<PAGE> 1
ONE GROUP(R) INVESTOR FUNDS
SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
[ONE GROUP MUTUAL FUNDS LOGO]
ONE GROUP(R) INVESTOR CONSERVATIVE GROWTH FUND
ONE GROUP(R) INVESTOR BALANCED FUND
ONE GROUP(R) INVESTOR GROWTH & INCOME FUND
ONE GROUP(R) INVESTOR GROWTH FUND
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[NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE]
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Table of Contents
- --------------------------------------------------------------------------------
ONE GROUP MUTUAL FUNDS DECEMBER 31, 1999
Portfolio Performance Review............................................... 2
Schedules of Portfolio Investments.......................................... 6
Statements of Assets and Liabilities......................................... 10
Statements of Operations..................................................... 11
Statements of Changes in Net Assets.......................................... 12
Schedules of Capital Stock Activity.......................................... 14
Financial Highlights......................................................... 16
Notes to Financial Statements................................................ 32
1
<PAGE> 4
- --------------------------------------------------------------------------------
Portfolio Performance Review
- --------------------------------------------------------------------------------
ONE GROUP MUTUAL FUNDS DECEMBER 31, 1999
STOCKS END YEAR ON STRONG NOTE
In general, most stock market averages finished 1999 on a strong note. For
example, both the S&P 500 Index and the Dow Jones Industrial Average posted
solid double-digit returns for an unprecedented fifth-consecutive year. For the
12 months ended December 31, 1999, the S&P posted a total return of 21.04%, and
the Dow showed a total return of 27.21%.
Perhaps the biggest stock market story of 1999 occurred on NASDAQ. The
technology-heavy index enjoyed a record-breaking year, increasing 85.6% during
1999. Even more amazing, more than half of that gain occurred after November 3,
the day the index topped the 3000 mark. NASDAQ's 1999 performance represents the
greatest single-year gain ever posted by a U.S. stock market index.
GROWTH SOARS, WHILE VALUE STRUGGLES
In terms of styles, large-capitalization growth stocks maintained their favored
status among investors, as evidenced by the S&P 500/BARRA Growth Index's six-
month total return of 15.56% and one-year total return of 28.25%, as of December
31, 1999. But, the fondness for growth stocks extended into other areas of the
market. The S&P MidCap 400/BARRA Growth Index posted a six-month total return of
18.99% and a one-year total return of 28.74%, as of December 31, 1999. Small-cap
growth stocks, as represented by the S&P SmallCap 600/BARRA Growth Index, posted
a six-month and one-year total return of 17.60% and 19.57%, respectively, for
the periods ended December 31, 1999.
Value stocks, in general, suffered a disappointing second half that capped off a
difficult year. Several factors worked against value stocks, including rising
interest rates, the dominance of the growth sector, and the frenzy for
high-flying technology stocks. As of December 31, 1999, large-capitalization
value stocks, as represented by the S&P 500/BARRA Value Index, offered a
six-month total return of -1.08% and a one-year total return of 12.72%.
Smaller-cap value stocks didn't fare nearly as well. For example, the S&P MidCap
400/BARRA Value Index posted a six-month total return of -3.17% and a one-year
total return of 2.33%; and the S&P SmallCap 600/BARRA Value Index posted six-
month and one-year total returns of -5.00% and 3.03%, respectively, for the
periods ended December 31, 1999.
TECHNOLOGY STOCKS DRIVE GROWTH SURGE
While growth stocks enjoyed solid overall returns in the second half of 1999,
much of that performance was concentrated in a single sector--technology.
Investors demonstrated strong demand for fast-growing technology plays. In
particular, Internet-related and wireless communications-related sectors
attracted significant investments and offered spectacular performance.
Many non-technology sectors, including some traditional growth sectors, actually
suffered during the period. For example, the growth-oriented health care sector
posted negative returns.
INTERNATIONAL STOCKS ENJOY TURNAROUND
The second half of 1999 saw the international stock market, as measured by the
Europe, Australia and Far East Gross Domestic Product (EAFE GDP) Index, stage a
turnaround. In fact, the EAFE index outperformed the S&P 500 Index for the final
six months of 1999 and for the entire 12-month period ended December 31, 1999.
EAFE GDP's six-month and one-year total returns were 23.99% and 31.00%,
respectively.
Despite a slow start to 1999, due primarily to problems associated with the
euro, Europe staged a comeback in the second half of the year. Also, Asia's
recovery came quicker and stronger than most expected. The emerging markets also
offered strong performance.
ONE GROUP FUNDS STAY TRUE TO STYLES
By staying true to their disciplines and stated style objectives, most One Group
stock funds offered solid total returns for the six-month and one-year periods.
In the growth sector, our funds remained focused on companies with predictable
earnings streams and solid earnings growth prospects. Our value-oriented funds
focused on attractively priced stocks with improving fundamentals.
Despite the performance advantages in the technology sector, our funds stayed
true to their stated style and diversification objectives. Many of our funds
were able to benefit from the technology rally, but within the
2
<PAGE> 5
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Portfolio Performance Review, continued
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ONE GROUP MUTUAL FUNDS DECEMBER 31, 1999
guidelines of our disciplined strategies. We did not significantly alter our
sector weightings or chase the best-performing technology stocks to boost
short-term performance. Instead, we simply invested in those issues--in the
technology sector and all others--that our research efforts identified as good
long-term prospects. We believe this is a prudent long-term strategy, regardless
of what happens over short-term time periods.
OUTLOOK REMAINS GOOD
We believe that conditions remain favorable for continued stock market growth,
though probably not at the pace we've seen over the last several years. We think
that interest rates will continue their upward course, at least for the first
half of 2000. This should continue to put some pressure on the stock market.
Once rates subside, we hope to see market participation widen into the value
sector.
We believe that diversification will be a key strategy in 2000. Investors should
avoid the temptation to chase 1999's big winners and make sure they maintain a
broadly diversified equity portfolio that includes a variety of domestic and
international stocks.
/s/ Richard R. Jandrain
Richard R. Jandrain III
Chief Investment Officer of Equity Securities
Banc One Investment Advisors
S&P 500/BARRA Growth Index contains those stocks in the S&P 500 with higher
price-to-book ratios. S&P MidCap 400/BARRA Growth Index is an unmanaged index
representing the performance of the highest price-to-book securities in the S&P
Midcap 400 Index. S&P Small Cap 600/BARRA Growth Index is an unmanaged index
generally representative of the performance of 600 small capitalization domestic
stocks with a higher price-to-book ratio. S&P 500/BARRA Value Index contains
those stocks in the S&P 500 with lower price-to-book ratios. S&P MidCap 400/
BARRA Value Index is an unmanaged index representing the performance of the
lowest price-to-book securities in the S&P Midcap 400 Index. S&P SmallCap
600/BARRA Value Index is an unmanaged index generally representative of the
performance of 600 small capitalization domestic stocks with a lower
price-to-book ratio. Morgan Stanley EAFE/GDP Index is an unmanaged index
generally representative of the performance of international stock markets.
Investors are unable to purchase the indexes directly, although they can invest
in the underlying securities.
3
<PAGE> 6
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Portfolio Performance Review, continued
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ONE GROUP MUTUAL FUNDS DECEMBER 31, 1999
RISING RATES RATTLE BOND MARKET
After a difficult period between July 1 and December 31, the year 1999 finished
as one of the worst years for the fixed income market, in terms of overall
performance, primarily due to rising interest rates. Interest rates rose
significantly during 1999, as the U.S. economy continued to surprise economists
with high levels of income growth and low inflation. Early in the year,
investors expected that 1998's emerging market crisis would result in a
significant slowdown of the U.S. economy. This, combined with the potential for
disinflation, was expected to cause interest rates to drop and the yield curve
to steepen.
Nonetheless, the economy continued to grow, fueled by high levels of personal
consumption and productivity. In addition, falling unemployment, the
re-emergence of economic growth abroad, a moderate rise in commodity prices and
a skyrocketing U.S. equity market helped sustain growth. The Federal
Reserve--growing uncomfortable with the levels of growth and employment,
potential wage pressures, the strong equity market, and the potential for future
inflation--began a tightening course that increased the federal funds rate a
total of 0.75 percentage points. More important, market rates increased by more
than 1.50 percentage points, pushing bond prices downward.
Treasury securities led the decline. For example, the yield on the 30-year
Treasury bond rose from 5.09% on December 31, 1998, to 5.99% on June 30, 1999,
and to 6.48% on December 31, 1999.
VOLATILITY CHARACTERIZES SPREAD SECTORS
While the spread sectors (non-Treasury sectors of the fixed income market, such
as the mortgage-backed, asset-backed and corporate bond sectors) offered better
relative performance than Treasuries, they experienced significant volatility
during the last six months of the calendar year. Spreads widened early in the
period, due to concerns over potential Fed rate hikes and Y2K readiness. Later,
spreads tightened as interest rate volatility subsided. Also, the Fed's
announcement that it would provide enough liquidity in the monetary system to
combat any perceived Y2K concerns contributed to the tightening. (Spreads refer
to the differences in yield between Treasury bonds and comparable-maturity
non-Treasury bonds. Non-Treasury bonds become more attractive as spreads
tighten.)
ONE GROUP FUNDS WEATHER THE STORM
Overall, despite the difficult market environment, the One Group fixed income
funds performed relatively well during the second half of calendar 1999 by
staying true to their investment styles. A key strategy we try to implement in
all market environments is to maintain a fairly controlled duration policy.
(Duration is a measure of a fund's sensitivity to interest rate changes. A
higher duration indicates greater sensitivity; a lower duration indicates less.)
By doing this in the second half of 1999, the funds were able to avoid severe
price declines that resulted from the rising interest rate environment. While on
an absolute basis the funds experienced the negative effects of rising interest
rates, on a relative basis the funds performed well compared to most bond market
averages.
In addition, our fund management teams continued to focus on securities that our
research analysts had identified as good long-term prospects. For most of the
funds, this meant maintaining overweighted positions in spread sectors, which
our analysts believed offered the greatest return potential. Indeed, these
securities weathered significant volatility during the six-month period, but
when all was said and done, they held up much better than comparable-maturity
Treasuries due to the cushion provided by higher yields. Adding to performance
was a very strong bottom-up security selection process within the spread
sectors, which proved beneficial during a difficult period for valuation.
MUNICIPAL MARKET STRUGGLES
The period between July 1, 1999, and December 31, 1999, proved to be an even
more difficult period for the municipal bond market. As with the taxable market,
the municipal market also was hurt by rising interest rates and Y2K illiquidity
concerns. But, the municipal market also underperformed due to better return
opportunities available in the taxable market. Institutional investors, in
particular, tended to move money out of municipals and into taxable bonds to
take advantage of higher yield opportunities. The impending
4
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Portfolio Performance Review, continued
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ONE GROUP MUTUAL FUNDS DECEMBER 31, 1999
presidential election didn't help matters either, as discussions and concerns
about new tax plan proposals began to influence price levels.
CONCERNS EMERGE IN HIGH-YIELD MARKET
Given their yield "cushion," high-yield bonds performed pretty well, on a
relative basis, during the second half of 1999. At the same time, though, the
sector experienced significant volatility and spread widening. Also, Y2K
concerns contributed to an oversupply of high-yield bonds, which didn't help
spread levels. The market also experienced a slight increase in default
levels--from 2% to 5%. While the overall default rate still remains low, the
increase raised some concerns and affected the market psychology so that
high-yield bonds were being priced to recession scenarios.
MONEY MARKETS BENEFIT FROM RATE HIKES
Perhaps the only area of the fixed income market that welcomed the Fed's rate
hikes was the money market arena, where higher rates only meant higher yields
for investors. One Group money market funds all maintain very short average
maturities, which allowed the funds to quickly take advantage of the rate hikes.
As long as there is some concern that the Fed will raise rates, money market
funds should remain attractive to those who want liquidity and stability.
IMPROVEMENTS MAY BE IN STORE FOR 2000
Looking ahead, we remain cautiously optimistic that the fixed income environment
will strengthen in 2000. We still expect to see a fair amount of volatility, and
we think the Fed will raise interest rates in the first half of the year. Of
course, this will put additional pressure on the bond market, but we think
things will improve in the second half of 2000, as rates and the economy
stabilize and volatility subsides. We continue to set our sights on maximizing
yield opportunities through investments in the spread sectors. We believe they
once again will outperform the Treasury market, particularly during the first
three to six months of the new year.
It's important to remember that it's fairly easy to make money in a bond market
rally, but it can be difficult to protect money in a severe bear market, such as
1999. One Group Funds have shown the ability to manage through one of the most
difficult periods for fixed income securities since the U.S. government began
issuing the 30-year Treasury bond in the late 1970's. Basically, everything that
could have gone wrong did go wrong. But, our teams persevered without any crises
or excess risk, and they offered good relative performance.
/s/ Gary J. Madich
Gary J. Madich, CFA
Chief Investment Officer of Fixed Income Securities
Banc One Investment Advisors
5
<PAGE> 8
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One Group Mutual Funds
Investor Conservative Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- --------- ------------------------------------- --------
<C> <S> <C>
INVESTMENT COMPANIES (100.0%):
1,626 One Group Bond Fund, Class I......... $ 16,289
745 One Group Diversified Equity Fund,
Class I............................ 10,984
189 One Group Diversified International
Fund, Class I...................... 3,641
182 One Group Diversified Mid Cap Fund,
Class I............................ 3,534
570 One Group Equity Income Fund, Class
I.................................. 12,461
3,661 One Group Government Bond Fund, Class
I.................................. 34,634
876 One Group High Yield Bond Fund, Class
I.................................. 8,308
4,365 One Group Income Bond Fund, Class
I.................................. 32,653
2,045 One Group Intermediate Bond Fund,
Class I............................ 20,547
107 One Group International Equity Index
Fund, Class I...................... 2,433
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- --------- ------------------------------------- --------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
503 One Group Large Cap Growth Fund,
Class I............................ $ 13,436
815 One Group Large Cap Value Fund, Class
I.................................. 13,211
137 One Group Mid Cap Growth Fund, Class
I.................................. 3,551
256 One Group Mid Cap Value Fund, Class
I.................................. 3,319
1,699 One Group Prime Money Market Fund,
Class I............................ 1,699
1,806 One Group Short-Term Bond Fund, Class
I.................................. 18,583
1,039 One Group Ultra Short-Term Bond Fund,
Class I............................ 10,106
--------
Total Investment Companies 209,389
--------
Total (Cost $210,079) (a) $209,389
========
</TABLE>
- ------------
Percentages indicated are based on net assets of $209,337.
(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...................... $ 6,543
Unrealized depreciation...................... (7,233)
-------
Net unrealized appreciation.................. $ (690)
=======
</TABLE>
See notes to financial statements.
6
<PAGE> 9
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One Group Mutual Funds
Investor Balanced Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- --------- ------------------------------------- --------
<C> <S> <C>
INVESTMENT COMPANIES (100.0%):
6,594 One Group Bond Fund, Class I......... $ 66,075
4,451 One Group Diversified Equity Fund,
Class I............................ 65,647
677 One Group Diversified International
Fund, Class I...................... 13,066
1,001 One Group Diversified Mid Cap Fund,
Class I............................ 19,474
5,191 One Group Government Bond Fund, Class
I.................................. 49,103
3,509 One Group High Yield Bond Fund, Class
I.................................. 33,266
8,774 One Group Income Bond Fund, Class
I.................................. 65,627
2,733 One Group Intermediate Bond Fund,
Class I............................ 27,463
815 One Group International Equity Index
Fund, Class I...................... 18,463
2,412 One Group Large Cap Growth Fund,
Class I............................ 64,367
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- --------- ------------------------------------- --------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
3,738 One Group Large Cap Value Fund, Class
I.................................. $ 60,561
1,412 One Group Mid Cap Growth Fund, Class
I.................................. 36,652
2,595 One Group Mid Cap Value Fund, Class
I.................................. 33,654
17,008 One Group Prime Money Market Fund,
Class I............................ 17,008
1,595 One Group Short-Term Bond Fund, Class
I.................................. 16,417
0 One Group Small Cap Value Fund, Class
I (b).............................. 5
1,127 One Group Ultra Short-Term Bond Fund,
Class I............................ 10,970
--------
Total Investment Companies 597,818
--------
Total (Cost $577,762) (a) $597,818
========
</TABLE>
- ------------
Percentages indicated are based on net assets of $597,845.
(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...................... $38,939
Unrealized depreciation...................... (18,883)
-------
Net unrealized appreciation.................. $20,056
=======
</TABLE>
(b) Rounds to less than 1,000.
See notes to financial statements.
7
<PAGE> 10
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One Group Mutual Funds
Investor Growth & Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- --------- ------------------------------------- --------
<C> <S> <C>
INVESTMENT COMPANIES (100.0%):
5,741 One Group Bond Fund, Class I......... $ 57,520
7,090 One Group Diversified Equity Fund,
Class I............................ 104,579
1,906 One Group Diversified International
Fund, Class I...................... 36,811
2,279 One Group Diversified Mid Cap Fund,
Class I............................ 44,342
3,007 One Group Government Bond Fund, Class
I.................................. 28,451
3,829 One Group High Yield Bond Fund, Class
I.................................. 36,302
6,642 One Group Income Bond Fund, Class
I.................................. 49,680
2,054 One Group Intermediate Bond Fund,
Class I............................ 20,644
1,080 One Group International Equity Index
Fund, Class I...................... 24,453
3,733 One Group Large Cap Growth Fund,
Class I............................ 99,635
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- --------- ------------------------------------- --------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
5,987 One Group Large Cap Value Fund, Class
I.................................. $ 96,987
2,448 One Group Mid Cap Growth Fund, Class
I.................................. 63,537
5,616 One Group Mid Cap Value Fund, Class
I.................................. 72,836
15,484 One Group Prime Money Market Fund,
Class I............................ 15,484
669 One Group Short-Term Bond Fund, Class
I.................................. 6,879
733 One Group Small Cap Growth Fund,
Class I............................ 8,275
554 One Group Small Cap Value Fund, Class
I.................................. 7,287
712 One Group Ultra Short-Term Bond Fund,
Class I............................ 6,924
--------
Total Investment Companies 780,626
--------
Total (Cost $750,046) (a) $780,626
========
</TABLE>
- ------------
Percentages indicated are based on net assets of $780,699.
(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...................... $61,623
Unrealized depreciation...................... (31,043)
-------
Net unrealized appreciation.................. $30,580
=======
</TABLE>
See notes to financial statements.
8
<PAGE> 11
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One Group Mutual Funds
Investor Growth Fund
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SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- --------- ------------------------------------- --------
<C> <S> <C>
INVESTMENT COMPANIES (99.9%):
788 One Group Bond Fund, Class I......... $ 7,900
4,525 One Group Diversified Equity Fund,
Class I............................ 66,743
706 One Group Diversified International
Fund, Class I...................... 13,624
1,353 One Group Diversified Mid Cap Fund,
Class I............................ 26,333
834 One Group Government Bond Fund, Class
I.................................. 7,888
1,260 One Group High Yield Bond Fund, Class
I.................................. 11,948
1,056 One Group Income Bond Fund, Class
I.................................. 7,899
33 One Group Intermediate Bond Fund,
Class I............................ 334
1,236 One Group International Equity Index
Fund, Class I...................... 28,003
2,875 One Group Large Cap Growth Fund,
Class I............................ 76,730
4,371 One Group Large Cap Value Fund, Class
I.................................. 70,812
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- --------- ------------------------------------- --------
<C> <S> <C>
INVESTMENT COMPANIES, CONTINUED:
2,459 One Group Mid Cap Growth Fund, Class
I.................................. $ 63,812
4,252 One Group Mid Cap Value Fund, Class
I.................................. 55,144
7,568 One Group Prime Money Market Fund,
Class I............................ 7,568
24 One Group Short-Term Bond Fund, Class
I.................................. 252
839 One Group Small Cap Growth Fund,
Class I............................ 9,473
634 One Group Small Cap Value Fund, Class
I.................................. 8,344
--------
Total Investment Companies 462,807
--------
Total (Cost $423,109) (a) $462,807
========
</TABLE>
- ------------
Percentages indicated are based on net assets of $463,241.
(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...................... $ 52,492
Unrealized depreciation...................... (12,794)
--------
Net unrealized appreciation.................. $ 39,698
========
</TABLE>
See notes to financial statements.
9
<PAGE> 12
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One Group Mutual Funds
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STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1999
(Amounts in Thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
INVESTOR INVESTOR INVESTOR INVESTOR
CONSERVATIVE BALANCED GROWTH & GROWTH
GROWTH FUND FUND INCOME FUND FUND
------------ -------- ----------- --------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at cost..................................... $210,079 $577,762 $750,046 $423,109
Unrealized appreciation (depreciation) from
investments............................................ (690) 20,056 30,580 39,698
-------- -------- -------- --------
Investments, at value.................................... 209,389 597,818 780,626 462,807
Dividends receivable..................................... 4 159 66 5
Receivable for capital shares issued..................... 185 547 729 711
Prepaid expenses and other assets........................ 1 6 9 56
-------- -------- -------- --------
TOTAL ASSETS............................................. 209,579 598,530 781,430 463,579
-------- -------- -------- --------
LIABILITIES:
Payable for capital shares redeemed...................... 74 350 352 120
Accrued expenses and other payables:
Administration fees.................................... 1 15 12 --
12b-1 fees............................................. 124 301 319 215
Other.................................................. 43 13 48 3
-------- -------- -------- --------
TOTAL LIABILITIES........................................ 242 679 731 338
-------- -------- -------- --------
NET ASSETS:
Capital.................................................. 205,723 559,964 717,635 396,492
Undistributed (distributions in excess) of net investment
income................................................. (1) 34 36 51
Accumulated undistributed net realized gains (losses)
from investment transactions........................... 4,305 17,791 32,448 27,000
Net unrealized appreciation (depreciation) from
investments............................................ (690) 20,056 30,580 39,698
-------- -------- -------- --------
NET ASSETS............................................... $209,337 $597,845 $780,699 $463,241
======== ======== ======== ========
NET ASSETS:
Class I................................................ $ 36,158 $86,110 $210,057 $106,314
Class A................................................ 34,449 213,852 271,460 118,566
Class B................................................ 129,190 279,405 283,176 220,870
Class C................................................ 9,540 18,478 16,006 17,491
-------- -------- -------- --------
Total.................................................... $209,337 $597,845 $780,699 $463,241
======== ======== ======== ========
OUTSTANDING UNITS OF BENEFICIAL INTEREST (SHARES):
Class I................................................ 3,258 6,925 15,400 7,114
Class A................................................ 3,109 17,196 19,733 7,974
Class B................................................ 11,661 22,484 20,650 14,739
Class C................................................ 863 1,493 1,176 1,180
-------- -------- -------- --------
Total.................................................... 18,891 48,098 56,959 31,007
======== ======== ======== ========
Net Asset Value
Class I Offering and redemption price per share........ $ 11.10 $ 12.43 $ 13.64 $ 14.95
======== ======== ======== ========
Class A Redemption price per share..................... $ 11.08 $ 12.44 $ 13.76 $ 14.87
======== ======== ======== ========
Maximum sales charge................................. 5.25% 5.25% 5.25% 5.25%
======== ======== ======== ========
Maximum offering price per share (100%/(100% --
maximum sales charge) of net asset value adjusted
to nearest cent)................................... $ 11.69 $ 13.13 $ 14.52 $ 15.69
======== ======== ======== ========
Class B Offering price per share (a)................... $ 11.08 $ 12.43 $ 13.71 $ 14.98
======== ======== ======== ========
Class C Offering price per share (a)................... $ 11.06 $ 12.38 $ 13.61 $ 14.83
======== ======== ======== ========
</TABLE>
- ------------
(a) Redemption price per Class B and Class C share varies based on length of
time shares are held.
See notes to financial statements.
10
<PAGE> 13
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One Group Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS SIX MONTHS ENDED DECEMBER 31, 1999
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
INVESTOR INVESTOR INVESTOR INVESTOR
CONSERVATIVE BALANCED GROWTH & GROWTH
GROWTH FUND FUND INCOME FUND FUND
------------ -------- ----------- --------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Distribution income from affiliates.................... $ 5,236 $13,505 $ 16,305 $ 9,460
------- ------- -------- -------
EXPENSES:
Investment advisory fees............................... 52 134 179 103
Administration fees.................................... 103 264 332 205
12b-1 fees (Class A)................................... 58 325 437 186
12b-1 fees (Class B)................................... 634 1,271 1,243 938
12b-1 fees (Class C)................................... 47 81 67 80
Legal and audit fees................................... 3 4 4 3
Trustees' fees and expenses............................ 3 4 5 3
Transfer agent fees.................................... 105 217 403 250
Registration and filing fees........................... 41 38 39 30
Printing costs......................................... 17 44 49 34
Other.................................................. 2 3 4 2
------- ------- -------- -------
Total expenses before waivers.......................... 1,065 2,385 2,762 1,834
Less waivers........................................... (136) (265) (423) (273)
------- ------- -------- -------
Net Expenses........................................... 929 2,120 2,339 1,561
------- ------- -------- -------
Net Investment Income (Loss)........................... 4,307 11,385 13,966 7,899
------- ------- -------- -------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains (losses) from investment
transactions and distributions of realized gains by
other investment companies........................... 4,873 19,393 40,499 29,305
Net change in unrealized appreciation (depreciation)
from investments..................................... (5,292) (8,178) (14,459) (6,726)
------- ------- -------- -------
Net realized/unrealized gains (losses) from
investments.......................................... (419) 11,215 26,040 22,579
------- ------- -------- -------
Change in net assets resulting from operations......... $ 3,888 $22,600 $ 40,006 $30,478
======= ======= ======== =======
</TABLE>
See notes to financial statements.
11
<PAGE> 14
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
(Amounts in Thousands)
<TABLE>
<CAPTION>
INVESTOR CONSERVATIVE INVESTOR
GROWTH FUND BALANCED FUND
----------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1999 1999 1999 1999
------------ -------- ------------ --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss).................. $ 4,307 $ 5,010 $ 11,385 $ 9,832
Net realized gains (losses) from investment
transactions................................ 4,873 1,991 19,393 5,382
Net change in unrealized appreciation
(depreciation) from investments............. (5,292) 1,707 (8,178) 16,871
-------- -------- -------- --------
Change in net assets resulting from operations..... 3,888 8,708 22,600 32,085
-------- -------- -------- --------
DISTRIBUTIONS TO CLASS I SHAREHOLDERS:
From net investment income.................... (889) (1,467) (1,903) (3,441)
From net realized gains from investment
transactions................................ (259) (372) (210) (2,012)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income.................... (774) (847) (4,310) (3,125)
From net realized gains from investment
transactions................................ (249) (193) (576) (1,311)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income.................... (2,462) (2,687) (4,826) (4,343)
From net realized gains from investment
transactions................................ (923) (708) (740) (2,775)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income.................... (183) (189) (312) (336)
From net realized gains from investment
transactions................................ (68) (53) (49) (232)
-------- -------- -------- --------
Change in net assets from shareholder
distributions.................................... (5,807) (6,516) (12,926) (17,575)
-------- -------- -------- --------
CAPITAL TRANSACTIONS:
Change in net assets from share transactions..... 14,321 108,576 81,754 288,629
-------- -------- -------- --------
Change in net assets............................. 12,402 110,768 91,428 303,139
NET ASSETS:
Beginning of period........................... 196,935 86,167 506,417 203,278
-------- -------- -------- --------
End of period................................. $209,337 $196,935 $597,845 $506,417
======== ======== ======== ========
</TABLE>
See notes to financial statements.
12
<PAGE> 15
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
(Amounts in Thousands)
<TABLE>
<CAPTION>
INVESTOR GROWTH & INVESTOR
INCOME FUND GROWTH FUND
----------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1999 1999 1999 1999
------------ -------- ------------ --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss).................. $ 13,966 $ 9,558 $ 7,899 $ 5,456
Net realized gains (losses) from investment
transactions................................ 40,499 7,915 29,305 12,487
Net change in unrealized appreciation
(depreciation) from investments............. (14,459) 38,821 (6,726) 29,588
-------- -------- -------- --------
Change in net assets resulting from operations..... 40,006 56,294 30,478 47,531
-------- -------- -------- --------
DISTRIBUTIONS TO CLASS I SHAREHOLDERS:
From net investment income.................... (4,299) (5,573) (2,029) (2,945)
From net realized gains from investment
transactions................................ (1,361) (3,758) (1,081) (4,219)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income.................... (5,073) (1,989) (2,130) (1,935)
From net realized gains from investment
transactions................................ (1,739) (1,911) (1,221) (3,069)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income.................... (4,314) (3,776) (3,416) (2,417)
From net realized gains from investment
transactions................................ (1,798) (4,316) (2,185) (4,568)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income.................... (244) (282) (273) (297)
From net realized gains from investment
transactions................................ (100) (335) (183) (564)
-------- -------- -------- --------
Change in net assets from shareholder
distributions.................................... (18,928) (21,940) (12,518) (20,014)
-------- -------- -------- --------
CAPITAL TRANSACTIONS:
Change in net assets from share transactions..... 71,265 424,171 60,032 137,033
-------- -------- -------- --------
Change in net assets............................. 92,343 458,525 77,992 164,550
NET ASSETS:
Beginning of period........................... 688,356 229,831 385,249 220,699
-------- -------- -------- --------
End of period................................. $780,699 $688,356 $463,241 $385,249
======== ======== ======== ========
</TABLE>
See notes to financial statements.
13
<PAGE> 16
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
SCHEDULES OF CAPITAL STOCK ACTIVITY
(Amounts in Thousands)
<TABLE>
<CAPTION>
INVESTOR CONSERVATIVE INVESTOR
GROWTH FUND BALANCED FUND
------------------------ ------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1999 1999 1999 1999
------------ -------- ------------ --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS I SHARES:
Proceeds from shares issued............................... $ 5,174 $19,054 $ 20,076 $ 24,622
Proceeds from shares issued in Pegasus acquisition........ -- -- -- 14,183
Dividends reinvested...................................... 402 370 876 1,516
Cost of shares redeemed................................... (6,184) (13,123) (20,463) (51,130)
-------- -------- -------- --------
Change in net assets from Class I Share transactions...... $ (608) $ 6,301 $ 489 $(10,809)
======== ======== ======== ========
CLASS A SHARES:
Proceeds from shares issued............................... $ 8,437 $22,281 $ 58,926 $ 60,946
Proceeds from shares issued in Pegasus acquisition........ -- -- -- 97,757
Dividends reinvested...................................... 1,052 936 4,782 3,991
Cost of shares redeemed................................... (4,500) (6,347) (30,560) (23,019)
-------- -------- -------- --------
Change in net assets from Class A Share transactions...... $ 4,989 $16,870 $ 33,148 $139,675
======== ======== ======== ========
CLASS B SHARES:
Proceeds from shares issued............................... $ 24,089 $88,650 $ 60,745 $139,496
Proceeds from shares issued in Pegasus acquisition........ -- -- -- 25,340
Dividends reinvested...................................... 3,577 3,063 5,851 6,726
Cost of shares redeemed................................... (18,617) (11,204) (21,661) (19,622)
-------- -------- -------- --------
Change in net assets from Class B Share transactions...... $ 9,049 $80,509 $ 44,935 $151,940
======== ======== ======== ========
CLASS C SHARES:
Proceeds from shares issued............................... $ 3,037 $ 6,499 $ 5,144 $ 9,361
Dividends reinvested...................................... 247 216 383 544
Cost of shares redeemed................................... (2,393) (1,819) (2,345) (2,082)
-------- -------- -------- --------
Change in net assets from Class C Share transactions...... $ 891 $ 4,896 $ 3,182 $ 7,823
======== ======== ======== ========
SHARE TRANSACTIONS:
CLASS I SHARES:
Issued.................................................... 466 1,717 1,647 2,027
Issued in Pegasus acquisition............................. -- -- -- 1,184
Reinvested................................................ 36 34 72 130
Redeemed.................................................. (558) (1,182) (1,693) (4,367)
-------- -------- -------- --------
Change in Class I Shares.................................. (56) 569 26 (1,026)
======== ======== ======== ========
CLASS A SHARES:
Issued.................................................... 765 2,010 4,856 5,133
Issued in Pegasus acquisition............................. -- -- -- 8,160
Reinvested................................................ 95 84 391 338
Redeemed.................................................. (408) (573) (2,535) (1,902)
-------- -------- -------- --------
Change in Class A Shares.................................. 452 1,521 2,712 11,729
======== ======== ======== ========
CLASS B SHARES:
Issued.................................................... 2,175 8,007 5,030 11,711
Issued in Pegasus acquisition............................. -- -- -- 2,117
Reinvested................................................ 324 277 479 573
Redeemed.................................................. (1,687) (1,010) (1,794) (1,595)
-------- -------- -------- --------
Change in Class B Shares.................................. 812 7,274 3,715 12,806
======== ======== ======== ========
CLASS C SHARES:
Issued.................................................... 275 585 427 793
Reinvested................................................ 22 20 31 47
Redeemed.................................................. (217) (165) (193) (177)
-------- -------- -------- --------
Change in Class C Shares.................................. 80 440 265 663
======== ======== ======== ========
</TABLE>
See notes to financial statements.
14
<PAGE> 17
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
SCHEDULES OF CAPITAL STOCK ACTIVITY
(Amounts in Thousands)
<TABLE>
<CAPTION>
INVESTOR GROWTH & INVESTOR
INCOME FUND GROWTH FUND
------------------------ ------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1999 1999 1999 1999
------------ -------- ------------ --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS I SHARES:
Proceeds from shares issued............................... $ 21,439 $ 45,077 $ 18,152 $ 26,700
Proceeds from shares issued in Pegasus acquisition........ -- 85,917 -- 794
Dividends reinvested...................................... 3,174 2,495 1,677 2,977
Cost of shares redeemed................................... (29,256) (32,247) (17,730) (23,549)
-------- -------- -------- --------
Change in net assets from Class I Share transactions...... $ (4,643) $101,242 $ 2,099 $ 6,922
======== ======== ======== ========
CLASS A SHARES:
Proceeds from shares issued............................... $ 54,728 $ 70,189 $ 34,437 $ 39,280
Proceeds from shares issued in Pegasus acquisition........ -- 163,313 -- 16,083
Dividends reinvested...................................... 6,987 4,511 3,336 5,019
Cost of shares redeemed................................... (42,978) (43,971) (25,096) (21,519)
-------- -------- -------- --------
Change in net assets from Class A Share transactions...... $ 18,737 $194,042 $ 12,677 $ 38,863
======== ======== ======== ========
CLASS B SHARES:
Proceeds from shares issued............................... $ 67,539 $118,374 $ 52,522 $ 84,953
Proceeds from shares issued in Pegasus acquisition........ -- 17,502 -- 12,323
Dividends reinvested...................................... 6,181 7,937 5,582 7,009
Cost of shares redeemed................................... (19,799) (20,030) (14,627) (18,200)
-------- -------- -------- --------
Change in net assets from Class B Share transactions...... $ 53,921 $123,783 $ 43,477 $ 86,085
======== ======== ======== ========
CLASS C SHARES:
Proceeds from shares issued............................... $ 5,214 $ 6,811 $ 4,286 $ 6,771
Dividends reinvested...................................... 351 573 452 853
Cost of shares redeemed................................... (2,315) (2,280) (2,959) (2,461)
-------- -------- -------- --------
Change in net assets from Class C Share transactions...... $ 3,250 $ 5,104 $ 1,779 $ 5,163
======== ======== ======== ========
SHARE TRANSACTIONS:
CLASS I SHARES:
Issued.................................................... 1,627 3,572 1,266 2,024
Issued in Pegasus acquisition............................. -- 6,749 -- 59
Reinvested................................................ 237 203 114 227
Redeemed.................................................. (2,252) (2,538) (1,256) (1,771)
-------- -------- -------- --------
Change in Class I Shares.................................. (388) 7,986 124 539
======== ======== ======== ========
CLASS A SHARES:
Issued.................................................... 4,156 4,934 2,463 2,958
Issued in Pegasus acquisition............................. -- 12,718 -- 1,203
Reinvested................................................ 518 359 228 389
Redeemed.................................................. (3,236) (2,859) (1,763) (1,634)
-------- -------- -------- --------
Change in Class A Shares.................................. 1,438 15,152 928 2,916
======== ======== ======== ========
CLASS B SHARES:
Issued.................................................... 5,145 9,331 3,704 6,368
Issued in Pegasus acquisition............................. -- 1,368 -- 911
Reinvested................................................ 458 639 377 538
Redeemed.................................................. (1,505) (1,547) (1,029) (1,367)
-------- -------- -------- --------
Change in Class B Shares.................................. 4,098 9,791 3,052 6,450
======== ======== ======== ========
CLASS C SHARES:
Issued.................................................... 397 553 305 514
Reinvested................................................ 26 46 31 66
Redeemed.................................................. (179) (180) (210) (184)
-------- -------- -------- --------
Change in Class C Shares.................................. 244 419 126 396
======== ======== ======== ========
</TABLE>
See notes to financial statements.
15
<PAGE> 18
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR CONSERVATIVE GROWTH FUND
-------------------------------------------------
CLASS I
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................ $ 11.20 $ 11.06 $ 10.33 $ 10.00
------- ------- ------- -------
Investment Activities:
Net investment income (loss)...................... 0.27 0.47 0.46 0.26
Net realized and unrealized gains (losses) from
investments.................................... (0.02) 0.28 0.82 0.33
------- ------- ------- -------
Total from Investment Activities............... 0.25 0.75 1.28 0.59
------- ------- ------- -------
Distributions:
Net investment income............................. (0.27) (0.48) (0.45) (0.26)
Net realized gains................................ (0.08) (0.13) (0.10) --
------- ------- ------- -------
Total Distributions............................ (0.35) (0.61) (0.55) (0.26)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD...................... $ 11.10 $ 11.20 $ 11.06 $ 10.33
======= ======= ======= =======
Total Return........................................ 2.28%(b) 7.01% 12.70% 6.00%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................. $36,158 $37,131 $30,352 $15,038
Ratio of expenses to average net assets........... 0.20%(c) 0.20% 0.20% 0.20%(c)
Ratio of net investment income to average net
assets......................................... 4.83%(c) 4.31% 4.43% 4.92%(c)
Ratio of expenses to average net assets*.......... 0.31%(c) 0.32% 0.56% 1.46%(c)
Ratio of net investment income to average net
assets*........................................ 4.72%(c) 4.19% 4.07% 3.66%(c)
Portfolio turnover (d)............................ 9.47% 9.73% 3.22% 28.46%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
16
<PAGE> 19
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR CONSERVATIVE GROWTH FUND
-------------------------------------------------
CLASS A
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................. $ 11.18 $ 11.04 $ 10.32 $10.00
------- ------- ------- ------
Investment Activities:
Net investment income (loss)....................... 0.26 0.44 0.43 0.22
Net realized and unrealized gains (losses) from
investments..................................... (0.02) 0.29 0.82 0.32
------- ------- ------- ------
Total from Investment Activities................ 0.24 0.73 1.25 0.54
------- ------- ------- ------
Distributions:
Net investment income.............................. (0.26) (0.46) (0.43) (0.22)
Net realized gains................................. (0.08) (0.13) (0.10) --
------- ------- ------- ------
Total Distributions............................. (0.34) (0.59) (0.53) (0.22)
------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD....................... $ 11.08 $ 11.18 $ 11.04 $10.32
======= ======= ======= ======
Total Return (Excludes Sales Charge)................. 2.15%(b) 6.77% 12.38% 5.46%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000).................. $34,449 $29,714 $12,538 $1,299
Ratio of expenses to average net assets............ 0.45%(c) 0.45% 0.45% 0.47%(c)
Ratio of net investment income to average net
assets.......................................... 4.63%(c) 4.07% 4.12% 4.76%(c)
Ratio of expenses to average net assets*........... 0.66%(c) 0.67% 0.82% 3.05%(c)
Ratio of net investment income to average net
assets*......................................... 4.42%(c) 3.85% 3.75% 2.18%(c)
Portfolio turnover (d)............................. 9.47% 9.73% 3.22% 28.46%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
17
<PAGE> 20
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR CONSERVATIVE GROWTH FUND
-------------------------------------------------
CLASS B
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................. $ 11.19 $ 11.05 $ 10.33 $10.00
-------- -------- ------- ------
Investment Activities:
Net investment income (loss)....................... 0.21 0.36 0.37 0.19
Net realized and unrealized gains (losses) from
investments..................................... (0.03) 0.29 0.81 0.33
-------- -------- ------- ------
Total from Investment Activities................ 0.18 0.65 1.18 0.52
-------- -------- ------- ------
Distributions:
Net investment income.............................. (0.21) (0.38) (0.36) (0.19)
Net realized gains................................. (0.08) (0.13) (0.10) --
-------- -------- ------- ------
Total Distributions............................. (0.29) (0.51) (0.46) (0.19)
-------- -------- ------- ------
NET ASSET VALUE, END OF PERIOD....................... $ 11.08 $ 11.19 $ 11.05 $10.33
======== ======== ======= ======
Total Return (Excludes Sales Charge)................. 1.68%(b) 6.10% 11.53% 5.30%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000).................. $129,190 $121,348 $39,489 $2,616
Ratio of expenses to average net assets............ 1.20%(c) 1.20% 1.20% 1.21%(c)
Ratio of net investment income to average net
assets.......................................... 3.86%(c) 3.33% 3.37% 4.06%(c)
Ratio of expenses to average net assets*........... 1.31%(c) 1.32% 1.47% 3.52%(c)
Ratio of net investment income to average net
assets*......................................... 3.75%(c) 3.21% 3.10% 1.75%(c)
Portfolio turnover (d)............................. 9.47% 9.73% 3.22% 28.46%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
18
<PAGE> 21
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR CONSERVATIVE GROWTH FUND
----------------------------------------
CLASS C
----------------------------------------
SIX MONTHS YEAR JULY 1,
ENDED ENDED 1997 THROUGH
DECEMBER 31, JUNE 30, JUNE 30,
1999 1999 1998 (a)
------------ -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $11.17 $11.03 $10.33
------ ------ ------
Investment Activities:
Net investment income (loss).............................. 0.21 0.36 0.35
Net realized and unrealized gains (losses) from
investments............................................ (0.03) 0.29 0.81
------ ------ ------
Total from Investment Activities....................... 0.18 0.65 1.16
------ ------ ------
Distributions:
Net investment income..................................... (0.21) (0.38) (0.36)
Net realized gains........................................ (0.08) (0.13) (0.10)
------ ------ ------
Total Distributions.................................... (0.29) (0.51) (0.46)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.............................. $11.06 $11.17 $11.03
====== ====== ======
Total Return (Excludes Sales Charge)........................ 1.68%(b) 6.00% 11.48%
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)......................... $9,540 $8,742 $3,788
Ratio of expenses to average net assets................... 1.20%(c) 1.20% 1.20%
Ratio of net investment income to average net assets...... 3.86%(c) 3.32% 3.39%
Ratio of expenses to average net assets*.................. 1.31%(c) 1.33% 1.47%
Ratio of net investment income to average net assets*..... 3.75%(c) 3.19% 3.12%
Portfolio turnover (d).................................... 9.47% 9.73% 3.22%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
19
<PAGE> 22
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR BALANCED FUND
-------------------------------------------------
CLASS I
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................... $ 12.24 $ 11.81 $ 10.63 $ 10.00
------- ------- ------- -------
Investment Activities:
Net investment income (loss)...................... 0.27 0.47 0.37 0.21
Net realized and unrealized gains (losses) from
investments.................................... 0.23 0.79 1.39 0.63
------- ------- ------- -------
Total from Investment Activities............... 0.50 1.26 1.76 0.84
------- ------- ------- -------
Distributions:
Net investment income............................. (0.28) (0.51) (0.36) (0.21)
Net realized gains................................ (0.03) (0.32) (0.22) --
------- ------- ------- -------
Total Distributions............................ (0.31) (0.83) (0.58) (0.21)
------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD..................................... $ 12.43 $ 12.24 $ 11.81 $ 10.63
======= ======= ======= =======
Total Return........................................ 4.20%(b) 11.16% 17.02% 8.48%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................. $86,110 $84,447 $93,557 $72,155
Ratio of expenses to average net assets........... 0.20%(c) 0.20% 0.20% 0.20%(c)
Ratio of net investment income to average net
assets......................................... 4.66%(c) 3.85% 3.31% 3.84%(c)
Ratio of expenses to average net assets*.......... 0.26%(c) 0.26% 0.32% 0.56%(c)
Ratio of net investment income to average net
assets*........................................ 4.60%(c) 3.79% 3.19% 3.48%(c)
Portfolio turnover (d)............................ 7.36% 13.51% 9.71% 12.20%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
20
<PAGE> 23
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR BALANCED FUND
-------------------------------------------------
CLASS A
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................... $ 12.24 $ 11.83 $ 10.66 $10.00
-------- -------- ------- ------
Investment Activities:
Net investment income (loss)...................... 0.27 0.42 0.34 0.17
Net realized and unrealized gains (losses) from
investments.................................... 0.23 0.79 1.39 0.66
-------- -------- ------- ------
Total from Investment Activities............... 0.50 1.21 1.73 0.83
-------- -------- ------- ------
Distributions:
Net investment income............................. (0.27) (0.48) (0.34) (0.17)
Net realized gains................................ (0.03) (0.32) (0.22) --
-------- -------- ------- ------
Total Distributions............................ (0.30) (0.80) (0.56) (0.17)
-------- -------- ------- ------
NET ASSET VALUE,
END OF PERIOD..................................... $ 12.44 $ 12.24 $ 11.83 $10.66
======== ======== ======= ======
Total Return (Excludes Sales Charge)................ 4.17%(b) 10.70% 16.62% 8.41%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................. $213,852 $177,336 $32,605 $2,176
Ratio of expenses to average net assets........... 0.45%(c) 0.45% 0.45% 0.47%(c)
Ratio of net investment income to average net
assets......................................... 4.67%(c) 3.27% 3.01% 3.78%(c)
Ratio of expenses to average net assets*.......... 0.61%(c) 0.61% 0.66% 1.12%(c)
Ratio of net investment income to average net
assets*........................................ 4.51%(c) 3.11% 2.80% 3.13%(c)
Portfolio turnover (d)............................ 7.36% 13.51% 9.71% 12.20%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
21
<PAGE> 24
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR BALANCED FUND
-------------------------------------------------
CLASS B
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................... $ 12.24 $ 11.82 $ 10.65 $10.00
-------- -------- ------- ------
Investment Activities:
Net investment income (loss)...................... 0.22 0.33 0.26 0.16
Net realized and unrealized gains (losses) from
investments.................................... 0.22 0.81 1.39 0.65
-------- -------- ------- ------
Total from Investment Activities............... 0.44 1.14 1.65 0.81
-------- -------- ------- ------
Distributions:
Net investment income............................. (0.22) (0.40) (0.26) (0.16)
Net realized gains................................ (0.03) (0.32) (0.22) --
-------- -------- ------- ------
Total Distributions............................ (0.25) (0.72) (0.48) (0.16)
-------- -------- ------- ------
NET ASSET VALUE,
END OF PERIOD..................................... $ 12.43 $ 12.24 $ 11.82 $10.65
======== ======== ======= ======
Total Return (Excludes Sales Charge)................ 3.69%(b) 10.01% 15.85% 8.22%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................. $279,405 $229,671 $70,463 $5,672
Ratio of expenses to average net assets........... 1.20%(c) 1.20% 1.20% 1.22%(c)
Ratio of net investment income to average net
assets......................................... 3.81%(c) 2.78% 2.26% 2.93%(c)
Ratio of expenses to average net assets*.......... 1.26%(c) 1.26% 1.31% 1.73%(c)
Ratio of net investment income to average net
assets*........................................ 3.75%(c) 2.72% 2.15% 2.42%(c)
Portfolio turnover (d)............................ 7.36% 13.51% 9.71% 12.20%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
22
<PAGE> 25
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR BALANCED FUND
----------------------------------------
CLASS C
----------------------------------------
SIX MONTHS YEAR JULY 1,
ENDED ENDED 1997 THROUGH
DECEMBER 31, JUNE 30, JUNE 30,
1999 1999 1998 (a)
------------ -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 12.19 $ 11.77 $10.63
------- ------- ------
Investment Activities:
Net investment income (loss).............................. 0.22 0.32 0.26
Net realized and unrealized gains (losses) from
investments............................................ 0.22 0.81 1.37
------- ------- ------
Total from Investment Activities....................... 0.44 1.13 1.63
------- ------- ------
Distributions:
Net investment income..................................... (0.22) (0.39) (0.27)
Net realized gains........................................ (0.03) (0.32) (0.22)
------- ------- ------
Total Distributions.................................... (0.25) (0.71) (0.49)
------- ------- ------
NET ASSET VALUE,
END OF PERIOD............................................. $ 12.38 $ 12.19 $11.77
======= ======= ======
Total Return (Excludes Sales Charge)........................ 3.71%(b) 10.04% 15.66%
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)......................... $18,478 $14,963 $6,653
Ratio of expenses to average net assets................... 1.20%(c) 1.20% 1.20%
Ratio of net investment income to average net assets...... 3.85%(c) 2.85% 2.24%
Ratio of expenses to average net assets*.................. 1.26%(c) 1.26% 1.30%
Ratio of net investment income to average net assets*..... 3.79%(c) 2.79% 2.14%
Portfolio turnover (d).................................... 7.36% 13.51% 9.71%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
23
<PAGE> 26
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR GROWTH & INCOME FUND
-------------------------------------------------
CLASS I
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................. $ 13.29 $ 12.57 $ 10.93 $ 10.00
-------- -------- ------- -------
Investment Activities:
Net investment income (loss)..................... 0.28 0.35 0.25 0.15
Net realized and unrealized gains (losses) from
investments................................... 0.44 1.32 1.92 0.93
-------- -------- ------- -------
Total from Investment Activities.............. 0.72 1.67 2.17 1.08
-------- -------- ------- -------
Distributions:
Net investment income............................ (0.28) (0.48) (0.25) (0.15)
Net realized gains............................... (0.09) (0.47) (0.28) --
-------- -------- ------- -------
Total Distributions........................... (0.37) (0.95) (0.53) (0.15)
-------- -------- ------- -------
NET ASSET VALUE,
END OF PERIOD.................................... $ 13.64 $ 13.29 $ 12.57 $ 10.93
======== ======== ======= =======
Total Return....................................... 5.49%(b) 14.11% 20.34% 10.87%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................ $210,057 $209,770 $98,060 $43,660
Ratio of expenses to average net assets.......... 0.20%(c) 0.20% 0.20% 0.20%(c)
Ratio of net investment income to average net
assets........................................ 4.21%(c) 3.70% 2.17% 2.78%(c)
Ratio of expenses to average net assets*......... 0.28%(c) 0.27% 0.34% 0.66%(c)
Ratio of net investment income to average net
assets*....................................... 4.13%(c) 3.63% 2.03% 2.32%(c)
Portfolio turnover (d)........................... 13.64% 17.87% 11.38% 18.07%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
24
<PAGE> 27
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR GROWTH & INCOME FUND
-------------------------------------------------
CLASS A
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................... $ 13.40 $ 12.69 $ 11.02 $10.00
-------- -------- ------- ------
Investment Activities:
Net investment income (loss)...................... 0.26 0.36 0.22 0.12
Net realized and unrealized gains (losses) from
investments.................................... 0.45 1.27 1.95 1.02
-------- -------- ------- ------
Total from Investment Activities............... 0.71 1.63 2.17 1.14
-------- -------- ------- ------
Distributions:
Net investment income............................. (0.26) (0.45) (0.22) (0.12)
Net realized gains................................ (0.09) (0.47) (0.28) --
-------- -------- ------- ------
Total Distributions............................ (0.35) (0.92) (0.50) (0.12)
-------- -------- ------- ------
NET ASSET VALUE,
END OF PERIOD..................................... $ 13.76 $ 13.40 $ 12.69 $11.02
======== ======== ======= ======
Total Return (Excludes Sales Charge)................ 5.39%(b) 13.62% 20.18% 11.50%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................. $271,460 $245,151 $39,874 $4,262
Ratio of expenses to average net assets........... 0.45%(c) 0.45% 0.45% 0.46%(c)
Ratio of net investment income to average net
assets......................................... 4.09%(c) 1.54% 1.91% 2.67%(c)
Ratio of expenses to average net assets*.......... 0.63%(c) 0.62% 0.67% 1.26%(c)
Ratio of net investment income to average net
assets*........................................ 3.91%(c) 1.37% 1.69% 1.87%(c)
Portfolio turnover (d)............................ 13.64% 17.87% 11.38% 18.07%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
25
<PAGE> 28
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR GROWTH & INCOME FUND
-------------------------------------------------
CLASS B
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD............................... $ 13.36 $ 12.64 $ 11.00 $10.00
-------- -------- ------- ------
Investment Activities:
Net investment income (loss)...................... 0.22 0.26 0.14 0.09
Net realized and unrealized gains (losses) from
investments.................................... 0.44 1.29 1.92 1.00
-------- -------- ------- ------
Total from Investment Activities............... 0.66 1.55 2.06 1.09
-------- -------- ------- ------
Distributions:
Net investment income............................. (0.22) (0.36) (0.14) (0.09)
Net realized gains................................ (0.09) (0.47) (0.28) --
-------- -------- ------- ------
Total Distributions............................ (0.31) (0.83) (0.42) (0.09)
-------- -------- ------- ------
NET ASSET VALUE,
END OF PERIOD..................................... $ 13.71 $ 13.36 $ 12.64 $11.00
======== ======== ======= ======
Total Return (Excludes Sales Charge)................ 4.95%(b) 12.93% 19.13% 11.02%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................. $283,176 $221,088 $85,468 $8,896
Ratio of expenses to average net assets........... 1.20%(c) 1.20% 1.20% 1.21%(c)
Ratio of net investment income to average net
assets......................................... 3.43%(c) 2.12% 1.15% 1.94%(c)
Ratio of expenses to average net assets*.......... 1.28%(c) 1.27% 1.32% 1.89%(c)
Ratio of net investment income to average net
assets*........................................ 3.35%(c) 2.05% 1.03% 1.26%(c)
Portfolio turnover (d)............................ 13.64% 17.87% 11.38% 18.07%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
26
<PAGE> 29
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR GROWTH & INCOME FUND
----------------------------------------
CLASS C
----------------------------------------
SIX MONTHS YEAR JULY 1,
ENDED ENDED 1997 THROUGH
DECEMBER 31, JUNE 30, JUNE 30,
1999 1999 1998 (a)
------------ -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 13.25 $ 12.54 $10.93
------- ------- ------
Investment Activities:
Net investment income (loss).............................. 0.22 0.26 0.14
Net realized and unrealized gains (losses) from
investments............................................ 0.45 1.28 1.90
------- ------- ------
Total from Investment Activities....................... 0.67 1.54 2.04
------- ------- ------
Distributions:
Net investment income..................................... (0.22) (0.36) (0.15)
Net realized gains........................................ (0.09) (0.47) (0.28)
------- ------- ------
Total Distributions.................................... (0.31) (0.83) (0.43)
------- ------- ------
NET ASSET VALUE,
END OF PERIOD............................................. $ 13.61 $ 13.25 $12.54
======= ======= ======
Total Return (Excludes Sales Charge)........................ 5.07%(b) 12.94% 19.08%
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)......................... $16,006 $12,347 $6,429
Ratio of expenses to average net assets................... 1.20%(c) 1.20% 1.20%
Ratio of net investment income to average net assets...... 3.50%(c) 2.20% 1.14%
Ratio of expenses to average net assets*.................. 1.28%(c) 1.27% 1.31%
Ratio of net investment income to average net assets*..... 3.42%(c) 2.13% 1.03%
Portfolio turnover (d).................................... 13.64% 17.87% 11.38%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
27
<PAGE> 30
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR GROWTH FUND
-------------------------------------------------
CLASS I
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................. $ 14.39 $ 13.39 $ 11.25 $ 10.00
-------- -------- ------- -------
Investment Activities:
Net investment income (loss)..................... 0.30 0.32 0.12 0.09
Net realized and unrealized gains (losses) from
investments................................... 0.71 1.77 2.49 1.25
-------- -------- ------- -------
Total from Investment Activities.............. 1.01 2.09 2.61 1.34
-------- -------- ------- -------
Distributions:
Net investment income............................ (0.29) (0.43) (0.12) (0.09)
Net realized gains............................... (0.16) (0.66) (0.35) --
-------- -------- ------- -------
Total Distributions........................... (0.45) (1.09) (0.47) (0.09)
-------- -------- ------- -------
NET ASSET VALUE,
END OF PERIOD.................................... $ 14.95 $ 14.39 $ 13.39 $ 11.25
======== ======== ======= =======
Total Return....................................... 7.05%(b) 16.84% 23.81% 13.50%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................ $106,314 $100,566 $86,355 $31,318
Ratio of expenses to average net assets.......... 0.20%(c) 0.20% 0.20% 0.20%(c)
Ratio of net investment income to average net
assets........................................ 4.18%(c) 2.57% 1.04% 1.70%(c)
Ratio of expenses to average net assets*......... 0.30%(c) 0.31% 0.36% 0.77%(c)
Ratio of net investment income to average net
assets*....................................... 4.08%(c) 2.46% 0.88% 1.13%(c)
Portfolio turnover (d)........................... 13.84% 14.62% 4.05% 18.49%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
28
<PAGE> 31
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR GROWTH FUND
-------------------------------------------------
CLASS A
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................. $ 14.30 $ 13.33 $ 11.21 $10.00
-------- -------- ------- ------
Investment Activities:
Net investment income (loss)..................... 0.28 0.29 0.10 0.07
Net realized and unrealized gains (losses) from
investments................................... 0.72 1.74 2.47 1.21
-------- -------- ------- ------
Total from Investment Activities.............. 1.00 2.03 2.57 1.28
-------- -------- ------- ------
Distributions:
Net investment income............................ (0.27) (0.40) (0.10) (0.07)
Net realized gains............................... (0.16) (0.66) (0.35) --
-------- -------- ------- ------
Total Distributions........................... (0.43) (1.06) (0.45) (0.07)
-------- -------- ------- ------
NET ASSET VALUE,
END OF PERIOD.................................... $ 14.87 $ 14.30 $ 13.33 $11.21
======== ======== ======= ======
Total Return (Excludes Sales Charge)............... 7.05%(b) 16.40% 23.44% 12.84%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................ $118,566 $100,789 $55,057 $4,439
Ratio of expenses to average net assets.......... 0.45%(c) 0.45% 0.45% 0.46%(c)
Ratio of net investment income to average net
assets........................................ 4.17%(c) 2.08% 0.78% 1.82%(c)
Ratio of expenses to average net assets*......... 0.65%(c) 0.66% 0.70% 1.62%(c)
Ratio of net investment income to average net
assets*....................................... 3.97%(c) 1.87% 0.53% 0.66%(c)
Portfolio turnover (d)........................... 13.84% 14.62% 4.05% 18.49%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
29
<PAGE> 32
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR GROWTH FUND
-------------------------------------------------
CLASS B
-------------------------------------------------
SIX MONTHS YEAR YEAR DECEMBER 10,
ENDED ENDED ENDED 1996 THROUGH
DECEMBER 31, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1997 (a)
------------ -------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............................. $ 14.44 $ 13.47 $ 11.34 $10.00
-------- -------- ------- ------
Investment Activities:
Net investment income (loss)..................... 0.24 0.20 0.02 0.04
Net realized and unrealized gains (losses) from
investments................................... 0.70 1.76 2.48 1.34
-------- -------- ------- ------
Total from Investment Activities.............. 0.94 1.96 2.50 1.38
-------- -------- ------- ------
Distributions:
Net investment income............................ (0.24) (0.33) (0.02) (0.04)
Net realized gains............................... (0.16) (0.66) (0.35) --
-------- -------- ------- ------
Total Distributions........................... (0.40) (0.99) (0.37) (0.04)
-------- -------- ------- ------
NET ASSET VALUE,
END OF PERIOD.................................... $ 14.98 $ 14.44 $ 13.47 $11.34
======== ======== ======= ======
Total Return (Excludes Sales Charge)............... 6.49%(b) 15.57% 22.52% 13.88%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)................ $220,870 $168,823 $70,515 $7,651
Ratio of expenses to average net assets.......... 1.20%(c) 1.20% 1.20% 1.20%(c)
Ratio of net investment income to average net
assets........................................ 3.50%(c) 1.44% 0.04% 0.97%(c)
Ratio of expenses to average net assets*......... 1.30%(c) 1.31% 1.35% 2.18%(c)
Ratio of net investment income to average net
assets*....................................... 3.40%(c) 1.33% (0.11)% (0.01)%(c)
Portfolio turnover (d)........................... 13.84% 14.62% 4.05% 18.49%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
30
<PAGE> 33
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTOR GROWTH FUND
----------------------------------------
CLASS C
----------------------------------------
SIX MONTHS YEAR JULY 1,
ENDED ENDED 1997 THROUGH
DECEMBER 31, JUNE 30, JUNE 30,
1999 1999 1998 (a)
------------ -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 14.30 $ 13.34 $11.25
------- ------- ------
Investment Activities:
Net investment income (loss).............................. 0.24 0.18 0.02
Net realized and unrealized gains (losses) from
investments............................................ 0.69 1.77 2.45
------- ------- ------
Total from Investment Activities....................... 0.93 1.95 2.47
------- ------- ------
Distributions:
Net investment income..................................... (0.24) (0.33) (0.03)
Net realized gains........................................ (0.16) (0.66) (0.35)
------- ------- ------
Total Distributions.................................... (0.40) (0.99) (0.38)
------- ------- ------
NET ASSET VALUE,
END OF PERIOD............................................. $ 14.83 $ 14.30 $13.34
======= ======= ======
Total Return (Excludes Sales Charge)........................ 6.48%(b) 15.65% 22.42%
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)......................... $17,491 $15,071 $8,772
Ratio of expenses to average net assets................... 1.20%(c) 1.20% 1.20%
Ratio of net investment income to average net assets...... 3.41%(c) 1.50% 0.04%
Ratio of expenses to average net assets*.................. 1.30%(c) 1.31% 1.35%
Ratio of net investment income to average net assets*..... 3.31%(c) 1.39% (0.11)%
Portfolio turnover (d).................................... 13.84% 14.62% 4.05%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares issued.
See notes to financial statements.
31
<PAGE> 34
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999
(Unaudited)
1. ORGANIZATION:
The One Group Mutual Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end investment
company established as a Massachusetts business trust. The accompanying
financial statements and financial highlights are those of the Investor
Conservative Growth Fund, the Investor Balanced Fund, the Investor Growth &
Income Fund, and the Investor Growth Fund (individually a "Fund",
collectively the "Funds") only. Each Fund is a diversified mutual fund.
The Funds' investment objectives are as follows:
<TABLE>
<CAPTION>
FUND OBJECTIVE
---- ---------
<S> <C>
Investor Conservative Growth Fund Seeks income and capital appreciation by investing primarily
in a diversified group of One Group Mutual Funds which
invest primarily in fixed income and equity securities.
Investor Balanced Fund Seeks high total return consistent with the preservation of
capital by investing primarily in a diversified group of
One Group Mutual Funds which invest primarily in equity and
fixed income securities.
Investor Growth & Income Fund Seeks long-term capital appreciation and growth of income by
investing primarily in a diversified group of One Group
Mutual Funds which invest primarily in equity securities.
Investor Growth Fund Seeks long-term capital appreciation by investing primarily
in a diversified group of One Group Mutual Funds which
invest primarily in equity securities.
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by the
Trust in preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period. Actual results could differ from those estimates.
SECURITY VALUATION
Investments in One Group Mutual Funds (the "Underlying Funds") are valued
at the closing net asset value per share of each Underlying Fund on the day
of valuation. Short-term investments maturing in 60 days or less are valued
at amortized cost, which approximates market value.
SECURITY TRANSACTIONS AND RELATED INCOME
Purchases and sales of the Underlying Funds are accounted for on a trade
date basis. Net realized gains or losses on sales of the Underlying Funds
are determined on the specific identification cost method. Other income and
expenses are recognized on the accrual basis. Distributions from the
Underlying Funds and dividends to the Funds' shareholders are recorded on
the ex-dividend date.
EXPENSES
Expenses directly attributable to a Fund are charged directly to that Fund,
while the expenses which are attributable to more than one fund of the
Trust are allocated among the respective Funds. Each class of shares bears
its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class,
such as distribution fees.
Continued
32
<PAGE> 35
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1999
(Unaudited)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly for
the Funds, except for the Investor Conservative Growth Fund, which is
declared and paid monthly. Net realized capital gains, if any, are
distributed at least annually. Dividends are declared separately for each
class. No class has preferential dividend rights; differences in per share
dividend rates are due to differences in separate class expenses.
Distributions from net investment income and from net capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to differing treatments for expiring capital loss carryforwards and
deferrals of certain losses. Permanent book and tax basis differences,
which affect shareholder distributions, have been reclassified to
additional paid-in capital.
FEDERAL INCOME TAXES
Each Fund intends to continue to qualify as a regulated investment company
by complying with the provisions available to certain investment companies
as defined in applicable sections of the Internal Revenue Code, and to make
distributions from net investment income and from net realized capital
gains sufficient to relieve it from all, or substantially all, Federal
income taxes.
3. SHARES OF BENEFICIAL INTEREST:
The Trust has an unlimited number of shares of beneficial interest, with no
par value, which may, without shareholder approval, be divided into an
unlimited number of series of such shares, and any series may be classified
or reclassified into one or more classes. The Trust is registered to offer
fifty-four series and six classes of shares: Class I, Class A, Class B, Class
C, Class S and Service Class. Currently, the Trust consists of forty-nine
active funds. The Funds are each authorized to issue Class I, Class A, Class
B and Class C shares only. Class A shares are subject to initial sales
charges, imposed at the time of purchase, in accordance with the Funds'
prospectus. Certain redemptions of Class B and Class C shares are subject to
contingent deferred sales charges in accordance with the Funds' prospectus.
Shareholders are entitled to one vote for each full share held and vote in
the aggregate and not by class or series, except as otherwise expressly
required by law or when the Board of Trustees has determined that the matter
to be voted on affects only the interest of shareholders of a particular
class or series. See Schedules of Capital Stock Activity.
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION AGREEMENTS:
The Trust and Banc One Investment Advisors Corporation (the "Advisor") are
parties to an investment advisory agreement under which the Advisor is
entitled to receive an annual fee, computed daily and paid monthly, equal to
0.05% of the average net assets of the Investor Conservative Growth Fund, the
Investor Balanced Fund, the Investor Growth & Income Fund, and the Investor
Growth Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services for
a fee that is computed daily and paid monthly, at an annual rate of 0.10% on
the first $500 million of each Fund's average daily net assets, 0.075% of
each Fund's average daily net assets between $500 million and $1 billion, and
0.05% of each Fund's average daily net assets when fund assets exceed $1
billion. The Advisor also serves as sub-Administrator to each fund of the
Trust, pursuant to an agreement between the Administrator and the Advisor.
Pursuant to this agreement, the Advisor performs many of the Administrator's
duties, for which the Advisor receives a fee paid by the Administrator.
Continued
33
<PAGE> 36
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1999
(Unaudited)
The Trust and The One Group Services Company (the "Distributor") are parties
to a distribution agreement under which shares of the funds are sold on a
continuous basis. Class A, Class B and Class C shares are subject to a
distribution and shareholder services plans (the "Plans") pursuant to Rule
12b-1 under the 1940 Act. As provided in the Plans, the Trust will pay the
Distributor a fee of 0.35% of the average daily net assets of Class A shares
of each of the funds and 1.00% of the average daily net assets of the Class B
and Class C shares of each of the funds. Currently, the Distributor has
voluntarily agreed to limit payments under the Plans to 0.25% of average
daily net assets of the Class A shares of each fund. Up to 0.25% of the fees
payable under the Plans may be used as compensation for shareholder services
by the Distributor and/or financial institutions and intermediaries. Fees
paid under the Plans may be applied by the Distributor toward (i)
compensation for its services in connection with distribution assistance or
provision of shareholder services; or (ii) payments to financial institutions
and intermediaries such as banks (including affiliates of the Advisor),
brokers, dealers and other institutions, including the Distributor's
affiliates and subsidiaries as compensation for services or reimbursement of
expenses incurred in connection with distribution assistance or provision of
shareholder services. Class I shares of each fund are offered without
distribution fees. For the period ended December 31, 1999, the Distributor
received $3,671,460 from commissions earned on sales of Class A shares and
redemptions of Class B and Class C shares, of which, the Distributor
re-allowed $3,615,189 to affiliated broker-dealers of the funds.
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the funds for serving in their
respective roles.
The Advisor, the Administrator and the Distributor voluntarily agreed to
waive a portion of their fees. For the period ended December 31, 1999, fees
in the following amounts were waived (amounts in thousands):
<TABLE>
<CAPTION>
INVESTMENT 12B-1 FEES
ADVISORY FEES ADMINISTRATION WAIVED
WAIVED FEES WAIVED CLASS A
------------- --------------- ----------
<S> <C> <C> <C>
Investor Conservative Growth Fund........................ $24 $ 95 $ 17
Investor Balanced Fund................................... 64 108 93
Investor Growth & Income Fund............................ 85 213 125
Investor Growth Fund..................................... 50 170 53
</TABLE>
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities) during the period ended December 31, 1999
were as follows (amounts in thousands):
<TABLE>
<CAPTION>
PURCHASES SALES
--------- -------
<S> <C> <C>
Investor Conservative Growth Fund........................... $ 41,816 $19,023
Investor Balanced Fund...................................... 135,694 38,274
Investor Growth & Income Fund............................... 177,323 95,502
Investor Growth Fund........................................ 109,608 55,339
</TABLE>
Continued
34
<PAGE> 37
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1999
(Unaudited)
6. LINE OF CREDIT:
The Trust and State Street Bank and Trust Company ("State Street") and a
group of banks (collectively, the "Banks") entered into a financing agreement
dated October 19, 1999. Under this agreement, the Banks provide an unsecured
committed credit facility in the aggregate amount of $500 million. The credit
facility is allocated, under the terms of the financing agreement, among the
Banks. Advances under the agreement are taken primarily for temporary or
emergency purposes, including the meeting of redemption requests that
otherwise might require the untimely disposition of securities, and are
subject to each Fund's borrowing restrictions. Interest on borrowings is
payable at the Federal Funds Rate plus 0.50% on an annualized basis. Interest
on borrowings during the period from and including December 15, 1999 to
January 17, 2000, is payable at 0.50% plus the higher of the Fed Funds
Effective Rate plus 0.50% or the Fed Funds Target Rate plus 1.50%. A
commitment fee of 0.10% per annum will be incurred on the unused portion of
the committed facility, which is allocated to all Funds.
During the six months ended December 31, 1999, there were no borrowings by
the Funds under the Agreement.
7. DEFERRED TRUSTEES FEES:
Independent Trustees of the Funds may participate in a Deferred Compensation
Plan in which they may defer any or all compensation related to performance
of their duties as a Trustee. All deferred compensation is paid by the Funds
and invested into various One Group Mutual Funds elected by each Trustee. The
Plan is fully funded and therefore, the Funds bear no additional trustee
expense over and above the normal cash compensation.
8. PEGASUS REORGANIZATION:
The Trust entered an agreement and plan of reorganization and liquidation
("the Reorganization") with the Pegasus Funds pursuant to which all of the
assets and liabilities of each Pegasus Fund transferred to a fund of the One
Group in exchange for shares of the corresponding fund of the One Group. The
Reorganization, which qualified as a tax-free exchange for Federal income tax
purposes, was completed on March 21, 1999 following approval by shareholders
of the Pegasus Funds at a special shareholder meeting. The following is a
summary of shares outstanding, net assets, net asset value per share issued
and unrealized appreciation immediately before and after the Reorganization
(amounts in thousands except per share amounts):
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
------------------------------ --------------
PEGASUS MANAGED INVESTOR INVESTOR
ASSETS CONSERVATIVE BALANCED BALANCED
FUND FUND FUND
------------------- -------- --------------
<S> <C> <C> <C>
Shares............................................... 10,038 25,605 37,066
Net assets........................................... $137,280 $306,589 $443,869
Net asset value:
Class I............................................ 13.73 11.98 11.98
Class A............................................ 13.67 11.98 11.98
Class B............................................ 13.68 11.97 11.97
Class C............................................ -- 11.92 11.92
Unrealized appreciation.............................. (3,150) 19,523 16,373
</TABLE>
Continued
35
<PAGE> 38
- --------------------------------------------------------------------------------
One Group Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
--------------------------------- ---------------
PEGASUS MANAGED INVESTOR INVESTOR
ASSETS BALANCED GROWTH & INCOME GROWTH & INCOME
FUND FUND FUND
--------------- --------------- ---------------
<S> <C> <C> <C>
Shares............................................... 25,159 27,223 48,058
Net assets........................................... $266,732 $347,797 $614,529
Net asset value:
Class I............................................ 10.50 12.73 12.73
Class A............................................ 10.53 12.84 12.84
Class B............................................ 11.96 12.79 12.79
Class C............................................ -- 12.69 12.69
Unrealized appreciation.............................. (11,652) 25,486 13,834
</TABLE>
<TABLE>
<CAPTION>
AFTER
BEFORE REORGANIZATION REORGANIZATION
-------------------------- --------------
PEGASUS MANAGED INVESTOR INVESTOR
ASSETS GROWTH GROWTH GROWTH
FUND FUND FUND
--------------- -------- --------------
<S> <C> <C> <C>
Shares............................................... 2,740 22,356 24,529
Net assets........................................... $29,200 $300,776 $329,976
Net asset value:
Class I............................................ 10.79 13.45 13.45
Class A............................................ 10.73 13.37 13.37
Class B............................................ 10.55 13.52 13.52
Class C............................................ -- 13.38 13.38
Unrealized appreciation.............................. (1,306) 22,458 21,152
</TABLE>
36
<PAGE> 39
(This page has been left blank intentionally.)
<PAGE> 40
One Group is distributed by
The One Group Services Company,
which is not affiliated with BANK
ONE CORPORATION. Banc One
Investment Advisors Corporation
serves as investment advisor to
the One Group, for which it
receives advisory fees.
Call Investor Services at
The One Group Service Center
at 1 800 480 4111 for a prospectus
containing complete information
about charges and expenses. Past
performance is no guarantee of
future results.
BANC ONE
INVESTMENT
ADVISORS
CORPORATION
TOG-F-044 (2/00) [BANK ONE LOGO]
