the annual rate of 0.35% of the average
daily net assets of the U.S. Treasury Securities Money Market Fund and the
Municipal Money Market Fund, 0.45% of the Government Bond Fund, 0.60% of the
Louisiana Municipal Bond Fund, 0.74% of the Disciplined Value Fund and the
Growth Opportunities Fund, 0.65% of the Asset Allocation Fund and 0.08% of the
Institutional Money Market Fund. Such fees are accrued daily and paid monthly.
For the year ended December 31, 1997, total investment advisory fees incurred by
the funds were as follows:
<TABLE>
<CAPTION>
Total Fees Waiver
---------- ------
<S> <C> <C>
U.S. Treasury Securities Money Market 10,067 2,841
Municipal Money Market 1,950 557
Government Bond 3,481 227
Louisiana Municipal Bond 995 381
Disciplined Value 4,422 ---
Growth Opportunities 5,248 ---
Asset Allocation 1,107 170
Treasury Only Money Market 445 ---
</TABLE>
(CONTINUED)
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS, (Continued)
(Unaudited)
-----------
Under the terms of the administration agreement, the Administrator's fees
for all funds except the Treasury Only Money Market Fund, are computed at the
annual rate of 0.20% on the first $1.5 billion of the One Group net assets
(excluding the Investor Growth Fund, the Investor Growth & Income Fund, the
Investor Conservative fund, and the Investor Balanced Fund (the "Investor Funds)
and the Treasury Only Money Market Fund and the Government Money Market Fund
(the "Institutional Money Market Funds")); 0.18% on the next $0.5 billion of the
One Group net assets (excluding the Investor Funds and the Institutional Money
Market funds); and 0.16% of the One Group net assets (excluding the Investor
Funds and the Institutional Money Market Funds) over $2 billion. The
Administrator's fees for the Treasury Only Money Market Fund are computed at the
annual rate of 0.05% of the average daily net assets. The Advisor also serves
as Sub-Administrator of each Fund of the One Group, 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. For the year ended December 31, 1997,
the Administrator's fee were as follows:
<TABLE>
<CAPTION>
Total Fees Waiver
---------- ------
<S> <C> <C>
U.S. Treasury Securities Money Market 4,735 337
Municipal Money Market 916 41
Government Bond 1,274 345
Louisiana Municipal Bond 273 ---
Disciplined Value 984 ---
Growth Opportunities 1,167 ---
Asset Allocation 280 154
Treasury Only Money Market 277 ---
</TABLE>
PRO FORMA ADJUSTMENTS AND PRO FORMA COMBINED COLUMNS:
The pro forma adjustments and pro forma combined columns of the statements
of operations reflect the adjustments necessary to show expenses at the rates
which would have been in effect if the Transferor Funds were included in the
Surviving Funds for the year ended December 31, 1997. Investment advisory and
shareholder service and 12b-1 fees in the pro forma combined column are
calculated at the rates in effect for the Surviving Funds based upon the
combined net assets of the Transferor Funds and the Surviving Funds.
(CONTINUED)
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS, (Continued)
(Unaudited)
-----------
For the year ended December 31, 1997, approximately $5,807 (in thousands)
of the investment advisory fees on a pro forma combined basis for the Surviving
Funds were waived.
The pro forma schedules of portfolio investments give effect to the
proposed transfer of such assets as if the reorganization had occurred at
December 31, 1997.
2. PORTFOLIO VALUATION, SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities of the Money Market Funds are valued utilizing the amortized
cost method permitted in accordance with Rule 2a-7 under the 1940 Act. Under
the amortized cost method, discount or premium is amortized on a constant basis
to the maturity of the security. In addition, the Funds may not (a) purchase
any instrument with a remaining maturity greater than thirteen months unless
such instrument is subject to a demand feature, or (b) maintain a
dollar-weighted average maturity which exceeds 90 days.
Pricing policies of the Survivor Funds and the Transferor Funds are the
same except as indicated. Listed securities of the Variable Net Asset Value
Funds are valued at the latest available sales price on the principal exchange
where such securities are traded. Unlisted securities of the Survivor Funds or
listed securities for which latest sales prices are not available are valued at
the mean of the latest bid and asked price in the principal market where such
securities are normally traded. Unlisted securities of the Transferor Funds or
listed securities for which latest sales prices are not available are valued at
the last quoted bid. For the Survivor funds, corporate debt securities and debt
securities of U.S. issuers (other than short-term investments maturing in 60
days or less), including municipal securities, are valued on the basis of
valuations provided by dealers or by an independent pricing service approved by
the Board of Trustees. Similarly for the Transferor funds, these securities are
valued at the most recent quoted bid price. Short-term investments maturing in
60 days or less are valued at amortized cost, which approximates market value.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded. Options traded on the
exchange are valued using the last sale price or, in the absence of a sale, the
last offering price. Options traded over-the counter- are valued using dealer-
supplied valuations. Investments of the Survivor Funds for which there are no
such quotations or valuations are carried at fair value as determined by the
Fair Value committee which is comprised of members of Banc One Investment
Advisors Corporation (the "Advisor") and The One Group Services Company ("the
Administrator") under the direction of the Board of Trustees. Investments of
the Transferor Funds for which quotations are not readily available are valued
at fair value using methods determined in good faith as approved by the Board of
Trustees.
(CONTINUED)
<PAGE>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS, (Continued)
(Unaudited)
-----------
Security transactions are accounted for on a trade date basis. Net
realized gains or losses from sales of securities are determined on the specific
identification cost method. Interest income and expenses are recognized on the
accrual basis. Dividends are recorded on the ex-divided date. Interest Income,
including any discount or premium, is accrued as earned using the effective
interest method.
3. CAPITAL SHARES:
The pro forma net asset values per share assume the issuance of shares of
the Surviving Funds, which would have occurred at December 31, 1997 in
connection with the proposed reorganization. The pro forma number of shares
outstanding consists of the following:
<TABLE>
<CAPTION>
Shares Additional Proforma
outstanding at Shares Shares at
December 31, Assumed in the December 31,
1997 Reorganization 1997
(000) (000) (000)
<S> <C> <C> <C>
U.S. Treasury Securities Money
Market Fund 3,521,481 1,420,474 4,941,955
Municipal Money Market Fund 596,488 126,377 722,865
Government Bond Fund 85,563 14,828 100,391
Louisiana Municipal Bond Fund 15,144 4,105 19,249
Disciplined Value Fund 40,165 8,837 49,002
Growth Opportunities Fund 44,341 1,986 46,327
Asset Allocation 16,133 10,879 27,012
Treasury Only Money Market Fund 768,703 54,714 823,417
</TABLE>
(CONTINUED)
