<PAGE> 1
ARMADA
SEMI-ANNUAL REPORT
FUNDS
NOVEMBER 30, 1997
EQUITY
(UNAUDITED)
SERIES
ARMADA INTERNATIONAL EQUITY FUND
ARMADA SMALL CAP GROWTH FUND
ARMADA SMALL CAP VALUE FUND
ARMADA EQUITY GROWTH FUND
ARMADA CORE EQUITY FUND
ARMADA EQUITY INCOME FUND
[ARMADA FUNDS LOGO]
Financial Power Close at Hand
<PAGE> 2
LOGO ARMADA FUNDS
EQUITY SERIES
SEMI-ANNUAL REPORT -- NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C> <C>
TABLE OF CONTENTS
Chairman's Message....................................... 1
Equity Market Overview................................... 3
FUND OVERVIEWS
Armada International Equity Fund......................... 5
Armada Small Cap Growth Fund............................. 8
Armada Small Cap Value Fund.............................. 11
Armada Equity Growth Fund................................ 14
Armada Core Equity Fund.................................. 17
Armada Equity Income Fund................................ 20
PORTFOLIOS OF INVESTMENTS AND FINANCIAL HIGHLIGHTS
Armada International Equity Fund......................... 23
Armada Small Cap Growth Fund............................. 27
Armada Small Cap Value Fund.............................. 30
Armada Equity Growth Fund................................ 34
Armada Core Equity Fund.................................. 38
Armada Equity Income Fund................................ 41
FINANCIAL STATEMENTS
Statement of Assets and Liabilities...................... 45
Statement of Operations.................................. 46
Statement of Changes in Net Assets....................... 47
NOTES TO FINANCIAL STATEMENTS............................ 48
</TABLE>
- - SHARES OF ARMADA FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED OR OTHERWISE SUPPORTED BY NATIONAL CITY BANK, NATIONAL ASSET
MANAGEMENT CORPORATION, THEIR AFFILIATES OR ANY BANK.
- - SHARES OF ARMADA FUNDS ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT,
FDIC, OR ANY GOVERNMENTAL AGENCY OR STATE.
- - AN INVESTMENT IN ARMADA FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
- - PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE, AND THE INVESTMENT
RETURN WILL FLUCTUATE.
National City Bank and National Asset Management Corporation serve as investment
advisers to Armada Funds for which they receive an investment advisory fee. For
more complete information about Armada Funds, including charges and expenses,
please contact your investment specialist or call 1-800-622-FUND (3863) for a
prospectus. Read it carefully before you invest or send money. Armada Funds are
distributed by SEI Investments Distribution Co. (SIDC), Oaks, PA 19456. SIDC is
not affiliated with National City Bank and is not a bank.
ARMADA
INTERNATIONAL
EQUITY FUND
ARMADA
SMALL CAP
GROWTH FUND
ARMADA
SMALL CAP
VALUE FUND
ARMADA
EQUITY GROWTH
FUND
ARMADA
CORE EQUITY
FUND
ARMADA
EQUITY INCOME
FUND
<PAGE> 3
LOGO CHAIRMAN'S MESSAGE
DEAR ARMADA FUNDS SHAREHOLDER:
It is my pleasure to update you on the semi-annual
performance of the Armada Funds. As of November 30,
1997, the Funds held total assets of $6.09 billion,
an increase of 13% over the total assets of six
months ago. This growth is the direct result of
additional investments by shareholders and strong,
ongoing improvement in investment income.
INVESTMENT PERFORMANCE EARNS NATIONAL RECOGNITION
Our performance has been impressive considering
the relatively high volatility in the recent market.
Especially noteworthy has been the recognition given
to Armada Funds by industry publications as
exemplified by the following:
- The Armada Equity Growth Fund was highlighted in
Investor's Business Daily as one of the leading
mutual funds for the past three years.
- The Armada Small Cap Value Fund (formerly the
Mid Cap Regional Fund) was awarded a 5-star
rating from Morningstar on August 31, 1997.
- The Armada GNMA Fund was recognized by The Wall
Street Journal on October 14, 1997 as one of the
top GNMA funds in the country.
- In the December 1997 issue of Mutual Funds
Magazine, the entire Armada Family of Funds was
awarded 4 stars out of a possible five.
EXPANDING AND CLARIFYING OUR RANGE OF INVESTMENT
CHOICES
The range of investment opportunities for current
and potential shareholders was significantly
expanded in August with the addition of three new
equity funds. Within the Armada Equity Series, you
now can diversify across large and small market
capitalizations, and take advantage of both growth
and value styles of investing. The six funds in the
Series are:
<TABLE>
<S> <C>
Armada Core Equity Fund Armada Small Cap Growth Fund
Armada International Equity Fund Armada Equity Income Fund
Armada Equity Growth Fund Armada Small Cap Value Fund
</TABLE>
1
<PAGE> 4
LOGO CHAIRMAN'S MESSAGE
CHANGES APPROVED BY SHAREHOLDERS
Several changes were approved at our November 1997
shareholder meeting. Additionally, three funds were
renamed to more accurately reflect their investment
style and fund characteristics:
Armada Small Cap Value Fund is the new name for the
former Armada Mid Cap Regional Fund.
Armada Bond Fund is the new name for the former
Armada Intermediate Government Fund.
Armada Intermediate Bond Fund is the new name for
the former Armada Fixed Income Fund.
Other changes were made to clarify the investment
objectives and limitations for a number of funds.
Also, all of the funds elected the Board of Trustees
who are listed on the back page of this report.
If you would like more information about your
investment, or any of the Armada Funds, please call
your account representative or 1-800-622-FUND(3863).
Or you can find us on the World Wide Web at
WWW.NATIONAL-CITY.COM. Click Invest It! for Armada
Funds information. We are pleased to answer your
questions and look forward to serving your
investment needs now and in the years to come.
Best wishes for a happy, healthy and rewarding
1998.
Sincerely,
/s/ Robert D. Neary
Robert D. Neary
Chairman
Armada Funds
2
<PAGE> 5
LOGO EQUITY MARKET OVERVIEW
REMARKS FROM THE ADVISERS
"THE STRONG ADVANCE OF THE
FINANCIAL MARKET HAS BEEN
DRIVEN
BY IMPRESSIVE CORPORATE
PROFIT
GROWTH AND LOW INTEREST
RATES.
CRITICAL TO BOTH IS A
CONTINUED
EVOLUTION OF FREE MARKET
ECONOMIES THROUGHOUT THE
WORLD." For a nervous year, Armada Funds' portfolio
managers have been scanning the investment horizon
for a credible threat to the long term advance of
the financial markets. We have enjoyed this time of
economic and financial nirvana, where twenty-four
year low unemployment levels, low interest rates,
rock bottom inflation and a seemingly endless string
of impressive corporate profit growth reports
combined to produce a dazzling three-year stock
market average annual return in excess of 25%.
Today, however, we see dark clouds amassing on the
investment horizon. In the Far East, we believe that
the catalyst for major stock market volatility has
been unleashed in the form of this currency
devaluation crisis. Its impact will not only strike
Japan, Korea, Thailand, Malaysia, and the
Philippines, but will also ripple around the world's
economies.
While the most serious threat to the health of the
domestic financial markets from Asian currency
devaluation will be in the form of strained
corporate profit growth, a more ominous and long
lasting threat could crystallize in the realm of
global politics and foreign national political
fortitude.
STRAINED CORPORATE PROFIT GROWTH
As global financial markets' confidence in the
potential of Asian economies to generate strong real
economic growth and support that growth with a sound
financial system, the Asian currencies are being
aggressively devalued. This currency devaluation
serves to make Asian exports more competitive on a
global scale, thereby generating the necessary
revenues and profits to positively address the
current unfavorable economic conditions. In theory,
Asia will export its way back to prosperity and
stability, at considerable expense to competing
global economies.
Consider that the 33% devaluation of the Korean
currency now makes a ton of Korean steel potentially
33% cheaper than it was only six months ago! As
domestic producers battle this tide of cheap
imports, struggling to protect market share, profit
margins will undoubtedly suffer. We seriously doubt
that domestic producers can stay price competitive
without a strong negative impact on profits and
profit growth.
CONCERN: Wall Street demands profit growth to
support an extremely high stock market valuation. In
fact, the continuation of strong profit growth
trends has long been factored into the price of many
equity securities. With this new and serious threat
to the continuation of corporate profit growth,
stock prices can be expected to tumble on any
indication of profit
3
<PAGE> 6
LOGO EQUITY MARKET OVERVIEW
REMARKS FROM THE ADVISERS
disappointment. There now exists the real
possibility of drastically slower or even negative
corporate profit growth trends. Without the
assumption of continued strong earnings growth, the
stock market is precariously overvalued.
POLITICAL FALLOUT.
The economic medicine prescribed by the IMF is
very contractionary to economic growth in the Asian
economies. The conditions for IMF loans are likely
to cause a spike in unemployment rates, bankruptcy
filings, and contract industrial output.
Historically, the IMF has been able to restore
confidence with these measures and put these
countries on firm footing for economic growth.
However, the IMF plans suffer from two potential
drawbacks. First, the medicine could be wrong.
Inducing economic contraction and financial reforms
has historically helped countries who were spending
beyond their means with very little real economic
development. However, the Asian economies are a
unique case. They were developing in a real sense,
but demand fell off for most of what they were
producing. They suddenly were unable to pay for the
investments they had made in plant and equipment.
The IMF solution that has worked so many times has
not been tested under these conditions. Secondly,
Asians may be understandably skeptical of a western
solution to their problems. For the last thirty
years, they've thrived on a uniquely Asian system of
organizing their economies. Relationships and trust
were much more important to granting credit or
establishing trade than collateral, cash flow and
contractual obligations. These values are deeply
ingrained in most Asian cultures. Even if we suppose
Asian leaders agree that the IMF reforms would make
their economies stronger in the end, they must sell
the proposition of continued pain for long term gain
to a public who is already suffering greatly.
The strong advance of the financial market has
been driven by impressive corporate profit growth
and low interest rates. Critical to both is a
continued evolution of free market economies
throughout the world. The Asian currency crisis
threatens not only immediate corporate profit trends
and interest rate expectations, but also threatens
the global political environment which has so warmly
welcomed free market economics. Given the extremely
high expectations of financial markets, and the
extremely low tolerance for disappointment, we are
very concerned with the continued health of the
financial market's advance.
4
<PAGE> 7
LOGO ARMADA INTERNATIONAL EQUITY FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
DAVID COOLEY
NATIONAL CITY'S
ASSET MANAGEMENT GROUP
FUND'S DATE OF INCEPTION:
AUGUST 1, 1997 (INSTITUTIONAL
SHARES)
AUGUST 1, 1997 (RETAIL
SHARES)
ASSETS:
$88,938,021 (INSTITUTIONAL
SHARES)
$ 3,650 (RETAIL SHARES)
INVESTMENT OBJECTIVE:
SEEK CAPITAL GROWTH
CONSISTENT
WITH REASONABLE INVESTMENT
RISK.
THE FUND WILL NORMALLY INVEST
AT
LEAST 80% OF ITS TOTAL ASSETS
IN
EQUITY SECURITIES OF FOREIGN
ISSUERS.
RECENT PERFORMANCE
The Armada International Equity Fund was launched
on August 1, 1997. From the inception date to
November 30, 1997, the Fund returned -7.80%, for
both Institutional and Retail shareholders versus
-10.72% for the EAFE index and -9.51% for the Lipper
International Equity Fund Index. The Fund's country
allocation discipline was the primary reason for its
outperformance. The Southeast Asian markets and
Japan appeared vulnerable to correction and
devaluation, and were therefore de-emphasized in the
portfolio from inception. The correction in both
currencies and market levels occurred in a
compressed period of time. The Fund remained fully
invested during the period.
FUND STRATEGIES
The investment strategy of the Fund is to focus
upon stocks in countries which are more competitive
than their trading partners, attractively valued,
and performing well recently. While the markets of
Southeast Asia have become much more competitive in
terms of unit labor costs, several problems remain.
Presently, they lack the stability in currency value
and financing cost to effectively transact business
and attract direct investment. The uncertainty has
been magnified by a lack of effective government
policy responses and anti-Western sentiment.
Moreover, the valuation of these markets is a bit of
a moving target. Enterprise values in local currency
terms are expanding as dollar denominated debts have
increased, even while equity prices contract.
Meanwhile, the earnings prospects of these companies
have been diminished, at least temporarily, by the
severe dislocation of the region's economies.
Lastly, the relative strength of these markets is
poor, suggesting investor sentiment has not yet
stabilized. For those reasons, we continue to limit
our exposure to the region.
FUND STRUCTURE
Over the course of the Fund's existence,
investments have been more heavily weighted in
Europe. Most of the buying activity has been in
financial institutions in smaller countries, such as
Denmark, Ireland, and Belgium. The Swiss market has
also attracted additional investment, despite higher
valuation and more demanding unit labor costs. The
high competitiveness of the Swiss economy is evident
in trade figures, which show large persistent
surpluses in relation to GDP. Likewise, valuations
versus global peers in many Swiss market
heavyweights are less demanding.
5
<PAGE> 8
LOGO ARMADA INTERNATIONAL EQUITY FUND OVERVIEW
COMMENTS FROM THE MANAGER
"SOUTHEAST ASIAN MARKETS FELL
SHARPLY SINCE THE FUND'S
INCEPTION, WITH EFFECTS
RIPPLING
ACROSS THE DEVELOPED MARKETS.
THE FUND HAS OUTPERFORMED DUE
TO A PERSISTENT EMPHASIS ON
EUROPEAN EQUITIES."
The Fund shifted holdings within sectors as well,
moving the focus in technology away from hardware
toward software, and in financial stocks toward life
insurance and mortgage banking. These shifts reflect
our discipline of buying stocks with attractive
valuations relative to growth rates, and selling
stocks showing vulnerability to deteriorating
business conditions.
LOOKING AHEAD
Looking ahead, we are constructive on the world
equity markets. Ultimately, the next leg of more
efficient growth in the world economy is being set
up by today's convulsive capital market movements.
All that is needed are the appropriate responses
from governments and managements to the task at
hand.
In Asia, currency rates should find a stable
equilibrium, foreign investment should return at a
more rational pace with more economic logic, and the
tremendous demographic potential of the region will
be realized. In Europe, the effect of Asia will only
heighten the need to restructure in preparation for
monetary union.
Japan's incredible tolerance for pain seems to
have slowed its adjustment to freer markets, and we
await concrete terms of reform. Yet on the whole,
the difficulties being experienced have been
necessary and positive events for world equity
markets. We believe 1998 will be a year of great
progress toward more efficient allocation of assets,
resulting in wealth creation in the future.
6
<PAGE> 9
LOGO ARMADA INTERNATIONAL EQUITY
FUND OVERVIEW
COMMENTS FROM THE MANAGER
<TABLE>
<CAPTION>
====================================================================
TOTAL RETURNS as of 11/30/97
--------------------------------------------------------------------
Since Inception(2,4)
--------------------------------------------------------------------
<S> <C>
Armada International Equity Fund
Institutional Shares(1) (7.80)%
--------------------------------------------------------------------
Armada International Equity Fund
Retail Shares With Sales Charge(5) (11.26)%
Without Sales Charge (7.80)%
--------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future
performance.
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Institutional Retail Shares
<S> <C> <C>
Aug-1-1997 10000.00 9625.00
Aug-1997 9240.00 8893.17
Sep-1997 9990.00 9615.02
Oct-1997 9260.00 8912.42
Nov-1997 9220.00 8873.92
<CAPTION>
Measurement Period Morgan Stanley MSCI EAFE
(Fiscal Year Covered) Index
<S> <C>
Aug-1-1997 10000.00
Aug-1997 9253.20
Sep-1997 9771.38
Oct-1997 9019.96
Nov-1997 8927.96
</TABLE>
1 Institutional shares are sold primarily to banks
and trust companies which are affiliated with
National City Corporation and clients of National
Asset Management Corporation ("NAM"). Certain
account level charges may apply.
2 The Armada International Equity Fund's date of
inception was August 1, 1997 for both
Institutional and Retail shares.
3 The return and principal value of an investment
will fluctuate. When redeemed, shares may be worth
more or less than their original cost.
4 Not annualized.
5 Performance calculated based on the maximum
front-end sales charge in effect at November 30,
1997 of 3.75%. Effective January 1, 1998, the
maximum front-end sales charge was increased to
5.50%
7
<PAGE> 10
LOGO ARMADA SMALL CAP GROWTH FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
NATIONAL CITY'S
ASSET MANAGEMENT GROUP
FUND'S DATE OF INCEPTION:
AUGUST 1, 1997 (INSTITUTIONAL
SHARES)
AUGUST 1, 1997 (RETAIL
SHARES)
ASSETS:
$30,838,494 (INSTITUTIONAL
SHARES)
$ 9,712 (RETAIL SHARES)
INVESTMENT OBJECTIVE:
SEEK LONG-TERM CAPITAL
APPRECIATION. THE FUND WILL
NORMALLY INVEST AT LEAST 80%
OF
ITS TOTAL ASSETS IN
SECURITIES OF
COMPANIES WITH STOCK MARKET
CAPITALIZATIONS OF UNDER $1.5
BILLION AT THE TIME OF
PURCHASE. RECENT PERFORMANCE
The opening date for the Armada Small Cap Growth
Fund, August 1, 1997, coincided with a distinct
shift in relative performance between small cap US
stocks and large cap US stocks as investors turned
away from the global "mega-cap" stocks and embraced
faster growing companies. During the
August-September period, small cap stocks, as
measured by the Russell 2000 Index outperformed
large cap stocks, as measured by the S&P 500 Index,
by over 10%. This trend reversed itself over the
October-November period, however, as the unfolding
economic crisis in Asia spooked investors and caused
a flight to larger stocks perceived to be more
stable. During this period, the Russell 2000
underperformed the S&P 500 by over 6%.
Within the small stock universe, growth-oriented
stocks underperformed their value-oriented
counterparts significantly. This is evident when
comparing the 2.0% return of the Russell Growth
Index and the 6.6% return of the Russell 2000 Value
Index for the four-month period. Clearly, investors
placed a higher value on lower priced, less
speculative issues and shied away from pricier,
high-flying growth stocks.
FUND STRATEGIES
The Armada Small Cap Growth Fund's strategy of
focusing on more established growth companies in the
small cap universe helped the Fund outperform the
Russell 2000 Growth Index appreciably, as the Fund
returned 4.7%, for both Institutional and Retail
shares (before sales charges), for the four-month
period compared to the 2.0% return of the Russell
2000 Growth Index.
The Fund was able to avoid the downdraft that
swept through the technology sector through its
large position in software and service stocks, which
held their value, and through zero exposure to
computer and networking stocks which suffered the
most. The Fund's strongest absolute performance was
in the health care sector where its concentrations
in the medical products and health services
sub-sectors were well rewarded.
FUND STRUCTURE
Since its opening on August 1, 1997, the Fund has
been consistently overweighted in the financial and
industrial & commercial sectors and underweighted in
the energy and information and entertainment
sectors. We recently increased our exposure to
selected regional U.S. bank stocks as we felt that,
in addition to having attractive individual
fundamentals, they should also benefit from the
falling interest rate environment and their domestic
focus.
8
<PAGE> 11
LOGO ARMADA SMALL CAP GROWTH FUND OVERVIEW
COMMENTS FROM THE MANAGER
"THE FUND'S STRONGEST
ABSOLUTE
PERFORMANCE WAS IN THE HEALTH
CARE SECTOR WHERE ITS
CONCENTRATIONS IN THE MEDICAL
PRODUCTS AND HEALTH SERVICES
SUB-SECTORS WERE WELL
REWARDED." LOOKING AHEAD
We do not anticipate making substantial changes in
the strategy that we have employed in managing the
Fund since its inception. Our strategy involves
careful screening and fundamental research of our
universe, focusing primarily on stocks with a market
cap under $1.5 billion. We look for high quality
companies that have demonstrated several years of
consistent, profitable growth without significant
volatility. We especially like companies which are
leaders in attractive market segments or niches. We
expect turnover to be relatively low (under 50%) and
to have a relatively low concentration in the Fund,
with the top ten holdings representing less than 35%
of assets.
Although we do not plan to change our strategy
going forward, we will make tactical moves as
opportunities develop. The current downturn in the
technology sector could be such an opportunity, and
we are currently combing through the wreckage for
attractive situations.
9
<PAGE> 12
LOGO ARMADA SMALL CAP GROWTH FUND OVERVIEW
COMMENTS FROM THE MANAGER
<TABLE>
<CAPTION>
====================================================================
TOTAL RETURNS as of 11/30/97
--------------------------------------------------------------------
Since Inception(2,4)
--------------------------------------------------------------------
<S> <C>
Armada Small Cap Growth Fund
Institutional Shares(1) 4.70%
--------------------------------------------------------------------
Armada Small Cap Growth Fund
Retail Shares With Sales Charge(5) 0.77%
Without Sales Charge 4.70%
--------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future
performance.
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Retail Shares Institutional Shares
<S> <C> <C>
8-1-97 9625.00 10000.00
8-97 9817.13 10200.00
9-97 10356.11 10760.00
10-97 10115.50 10510.00
11-97 10077.00 10470.00
<CAPTION>
Measurement Period Frank Russell 2000 Growth
(Fiscal Year Covered) Index
<S> <C>
8-1-97 10000.00
8-97 10228.80
9-97 10977.45
10-97 10495.54
11-97 10427.32
</TABLE>
1 Institutional shares are sold primarily to banks
and trust companies which are affiliated with
National City Corporation and clients of National
Asset Management Corporation ("NAM"). Certain
account level charges may apply.
2 The Armada Small Cap Growth Fund's date of
inception was August 1, 1997 for both
Institutional and Retail shares.
3 The return and principal value of an investment
will fluctuate. When redeemed, shares may be worth
more or less than their original cost.
4 Not annualized.
5 Performance calculated based on the maximum
front-end sales charge in effect at November 30,
1997 of 3.75%. Effective January 1, 1998, the
maximum front-end sales charge was increased to
5.50%.
10
<PAGE> 13
LOGO ARMADA SMALL CAP VALUE FUND OVERVIEW
(FORMERLY ARMADA MID CAP REGIONAL FUND)
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
LAWRENCE E. BAUMGARTNER,
PRESIDENT
BROAD STREET
ASSET MANAGEMENT
FUND'S DATE OF INCEPTION:
JULY 26, 1994 (INSTITUTIONAL
SHARES)
AUGUST 15, 1994 (RETAIL
SHARES)
ASSETS:
$266,351,844 (INSTITUTIONAL
SHARES)
$ 7,630,351 (RETAIL SHARES)
INVESTMENT OBJECTIVE:
SEEK CAPITAL APPRECIATION BY
INVESTING IN A DIVERSIFIED
PORTFOLIO OF PUBLICLY TRADED
EQUITY SECURITIES.
RECENT PERFORMANCE
For the six months ended November 30, 1997, the
small-and-mid cap markets continued to move forward
with the Russell 2000 Small Cap Index advancing
13.9%, and the S&P Mid Cap Index showing a 15.9%
gain. Over the same period, the Armada Small Cap
Value Fund gained 18.7%, for Institutional
shareholders, and the annualized rate of return
since Fund inception in July, 1994 now stands at
24.1%. With the Fund passing its 3-year birthday in
July, we were pleased to have received a 4-star
overall ranking from fund-watcher Morningstar Inc.
in our initial rating, placing us in the top
one-third of all domestic equity funds over the past
3 years. Since that initial ranking, our monthly
overall rating has varied between 4 and 5 stars
based on the previous 3-year risk-adjusted returns.
A 5-star ranking places the Fund in the top 10% of
all domestic equity funds according to the
Morningstar system. In their assessment, Morningstar
noted the above average returns generated by the
Small Cap Value Fund, combined with below average
risk. We were pleased by this recognition,
especially given that the market has been
unquestionably led by large cap stocks since Fund
inception.
As you've probably noticed, the Fund has changed
its name to the Armada Small Cap Value Fund from the
Mid Cap Regional Fund. The reasons for this change
are simple. We changed the name to reflect the
investment style employed, and the size of companies
actually in the Fund. It is clear that the Value
style of purchasing stocks with low price/earnings,
low price/book, and low price/cash flow
characteristics is the overwhelming factor affecting
performance, thus the Value name. Additionally, as
the stock market overall has nearly doubled since
inception of this Fund, so have the capitalizations
of the companies considered Mid Cap. The weighted
market capitalization of the S&P Mid Cap is now
nearly $3.5B, compared to our Fund at around $800mm.
We continue to focus on companies with smaller
capitalization because that is where we believe
there is value to be added. This name change will
have no effect on the day to day management of the
Fund.
FUND STRATEGIES
In looking at the past six months, we made two
distinctive decisions which helped Fund performance.
First, when long term interest rates pierced the
7.0% level during the April-May time frame, we
decided it was
11
<PAGE> 14
LOGO ARMADA SMALL CAP VALUE FUND OVERVIEW
(FORMERLY ARMADA MID CAP REGIONAL FUND)
COMMENTS FROM THE MANAGER
"TRUE TO FORM, THE FUND HELD
ITS
VALUE NICELY DURING THE
OCTOBER CORRECTION AND,
ACCORDING TO THESTREET.COM,
AN
ON-LINE INVESTMENT
NEWSLETTER,
THE ARMADA MID CAP REGIONAL
FUND WAS THE SECOND BEST
PERFORMING MID CAP FUND IN
THE
LIPPER UNIVERSE DURING THE
MINI-CRASH ON OCTOBER 27." time to increase our holdings in the interest
sensitive area of the market. Based on bottom-up
analysis, we found many specialty finance and
insurance stocks which had negatively reacted to the
rise in rates earlier in the year and were priced at
low multiples of earnings and book value. Our second
decision, concurrent with our interest rate
decision, was to increase Fund holdings in the
technology sector, as many of these stocks had been
thoroughly thrashed in the first quarter of the
calendar year. Again, many technology stocks began
showing up as very favorably priced based on
earnings and asset value. As the market bottomed in
late April, coincident with the peak in long term
interest rates, we were favorably positioned for the
ensuing 38% advance by the Russell 2000 Small Cap
Index.
Quite honestly, we were pleasantly surprised by
the Fund's ability to keep up with an aggressively
advancing market, as our signature has been to fall
behind during sharp advances, while holding value
during market corrections. True to form, the Fund
held its value nicely during the October correction
and, according to TheStreet.com, an on-line
investment newsletter, the Armada Mid Cap Regional
Fund was the second best performing Mid Cap fund in
the Lipper universe during the mini-crash on October
27. Also during this reporting period, we again had
several of our companies announce merger agreements
at premiums to then market prices.
Specific stocks helping performance during the
past six months were Bon-Ton Stores (+140%), Paragon
Trade Brands (+43%), Lawyers Title Company (+76%),
and Eaton Vance (+46%). Detracting from performance
were WLR Foods (-5%), Nord Resources (-41%), High
Plains (-17%) and Thorn Apple Valley (-18%).
Takeover names during the period included mortgage
banker Homeside, retailer Carson Pirie Scott,
insurance concern Equitable of Iowa, and electronics
distributor Sterling Electronics.
12
<PAGE> 15
LOGO ARMADA SMALL CAP VALUE FUND OVERVIEW
(FORMERLY ARMADA MID CAP REGIONAL FUND)
COMMENTS FROM THE MANAGER
<TABLE>
<CAPTION>
=========================================================
TOTAL RETURNS as of 11/30/97
--------------------------------------------------------
Six Months
<S> <C>
Armada Small Cap Value Fund
Institutional Shares(1) 18.68%
---------------------------------------------------------
Armada Small Cap Value Fund
Retail Shares With Sales Charge(5) 14.17%
Without Sales Charge 18.60%
---------------------------------------------------------
<CAPTION>
---------------------------------------------------------
TOTAL RETURNS as of 11/30/97
---------------------------------------------------------
1-Year
<S> <C>
Armada Small Cap Value Fund
Institutional Shares(1) 36.68%
---------------------------------------------------------
Armada Small Cap Value Fund
Retail Shares With Sales Charge(5) 31.27%
Without Sales Charge 36.38%
---------------------------------------------------------
<CAPTION>
=========================================================
TOTAL RETURNS as of 11/30/97
---------------------------------------------------------
3-Years(4)
Armada Small Cap Value Fund
Institutional Shares(1) 25.27%
---------------------------------------------------------
Armada Small Cap Value Fund
Retail Shares With Sales Charge(5) 23.38%
Without Sales Charge 24.94%
---------------------------------------------------------
<CAPTION>
==========================================================
TOTAL RETURNS as of 11/30/97
---------------------------------------------------------
Since
Inception(2,4)
Armada Small Cap Value Fund
Institutional Shares(1) 24.09%
---------------------------------------------------------
Armada Small Cap Value Fund
Retail Shares With Sales Charge(5) 21.85%
Without Sales Charge 23.28%
---------------------------------------------------------
</TABLE>
Past performance is not predictive of future
performance.
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
Armada Small Cap Value
Measurement Period Russell 2000 Value Fund (Institutional
(Fiscal Year Covered) Index S&P Midcap 400 Index Shares)(1)
<S> <C> <C> <C>
Jul-94 10000.00 10000.00 10000.00
Nov-94 10055.30 9970.02 10490.00
May-95 11230.20 11372.20 11461.60
Nov-95 12919.90 13205.20 12337.80
May-96 15262.30 14604.30 14056.90
Nov-96 15055.70 15686.80 15087.00
May-97 16327.40 17259.70 17375.10
Nov-97 18581.00 19990.30 20620.70
<CAPTION>
Armada Small Cap Value
Measurement Period Fund (Retail Shares
(Fiscal Year Covered) with sales charge) (5)
<S> <C>
Jul-94 9625.00
Nov-94 9839.02
May-95 10736.00
Nov-95 11536.90
May-96 13127.90
Nov-96 14071.40
May-97 16182.00
Nov-97 19191.10
</TABLE>
1 Institutional shares are sold primarily to banks
and trust companies which are affiliated with
National City Corporation and clients of National
Asset Management Corporation ("NAM"). Certain
account level charges may apply.
2 The Armada Small Cap Value Fund's date of
inception was July 26, 1994 for Institutional
shares and August 15, 1994 for Retail shares.
3 The return and principal value of an investment
will fluctuate. When redeemed, shares may be worth
more or less than their original cost.
4 Annualized.
5 Performance calculated based on the maximum
front-end sales charge in effect at November 30,
1997 of 3.75%. Effective January 1, 1998, the
maximum front-end sales charge was increased to
5.50%.
13
<PAGE> 16
LOGO ARMADA EQUITY GROWTH FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
ERIC S. FUCHS,
NATIONAL CITY'S
ASSET MANAGEMENT GROUP
FUND'S DATE OF INCEPTION:
DECEMBER 20, 1989
(INSTITUTIONAL SHARES)
APRIL 15, 1991 (RETAIL
SHARES)
ASSETS:
$308,884,226 (INSTITUTIONAL
SHARES)
$ 8,375,486 (RETAIL SHARES)
INVESTMENT OBJECTIVE:
SEEK A HIGH LEVEL OF TOTAL
RETURN ARISING PRIMARILY OUT
OF
CAPITAL APPRECIATION. THE
FUND
INVESTS IN COMMON STOCKS AND
SECURITIES CONVERTIBLE INTO
COMMON STOCKS. RECENT PERFORMANCE
The Armada Equity Growth Fund achieved a total
return of 16.40% for Institutional shareholders and
16.28% (before sales charges) for Retail
shareholders for the six months ended November 30,
1997. In comparison, the S&P 500 Index was up 13.58%
and the more volatile and concentrated S&P Barra
Growth Index appreciated 13.74%.
The Fund ranked in the top 4% of all equity funds
within its Morningstar category (over 650) for the
twelve months ended November 30, 1997, with a total
return of 31.0% for Institutional shareholders.
Similarly, the Fund ranked in the top 5% of all
growth funds (over 660) in the Lipper universe for
calendar year to date ended November 30, 1997.
Leading the Fund's performance results over the
past six-month period with gains of over 25% were
consumer cyclicals such as Home Depot, Tandy,
Wal-Mart, Costco, and Dayton Hudson. Health care
stocks such as Pfizer, Schering-Plough,
Bristol-Myers Squibb, Eli Lilly and Guidant posted
25%+ gains. Similarly, in technology, Lucent
Technology, Compaq Computer and America Online were
big winners. In oil field services, Schlumberger and
Halliburton were major contributors to performance
and in the transportation sector, Southwest Airlines
was a big winner. Consumer staples such as Gillette,
Coca Cola and PepsiCo were underperformers during
this period.
FUND STRATEGIES
The critical elements in the Fund's stock
selection methodology revolve around both superior
and improving earnings growth, with a watchful eye
on purchasing and holding shares at a reasonable
price relative to each stock's projected valuation.
Our sell discipline mandates a reduction or
replacement of equity positions that violate our
earnings growth and valuation criteria. Continuous
and highly disciplined active management of each
stock's risk/reward ratio is the focal point of our
portfolio strategy.
FUND STRUCTURE
The portfolio structure has changed moderately
over the past six months, as we have reduced the
basic materials, capital goods, and energy sectors
and increased exposure to financial services. We
anticipate a slowing of worldwide economic growth,
particularly in Asia and Europe, and we have shifted
our equity positions accordingly.
14
<PAGE> 17
LOGO ARMADA EQUITY GROWTH FUND OVERVIEW
COMMENTS FROM THE MANAGER
LOOK AHEAD
Keeping in mind that the Armada Equity Growth Fund
has compounded at 28.14% for Institutional
shareholders over the past 3 years, and that these
equity returns are historically high, we are paying
increasing attention to current price levels
relative to fair and reasonable valuation targets of
each individual equity holding in the Fund.
From our perspective, the Equity Growth Fund
offers a highly disciplined, earnings growth
approach to investing in large-cap securities. We
look forward to a progressively challenging period
ahead in 1998.
15
<PAGE> 18
LOGO ARMADA EQUITY GROWTH FUND OVERVIEW
COMMENTS FROM THE MANAGER
<TABLE>
<CAPTION>
================================================================
TOTAL RETURNS as of 11/30/97
----------------------------------------------------------------
Six Months 1-Year
----------------------------------------------------------------
<S> <C> <C>
Armada Equity Growth Fund
Institutional Shares(1) 16.40% 31.00%
----------------------------------------------------------------
Armada Equity Growth Fund
Retail Shares With Sales Charge(5) 11.91% 25.74%
Without Sales Charge 16.28% 30.65%
----------------------------------------------------------------
<CAPTION>
================================================================
TOTAL RETURNS as of 11/30/97
----------------------------------------------------------------
3-Years(4) 5-Years(4)
<S> <C>
Armada Equity Growth Fund
Institutional Shares(1) 28.14% 15.77%
----------------------------------------------------------------
Armada Equity Growth Fund
Retail Shares With Sales Charge(5) 26.22% 14.62%
Without Sales Charge 27.82% 15.50%
----------------------------------------------------------------
<CAPTION>
===============================================================
TOTAL RETURNS as of 11/30/97
----------------------------------------------------------------
Since Inception(2,4)
Armada Equity Growth Fund
Institutional Shares(1) 15.53%
----------------------------------------------------------------
Armada Equity Growth Fund
Retail Shares With Sales Charge(5) 14.73%
Without Sales Charge 15.29%
----------------------------------------------------------------
</TABLE>
Past performance is not predictive of future
performance.
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
Armada Equity Growth Armada Equity Growth
Measurement Period Fund (Retail Shares Fund (Institutional
(Fiscal Year Covered) with sales charge)(5) Shares)(1) S&P 500 Composite Index
<S> <C> <C> <C>
Dec-89 9625.00 10000.00 10000.00
May-90 10439.30 10846.50 10378.90
Nov-90 9695.72 10073.90 9427.68
May-91 12328.90 12809.70 11599.90
Nov-91 12071.50 12578.90 11346.60
May-92 13374.30 13950.20 12746.50
Nov-92 14519.10 15164.10 13438.90
May-93 14310.80 14955.00 14224.00
Nov-93 14245.80 14911.90 14790.40
May-94 14470.50 15165.80 14826.00
Nov-94 14286.50 14986.70 14944.90
May-95 15968.80 16776.00 17814.10
Nov-95 18005.40 18942.30 20464.70
May-96 19855.10 20905.40 22876.00
Nov-96 22837.70 24068.60 26163.00
May-97 25659.70 27086.70 29602.20
Nov-97 29837.80 31530.00 33622.60
<CAPTION>
Measurement Period S&P 500/BARRA Growth
(Fiscal Year Covered) Index
<S> <C>
Dec-89 10000.00
May-90 10599.00
Nov-90 9710.92
May-91 12088.60
Nov-91 12152.40
May-92 13387.70
Nov-92 14471.60
May-93 14318.60
Nov-93 14709.10
May-94 14467.60
Nov-94 15015.50
May-95 17827.00
Nov-95 20862.80
May-96 23265.20
Nov-96 26774.80
May-97 31012.50
Nov-97 35278.80
</TABLE>
1 Institutional shares are sold primarily to banks
and trust companies which are affiliated with
National City Corporation and clients of National
Asset Management Corporation ("NAM"). Certain
account level charges may apply.
2 The Armada Equity Growth Fund's date of inception
was December 20, 1989 for Institutional shares and
April 15, 1991 for Retail shares. The performance
information of the Retail shares includes
information from the commencement of operations of
the Institutional shares, rather than the date
Retail shares were introduced. The performance of
the Retail shares prior to their introduction date
does not reflect shareholder servicing fees,
which, if reflected, would reduce the performance
quoted for such periods.
3 The return and principal value of an investment
will fluctuate. When redeemed, shares may be worth
more or less than their original cost.
4 Annualized.
5 Performance calculated based on the maximum
front-end sales charge in effect at November 30,
1997 of 3.75%. Effective January 1, 1998, the
maximum front-end sales charge was increased to
5.50%.
16
<PAGE> 19
LOGO ARMADA CORE EQUITY FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
NATIONAL ASSET
MANAGEMENT CORPORATION'S
INVESTMENT MANAGEMENT
GROUP
FUND'S DATE OF INCEPTION:
AUGUST 1, 1997 (INSTITUTIONAL
SHARES)
AUGUST 1, 1997 (RETAIL
SHARES)
ASSETS:
$105,199,042 (INSTITUTIONAL
SHARES)
$ 81,916 (RETAIL SHARES)
INVESTMENT OBJECTIVE:
SEEK A TOTAL RATE OF RETURN,
BEFORE FUND EXPENSES, GREATER
THAN THAT OF THE STANDARD &
POOR'S 500 COMPOSITE STOCK
PRICE INDEX (THE "S&P 500").
THE FUND INVESTS IN A
DIVERSIFIED
PORTFOLIO OF DOMESTIC COMMON
STOCKS OF ISSUERS WITH LARGE
CAPITALIZATIONS. RECENT PERFORMANCE
The Armada Core Equity Fund commenced operations
on August 1, 1997. The Fund's Manager, National
Asset Management Corporation, has utilized the
Multiple Attribute Core Equity Approach since 1988,
and has outperformed the S&P 500 seven out of the
last nine years, with respect to its other equity
accounts. The Fund produced a total return of 0.3%,
for both Institutional and Retail shareholders
(before sales charges), for the four-month period
ended November 30, 1997. The S&P 500 returned 0.7%
during the same time period. Beginning in September,
technology stocks exhibited weakness, due in large
part to concerns about the Asian economy.
FUND STRUCTURE
Our overweighting in technology was a negative
during the period. Early in the period, the Fund was
also negatively impacted by a rally in smaller
capitalization stocks, as the Fund invests primarily
in large capitalization stocks. This trend has since
reversed, with large cap stocks once again leading
the market. The Fund benefited from the strong
performance of pharmaceutical companies and
selective firms in the consumer staples and finance
sectors.
FUND STRATEGIES
The Fund is currently overweighted in high quality
growth stocks. Growth stocks historically have
performed well during times of stable economic
growth and low inflation, which are both present as
we close out the calendar year. We have reduced our
overweighting in the technology sector, and
increased our exposure to companies with less
volatile earnings. Going forward, we expect to
maintain our high quality growth bias. However, we
will purchase cyclical stocks, whose earnings are
correlated to the strength in the economy, when the
valuation is attractive and the long-term
fundamental outlook is positive.
LOOKING AHEAD
As we enter 1998, global economic concerns are in
the minds of many investors. In Japan, the economy
has been stagnant for most of the 1990's. Economic
growth rates in Indonesia, Korea, Malaysia, and
Thailand have been reduced. U.S. firms that have a
significant presence in this region are beginning to
be affected by the weakness.
17
<PAGE> 20
LOGO ARMADA CORE EQUITY FUND OVERVIEW
COMMENTS FROM THE MANAGER
Given this backdrop, we expect companies that can
produce consistent earnings growth to continue to do
well. However, we will selectively add cyclical
companies to the Core Equity Fund when it appears
that the market has overreacted to global economic
concerns. We are currently monitoring aluminum
companies, paper stocks, and industrial gas concerns
with good long-term fundamentals for inclusion in
the Fund.
18
<PAGE> 21
LOGO ARMADA CORE EQUITY FUND OVERVIEW
COMMENTS FROM THE MANAGER
<TABLE>
<CAPTION>
====================================================================
TOTAL RETURNS as of 11/30/97
Since Inception(2,4)
------------------------------------------------------------------
<S> <C>
Armada Core Equity Fund
Institutional Shares(1) 0.32%
--------------------------------------------------------------------
Armada Core Equity Fund
Retail Shares With Sales Charge(5) (3.45)%
Without Sales Charge 0.31%
--------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future
performance.
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
Measurement Period Armada Core Equity Fund
(Fiscal Year Covered) S&P 500 Composite Index (Institutional Shares)(1)
<S> <C> <C>
Aug-1-1997 10000.00 10000.00
Aug-31-1997 9440.30 9480.00
Sep-97 9957.30 9900.00
Oct-97 9624.72 9560.63
Nov-97 10070.40 10031.60
<CAPTION>
Armada Core Equity Fund
(Fiscal Year Covered) charge)(5)
<S> <C>
Aug-1-1997 9625.00
Aug-31-1997 9124.16
Sep-97 9528.39
Oct-97 9201.43
Nov-97 9654.75
</TABLE>
1 Institutional shares are sold primarily to banks
and trust companies which are affiliated with
National City Corporation and clients of National
Asset Management Corporation ("NAM"). Certain
account level charges may apply.
2 The Armada Core Equity Fund's date of inception
was August 1, 1997 for both Institutional and
Retail shares.
3 The return and principal value of an investment
will fluctuate. When redeemed, shares may be worth
more or less than their original cost.
4 Not annualized.
5 Performance calculated based on the maximum
front-end sales charge in effect at November 30,
1997 of 3.75%. Effective January 1, 1998, the
maximum front-end sales charge was increased to
5.50%.
19
<PAGE> 22
LOGO ARMADA EQUITY INCOME FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
MARYJANE MATTS
NATIONAL CITY'S
ASSET MANAGEMENT GROUP
FUND'S DATE OF INCEPTION:
JULY 1, 1994 (INSTITUTIONAL
SHARES)
AUGUST 22, 1994 (RETAIL
SHARES)
ASSETS:
$163,886,921 (INSTITUTIONAL
SHARES)
$ 757,528 (RETAIL SHARES)
INVESTMENT OBJECTIVE:
SEEK A COMPETITIVE TOTAL RATE
OF
RETURN THROUGH INVESTMENTS IN
EQUITY AND EQUITY EQUIVALENT
SECURITIES WHICH, IN THE
AGGREGATE, PROVIDE A PREMIUM
CURRENT YIELD. RECENT PERFORMANCE
Despite a relatively strong third quarter
performance, value stocks have generally
underperformed growth stocks this year, posing a
somewhat difficult environment for a fund focused on
high yield, low multiple stocks. Relative to its
benchmark, however, the Fund has outperformed in the
past six months. The Armada Equity Income Fund
recorded a 13.66% return for Institutional
shareholders and a 13.53% return (before sales
charges) for Retail shareholders for the six-month
period ended November 30, 1997. The Fund's
benchmark, the Standard and Poor's/BARRA Value Index
("the BARRA Value Index"), returned 13.32% over the
same period.
Industry weights that aided the performance of the
Fund included overweights in banks and gas
utilities, and underweights in health care
(non-drug), precious metals, and publishing.
Industry weights that detracted from performance
included underweights in telephone and media and
overweights in chemicals and construction. For the
twelve-month period ended November 30, 1997, the
Armada Equity Income Fund recorded a 24.54% return
for Institutional shareholders and a 24.26% return
(before sales charges) for Retail shareholders. The
BARRA Value Index returned 25.08% over the same
period.
FUND STRUCTURE
Relative to our benchmark, the Fund
characteristics include: higher yield, lower risk,
lower price/book, and lower weighted average market
capitalization of $31 billion versus $37 billion.
Over the course of the past year, we have increased
exposure to higher yielding, smaller capitalization
issues as these types of stocks have lagged the
overall market and appear relatively attractive.
Current sector weights include an overweight in
basic materials and capital goods, and underweights
in technology, consumer staples, and communication
services.
FUND STRATEGIES
The investment strategy is to identify stocks
offering both good value and good news. The Fund
invests in statistically cheap stocks that appear
undervalued and poised for an improvement in
relative performance. By statistically cheap, we
mean stocks with premium yields, low price/earnings
ratios, low price/book ratios, etc. By undervalued,
we refer to stocks that do not deserve to trade at
steep discounts to the market based on our
assessment of future prospects. To determine whether
a stock is poised for an improvement or likely to
languish, we focus on changes in investor sentiment.
As measured by changes in earnings estimates, the
Fund buys
20
<PAGE> 23
LOGO ARMADA EQUITY INCOME FUND OVERVIEW
COMMENTS FROM THE MANAGER
when investor sentiment is improving and sells when
investor sentiment is deteriorating.
LOOKING AHEAD
The Fund's defensive, income-oriented discipline
will be maintained going forward. In the event of a
market correction, we believe the Fund, with its
higher yield, is well-positioned to outperform
higher risk profile investments.
21
<PAGE> 24
LOGO ARMADA EQUITY INCOME FUND OVERVIEW
COMMENTS FROM THE MANAGER
<TABLE>
<CAPTION>
=========================================================
TOTAL RETURNS as of 11/30/97
---------------------------------------------------------
Six Months
<S> <C>
Armada Equity Income Fund
Institutional Shares(1) 13.66%
---------------------------------------------------------
Armada Equity Income Fund
Retail Shares With Sales Charge(5) 9.27%
Without Sales Charge 13.53%
---------------------------------------------------------
<CAPTION>
=========================================================
TOTAL RETURNS as of 11/30/97
--------------------------------------------------------
1-Year
<S> <C>
Armada Equity Income Fund
Institutional Shares(1) 24.54%
---------------------------------------------------------
Armada Equity Income Fund
Retail Shares With Sales Charge(5) 19.63%
Without Sales Charge 24.26%
---------------------------------------------------------
<CAPTION>
=========================================================
TOTAL RETURNS as of 11/30/97
---------------------------------------------------------
3-Years(4)
Armada Equity Income Fund
Institutional Shares(1) 24.41%
---------------------------------------------------------
Armada Equity Income Fund
Retail Shares With Sales Charge(5) 22.53%
Without Sales Charge 24.12%
---------------------------------------------------------
<CAPTION>
=========================================================
TOTAL RETURNS as of 11/30/97
---------------------------------------------------------
Since
Inception(2,4)
Armada Equity Income Fund
Institutional Shares(1) 20.96%
---------------------------------------------------------
Armada Equity Income Fund
Retail Shares With Sales Charge(5) 19.33%
Without Sales Charge 20.73%
---------------------------------------------------------
</TABLE>
Past performance is not predictive of future
performance.
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
Armada Equity Income
Measurement Period Fund (Institutional
(Fiscal Year Covered) Shares)(1) S&P 500 Stock Index S&P/BARRA Value Index
<S> <C> <C> <C>
Jul-94 10000.00 10000.00 10000.00
Nov-94 9959.57 10333.30 10055.50
May-95 11309.10 12317.10 12040.60
Nov-95 12439.80 14149.80 13567.80
May-96 13539.50 15817.10 15212.40
Nov-96 15398.00 18089.80 17292.50
May-97 16872.40 20466.00 19085.10
Nov-97 19176.30 23245.70 21627.80
<CAPTION>
Armada Equity Income
Measurement Period Fund (Retail Shares
(Fiscal Year Covered) with sales charge)(5)
<S> <C>
Aug-94 9625.00
Nov-94 9336.85
May-95 10594.80
Nov-95 11641.90
May-96 12646.50
Nov-96 14366.40
May-97 15723.60
Nov-97 17851.60
</TABLE>
1 Institutional shares are sold primarily to banks
and trust companies which are affiliated with
National City Corporation and clients of National
Asset Management Corporation ("NAM"). Certain
account level charges may apply.
2 The Armada Equity Income Fund's date of inception
was July 1, 1994 for Institutional shares and
August 22, 1994 for Retail shares.
3 The return and principal value of an investment
will fluctuate. When redeemed, shares may be worth
more or less than their original cost.
4 Annualized.
5 Performance calculated based on the maximum
front-end sales charge in effect at November 30,
1997 of 3.75%. Effective January 1, 1998, the
maximum front-end sales charge was increased to
5.50%.
22
<PAGE> 25
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA INTERNATIONAL EQUITY FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- 94.3%
AUSTRALIA -- 3.2%
National Australia Bank --
ADR....................... 20,300 $ 1,353,756
News Limited -- ADR........ 35,200 763,400
Santos, Limited............ 174,200 721,125
------------
2,838,281
------------
AUSTRIA -- 0.8%
Mayr Melnhof Karton AG..... 12,900 722,202
------------
BELGIUM -- 1.6%
Fortis AG.................. 4,500 895,300
Lernout & Hauspie Speech
Products NV -- ADR+....... 10,300 493,434
------------
1,388,734
------------
BERMUDA -- 0.9%
Exel Limited -- ADR........ 13,400 824,100
------------
DENMARK -- 1.0%
Unidanmark................. 13,300 938,917
------------
FINLAND -- 1.9%
Cultor Oy.................. 9,750 513,920
Nokia Corp. -- ADR......... 14,000 1,163,750
------------
1,677,670
------------
FRANCE -- 7.4%
Alcatel Alsthom -- ADR..... 26,800 663,300
Coflexip -- ADR+........... 12,000 597,750
Compagnie de Saint
Gobain.................... 2,750 373,593
Compagnie Generale de
Geophysique SA+........... 3,500 379,437
L'Oreal.................... 1,050 401,966
LVMH Moet Hennesey --
ADR....................... 8,200 284,437
Pinault -- Printemps
Redoute SA................ 950 485,984
Rhone Poulenc Limited --
ADR....................... 17,500 785,313
Societe Generale........... 4,850 637,521
Suez Lyonnaise des Eaux.... 8,400 903,533
Total Petroleum of North
America -- ADR............ 14,300 751,644
Valeo SA................... 5,650 373,637
------------
6,638,115
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
GERMANY -- 7.8%
Allianz AG................. 3,500 $ 827,461
BASF AG.................... 15,600 551,448
Bayerische Vereinsbank
AG........................ 19,350 1,148,606
Buderus AG................. 1,600 771,956
Mannesmann AG.............. 1,950 905,444
SAP AG..................... 1,950 568,252
Siemens AG................. 10,750 636,895
Veba AG.................... 17,850 1,057,542
Volkswagen AG.............. 1,000 567,515
------------
7,035,119
------------
HONG KONG -- 2.6%
Cheung Kong Holdings
Limited................... 101,000 712,069
Citic Pacific Limited...... 91,000 362,574
Hong Kong & China Gas Co.
Limited................... 194,000 348,836
HSBC Holdings Plc -- GDR... 25,400 612,797
Hutchison Whampoa Limited.. 44,000 293,133
------------
2,329,409
------------
IRELAND -- 1.2%
Bank of Ireland -- GDR..... 47,000 633,883
CBT Group PLC -- ADR+...... 5,900 417,794
------------
1,051,677
------------
ITALY -- 2.8%
Istituto Mobiliare Italiano
SpA....................... 101,800 1,063,331
Telecom Italia
SpA -- ADR................ 23,000 1,428,875
------------
2,492,206
------------
JAPAN -- 18.0%
Bank of Tokyo --
Mitsubishi -- ADR......... 64,900 941,050
Bridgestone Corp. ......... 51,000 1,106,915
Canon Inc. ................ 36,000 868,795
</TABLE>
See Accompanying Notes
23
<PAGE> 26
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA INTERNATIONAL EQUITY FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
JAPAN -- CONTINUED
Daiwa House Industry Co.
Limited................... 43,000 $ 347,032
Ito Yokado Co. Limited..... 15,000 676,983
Kyocera Corp. ............. 12,000 579,197
Mitsubishi Corp. .......... 88,000 686,762
Mitsubishi Materials
Corp. .................... 222,000 500,968
Nippon Electric Corp....... 75,000 793,340
Nissin Food Products Co.
Limited................... 19,000 425,779
NTT Data Communications
Systems Co................ 200 971,596
Promise Co., Ltd........... 10,000 552,400
SMC Corp................... 10,000 885,406
Sony Corp.................. 13,000 1,110,284
Sumitomo Metal
Industries+............... 276,000 562,272
Sumitomo Sitix............. 39,000 678,394
Takara Smuzo............... 133,000 561,700
Takeda Chemical
Industries................ 38,000 1,110,597
Tokio Marine & Fire
Insurance Co. ............ 43,000 407,679
Tokuyama Corp. ............ 166,000 578,805
Tokyo Electron, Limited.... 12,000 459,785
Toshiba Ceramics Co........ 47,000 200,705
Toyota Motor Corp. -- ADR.. 14,500 831,031
Yamaha Corp. .............. 22,000 308,560
------------
16,146,035
------------
NETHERLANDS -- 6.5%
Aegon NV -- ADR............ 11,300 960,500
AKZO NV -- ADR............. 4,600 403,650
Ing Groep NV............... 15,700 638,125
Koninklijke Ahold NV --
ADR....................... 24,600 651,900
Royal Dutch Petroleum
Co........................ 21,600 1,138,050
Royal PTT Nederland NV..... 12,900 517,830
Unilever NV -- ADR......... 26,000 1,509,625
------------
5,819,680
------------
NORWAY -- 1.3%
Norsk Hydro................ 14,800 762,455
Smedvig.................... 14,600 389,779
------------
1,152,234
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
SPAIN -- 4.3%
Banco Bilbao
Vizcaya -- ADR............ 44,400 $ 1,326,450
Endesa -- Sponsored ADR.... 62,000 1,162,500
Telefonica De Espania --
ADR....................... 16,100 1,392,650
------------
3,881,600
------------
SWEDEN -- 3.9%
Ericsson, (L.M.) Telephone
Co. -- ADR................ 38,800 1,567,763
Svenska Cellulosa AB-A..... 22,900 513,108
Svenska Handelsbanken-A.... 16,000 563,659
Volvo AB-B................. 32,500 867,118
------------
3,511,648
------------
SWITZERLAND -- 7.8%
Credit Suisse Group........ 7,900 1,155,335
Nestle SA.................. 800 1,177,255
Novartis AG................ 1,600 2,556,516
Roche Holding AG........... 90 805,505
Schweizerische
Rueckversicherungs --
Gesellschaft.............. 800 1,306,876
------------
7,001,487
------------
UNITED KINGDOM -- 21.3%
Abbey National Plc......... 61,100 972,799
BOC Group Plc.............. 37,800 601,830
British American Tobacco
Industries Plc -- ADR..... 68,700 1,249,481
British Petroleum Co. Plc
Sponsored ADR............. 15,300 1,269,900
British Steel Plc -- ADR... 23,700 568,800
Cable & Wireless Plc....... 66,000 598,241
Carlton Communications
Plc....................... 80,600 615,832
General Electric Co. Plc... 150,000 974,239
Glaxo Wellcome Plc -- ADR.. 30,300 1,384,331
Grand Metropolitan Plc --
ADR....................... 31,500 1,173,375
Marks & Spencer Plc........ 101,700 1,043,490
National Grid Group Plc.... 191,400 948,068
Pearson Plc................ 59,800 831,199
Royal & Sun Alliance
Insurance Group Plc....... 147,700 1,326,349
</TABLE>
See Accompanying Notes
24
<PAGE> 27
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA INTERNATIONAL EQUITY FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
UNITED KINGDOM -- CONTINUED
Siebe Plc.................. 56,300 $ 1,021,584
SmithKline Beecham Plc --
ADR....................... 34,400 1,707,100
Tesco Plc.................. 139,800 1,127,039
Tomkins Plc -- ADR......... 84,700 1,752,231
------------
19,165,888
------------
TOTAL COMMON STOCK....................... 84,615,002
------------
(Cost $89,308,170)
PREFERRED STOCK -- 0.3%
GERMANY -- 0.3%
SAP AG..................... 900 277,068
------------
(Cost $269,744)
INVESTMENT COMPANIES -- 5.4%
Goldman Sachs Financial
Square Premium Fund....... 3,405,680 3,405,680
Schroder Asian Growth Fund
(Closed-End).............. 75,000 618,750
Scudder Latin America
Fund...................... 32,595 856,584
------------
TOTAL INVESTMENT COMPANIES... 4,881,014
------------
(Cost $5,084,430)
TOTAL INVESTMENTS -- 100.0% $ 89,773,084
============
(Cost $94,662,344*)
- ---------------
*Also cost for Federal income tax purposes.
The gross unrealized appreciation (depreciation) for
Federal income tax purposes is as follows:
Gross appreciation.................... $ 2,536,086
Gross depreciation.................... (7,425,346)
------------
$ (4,889,260)
------------
+Non-income producing security.
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
</TABLE>
See Accompanying Notes
25
<PAGE> 28
LOGO FINANCIAL HIGHLIGHTS
ARMADA INTERNATIONAL EQUITY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE FOUR MONTHS
ENDED NOVEMBER 30, 1997
--------------------------
INSTITUTIONAL(5) RETAIL(5)
-------------- -------
<S> <C> <C>
Net asset value, beginning of period................................... $ 10.00 $ 10.00
------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................................ 0.02 0.01
Net loss on securities (realized and unrealized)..................... (0.80) (0.79)
------- ------
Total from investment operations................................ (0.78) (0.78)
------- ------
LESS DISTRIBUTIONS
Total distributions............................................. (0.00) (0.00)
------- ------
Net asset value, end of period......................................... $ 9.22 $ 9.22
======= ======
TOTAL RETURN........................................................... (21.57)%(4) (21.57)%(3,4)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)................................. $ 88,938 $ 4
Ratio of expenses to average net assets.............................. 0.98%(1,4) 1.23%(2,4)
Ratio of net investment income to average net assets................. 0.75%(1,4) 0.50%(2,4)
Portfolio turnover rate.............................................. 15% 15%
Average commission rate.............................................. $ 0.05 $ 0.05
</TABLE>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Adviser and Administrator for the Institutional
class for the period ended November 30, 1997 would have been 1.26% and .47%,
respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Adviser and Administrator for the Retail class for
the period ended November 30, 1997 would have been 1.51% and .22%,
respectively.
(3) Total return excludes sales charge.
(4) Annualized.
(5) Institutional and Retail classes both commenced operations on August 1,
1997.
See Accompanying Notes
26
<PAGE> 29
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA SMALL CAP GROWTH FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------ ------------
<S> <C> <C>
COMMON STOCK -- 93.7%
ADVERTISING -- 1.9%
ADVO, Inc.+............. 27,000 $ 587,250
------------
BANKS -- 8.6%
Associated Banc-Corp.... 15,000 748,125
First Commercial
Corporation............ 12,000 618,000
Mercantile Bankshares
Corp................... 16,000 544,000
Wilmington Trust
Corp................... 13,000 758,875
------------
2,669,000
------------
BEVERAGES -- 1.6%
Beringer Wine
Estates+............... 15,000 484,687
------------
BUSINESS SERVICES -- 26.8%
American Management
Systems, Inc.+......... 42,000 977,812
BGS Systems, Inc........ 14,800 493,025
Bisys Group, Inc.+...... 20,000 636,250
Cognos Inc.+............ 27,000 477,562
Dames & Moore, Inc...... 35,000 433,125
DST Systems, Inc.+...... 14,000 518,875
G. & K. Services,
Inc.................... 25,000 928,125
Metromail Corp.+........ 22,000 393,250
Shared Medical Systems
Corp................... 17,000 1,088,000
Sterling Software,
Inc.+.................. 20,000 732,500
Synopsys, Inc.+......... 16,000 659,000
Systems & Computer
Technology Corp.+...... 7,400 345,025
Tetra Tech, Inc.+....... 25,000 643,750
------------
8,326,299
------------
COMPUTERS -- 2.1%
Policy Management
Systems+............... 10,000 646,250
------------
ELECTRICAL
EQUIPMENT -- 8.4%
Dallas Semiconductor
Corp................... 20,000 977,500
Littelfuse, Inc.+....... 20,000 550,000
Silicon Valley Group,
Inc.+.................. 33,000 786,844
UCAR International,
Inc.+.................. 7,000 279,562
------------
2,593,906
------------
<CAPTION>
NUMBER
OF SHARES VALUE
------------ ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
ENTERTAINMENT -- 2.0%
Speedway Motorsports,
Inc.................... 28,800 $ 637,200
------------
HOME FURNISHINGS/HOUSEWARES -- 0.8%
Ethan Allen Interiors,
Inc.................... 6,800 261,800
------------
INSURANCE-LIFE -- 2.1%
Reinsurance Group of
America................ 15,250 650,984
------------
INSURANCE-PROPERTY AND CASUALTY -- 2.9%
Frontier Insurance
Group, Inc............. 37,000 890,313
------------
MACHINERY & HEAVY EQUIPMENT -- 1.8%
Nordson Corp............ 11,000 573,375
------------
MACHINERY & MANUFACTURING -- 1.6%
Paxar Corp.............. 33,750 506,250
------------
MACHINERY (ELECTRIC) -- 4.2%
Donaldson, Inc.......... 11,000 528,000
Ionics, Inc.+........... 21,000 774,375
------------
1,302,375
------------
MEDICAL & MEDICAL SERVICES -- 5.9%
Covance, Inc.+.......... 41,000 743,125
Datascope Corp.+........ 15,000 380,625
Life Technologies,
Inc.................... 23,000 694,313
------------
1,818,063
------------
MEDICAL INSTITUTION SUPPLIES -- 0.9%
Biomet, Inc.+........... 11,700 278,972
------------
OIL & GAS -- 0.8%
Barrett Resources
Corp.+................. 9,000 266,625
------------
</TABLE>
See Accompanying Notes
27
<PAGE> 30
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA SMALL CAP GROWTH FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------ ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
PHARMACEUTICAL -- 1.5%
Genzyme Corp.+.......... 17,000 $ 456,344
------------
PHOTO-EQUIPMENT & SUPPLIES -- 1.7%
X-Rite Inc.............. 28,000 539,000
------------
RESIDENTIAL CONSTRUCTION -- 2.8%
U.S. Rentals, Inc....... 33,500 860,531
------------
RETAIL STORES -- 5.9%
Arbor Drugs, Inc........ 26,000 702,813
Barnes & Noble, Inc.+... 18,000 556,875
OfficeMax, Inc.+........ 40,000 562,500
------------
1,822,188
------------
SPECIALTY CHEMICALS -- 4.6%
Bush Boake Allen,
Inc.+.................. 18,200 511,875
Minerals Technologies,
Inc.................... 21,000 918,750
------------
1,430,625
------------
TELECOMMUNICATIONS -- 1.1%
Andrew Corp.+........... 13,000 344,094
------------
TRANSPORTATION -- 2.0%
Air Express
International Corp..... 21,000 608,344
------------
TRUCKING -- 1.7%
Werner Enterprises,
Inc.................... 24,000 519,000
------------
TOTAL COMMON STOCK....................... 29,073,475
------------
(Cost $28,322,063)
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
-------- --------- ------------
<S> <C> <C> <C>
REPURCHASE AGREEMENT -- 6.3%
J. P. Morgan & Co. Inc.:
5.67%......... 12/01/97 $ 1,945 $ 1,945,000
------------
(Agreement dated 11/28/97 to
be repurchased at
$1,945,919 on 12/01/97,
collateralized by
$1,525,000 U.S. Treasury
Notes, 11.875% due
11/15/03. The market
value of the collateral
is $1,976,305.)
(Cost $1,945,000)
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
------------
<S> <C> <C>
INVESTMENT COMPANIES -- 0.0%
Goldman Sachs Financial
Square Premium......... 789 789
------------
(Cost $789)
TOTAL INVESTMENTS -- 100.0% $ 31,019,264
============
(Cost $30,267,852*)
- ---------------
*Also cost for Federal income tax purposes.
The gross unrealized appreciation (depreciation) for
Federal income tax purposes is as follows:
Gross appreciation.................... $ 1,998,407
Gross depreciation.................... (1,246,995)
------------
$ 751,412
------------
+Non-income producing security.
</TABLE>
See Accompanying Notes
28
<PAGE> 31
LOGO FINANCIAL HIGHLIGHTS
ARMADA SMALL CAP GROWTH FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE FOUR MONTHS
ENDED NOVEMBER 30, 1997
--------------------------
INSTITUTIONAL(5) RETAIL(5)
-------------- -------
<S> <C> <C>
Net asset value, beginning of period..................................... $ 10.00 $ 10.00
------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income.................................................. 0.01 0.00
Net gain on securities (realized and unrealized)....................... 0.46 0.47
------- ------
Total from investment operations.................................. 0.47 0.47
------- ------
LESS DISTRIBUTIONS
Total distributions............................................... (0.00) (0.00)
------- ------
Net asset value, end of period........................................... $ 10.47 $ 10.47
======= ======
TOTAL RETURN............................................................. 14.73%(4) 14.73%(3,4)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)................................... $ 30,838 $ 10
Ratio of expenses to average net assets................................ 0.96%(1,4) 1.21%(2,4)
Ratio of net investment income to average net assets................... 0.31%(1,4) 0.06%(2,4)
Portfolio turnover rate................................................ 8% 8%
Average commission rate................................................ $ 0.04 $ 0.04
</TABLE>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Administrator for the Institutional class for the period
ended November 30, 1997 would have been 1.06% and .21%, respectively.
(2) The operating expense ratio and net investment income/(loss) ratio before
fee waivers by the Administrator for the Retail class for the period ended
November 30, 1997 would have been 1.31% and (.04)%, respectively.
(3) Total return excludes sales charge.
(4) Annualized.
(5) Institutional and Retail classes both commenced operations on August 1,
1997.
See Accompanying Notes
29
<PAGE> 32
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA SMALL CAP VALUE FUND
(UNAUDITED) (FORMERLY ARMADA MID CAP REGIONAL FUND)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- 95.9%
AUTOMOTIVE PARTS-EQUIPMENT -- 7.5%
Amcast Industrial Corp..... 72,900 $ 1,804,275
Borg-Warner Automotive,
Inc....................... 40,000 1,885,000
Exide Corp................. 230,000 5,491,250
Simpson Industries, Inc.... 170,000 1,965,625
Spartan Motors, Inc........ 300,000 1,675,593
Standard Products Co....... 144,400 3,628,050
TBC Corp.+................. 197,500 2,012,031
Transpro, Inc.............. 191,400 1,722,600
------------
20,184,424
------------
BANKING -- 5.0%
First Virginia Banks,
Inc....................... 67,500 3,227,344
Pacific Century Financial
Corp...................... 82,000 4,182,000
UnionBanCal Corp........... 69,700 6,050,831
------------
13,460,175
------------
BUILDING & BUILDING SUPPLIES -- 0.6%
Patrick Industries, Inc.... 120,800 1,736,500
------------
BUSINESS SERVICES -- 2.0%
Franklin Covey Co.+........ 185,300 3,926,044
Information Resources,
Inc.+..................... 89,000 1,335,000
------------
5,261,044
------------
CHEMICALS 2.9%
American Pacific Corp.+.... 130,000 958,750
Geon Co.................... 160,000 3,780,000
High Plains Co............. 290,000 915,312
Wellman, Inc............... 100,400 2,127,225
------------
7,781,287
------------
COMPUTERS -- 1.6%
Komag, Inc.+............... 210,000 4,232,812
------------
CONSUMER STAPLES -- 2.0%
Paragon Trade Brands,
Inc.+..................... 234,300 5,271,750
------------
DRUGS & HEALTH CARE -- 2.1%
Bindley Western Industries,
Inc....................... 185,900 5,716,425
------------
ELECTRONICS -- 3.5%
Bell Industries, Inc....... 267,900 4,453,837
Bell Micro Products,
Inc.+..................... 200,000 1,687,500
Jaco Electronics, Inc.+.... 190,000 1,282,500
Marshall Industries,
Inc.+..................... 60,000 2,070,000
------------
9,493,837
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
ENTERTAINMENT -- 2.0%
King World Productions,
Inc....................... 100,000 $ 5,437,500
------------
FINANCIAL SERVICES -- 9.2%
ARM Financial Group, Inc.,
Class A................... 199,000 4,042,187
Countrywide Credit
Industries, Inc........... 95,000 3,889,062
Eaton Vance Corp........... 37,200 1,299,675
Lawyers Title Corp......... 55,200 1,752,600
Liberty Financial
Companies, Inc............ 118,100 6,399,544
Nationwide Financial
Services.................. 65,000 2,222,187
Phoenix Duff & Phelps
Corp...................... 350,000 2,625,000
U.S. Trust Corp............ 43,400 2,557,887
------------
24,788,142
------------
FOODS -- 2.3%
John B. Sanfillippo+....... 114,000 901,312
Thorn Apple Valley,
Inc.+..................... 248,100 3,488,906
WLR Foods, Inc............. 193,948 1,733,410
------------
6,123,628
------------
INSURANCE -- LIFE -- 1.5%
FBL Financial Group,
Inc....................... 40,000 1,580,000
Kansas City Life Insurance
Co........................ 30,200 2,545,294
------------
4,125,294
------------
INSURANCE -- PROPERTY AND CASUALTY -- 10.1%
Berkley (W.R.) Corp........ 122,500 5,137,344
Commerce Group, Inc........ 53,900 1,691,112
EMC Insurance Group,
Inc....................... 32,500 434,687
Farm Family Holdings,
Inc.+..................... 51,000 1,510,875
</TABLE>
See Accompanying Notes
30
<PAGE> 33
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA SMALL CAP VALUE FUND
(UNAUDITED) (FORMERLY ARMADA MID CAP REGIONAL FUND)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
INSURANCE -- PROPERTY AND CASUALTY -- CONTINUED
Harleysville Group, Inc.... 181,400 $ 4,251,563
Horace Mann Educators
Corp...................... 144,700 8,085,113
PXRE Corp.................. 136,500 4,035,281
Selective Insurance Group,
Inc....................... 39,300 1,992,019
------------
27,137,994
------------
MANUFACTURING -- 0.9%
Park Ohio Industries,
Inc.+..................... 127,100 2,279,856
------------
MEDICAL & MEDICAL SERVICES -- 9.0%
John Alden Financial
Corp...................... 582,300 15,685,706
Maxicare Health Plans,
Inc.+..................... 259,500 3,357,281
Rightchoice Managed Care,
Inc., Class A+............ 118,800 1,284,525
West, Inc.................. 120,000 3,810,000
------------
24,137,512
------------
METALS & MINING -- 2.4%
Carbide/Graphite Group,
Inc.+..................... 41,000 1,583,625
Cleveland Cliffs, Inc...... 90,900 3,920,063
Nord Resources Corp.+...... 515,600 902,300
------------
6,405,988
------------
PERSONNEL SERVICES -- 1.4%
Olsten Corp................ 260,000 3,867,500
------------
RAILROADS -- 1.0%
Railtex, Inc.+............. 189,000 2,799,563
------------
REAL ESTATE -- 1.3%
Great Lakes REIT, Inc...... 186,500 3,578,469
------------
RESIDENTIAL CONSTRUCTION -- 4.1%
Cavalier Homes, Inc........ 272,000 2,652,000
Pulte Corp................. 80,000 3,245,000
Ryland Group, Inc.......... 150,600 3,284,962
Southern Energy Homes,
Inc.+..................... 183,700 1,727,928
------------
10,909,890
------------
RESTAURANTS -- 2.2%
Lone Star Steakhouse &
Saloon+................... 225,000 4,204,688
Rare Hospitality+.......... 160,000 1,720,000
------------
5,924,688
------------
NUMBER
OF SHARES VALUE
--------- ------------
COMMON STOCK -- CONTINUED
RETAIL MERCHANDISING -- 0.7%
Ames Department Stores,
Inc.+..................... 24,000 $ 405,000
Bon Ton Stores, Inc.+...... 100,000 1,575,000
------------
1,980,000
------------
SPECIALTY CHEMICALS -- 1.3%
Schulman (A.), Inc......... 160,000 3,600,000
------------
STEEL -- 6.6%
Huntco, Inc................ 251,400 3,173,925
Insteel Industries, Inc.... 341,400 2,560,500
Novamerican Steel+......... 200,000 2,550,000
Olympic Steel, Inc.+....... 257,500 3,613,047
Ryerson Tull, Inc., Class
A+........................ 168,300 2,492,944
Steel Technologies, Inc.... 283,800 3,228,225
------------
17,618,641
------------
TECHNOLOGY -- 5.1%
Bel Fuse, Inc.............. 27,800 543,838
Eagle Point Software
Corp.+.................... 70,000 242,813
Information Storage
Devices, Inc.+............ 95,000 670,938
Mapinfo Corp.+............. 159,500 2,153,250
Opti, Inc.+................ 276,400 1,710,225
Optical Coating Laboratory,
Inc....................... 89,700 1,379,138
SDL, Inc.+................. 111,000 1,880,063
Vishay Intertechnology,
Inc.+..................... 145,000 3,072,188
Wall Data, Inc.+........... 118,000 1,924,875
------------
13,577,328
------------
TIRE & RUBBER -- 1.5%
Cooper Tire & Rubber Co.... 185,000 4,139,375
------------
</TABLE>
See Accompanying Notes
31
<PAGE> 34
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA SMALL CAP VALUE FUND
(UNAUDITED) (FORMERLY ARMADA MID CAP REGIONAL FUND)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
TOBACCO -- 3.2%
DIMON, Inc................. 196,000 $ 4,900,000
Universal Corp............. 92,000 3,639,750
------------
8,539,750
------------
TRUCKING -- 1.5%
M.S. Carriers, Inc.+....... 100,000 2,412,500
MTL, Inc.+................. 58,700 1,573,894
------------
3,986,394
------------
UTILITIES-ELECTRIC -- 1.4%
Illinova Corp.............. 153,200 3,705,525
------------
TOTAL COMMON STOCK........... 257,801,291
------------
(Cost $219,765,242)
PREFERRED STOCK -- 1.5%
ENERGY -- 1.5%
Sun Co., Inc............... 115,000 4,060,938
------------
(Cost $3,126,275)
NUMBER
OF SHARES VALUE
--------- ------------
INVESTMENT COMPANIES -- 2.6%
Fidelity Domestic Market
Portfolio................. 6,972,535 $ 6,972,535
------------
(Cost $6,972,535)
TOTAL INVESTMENTS -- 100.0% $268,834,764
============
(Cost $229,864,052*)
- ---------------
* Cost for Federal income tax purposes -- $230,672,652
The gross unrealized appreciation (depreciation) for
Federal income tax purposes is as follows:
Gross appreciation.................... $ 46,699,178
Gross depreciation.................... (8,537,066)
------------
$ 38,162,112
------------
+Non-income producing security.
</TABLE>
See Accompanying Notes
32
<PAGE> 35
LOGO FINANCIAL HIGHLIGHTS
ARMADA SMALL CAP VALUE FUND
(FORMERLY ARMADA MID CAP REGIONAL FUND)
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED NOVEMBER 30, FOR THE YEAR ENDED MAY 31, FOR THE PERIOD
1997 ----------------------------------------------- ENDED MAY 31,
(UNAUDITED) 1997 1996 1995
---------------------- ---------------------- ---------------------- ------------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL(3) RETAIL(3)
------------- ------ ------------- ------ ------------- ------ -------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 15.15 $14.95 $ 13.10 $12.94 $ 11.38 $11.26 $ 10.00 $10.16
-------- ------ -------- ------ -------- ------ -------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income........ 0.03 0.01 0.09 0.08 0.08 0.06 0.10 0.07
Net gain on securities
(realized and
unrealized)................ 2.80 2.77 2.90 2.83 2.41 2.37 1.36 1.11
-------- ------ -------- ------ -------- ------ -------- ------
Total from investment
operations............. 2.83 2.78 2.99 2.91 2.49 2.43 1.46 1.18
-------- ------ -------- ------ -------- ------ -------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.00) (0.00) (0.09) (0.05) (0.08) (0.06) (0.04) (0.04)
Dividends in excess of net
investment income.......... (0.00) (0.00) (0.00) (0.00) (0.02) (0.02) (0.00) (0.00)
Dividends from net realized
capital gains.............. (0.00) (0.00) (0.85) (0.85) (0.67) (0.67) (0.04) (0.04)
-------- ------ -------- ------ -------- ------ -------- ------
Total distributions...... (0.00) (0.00) (0.94) (0.90) (0.77) (0.75) (0.08) (0.08)
-------- ------ -------- ------ -------- ------ -------- ------
Net asset value, end of
period....................... $ 17.98 $17.73 $ 15.15 $14.95 $ 13.10 $12.94 $ 11.38 $11.26
======== ====== ======== ====== ======== ====== ======== ======
TOTAL RETURN.................. 40.72%(4) 40.52%(4,5) 23.61% 23.26%(5) 22.64% 22.28%(5) 17.42%(4) 14.80%(4,5)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's)..................... $ 266,352 $7,630 $ 199,311 $4,929 $ 99,294 $4,702 $ 50,993 $3,567
Ratio of expenses to average
net assets................. 0.97%(4) 1.22%(4) 0.97% 1.22% 1.05%(1) 1.30%(2) 1.01%(1,4) 1.34%(2,4)
Ratio of net investment
income to average net
assets..................... 0.41%(4) 0.17%(4) 0.83% 0.57% 0.83%(1) 0.58%(2) 1.31%(1,4) 1.09%(2,4)
Portfolio turnover rate...... 52% 52% 64% 64% 106% 106% 69% 69%
Average commission rate...... $ 0.05 $0.05 $ 0.05 $0.05 $ 0.06 $0.06 -- --
</TABLE>
(1) The operating expense ratio and the net investment income ratio before fee
waivers by the Custodian for the Institutional class for the year ended May
31, 1996 would have been 1.06% and .82%, respectively. The operating expense
ratio and the net investment income ratio before fee waivers by the
Investment Adviser, Administrator and Custodian for the Institutional class
for the period ended May 31, 1995 would have been 1.15% and 1.17%,
respectively.
(2) The operating expense ratio and the net investment income ratio before fee
waivers by the Custodian for the Retail class for the year ended May 31,
1996 would have been 1.32% and .56%, respectively. The operating expense
ratio and the net investment income ratio before fee waivers by the
Investment Adviser, Administrator and Custodian for the Retail class for the
period ended May 31, 1995 would have been 1.38% and 1.05%, respectively.
(3) Institutional and Retail classes commenced operations on July 26, 1994 and
August 15, 1994, respectively.
(4) Annualized.
(5) Total return excludes sales charge.
See Accompanying Notes
33
<PAGE> 36
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA EQUITY GROWTH FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK -- 92.4%
AIRLINES -- 4.7%
AMR Corp.+ ............... 45,000 $ 5,453,437
Southwest Airlines Co..... 217,200 5,307,825
UAL Corp.+................ 56,000 4,760,000
------------
15,521,262
------------
AUTO-TRUCKS -- 0.6%
Ford Motor Co............. 45,000 1,935,000
------------
BANKING -- 2.4%
Comerica, Inc............. 30,000 2,555,625
Golden State Bancorp,
Inc.+.................... 35,000 1,165,937
MBNA Corp................. 150,000 3,984,375
------------
7,705,937
------------
BEVERAGES -- 0.7%
PepsiCo, Inc.............. 60,000 2,212,500
------------
BROADCASTING & PUBLISHING -- 2.2%
Time Warner, Inc.......... 121,000 7,048,250
------------
CHEMICALS -- 1.1%
Crompton & Knowles Corp... 40,000 1,060,000
E.I. DuPont de Nemours &
Co....................... 40,400 2,446,725
------------
3,506,725
------------
COMPUTERS -- 8.5%
Compaq Computer, Inc...... 20,000 1,248,750
Computer Associates
International, Inc....... 288,150 15,001,809
Digital Equipment
Corp.+................... 159,900 7,875,075
Microsoft Corp.+.......... 25,000 3,536,719
------------
27,662,353
------------
CONSUMER SERVICES -- 0.7%
CUC International,
Inc.+.................... 75,000 2,156,250
------------
CONSUMER STAPLES -- 1.7%
Gillette Co............... 20,000 1,846,250
Procter & Gamble Co....... 50,000 3,815,625
------------
5,661,875
------------
<CAPTION>
NUMBER
OF SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
DIVERSIFIED -- 0.7%
General Electric Co....... 30,000 $ 2,212,500
------------
ELECTRONICS -- 1.8%
Adaptec, Inc.............. 120,000 5,936,250
------------
FINANCIAL SERVICES -- 5.5%
Federal National Mortgage
Association.............. 10,000 528,125
Freddie Mac............... 106,800 4,405,500
Golden West Financial
Corp..................... 50,000 4,481,250
H.F. Ahmanson & Co........ 80,000 4,760,000
Norwest Corp.............. 36,600 1,370,212
Travelers Group, Inc...... 45,000 2,272,500
------------
17,817,587
------------
FOODS -- 0.7%
Campbell Soup Co.......... 40,000 2,240,000
------------
INSURANCE -- 7.6%
American International
Group, Inc............... 24,000 2,419,500
Conseco Inc............... 256,400 11,938,625
Jefferson-Pilot Corp...... 10,000 763,125
MGIC Investment Corp...... 35,000 2,045,313
SunAmerica, Inc........... 155,000 6,277,500
Torchmark Corp............ 35,000 1,428,438
------------
24,872,501
------------
MACHINERY & HEAVY EQUIPMENT -- 0.6%
Caterpillar, Inc.......... 20,000 958,750
Halliburton Co............ 20,000 1,078,750
------------
2,037,500
------------
MANUFACTURING -- 1.2%
Allied-Signal, Inc........ 10,000 371,250
Tyco International Ltd.... 88,000 3,454,000
------------
3,825,250
------------
</TABLE>
See Accompanying Notes
34
<PAGE> 37
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA EQUITY GROWTH FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
MEDICAL & MEDICAL SERVICES -- 3.3%
Guidant Corp.............. 25,000 $ 1,606,250
Healthsouth Corp.+........ 110,000 2,887,500
HBO & Co.................. 65,000 2,912,813
Warner-Lambert Co......... 25,000 3,496,875
------------
10,903,438
------------
METALS & MINING -- 0.5%
Trinity Industries,
Inc...................... 35,000 1,588,125
------------
OFFICE PERSONNEL -- 0.5%
Robert Half International
Inc.+.................... 37,500 1,464,844
------------
PAPER & FOREST PRODUCTS -- 0.7%
Fort James Corp........... 61,875 2,420,859
------------
PHARMACEUTICAL -- 11.0%
Abbott Labs............... 50,860 3,305,900
Bristol-Myers Squibb
Co....................... 80,000 7,490,000
Eli Lilly & Co............ 80,000 5,045,000
Mylan Laboratories Inc.... 225,000 4,992,187
Pfizer, Inc............... 80,000 5,820,000
Schering-Plough Corp...... 100,000 6,268,750
SmithKline Beecham........ 60,000 2,977,500
------------
35,899,337
------------
RETAIL FOOD CHAINS -- 1.5%
Kroger Co.+............... 120,000 4,132,500
Rainforest Cafe, Inc.+.... 25,000 896,875
------------
5,029,375
------------
RETAIL STORES -- 24.9%
CompUSA, Inc.+............ 10,000 365,625
Costco Companies, Inc.+... 185,000 8,209,375
CVS Corp.................. 81,500 5,409,563
Dayton Hudson Corp........ 70,000 4,650,625
Federated Department
Stores, Inc.+............ 190,000 8,656,875
<CAPTION>
NUMBER
OF SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
RETAIL STORES -- CONTINUED
General Nutrition Co.,
Inc+..................... 215,000 $ 7,350,313
Home Depot, Inc........... 156,000 8,726,250
Kohls Corp.+.............. 25,000 1,809,375
Lowe's Companies.......... 83,400 3,831,188
Rite Aid Corp............. 28,500 1,873,875
Safeway, Inc.+............ 170,000 10,327,500
Tandy Corp................ 174,000 7,482,000
Toys "R" Us, Inc.+........ 215,000 7,336,875
Walgreen Co............... 50,000 1,609,375
Wal-Mart Stores, Inc...... 90,000 3,594,375
------------
81,233,189
------------
SAVINGS & LOAN ASSOCIATIONS -- 1.1%
Dime Bancorp, Inc......... 100,000 2,425,000
GreenPoint Financial
Corp..................... 15,000 999,375
------------
3,424,375
------------
TELECOMMUNICATIONS -- 4.0%
AT&T Corp................. 20,000 1,117,500
Ericsson (LM) Telephone... 85,000 3,434,531
Lucent Technologies,
Inc...................... 60,000 4,807,500
Tele-Communications, Inc.-
Class A+................. 155,000 3,550,469
------------
12,910,000
------------
TOBACCO -- 0.5%
Philip Morris Co., Inc.... 40,000 1,740,000
------------
TRAVEL -- 0.8%
Carnival Corp. Class A.... 50,000 2,703,125
------------
UTILITIES-TELEPHONE -- 2.9%
Airtouch Communications,
Inc.+.................... 243,000 9,537,750
------------
TOTAL COMMON STOCK....................... 301,206,157
------------
(Cost $244,413,869)
</TABLE>
See Accompanying Notes
35
<PAGE> 38
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA EQUITY GROWTH FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------- ------------
<S> <C> <C>
RIGHTS -- 0.7%
FINANCIAL SERVICES -- 0.7%
Newcourt Credit Group..... 75,000 $ 2,345,562
------------
(Cost $2,442,997)
INVESTMENT COMPANIES -- 6.9%
Federated Investors Prime
Obligations Fund......... 16,157,756 16,157,756
Fidelity Domestic Market
Portfolio................ 6,398,984 6,398,984
------------
TOTAL INVESTMENT COMPANIES............... 22,556,740
------------
(Cost $22,556,740)
TOTAL INVESTMENTS -- 100.0%.............. $326,108,459
============
(Cost $269,413,606*)
</TABLE>
- ---------------
<TABLE>
<S> <C> <C>
*Cost for Federal income tax purposes -- $269,745,854
The gross unrealized appreciation (depreciation)
for Federal income tax purposes is as follows:
Gross appreciation................... $ 57,411,142
Gross depreciation................... (1,048,537)
------------
$ 56,362,605
------------
+Non-income producing security.
</TABLE>
See Accompanying Notes
36
<PAGE> 39
LOGO FINANCIAL HIGHLIGHTS
ARMADA EQUITY GROWTH FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED MAY 31,
MONTHS ENDED ----------------------------------------------------------------------
NOVEMBER 30, 1997
(UNAUDITED) 1997 1996 1995
--------------------- ---------------------- --------------------- ---------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL
------------- ------ ------------- ------ ------------- ------ ------------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 18.63 $18.67 $ 18.02 $18.05 $ 14.77 $14.79 $ 13.66 $13.68
-------- ------ --------- ------ --------- ------ --------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income......... 0.00 0.00 0.09 0.05 0.14 0.10 0.21 0.18
Net gain on securities
(realized and unrealized)... 3.06 3.04 4.66 4.66 3.46 3.47 1.21 1.21
-------- ------ --------- ------ --------- ------ --------- ------
Total from investment
operations............... 3.06 3.04 4.75 4.71 3.60 3.57 1.42 1.39
-------- ------ --------- ------ --------- ------ --------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income...................... (0.00) (0.00) (0.09) (0.05) (0.14) (0.10) (0.20) (0.17)
Dividends in excess of net
investment income........... (0.01) (0.00) (0.02) (0.01) (0.02) (0.02) (0.00) (0.00)
Dividends from net realized
capital gains............... (0.00) (0.00) (4.03) (4.03) (0.19) (0.19) (0.00) (0.00)
Dividends in excess of net
realized capital gains...... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.11) (0.11)
-------- ------ --------- ------ --------- ------ --------- ------
Total distributions........ (0.01) (0.00) (4.14) (4.09) (0.35) (0.31) (0.31) (0.28)
-------- ------ --------- ------ --------- ------ --------- ------
Net asset value, end of
period........................ $ 21.68 $21.71 $ 18.63 $18.67 $ 18.02 $18.05 $ 14.77 $14.79
======== ====== ========= ====== ========= ====== ========= ======
TOTAL RETURN................... 35.39%(4) 35.11%(3,4) 29.57% 29.24%(3) 24.61% 24.34%(3) 10.62% 10.35%(3)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's)...................... $308,884 $8,375 $ 255,594 $6,931 $ 166,671 $6,013 $ 119,634 $5,974
Ratio of expenses to average
net assets.................. 0.98%(4) 1.23%(4) 0.97% 1.22% 1.01%(1) 1.26%(2) 1.01%(1) 1.27%(2)
Ratio of net investment
income/(loss) to average net
assets...................... (0.02)%(4) (0.27)%(4) 0.49% 0.25% 0.85%(1) 0.60%(2) 1.53%(1) 1.23%(2)
Portfolio turnover rate....... 115% 115% 197% 197% 74% 74% 17% 17%
Average commission rate....... $ 0.06 $ 0.06 $ 0.05 $ 0.05 $ 0.06 $ 0.06 -- --
<CAPTION>
1994 1993
--------------------- ----------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL
------------- ------ ------------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 13.78 $13.80 $ 13.13 $13.13
-------- ------ ------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income......... 0.18 0.15 0.27 0.23
Net gain on securities
(realized and unrealized)... 0.01 0.00 0.67 0.68
-------- ------ ------- ------
Total from investment
operations............... 0.19 0.15 0.94 0.91
-------- ------ ------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income...................... (0.18) (0.15) (0.27) (0.23)
Dividends in excess of net
investment income........... (0.01) (0.00) (0.02) (0.01)
Dividends from net realized
capital gains............... (0.11) (0.11) (0.00) (0.00)
Dividends in excess of net
realized capital gains...... (0.01) (0.01) (0.00) (0.00)
-------- ------ ------- ------
Total distributions........ (0.31) (0.27) (0.29) (0.24)
-------- ------ ------- ------
Net asset value, end of
period........................ $ 13.66 $13.68 $ 13.78 $13.80
======== ====== ======= ======
TOTAL RETURN................... 1.41% 1.12%(3) 7.20% 7.00%(3)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's)...................... $ 90,446 $7,521 $85,256 $7,707
Ratio of expenses to average
net assets.................. 1.07% 1.32% 0.34%(1) 0.59%(2)
Ratio of net investment
income/(loss) to average net
assets...................... 1.33% 1.08% 2.13%(1) 1.88%(2)
Portfolio turnover rate....... 15% 15% 15% 15%
Average commission rate....... -- -- -- --
</TABLE>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Custodian for the Institutional class for the years ended May
31, 1996 and 1995 would have been 1.03% and .83%, and 1.02% and 1.51%,
respectively. The operating expense ratio and the net investment income
ratio before fee waivers by the Investment Advisers for the Institutional
class for the year ended May 31, 1993 would have been 1.01% and 1.46%,
respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Custodian for the Retail class for the years ended May 31,
1996 and 1995 would have been 1.28% and .58%, and 1.28% and 1.22%,
respectively. The operating expense ratio and the net investment income
ratio before fee waivers by the Investment Advisers for the Retail class for
the year ended May 31, 1993 would have been 1.26% and 1.21%, respectively.
(3) Total return excludes sales charge.
(4) Annualized.
See Accompanying Notes
37
<PAGE> 40
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA CORE EQUITY FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- 98.3%
ADVERTISING -- 4.2%
Interpublic Group of Co's.,
Inc....................... 39,085 $ 1,873,637
Omnicom Group, Inc......... 33,700 2,498,012
------------
4,371,649
------------
BANKING -- 5.8%
Banc One Corp.............. 22,900 1,176,487
Chase Manhattan Corp....... 12,930 1,404,521
Commerce Bancshares,
Inc....................... 26,116 1,622,432
First Union Corp........... 38,000 1,852,500
------------
6,055,940
------------
BUILDING & BUILDING SUPPLIES -- 1.0%
Sherwin Williams Co........ 38,050 1,086,803
------------
BUSINESS SERVICES -- 5.1%
Automatic Data Processing,
Inc....................... 24,760 1,392,750
Cintas Corp................ 40,700 1,589,844
Computer Sciences Corp.+... 29,970 2,373,249
------------
5,355,843
------------
CHEMICALS --3.9%
Dow Chemical Co............ 15,700 1,550,375
E.I. DuPont de Nemours &
Co........................ 21,150 1,280,897
Eastman Chemical Co........ 21,160 1,277,535
------------
4,108,807
------------
CONSUMER STAPLES --2.8%
Procter & Gamble Co........ 37,840 2,887,665
------------
DIVERSIFIED --2.5%
General Electric Co........ 35,930 2,649,837
------------
ELECTRICAL EQUIPMENT -- 3.0%
Emerson Electric Co........ 31,792 1,748,560
Hubbell, Inc............... 31,696 1,440,187
------------
3,188,747
------------
FINANCIAL SERVICES -- 2.4%
Federal National Mortgage
Association............... 47,870 2,528,134
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
FOODS -- 3.4%
Conagra, Inc............... 61,740 $ 2,218,781
Sara Lee Corp.............. 25,200 1,332,450
------------
3,551,231
------------
HOME FURNISHINGS & HOUSEWARES -- 1.9%
Newell Co.................. 49,570 2,023,076
------------
INSURANCE -- 9.8%
Aflac, Inc.+............... 3,620 166,973
American International
Group, Inc................ 27,330 2,755,206
MBIA, Inc.................. 16,540 1,039,953
PMI Group, Inc............. 41,610 2,704,650
The Chubb Corp............. 28,540 2,024,556
Travelers Group, Inc....... 32,910 1,661,955
------------
10,353,293
------------
MEDICAL & MEDICAL SERVICES -- 1.2%
United Healthcare Corp..... 24,200 1,259,913
------------
MEDICAL INSTITUTION SUPPLIES -- 2.2%
Boston Scientific Corp.+... 15,910 718,933
Medtronic, Inc............. 34,250 1,635,438
------------
2,354,371
------------
OFFICE EQUIPMENT -- 1.0%
Pitney Bowes, Inc.......... 12,950 1,088,609
------------
OIL & GAS -- 6.6%
Amoco Corp................. 15,320 1,378,800
Exxon Corp................. 25,890 1,579,290
Mobil Corp................. 26,180 1,883,324
Texaco Inc................. 36,820 2,080,330
------------
6,921,744
------------
PAPER & FOREST PRODUCTS -- 1.4%
Georgia Pacific Corp....... 17,800 1,519,675
------------
</TABLE>
See Accompanying Notes
38
<PAGE> 41
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA CORE EQUITY FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
PHARMACEUTICAL -- 12.8%
Abbott Laboratories........ 40,030 $ 2,601,950
American Home Products
Corp...................... 21,620 1,510,697
Bristol-Myers Squibb Co.... 27,420 2,567,197
Johnson & Johnson.......... 4,160 261,820
Merck & Co., Inc........... 34,370 3,250,113
Pfizer, Inc................ 20,630 1,500,833
Schering-Plough Corp....... 27,500 1,723,906
------------
13,416,516
------------
RAILROADS -- 1.3%
CSX Corp................... 26,520 1,387,328
------------
RESIDENTIAL CONSTRUCTION -- 1.2%
Centex Corp................ 11,730 743,389
Pulte Corp................. 12,960 525,690
------------
1,269,079
------------
RETAIL STORES -- 2.8%
Home Depot, Inc............ 30,390 1,699,941
Wal-Mart Stores, Inc....... 30,980 1,237,264
------------
2,937,205
------------
SPECIALTY CHEMICALS -- 2.1%
Sigma Aldrich Corp......... 62,190 2,231,066
------------
STEEL -- 0.5%
Worthington Industries,
Inc....................... 26,230 473,779
------------
TECHNOLOGY -- 12.5%
Altera Corp.+.............. 19,780 927,188
Applied Materials, Inc.+... 30,090 992,030
Cisco Systems, Inc.+ 28,020 2,415,849
Intel Corp................. 24,740 1,921,216
Lam Research Corp.+........ 26,110 797,987
Linear Technology Corp..... 21,140 1,359,566
Maxim Integrated Products,
Inc.+..................... 16,940 1,170,448
Microsoft Corp.+........... 15,000 2,136,178
Teradyne, Inc.+............ 41,920 1,375,500
------------
13,095,962
------------
NUMBER
OF SHARES VALUE
--------- ------------
COMMON STOCK -- CONTINUED
TELECOMMUNICATIONS -- 0.9%
Lucent Technologies,
Inc....................... 11,904 $ 953,808
------------
TOBACCO -- 2.6%
Philip Morris Co., Inc..... 61,820 2,689,170
------------
UTILITIES-ELECTRIC -- 1.3%
Allegheny Energy Inc....... 31,710 961,209
Wisconsin Energy Corp...... 16,565 447,255
------------
1,408,464
------------
UTILITIES-TELEPHONE -- 2.1%
Ameritech Corp............. 14,130 1,088,893
BellSouth Corp............. 21,220 1,161,795
------------
2,250,688
------------
TOTAL COMMON STOCK....................... 103,418,402
------------
(Cost $103,524,673)
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR(000)
-------- ----------
<S> <C> <C> <C>
CONVERTIBLE BOND -- 1.3%
Automatic Data Processing, Inc.
0.00%........ 02/20/02 $ 1,910 1,411,013
------------
(Cost
$1,234,103)
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
----------
<S> <C> <C> <C>
INVESTMENT COMPANIES -- 0.4%
Goldman Sachs Financial
Square Premium.......... 383,144 383,144
------------
(Cost
$383,144)
TOTAL INVESTMENTS -- 100.0% $105,212,559
============
(Cost
$105,141,920*)
- ---------------
* Cost for Federal income tax purposes -- $105,292,691
The gross unrealized appreciation (depreciation) for
federal income tax purposes is as follows:
Gross appreciation..................... $ 4,366,096
Gross depreciation..................... (4,446,228)
------------
$ (80,132)
------------
+Non-income producing security.
</TABLE>
See Accompanying Notes
39
<PAGE> 42
LOGO FINANCIAL HIGHLIGHTS
ARMADA CORE EQUITY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE FOUR MONTHS
ENDED NOVEMBER 30, 1997
--------------------------
INSTITUTIONAL(5) RETAIL(5)
-------------- -------
<S> <C> <C>
Net asset value, beginning of period................................... $ 10.00 $ 10.00
-------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................................ 0.03 0.01
Net gain on securities (realized and unrealized)..................... 0.00 0.02
-------- -------
Total from investment operations................................ 0.03 0.03
-------- -------
LESS DISTRIBUTIONS
Dividends from net investment income................................. (0.02) (0.02)
-------- -------
Total distributions............................................. (0.02) (0.02)
-------- -------
Net asset value, end of period......................................... $ 10.01 $ 10.01
======== =======
TOTAL RETURN........................................................... 0.95%(4) 0.94%(3,4)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)................................. $105,199 $ 82
Ratio of expenses to average net assets.............................. 0.78%(1,4) 1.03%(2,4)
Ratio of net investment income to average net assets................. 0.86%(1,4) 0.61%(2,4)
Portfolio turnover rate.............................................. 17% 17%
Average commission rate.............................................. $ 0.06 $ 0.06
</TABLE>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Adviser and Administrator for the Institutional
class for the period ended November 30, 1997 would have been 1.06% and .57%,
respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Adviser and Administrator for the Retail class for
the period ended November 30, 1997 would have been 1.32% and .32%,
respectively.
(3) Total return excludes sales charge.
(4) Annualized.
(5) Institutional and Retail classes both commenced operations on August 1,
1997.
See Accompanying Notes
40
<PAGE> 43
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA EQUITY INCOME FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- 92.2%
AEROSPACE -- 3.8%
General Dynamics Corp. ...... 29,800 $ 2,581,425
Northrop Grumman Corp. ...... 28,300 3,190,825
United Technologies Corp. ... 6,400 479,600
------------
6,251,850
------------
AUTO - TRUCKS -- 2.4%
Chrysler Corp. .............. 32,300 1,108,294
Ford Motor Co. .............. 67,600 2,906,800
------------
4,015,094
------------
AUTOMOTIVE PARTS -- EQUIPMENT -- 1.2%
Genuine Parts Co. ........... 63,300 2,025,600
------------
BANKING -- 17.1%
Banc One Corp. .............. 80,700 4,145,962
BankBoston Corp. ............ 9,300 828,862
Bankers Trust New York
Corp. ...................... 22,200 2,632,087
First Union Corp. ........... 62,500 3,046,875
Fleet Financial Group,
Inc. ....................... 42,600 2,814,262
J.P. Morgan & Co., Inc. ..... 21,200 2,420,775
Mellon Bank Corp. ........... 48,500 2,749,344
Norwest Corp. ............... 92,400 3,459,225
PNC Bank Corp. .............. 47,300 2,545,331
Wachovia Corp. .............. 46,100 3,549,700
------------
28,192,423
------------
BUILDING & BUILDING SUPPLIES -- 3.0%
Armstrong World Industries,
Inc. ....................... 20,200 1,392,537
Masco Corp. ................. 76,100 3,586,212
------------
4,978,749
------------
BUSINESS SERVICES -- 0.4%
Dun & Bradstreet Corp. ...... 20,900 585,200
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
CHEMICALS -- 5.6%
BetzDearborn, Inc. .......... 30,700 $ 1,868,862
Dow Chemical Co. ............ 11,900 1,175,125
E.I. DuPont de Nemours &
Co. ........................ 47,200 2,858,550
Rpm, Inc. OH................. 143,200 2,859,525
WD-40 Co. ................... 16,200 438,412
------------
9,200,474
------------
DIVERSIFIED -- 2.6%
General Electric Co. ........ 20,800 1,534,000
Minnesota Mining &
Manufacturing Co. .......... 20,900 2,036,444
Textron, Inc. ............... 12,100 715,412
------------
4,285,856
------------
DIVERSIFIED CONSUMER PRODUCTS -- 1.1%
Fortune Brands, Inc. ........ 52,900 1,914,319
------------
ELECTRICAL EQUIPMENT -- 3.3%
Cooper Industries, Inc. ..... 29,400 1,517,775
Hubbell, Inc. ............... 44,900 2,040,144
Thomas & Betts Corp. ........ 40,800 1,851,300
------------
5,409,219
------------
FINANCIAL SERVICES -- 2.0%
Beneficial Corp. ............ 12,800 993,600
Federal National Mortgage
Association................. 43,100 2,276,219
------------
3,269,819
------------
FOOD & BEVERAGE -- 1.3%
General Mills, Inc. ......... 28,800 2,131,200
------------
HOME APPLIANCES -- 0.8%
Maytag Corp. ................ 43,400 1,402,362
------------
</TABLE>
See Accompanying Notes
41
<PAGE> 44
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA EQUITY INCOME FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
INSURANCE -- 3.0%
Cigna Corp. ................. 10,100 $ 1,689,225
Marsh & McLennan Cos.,
Inc. ....................... 32,600 2,426,663
The Chubb Corp. ............. 11,702 830,111
------------
4,945,999
------------
MACHINERY & HEAVY EQUIPMENT -- 0.5%
Caterpillar, Inc. ........... 16,500 790,969
------------
METALS & MINING -- 1.4%
Aluminum Company of America.. 18,700 1,257,575
USX-U.S. Steel Group,
Inc. ....................... 31,800 995,738
------------
2,253,313
------------
OFFICE & BUSINESS EQUIPMENT -- 1.6%
Pitney Bowes, Inc. .......... 10,200 857,438
Xerox Corp. ................. 22,300 1,732,431
------------
2,589,869
------------
OIL & GAS -- 15.9%
Atlantic Richfield Co. ...... 41,700 3,398,550
Chevron Corp. ............... 71,300 5,717,369
Exxon Corp. ................. 76,300 4,654,300
Mobil Corp. ................. 55,700 4,006,919
Royal Dutch Petroleum Co. ... 68,500 3,609,094
Texaco Inc. ................. 86,600 4,892,900
------------
26,279,132
------------
PAPER & FOREST PRODUCTS -- 1.0%
Weyerhaeuser Co. ............ 30,100 1,589,656
------------
PHARMACEUTICAL -- 1.3%
Bristol-Myers Squibb Co. .... 22,300 2,087,837
------------
RAILROADS -- 1.2%
Union Pacific Corp. ......... 32,600 1,956,000
------------
REAL ESTATE -- 4.0%
Arden Realty Group........... 47,500 1,445,781
California Realty Corp. ..... 20,000 793,750
Duke Realty Investments
Inc. ....................... 133,600 3,072,800
Sun Communities, Inc. ....... 36,000 1,311,750
------------
6,624,081
------------
NUMBER
OF SHARES VALUE
--------- ------------
COMMON STOCK -- CONTINUED
RETAIL MERCHANDISING -- 4.1%
Intimate Brands, Inc. ....... 59,700 $ 1,339,519
May Department Stores Co. ... 42,400 2,279,000
Penney, J.C. Co. ............ 49,700 3,193,225
------------
6,811,744
------------
TELECOMMUNICATIONS -- 0.6%
AT&T Corp. .................. 17,000 949,875
------------
TOBACCO -- 0.4%
UST, Inc. ................... 24,200 747,175
------------
UTILITIES -- ELECTRIC -- 4.6%
American Water Works Co.,
Inc. ....................... 20,900 599,569
Consolidated Edison Co.,
Inc. ....................... 63,500 2,397,125
Dominion Resources, Inc. .... 44,300 1,722,163
Florida Progress Corp. ...... 23,600 836,325
Kansas City Power & Light
Co. ........................ 10,500 301,875
Wisconsin Energy Corp. ...... 62,200 1,679,400
------------
7,536,457
------------
UTILITIES -- GAS & ELECTRIC -- 0.7%
LG&E Energy Corp. ........... 51,800 1,159,025
------------
UTILITIES -- TELEPHONE -- 6.2%
Ameritech Corp. ............. 43,100 3,321,394
Bell Atlantic Corp. ......... 19,364 1,728,237
BellSouth Corp. ............. 42,300 2,315,925
GTE Corp. ................... 56,900 2,877,006
------------
10,242,562
------------
</TABLE>
See Accompanying Notes
42
<PAGE> 45
LOGO PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997 ARMADA EQUITY INCOME FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK -- CONTINUED
WASTE COLLECTION & DISPOSAL -- 1.1%
Browning-Ferris Industries,
Inc. ....................... 37,400 $ 1,334,713
Ogden Corp. ................. 19,300 513,863
------------
1,848,576
------------
TOTAL COMMON STOCK..................... 152,074,435
------------
(Cost $119,025,513)
PREFERRED STOCK -- 2.3%
FINANCIAL -- 0.9%
American General Delaware
L.L.C. ..................... 22,500 1,575,000
------------
METALS & MINING -- 0.3%
Cyprus AMAX Minerals
Convertible Preferred....... 9,600 489,600
------------
PAPER & FOREST PRODUCTS -- 1.1%
International Paper Co.
5.25%....................... 34,600 1,790,550
------------
TOTAL PREFERRED STOCK.................. 3,855,150
------------
(Cost $3,567,227)
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
---------- --------- ------------
<S> <C> <C> <C>
CONVERTIBLE BOND -- 2.1%
OIL & GAS -- 2.1%
Consolidated Natural Gas,
7.25%........... 12/15/15 $ 2,980 $ 3,486,600
------------
(Cost $3,318,633)
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
---------
<S> <C> <C>
INVESTMENT COMPANIES -- 3.4%
Fidelity Domestic Market
Portfolio................... 5,601,427 5,601,427
------------
(Cost $5,601,427)
TOTAL INVESTMENTS -- 100.0%............ $165,017,612
============
(Cost $131,512,800*)
- ---------------
* Cost for Federal income tax purposes -- $131,530,373.
The gross unrealized appreciation (depreciation) for
Federal income tax purposes is as follows:
Gross appreciation..................... $ 33,718,182
Gross depreciation..................... (230,943)
------------
$ 33,487,239
------------
</TABLE>
See Accompanying Notes
43
<PAGE> 46
LOGO FINANCIAL HIGHLIGHTS
ARMADA EQUITY INCOME FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED NOVEMBER 30, FOR THE YEAR ENDED MAY 31, FOR THE PERIOD
1997 ----------------------------------------------- ENDED MAY 31,
(UNAUDITED) 1997 1996 1995
---------------------- --------------------- ---------------------- ------------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL(3) RETAIL(3)
------------- ------ ------------- ------ ------------- ------ ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 14.87 $14.86 $ 12.66 $12.65 $ 11.01 $11.01 $ 10.00 $10.26
--------- ------ --------- ------ -------- ------ -------- ------
INCOME FROM INVESTMENT-
OPERATIONS
Net investment income........ 0.16 0.14 0.30 0.31 0.34 0.33 0.34 0.26
Net gain on securities
(realized and
unrealized)................ 1.87 1.87 2.73 2.68 1.79 1.77 0.94 0.75
--------- ------ --------- ------ -------- ------ -------- ------
Total from investment
operations............. 2.03 2.01 3.03 2.99 2.13 2.10 1.28 1.01
--------- ------ --------- ------ -------- ------ -------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income..................... (0.17) (0.15) (0.31) (0.27) (0.34) (0.32) (0.27) (0.26)
Dividends from net realized
capital gains.............. (0.00) (0.00) (0.51) (0.51) (0.14) (0.14) (0.00) (0.00)
--------- ------ --------- ------ -------- ------ -------- ------
Total distributions...... (0.17) (0.15) (0.82) (0.78) (0.48) (0.46) (0.27) (0.26)
--------- ------ --------- ------ -------- ------ -------- ------
Net asset value, end of
period....................... $ 16.73 $16.72 $ 14.87 $14.86 $ 12.66 $12.65 $ 11.01 $11.01
========= ====== ========= ====== ======== ====== ======== ======
TOTAL RETURN.................. 29.08%(4) 28.81(4,5) 24.62% 24.33%(5) 19.72% 19.37%(5) 14.34%(4) 13.18%(4,5)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's)..................... $ 163,887 $ 758 $ 127,130 $ 410 $ 61,978 $ 263 $ 36,194 $ 125
Ratio of expenses to average
net assets................. 1.02%(4) 1.27%(4) 1.01% 1.26% 1.06%(1) 1.31%(2) 0.99%(1,4) 1.41%(2,4)
Ratio of net investment
income to average net
assets..................... 2.08%(4) 1.83%(4) 2.44% 2.17% 3.02%(1) 2.75%(2) 3.87%(1,4) 3.45%(2,4)
Portfolio turnover rate...... 12% 12% 35% 35% 53% 53% 12% 12%
Average commission rate...... $ 0.06 $ 0.06 $ 0.05 $ 0.05 $ 0.07 $ 0.07 -- --
</TABLE>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Custodian for the Institutional class for the year ended May
31, 1996 would have been 1.08% and 3.00%, respectively. The operating
expense ratio and the net investment income ratio before fee waivers by the
Investment Advisers, Administrator, and Custodian for the Institutional
class for the period ended May 31, 1995 would have been 1.21% and 3.66%,
respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Custodian for the Retail class for the year ended May 31,
1996 would have been 1.32% and 2.74%, respectively. The operating expense
ratio and the net investment income ratio before fee waivers by the
Investment Advisers, Administrator, and Custodian for the Retail class for
the period ended May 31, 1995 would have been 1.45% and 3.40%, respectively.
(3) Institutional and Retail classes commenced operations on July 1, 1994 and
August 22, 1994, respectively.
(4) Annualized.
(5) Total return excludes sales charge.
See Accompanying Notes
44
<PAGE> 47
LOGO FINANCIAL STATEMENTS
ARMADA FUNDS EQUITY SERIES
NOVEMBER 30, 1997
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP SMALL CAP EQUITY CORE EQUITY
EQUITY FUND GROWTH FUND VALUE FUND GROWTH FUND EQUITY FUND INCOME FUND
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at value (Cost
$94,662,344, $30,267,852,
$229,864,052, $269,413,606,
$105,141,920 and $131,512,800,
respectively)................. $89,773,084 $31,019,264 $268,834,764 $326,108,459 $105,212,559 $165,017,612
Interest, dividends, and
reclaims receivable........... 187,760 2,059 415,925 276,002 157,269 624,346
Receivable for Fund shares
sold.......................... 500 500 85,933 101,571 -- 59,728
Receivable for investments
sold.......................... -- 13,962 5,212,343 1,541,053 161,542 --
Prepaid expenses............... -- -- 10,970 3,406 -- 11,448
----------- ------------ ------------ ------------ ------------ ------------
TOTAL ASSETS................... 89,961,344 31,035,785 274,559,935 328,030,491 105,531,370 165,713,134
----------- ------------ ------------ ------------ ------------ ------------
LIABILITIES
Payable for Fund shares
redeemed...................... 24,433 35,211 52,212 119,698 -- 96,971
Payable for investments
purchased..................... 908,499 129,389 284,075 10,294,189 164,797 809,177
Accrued expenses............... 86,741 22,979 241,453 356,892 85,615 162,537
----------- ------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES.............. 1,019,673 187,579 577,740 10,770,779 250,412 1,068,685
----------- ------------ ------------ ------------ ------------ ------------
NET ASSETS..................... $88,941,671 $30,848,206 $273,982,195 $317,259,712 $105,280,958 $164,644,449
=========== ============ ============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital................ $95,624,094 $29,951,503 $195,502,088 $205,957,015 $105,147,400 $123,344,265
Undistributed/accumulated net
investment income/(loss)...... 209,315 27,088 1,024,069 (96,509) 70,796 567,932
Undistributed net realized
gain/(loss) on investments
sold.......................... (1,972,586) 118,203 38,247,016 54,735,878 (7,877) 7,227,440
Accumulated net realized loss
on foreign currency
transactions.................. (25,805) -- -- -- -- --
Undistributed net realized gain
on futures sold............... -- -- 238,310 15,575 -- --
Net unrealized
appreciation/(depreciation) on
investments................... (4,889,260) 751,412 38,970,712 56,694,853 70,639 33,504,812
Net unrealized depreciation on
translation of assets and
liabilities denominated in
foreign currencies............ (4,087) -- -- -- -- --
Net unrealized depreciation on
futures....................... -- -- -- (47,100) -- --
----------- ------------ ------------ ------------ ------------ ------------
$88,941,671 $30,848,206 $273,982,195 $317,259,712 $105,280,958 $164,644,449
=========== ============ ============ ============ ============ ============
Net Assets -- Institutional
class......................... $88,938,021 $30,838,494 $266,351,844 $308,884,226 $105,199,042 $163,886,921
Shares
outstanding -- Institutional
class......................... 9,647,135 2,944,822 14,811,832 14,249,915 10,507,465 9,796,353
Net asset value, Offering price
and Redemption price per
share- Institutional class.... $ 9.22 $ 10.47 $ 17.98 $ 21.68 $ 10.01 $ 16.73
=========== ============ ============ ============ ============ ============
Net Assets -- Retail class..... $ 3,650 $ 9,712 $ 7,630,351 $ 8,375,486 $ 81,916 $ 757,528
Shares outstanding -- Retail
class......................... 396 928 430,366 385,878 8,186 45,317
Net asset value and Redemption
price per share -- Retail
class......................... $ 9.22 $ 10.47 $ 17.73 $ 21.71 $ 10.01 $ 16.72
=========== ============ ============ ============ ============ ============
Maximum sales charge- Retail
class......................... 3.75% 3.75% 3.75% 3.75% 3.75% 3.75%
Maximum offering price per
Retail share.................. $ 9.58 $ 10.88 $ 18.42 $ 22.56 $ 10.40 $ 17.37
=========== ============ ============ ============ ============ ============
</TABLE>
See Accompanying Notes
45
<PAGE> 48
LOGO FINANCIAL STATEMENTS
ARMADA FUNDS EQUITY SERIES
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP SMALL CAP EQUITY CORE EQUITY
EQUITY GROWTH VALUE GROWTH EQUITY INCOME
FUND(1) FUND(1) FUND FUND FUND(1) FUND
------------- --------- ----------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends...................... $ 401,058 $ 40,407 $ 1,517,938 $ 1,111,702 $552,890 $ 2,260,101
Interest....................... 119,694 70,587 214,458 331,167 10,124 67,950
Less foreign taxes withheld.... (36,405) -- -- -- -- --
----------- -------- ----------- ----------- --------- -----------
Total investment income........ 484,347 110,994 1,732,396 1,442,869 563,014 2,328,051
----------- -------- ----------- ----------- --------- -----------
EXPENSES:
Investment Advisory fees....... 210,300 65,670 935,947 1,122,775 258,295 555,574
Custodian fees................. 60,480 1,809 17,672 20,328 6,807 12,433
Administration fees............ 28,040 8,760 118,666 137,346 34,439 74,076
Registration and filing fees... 19,708 5,058 21,745 56,263 25,001 29,138
12b-1 fees..................... 11,216 3,503 49,917 59,881 13,776 29,631
Transfer Agent fees............ 8,971 4,330 23,373 36,195 8,473 29,919
Distribution fees.............. 5,676 1,379 21,757 15,282 7,501 11,182
Miscellaneous.................. 2,978 321 2,434 1,107 4,758 4,905
Legal fees..................... 2,432 609 8,700 6,358 3,054 4,685
Audit fees..................... 2,358 799 5,562 5,507 2,474 5,527
Printing and shareholder
reports....................... 679 169 2,193 1,775 855 4,898
Trustees' fees................. 641 160 2,820 3,639 806 1,803
Insurance...................... 375 95 1,664 2,224 469 1,090
Shareholder servicing fees-
Retail class only............. 2 4 7,673 9,763 28 606
Amortization of organization
costs......................... -- -- 1,870 -- -- 2,226
Fees waived by Administrator... (28,040) (8,760) -- -- (34,439) --
Fees waived by Investment
Adviser....................... (50,784) -- -- -- (64,683) --
----------- -------- ----------- ----------- --------- -----------
Total expenses................. 275,032 83,906 1,221,993 1,478,443 267,614 767,693
----------- -------- ----------- ----------- --------- -----------
NET INVESTMENT INCOME/(LOSS)... 209,315 27,088 510,403 (35,574) 295,400 1,560,358
----------- -------- ----------- ----------- --------- -----------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
Net realized gain/(loss) on
investments sold.............. (1,972,586) 118,203 28,959,107 37,831,606 (7,877) 3,723,613
Net realized loss on foreign
currency transactions......... (25,805) -- -- -- -- --
Net realized gain on futures... -- -- 84,050 15,575 -- --
Net change in unrealized
appreciation/depreciation on
investments................... (4,889,260) 751,412 10,082,047 5,523,933 70,639 12,654,698
Net change in unrealized
depreciation on translation of
assets and liabilities
denominated in foreign
currencies.................... (4,087) -- -- -- -- --
Net change in unrealized
appreciation/depreciation on
futures....................... -- -- (74,975) (47,100) -- --
----------- -------- ----------- ----------- --------- -----------
Net gain/(loss) on
investments................... (6,891,738) 869,615 39,050,229 43,324,014 62,762 16,378,311
----------- -------- ----------- ----------- --------- -----------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................... $(6,682,423) $896,703 $39,560,632 $43,288,440 $358,162 $17,938,669
=========== ======== =========== =========== ========= ===========
</TABLE>
(1) Fund commenced operations on August 1, 1997.
See Accompanying Notes
46
<PAGE> 49
LOGO FINANCIAL STATEMENTS
ARMADA FUNDS EQUITY SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP CORE
EQUITY FUND GROWTH FUND SMALL CAP VALUE FUND EQUITY GROWTH FUND EQUITY FUND
------------ ------------ -------------------------- -------------------------- ------------
FOR THE FOUR FOR THE FOUR FOR THE SIX FOR THE SIX FOR THE FOUR
MONTHS ENDED MONTHS ENDED MONTHS ENDED FOR THE MONTHS ENDED FOR THE MONTHS ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1997(1) 1997(1) 1997 MAY 31, 1997 MAY 31, 1997(1)
(UNAUDITED) (UNAUDITED) (UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED)
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET
ASSETS:
Operations:
Net investment income/(loss)... $ 209,315 $ 27,088 $ 510,403 $ 1,081,496 $ (35,574) $ 1,039,079 $ 295,400
Net realized gain/(loss) on
investments sold.............. (1,972,586) 118,203 28,959,107 12,634,349 37,831,606 47,980,337 (7,877)
Net realized loss on foreign
currency transactions......... (25,805) -- -- -- -- -- --
Net realized gain on futures... -- -- 84,050 154,260 15,575 -- --
Net change in unrealized
appreciation/(depreciation) on
investments................... (4,889,260) 751,412 10,082,047 17,865,311 5,523,933 14,208,938 70,639
Net change in unrealized
depreciation on translation of
assets and liabilities
denominated in foreign
currencies.................... (4,087) -- -- -- -- -- --
Net change in unrealized
appreciation/(depreciation) on
futures....................... -- -- (74,975) 74,975 (47,100) -- --
----------- ----------- ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in net
assets resulting from
operations.................... (6,682,423) 896,703 39,560,632 31,810,391 43,288,440 63,228,354 358,162
----------- ----------- ------------ ------------ ------------ ------------ ------------
Distributions to shareholders
from net investment income.... -- -- -- (819,335) -- (1,039,079) (224,604)
Distributions to shareholders
in excess of net investment
income........................ -- -- -- -- (76,919) (173,123) --
Distributions to shareholders
from net realized capital
gains......................... -- -- -- (7,938,420) -- (46,984,255) --
Increase in net assets derived
from capital share
transactions.................. 95,624,094 29,951,503 30,181,751 77,191,102 11,522,700 74,810,230 105,147,400
----------- ----------- ------------ ------------ ------------ ------------ ------------
Total increase in net assets... 88,941,671 30,848,206 69,742,383 100,243,738 54,734,221 89,842,127 105,280,958
----------- ----------- ------------ ------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period............ 0 0 204,239,812 103,996,074 262,525,491 172,683,364 0
----------- ----------- ------------ ------------ ------------ ------------ ------------
End of period.................. $88,941,671 $30,848,206 $273,982,195 $204,239,812 $317,259,712 $262,525,491 $105,280,958
=========== =========== ============ ============ ============ ============ ============
END OF PERIOD UNDISTRIBUTED/
ACCUMULATED NET INVESTMENT
INCOME/(LOSS)................. $ 209,315 $ 27,088 $ 1,024,069 $ 513,666 $ (96,509) $ 15,984 $ 70,796
=========== =========== =========== ============ ============ ============ ============
<CAPTION>
EQUITY INCOME FUND
--------------------------
FOR THE SIX
MONTHS ENDED FOR THE
NOVEMBER 30, YEAR ENDED
1997 MAY 31,
(UNAUDITED) 1997
------------ ------------
<S> <C> <C>
INCREASE/(DECREASE) IN NET
ASSETS:
Operations:
Net investment income/(loss)... $ 1,560,358 $ 2,176,946
Net realized gain/(loss) on
investments sold.............. 3,723,613 4,439,199
Net realized loss on foreign
currency transactions......... -- --
Net realized gain on futures... -- --
Net change in unrealized
appreciation/(depreciation) on
investments................... 12,654,698 13,884,617
Net change in unrealized
depreciation on translation of
assets and liabilities
denominated in foreign
currencies.................... -- --
Net change in unrealized
appreciation/(depreciation) on
futures....................... -- --
------------ -------------
Net increase/(decrease) in net
assets resulting from
operations.................... 17,938,669 20,500,762
------------ -------------
Distributions to shareholders
from net investment income.... (1,513,921) (1,997,094)
Distributions to shareholders
in excess of net investment
income........................ -- --
Distributions to shareholders
from net realized capital
gains......................... -- (3,277,549)
Increase in net assets derived
from capital share
transactions.................. 20,679,645 50,072,896
------------ -------------
Total increase in net assets... 37,104,393 65,299,015
------------ -------------
NET ASSETS:
Beginning of period............ 127,540,056 62,241,041
------------ ------------
End of period.................. $164,644,449 $ 127,540,056
============ =============
END OF PERIOD UNDISTRIBUTED/
ACCUMULATED NET INVESTMENT
INCOME/(LOSS)................. $ 567,932 $ 521,495
============ ============
</TABLE>
(1) Fund commenced operations on August 1, 1997.
See Accompanying Notes
47
<PAGE> 50
LOGO NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. FUND ORGANIZATION
Armada Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company.
The Trust was organized as a Massachusetts business trust on January 28, 1986.
The Trust is a series of twenty-one funds each of which is authorized to issue
two classes of shares designated as Institutional and Retail Shares. Each share
class represents an interest in the same portfolio of investments of the
respective Fund and is substantially the same in all respects, except that the
classes are subject to different shareholder serving fees and investment
minimums. In addition, Retail shares are subject to a front-end sales charge,
which may be reduced or waived under certain circumstances (See Note 8).
The Trust currently has four Series that consist of the following Funds:
Money Market Series
Money Market Fund, Government Money Market Fund, Treasury Money Market Fund, Tax
Exempt Money Market Fund and Pennsylvania Tax Exempt Money Market Fund;
Equity Series
International Equity Fund, Small Cap Growth Fund, Small Cap Value Fund, Equity
Growth Fund, Core Equity Fund, Equity Income Fund and Equity Index Fund;
Tax Exempt Series
Ohio Tax Exempt Fund, Pennsylvania Municipal Fund and National Tax Exempt Fund;
Income Series
Total Return Advantage Fund, Intermediate Bond Fund, Enhanced Income Fund, GNMA
Fund, Bond Fund and Real Return Advantage Fund.
As of the date of this report, the Equity Index, National Tax Exempt, and Real
Return Advantage Funds have not commenced operations.
Effective March 10, 1997, the Armada Equity Fund's name was changed to the
Armada Equity Growth Fund.
Effective November 19, 1997, the name of the Armada Mid Cap Regional Fund was
changed to the Armada Small Cap Value Fund.
The International Equity, Small Cap Growth and Core Equity Funds each
commenced operations on August 1, 1997. Accordingly, the Statements of Assets
and Liabilities, Operations, Changes in Net Assets and Financial Highlights for
each of the Funds is presented as of November 30, 1997 and for the four-month
period then ended.
FUND REORGANIZATION: On May 3, 1996, Integra Financial Corporation ("Integra
Financial") merged into National City Corporation ("National City"). Integra
Trust Company, an affiliate of Integra Financial, served as Investment Adviser
to Inventor Funds, Inc. ("Inventor"). A new investment advisory agreement
between Inventor and affiliates of National City received shareholder approval
in May 1996.
As part of the Reorganization, on September 9, 1996, the Inventor Equity
Growth Fund transferred all of its assets and liabilities with an approximate
value of $47,517,535 (including $3,942,382 of net unrealized gain on
investments) in exchange for shares of the former Armada Equity Fund. The
Reorganization was executed as a tax-free reorganization in accordance with
Section 368(a)(1)(C) of the Internal Revenue Code of 1986 as amended (the
"Internal Revenue Code").
In accordance with provisions of the Agreement, the Trust and Inventor were
each responsible for the payment of their own expenses incurred in connection
with the Reorganization to the extent not borne by their respective Investment
Advisers. Accordingly, the Trust recognized approximately $200,000 in costs
connected with the Reorganization, which has been allocated among the various
funds in the Trust.
48
<PAGE> 51
LOGO NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
International Equity, Small Cap Growth, Small Cap Value, Equity Growth, Core
Equity and Equity Income Funds (the "Funds") in preparation of their financial
statements.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
PORTFOLIO VALUATION: Investments in securities traded on an exchange are
valued at the last quoted sale price for a given day, or if a sale is not
reported for that day, at the mean between the most recent quoted bid and asked
prices. Unlisted securities and securities traded on a national securities
market for which market quotations are readily available are valued at the mean
between the most recent bid and asked prices. Securities and other assets for
which no quotations are readily available are valued at their fair value under
procedures approved by the Board of Trustees. Short-term investments having
maturities of 60 days or less are generally valued on the basis of amortized
cost.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on the trade date. Realized gains and losses on investments sold are
recorded on the identified cost basis. Interest income is accrued on a daily
basis. Dividends are recorded on the ex-dividend date. Expenses common to all of
the Funds in the Trust are allocated among them.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from the net investment
income of the Equity Growth, Core Equity and Equity Income Funds are declared
and paid quarterly; dividends from the net investment income of the
International Equity, Small Cap Growth and Small Cap Value Funds are declared
and paid annually. With respect to each Fund, net income for dividend purposes
consists of dividends, interest income, and discount earned (including both
original issue and market discount), less amortization of any market premium and
accrued expenses. Any net realized capital gains will be distributed at least
annually.
FEDERAL INCOME TAXES: Each of the Funds is classified as a separate taxable
entity for Federal income tax purposes. Each of the Funds intends to qualify as
a separate "regulated investment company" under the Internal Revenue Code and
make the requisite distributions to its shareholders that will be sufficient to
relieve it from Federal income tax and Federal excise tax. Therefore, no Federal
tax provision is required. To the extent that distributions from net investment
income and realized net capital gains exceed amounts reported in the financial
statements, such amounts are reported separately.
ORGANIZATIONAL COSTS: The Trust bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
shares for distribution under Federal and state securities regulations. All
organization expenses are being amortized on a straight-line basis over a period
of five years from the date of commencement of operations.
FOREIGN CURRENCY TRANSLATION: The books and records of the International
Equity Fund are maintained in U.S. dollars as follows: (1) the foreign currency
market values of investment securities and other assets and liabilities stated
in foreign currencies are translated at the exchange rates prevailing at the end
of the period; and (2) purchases, sales and income are translated at the rates
of exchange prevailing on the respective dates of such transactions. The
resulting exchange gains and losses are included in the Statement of Operations.
The Fund does not generally isolate the effect of fluctuations in foreign
exchange rates from the effect of fluctuations in the market prices of
investments.
FORWARD FOREIGN CURRENCY CONTRACTS: The International Equity Fund entered
into forward foreign
49
<PAGE> 52
LOGO NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
currency contracts as hedges against either specific transactions or portfolio
positions. All commitments are "marked-to-market" daily at the applicable
foreign exchange rate and any resulting unrealized gains or losses are recorded
currently. The funds realize gains or losses at the time forward contracts are
extinguished.
FUTURES CONTRACTS: During the period, the Equity Growth Fund bought and sold
financial futures contracts for the purpose of hedging the portfolio against
adverse effects of anticipated movements in the market or to maintain liquidity.
When investing in futures contracts, the Fund bears the market risk that arises
from changes in the value of these financial instruments. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial margin as
required by the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an amount of cash
equal to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the time it was closed. (See Note 6).
REPURCHASE AGREEMENTS: Repurchase agreements are considered loans under the
1940 Act. In connection therewith, the Trust's Custodian receives and holds
collateral of not less than 102% of the repurchase price plus accrued interest.
If the value of the collateral falls below this amount, the Trust will require
the seller to deposit additional collateral by the next business day. If the
request for additional collateral is not met or the seller defaults on its
repurchase obligation, the Trust maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller.
3. INVESTMENT ADVISERS, DISTRIBUTION FEE AND OTHER RELATED PARTY TRANSACTIONS
Fees paid by the Trust pursuant to the Advisory Agreements with National City
Bank and National Asset Management Corporation, (collectively, the "Adviser" or
"Advisers"), wholly-owned subsidiaries of National City Corporation, are payable
monthly based on the annual rate of .75% of each Fund's average daily net
assets. The Advisers may from time to time waive their fees payable by the
Funds. For the period ended November 30, 1997, the Advisers have earned and
waived the following fees:
<TABLE>
<CAPTION>
EARNED WAIVED
---------- --------
<S> <C> <C>
International Equity Fund......... $ 210,300 $ 50,784
Small Cap Growth Fund............. 65,670 --
Small Cap Value Fund.............. 935,947 --
Equity Growth Fund................ 1,122,775 --
Core Equity Fund.................. 258,295 64,683
Equity Income Fund................ 555,574 --
</TABLE>
At November 30, 1997, advisory fees accrued and unpaid amounted to:
<TABLE>
<S> <C>
International Equity Fund.................... $ 52,549
Small Cap Growth Fund........................ 18,648
Small Cap Value Fund......................... 169,139
Equity Growth Fund........................... 207,501
Core Equity Fund............................. 63,872
Equity Income Fund........................... 92,294
</TABLE>
Wellington Management Company, LLP (the "Sub Adviser") serves as the
investment sub-adviser to the Small Cap Growth Fund and is entitled to earn a
fee pursuant to such agreement. No such fees are paid to the Sub-Adviser
directly from the Trust.
The Trust maintains a Shareholder Services Plan (the "Services Plan") with
respect to the Retail shares in the Funds. Pursuant to the Services Plan, the
Trust enters into shareholder servicing agreements with certain financial
institutions under which they agree to provide shareholder administrative
services to their customers who beneficially own Retail shares in consideration
for the payment of up to .25% on an annualized basis of the net asset value of
the Retail shares of the International Equity, Small Cap Growth, Small Cap
Value, Equity Growth, Core Equity and Equity Income Funds. For
50
<PAGE> 53
LOGO NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
the period ended November 30, 1997, fees paid under the Services Plan to NatCity
Investments, Inc., a wholly-owned subsidiary of National City Corporation,
amounted to:
<TABLE>
<S> <C>
International Equity Fund...................... $ 1
Small Cap Growth Fund.......................... 0
Small Cap Value Fund........................... 6,399
Equity Growth Fund............................. 9,058
Core Equity Fund............................... 12
Equity Income Fund............................. 476
</TABLE>
National City Bank serves as the Funds' Custodian. For the period ended
November 30, 1997, National City Bank has earned custodian fees as follows:
<TABLE>
<S> <C>
International Equity Fund..................... $60,480
Small Cap Growth Fund......................... 1,809
Small Cap Value Fund.......................... 17,672
Equity Growth Fund............................ 20,328
Core Equity Fund.............................. 6,807
Equity Income Fund............................ 12,433
</TABLE>
Pursuant to Board of Trustees' approval, SEI Investments Distribution Co., a
wholly-owned subsidiary of SEI Investments Company ("SEI" or "Distributor"),
began serving as the Trust's Distributor on March 10, 1997. Each Fund pays a fee
to the Distributor for distributing its shares. Under the Trust's Distribution
Agreement and related Distribution Plan adopted pursuant to Rule 12b-1 under the
1940 Act, the Trust compensates the Distributor for services provided and
expenses assumed in providing advertising, marketing, prospectus printing and
other distribution services up to a maximum of .10% per annum of the average net
assets of each Fund, inclusive of an annual base fee of $1,250,000, plus
incentive fees related to asset growth, which are allocated among the investment
funds with respect to which the Distributor is distributing shares.
440 Financial Distributors, Inc., ("440") a wholly-owned subsidiary of The
Shareholder Services Group, Inc., and an indirect wholly-owned subsidiary of
First Data Corp., served as the Trust's distributor until March 7, 1997. Each
Fund reimbursed 440 for direct and indirect expenses incurred in performing
distribution services, up to a maximum of .10% per annum of the average net
assets of each Fund, inclusive of an annual fee of $250,000, which was allocated
among the investment funds for which 440 was distributing shares.
Each Trustee receives an annual fee of $7,500 plus $2,500 for each Board
meeting attended and reimbursement of out-of-pocket expenses. The Chairman of
the Board receives an additional $2,500 per annum for services in such capacity.
Such fees are paid for services rendered to all of the Funds and are allocated
accordingly. No person who is an officer, director, trustee, or employee of the
Investment Advisers, Distributor, or of any parent or subsidiary thereof, who
serves as an officer, trustee, or employee of the Trust receives any
compensation from the Trust.
Expenses for the period ended November 30, 1997 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary of the Trust.
PFPC Inc. ("PFPC") serves as Administrator and Accounting Agent to the Trust.
As compensation for services performed, each Fund pays PFPC an asset-based fee
plus reimbursement of reasonable out-of-pocket expenses. An officer of PFPC
serves as Treasurer to the Trust.
4. PURCHASES AND SALES OF SECURITIES
During the period ended November 30, 1997, purchases and sales of securities,
other than short-term investments or U.S. government obligations, aggregated:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
International Equity Fund... $105,605,807 $ 12,376,558
Small Cap Growth Fund....... 30,008,743 1,804,883
Small Cap Value Fund........ 150,494,687 124,200,280
Equity Growth Fund.......... 329,512,706 326,889,142
Core Equity Fund............ 121,703,940 16,946,221
Equity Income Fund.......... 33,433,640 16,577,638
</TABLE>
51
<PAGE> 54
LOGO NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. FORWARD FOREIGN CURRENCY CONTRACTS
The International Equity Fund had the following open forward currency contract
at November 30, 1997:
<TABLE>
<CAPTION>
SETTLEMENT CONTRACT CONTRACT CURRENT UNREALIZED
CURRENCY DATE AMOUNT RATE RATE LOSS
- ------------- ---------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Belgium
Francs..... 12/1/97 $903,836 35.864 36.39002 ($17,728)
</TABLE>
6. FUTURES CONTRACTS
The Equity Growth Fund had the following open futures contracts at November
30, 1997.
<TABLE>
<CAPTION>
NUMBER OF CONTRACT EXPIRATION UNREALIZED
CONTRACTS VALUE DATE LOSS
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Standard & Poors
500 Stock Index
Futures......... 20 $4,744,500 12/97 ($47,100)
</TABLE>
The aggregate market value of cash or eligible securities pledged to cover
margin requirements for open futures positions at November 30, 1997 was
$201,000.
7. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Board of Trustees to issue an
unlimited number of shares of beneficial interest and to classify or reclassify
any unissued shares of the Trust into one or more additional classes of shares
and to classify or reclassify any class of shares into one or more series of
shares. Transactions in capital shares are summarized below for the Funds.
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED NOVEMBER 30, 1997 (UNAUDITED)
--------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
--------------------------- ----------------------
SHARES VALUE SHARES VALUE
---------- ------------ ------- ----------
<S> <C> <C> <C> <C>
INTERNATIONAL EQUITY FUND*
Shares sold.................................. 9,696,682 $ 96,109,264 396 $ 3,887
Shares reinvested............................ -- -- -- --
Shares repurchased........................... (49,547) (489,057) -- --
---------- ------------ ------- ----------
Net increase................................. 9,647,135 $ 95,620,207 396 $ 3,887
========== ============ ======= ==========
SMALL CAP GROWTH FUND*
Shares sold.................................. 2,976,326 $ 30,277,816 928 $ 9,787
Shares reinvested............................ -- -- -- --
Shares repurchased........................... (31,504) (336,100) -- --
---------- ------------ ------- ----------
Net increase................................. 2,944,822 $ 29,941,716 928 $ 9,787
========== ============ ======= ==========
SMALL CAP VALUE FUND
Shares sold.................................. 2,574,613 $ 44,266,139 125,854 $2,212,244
Shares reinvested............................ -- -- -- --
Shares repurchased........................... (920,600) (15,879,136) (25,090) (417,496)
---------- ------------ ------- ----------
Net increase................................. 1,654,013 $ 28,387,003 100,764 $1,794,748
========== ============ ======= ==========
</TABLE>
- ---------------
*Fund commenced operations on August 1, 1997.
52
<PAGE> 55
LOGO NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED NOVEMBER 30, 1997 (UNAUDITED)
-----------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
---------------------------- ------------------------
SHARES VALUE SHARES VALUE
---------- ------------- -------- -----------
<S> <C> <C> <C> <C>
EQUITY GROWTH FUND
Shares sold................................. 1,474,680 $ 30,702,978 28,544 $ 605,372
Shares reinvested........................... 1,497 29,989 -- --
Shares repurchased.......................... (949,118) (19,525,327) (13,942) (290,312)
---------- ------------- -------- -----------
Net increase................................ 527,059 $ 11,207,640 14,602 $ 315,060
========== ============= ======== ===========
CORE EQUITY FUND*
Shares sold................................. 10,485,517 $ 104,848,724 8,174 $ 80,721
Shares reinvested........................... 22,547 223,668 12 117
Shares repurchased.......................... (599) (5,830) -- --
---------- ------------- -------- -----------
Net increase................................ 10,507,465 $ 105,066,562 8,186 $ 80,838
========== ============= ======== ===========
EQUITY INCOME FUND
Shares sold................................. 1,617,435 $ 26,356,182 21,484 $ 356,795
Shares reinvested........................... 47,693 778,250 218 3,555
Shares repurchased.......................... (416,518) (6,748,989) (3,943) (66,148)
---------- ------------- -------- -----------
Net increase................................ 1,248,610 $ 20,385,443 17,759 $ 294,202
========== ============= ======== ===========
</TABLE>
- ---------------
(*) Fund commenced operations on August 1, 1997.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31, 1997
---------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
--------------------------- -----------------------
SHARES VALUE SHARES VALUE
---------- ------------ -------- ----------
<S> <C> <C> <C> <C>
SMALL CAP VALUE FUND
Shares sold................................. 6,042,026 $ 83,857,858 57,754 $ 777,378
Shares reinvested........................... 262,351 3,565,347 18,744 251,734
Shares repurchased.......................... (725,713) (9,823,087) (110,151) (1,438,128)
---------- ------------- --------- -----------
Net increase (decrease)..................... 5,578,664 $ 77,600,118 (33,653) $ (409,016)
========== ============= ========= ===========
EQUITY GROWTH FUND
Shares sold................................. 7,181,302 $124,275,293 41,911 $ 770,395
Shares issued in Reorganization............. 2,631,093 47,517,535 -- --
Shares reinvested........................... 943,703 15,463,981 73,923 1,215,567
Shares repurchased.......................... (6,282,893) (113,035,710) (77,687) (1,396,831)
---------- ------------- --------- -----------
Net increase................................ 4,473,205 $ 74,221,099 38,147 $ 589,131
========== ============= ========= ===========
EQUITY INCOME FUND
Shares sold................................. 4,394,354 $ 60,026,833 7,046 $ 96,190
Shares reinvested........................... 199,623 2,708,195 1,252 16,939
Shares repurchased.......................... (941,262) (12,754,028) (1,536) (21,233)
---------- ------------- --------- -----------
Net increase................................ 3,652,715 $ 49,981,000 6,762 $ 91,896
========== ============= ========= ===========
</TABLE>
53
<PAGE> 56
LOGO NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. SUBSEQUENT EVENTS:
Effective January 1, 1998, each of the International Equity, Small Cap Growth,
Small Cap Value, Equity Growth, Core Equity and Equity Income Funds commenced
offering B shares. B shares, like Retail shares, are subject to shareholder
servicing fees under a services plan. In addition, B shares have in place a
separate Distribution Agreement and related Distribution Plan adopted pursuant
to Rule 12b-1 under the 1940 Act under which each fund will pay up to a maximum
of .75% per annum of the average net assets of B shares. B shares are subject to
a contingent deferred sales charge, which may be reduced or waived under certain
circumstances.
Effective January 1, 1998, the maximum front-end sales charge on Retail shares
increased to 5.50% from 3.75%. Such front-end charges may be reduced or waived
under certain circumstances.
9. RESULTS OF PROXY VOTING
A special meeting of the Shareholders of the Funds was held on November 19,
1997. Shareholders of the Small Cap Value, Equity Growth and Equity Income Funds
each approved the following proposals:
PROPOSAL 1.
To approve a new Investment Advisory Agreement between the Trust and National
City Bank.
At least 87.45% of shareholders in each Fund voted to approve the proposal. No
more than 2.39% in each Fund voted against the proposal.
PROPOSAL 2.
To approve certain changes to the fundamental investment objectives of the
Funds.
At least 82.80% of shareholders in each Fund voted to approve the proposal. No
more than 3.91% in each Fund voted against the proposal.
PROPOSAL 3A.
To approve changes to the fundamental investment limitation on underwriting
activities.
At least 82.69% of shareholders in each Fund voted to approve the proposal. No
more than 3.71% in each Fund voted against the proposal.
PROPOSAL 3B.
To approve changes to the fundamental investment limitation on real estate
related transactions.
At least 83.16% of shareholders in each Fund voted to approve the proposal. No
more than 3.80% in each Fund voted against the proposal.
PROPOSAL 3C.
To approve changes to the fundamental investment limitation on investment in
commodities.
At least 83.34% of shareholders in each Fund voted to approve the proposal. No
more than 4.11% in each Fund voted against the proposal.
PROPOSAL 3D.
To approve changes to the fundamental investment limitation regarding industry
concentration.
At least 83.00% of shareholders in each Fund voted to approve the proposal. No
more than 3.77% in each Fund voted against the proposal.
PROPOSAL 3E.
To approve changes to the fundamental investment limitation on loans.
At least 82.61% of shareholders in each Fund voted to approve the proposal. No
more than 3.86% in each Fund voted against the proposal.
PROPOSAL 3F.
To approve changes to the fundamental investment limitation on borrowing and
issuance of senior securities.
At least 83.84% of shareholders in each Fund voted to approve the proposal. No
more than 3.60% in each Fund voted against the proposal.
PROPOSAL 4B.
To approve a change in the fundamental investment policies related to
limitations on illiquid securities to make such policies non-fundamental.
54
<PAGE> 57
LOGO NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
At least 83.31% of shareholders in each Fund voted to approve the proposal. No
more than 3.82% in each Fund voted against the proposal.
PROPOSAL 4C.
To approve a change in the fundamental investment policies related to
limitations on purchasing securities on margin to make such policies non-
fundamental.
At least 83.38% of shareholders in each Fund voted to approve the proposal. No
more than 4.34% in each Fund voted against the proposal.
PROPOSAL 4D.
To approve a change in the fundamental investment policies related to
limitations on purchasing securities of companies for the purpose of exercising
control to make such policies non-fundamental.
At least 83.31% of shareholders in each Fund voted to approve the proposal. No
more than 4.00% in each Fund voted against the proposal.
PROPOSAL 4E.
To approve a change in the fundamental investment policies related to
limitations on writing or selling put options, call options, straddles, spreads,
or any combination thereof to make such policies non-fundamental.
At least 83.29% of shareholders in each Fund voted to approve the proposal. No
more than 3.88% in each Fund voted against the proposal.
PROPOSAL 4F.
To approve a change in the fundamental investment policies related to
limitations on purchasing or retaining securities of any issuer if officers or
trustees/directors of the Trust or any of its investment advisors own
beneficially more than certain percentages of that issuer's securities to make
such policies non-fundamental.
At least 83.17% of shareholders in each Fund voted to approve the proposal. No
more than 3.95% in each Fund voted against the proposal.
PROPOSAL 6.
Election of Trustees for all Armada Funds (including International Equity,
Small Cap Growth and Core Equity Funds) -- Institutional and Retail.
At least 92.53% of voting shareholders voted to elect each Trustee. No more
than 7.47% of voting shareholders withheld authority to elect a Trustee.
55
<PAGE> 58
LOGO ARMADA FUNDS
BOARD OF TRUSTEES
ROBERT D. NEARY
Chairman
Retired Co-Chairman, Ernst & Young
Director:
Cold Metal Products, Inc.
Zurn Industries, Inc.
HERBERT R. MARTENS, JR.
President
Executive Vice President,
National City Corporation
Chairman, President and Chief Executive
Officer, NatCity Investments, Inc.
LEIGH CARTER
Retired President and Chief Operating
Officer, B.F. Goodrich Company
Director:
Acromed Corporation
Kirtland Capital Corporation
Morrison Products
JOHN F. DURKOTT
President and Chief Operating Officer,
Kittle's Home Furnishing's Center, Inc.
ROBERT J. FARLING
Retired Chairman, President and
Chief Executive Officer, Centerior Energy
Director:
Republic Engineered Steels
RICHARD W. FURST, DEAN
Professor of Finance and Dean
Carol Martin Gatton College of Business
and Economics, University of Kentucky
Director:
Foam Design, Inc.
The Seed Corporation
GERALD L. GHERLEIN
Executive Vice President and General
Counsel, Eaton Corporation
Trustee:
Meridia Health System
WVIZ Educational Television
J. WILLIAM PULLEN
President and Chief Executive Officer,
Whayne Supply Company
<PAGE> 59
LOGO NOTES
<PAGE> 60
[ARMADA FUNDS LOGO] BULK RATE
U.S POSTAGE
Oaks, Pennsylvania 19456 PAID
CLEVELAND, OH
PERMIT NO. 1535
INVESTMENT ADVISERS
AFFILIATES OF
NATIONAL CITY
CORPORATION
NATIONAL ASSET MANAGEMENT
CORPORATION
101 SOUTH FIFTH STREET
LOUISVILLE, KY 40202
National City Bank
1900 East Ninth Street
Cleveland, Ohio 44114
AF-804 (1/98)
