<PAGE>
PROGRESSIVE
- --------------------
P O R T F O L I O
S E R I E S
__________________
Aggressive Growth Portfolio
Value Portfolio
Environmental Portfolio
Annual Report
June 30, 1995
<PAGE>
From the Portfolio Manager
- -----------------------------------------------------------------
Dear Shareholders:
The Progressive Aggressive Portfolio ("Aggressive") of
Progressive Portfolios Series has declined from $9.51 to $8.94,
or 5.99% for the fiscal period ended June 30, 1995. After a
strong fiscal year ended June 30, 1994 where we advanced 23.03%
versus a 1.41% gain in the S & P 500, we had weak results from
June 30, 1994 to December 31, 1994. During this time the Fund
declined 14.41% as the stock market and the small capitalization
stocks we specialize in were weak. However, from a price of
8.14 at December 31 we have appreciated 21% to $9.85 at the date
of this letter. As you can see the results of this Fund tend to
be volatile but we believe the small emerging growth companies
that we are invested in give the Fund excellent return potential
when measured over the long term. We have had appreciation of
over 20% so far this calendar period from Avert, Authentic
Fitness, Super Rite Foods, Integrated Devices, Casino Data
Systems and Vari-L. Since we intend to maintain a concentrated
portfolio with between 20 and 30 positions, having this many
winners had a significant positive impact on the portfolio. We
believe the remainder of our positions which have lagged these
stellar performers so far this year will drive the Fund's
performance over the remainder of the year.
Thank you for your continued support.
Sincerely yours,
Mark D. Beckerman,
President
September 7, 1995
MANAGEMENT DISCUSSION & ANALYSIS
For the fiscal year ended June 30, 1995, the Progressive
Aggressive Portfolio concentrated on those investments which had
excellent upside market potential but traded at modest prices.
Management isolated and focused on certain industry groups which
were identified earlier as undervalued based on either
unrecognized assets, such as a valuable franchise, or some other
quality that would facilitate its earnings growth. These groups
included high technology and consumer - oriented companies. The
Fund's largest gains for the year were from investments in
Avert, Mastec, and Petsmart Inc. The greatest unrealized
appreciation occurred in such issues as Avert, Authentic
Fitness, Super Rite Foods, Integrated Devices, Casino Data
<PAGE>
Systems and Vari-L. As is the situation with any mutual fund,
not all portfolio holdings resulted in gains. The Fund
realized significant losses in Spectravision Rights and MTC
Electronics and unrealized losses in China Industrial and Good
Times Restaurant. Aggressive's price per share, or Net Asset
Value, declined from $9.51 to $ 8.94, or 5.99%, over the past
twelve months ended June 30, 1995.
Furthermore, the net operating loss is attributable to the
fundamental investment approach the Fund has been operating
under since its inception. Management does not necessarily
consider income as a fundamental criterion for portfolio stock
selection. Therefore, The Fund's net investment loss is the
outgrowth of expenses exceeding dividend and interest income
generated from portfolio securities.
As of June 30, 1995, Mark D. Beckerman provided Portfolio
management service to the Fund, and as such he has the exclusive
authority to make strategy and investment decisions with respect
to the selection of portfolio securities. Mr. Beckerman has
served in this capacity since September 27, 1993. Schield
management provided for management advisory services prior to
this date.
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
PROGRESSIVE AGGRESSIVE PORTFOLIO OF PROGRESSIVE PORTFOLIOS SERIES
VS S&P 500 INDEX. FROM INCEPTION OF MANAGEMENT* THROUGH JUNE 30,
1995
55000
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
1/86 3/87 3/88 3/89 3/90 3/91 3/92 3/93 3/94 3/95
Progressive Aggressive's one, five year and since inception of
management average compound annual return performance is as
follows:
One Year Five Year Inception of Management
- -5.99% -1.02% +2.82%
Inception of management is computed as of the last day of the
first month in the quarter in which management and the fund
commenced operations.
* The above relative performance chart is reflective of
Progressive Portfolios Series' change in value since January
1986 for Progressive Aggressive Portfolio. (Inception of Fund &
Management January 31, 1986). Past performance is not predictive
of future performance.
<PAGE>
FROM THE PORTFOLIO MANAGER
- -----------------------------------------------------------------
Dear Shareholders:
The Progressive Value Portfolio("Value") of Progressive
Portfolios Series has advanced 7.41% to $10.44 for the fiscal
period which ended June 30, 1995. This performance as compared
to a nationally recognized market index, is outlined in the
accompanying chart.
In analyzing the investment performance of the fund we
should look at two distinct influences; the performance of the
investments made and the expense ratio of the fund.
As to the former, from January 1, 1995 to the date of this
letter we have had appreciation of 210.43% for Culbro
Corporation, 42.75% for Kansas City Southern Industries, Inc.
and 61.21% for Showboat. Overall the current stock portion of
the fund's portfolio has an unrealized appreciation of 41.84%.
However, the redemptions we experienced after Hamilton & Bache
resigned as a subadvisor to the fund have caused us to drop
below the critical mass level for a mutual fund; we had only
$263,347 in net assets as of June 30, 1995. Therefore, the
combination of the fixed expenses of running a mutual fund and a
small asset base cause us to have a high expense ratio. This
ratio detracts from the investment performance of the portfolio.
Further information about our recommendations to
shareholders will follow shortly. We thank you for your loyalty
to the fund and are happy that we were able to generate gains
over the most recent time period. Going forward we are
optimistic that our large cash position should also have limited
downside risk due to their strong balance sheets and reasonable
stock prices. We are optimistic that the various business plans
for the companies held in our portfolio will drive the stocks up
over the next few months. Thank you for your support.
Sincerely,
Mark D. Beckerman,
President
September 7, 1995
<PAGE>
MANAGEMENT DISCUSSION & ANALYSIS
Progressive Value's portfolio advanced from $9.72 to 10.44
per share, or 7.41% for the past twelve months ended June 30,
1995. The Fund achieved these gains through market appreciation
from fundamental value analysis and realizing capital gains on
investments, that is we sold securities at a value greater than
the price at which they were acquired. The industry groups in
which these gains occurred included health care and financial
services. The Fund's largest gains for the year were in : Amgen,
Paychex and Glendale Federal. The greatest unrealized
appreciation occurred in such issues as Culbro and Americana
Hotel and Realty. As is the situation with any mutual fund, not
all portfolio holdings resulted in gains. The Fund realized
losses in Chart House and Providential Corp. However, in the
final analysis gains on the disposition of portfolio securities
exceeded losses for the fiscal period.
Furthermore, the net operating loss is attributable to the
fundamental investment approach the Fund has been operating
under since its inception. Management does not necessarily
consider income as a fundamental criterion for portfolio stock
selection. Therefore, the Fund's net investment loss is the
result of expense exceeding dividend and interest income.
Redemptions following Hamilton & Bache resigning their
sub-advisory agreement with the Fund in a formal letter dated
July 19, 1994, caused the assets of the fund to shrink driving
up our expense ratio. This has made it difficult for the Fund
to post gains despite good appreciation from its portfolio
holdings.
As of June 30, 1995, Mark D. Beckerman provided portfolio
management services to the fund and as such he has the exclusive
authority to make strategy and investment decisions with respect
to the selection of portfolio securities. Mr. Beckerman has
served in this capacity since July 19, 1994.
<PAGE>
FROM THE PORTFOLIO MANAGER
- -----------------------------------------------------------------
After several reports dealing with difficult periods, it is
with great pleasure that I share with you the results of the
Progressive Environmental Fund since my last letter.
From its December 31, 1994 price of $3.77 per share, your
Fund has increased to $4.15 per share on June 30, 1995, for an
increase of 10.1%. Twelve month numbers are less exciting, due
to the issues discussed in my January letter. The Fund actually
declined from $4.31 per share twelve months ago, for a one year
loss of 3.7%.
As I pointed out in my last letter, various factors such as
the sell off of "green: stocks due to the closure of several
environmental funds, the failure of the administration to enact
meaningful regulations, the election of a much more
anti-environmental Congress, and others had driven our stocks to
prices which represented much greater value than we have seen in
several years. As this year's stock market was driven higher by
the twin engines of an anticipated "soft landing" with lower
interest rates plus the explosion in "high tech" stocks, our
environmental portfolio began to move back to more reasonable
valuations.
We did have one high tech stock in our portfolio, Atmel
Corp.(ATML) which gained 45% during the period it was in the
portfolio. Other than that, however, we made our money in our
environmental positions, such as Calgon Carbon(CCC) up 17%,
Energy Conversion Devices (ENER) up 30%, Healthy Planet
Products(HPP) up 23 %, Molten Metal Technology(MLTN) up 25%,
Thermo Electon (TMO) up 34% and York International (YRK) up 33%.
Our old friend from 1993 and nemesis in 1994, Air Sensors(ARSN)
began to move up in the first half of the year which looks
sustainable for a little longer.
Of course, not all holdings were stellar performers. We
accepted a loss and closed out our position in Dames & Moore(DM.
Also disappointing was Kenetech (KWND) which appears to be
losing ground to its rival New World (NWPC) whose stock also
under-performed. KWND also ran into some accounting
disagreements and terminated their audit firm. Other laggards
included Groundwater Technology (GWTI), Allwaste (ALW), Archer
Daniels Midland (ADM), Unique Mobility (UQM) and Marcum Natural
Gas (MGAS).
Is this current positive trend strong enough to withstand
the negative pressures of Congress, Rush Limbaugh and an
increasingly overvalued market? Many investors or registered
representatives ask me some variation of this question.
Ultimately environmental quality, like politics is local. The
question (not always valid) of jobs versus pollution is not such
a slam dunk when the pollution is in your own back yard. I
believe that practical progress in preservation of
environmental quality will come through the efforts of local
governments and community groups, rather than via the federal
<PAGE>
government. Threats to the environment such as that posed by
the weakening of the Endangered Species Act do not necessarily
translate into threats to the profits of "green" companies. Our
fund's focus is on those companies who have weaned themselves
from the public through, or those who have never been addicted
to it. Alternative energy, recycling and air and water cleanup
are already or soon will be competitive without government
mandates. Who could have imagined two years ago that the media
would report the theft of newspapers set out for recycling?
Alternative energy projects have the most doubt, so long as oil
and natural gas prices do not move up.
The risks to the portfolio of the stock market itself are
more difficult to assess. The market is over-valued by numerous
historic indicators. Many optimists express the opinion that
"things are different this time," a quotation in tamer times
considered to be the five most dangerous words on Wall Street.
Some things clearly are different, or we would not be where we
are today. The question is, how long will they remain
different, and how quickly will they return to the norm? Your
Fund's charter remains to be significantly invested in the
stocks of companies which have a positive environmental impact.
This means that, as portfolio manager, I must be alert to
weaknesses in the stocks that the fund owns, rather than to the
overall market. The portfolio is not a market timing device,
1994's experience taught that the best offense is a good
defense, and that stocks that begin to act badly should be cut
quickly. Further, it is still possible to find quality "green"
companies which sell at a discount to the market and to their
growth rate or other valuation.
As always, your support of your fund is inspiring. As a
relative volatile fund, Progressive Environmental is especially
appropriate for the technique known as "dollar cost averaging,"
which means a periodic investment of a set amount of money.
Although no technique is guaranteed to cause profits, dollar
cost averaging in a volatile investment will lead to a lower
average price paid for the investment over time. Since the goal
of any investment is to buy low and sell high, this technique
helps. I would encourage you to consider doing as I have done
and begin monthly or quarterly additions to you Environmental
Fund accounts.
Finally, as environmentally conscious investors, you may be
interested to know of a letter writing campaign sponsored by the
Social investment Forum. The Securities and Exchange
Commission (SEC) has recently issued several rulings which
restrict the ability of stockholders to propose resolutions
which deal with issues of corporate responsibility. If you
would like more information on this issue, including a sample
letter to President Clinton, call the Interfaith Center on
Corporate Responsibility at (212)870-2293.
Best wishes for the second half of 1995.
GEORGE R. GAY CFP
PORTFOLIO MANAGER
<PAGE>
MANAGEMENT DISCUSSION & ANALYSIS
From its December 31, 1994 price of $3.77 per share, the
fund increased 10.1% to $4.15 per share on June 30, 1995.
Twelve month numbers are less exciting, due to the issues
discussed previously, such as liquidation of other environmental
funds, general market conditions, and specific stock
performances. The fund actually declined from $4.31 per share
twelve months ago, for a one year loss of 3.7 %. Some of the
winning stocks we held during the fiscal period were Atmel
Corp., Energy conversion and York International. Losses, on the
other hand, in Dames & Moore, Kenetech and New World Power were
a drag on our performance.
Generally speaking, most Environmental companies are "small
cap" companies. The fund, therefore, will share the
characteristics of the smaller cap market. The stocks in the
fund will often be volatile, will pay little or no dividends,
and may often be relatively il-liquid. Many of the companies
also have only few products or services making them more
susceptible to business risk than more diversified companies.
These companies are also strongly affected by federal, State and
local government spending and regulation.
Furthermore, the net operating loss is attributable to the
fundmental investment approach the fund has been operating
under since its inception. Management does not necessarily
consider income as a fundamental criterion for portfolio stock
selection. Therefore, the Funds net investment loss is the
outgrowth of expenses exceeding dividend and interest income
generated from portfolio securities.
As of June 30, 1995, George Gay provided portfolio
management services to the Fund. He has the authority to make
strategy and investment decisions with respect to the selection
of portfolio securities. Mr. Gay has served in this capacity
since June 27, 1992.
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
PROGRESSIVE VALUE & PROGRESSIVE ENVIRONMENTAL
PORTFOLIOS OF PROGRESSIVE PORTFOLIOS SERIES VS S&P 500 INDEX
FROM INCEPTION OF MANAGEMENT THROUGH JUNE 30, 1995
25000
20000
15000
10000
5000
6/92 9/92 12/92 3/93 6/93 12/93 3/94 6/94 9/94 12/94 3/95 6/96
Progressive Value's and Progressive Environmental's one year and
since inception of management average compound annual return
performance is as follows:
One Year Inception of Management
Value 7.41% 8.78%
Environmental -3.71% -1.25%
Inception of Management is computed as of the last day of first
quarter ended the month current portfolio management commenced
the rendering of their advisory services.
* The above relative performance chart is reflective of
Progressive Portfolios Series' change in value since
June 30, 1992 for Progressive Value Portfolio; June 27, 1992 for
Progressive Environmental Portfolio (inception of Management).
Previous periods for which these funds were managed by another
investment adviser are not shown.
Past performance is not predictive of future performance.
<PAGE>
<TABLE>
<CAPTION>
WHAT YOU OWN ...
AGGRESSIVE GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS AS OF JUNE 30, 1995
================================================================
MARKET
SHARES OR PRINCIPAL VALUE
- -----------------------------------------------------------------
<C> <C> <S> <C>
COMMON STOCKS:
Aircraft Maintenance Systems
4.12% 10,000 Precision Standard, Inc. * $19,375
- -----------------------------------------------------------------
Beverage
3.73% 10,000 Cable Car Beverage Corp. * 17,500
- -----------------------------------------------------------------
Communications/Broadcasting
5,000 Spectravision,Inc. CVR * 0
- -----------------------------------------------------------------
Diversified
18,000 China Industrial Group, Inc.* 36,000
32,000 China Industrial Group, Inc.
Warrants * 2,000
8.09% Total 38,000
- -----------------------------------------------------------------
Gaming Equipment
3.06% 1,000 Casino Data Systems * 14,375
- -----------------------------------------------------------------
Industrial
5.03% 3,000 American Electronic
Components, Inc. * 23,625
- -----------------------------------------------------------------
Real Estate
11,000 Americana Hotels & Realty Corp. * 34,375
3,000 One Liberty Properties, Inc. 36,937
2,500 United Capital Corp. * 24,062
20.30% Total 95,374
- -----------------------------------------------------------------
Restaurant
5.51% 18,000 Good Times Restaurants, Inc.* 25,875
- -----------------------------------------------------------------
Retailing
2,000 Authentic Fitness Corp. * 33,500
2,500 Super Rite Corp. * 54,063
18.64% Total 87,563
- -----------------------------------------------------------------
Specialty Services
2,000 Avert,Inc.* 12,125
5,000 Avert, Inc. Warrants * 2,266
1,000 Transmedia Network, Inc. 10,000
5.19% Total 24,391
</TABLE>
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<TABLE>
<CAPTION>
WHAT YOU OWN ...
AGGRESSIVE GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS AS OF JUNE 30, 1995
=================================================================
MARKET
SHARES OR PRINCIPAL VALUE
- ----------------------------------------------------------------
<C> <C> <S> <C>
COMMON STOCKS:
Technology
10,000 Imatron Corp. * 8,437
300 Integrated Device Technology * 13,875
2,000 Vari-L Co., Inc. * 25,250
10.12% Total 47,562
- ----------------------------------------------------------------
83.79% TOTAL COMMON STOCKS
Cost $385,211 393,640
- ----------------------------------------------------------------
SHORT-TERM INVESTMENTS:
20,000 First American Institutional
Government Money Fund 20,000
30,000 U.S. Treasury Bill, 5.15% 29,916
Due 07/20/95
Total 49,916
- ----------------------------------------------------------------
10.62% TOTAL SHORT-TERM INVESTMENTS
Cost $49,916 49,916
- ----------------------------------------------------------------
94.41% TOTAL INVESTMENTS
Cost $435,127 + 443,556
5.59% Cash, Receivables, and Other
Assets, Net of Liabilities 26,246
100% NET ASSETS $469,802
- ----------------------------------------------------------------
*Non-income producing securities
+Aggregate cost for federal income tax purposes is the same.
See Notes to Financial Statements.
</TABLE>
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<TABLE>
<CAPTION>
WHAT YOU OWN ...
VALUE PORTFOLIO
STATEMENT OF INVESTMENTS AS OF JUNE 30, 1995
=================================================================
MARKET
SHARES OR PRINCIPAL VALUE
- ----------------------------------------------------------------
<C> <C> <S> <C>
COMMON STOCKS:
Consumer
1,000 Culbro Inc.* $33,000
20 Windmere Corp. Warrants* 15
12.53% Total 33,015
- ----------------------------------------------------------------
Diversified
300 Kansas City Southern 11,175
Industries, Inc.
1,000 Quixote Corp. 12,500
8.99% Total 23,675
- ----------------------------------------------------------------
Gaming
1,000 Showboat, Inc. 18,500
1,500 Video Lottery Technology, Inc.* 9,750
10.73% Total 28,250
- ----------------------------------------------------------------
Real Estate
10,000 Americana Hotel & Realty Corp.* 31,250
500 Mark Centers Trust 6,500
1,000 One Liberty Properties, Inc. 12,313
19.01% Total 50,063
- ----------------------------------------------------------------
51.26% TOTAL COMMON STOCKS
Cost $103,305 135,003
- ----------------------------------------------------------------
SHORT-TERM INVESTMENTS:
12,000 First American Institutional
Government Money Fund 12,000
50,000 U.S. Treasury Bill, 5.32%
Due 07/25/95 49,860
Total 61,860
- ----------------------------------------------------------------
23.49% TOTAL SHORT-TERM INVESTMENTS
Cost $61,860 61,860
- ----------------------------------------------------------------
74.75% TOTAL INVESTMENTS
Cost $165,165 + 196,863
25.25% Cash, Receivables, and Other
Assets, Net of Liabilities 66,484
100% NET ASSETS $263,347
- ----------------------------------------------------------------
*Non-income producing securities
+Aggregate cost for federal income tax purposes is the same.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WHAT YOU OWN ...
ENVIRONMENTAL PORTFOLIO
STATEMENT OF INVESTMENTS AS OF JUNE 30, 1995
=================================================================
MARKET
SHARES OR PRINCIPAL VALUE
- ----------------------------------------------------------------
ENVIRONMENTAL COMMON STOCKS:
Agricultural Products
<C> <C> <S> <C>
1.16% 1,000 Archer-Daniels-Midland Co. $18,625
- ----------------------------------------------------------------
Air Pollution Control
10,000 Midwesco Filter Resources,Inc.* 53,750
20,000 Noxso Corporation * 70,000
7.72% Total 123,750
- -----------------------------------------------------------------
Asbestos Removal
.10% 30,000 Advatex Associates, Inc. * 1,650
- -----------------------------------------------------------------
Alternative Energy (Wind Power)
2,000 Kenetech Corp.* 23,500
10,000 New World Power Corporation * 52,500
4.74% Total 76,000
- -----------------------------------------------------------------
Alternative Energy (Natural Gas)
8,000 Air Sensors, Inc. * 76,125
25,000 Air Sensors, Inc. Warrants * 32,813
6.79% Total 108,938
- -----------------------------------------------------------------
Alternative Transportation
3,000 Energy Conversion * 48,750
6,000 Unique Mobility, Inc. * 32,250
5.05% Total 81,000
- -----------------------------------------------------------------
Building Products
4.21% 1,500 York International Corp. * 67,500
- -----------------------------------------------------------------
Electric Power
1.70% 2,000 Thermo Eco Tech Inc.* 27,250
- -----------------------------------------------------------------
Environmental Engineering & Consulting
3,000 Greiner Engineering, Inc. 34,500
3,000 Groundwater Technology Corp. * 36,375
2,325 Thermo Electron Corp. * 93,581
10.26% Total 164,456
</TABLE>
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<TABLE>
<CAPTION>
WHAT YOU OWN ...
ENVIRONMENTAL PORTFOLIO
STATEMENT OF INVESTMENTS AS OF JUNE 30, 1995
=================================================================
MARKET
SHARES OR PRINCIPAL VALUE
- -----------------------------------------------------------------
<C> <C> <S> <C>
Manufacturing
1,000 Whirlpool Corp 55,000
5,000 Williams Controls * 16,250
4.44% Total 71,250
- -----------------------------------------------------------------
Natural Gas
3,243 Citizen's Utilities 38,510
15,000 Marcum Natural Gas Service* 20,156
2,400 MCN Corp. 47,400
1,500 Northwest Natural Gas Co. 46,875
9.54% Total 152,941
- -----------------------------------------------------------------
Printing Non - Profit Organizations
4.02% 6,000 Healthy Planet Products, Inc. * 64,500
- -----------------------------------------------------------------
Recycling (Aluminum)
1.67% 1,500 CasTech Aluminum Group Inc.* 26,813
- -----------------------------------------------------------------
Recycling (Glass)
3.09% 9,000 Allwaste, Inc. * 49,500
- -----------------------------------------------------------------
Recycling (Paper)
1,000 Caraustar Industries Inc. 18,000
2,150 Thermo Fibertek, Inc. * 42,731
3.79% Total 60,731
- -----------------------------------------------------------------
Recycling (Tires)
.15% 47,587 Premium Enterprises, Inc. * 2,379
- -----------------------------------------------------------------
Retailing (Natural Foods)
1.33% 1,400 Whole Food Markets, Inc. * 21,350
- -----------------------------------------------------------------
Semi-Conductors
3.10% 1,000 Arrow Electronics Inc.* 49,750
- -----------------------------------------------------------------
Solid Waste Management
1.57% 800 Sanifil Inc. * 25,100
- -----------------------------------------------------------------
Specialty Chemicals
3.03% 4,000 Calgon Carbon Corp. 48,500
- -----------------------------------------------------------------
Water Treatment & Purification
7.59% 3,500 Ionics, Inc. * 121,625
</TABLE>
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<TABLE>
<CAPTION>
WHAT YOU OWN ...
ENVIRONMENTAL PORTFOLIO
STATEMENT OF INVESTMENTS AS OF JUNE 30, 1995
=================================================================
MARKET
SHARES OR PRINCIPAL VALUE
- -----------------------------------------------------------------
<C> <C> <S> <C>
Water Utility
2.87% 2,000 Aquarion Co. 46,000
- -----------------------------------------------------------------
87.92% TOTAL COMMON AND PREFERRED STOCKS
Cost $1,524,659 1,409,608
- -----------------------------------------------------------------
ENVIRONMENTAL CONVERTIBLE BONDS:
Recycling (Asphalt)
60,000 Cyclean, Inc.
Sub. Deb. Conv. 12.00% 45,000
2.81% June 30, 1996
Solid Waste Management
100,000 USA Waste Services, Inc. 117,750
7.34% Sub. Deb. Conv., 8.50%
October 15, 2002
- -----------------------------------------------------------------
10.15% TOTAL CONVERTIBLE BONDS
Cost $160,000 162,750
- -----------------------------------------------------------------
SHORT-TERM INVESTMENTS:
2.50% 40,000 First American Institutional
Government Money Fund
Cost $40,000 40,000
- -----------------------------------------------------------------
100.57% TOTAL INVESTMENTS
Cost $1,724,659 + 1,612,358
(.57%) Cash, Receivables, and Other
Assets, Net of Liabilities (9,145)
100% NET ASSETS $1,603,213
- -----------------------------------------------------------------
*Non-income producing securities
+Aggregate cost for federal income tax purposes is the same.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROGRESSIVE PORTFOLIO SERIES
FINANCIAL INFORMATION
- -----------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES, JUNE 30, 1995
- -----------------------------------------------------------------
AGGRESSIVE
GROWTH VALUE ENVIRONMENTAL
<S> <C> <C> <C>
ASSETS:
Investments in securities at value $443,556 $196,863 $1,612,358
(Cost $435,127, $165,165 and $1,724,659)
Cash 27,846 71,088 1,269
Receivable for capital stock sold 2,995 0 0
Dividends and interest receivable 772 0 3,769
Other assets 433 638 632
------- ------- ---------
Total Assets 475,602 268,589 1,618,028
------- ------- ---------
LIABILITIES:
Payable for capital shares redeemed 2,559 133 0
Accrued expenses and others 3,241 5,109 14,815
------ ------ -------
Total Liabilities 5,800 5,242 14,815
------- ------- ---------
NET ASSETS $469,802 $263,347 $1,603,213
======== ======== ==========
SHARES OUTSTANDING (NOTE 2) 52,564 25,234 385,939
====== ====== ========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE $8.94 $10.44 $4.15
===== ====== =====
MAXIMUM SALES LOAD -% 4.0% 4.0%
===== ===== =====
OFFERING PRICE PER SHARE
[(Net asset value/(1-Maximum Sales
Load)] $8.94 $10.88 $4.32
===== ====== =====
</TABLE>
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<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS, FOR THE YEAR ENDED JUNE 30, 1995
- ----------------------------------------------------------
AGGRESSIVE
GROWTH VALUE ENVRIONMENTAL
<S> <C> <C> <C>
INVESTMENT LOSS:
Income:
Interest $2,109 $1,027 $18,591
Dividends 3,115 10,002 12,084
----- ------ -------
Total Income 5,224 11,029 31,039
Expense:(Note 4)
Management fees 4,903 4,772 18,591
Distribution fees - 2,383 9,303
Transfer agent fees and expenses 8,024 8,193 8,197
Organization expenses - - 5,088
Custodian fees and expenses 2,377 2,749 6,209
Professional fees 17,989 15,637 24,108
Administrative and clerical 3,333 3,333 3,333
Printing - 2,545 2,057
Registration fees 2,390 2,990 4,740
Other expenses 3,867 6,277 5,305
------ ------ ------
Total 42,883 48,879 86,931
Less advisory reimbursements (4,903) (4,772) (18,591)
------- ------- -------
Net Expenses 37,980 44,107 68,340
------ ------- -------
NET INVESTMENT LOSS (32,756) (33,078) (37,301)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on securities
transactions (28,393) 129,917 (161,314)
Unrealized appreciation(depreciation)
of investments 25,454 (62,454) 102,709
-------- -------- ---------
Net gain (loss) on investments (2,939) 67,463 (58,605)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $(35,695) $34,385 $(95,906)
--------- ------- ---------
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS,YEARS ENDED JUNE 30,1995 AND
1994
- -----------------------------------------------------------------
AGGRESSIVE
GROWTH
PORTFOLIO
1995 1994
---- ----
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment loss $(32,756) $(19,937)
Net realized gain (loss) from
investment transactions (28,393) 150,382
Unrealized appreciation (depreciation)
of investments 25,454 15,203
------- --------
Net increase (decrease) in net assets
resulting from operations (35,695) 145,648
-------- --------
FUND SHARE TRANSACTIONS (NOTE 2):
Shares sold 10,565 101,705
Cost of shares redeemed (72,654) (356,828)
-------- ---------
Net increase (decrease) in net assets
from fund share transactions (62,089) (255,123)
-------- ---------
NET INCREASE (DECREASE) IN
NET ASSETS: (97,784) (109,475)
NET ASSETS:
Beginning of year 567,586 677,061
-------- --------
End of year $469,802 $567,586
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS,YEARS ENDED JUNE 30,1995 AND
1994
- -----------------------------------------------------------------
VALUE
PORTFOLIO
1995 1994
----- -----
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment loss $(33,078) $(1,080)
Net realized gain (loss) from
investment transactions 129,917 61,794
Unrealized appreciation (depreciation)
of investments (62,454) (23,572)
------- --------
Net increase (decrease) in net assets
resulting from operations 34,385 37,142
-------- --------
FUND SHARE TRANSACTIONS (NOTE 2):
Shares sold 7,731 216,766
Cost of shares redeemed (759,851) (327,613)
--------- ---------
Net increase (decrease) in net assets
from fund share transactions (752,120) (110,847)
-------- ---------
NET INCREASE (DECREASE) IN
NET ASSETS: (717,735) (73,705)
NET ASSETS:
Beginning of year 981,082 1,054,787
-------- --------
End of year $263,347 $981,082
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS,YEARS ENDED JUNE 30,1995 AND
1994
- -----------------------------------------------------------------
ENVIRONMENTAL
PORTFOLIO
1995 1994
----- -----
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment loss $(37,301) $(23,932)
Net realized gain (loss) from
investment transactions (161,314) 49,298
Unrealized appreciation (depreciation)
of investments 102,709 (324,210)
--------- --------
Net increase (decrease) in net assets
resulting from operations (95,906) (298,844)
-------- ---------
FUND SHARE TRANSACTIONS (NOTE 2):
Shares sold 23,968 135,947
Cost of shares redeemed (533,306) (842,596)
--------- ---------
Net increase (decrease) in net assets
from fund share transactions (509,338) (706,649)
--------- ---------
NET INCREASE (DECREASE) IN
NET ASSETS: (605,244) (1,005,493)
NET ASSETS:
Beginning of year 2,208,457 3,213,950
--------- ---------
End of year $1,603,213 $2,208,457
========== ==========
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------
1. Summary of Significant Accounting Policies
Progressive Portfolios Series (the "Trust"), was organized as a
Massachusetts business trust and is registered under the
Investment Company Act of 1940, as an open-end management
investment company. The Aggressive Growth Portfolio, Value
Portfolio, and the Environmental Portfolio are Series of the
Trust.
Investment Valuation - Securities traded on a national
securities exchange or listed on any NASDAQ national market
system for which electronic quotations are available are valued
at the last sale price on the exchange of market when primarily
traded of listed or, if there has been no sale that day, at the
mean of the last bid and asked quotation. Other securities
which are traded in the over-the-counter market are valued at
the mean of the last bid and asked quotations. Short-term
investments are valued at amortized cost. All other securities
are valued at fair value as determined in good faith by the
trustees or their delegates.
Investment Transactions and Related Investment Income-
Investment transactions are accounted for on the trade date.
Interest income is accrued on a daily basis and dividend income
is recorded on the ex-dividend date. Securities gains and
losses are determined on the basis of identified cost.
Federal Income Taxes- It is each Portfolio's policy to comply
with provisions of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its
taxable income. Therefore, no federal income tax provision is
required.
2. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
The Trust has the authority to issue an unlimited number of
shares of beneficial interest with no par value. Transaction in
shares of beneficial interest for the years ended June 30, 1995
and 1994, and aggregate paid in capital for each portfolio were
as follows:
Aggressive
Growth Value Environmental
1995 1994 1995 1994 1995 1994
--------------- ----------------- ------------------
Shares
sold 1,319 10,540 804 22,114 6,201 27,473
Shares
redeemed(8,460) (38,428) (76,517) (33,053) (132,866) (174,792)
------ ------ ------ ------ ------- -------
Net
decrease(7,141) (27,888) (75,713) (10,939) (126,665) (147,319)
<PAGE>
----- ------ ------ ------ ------- -------
Capital
paidin $653,383 $748,228 $574,909 $1,360,107 $2,699,602$3,246,241
3. INVESTMENT TRANSACTIONS
At June 30, 1995 the aggregate gross unrealized appreciation and
depreciation of investments, and accumulated net realized loss,
for each Portfolio were as follows:
Aggressive
Growth Value Environmental
-------- ------ -------------
Unrealized appreciation $82,903 $37,630 $218,401
Unrealized depreciation (74,474) (5,932) (330,702)
------- ------ --------
Net unrealized appreciation
(depreciation) $8,429 $31,698 $(112,301)
======= ======= ==========
Accumulated net realized loss
from investment transactions $(192,010)$(343,260) $(984,088)
========= ======== =========
These losses represent tax basis capital losses which may be
carried forward to offset futures capital gains. Such losses
expire in varying amounts through June 30, 2003 for the
Aggressive Growth and Environmental Portfolios; and through June
30, 2001 for the Value Portfolio.
For the year ended June 30, 1995, purchases and sales of
investment securities(excluding short term securities) were as
follows:
Aggressive
Growth Value Environmen.
Purchases $105,825 $455,713 $653,160
------- ------- --------
Sales $198,832 $1,159,281 $1,119,459
4. MANAGEMENT FEES, DISTRIBUTION FEES, AND OTHER TRANSACTIONS
WITH AFFILIATES
Pursuant to separate investment advisory agreements, MDB Asset
Management Corporation("Asset Management") renders investment
advice to and provides management services for the Aggressive
Growth and Value Portfolios, and provides supervisory management
services only for the Environmental Portfolio. For its services,
the Adviser receives a fee equivalent to 1% per annum of the
average daily net assets of each portfolio, less any fee paid to
a sub-adviser. Asset management has agreed to waive the
investment advisory fees with respect to the Aggressive Growth
Portfolio and the Value Portfolio through June 21, 1996. The
<PAGE>
investment advisory agreements require Asset Management to
reimburse the Aggressive Growth and Value Portfolios (limited to
the amount of advisory fee for the period) if and to the extent
that the respective expenses of each Portfolio exceed the lowest
limitation specified in any state in which shares of each
Portfolio are registered for sale. The investment advisory
agreement for the Environmental Portfolio requires Asset
Management to reimburse the Portfolio(limited to the aggregate
advisory and sub-advisory fee) if and to the extent that
the total expenses(excluding taxes, interest, litigation and
other extraordinary expenses) in any period exceeds 2-1/2% of
the first $30 million of average net assets, 2% of the next $70
million of average net assets, and 1 1/2% of the remaining
average net assets. Pursuant to a sub-advisory agreement, First
Affirmative Financial Network, Inc.("First Affirmative")
provides investment advisory services to the Environmental
Portfolio. For its services, First Affirmative receives a fee
at the annual rate of 0% of average net assets less than $5
million; 0.25% of average net assets between $5 million and $
7.5 million; 0.375% of average net assets between 7.5 million
and $10 million; and .50% of average net assets in
excess of $10 million.
Pursuant to a sub-advisory agreement, Hamilton & Bache, Inc.
provided investment advisory services to the Value Portfolio.
For its services, Hamilton & Bache received a fee at the annual
rate of .50% of average net assets less than $5 million; .75% of
average net assets in excess of %5 million. On July 19, 1994,
Hamilton & Bache terminated its subadvisory agreement with the
Value Portfolio. During the period from July 1, 1994 through
July 19, 1994, the Value Portfolio paid $256 to Hamilton &
Bache.
Beckerman and Company, Inc.("BecCo") acts as principal
underwriter for shares of the Trust. During the year ended June
30, 1995, BecCo retained $198 of commissions and sales charges
paid by investors on the sale of the Trust's shares.
Under a Distribution Plan adopted pursuant to Rule 12B-1 of the
Investment Company Act of 1940, The Value and Environmental
Portfolios pay a distribution fee to BecCo. at the annual rate
of .50% of their respective average daily net assets.
Distribution fees of $2,383 and $9,303 were earned by BecCo from
the Value and Environmental Portfolios, respectively.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Trustees and Shareholders
Progressive Portfolios Series
We have audited the accompanying statement of assets and
liabilities, including the statement of investments, of the
Aggressive Growth, Value and Environmental Portfolios( all of
which are portfolios of Progressive Portfolios Series (the
Trust) as of June 30, 1995, the related statements of operation
for the year then ended, and the statements of changes in net
assets and selected financial information for each of the two
years in the period then ended. These financial statements and
selected financial information are the responsibility of the
Trust's management. Our responsibility is to express an opinion
on these financial statements and selected financial information
based on our audits. The selected financial information for the
periods prior to July 1, 1993 were audited by other auditors
whose report thereon, dated July 30, 1993, expressed an
unqualified opinion with respect thereto.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements and selected financial information are
free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation
of securities owned as of June 30, 1995, by correspondence with
the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our
opinion.
In our opinion, the financial statements and selected financial
information present fairly, in all material respects, the
financial position of the Aggressive Growth, Value and
Environmental Portfolios at June 30, 1995, the results of their
operations, the changes in their net assets and the selected
financial information for the periods indicated in conformity
with generally accepted accounting principles.
McGladrey & Pullen, LLP
New York, New York
August 10, 1995
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
SELECTED FINANCIAL INFORMATION, FOR THE PERIODS ENDED JUNE 30,
1995
AGGRESSIVE GROWTH PORTFOLIO
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset Value
at Beginning of
period $9.51 7.73 8.85 11.41 13.88
Income from
investment
operations:
Net investment
income (loss) $(.62) (2.37) (1.00) (.52) (.22)
Net realized
and unrealized
gain (loss) on
investments $.05 4.15 (.12) .12 .09
Total from
investment
operations (.57) 1.78 (1.12) (.40) (.13)
Less Distributions:
Distribution from
Net investment income: (2.34)
Distribution from Net
realized gains: (2.16)
Total Distributions (2.16) (2.34)
Net Asset Value
at End of period: $8.94 9.51 7.73 8.85 11.41
Total Return (5.99)% 23.03% (12.66)%(6.06)% .10%
Ratio of Operating
Expenses to Average
Net Assets: 7.75%(1) 3.40%(1) 2.32% 2.50% 2.50%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets: (6.68)% (3.02)% (2.00)% (1.82)%(1.87)%
Portfolio turnover
Rate: 23.80% 124.16% 339.51% 356.93%163.39%
Net Assets end of
Period: 469,802 567,586 677,061 965,904 1,381,285
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
SELECTED FINANCIAL INFORMATION, FOR THE PERIODS ENDED JUNE 30,
1995
AGGRESSIVE GROWTH PORTFOLIO
1990 1989 1988 1987 1986+
<S> <C> <C> <C> <C> <C>
Net Asset Value
at Beginning of
period $11.97 11.59 12.18 12.78 10.51
Income from
investment
operations:
Net investment
income (loss) $.01 .01 (.12) (.05) (.01)
Net realized
and unrealized
gain (loss) on
investments $2.27 .43 (.47) (.55) 2.28
Total from
investment
operations 2.28 .44 (.59) (.60) 2.27
Less Distributions:
Distribution from
Net investment incom(.03) (.06)
Distribution from Net
realized gains: (.34)
Total Distributions (.37) (.06)
Net Asset Value
at End of period: $13.88 11.97 11.59 12.18 12.78
Total Return 19.64% 3.90% (4.84)% (4.69) 9.02%
Ratio of Operating
Expenses to Average
Net Assets: 2.50% 2.50% 2.50% 2.50% 2.50%*
Ratio of Net
Investment Income
(Loss) to Average
Net Assets: .03% .06% (.54)% (.77)% (.39)%*
Portfolio turnover
Rate: 307.32% 242.10% 104.83% 57.41% 27.46%*
Net Assets end of
Period: 1,589,746 2,472,308 4,153,265 7,343,334 2,275,568
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
SELECTED FINANCIAL INFORMATION, FOR THE PERIODS ENDED JUNE 30,
1995
VALUE PORTFOLIO
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset Value
at Beginning of
period $9.72 9.43 8.11 10.45 10.91
Income from
investment
operations:
Net investment
income(loss) $(.66)*** (.05) (.16) (.36) (.13)
Net realized
and unrealized
gain (loss) on
investments $ 1.38*** .34 1.48 (1.98) (.18)
Total from
investment
operations .72 .29 1.32 (2.34) (.31)
Less Distributions:
Distribution from
Net investment income: (.15)
Distribution from Net
realized gains:
Total Distributions (.15)
Net Asset Value
at End of period:$10.44 $9.72 9.43 8.11 10.45
Total Return 7.41% 3.08% 16.28% (22.39)% (2.87)%
Ratio of Operating
Expenses to Average
Net Assets: 9.24%(2) 2.34%(2) 2.24% 2.50% 2.50%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets: (6.63)% (.10)% (.51)% (1.78)% 1.17%
Portfolio turnover
Rate: 118.20% 17.84% 40.20% 390.47% 193.73%
Net Assets end of
Period: 263,347 981,082 1,054,787 561,015 1,225,467
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
SELECTED FINANCIAL INFORMATION, FOR THE PERIODS ENDED JUNE 30,
1995
VALUE PORTFOLIO
1990 1989 1988 1987 1986+
<S> <C> <C> <C> <C> <C>
Net Asset Value
at Beginning of
period $11.72 12.13 12.57 12.99 10.68
Income from
investment
operations:
Net investment
income (loss) $.25 .23 .06 .02 .01
Net realized
and unrealized
gain (loss) on
investments $(.84) (.45) (.17) (.44) 2.30
Total from
investment
operations (.59) (.22) (.11) (.42) 2.31
Less Distributions:
Distribution from
Net investment incom(.22) (.19) (.04)
Distribution from Net
realized gains: (.29)
Total Distributions (.22) (.19) (.33)
Net Asset Value
at End of period: $10.91 11.72 12.13 12.57 12.99
Total Return (5.10)% (1.66)% ( .77)% (3.23)% 9.62%
Ratio of Operating
Expenses to Average
Net Assets: 2.50% 2.17% 2.50% 2.50% 2.50%*
Ratio of Net
Investment Income
(Loss) to Average
Net Assets: 1.80% 1.50% .50% .23% .57%*
Portfolio turnover
Rate: 466.95% 259.20% 234.13% 89.88% 18.08%*
Net Assets end of
Period: 1,745,698 2,858,168 5,789,358 6,170,362 2,377,235
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
SELECTED FINANCIAL INFORMATION, FOR THE PERIODS ENDED JUNE 30,
1995
ENVIRONMENTAL PORTFOLIO
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset Value
at Beginning of
period $4.31 4.87 4.31 5.61 6.49
Income from investment
operations:
Net investment
income (loss) $(.10) (.13) (.04) (.17) (.02)
Net realized
and unrealized
gain (loss) on
investments (.06) (.43) .60 (.77) (.73)
Total from
investment
operations (.16) (.56) .56 (.94) (.75)
Less Distributions:
Distribution from
Net investment income: (.13)
Distribution from Net
realized gains: (.36)
Total Distributions (.36) (.13)
Net Asset Value
at End of period: $4.15 $ 4.31 4.87 4.31 5.61
Total Return (3.71)% (11.50)% 12.99% (17.19)% (11.42)%
Ratio of Operating
Expenses to Average
Net Assets: 3.68%(3) 1.85%(3) 2.30% 2.50% 2.50%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets: (2.01)% (.82)% (.98)% (1.52)% (1.66)%
Portfolio turnover
Rate: 37.54% 26.08% 123.58 88.90% 82.02%
Net Assets end of
Period: 1,603,213 2,208,457 3,213,950 2,812,304 4,169,623
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
- -----------------------------------------------------------------
SELECTED FINANCIAL INFORMATION, FOR THE PERIODS ENDED JUNE 30,
1995
ENVIRONMENTAL PORTFOLIO
1990
<S> <C>
Net Asset Value
at Beginning of
period $5.00
Income from
investment
operations:
Net investment
income (loss) $.01
Net realized
and unrealized
gain (loss) on
investments $1.48
Total from
investment
operations 1.49
Less Distributions:
Distribution from
Net investment income
Distribution from Net
realized gains:
Total Distributions
Net Asset Value
at End of period: $6.49
Total Return 29.80%
Ratio of Operating
Expenses to Average
Net Assets: 2.50%*
Ratio of Net
Investment Income
(Loss) to Average
Net Assets: 1.02%*
Portfolio turnover
Rate: 75.84%*
Net Assets end of
Period: 1,626,556
</TABLE>
<PAGE>
* Annualized
+ Selected financial information is included only for periods
subsequent to the effective date of each registration
statement (January 10, 1986 through June 30, 1986 for
Aggressive Growth and Value Portfolios; February 5, 1990
through June 30, 1990 for Environmental Portfolio).
** Total return does not reflect sales commissions.
*** Based on average month-end shares outstanding.
(1) Net of expenses reimbursed of 1.0% and 1.37% of average net
assets for the years ended June 30, 1995 and 1994, respectively.
(2) Net of expense reimbursed of 1.0% and 0.8% of average net
assets for the years ended June 30, 1995 and 1994, respectively.
(3) Net of expenses reimbursed of 1.0% and 0.5% of average net
assets for the years ended June 30, 1995 and 1994, respectively.
Note: on June 22, 1994 MDB Asset Management was approved as the
investment adviser to the Progressive Portfolios Series and First
Affirmative Financial Networks was approved as the sub-adviser
to Progressive Environmental Portfolio.
