<PAGE>
ARMADA FUNDS 2000 ANNUAL REPORT
[Logo omitted]
DESIGN YOUR OWN DESTINY
WWW.armadafunds.com
<PAGE>
ANNUAL REPORT -- MAY 31, 2000
TABLE OF CONTENTS
================================================================================
ARMADA FUNDS
CORE EQUITY FUND
EQUITY GROWTH FUND
EQUITY INCOME FUND
EQUITY INDEX FUND
INTERNATIONAL EQUITY FUND
SMALL CAP GROWTH FUND
SMALL CAP VALUE FUND
TAX MANAGED EQUITY FUND
BALANCED ALLOCATION FUND
BOND FUND
ENHANCED INCOME FUND
GNMA FUND
INTERMEDIATE BOND FUND
TOTAL RETURN ADVANTAGE FUND
NATIONAL TAX EXEMPT BOND FUND
OHIO TAX EXEMPT BOND FUND
PENNSYLVANIA MUNICIPAL BOND FUND
GOVERNMENT MONEY MARKET FUND
MONEY MARKET FUND
OHIO MUNICIPAL MONEY MARKET FUND
PENNSYLVANIA TAX EXEMPT
MONEY MARKET FUND
TAX EXEMPT MONEYMARKET FUND
TREASURY MONEY MARKET FUND
PARKSTONE CONTINUING FUNDS
(POST MERGER)
PARKSTONE LARGE CAPITALIZATION FUND
(ARMADA LARGE CAP ULTRA FUND)
PARKSTONE MID CAPITALIZATION FUND
(ARMADA MID CAP GROWTH FUND)
PARKSTONE U.S. GOVERNMENT INCOME FUND
(ARMADA U.S. GOVERNMENT INCOME FUND)
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
(ARMADA MICHIGAN MUNICIPAL BOND FUND)
PARKSTONE TREASURY FUND
(ARMADA TREASURY PLUS MONEY
MARKET FUND)
--------------------------------------------------------------------------------
Chairman's Message ................................................... 1
Economic Overview .................................................... 2
ARMADA FUNDS
Fund Overviews ....................................................... 4
Additional Armada Performance Information ............................ 21
Report of Independent Auditors ....................................... 22
Notice to Shareholders ............................................... 23
Financial Highlights ................................................. 25
Statements of Net Assets ............................................. 48
Financial Statements ................................................. 132
Notes to Financial Statements ........................................ 144
PARKSTONE GROUP OF FUNDS (FIVE CONTINUING FUNDS)
Fund Overviews ....................................................... 158
Additional Parkstone Performance Information ......................... 162
Financial Highlights ................................................. 164
Statements of Net Assets ............................................. 179
Financial Statements ................................................. 191
Notes to Financial Statements ........................................ 195
Report of Independent Auditors ....................................... 203
Notice to Parkstone Shareholders ..................................... 204
Results of Proxy Voting .............................................. 205
--------------------------------------------------------------------------------
-----------------------------------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
-----------------------------------------------------
National City Investment Management Company (IMC) serves as investment adviser
to Armada Funds, for which it receives an investment advisory fee. Armada Funds
are distributed by SEI Investments Distribution Company (SIDC), Oaks, PA 19456.
SIDC is not affiliated with IMC and is not a bank. Mutual funds involve risks
including possible loss of principal. Performance figures quoted herein may be
lower due to recent market volatility. 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.
AN INVESTMENT IN MONEY MARKET FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE MONEY
MARKET FUND(S) SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND(S).
--------------------------------------------------------------------------------
<PAGE>
CHAIRMAN'S MESSAGE
JULY 14, 2000
DEAR SHAREHOLDERS:
During the year ended May 31, 2000, we witnessed the volatility of the equity
markets as many high-flying technology stocks soared and then declined. An
environment of extreme swings may tempt investors to stray from their long-term
investment strategy in pursuit of short-term rewards. We continue to encourage
shareholders to remain true to basic investment strategies such as maintaining a
diversified portfolio, focusing on investment objectives and investing according
to your risk tolerance.
On June 16, 2000, we completed the reorganization of the Parkstone Group of
Funds with Armada Funds, the culmination of two years of work to unify the
investment and administrative functions of the fund families. Armada Funds is
now comprised of 28 investment portfolios with more than $16.5 billion in
assets. Fund performance, management discussions and financial statements for
the five continuing Parkstone Funds are included in this report. Going forward,
each fund will continue under its new Armada name.
The Armada Funds Web site, WWW.ARMADAFUNDS.COM, continues to be an important
resource for our shareholders. In the first five months of 2000, close to 39,000
people visited the site to view daily prices, yields and other fund information.
During this same period, Armada's fund-direct shareholders completed more than
5,000 transactions online.
In addition, we recently introduced our newest investment option: Class C
shares. Some investors prefer the asset-based "level load" structure offered by
C shares since it allows them to pay for investment services as they are
received.
Thank you for your continued investment in Armada Funds. Detailed information
about your investment(s) can be found in the following pages of this report. If
you have any questions regarding your investment, please contact your Financial
Consultant, visit WWW.ARMADAFUNDS.COM or call 1-800-622-FUND (3863).
Sincerely,
/s/signature omitted
Robert D. Neary
Chairman
[Logo omitted]
Armada [Register Mark] Funds
1
<PAGE>
ECONOMIC OVERVIEW
================================================================================
DEAR SHAREHOLDER:
The U.S. economy set a record for the longest expansion in the country's
history during the past fiscal year-110 consecutive months by the end of May.
Gross domestic product growth hit an annualized rate of 5.5 percent for the last
three months of 1999 and reached an unimaginable 7.3 percent annualized rate
during the first quarter of 2000. In fact, consumer spending and business fixed
investment continued climbing at the fastest pace in recent memory. The former
increased 7.7 percent annualized during the first quarter of 2000, with the
latter surging 23.7 percent annualized.
With this level of growth so far into the current expansion, it was
inevitable that we would have to deal with 3.9 percent unemployment and rising
employment costs. The latter jumped an eye-popping 1.4 percent during the first
quarter of 2000. Throw into the mix rising energy costs and the wealth effect
caused by the stock market's precipitous rise, and it's little wonder that
inflation remains at the top of the Federal Reserve Board's agenda. As far back
as June 1999, Mr. Greenspan and Company announced the first of six eventual
interest rate increases throughout the period. These culminated in a
50-basis-point hike in May.
Did these aggressive tightenings manage to cool down the economy a bit and
bring the stock market back to earth? We've witnessed some initial signs of
relief, including soft retail sales and a slowdown in existing home sales. Yet,
these and other indicators may not be enough to satisfy the Fed. The core
Consumer Price Index jumped 0.4 percent in April, its biggest advance in five
years, indicating that domestic businesses may now feel more comfortable with
passing increased wage and benefit costs along to consumers. It is hard to
imagine the Fed standing still for this new mindset, which we characterize as "a
little inflation is OK."
TECHNOLOGY AGAIN DROVE THE EQUITY MARKETS
Looking at the U.S. equity markets, we again saw strong performance in the
S&P 500 Composite Index. Despite an aggressive Fed, this index managed to return
a total of 10.47 percent. This marks its sixth consecutive year of double-digit
gains. After an extended period of relative underperformance, small cap and mid
cap stocks staged a major comeback. The Russell 2000 Index, a leading small cap
benchmark, gained 10.0 percent, while the Russell Midcap Growth Index returned a
stunning 43.72 percent.
However, hidden behind these aggregate numbers is the fact that technology
and telecom-related stocks enjoyed a disproportionate share of the market's
advance. The Nasdaq Stock Market-home to Cisco Systems, Intel, Microsoft, Sun
Microsystems and a slew of other high-profile tech companies-finished the period
up 38 percent even after its huge spring correction. Many other sectors-consumer
cyclicals, basic materials, capital goods, transportation, and consumer staples
among them-posted small or even negative returns.
The technology-heavy S&P 500/BARRA Growth Index returned a total of 17.56
percent, but the S&P 500/BARRA Value Index, lagged with a total return of only
2.58 percent. The small cap market told a similar story. While the Russell 2000
Growth Index returned 19.69 percent for the year, the Russell 2000 Value Index
finished in the red, down 0.26 percent.
As expected, though, we have begun to witness a long-overdue shakeout in the
technology sector. As the final three months of the period showed, fundamentals
have come back into vogue. Investors no longer seem content to throw money
indiscriminately at dot-com companies and have begun differentiating between
those that have viable business models and those that are unlikely to succeed.
Globally, we are witnessing the first synchronous worldwide expansion in a
decade. Few could have predicted the speed of the economic recovery that took
place in the emerging markets of Asia and Latin America following the meltdown
of 1998. However, the rapid and large monetary stimulus provided by innumerable
central banks served to quickly restore confidence, allowing developing
currencies and, subsequently, interest rates, to stabilize. At the same time,
rapid growth in the United States allowed exports from many developing regions
to expand vigorously. In Europe, consumer confidence stands at its highest level
in a decade, and GDP growth may surpass that of the United States for the first
time in 10 years.
These factors helped the international equity markets stage a major comeback
in fiscal 2000. The Morgan Stanley MSCI EAFE (Europe, Australia, Far East)
Equity Index posted a total return of 17.14 percent. Thanks in part to a wave of
merger activity and technology and telecom buying, many leading European
2
<PAGE>
ECONOMIC OVERVIEW
================================================================================
indices finished the period with outstanding numbers. In local currency terms,
the Morgan Stanley MSCI EMU Index returned 38.24 percent, France's CAC 40 grew
by 50.98 percent, and Germany's DAX increased by 40.23 percent. Admittedly,
European results in dollars were dampened by the dismal performance of the euro,
which dropped 9.9 percent versus the U.S. dollar. As a result, the MSCI EMU
Index's performance translated into a 23.79 percent gain in dollar terms.
In Asia, the markets in Hong Kong, Singapore, Taiwan and South Korea all
performed strongly, with Hong Kong's Hang Seng Stock Index gaining 24.39 percent
for the period. Meanwhile, Japan continued to struggle with structural reforms.
Although a strong yen helped the Nikkei 225 Index jump 15.26 percent in U.S.
dollars, it returned a disappointing 2.06 percent in local currency terms.
A DIFFICULT YEAR FOR THE FIXED INCOME MARKETS
A number of factors conspired to punish the bond markets including the
specter of inflation, attendent Fed tightenings, a supply bubble in corporate
and asset-backed securities, corporate credit concerns, and several Treasury buy
backs. Consequently, prices in the non-Treasury-or spread-sectors suffered
throughout most of the period. A bill introduced in Congress that could remove
the implied government guarantee behind Fannie Mae and Freddie Mac, as well as
other government-sponsored enterprises ("GSE") while unlikely to pass in the
future, also cast a cloud over the fixed income market. The Lehman U.S.
Aggregate Index, a leading benchmark, returned a total of 2.10 percent for the
past 12 months.
After a steady drop from their "flight to quality" highs, Treasury prices,
especially at the long end of the curve, began to rise in January as the federal
government announced plans to buy back some $30 billion of debt. Treasury
securities across the yield curve are likely to increase in value as the buyback
progresses. We are not as sanguine about the outlook for the spread sectors,
particularly on the long end. Even after May's 50-basis-point hike, more may be
in the offing as the Fed attempts to stem the wealth effect caused by the stock
market's precipitous rise. Although some of its speculative excess has been
removed, rising energy prices and virtually full employment make inflation a
concern.
A REBOUND IN VALUE?
The prospects for the equity markets remain solid, while the inequality that
we witnessed between the growth- and value-oriented sectors that we witnessed is
unlikely to continue. The solid underlying fundamentals of the economy and
healthy profit outlook for many overlooked sectors should lead to a broadening
of the market.
Internationally, we are particularly intrigued by the earnings potential of
companies in Asia and Europe as well as Latin America. Many of these economies
are at much earlier stages in their economic expansion than the United States.
Hong Kong, in particular, stands to benefit from China's likely entry into the
World Trade Organization.
Moreover, we believe that Japan and the countries of Western Europe are
finally beginning to undertake, albeit reluctantly, the sorely needed economic
reforms that will enable them to compete in a competitive and truly global 21st
-century economy. The euro, which we believe to be fundamentally undervalued,
should begin to recover, which should benefit the international portfolios of
U.S. investors.
In sum, we look forward to continued strong worldwide economic growth with
virtually no region of the globe left behind. The outlook for corporate profits
remains positive as well. Although we are concerned that more monetary
tightenings may be on the horizon, we are not forecasting markedly higher
interest rates. Instead, inflation will likely remain tame as cyclical pressures
recede. Ultimately, we see a continued positive environment for the equity
markets.
Sincerely,
/s/signature
Donald L. Ross
President and Chief Investment Officer
National City Investment Management Company
3
<PAGE>
EQUITY FUNDS
ARMADA CORE EQUITY FUND OVERVIEW
================================================================================
COMMENTS FROM NATIONAL ASSET MANAGEMENT CORPORATION
Technology stocks again accounted for most of the growth in the domestic
large cap market over the past year. The Nasdaq Stock Market, a leading
technology indicator, gained 38% despite its steep spring correction and the
tug-of-war investors witnessed between old- and new-economy stocks. Effective
selection within the tech sector and a slight overweight to the S&P 500
Composite Index contributed to most of the Fund's outperformance.
For the fiscal year ended May 31, 2000, the Armada Core Equity Fund produced
a total return of 11.31% (before sales charges) for Class B shareholders and
12.31% for Class I investors. Over the same period, the Fund's benchmark, S&P
500 Composite Index, had a return of 10.47%.
A large stake in semiconductor stocks proved highly beneficial to the Fund
during the first half of the reporting period. The industry's cycle of
overcapacity ended as Internet- and wireless-driven demand boosted earnings
throughout the industry. The Philadelphia Semiconductor Index, commonly known as
the SOX, finished the 12-month period up 131%. Within the portfolio, Altera,
Applied Materials, Intel, Linear Technologies, Maxim Integrated Products,
Teradyne, and Xilinx all more than doubled in value.
Spurred by valuation concerns, the Fund's management team reduced the Fund's
semiconductor exposure in early 2000 and further diversified its tech stake into
software and telecom-related stocks. Lured by strong product demand, we added
Siebel Systems, a leader in eBusiness application software, as well as Applied
Micro Circuits, Tellabs, and Vitesse. All have performed solidly.
Although technology stocks were most responsible for the Fund's performance,
stock selection in other sectors also proved beneficial. Due to its acquisition
by International Paper, Champion International gained 42% during the period.
Medtronic, a maker of pacemakers and other medical equipment, added 45% to its
market value. Despite the weakness of the financial sector, Citigroup's twin
strengths in banking and brokerage lifted its share price by 41%. General
Electric, yet another holding, gained 55% after posting better-than-expected
earnings. It also recaptured the market cap crown from Microsoft and Cisco
Systems.
Among its underweights, the portfolio benefited most from a modest exposure
to the utilities sector. Electric utility stocks in particular are suffering due
to poor earnings growth and a questionable regulatory environment. Frankly, we
do not see this situation changing in the near future.
The prospects for the U.S. economy continue to look strong, and we expect the
contest between the old and the new economy to continue. Given the difficulty of
predicting which group will emerge victorious, the Fund has an emphasis on one
end to technology stocks and on the other to the basic industry and financial
sectors. The management team is underweighted to many so-called middle-ground
sectors--such as retail, pharmaceuticals, and consumer goods--which do not
appear to be benefiting from either tug of the rope.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Core Equity Fund Armada Core Equity Fund
(Class I Shares) (Class B Shares) 2,4 S&P 500 Composite Index
<S> <C> <C> <C>
8/1/97 $10,000 $10,000 $10,000
5/31/98 $11,404 $11,364 $11,585
5/31/99 $14,378 $14,224 $14,024
5/31/00 $16,148 $15,433 $15,492
</TABLE>
ARMADA CORE EQUITY FUND
-----------------------
Average Annual Total Returns, as of 5/31/00
-------------------------------------------------------------------
SINCE CUMULATIVE SINCE
1 YEAR INCEPTION (1) INCEPTION (1)
-------------------------------------------------------------------
Class I Shares 12.31% 18.43% 61.47%
-------------------------------------------------------------------
Class A Shares 11.98% 18.14% 60.36%
-------------------------------------------------------------------
Class A Shares
with Sales Charge 5.81% 15.81% 51.57%
-------------------------------------------------------------------
Class B Shares 11.31% 19.71% 54.00%
-------------------------------------------------------------------
Class B Shares
with Sales Charge 6.31% 18.41% 50.00%
-------------------------------------------------------------------
Class C Shares 3,4 11.38% N/A 0.55%
-------------------------------------------------------------------
Class C Shares 3,4
with Sales Charge 10.38% N/A (0.45)%
-------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: AUGUST 1, 1997 (CLASS I
SHARES); AUGUST 1, 1997 (CLASS A SHARES); JANUARY 6, 1998 (CLASS B SHARES) AND
JANUARY 20, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD AUGUST 1, 1997 TO JANUARY 6, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 6, 1998 TO JANUARY 20, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
4
<PAGE>
EQUITY FUNDS
ARMADA EQUITY GROWTH FUND OVERVIEW
================================================================================
COMMENTS FROM THE EQUITY GROWTH TEAM
Technology stocks continued to lead the large cap market higher during the
past year, even as many high-flying tech names suffered a steep correction in
the last three months of the reporting period. The management team's focus on
growth at a reasonable price insulated the Fund somewhat as we focused the
Fund's technology holdings on the resurgent semiconductor sector.
For the fiscal year ended May 31, 2000, the Armada Equity Growth Fund
produced a total return of 17.68% (before sales charges) for Class B
shareholders and 18.49% for Class I investors. Over the same period, the Fund's
benchmark, the Standard & Poor's 500 Composite Index, had a return of 10.47%.
The management team began adding to the Fund's semiconductor holdings last
summer as the industry's cycle of overcapacity appeared to be nearing an end.
The explosive growth of the Internet and wireless industries has driven sales of
microprocessors, and some of the Fund's holdings such as Analog Devices, Altera,
Applied Materials, Intel, and Texas Instruments have been among the chief
beneficiaries of this trend. All doubled in value or better during the past year
as did a number of other technology and telecom holdings. These include ADC
Telecommunications, Cisco Systems, EMC, Nortel Networks, and Sun Microsystems.
Spurred primarily by valuation concerns, the management team trimmed the Fund's
holdings in some of these stocks. At year-end, we maintained a modest
underweight in technology versus the benchmark, although within the sector we
remain bullish on semiconductors.
Looking ahead, the management team maintains moderate holdings in the energy
and health care sectors as compared to the benchmark. Due to the recovery in
energy prices, many companies involved in oil field services and natural gas
exploration and development are showing accelerating earnings growth. The Fund's
holdings in Schlumberger, Burlington Resources, and Coastal are all performing
well with the latter, soon to be acquired by El Paso, gaining 73% since
January 1.
The Fund's health care holdings remain tilted toward pharmaceutical companies
such as Pfizer and Pharmacia. Pfizer boasts a deep product pipeline, and its
acquisition of Warner-Lambert, another holding, brings drug Lipitor into the
fold. Pharmacia has high hopes for Celebrex--a pain reliever with few
gastrointestinal side effects--that came with its acquisition of Monsanto.
Although the Fund is still weighted below its benchmark in financial services
-- which contributed to the Fund's outperformance during the year -- the
management team has increased the Fund's exposure through stakes in such
companies as Bank of New York and Marsh & McClennan. The former is a major
player in the thriving global custody arena and issues a large number of
American Depository Receipts (ADRs). The latter is profiting from the upswing in
the property and casualty pricing cycle.
GROWTH OF A $10,000 INVESTMENT (6)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Equity Growth Fund Armada Equity Growth Fund
(Class I Shares) (Class B Shares) 3,5 S&P 500 Composite Index
<S> <C> <C> <C>
5/31/90 $10,000 $10,000 $10,000
5/31/91 $11,806 $11,810 $11,176
5/31/92 $12,854 $12,811 $12,280
5/31/93 $13,776 $13,708 $13,703
5/31/94 $13,972 $13,862 $14,283
5/31/95 $15,457 $15,297 $17,161
5/31/96 $19,262 $19,020 $22,038
5/31/97 $24,958 $24,581 $28,518
5/31/98 $32,109 $31,439 $37,264
5/31/99 $38,582 $37,482 $45,108
5/31/00 $45,716 $44,109 $49,831
</TABLE>
ARMADA EQUITY GROWTH FUND
-------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION (1) INCEPTION (1)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I Shares 18.49% 22.35% 24.22% 16.41% 16.55% 395.87%
-------------------------------------------------------------------------------------------
Class A Shares 2,5 18.22% 22.06% 23.92% 16.15% 16.04% 287.83%
-------------------------------------------------------------------------------------------
Class A Shares
with Sales Charge 2,5 11.71% 19.77% 22.53% 15.49% 15.33% 266.54%
-------------------------------------------------------------------------------------------
Class B Shares 3,5 17.68% 21.52% 23.59% 16.00% 19.58% 53.58%
-------------------------------------------------------------------------------------------
Class B Shares
with Sales Charge 3,5 12.68% 20.61% 23.42% N/A 18.27% 49.58%
-------------------------------------------------------------------------------------------
Class C Shares 4,5 17.73% 21.53% 23.60% 16.00% N/A 1.21%
-------------------------------------------------------------------------------------------
Class C Shares
with Sales Charge 4,5 16.73% N/A N/A N/A N/A 0.21%
-------------------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: DECEMBER 20, 1989 (CLASS I
SHARES); APRIL 15, 1991 (CLASS A SHARES); JANUARY 6, 1998 (CLASS B SHARES) AND
JANUARY 27, 2000 (CLASS C SHARES).
2 CLASS A SHARES RETURNS FOR THE PERIOD PRIOR TO APRIL 15, 1991 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
3 CLASS B SHARES RETURNS FOR THE PERIOD APRIL 15, 1991 TO JANUARY 6, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO APRIL 15, 1991 REFLECT THE PERFORMANCE OF THE FUND'S CLASS I
SHARES.
4 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 6, 1998 TO JANUARY 27, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES, RETURNS FOR THE PERIOD
APRIL 15, 1991 TO JANUARY 6, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS
A SHARES, AND FOR THE PERIOD PRIOR TO APRIL 15, 1991 RETURNS REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
5 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
6 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
5
<PAGE>
EQUITY FUNDS
ARMADA EQUITY INCOME FUND OVERVIEW
================================================================================
COMMENTS FROM THE EQUITY VALUE TEAM
In a large cap market dominated by high-priced technology stocks, the past
year proved frustrating for value investors and resulted in disappointing
performance for Armada Equity Income Fund. For the 12 months ended May 31, 2000,
the Fund produced a total return of (8.77)% (before sales charges) for Class B
shareholders and (7.95)% for Class I investors. Over the same period, the Fund's
benchmark, the S&P 500/BARRA Value Index, had a return of 2.58%.
Several of the stocks within the Fund's benchmark such as AIG, Micron
Technology, and Motorola posted strong gains but failed to meet our good value
and good news criteria. Frankly, we believed that these stocks were priced to
perfection and did not take into account the possibility of any negative news on
the horizon. Indeed, despite its 20% year-over-year gain, Motorola's stock had
actually been up as much as 90% before earnings concerns hammered its share
price practically overnight.
After a difficult initial nine months, many of the Fund's holdings began to
rally in March as the technology sector underwent a serious correction. The
Fund's energy holdings, in particular, benefited from soaring oil and gas prices
and renewed investor focus on reasonable valuation. Enron, one of the
portfolio's largest holdings, finished the period up 100%.
Although the Fund maintained a large exposure to financial stocks, it
benefited from a more conservative exposure to this sector versus the benchmark.
Banks are facing bottom-line growth challenges, and their outlook has been
further clouded by the Federal Reserve Board's aggressive series of rate hikes.
However, the management team is sanguine about earnings growth among property
and casualty insurers, which are benefiting from increased pricing power. Among
our holdings in this area, Marsh & McClennan has climbed 55% and St. Paul is up
15% since being added to the portfolio.
Looking ahead, the management team is optimistic about the outlook for the
energy, basic materials, and utilities sectors as well as real estate investment
trusts (REITs). Energy stocks should continue to benefit from rising prices, and
we recently added Conoco -- with its strong refining assets -- to the portfolio.
We believe the basic materials sector could reap the rewards of thriving
domestic and international economies and rising commodity prices. REITs have
been trading below their underlying property values and offer strong earnings
growth and dividend yields. Our holdings in this sector include Arden Realty and
Duke-Weeks Realty.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Equity Income Fund Armada Equity Income Fund
(Class I Shares) (Class B Shares) 2,4 S&P 500/BARRA Value Index
<S> <C> <C> <C>
7/1/94 $10,000 $10,000 $10,000
5/31/95 $11,309 $11,272 $12,041
5/31/96 $13,540 $13,455 $15,213
5/31/97 $16,872 $16,728 $19,087
5/31/98 $21,206 $21,007 $24,607
5/31/99 $23,458 $22,927 $27,828
5/31/00 $21,593 $20,917 $28,545
</TABLE>
ARMADA EQUITY INCOME FUND
-------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION (1) INCEPTION (1)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class I Shares (7.95)% 8.57% 13.81% 13.89% 115.93%
----------------------------------------------------------------------------------------
Class A Shares (8.30)% 8.28% 13.51% 13.46% 107.42%
----------------------------------------------------------------------------------------
Class A Shares
with Sales Charge (13.33)% 6.27% 12.23% 12.35% 95.96%
----------------------------------------------------------------------------------------
Class B Shares 2,4 (8.77)% 7.73% 13.16% 3.63% 8.92%
----------------------------------------------------------------------------------------
Class B Shares
with Sales Charge 2,4 (13.03)% 6.57% 12.92% 2.04% 4.96%
----------------------------------------------------------------------------------------
Class C Shares 3,4 (8.76)% 7.74% 13.16% N/A 4.65%
----------------------------------------------------------------------------------------
Class C Shares
with Sales Charge 3,4 (9.61)% N/A N/A N/A 3.65%
----------------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: JULY 1,
1994 (CLASS I SHARES); AUGUST 22, 1994 (CLASS A SHARES); JANUARY 6, 1998 (CLASS
B SHARES) AND JANUARY 27, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD AUGUST 22, 1994 TO JANUARY 6, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES AND RETURNS FOR THE PERIOD
PRIOR TO AUGUST 22, 1994 REFLECT THE PERFORMANCE OF THE FUND'S CLASS I SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 6, 1998 TO JANUARY 27, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES AND RETURNS FOR THE PERIOD
AUGUST 22, 1994 TO JANUARY 6, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS A
SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT SHOWN
IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
6
<PAGE>
EQUITY FUNDS
ARMADA EQUITY INDEX FUND OVERVIEW
================================================================================
COMMENTS FROM THE EQUITY TEAM
Despite a steep correction among technology stocks in March, this sector was
largely responsible for the sixth consecutive year of double-digit returns for
the S&P 500 Composite Index. As predicted in last year's annual report, though,
the already rich valuations of many components kept this leading large cap
benchmark from again posting another year of 20-plus percent gains.
By owning all 500 component companies in their exact proportions, we were
able to track the index's performance very closely. For the 12 months ended May
31, 2000, the Fund produced a total return of 9.70% (before sales charges) for
Class A shareholders and 9.92% for Class I investors. By comparison, the S&P 500
Composite Index had a return of 10.47%.
Looking ahead, the earnings outlook for the S&P 500 is strong, with expected
earnings growth of 14%. However, stock prices could be challenged by additional
Fed-driven rate hikes and concerns about extended valuations at the high-end of
the index's market cap range. Value-oriented sectors, such as energy, consumer
staples, and basic materials, appear poised to outperform.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Equity Index Fund Armada Equity Index Fund
(Class I Shares) (Class B Shares) 2,4 S&P 500 Composite Index
<S> <C> <C> <C>
7/1/98 $10,000 $10,000 $10,000
5/31/99 $11,414 $11,377 $11,632
5/31/00 $12,546 $11,949 $12,850
</TABLE>
ARMADA EQUITY INDEX FUND
------------------------
Average Annual Total Returns, as of 5/31/00
-------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR INCEPTION (1) INCEPTION (1)
-------------------------------------------------------------------
Class I Shares 9.92% 12.74% 25.48%
-------------------------------------------------------------------
Class A Shares 9.70% 21.31% 36.94%
-------------------------------------------------------------------
Class A Shares
with Sales Charge 5.59% 18.52% 31.86%
-------------------------------------------------------------------
Class B Shares 2,4 9.42% N/A 1.46%
-------------------------------------------------------------------
Class B Shares
with Sales Charge 2,4 4.42% N/A (3.54)%
-------------------------------------------------------------------
Class C Shares 3,4 9.37% N/A (3.17)%
-------------------------------------------------------------------
Class C Shares
with Sales Charge 3,4 8.37% N/A (4.14)%
-------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: JULY 10, 1998 (CLASS I
SHARES); OCTOBER 15, 1998 (CLASS A SHARES); JANUARY 4, 2000 (CLASS B SHARES)
AND JANUARY 17, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD OCTOBER 15, 1998 TO JANUARY 4, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES AND RETURNS FOR THE
PERIOD PRIOR TO OCTOBER 15, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS I
SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 4, 2000 TO JANUARY 17, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES AND RETURNS FOR THE
PERIOD OCTOBER 15, 1998 TO JANUARY 4, 2000 REFLECT THE PERFORMANCE OF THE
FUND'S CLASS A SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
7
<PAGE>
EQUITY FUNDS
ARMADA INTERNATIONAL EQUITY FUND OVERVIEW
================================================================================
COMMENTS FROM THE INTERNATIONAL EQUITY TEAM
Led by an aggressive weighting in resurgent Asian economies and strong
individual stock selection, the Armada International Equity Fund more than
doubled its benchmark's return and produced its best one-year returns to date.
For the fiscal year ended May 31, 2000, the Fund produced a total return of
37.61% (before sales charges) for Class B shareholders and 38.90% for Class I
investors. Over the same period, the Morgan Stanley MSCI EAFE (Europe,
Australasia, Far East) Equity Index had a return of 17.14%.
Although the portfolio's weighting in Asia mirrored the benchmark's
throughout most of the period, the management team minimized its exposure to
Japan in favor of Hong Kong, Singapore, South Korea, and Taiwan. All have
enjoyed a remarkably rapid recovery from the meltdown of 1998, with many
technology, telecom, and media stocks making outstanding gains. Among the Fund's
positions, Hong Kong-traded China Telecom climbed in value by 248% with Taiwan
Semiconductor up 112%.
Japan is still grappling with anemic gross domestic product (GDP) growth and
other economic roadblocks, although many companies, such as NEC, have finally
begun embracing painful but necessary corporate restructuring measures. A top 10
holding, the computer and semiconductor manufacturer returned 130.63% versus
18.13% for Japan's TOPIX Index.
Despite the euro's poor performance and high unemployment levels relative to
the rest of the world, the management team remains positive on Europe's economic
rebound. Consumer confidence stands at its highest level in a decade, and GDP
growth may surpass that of the United States for the first time in 10 years. We
maintained a consistent emphasis on France, which has taken the lead among its
neighbors at reducing taxes and creating an environment that is hospitable to
business. The Fund's holdings there include Total Fina Elf, one of the world's
most successful integrated oil companies, and Societe Television Francaise 1.
The former stock climbed 46.37% in U.S. dollars over the past 12 months with the
latter up 186%.
Many of the Fund's European holdings actually benefited from the weakness in
the euro because of the large export component to their businesses. For example,
Finland's Nokia, the portfolio's largest holding, increased 192.94% in U.S.
dollar terms as demand for its wireless handsets around the world continued to
climb.
Looking ahead, the management team has been eyeing Germany with interest. Its
economy shows renewed vigor, and the government has finally undertaken
much-needed tax and pension reform. We are likely to maintain our overweights in
Hong Kong and Singapore, where growth continues to accelerate and valuations
remain reasonable. Hong Kong, in particular, stands to benefit from China's
likely entry into the World Trade Organization.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada International Equity Fund Armada International Equity Fund Morgan Stanley
(Class I Shares) (Class B Shares) 2,4 MSCI EAFE Index
<S> <C> <C> <C>
8/1/97 $10,000 $10,000 $10,000
5/31/98 $10,875 $10,839 $10,361
5/31/99 $10,978 $10,849 $10,813
5/31/00 $15,249 $14,530 $12,666
</TABLE>
ARMADA INTERNATIONAL EQUITY FUND
--------------------------------
Average Annual Total Returns, as of 5/31/00
------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR INCEPTION (1) INCEPTION (1)
------------------------------------------------------------------
Class I Shares 38.90% 16.07% 52.51%
------------------------------------------------------------------
Class A Shares 38.50% 15.72% 51.23%
------------------------------------------------------------------
Class A Shares
with Sales Charge 30.91% 13.44% 42.94%
------------------------------------------------------------------
Class B Shares 37.61% 21.77% 60.42%
------------------------------------------------------------------
Class B Shares
with Sales Charge 32.61% 20.49% 56.42%
------------------------------------------------------------------
Class C Shares 3,4 37.61% N/A (3.51)%
------------------------------------------------------------------
Class C Shares
with Sales Charge 3,4 36.61% N/A (4.48)%
------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: AUGUST 1, 1997 (CLASS I
SHARES); AUGUST 1, 1997 (CLASS A SHARES); JANUARY 6, 1998 (CLASS B SHARES) AND
JANUARY 5, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD AUGUST 1, 1997 TO JANUARY 6, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 6, 1998 TO JANUARY 5, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
8
<PAGE>
EQUITY FUNDS
ARMADA SMALL CAP GROWTH FUND OVERVIEW
================================================================================
COMMENTS FROM THE SMALL AND MID CAP GROWTH TEAM
Driven largely by the rally in the technology, telecom, and biotech sectors,
small cap growth stocks performed strongly during the past year and posted
returns that outpaced those of their long-dominant large cap growth
counterparts. Effective stock selection helped the Fund surpass its benchmark by
more than 20 percentage points and post its best performance to date. For the
fiscal year ended May 31, 2000, the Armada Small Cap Growth Fund produced a
total return of 45.65% (before sales charges) for Class B shareholders and
47.04% for Class I investors. Over the same period, the Fund's benchmark, the
Russell 2000 Growth Index, had a return of 19.69%.
Although the portfolio was never more than slightly overweighted to the
technology sector versus its benchmark, the Fund reaped huge gains from our bet
on a rebound among semiconductor companies. Indeed, the widely-followed
Philadelphia Semiconductor Index, commonly known as the SOX, finished the
12-month period up 131%. We began adding to our semiconductor holdings in
earnest in June 1999 just as the sector, driven by the infrastructure demands of
the Internet and wireless industries, saw profits beginning to climb. Our
strongest performers included Exar as well as SDL and Credence Systems.
Anticipating decelerating growth trends, we began taking profits and trimmed
many of our holdings in May.
Among our wireless holdings, SBA Communications increased 333% since we
purchased the stock during its June 1999 IPO and in the aftermarket. SBA, which
owns the towers that house antennas for a number of wireless companies, should
continue to benefit from the explosive growth in this sector. Audiovox, the No.
2 CDMA handset manufacturer in the United States, also performed strongly,
although we sold our position before year-end due to concerns about shrinking
margins and rising inventory levels.
The rally in technology and biotech stocks occurred principally from November
through February before a painful correction wiped out a significant portion of
the tremendous gains made during that period. We added to our biotech weighting
in December, somewhat belatedly, but, led by our valuation discipline, we also
locked in profits by decreasing our position substantially before the market
turned.
Looking ahead, the management team has trimmed many of the Fund's more
speculative holdings in favor of an increased position in oil services stocks.
With climbing oil prices spurring new exploration, we believe that many of the
companies that provide drilling, seismic, and deepwater expertise are poised to
benefit. We've held a position in Cal Dive International since April 1999 and
after the new year added Pride International, Global Industries, UTI Energy, and
Veritas DGC. In March we also added two retailers -- 99 Cents Only Stores and
Michaels Stores -- both of which boast solid fundamentals and reasonable
valuations.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Small Cap Growth Fund Armada Small Cap Growth Fund Russell 2000
(Class I Shares) (Class B Shares) 2,4 Growth Index
<S> <C> <C> <C>
8/1/97 $10,000 $10,000 $10,000
5/31/98 $11,735 $11,697 $10,659
5/31/99 $10,285 $10,146 $11,078
5/31/00 $15,123 $14,377 $13,259
</TABLE>
ARMADA SMALL CAP GROWTH FUND
----------------------------
Average Annual Total Returns, as of 5/31/00
------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR INCEPTION (1) INCEPTION (1)
------------------------------------------------------------------
Class I Shares 47.04% 15.72% 51.23%
------------------------------------------------------------------
Class A Shares 46.49% 15.42% 50.12%
------------------------------------------------------------------
Class A Shares
with Sales Charge 38.41% 13.15% 41.90%
------------------------------------------------------------------
Class B Shares 45.65% 14.52% 38.46%
------------------------------------------------------------------
Class B Shares
with Sales Charge 40.65% 13.13% 34.46%
------------------------------------------------------------------
Class C Shares 3,4 45.55% N/A (10.06)%
------------------------------------------------------------------
Class C Shares
with Sales Charge 3,4 44.55% N/A (10.96)%
------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: AUGUST 1, 1997 (CLASS I
SHARES); AUGUST 1, 1997 (CLASS A SHARES); JANUARY 6, 1998 (CLASS B SHARES) AND
JANUARY 20, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD AUGUST 1, 1997 TO JANUARY 6, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 6, 1998 TO JANUARY 20, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
9
<PAGE>
EQUITY FUNDS
ARMADA SMALL CAP VALUE FUND OVERVIEW
================================================================================
COMMENTS FROM THE EQUITY VALUE TEAM
An emphasis on the technology sector for most of the year and strong stock
selection led the Armada Small Cap Value Fund to outperform its benchmark, the
Russell 2000 Value Index. For the fiscal year ended May 31, 2000, the Fund
produced a total return of 11.87% (before sales charges) for Class B
shareholders and 12.87% for Class I investors. Over the same period, the Russell
2000 Value Index had a return of (0.26)%.
In contrast to the large cap market, where value and technology appeared to
be mutually exclusive, the management team identified several small cap tech
stocks that met the Fund's investment criteria. Semiconductor stocks Integrated
Device Technologies and AMKOR Corp. returned 270% and 138%, respectively. These
companies are benefiting from improved earnings, driven by increasing demand
from the Internet and telecom industries. Network installer MasTec, Inc.,
another holding, gained 160%.
Driven by our good value and good news investment discipline, the management
team reduced the Fund's technology weighting significantly in late February just
before the sector suffered a major sell-off. At the same time, we increased the
Fund's energy holdings, which subsequently rallied in March due to soaring
energy prices and reasonable valuations. Such holdings as crude oil and natural
gas explorer Ocean Energy returned 51.90%, while contract driller Helmerich &
Payne returned 61.41%.
Despite the poor performance of financial stocks in general, stock selection
within the sector proved beneficial. Mortgage insurer PMI Group, a long-term
holding, gained 30% during the year. Elsewhere in the portfolio, Quest
Diagnostics, the country's largest independent clinical lab, gained 87% since
being added to the portfolio in March. Quest's earnings have improved partially
due to less restrictive testing policies among managed care providers.
Looking ahead, we continue to emphasize the energy sector as well as the
health care stocks and real estate investment trusts (REITs). In the health care
space, we particularly like the prospects for such hospital stocks as Province
Healthcare and Foundation Health Systems, which could benefit in the event that
the federal government, increases Medicare reimbursements. REITS like Essex
Property Trust and General Growth Properties have been trading below their
underlying property values and offer reasonable earnings growth and good
dividend yields.
Although the Fund's percentage of holdings in financial stocks is equal to
that of the benchmark, the Fund's exposure is tilted toward property and
casualty insurers, which are benefiting from improved pricing power. A number of
reinsurance companies were added to the portfolio in March. The first to feel
the impact of any pricing changes, these stocks include American Financial
Group, Everest-Reinsurance, and Renaissance Reinsurance.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Small Cap Value Fund Armada Small Cap Value Fund Russell 2000
(Class I Shares) (Class B Shares) 2,4 Value Index
<S> <C> <C> <C>
7/26/94 $10,000 $10,000 $10,000
5/31/95 $11,464 $11,416 $11,084
5/31/96 $14,059 $13,959 $14,049
5/31/97 $17,378 $17,206 $16,946
5/31/98 $20,823 $20,496 $21,465
5/31/99 $20,058 $19,444 $19,420
5/31/00 $22,640 $21,753 $19,369
</TABLE>
ARMADA SMALL CAP VALUE FUND
---------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION (1) INCEPTION (1)
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class I Shares 12.87% 9.22% 14.58% 14.99% 126.40%
------------------------------------------------------------------------------------
Class A Shares 12.59% 8.76% 14.16% 14.22% 116.17%
------------------------------------------------------------------------------------
Class A Shares
with Sales Charge 6.43% 6.73% 12.87% 13.12% 104.31%
------------------------------------------------------------------------------------
Class B Shares 2,4 11.87% 8.13% 13.77% 2.90% 7.11%
------------------------------------------------------------------------------------
Class B Shares
with Sales Charge 2,4 6.87% 7.00% 13.53% 1.36% 3.28%
------------------------------------------------------------------------------------
Class C Shares 3,4 11.87% 8.13% 13.77% N/A 11.86%
------------------------------------------------------------------------------------
Class C Shares
with Sales Charge 3,4 10.87% N/A N/A N/A 10.86%
------------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: JULY 26, 1994 (CLASS I
SHARES); AUGUST 15, 1994 (CLASS A SHARES); JANUARY 6, 1998 (CLASS B SHARES)
AND JANUARY 27, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD AUGUST 15, 1994 TO JANUARY 6, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES AND RETURNS FOR THE
PERIOD PRIOR TO AUGUST 15, 1994 REFLECT THE PERFORMANCE OF THE FUND'S CLASS I
SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 6, 1998 TO JANUARY 27, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES, RETURNS FOR THE PERIOD
AUGUST 15, 1994 TO JANUARY 6, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS
A SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
10
<PAGE>
EQUITY FUNDS
ARMADA TAX MANAGED EQUITY FUND OVERVIEW
================================================================================
COMMENTS FROM THE EQUITY GROWTH TEAM
Despite a year-long underweight to technology stocks, good selection in this
sector and in telecommunications helped the Armada Tax Managed Equity Fund
outperform its benchmark. The growing infrastructure demands of the Internet and
wireless industries contributed to solid earnings growth and to a more than
twofold price increase in a number of the Fund's holdings, including Cisco
Systems, Intel, Nortel Networks, Sun Microsystems, and Texas Instruments. An
underweight in consumer noncyclicals also proved beneficial as earnings
disappointments at bellwethers Procter & Gamble and Gillette cast a cloud over
the entire sector.
For the fiscal year ended May 31, 2000, the Armada Tax Managed Equity Fund
produced a total return of 16.95% (before sales charges) for Class B
shareholders and 18.06% for Class I investors. Over the same period, the Fund's
benchmark, the Standard & Poor's 500 Composite Index, had a return of 10.47%.
Measured on an after-tax basis, the Fund's performance was even more impressive
as investors received a modest penny per share in capital gains in the 1999
calendar year.
We accomplished this feat through a strategy of favoring capital appreciation
(with its lower tax rate) over dividends, keeping portfolio turnover under 25%,
and selling depreciated securities to offset some of the Fund's gains. For
example, we took some profits in long-term holdings American International
Group, Intel, and Home Depot after a period of strong price appreciation in
order to keep these holdings at targeted levels. In turn, we trimmed our
investments in disappointing performers Air Products & Chemicals, Nordstrom,
Xerox, Gillette, and a number of other holdings.
The Fund's emphasis on low turnover results in a portfolio that is structured
toward equities that offer the potential for consistent, long-term growth. In
contrast, cyclical stocks have to be traded aggressively for outperformance and,
as a result, can generate significant short-term capital gains.
At year end, health care stocks -- primarily pharmaceuticals -- remained the
Fund's largest overweight. Although this sector detracted from performance
earlier in the year, it rallied late in the reporting period. Holdings include
Pfizer, Bristol-Myers Squibb, and Schering Plough, all of which have performed
well over long periods of time, hold a valuable collection of drug patents, and,
with an aging population, appear to have demographics working in their favor.
Although the Fund's technology weighting remains somewhat less than that of
its benchmark, it is our largest sector holding and one we are likely to
increase once valuations appear more reasonable. The Fund's sector allocation
remains close to that of its benchmark in all other sectors, with the exception
of utility stocks. Since dividends account for such a large portion of their
returns, they do not fit the Fund's tax-efficient focus.
GROWTH OF A $10,000 INVESTMENT (6)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Tax Managed Equity Fund Armada Tax Managed Equity Fund S&P 500
(Class I Shares) (Class B Shares) 2,5 Composite Index
<S> <C> <C> <C>
5/31/90 $10,000 $10,000 $10,000
5/31/91 $11,492 $11,492 $11,176
5/31/92 $12,530 $12,530 $12,280
5/31/93 $13,588 $13,588 $13,703
5/31/94 $13,769 $13,769 $14,283
5/31/95 $15,423 $15,423 $17,161
5/31/96 $19,413 $19,413 $22,038
5/31/97 $24,978 $24,978 $28,518
5/31/98 $33,451 $33,451 $37,264
5/31/99 $41,085 $40,914 $45,108
5/31/00 $48,505 $47,849 $49,831
</TABLE>
ARMADA TAX MANAGED EQUITY FUND
------------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION (1) INCEPTION (1)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I Shares 18.06% 24.76% 25.75% 17.11% 17.67% 1,236.03
---------------------------------------------------------------------------------------------
Class A Shares 3,5 18.01% 24.81% 25.78% 17.12% 17.68% 1,237.69
---------------------------------------------------------------------------------------------
Class A Shares
with Sales Charge 3,5 11.50% 22.46% 24.37% 16.45% 17.27% 1,164.72
---------------------------------------------------------------------------------------------
Class B Shares 2,5 16.95% 24.19% 25.41% 16.95% 17.57% 1,218.02
---------------------------------------------------------------------------------------------
Class B Shares
with Sales Charge 2,5 11.95% 23.32% 25.25% N/A N/A N/A
---------------------------------------------------------------------------------------------
Class C Shares 4,5 16.95% 24.19% 25.41% 16.95% 17.57% 1,218.02
---------------------------------------------------------------------------------------------
Class C Shares
with Sales Charge 4,5 15.95% N/A N/A N/A N/A N/A
---------------------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: APRIL 9, 1998 (CLASS I
SHARES); MAY 11, 1998 (CLASS A SHARES); MAY 4, 1998 (CLASS B SHARES) AND
JANUARY 10, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD PRIOR TO MAY 4, 1998 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
3 CLASS A SHARES RETURNS FOR THE PERIOD MAY 4, 1998 TO MAY 11, 1998 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS B SHARES, AND RETURNS FOR THE PERIOD PRIOR TO
MAY 4, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS I SHARES.
4 CLASS C SHARES RETURNS FOR THE PERIOD MAY 11, 1998 TO JANUARY 10, 2000 REFLECT
THE PERFORMANCE OF THE FUND'S CLASS A SHARES, RETURNS FOR THE PERIOD MAY 4, 1998
TO MAY 11, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES, AND
RETURNS FOR THE PERIOD PRIOR TO MAY 4, 1998 REFLECT THE PERFORMANCE OF THE
FUND'S CLASS I SHARES.
5 THE PERFORMANCE HISTORY FOR EACH CLASS INCLUDES PERFORMANCE OF A PREDECESSOR
TRUST FUND WHICH COMMENCED OPERATIONS ON JUNE 30, 1984. WHERE PERFORMANCE OF AN
OLDER SHARE CLASS IS USED TO CALCULATE HISTORICAL PERFORMANCE OF A NEWER SHARE
CLASS, THE PERFORMANCE OF THE OLDER CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE
HIGHER OPERATING EXPENSES OF THE NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE
BEEN LOWER.
6 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT SHOWN
IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
11
<PAGE>
BALANCED FUND
ARMADA BALANCED ALLOCATION FUND OVERVIEW
================================================================================
COMMENTS FROM THE EQUITY AND FIXED INCOME TEAMS
Strong performance throughout the Fund's equity portfolio, particularly among
its small cap growth and international components, helped the Armada Balanced
Allocation Fund easily outperform its benchmarks. For the fiscal year ended May
31, 2000, the Fund produced a total return of 15.72% for Class I shareholders
and 14.79% (before sales charges) for Class B investors. By comparison, the
Balanced Allocation Hybrid Benchmark had a return of 7%, the S&P 500 Composite
Index had a return of 10.47%, and the Lehman Aggregate Bond Index had a return
of 2.10%.
Among our domestic equity funds, an emphasis on semiconductor stocks played a
significant role in the Fund's performance. The Fund management team began
adding to the Fund's semiconductor holdings last summer as the industry's cycle
of overcapacity--driven largely by the growth of the Internet and wireless
industries--appeared to be nearing an end. Internationally, an aggressive
weighting in the resurgent economies of Asia proved beneficial, with many
technology, telecom, and media stocks posting outstanding gains.
The fixed income portion of the portfolio--with an emphasis on non-government
sectors -- suffered from oversupply in the corporate and asset-backed markets
early in the period and from six interest rate hikes by an active Fed.
After maintaining a roughly 60/40 distribution of assets in equities and
fixed income securities, respectively, throughout the 12-month period, the Fund
management teams trimmed the Fund's exposure in both by year-end and increased
the portfolio's cash position. As of May 31, equities account for 55% of the
portfolio and bonds for 40%. Frankly, we remain concerned over the extended
valuations of many growth stocks and over the negative impact that additional
rate hikes might have on the stock and bond markets.
Solid earnings and reasonable valuations led the management team to introduce
large cap value stocks into the portfolio for the first time, and at fiscal year
end accounted for roughly 40% of the Fund's equity stake. We particularly like
the prospects for energy stocks. Robust worldwide economic growth is driving the
demand for energy, and a number of companies are benefiting from the attendant
increase in exploration.
Management has weighted fully 25% of the portfolio's equity allocation
towards international stocks. Consumer confidence in Europe stands at its
highest level in a decade, and its GDP growth may surpass that of the United
States for the first time in 10 years. Moreover, we believe that the
fundamentally undervalued euro may be poised for a rebound. The Asian markets,
led by Hong Kong and Singapore, continue their strong recovery, and valuations
remain reasonable. Even Japan has begun the painful corporate restructuring that
should lead to improved earnings.
The U.S. Government's plan to buy back some $30 billion of debt at the
long-end of the curve has led us to overweight the bond portion of the portfolio
towards long Treasuries. These securities should increase in value as supply
becomes scarce. We have taken a defensive stance on non-government sectors,
focusing on the front end of the curve. Our view is that the Fed will continue
to raise rates; therefore, the overall bond holdings are slightly less sensitive
to interest rate movements than the fixed income benchmark, the Lehman Aggregate
Bond Index.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Balanced Armada Balanced 60% S&P 500/
Allocation Fund Allocation Fund S&P 500 Lehman Aggregate 40% Lehman
(Class I Shares) (Class B Shares) 2,4 Composite Index Bond Index Aggregate Blend
<S> <C> <C> <C> <C> <C>
7/1/98 $10,000 $10,000 $10,000 $10,000 $10,000
5/31/99 $10,457 $10,435 $11,632 $10,346 $11,165
5/31/00 $12,101 $11,478 $12,850 $10,563 $11,986
</TABLE>
ARMADA BALANCED ALLOCATION FUND
-------------------------------
Average Annual Total Returns, as of 5/31/00
------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR INCEPTION (1) INCEPTION (1)
------------------------------------------------------------------
Class I Shares 15.72% 10.60% 21.01%
------------------------------------------------------------------
Class A Shares 15.48% 12.36% 23.86%
------------------------------------------------------------------
Class A Shares
with Sales Charge 10.03% 9.40% 17.93%
------------------------------------------------------------------
Class B Shares 14.79% 13.51% 21.76%
------------------------------------------------------------------
Class B Shares
with Sales Charge 9.79% 10.49% 16.76%
------------------------------------------------------------------
Class C Shares 3,4 14.79% N/A (1.52)%
------------------------------------------------------------------
Class C Shares
with Sales Charge 3,4 13.79% N/A (2.50)%
------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: JULY 10, 1998 (CLASS I
SHARES); JULY 31, 1998 (CLASS A SHARES); NOVEMBER 11, 1998 (CLASS B SHARES)
AND APRIL 20, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD JULY 31, 1998 TO NOVEMBER 11, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO JULY 31, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS I
SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD NOVEMBER 11, 1998 TO APRIL 20, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
12
<PAGE>
FIXED INCOME FUNDS
ARMADA BOND FUND OVERVIEW
================================================================================
COMMENTS FROM THE TAXABLE FIXED INCOME TEAM
Inflationary pressures, six attendant rate hikes, and an oversupply of new
corporate issues resulted in a particularly difficult year for the bond market.
For the 12 months ended May 31, 2000, the Armada Bond Fund produced a total
return (before sales charges) of (0.71)% for Class B shareholders and 0.24% for
Class I investors. By comparison, the Fund's benchmark, the Lehman U.S.
Aggregate Bond Index, had a return of 2.10%.
The Fund entered the fiscal year with an emphasis in spread--or
non-government--sectors, which the management team believed offered superior
value. Unfortunately, fears of an eventuaL Y2K-related pullback by investors led
corporate and asset-backed issuers to flood the bond market throughout the
summer. This supply bubble led to a steep price drop from which the spread
sectors did not begin to recover until September. Treasury prices also continued
descending from their "flight to quality" highs throughout the period.
In January, the management team became more defensive on spread product,
moving to shorter-term securities but still retaining our overweight versus the
benchmark. As it turns out, we were not defensive enough. In a dramatic
decoupling, Treasury prices, especially at the long end of the curve, began to
rise in January as the federal government announced plans to buy back some $30
billion of debt. This yield curve inversion, on top of an active Fed, caused
significant spread product underperformance.
As we enter a new fiscal year, the management team has overweighted the
portfolio to long Treasuries, which should increase in value as supply becomes
scarce. In fact, we believe that the buyback will make Treasuries more expensive
across the yield curve.
At the same time, we've taken a more defensive stance on spread product and
duration. Our spread holdings tend to be on the shorter end of the yield curve,
and the portfolio in total is roughly 5% less sensitive to interest rate
movements than the benchmark. Even after rate increases in February, March, and
May, the latter a 50-basis-point hike, more may be in the offing as the Fed
attempts to stem the wealth effect caused by the stock market's precipitous
rise. Although some of its speculative excess has been removed, rising energy
prices and virtually full employment are also exerting inflationary pressures.
As of May 31, 19% of the Fund's net assets were invested in U.S. Treasury
securities, 40% in mortgage-backed securities, 23% in corporate bonds, 17% in
asset backed securities, and 1% in agency issues. As of the same date, the
average maturity of the Fund was 8.3 years with an average credit quality of
triple-A.
GROWTH OF A $10,000 INVESTMENT (6)
[line graph omitted--plot points as follows]
Armada Bond Fund Armada Bond Fund Lehman U.S.
(Class I Shares) (Class B Shares) 3,5 Aggregate Bond Index
8/10/94 $10,000 $10,000 $10,000
5/31/95 $10,773 $10,773 $10,995
5/31/96 $11,195 $11,195 $11,435
5/31/97 $12,023 $12,005 $12,387
5/31/98 $13,051 $13,021 $13,739
5/31/99 $13,550 $13,420 $14,336
5/31/00 $13,582 $13,324 $14,637
ARMADA BOND FUND
----------------
Average Annual Total Returns, as of 5/31/00
--------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION (1) INCEPTION (1)
--------------------------------------------------------------------------------
Class I Shares 0.24% 4.14% 4.74% 5.41% 35.83%
--------------------------------------------------------------------------------
Class A Shares 2,5 0.11% 4.00% 4.63% 4.71% 18.68%
--------------------------------------------------------------------------------
Class A Shares
with Sales Charge 2,5 (4.67)% 2.33% 3.61% 3.34% 13.01%
--------------------------------------------------------------------------------
Class B Shares 2,5 (0.71)% 3.53% 4.34% 1.59% 3.86%
--------------------------------------------------------------------------------
Class B Shares
with Sales Charge 3,5 (5.42)% 2.36% 4.03% 0.10% 0.24%
--------------------------------------------------------------------------------
Class C Shares 4,5 (0.71)% 3.54% 4.34% N/A 0.52%
--------------------------------------------------------------------------------
Class C Shares
with Sales Charge 4,5 (1.65)% N/A N/A N/A (0.47)%
--------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 ACTIVITY FOR THE PERIOD PRESENTED INCLUDES THAT OF A PREDECESSOR FUND THROUGH
SEPTEMBER 6, 1996. THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: AUGUST 10,
1994 (CLASS I SHARES); SEPTEMBER 11, 1996 (CLASS A SHARES); JANUARY 6, 1998
(CLASS B SHARES) AND JANUARY 27, 2000 (CLASS C SHARES).
2 CLASS A SHARES RETURNS FOR THE PERIOD PRIOR TO SEPTEMBER 11, 1996 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
3 CLASS B SHARES RETURNS FOR THE PERIOD SEPTEMBER 11, 1996 TO JANUARY 6, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO SEPTEMBER 11, 1996 REFLECT THE PERFORMANCE OF THE FUND'S CLASS
I SHARES.
4 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 6, 1998 TO JANUARY 27, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES, RETURNS FOR THE PERIOD
SEPTEMBER 11, 1996 TO JANUARY 6, 1998 REFLECT THE PERFORMANCE OF THE FUND'S
CLASS A SHARES, AND RETURNS FOR THE PERIOD PRIOR TO SEPTEMBER 11, 1996 REFLECT
THE PERFORMANCE OF THE FUND'S CLASS I SHARES.
5 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
6 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
13
<PAGE>
FIXED INCOME FUNDS
ARMADA ENHANCED INCOME FUND OVERVIEW
================================================================================
COMMENTS FROM THE TAXABLE FIXED INCOME TEAM
The specter of inflation, six preemptive rate hikes, and an oversupply of new
corporate issues resulted in a particularly difficult year for the bond market.
For the year ended May 31, 2000, the Armada Enhanced Income Fund produced a
total return (before sales charges) of 3.47% for Class A shareholders and 3.22%
for Class I investors.
By comparison, the Merrill Lynch 1-3 year Treasury Bill Index returned 4.16%
and the Merrill Lynch 1-3 Year Corporate/Government Index, the Fund's benchmark,
had a return of 4.10%. Management adopted the latter as its benchmark this past
year because it better represents the portfolio's orientation towards
nongovernment-or spread-securities.
The Fund entered the fiscal year with a traditional emphasis on
mortgage-backed and asset-backed securities as well as corporate bonds.
Throughout the entire period, in fact, these spread sectors accounted for no
less than 80% of the portfolio versus approximately 45% for the benchmark.
Despite the steep price drop in spread product-the result of a summer supply
bubble, an active Fed, and an announced Treasury buyback-the risk/return ratio
still favored such securities over Treasuries on the shorter end of the yield
curve.
As we enter a new fiscal year, the Fund remains significantly overweight in
all three major spread sectors. Although management has taken a defensive
posture on corporate credit in general, we are confident in the ability of
issuers to meet their obligations on the short-end of the curve. Given the
current interest rate environment, the Fund maintains a roughly neutral duration
posture relative to the benchmark. Even after rate increases in February, March,
and May, the latter a 50-basis-point hike, more may be in the offing as the Fed
attempts to stem the wealth effect caused by the extended bull market in stocks.
Although some of the stock market's speculative excess has been removed, rising
energy prices and virtually full employment continue to make inflation a
concern.
As of May 31, 8% of the Fund's net assets were invested in mortgage-backed
securities, 47% in corporate bonds, 32% in asset-backed securities, 9% in
Treasuries, and 1% in Agency. As of the same date, the average maturity of the
Fund was 1.9 years with an average credit quality of double-A. The Fund was
renamed the Armada Limited Maturity Bond Fund following the reorganization of
the Parkstone Funds--also managed by National City Investment Management Company
on June 10.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada Enhanced Armada Enhanced Merrill 1-3 Year Merrill 1-3 Year
Income Fund Income Fund U.S. Corporate/ U.S. Treasury
(Class I Shares) (Class B Shares) 2,4 Government Index Bill Index
<S> <C> <C> <C> <C>
7/7/94 $10,000 $10,000 $10,000 $10,000
5/31/95 $10,577 $10,577 $10,722 $10,714
5/31/96 $11,142 $11,119 $11,294 $11,276
5/31/97 $11,812 $11,776 $12,048 $12,020
5/31/98 $12,601 $12,563 $12,895 $12,859
5/31/99 $13,248 $13,183 $13,592 $13,541
5/31/00 $13,675 $13,530 $14,149 $14,104
</TABLE>
ARMADA ENHANCED INCOME FUND
---------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION (1) INCEPTION (1)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class I Shares 3.22% 5.00% 5.27% 5.44% 36.75%
-----------------------------------------------------------------------------------
Class A Shares 3.47% 5.02% 5.22% 5.42% 35.31%
-----------------------------------------------------------------------------------
Class A Shares
with Sales Charge 0.64% 4.06% 4.63% 4.90% 31.53%
-----------------------------------------------------------------------------------
Class B Shares 2,4 2.63% 4.74% 5.05% N/A 2.22%
-----------------------------------------------------------------------------------
Class B Shares
with Sales Charge 2,4 (2.25)% 3.54% 4.73% N/A (2.69)%
-----------------------------------------------------------------------------------
Class C Shares 3,4 2.63% 4.74% 5.05% N/A 0.56%
-----------------------------------------------------------------------------------
Class C Shares
with Sales Charge 3,4 1.66% N/A N/A N/A (0.42)%
-----------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: JULY 7, 1994 (CLASS I
SHARES); SEPTEMBER 9, 1994 (CLASS A SHARES); AUGUST 11, 1999 (CLASS B SHARES)
AND JANUARY 27, 2000 (CLASS C SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD SEPTEMBER 9, 1994 TO AUGUST 11, 1999
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO SEPTEMBER 9, 1994 REFLECT THE PERFORMANCE OF THE FUND'S CLASS
I SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD AUGUST 11, 1999 TO JANUARY 27, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES, RETURNS FOR THE PERIOD
SEPTEMBER 9, 1994 TO AUGUST 11, 1999 REFLECT THE PERFORMANCE OF THE FUND'S
CLASS A SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
14
<PAGE>
FIXED INCOME FUNDS
================================================================================
ARMADA GNMA FUND OVERVIEW
COMMENTS FROM THE TAXABLE FIXED INCOME TEAM
In a difficult year for the bond market, the Armada GNMA Fund benefited from
its high credit quality and significant exposure to Treasury securities. For the
year ended May 31, 2000, the Fund produced a total return (before sales charges)
of 2.33% for Class A shareholders and 2.48% for Class I investors. By
comparison, the Fund's benchmark, the Lehman GNMA Index had a return of 3.19%.
As inflationary pressures, six Fed tightenings, and an oversupply of new
corporate issues took their toll on the non-Treasury (or spread-sectors), the
portfolio's high credit quality insulated the Fund somewhat from the extremes of
market volatility. GNMA securities are backed by the full faith and credit of
the U.S. Government.
An emphasis on Treasury securities-growing throughout the reporting period to
account for more than 10% of the portfolio by early 2000-proved particularly
beneficial. Treasury prices, especially at the long end of the yield curve,
began to rise in January as the federal government announced plans to buy back
some $30 billion of debt. This yield curve inversion, on top of an active Fed,
sent prices falling in mortgage-backed securities and other spread sectors.
Although GNMA securities underperformed relative to U.S. Treasury securities,
they outperformed other agency-backed issues. Fannie Maes and Freddie Macs have
come under some pressure as a bill proposing to modify or remove their implied
government guarantee works its way through Congress. In the unlikely event that
such a bill passes, both face the possibility of a credit quality downgrade.
Looking ahead, GNMA prepayments are not a concern since much of the mortgage
market is trading at a discount. The management team maintains the portfolio's
overweight to Treasury securities, which should increase in value as supply
becomes scarce. We believe that the buyback at the long end of the curve will
make Treasuries more expensive across the yield curve. The uncertainty
surrounding Fannie Maes and Freddie Macs should also add to the appeal of
Treasuries.
Meanwhile, we've made the portfolio roughly 5% less sensitive to interest
rate movements than the benchmark. Even after rate increases in February, March,
and May, the latter a 50-basis-point hike, more may be in the offing as the Fed
attempts to stem the wealth effect caused by the stock market's precipitous
rise. Although some of its speculative excess has been removed, rising energy
prices and virtually full employment continue to make inflation a concern.
As of May 31, 85% of the Fund's net assets were invested in GNMA securities,
4% in other mortgage-backed securities, and 10% in Treasuries. As of the same
date, the average maturity of the Fund was 7.8 years.
GROWTH OF A $10,000 INVESTMENT (6)
[line graph omitted--plot points as follows]
Armada GNMA Fund Armada GNMA Fund Lehman
(Class I Shares) (Class B Shares) 3,5 GNMA Index
8/1/94 $10,000 $10,000 $10,000
5/31/95 $10,961 $10,962 $10,960
5/31/96 $11,466 $11,468 $11,547
5/31/97 $12,513 $12,495 $12,643
5/31/98 $13,661 $13,607 $13,857
5/31/99 $14,210 $14,120 $14,538
5/31/00 $14,562 $14,360 $15,002
ARMADA GNMA FUND
----------------
Average Annual Total Returns, as of 5/31/00
-------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION (1) INCEPTION (1)
-------------------------------------------------------------------------------
Class I Shares 2.48% 5.19% 5.85% 6.69% 45.66%
-------------------------------------------------------------------------------
Class A Shares 2,5 2.33% 4.96% 5.68% 5.91% 23.80%
-------------------------------------------------------------------------------
Class A Shares
with Sales Charge 2,5 (2.50)% 3.26% 4.65% 4.53% 17.92%
-------------------------------------------------------------------------------
Class B Shares 3,5 1.70% 4.75% 5.55% N/A 4.07%
-------------------------------------------------------------------------------
Class B Shares
with Sales Charge 3,5 (3.13)% 3.57% 5.24% N/A (0.93)%
-------------------------------------------------------------------------------
Class C Shares 4,5 1.70% 4.75% 5.55% N/A 2.16%
-------------------------------------------------------------------------------
Class C Shares
with Sales Charge 4,5 0.73% N/A N/A N/A 1.16%
-------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 ACTIVITY FOR THE PERIOD PRESENTED INCLUDES THAT OF A PREDECESSOR FUND THROUGH
SEPTEMBER 6, 1996. THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: AUGUST 10,
1994 (CLASS I SHARES); SEPTEMBER 11, 1996 (CLASS A SHARES); AUGUST 11, 1999
(CLASS B SHARES) AND JANUARY 27, 2000 (CLASS C SHARES).
2 CLASS A SHARES RETURNS FOR THE PERIOD PRIOR TO SEPTEMBER 11, 1996 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
3 CLASS B SHARES RETURNS FOR THE PERIOD SEPTEMBER 11, 1996 TO AUGUST 11, 1999
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO SEPTEMBER 11, 1996 REFLECT THE PERFORMANCE OF THE FUND'S CLASS
I SHARES.
4 CLASS C SHARES RETURNS FOR THE PERIOD AUGUST 11, 1999 TO JANUARY 27, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES, RETURNS FOR THE PERIOD
SEPTEMBER 11, 1996 TO AUGUST 11, 1999 REFLECT THE PERFORMANCE OF THE FUND'S
CLASS A SHARES, AND RETURNS FOR THE PERIOD PRIOR TO SEPTEMBER 11, 1996 REFLECT
THE PERFORMANCE OF THE FUND'S CLASS I SHARES.
5 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
6 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
15
<PAGE>
FIXED INCOME FUNDS
ARMADA INTERMEDIATE BOND FUND OVERVIEW
================================================================================
COMMENTS FROM THE TAXABLE FIXED INCOME TEAM
The specter of inflation, six preemptive rate hikes, and an oversupply of new
corporate issues resulted in a particularly difficult year for the bond market.
For the 12 months ended May 31, 2000, the Armada Intermediate Bond Fund produced
a total return (before sales charges) of 0.64% for Class B shareholders and
1.50% for Class I investors. By comparison, the Fund's benchmark, the Lehman
Intermediate Government/Corporate Bond Index, had a return of 2.47%.
The Fund entered the fiscal year with an emphasis in mortgage-backed
securities, corporate bonds, and asset-backed securities, which the management
team believed offered superior value. Unfortunately, fears of an eventual
Y2K-related pullback by investors led corporate and asset-backed issuers to
flood the bond market throughout the summer. Although the Fund was insulated
somewhat by the shorter maturities of its holdings, this supply bubble led to a
steep price drop from which the non-government--or spread-- sectors did not
begin to recover until September. Treasury prices also continued falling from
their "flight to quality" highs throughout the period.
In January, the management team became more defensive on spread product,
moving to shorter-term securities but still retaining our overweight versus the
benchmark. As it turns out, we were not defensive enough. A yield curve
inversion, largely the result of a $30 billion Treasury buyback plan, and an
active Federal Reserve Board caused significant spread product underperformance.
Talk in Congress of eliminating the implicit government guarantee of agencies
such as Fannie Mae and Freddie Mac only made matters worse.
As we enter a new fiscal year, the Fund remains overweighted to mortgage-
backed and asset-backed securities, which offer superior credit quality and
liquidity versus the corporate bond market. The Fund's management team has
reduced the Fund's exposure to corporates, whose climbing debt ratios trouble
us.
Our spread holdings tend to be on the shorter end of the yield curve, and the
portfolio in total is roughly 5% less sensitive to interest rate movements than
the benchmark. Even after rate increases in February, March, and May, the latter
a 50-basis-point hike, more may be in the offing as the Fed attempts to stem the
wealth effect caused by the extended bull market in stocks. Although some of the
stock market's speculative excess has been removed, rising energy prices and
virtually full employment continue to make inflation a concern.
As of May 31, 21% of the Fund's net assets were invested in U.S. Treasury
securities, 16% in mortgage-backed securities, 33% in corporate bonds, and 28%
in asset backed securities. As of the same date, the average maturity of the
Fund was 4.9 years with an average credit quality of triple-A.
GROWTH OF A $10,000 INVESTMENT (6)
[line graph omitted--plot points as follows]
Armada Intermediate Armada Intermediate Lehman Intermediate
Bond Fund Armada Bond Fund U.S. Government/
(Class I Shares) (Class B Shares) 3,5 Corporate Index
5/31/90 $10,000 $10,000 $10,000
5/31/91 $11,222 $11,220 $11,193
5/31/92 $12,637 $12,637 $12,490
5/31/93 $14,066 $14,030 $13,789
5/31/94 $14,066 $13,997 $13,969
5/31/95 $15,410 $15,294 $15,315
5/31/96 $15,994 $15,820 $16,018
5/31/97 $17,054 $16,826 $17,200
5/31/98 $18,434 $18,068 $18,717
5/31/99 $19,167 $18,579 $19,612
5/31/00 $19,455 $18,698 $20,096
ARMADA INTERMEDIATE BOND FUND
-----------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION (1) INCEPTION (1)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I Shares 1.50% 4.49% 4.77% 6.88% 6.67% 96.45%
------------------------------------------------------------------------------------------
Class A Shares 2,5 1.25% 4.13% 4.44% 6.57% 5.99% 69.93%
------------------------------------------------------------------------------------------
Class A Shares
with Sales Charge 2,5 (3.57)% 2.46% 3.42% 6.06% 5.42% 61.79%
------------------------------------------------------------------------------------------
Class B Shares 3,5 0.64% 3.58% 4.10% 6.46% 1.96% 4.77%
------------------------------------------------------------------------------------------
Class B Shares
with Sales Charge 3,5 (4.13)% 2.38% 3.78% N/A 0.44% 1.06%
------------------------------------------------------------------------------------------
Class C Shares 4,5 0.64% 3.58% 4.10% 6.46% N/A 0.22%
------------------------------------------------------------------------------------------
Class C Shares
with Sales Charge 4,5 (0.31)% N/A N/A N/A N/A (0.78)%
------------------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: DECEMBER 20, 1989 (CLASS I
SHARES); APRIL 15, 1991 (CLASS A SHARES); JANUARY 6, 1998 (CLASS B SHARES) AND
MAY 30, 2000 (CLASS C SHARES).
2 CLASS A RETURNS FOR THE PERIOD PRIOR TO APRIL 15, 1991 REFLECT THE PERFORMANCE
OF THE FUND'S CLASS I SHARES.
3 CLASS B SHARES RETURNS FOR THE PERIOD APRIL 15, 1991 TO JANUARY 6, 1998
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO APRIL 15, 1991 REFLECT THE PERFORMANCE OF THE FUND'S CLASS I
SHARES.
4 CLASS C SHARES RETURNS FOR THE PERIOD APRIL 15, 1999 TO MAY 30, 2000 REFLECT
THE PERFORMANCE OF THE FUND'S CLASS B SHARES, RETURNS FOR THE PERIOD APRIL 15,
1991 TO JANUARY 6, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES,
AND RETURNS FOR THE PERIOD PRIOR TO APRIL 15, 1991 REFLECT THE PERFORMANCE OF
THE FUND'S CLASS I SHARES.
5 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
6 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
16
<PAGE>
FIXED INCOME FUNDS
ARMADA TOTAL RETURN ADVANTAGE FUND OVERVIEW
================================================================================
COMMENTS FROM NATIONAL ASSET MANAGEMENT CORPORATION
Six interest rate hikes, an oversupply of new corporate issues early in the
period, and an announced Treasury buyback resulted in a particularly difficult
year for the bond market. For the 12 months ended May 31, 2000, the Armada Total
Return Advantage Fund produced a total return of 1.41% (before sales charges)
for Class A shareholders and 1.78% for Class I investors. By comparison, the
Lehman Government/ Corporate Bond Index had a return of 1.89%.
An emphasis on corporate bonds throughout the period had a slightly negative
impact on the Fund's performance. During the summer, corporate and asset-backed
issuers flooded the market in anticipation of a Y2K-related pullback by
investors. This supply bubble led to a steep price drop from which the
non-Treasury-or spread-sectors did not begin to recover until September. With
the specter of inflation also punishing prices, the Fund's long duration posture
during this period also detracted from results. The portfolio was positioned
anywhere from 5 to 10 percent longer than the benchmark early in the period and
as much as 20 percent longer by late November.
After rebounding strongly, corporates were dealt a second blow in January
when the Treasury announced plans to buy back some $30 billion in debt. The
buyback resulted in a dramatic decoupling of the Treasury and spread markets as
long Treasury prices began to rise. An inversion of the Treasury curve combined
with an active Fed caused significant corporate underperformance, especially
during February and March.
Fortunately, we had increased the Fund's weighting in long Treasuries in
November and December and were well positioned for the events that followed. The
Fund also benefited from an underweight in Agency holdings. Fannie Mae and
Freddie Mac have come under some pressure as a bill proposing to modify or
remove the implied government guarantee behind their securities works it way
through Congress. In the unlikely event that such a bill passes, both face the
possibility of a credit quality downgrade.
We reduced the Fund's duration to be the same as the benchmark in mid-April.
This move proved beneficial as Mr. Greenspan and Company announced their fifth
and sixth tightenings soon after. More may be in the offing as the Fed attempts
to stem the wealth effect caused by, among other things, the extended bull
market in stocks. Although some of the stock market's speculative excess has
been removed, rising energy prices and virtually full employment continue to
make inflation a concern.
As of May 31, 33% of the Fund's net assets were invested in U.S. Treasury
securities, 34% in corporate bonds, and 30% in asset backed securities. As of
the same date, the average maturity of the fund was 9.5 years with an average
credit quality of AA+.
GROWTH OF A $10,000 INVESTMENT (4)
[line graph omitted--plot points as follows]
Armada Total Return Armada Total Return Lehman
Advantage Fund Advantage Fund U.S. Government/
(Class I Shares) (Class B Shares) 2,3 Corporate Bond Index
7/7/94 $10,000 $10,000 $10,000
5/31/95 $11,113 $11,044 $11,187
5/31/96 $11,579 $11,455 $11,645
5/31/97 $12,564 $12,411 $12,565
5/31/98 $13,864 $13,661 $14,008
5/31/99 $14,355 $14,096 $14,577
5/31/00 $14,610 $14,317 $14,852
ARMADA TOTAL RETURN ADVANTAGE FUND
----------------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION (1) INCEPTION (1)
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class I Shares 1.78% 5.16% 5.63% 6.63% 46.08%
----------------------------------------------------------------------------------
Class A Shares 1.41% 4.82% 5.29% 6.21% 41.26%
----------------------------------------------------------------------------------
Class A Shares
with Sales Charge (3.43)% 3.15% 4.27% 5.30% 34.50%
----------------------------------------------------------------------------------
Class B Shares 2,3 1.57% 4.88% 5.33% N/A 2.17%
----------------------------------------------------------------------------------
Class B Shares
with Sales Charge 2,3 (3.19)% 3.70% 5.03% N/A (2.71)%
----------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: JULY 7, 1994 (CLASS I
SHARES); SEPTEMBER 6, 1994 (CLASS A SHARES); SEPTEMBER 29, 1999 (CLASS B
SHARES).
2 CLASS B SHARES RETURNS FOR THE PERIOD SEPTEMBER 6, 1994 TO SEPTEMBER 29, 1999
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO SEPTEMBER 6, 1994 REFLECT THE PERFORMANCE OF THE FUND'S CLASS
I SHARES.
3 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
4 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A WOULD BE GREATER THAN OR LESS THAN THAT SHOWN IN THE
GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY SHAREHOLDERS
INVESTING CLASS A.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
17
<PAGE>
TAX EXEMPT FUNDS
ARMADA NATIONAL TAX EXEMPT BOND FUND OVERVIEW
================================================================================
COMMENTS FROM THE TAX EXEMPT FIXED INCOME TEAM
Unusually strong economic growth, the resulting specter of inflation, and a
rising interest rate environment took their toll on fixed income securities
during the past 12 months. Although the municipal market suffered along with
taxable bonds, the management team's conservative investment style served the
Armada National Tax Exempt Bond Fund well under adverse conditions. The Fund
also benefited from our focus on bonds with intermediate maturities--largely in
the 2- to 12-year range--which are somewhat less sensitive to interest rate
movements than those at the longer end of the spectrum.
For the fiscal year ended May 31, 2000, the Armada National Tax Exempt Bond
Fund produced a total return of (1.05)% (before sales charges) for Class B
investors and (0.24)% for Class I shareholders. Over the same period, the Fund's
benchmark, the Lehman 7-Year Municipal Bond Index, had a return of 0.24% while
the Lehman Intermediate Mutual Fund Index returned 0.18%. For internal purposes,
the management team prefers to use the Intermediate Mutual Fund Index, because
we fell it better reflects the range of maturities within the Fund's portfolio.
Previously the Fund measured its performance to the Lehman 10-Year Municipal
Bond Index, but the Lehman 7-Year Municipal Bond Index more accurately reflects
the Fund's maturity.
Although we witnessed a decline in supply of new issues versus the preceding
year, demand for municipal bonds dropped even more. Lured by the prodigious
returns generated by technology stocks, many investors weighted their portfolios
heavily towards equities. Despite these events, the management team succeeded in
increasing the portfolio's year-over-year distribution yield by a full half of a
percentage point and finished the fiscal year ranked in the top 10% of the
widely followed Lipper General Municipal Universe.
The Fund retained its historic emphasis on diversification, with holdings in
31 states and territories. More than 90% of the Fund's assets were invested in
issues rated double-A or higher, with 70% of assets in highest-quality, triple-A
rated issues at year-end. The Fund held very few A rated and triple-B rated
securities because in the management team's opinion, the small spread between
credit grades that characterized the past 12 months did not warrant taking on
additional risk. In particular, we largely avoided the hospital sector, which is
facing the challenges of overcapacity and reduced Medicare reimbursements.
At year-end, 43% of the Fund's assets were invested in general obligation
securities, and 17% in pre-refunded and escrowed-to-maturity securities. Of the
Fund's revenue bonds, agencies accounted for 28%, utilities for 12%, and
hospitals for 1% of the total portfolio. As of May 31, 2000, the average
maturity of the securities in the Fund was 7.07 years.
Looking ahead, we will continue to maintain our emphasis on income and
stability. However, we will likely lengthen the Fund's average maturity and
duration once we see clear signs that interest rates may have reached their
peak.
GROWTH OF A $10,000 INVESTMENT (6)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Armada National Armada National Lehman Lehman
Tax Exempt Bond Fund Tax Exempt Bond Fund 7-Year Municipal 10-Year Municipal
(Class I Shares) (Class B Shares) 3,5 Bond Index Bond Index
<S> <C> <C> <C> <C>
5/31/90 $10,000 $10,000 $10,000 $10,000
5/31/91 $10,644 $10,644 $11,001 $11,039
5/31/92 $11,555 $11,555 $11,990 $12,065
5/31/93 $13,164 $13,164 $13,247 $13,550
5/31/94 $13,287 $13,287 $13,682 $14,012
5/31/95 $14,372 $14,372 $14,799 $15,270
5/31/96 $14,305 $14,305 $15,485 $15,992
5/31/97 $15,075 $15,075 $16,546 $17,299
5/31/98 $16,237 $16,234 $17,882 $18,902
5/31/99 $16,898 $16,859 $18,727 $19,776
5/31/00 $16,858 $16,682 $18,774 $19,740
</TABLE>
ARMADA NATIONAL TAX EXEMPT BOND FUND
------------------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION (1) INCEPTION (1)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I Shares 5 (0.24)% 3.79% 3.24% 5.36% 6.57% 174.16%
---------------------------------------------------------------------------------------
Class A Shares 2,5 (0.02)% 3.86% 3.28% 5.38% 6.59% 174.69%
---------------------------------------------------------------------------------------
Class A Shares
with Sales Charge 2,5 (4.80)% 2.19% 2.27% 4.87% 6.26% 161.70%
---------------------------------------------------------------------------------------
Class B Shares 3,5 (1.05)% 3.44% 3.03% 5.25% 6.50% 171.39%
---------------------------------------------------------------------------------------
Class B Shares
with Sales Charge 3,5 (5.81)% 2.23% 2.71% N/A N/A N/A
---------------------------------------------------------------------------------------
Class C Shares 4,5 (1.69)% 3.22% 2.90% 5.18% 6.46% 169.06%
---------------------------------------------------------------------------------------
Class C Shares
with Sales Charge 4,5 (2.65)% N/A N/A N/A N/A N/A
---------------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: APRIL 9, 1998 (CLASS I
SHARES); JUNE 22, 1998 (CLASS A SHARES); JANUARY 29, 1999 (CLASS B SHARES) AND
FEBRUARY 19, 2000 (CLASS C SHARES).
2 CLASS A SHARES RETURNS FOR THE PERIOD PRIOR TO JUNE 22, 1998 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
3 CLASS B SHARES RETURNS FOR THE PERIOD JUNE 22, 1998 TO JANUARY 29, 1999
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO JUNE 22, 1998 REFLECT THE PERFORMANCE OF THE FUND'S CLASS I
SHARES.
4 CLASS C SHARES RETURNS FOR THE PERIOD JANUARY 29, 1999 TO FEBRUARY 19, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS B SHARES, RETURNS FOR THE PERIOD
JUNE 22, 1998 TO JANUARY 29, 1999 REFLECT THE PERFORMANCE OF THE FUND'S CLASS
A SHARES, AND RETURNS FOR THE PERIOD PRIOR TO JUNE 22, 1998 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
5 THE PERFORMANCE HISTORY FOR EACH CLASS INCLUDES PERFORMANCE OF A PREDECESSOR
TRUST FUND WHICH COMMENCED OPERATIONS ON JULY 31, 1984. WHERE PERFORMANCE OF
AN OLDER SHARE CLASS IS USED TO CALCULATE HISTORICAL PERFORMANCE OF A NEWER
SHARE CLASS, THE PERFORMANCE OF THE OLDER CLASS HAS NOT BEEN ADJUSTED TO
REFLECT THE HIGHER OPERATING EXPENSES OF THE NEWER CLASS. IF IT HAD,
PERFORMANCE WOULD HAVE BEEN LOWER.
6 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS B SHARES ONLY. THE
PERFORMANCE OF CLASS A AND CLASS C WOULD BE GREATER THAN OR LESS THAN THAT
SHOWN IN THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THOSE CLASSES.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
18
<PAGE>
TAX EXEMPT FUNDS
ARMADA OHIO TAX EXEMPT BOND FUND OVERVIEW
================================================================================
COMMENTS FROM THE TAX EXEMPT FIXED INCOME TEAM
Strong economic growth, a string of Fed-driven interest rate hikes, and a
drop in demand for fixed-income securities took their toll on the market for
municipal bonds during the past 12 months. Despite these circumstances, the
management team's focus on income and stability served investors well. The Fund
also benefited from a concentration on bonds with intermediate maturities--
largely in the 2- to 12-year range--which are somewhat less sensitive to
interest rate movements than those at the longer end of the spectrum.
For the fiscal year ended May 31, 2000, the Armada Ohio Tax Exempt Bond Fund
produced a total return of (0.51)% (before sales charges) for Class A investors
and (0.40)% for Class I shareholders. Over the same period, the Fund's
benchmark, Lehman 7-Year Municipal Bond Index had a return of 0.24% while the
Lehman Intermediate Mutual Fund Index returned 0.18%. For internal purposes, the
management team uses the Intermediate Mutual Fund Index, because we feel it
better reflects the range of maturities within the portfolio.
More than 85% of the Fund's assets were invested in issues rated double-A or
higher with at least 60% of assets in highest-quality, triple-A issues at
year-end. The Fund held very few A-rated and triple-B rated securities because
the small spread between credit grades that characterized the past 12 months did
not warrant adding any extra risk to the portfolio.
On May 11, the State Supreme Court ruled (for the second time) that the State
of Ohio has not done enough to close the funding gap between its poorest and
most affluent school districts. The Court has given the state until June 2001 to
devise a remedy. The management team believes that the school districts can only
benefit from any resolution to this matter and has increased the Fund's holdings
in school district bonds to 23.1% of the portfolio. At the same time, we've
further reduced the Fund's exposure to state-issued general obligations to a
mere 2.6% of assets. Although the state could raise taxes to resolve its
dilemma, we consider it unlikely that the state legislature would raise taxes in
an election year.
At year-end, 49% of the Fund was invested in general obligation securities,
and 10% in pre-refunded and escrowed-to-maturity securities. Of the Fund's
revenue bonds, agencies accounted for 24%, utilities for 17%, and hospitals for
9% of the total portfolio. As of May 31, 2000, the average maturity of the Fund
was 6.81 years.
Looking ahead, we will likely look for higher yields by lengthening the
Fund's average maturity and duration once we see indications that interest rates
may have reached their peak.
GROWTH OF A $10,000 INVESTMENT (3)
[line graph omitted--plot points as follows]
Armada Ohio Armada Ohio Lehmann
Tax Exempt Bond Fund Tax Exempt Bond Fund 7-Year Municipal
(Class I Shares) (Class B Shares) 2,3 Bond Index
5/31/90 $10,000 $9,700 $10,000
5/31/91 $10,737 $10,374 $11,001
5/31/92 $11,402 $11,020 $11,990
5/31/93 $12,537 $12,151 $13,247
5/31/94 $12,823 $12,429 $13,682
5/31/95 $13,671 $13,255 $14,799
5/31/96 $14,267 $13,831 $15,485
5/31/97 $15,176 $14,714 $16,546
5/31/98 $16,303 $15,801 $17,882
5/31/99 $16,945 $16,422 $18,727
5/31/00 $16,878 $16,338 $18,774
ARMADA OHIO TAX EXEMPT BOND FUND
--------------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION (1) INCEPTION (1)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I Shares (0.40)% 3.61% 4.30% 5.37% 5.21% 69.68%
------------------------------------------------------------------------------------------
Class A Shares 2,3 (0.51)% 3.55% 4.27% 5.35% 5.18% 58.39%
------------------------------------------------------------------------------------------
Class A Shares
with Sales Charge 2,3 (3.50)% 2.52% 3.64% 5.03% 4.83% 53.68%
------------------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: JANUARY 5, 1990 (CLASS I
SHARES) AND APRIL 15, 1991 (CLASS A SHARES).
2 CLASS A SHARES RETURNS FOR THE PERIOD PRIOR TO APRIL 15, 1991 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
3 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
19
<PAGE>
TAX EXEMPT FUNDS
ARMADA PENNSYLVANIA MUNICIPAL BOND FUND OVERVIEW
================================================================================
COMMENTS FROM THE TAX EXEMPT FIXED INCOME TEAM
Strong economic growth and no fewer than six Fed-driven interest rate hikes
took their toll on the market for municipal bonds during the past 12 months. The
heady returns of technology stocks during the early part of the period also
caused many investors to flee fixed-income securities. Despite these
circumstances, the management team's focus on income and stability served
investors well.
For the fiscal year ended May 31, 2000, the Armada Pennsylvania Municipal
Bond Fund produced a total return of (0.05)% (before sales charges) for Class A
investors and (0.06)% for Class I shareholders. Over the same period the Fund's
benchmark, the Lehman 7-Year Municipal Bond Index returned 0.24% while the
Lehman Intermediate Mutual Fund Index had a return of 0.18%. For internal
purposes, the management team prefers to use the Intermediate Mutual Fund Index,
because we feel it better reflects the range of maturities within the portfolio.
More than 90% of the Fund's assets were invested in issues rated double-A or
higher, with nearly 82% of assets in highest-quality, triple-A issues. We held
very few A-rated and triple-B rated securities, which did not offer sufficient
incentive for assuming the additional risk.
At fiscal year-end, 27% of the Fund's assets were invested in general
obligation securities, with 18% in pre-refunded and escrowed-to-maturity
securities. Of the Fund's revenue bonds, agencies accounted for 50%, utilities
for 11%, and hospitals for 1% of the total portfolio. As of May 31, 2000, the
average maturity of the Fund was 5.9 years.
The management team remains wary of the hospital sector, which still operates
under the shadow of the 1998 Allegheny Health Education & Research Foundation
(AHERF) bond default. We did not hold any AHERF debt because its slightly higher
yield did not warrant subjecting the portfolio to additional risk; that position
sums up our current posture toward hospital debt in the state. Although
for-profit Tenet Health Care recently purchased a large percentage of AHERF
hospitals, we believe that Tenet's economies of scale will only put more
competitive pressure on the remaining non-profit hospitals. Our only hospital
holding is actually a continuing care retirement community, which also operates
residential, assisted living, and skilled nursing facilities.
Due to Pennsylvania's impending electricity deregulation, we see a lot of
uncertainty ahead in the utilities sector as well. Consequently, we've
positioned the portfolio in only the highest-quality names. We anticipate
lengthening the Fund's average maturity and duration, but only once we see clear
signs that the Fed is unlikely to hike rates further.
GROWTH OF A $10,000 INVESTMENT (5)
[line graph omitted--plot points as follows]
Armada Pennsylvania Armada Pennsylvania Lehmann
Municipal Bond Fund Municipal Bond Fund 7-Year Municipal
(Class I Shares) (Class B Shares) 2, 4 Bond Index
8/10/94 $10,000 $10,000 $10,000
5/31/95 $10,518 $10,203 $10,685
5/31/96 $10,858 $10,532 $11,181
5/31/97 $11,532 $11,178 $11,946
5/31/98 $12,334 $11,942 $12,910
5/31/99 $12,853 $12,445 $13,521
5/31/00 $12,845 $12,439 $13,555
ARMADA PENNSYLVANIA MUNICIPAL BOND FUND
---------------------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION (1) INCEPTION (1)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class I Shares (0.06)% 3.66% 4.08% 4.40% 28.45%
-----------------------------------------------------------------------------------
Class A Shares 2,4 (0.05)% 3.63% 4.04% 4.12% 16.21%
-----------------------------------------------------------------------------------
Class A Shares
with Sales Charge 2,4 (3.04)% 2.57% 3.42% 3.28% 12.75%
-----------------------------------------------------------------------------------
Class C Shares 3,4 (0.93)% 3.32% 3.86% N/A (0.06)%
-----------------------------------------------------------------------------------
Class C Shares
with Sales Charge 3,4 (1.88)% N/A N/A N/A (1.05)%
-----------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 ACTIVITY FOR THE PERIOD PRESENTED INCLUDES THAT OF A PREDECESSOR FUND THROUGH
SEPTEMBER 6, 1996. THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: AUGUST 10,
1994 (CLASS I SHARES); SEPTEMBER 11, 1996 (CLASS A SHARES) AND FEBRUARY 24,
2000 (CLASS C SHARES).
2 CLASS A SHARES RETURNS FOR THE PERIOD PRIOR TO SEPTEMBER 11, 1996 REFLECT THE
PERFORMANCE OF THE FUND'S CLASS I SHARES.
3 CLASS C SHARES RETURNS FOR THE PERIOD SEPTEMBER 11, 1996 TO FEBRUARY 24, 2000
REFLECT THE PERFORMANCE OF THE FUND'S CLASS A SHARES, AND RETURNS FOR THE
PERIOD PRIOR TO SEPTEMBER 11, 1996 REFLECT THE PERFORMANCE OF THE FUND'S CLASS
I SHARES.
4 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
5 THE LINE GRAPH SHOWS PERFORMANCE OF CLASS I AND CLASS A SHARES ONLY. THE
PERFORMANCE OF CLASS C WOULD BE GREATER THAN OR LESS THAN THAT SHOWN IN THE
GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY SHAREHOLDERS
INVESTING IN CLASS C.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 21.
20
<PAGE>
ADDITIONAL ARMADA PERFORMANCE INFORMATION
================================================================================
The following information is helpful for a complete understanding of the
Armada Funds performance figures presented within this report.
The return and principal value of an investment will fluctuate. When
redeemed, shares may be worth more or less than original cost.
Certain sales charges are associated with the purchase of Class A, B and C
Shares. Based on a $10,000 purchase, the following sales charges were in effect
as of May 31, 2000 and were used to calculate performance for the respective
share classes of each fund.
o Each of the Armada equity funds have a front-end sales charge of 5.50% for
Class A Shares except the Equity Index Fund which has a 3.75% front-end sales
charge.
o There is a 4.75% front-end sales charge for Class A Shares for the following
Armada portfolios: Balanced Allocation Fund, Total Return Advantage Fund, Bond
Fund, Intermediate Bond Fund, GNMA Fund and the National Tax Exempt Bond Fund.
o The Armada Enhanced Income Fund has a 2.75% front-end sales charge for Class A
Shares.
o The Armada Ohio Tax Exempt Bond Fund and the Pennsylvania Municipal Bond Fund
have a front-end sales charge of 3.00% for Class A Shares.
o All Class B Shares have a maximum deferred sales charge of 5.00%. This charge
declines from 5.00% in the first year to 0.00% after five years, as outlined
in the prospectus.
o All Class C Shares have a maximum deferred sales charge of 1.00%. This charge
is applied on redemptions of shares that are held for less than 18 months.
Class I Shares are sold for financial institutions investing for their own or
their customers' accounts.
21
<PAGE>
REPORT OF INDEPENDENT AUDITORS
================================================================================
To the Shareholders and Board of Trustees
Armada Funds
We have audited the accompanying statements of net assets of the Armada Core
Equity Fund, Armada Equity Growth Fund, Armada Equity Income Fund, Armada Equity
Index Fund, Armada International Equity Fund, Armada Small Cap Growth Fund,
Armada Small Cap Value Fund, Armada Tax Managed Equity Fund, Armada Balanced
Allocation Fund, Armada Bond Fund, Armada Enhanced Income Fund, Armada GNMA
Fund, Armada Intermediate Bond Fund, Armada Total Return Advantage Fund, Armada
National Tax Exempt Bond Fund, Armada Ohio Tax Exempt Bond Fund, Armada
Pennsylvania Municipal Bond Fund, Armada Government Money Market Fund, Armada
Money Market Fund, Armada Ohio Municipal Money Market Fund, Armada Pennsylvania
Tax Exempt Money Market Fund, Armada Tax Exempt Money Market Fund, and Armada
Treasury Money Market Fund (the "Funds") as of May 31, 2000, and the related
statements of operations for the year then ended and the statements of changes
in net assets for each of the periods indicated therein. We have also audited
the financial highlights for each of the periods indicated therein for the
Armada Core Equity Fund, Armada Equity Growth Fund, Armada Equity Income Fund,
Armada Equity Index Fund, Armada International Equity Fund, Armada Small Cap
Growth Fund, Armada Small Cap Value Fund, Armada Tax Managed Equity Fund, Armada
Balanced Allocation Fund, Armada Enhanced Income Fund, Armada Intermediate Bond
Fund, Armada Total Return Advantage Fund, Armada National Tax Exempt Bond Fund,
Armada Ohio Tax Exempt Bond Fund, Armada Government Money Market Fund, Armada
Money Market Fund, Armada Ohio Municipal Money Market Fund, Armada Tax Exempt
Money Market Fund, and Armada Treasury Money Market Fund and for the four years
in the period ended May 31, 2000 for the Armada Bond Fund, Armada GNMA Fund,
Armada Pennsylvania Municipal Bond Fund, and Armada Pennsylvania Tax Exempt
Money Market Fund. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the periods presented through May 31, 1996
for the Armada Bond Fund, Armada GNMA Fund, Armada Pennsylvania Municipal Bond
Fund, and Armada Pennsylvania Tax Exempt Money Market Fund were audited by other
auditors whose report dated July 26, 1996 expressed an unqualified opinion on
those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of May 31, 2000, by correspondence with the
Funds' custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds at May 31, 2000, the results of their operations for the
year then ended, the changes in their net assets for each of the periods
indicated therein, and for the Armada Core Equity Fund, Armada Equity Growth
Fund, Armada Equity Income Fund, Armada Equity Index Fund, Armada International
Equity Fund, Armada Small Cap Growth Fund, Armada Small Cap Value Fund, Armada
Tax Managed Equity Fund, Armada Balanced Allocation Fund, Armada Enhanced Income
Fund, Armada Intermediate Bond Fund, Armada Total Return Advantage Fund, Armada
National Tax Exempt Bond Fund, Armada Ohio Tax Exempt Bond Fund, Armada
Government Money Market Fund, Armada Money Market Fund, Armada Ohio Municipal
Money Market Fund, Armada Tax Exempt Money Market Fund, and Armada Treasury
Money Market Fund, the financial highlights for each of the periods indicated
therein, and for the Armada Bond Fund, Armada GNMA Fund, Armada Pennsylvania
Municipal Bond Fund, and Armada Pennsylvania Tax Exempt Money Market Fund, the
financial highlights for the four years in the period ended May 31, 2000, in
conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
/s/signature
Philadelphia, Pennsylvania
July 7, 2000
22
<PAGE>
NOTICE TO SHAREHOLDERS (UNAUDITED)
================================================================================
MAY 31, 2000
The information set forth below is for each Fund's fiscal year as required by
federal laws. Shareholders, however, must report distributions on a calendar
year basis for income tax purposes, which may include distributions for portions
of two fiscal years of a Fund. Accordingly, the information needed by
shareholders for income tax pur- poses will be sent to them in early 2001.
Please consult your tax advisor for proper treatment of this information.
For the fiscal year ended May 31, 2000, each Fund designated long term capital
gains and exempt income with regard to distributions paid during the year as
follows:
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
Long Term Ordinary Tax
Capital Gains Income Exempt Total Qualifying
Distributions Distributions Distributions Distribution Dividends
Fund (Tax Basis) (Tax Basis) (Tax Basis) (Tax Basis) (1)
------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Core Equity 99.51% 0.49% 0.00% 100.00% 100.00%
Equity Growth 77.40% 22.60% 0.00% 100.00% 83.51%
Equity Income 61.01% 38.99% 0.00% 100.00% 100.00%
Equity Index 14.88% 85.12% 0.00% 100.00% 100.00%
International Equity 71.05% 28.95% 0.00% 100.00% 0.00%
Small Cap Growth 0.00% 0.00% 0.00% 0.00% 0.00%
Small Cap Value 0.00% 100.00% 0.00% 100.00% 100.00%
Tax Managed Equity 36.77% 63.23% 0.00% 100.00% 100.00%
Balanced Allocation 0.00% 100.00% 0.00% 100.00% 0.00%
Bond 0.00% 100.00% 0.00% 100.00% 0.00%
Enhanced Income 0.00% 100.00% 0.00% 100.00% 0.00%
GNMA 0.00% 100.00% 0.00% 100.00% 0.00%
Intermediate Bond 1.05% 98.95% 0.00% 100.00% 0.00%
Total Return Advantage 9.47% 90.53% 0.00% 100.00% 0.00%
National Tax Exempt Bond 3.38% 0.00% 96.62% 100.00% 0.00%
Ohio Tax Exempt Bond 1.58% 0.00% 98.42% 100.00% 0.00%
Pennsylvania Municipal Bond 3.47% 0.00% 96.53% 100.00% 0.00%
Government Money Market 0.00% 100.00% 0.00% 100.00% 0.00%
Money Market 0.00% 100.00% 0.00% 100.00% 0.00%
Ohio Municipal Money Market 0.00% 0.00% 100.00% 100.00% 0.00%
Pennsylvania Tax Exempt
Money Market 0.00% 0.00% 100.00% 100.00% 0.00%
Tax Exempt Money Market 0.00% 0.00% 100.00% 100.00% 0.00%
Treasury Money Market 0.00% 100.00% 0.00% 100.00% 0.00%
</TABLE>
Items (A), (B), (C) and (D) are based on a percentage of the Fund's total
distribution.
Item (E) is based on a percentage of ordinary income distributions of the Fund.
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
23
<PAGE>
[Logo omitted]
Armada [Register Mark] Funds
FINANCIAL STATEMENTS
FOR THE YEAR ENDED MAY 31, 2000
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA CORE EQUITY FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31, FOR THE
---------------------------------------------------------------- PERIOD ENDED
2000 1999 MAY 31, 1998
------------------------------------ ------------------------- -------------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B CLASS I 2 CLASS A 2 CLASS B 2
------- ------- ------- --------- ------- ------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 13.75 $13.71 $13.63 $14.55 $ 11.35 $11.34 $11.33 $ 10.00 $10.00 $10.25
-------- ------ ------ ------ -------- ------ ------ -------- ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) 0.02 (0.00) (0.07) (0.05) (0.02)5 (0.05)5 (0.16)5 0.05 0.04 (0.00)
Net gain on securities (realized
and unrealized) .......... 1.65 1.62 1.59 0.13 2.94 2.93 2.97 1.35 1.34 1.08
-------- ------ ------ ------ -------- ------ ------ -------- ------ ------
Total from investment
operations ............. 1.67 1.62 1.52 0.08 2.92 2.88 2.81 1.40 1.38 1.08
-------- ------ ------ ------ -------- ------ ------ -------- ------ ------
LESS DISTRIBUTIONS
Dividends from net investment
income ................... (0.01) (0.00) (0.00) (0.00) (0.01) (0.00) (0.00) (0.05) (0.04) (0.00)
Distributions from net realized
capital gains ............ (0.53) (0.53) (0.53) (0.00) (0.51) (0.51) (0.51) (0.00) (0.00) (0.00)
-------- ------ ------ ------ -------- ------ ------ -------- ------ ------
Total distributions ...... (0.54) (0.53) (0.53) (0.00) (0.52) (0.51) (0.51) (0.05) (0.04) (0.00)
-------- ------ ------ ------ -------- ------ ------ -------- ------ ------
Net asset value, end of period $ 14.88 $14.80 $14.62 $14.63 $ 13.75 $13.71 $13.63 $ 11.35 $11.34 $11.33
======== ====== ====== ====== ======== ====== ====== ======== ====== ======
TOTAL RETURN .................. 12.31% 11.98%4 11.31%4 0.55%3,4 26.08% 25.78%4 25.17%4 14.03%3 13.85%3,4 10.54%3,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............... $141,207 $4,146 $1,840 $4,272 $145,603 $1,731 $1,106 $110,504 $ 408 $ 2
Ratio of expenses to average
net assets ............... 1.00% 1.25% 1.96% 1.96%1 0.98% 1.23% 1.94% 0.89%1 1.14%1 1.83%1
Ratio of net investment income/
(loss) to average net assets 0.03% (0.22)% (0.93)% (0.93)%1 (0.15)% (0.40)% (1.11)% 0.61%1 0.14%1 (0.51)%1
Ratio of expenses to average
net assets before fee waivers 1.06% 1.31% 1.96% 1.96%1 0.98% 1.23% 1.94% 1.06%1 1.30%1 2.00%1
Ratio of net investment income/
(loss) to average net assets
before fee waivers ....... (0.03)% (0.28)% (0.93)% (0.93)%1 (0.15)% (0.40)% (1.11)% 0.44%1 0.04%1 (0.50)%1
Portfolio turnover rate ..... 37% 37% 37% 37% 43% 43% 43% 60% 60% 60%
<FN>
1 ANNUALIZED.
2 CLASS I, CLASS A, CLASS B AND CLASS C COMMENCED OPERATIONS ON AUGUST 1, 1997,
AUGUST 1, 1997, JANUARY 6, 1998 AND JANUARY 20, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
5 CALCULATED BASED UPON AVERAGE SHARES OUTSTANDING.
</FN>
</TABLE>
See Accompanying Notes
25
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA EQUITY GROWTH FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-------------------------------------------------------------------------
2000 1999
------------------------------------------ ------------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B
-------- ------- ------- --------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 24.61 $ 24.55 $24.33 $28.04 $ 21.35 $ 21.35 $21.28
---------- -------- ------ ------ ---------- -------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income/(loss) ............. 0.00 5 (0.06)5 (0.26)5 (0.08)5 (0.03)5 (0.09)5 (0.27)5
Net gain on securities
(realized and
unrealized) ............... 4.55 4.53 4.56 0.42 4.28 4.28 4.31
---------- -------- ------ ------ ---------- -------- ------
Total from investment
operations ........... 4.55 4.47 4.30 0.34 4.25 4.19 4.04
---------- -------- ------ ------ ---------- -------- ------
LESS DISTRIBUTIONS
Dividends from net
investment income ......... (0.01) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Dividends in excess of
net investment
income .................... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Distributions from net
realized capital
gains ..................... (0.26) (0.26) (0.26) (0.00) (0.99) (0.99) (0.99)
---------- -------- ------ ------ ---------- -------- ------
Total distributions ..... (0.27) (0.26) (0.26) (0.00) (0.99) (0.99) (0.99)
---------- -------- ------ ------ ---------- -------- ------
Net asset value,
end of period............... $ 28.89 $ 28.76 $28.37 $28.38 $ 24.61 $ 24.55 $24.33
========== ======== ====== ====== ========== ======== ======
TOTAL RETURN ................. 18.49% 18.22%4 17.68%4 1.21%3,4 20.16% 19.88%4 19.22%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ................ $1,251,015 $180,000 $3,713 $ 263 $1,262,154 $156,356 $1,400
Ratio of expenses to
average net assets ........ 0.90% 1.15% 1.86% 1.86%1 0.92% 1.17% 1.88%
Ratio of net investment
income/(loss) to average
net assets ................ 0.01% (0.24)% (0.95)% (0.95%)1 (0.11)% (0.36)% (1.07)%
Ratio of expenses to
average net assets before
fee waivers ............... 0.96% 1.21% 1.86% 1.86%1 0.92% 1.17% 1.88%
Ratio of net investment
income/(loss) to average
net assets before
fee waivers ............... (0.05)% (0.30)% (0.95)% (0.95%)1 (0.11)% (0.36)% (1.07)%
Portfolio turnover rate .... 25% 25% 25% 25% 57% 57% 57%
FOR THE YEAR ENDED MAY 31,
-----------------------------------------------------------------------
1998 1997 1996
----------------------------- ------------------- ----------------
CLASS I CLASS A CLASS B2 CLASS I CLASS A CLASS I CLASS A
------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 18.63 $ 18.67 $ 19.44 $ 18.02 $18.05 $ 14.77 $14.79
-------- ------- -------- -------- ------ -------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income/(loss) ............. (0.00) (0.04) (0.24) 0.09 0.05 0.14 0.10
Net gain on securities
(realized and
unrealized) ............... 5.00 4.99 2.08 4.66 4.66 3.46 3.47
-------- ------- -------- -------- ------ -------- ------
Total from investment
operations ........... 5.00 4.95 1.84 4.75 4.71 3.60 3.57
-------- ------- -------- -------- ------ -------- ------
LESS DISTRIBUTIONS
Dividends from net
investment income ......... (0.01) (0.00) (0.00) (0.09) (0.05) (0.14) (0.10)
Dividends in excess of
net investment
income .................... (0.00) (0.00) (0.00) (0.02) (0.01) (0.02) (0.02)
Distributions from net
realized capital
gains ..................... (2.27) (2.27) (0.00) (4.03) (4.03) (0.19) (0.19)
-------- ------- -------- -------- ------ -------- ------
Total distributions ..... (2.28) (2.27) (0.00) (4.14) (4.09) (0.35) (0.31)
-------- ------- -------- -------- ------ -------- ------
Net asset value,
end of period. ............. $ 21.35 $ 21.35 $ 21.28 $ 18.63 $18.67 $ 18.02 $18.05
======== ======= ======== ======== ====== ======== ======
TOTAL RETURN ................. 28.65% 28.32%4 27.90%1,4 29.57% 29.24%4 24.61% 24.34%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ................ $352,413 $12,380 $ 24 $255,594 $6,931 $166,671 $6,013
Ratio of expenses to
average net assets ........ 0.98% 1.23% 1.92%1 0.97% 1.22% 1.01% 1.26%
Ratio of net investment
income/(loss) to average
net assets ................ (0.01)% (0.26)% (0.92)%1 0.49% 0.25% 0.85% 0.60%
Ratio of expenses to
average net assets before
fee waivers ............... 0.98% 1.23% 1.92%1 0.97% 1.22% 1.03% 1.28%
Ratio of net investment
income/(loss) to average
net assets before
fee waivers ............... (0.01)% (0.26)% (0.92)%1 0.49% 0.25% 0.83% 0.58%
Portfolio turnover rate .... 260% 260% 260% 197% 197% 74% 74%
<FN>
1 ANNUALIZED.
2 CLASS B AND CLASS C COMMENCED OPERATIONS ON JANUARY 6, 1998 AND JANUARY 27, 2000, RESPECTIVELY.
3 TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
5 CALCULATED BASED UPON AVERAGE SHARES OUTSTANDING.
</FN>
</TABLE>
See Accompanying Notes
26
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA EQUITY INCOME FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-----------------------------------------------------------------------------------------------------
2000 1999 1998
-------------------------------------- ------------------------------ ---------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B CLASS I CLASS A CLASS B 2
------- ------- ------- --------- ------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............. $ 18.80 $18.79 $18.69 $15.27 $ 17.53 $ 17.51 $17.54 $ 14.87 $14.86 $16.28
-------- ------ ------ ------ -------- ------- ------ -------- ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .. 0.35 0.30 0.19 0.08 0.30 0.21 0.17 0.27 0.26 0.46
Net gain/(loss) on
securities (realized
and unrealized) ....... (1.85) (1.87) (1.84) 0.63 1.50 1.55 1.39 3.44 3.41 0.86
-------- ------ ------ ------ -------- ------- ------ -------- ------ ------
Total from investment
operations ....... (1.50) (1.57) (1.65) 0.71 1.80 1.76 1.56 3.71 3.67 1.32
-------- ------ ------ ------ -------- ------- ------ -------- ------ ------
LESS DISTRIBUTIONS
Dividends from net
investment income ..... (0.36) (0.31) (0.20) (0.05) (0.28) (0.23) (0.16) (0.32) (0.29) (0.06)
Distributions from net
realized capital gains (0.91) (0.91) (0.91) (0.00) (0.25) (0.25) (0.25) (0.73) (0.73) (0.00)
-------- ------ ------ ------ -------- ------- ------ -------- ------ ------
Total distributions . (1.27) (1.22) (1.11) (0.05) (0.53) (0.48) (0.41) (1.05) (1.02) (0.06)
-------- ------ ------ ------ -------- ------- ------ -------- ------ ------
Net asset value,
end of period ......... $ 16.03 $16.00 $15.93 $15.93 $ 18.80 $ 18.79 $18.69 $ 17.53 $17.51 $17.54
======== ====== ====== ====== ======== ======= ====== ======== ====== ======
TOTAL RETURN ............. (7.95)% (8.30)%4 (8.77)%4 4.65%3,4 10.62% 10.40%4 9.14%4 25.69% 25.41%4 25.58%1,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............ $500,135 $9,070 $1,357 $ 105 $548,361 $11,075 $ 997 $193,923 $2,151 $ 3
Ratio of expenses to
average net assets .... 0.92% 1.17% 1.88% 1.88%1 0.93% 1.18% 1.89% 0.92% 1.17% 1.86%1
Ratio of net investment
income to average
net assets ............ 2.07% 1.82% 1.11% 1.11%1 2.07% 1.82% 1.11% 1.80% 1.62% 0.68%1
Ratio of expenses to
average net assets
before fee waivers .... 0.98% 1.23% 1.88% 1.88%1 0.93% 1.18% 1.89% 0.92% 1.17% 1.86%1
Ratio of net investment
income to average
net assets before
fee waivers ........... 2.01% 1.76% 1.11% 1.11%1 2.07% 1.82% 1.11% 1.80% 1.62% 0.68%1
Portfolio turnover rate 40% 40% 40% 40% 19% 19% 19% 18% 18% 18%
FOR THE YEAR ENDED MAY 31,
------------------------------------------
1997 1996
------------------- ------------------
CLASS I CLASS A CLASS I CLASS A
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .............. $ 12.66 $ 12.65 $ 11.01 $ 11.01
-------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .. 0.30 0.31 0.34 0.33
Net gain/(loss) on securities
(realized and unrealized) 2.73 2.68 1.79 1.77
-------- ------- ------- -------
Total from investment
operations ....... 3.03 2.99 2.13 2.10
-------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income ..... (0.31) (0.27) (0.34) (0.32)
Distributions from net
realized capital gains (0.51) (0.51) (0.14) (0.14)
-------- ------- ------- -------
Total distributions . (0.82) (0.78) (0.48) (0.46)
-------- ------- ------- -------
Net asset value,
end of period ......... $ 14.87 $ 14.86 $ 12.66 $ 12.65
======== ======= ======= =======
TOTAL RETURN ............. 24.62% 24.33%4 19.72% 19.37%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............ $127,130 $ 410 $61,978 $ 263
Ratio of expenses to
average net assets .... 1.01% 1.26% 1.06% 1.31%
Ratio of net investment
income to average
net assets ............ 2.44% 2.17% 3.02% 2.75%
Ratio of expenses to
average net assets
before fee waivers .... 1.01% 1.26% 1.08% 1.32%
Ratio of net investment
income to average
net assets before
fee waivers ........... 2.44% 2.17% 3.00% 2.74%
Portfolio turnover rate 35% 35% 53% 53%
<FN>
1 ANNUALIZED.
2 CLASS B AND CLASS C COMMENCED OPERATIONS ON JANUARY 6, 1998 AND JANUARY 27, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
27
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA EQUITY INDEX FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE PERIOD ENDED
MAY 31, 2000 MAY 31, 1999
-------------------------------------- -----------------------------------------
CLASS I CLASS A CLASS B 2 CLASS C 2 CLASS I 2 CLASS A 2
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 11.32 $11.29 $12.04 $12.61 $ 10.00 $ 9.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income ...................... 0.13 0.09 0.01 0.01 0.11 0.07
Net gain/(loss) on securities
(realized and unrealized) ................ 0.99 1.01 0.17 (0.41) 1.29 2.18
-------- ------ ------ ------ -------- ------
Total from investment operations ........ 1.12 1.10 0.18 (0.40) 1.40 2.25
-------- ------ ------ ------ -------- ------
LESS DISTRIBUTIONS
Dividends from net investment income ....... (0.13) (0.11) (0.02) (0.01) (0.08) (0.05)
Distributions from net realized
capital gains ............................. (0.06) (0.06) (0.00) (0.00) (0.00) (0.00)
-------- ------ ------ ------ -------- ------
Total distributions ..................... (0.19) (0.17) (0.02) (0.01) (0.08) (0.05)
-------- ------ ------ ------ -------- ------
Net asset value, end of period ............... $ 12.25 $12.22 $12.20 $12.20 $ 11.32 $11.29
======== ====== ====== ====== ======== ======
TOTAL RETURN ................................. 9.92% 9.70%4 1.46%3,4 (3.17)%3,4 14.16%3 24.83%3,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ....... $354,637 $8,253 $ 524 $ 277 $253,854 $3,892
Ratio of expenses to average net assets .... 0.34% 0.59% 1.34%1 1.34%1 0.20%1 0.36%1
Ratio of net investment income to average
net assets ................................ 1.02% 0.77% 0.02%1 0.02%1 1.38%1 1.22%1
Ratio of expenses to average net
assets before fee waivers ................. 0.59% 0.84% 1.49%1 1.49%1 0.55%1 0.71%1
Ratio of net investment income/(loss) to
average net assets before fee waivers ..... 0.77% 0.52% (0.13)%1 (0.13)%1 1.03%1 0.87%1
Portfolio turnover rate .................... 48% 48% 48% 48% 9% 9%
<FN>
1 ANNUALIZED.
2 CLASS I, CLASS A, CLASS B AND CLASS C COMMENCED OPERATIONS ON JULY 10, 1998,
OCTOBER 15, 1998, JANUARY 4, 2000 AND JANUARY 17, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
28
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA INTERNATIONAL EQUITY FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
--------------------------------------------------------------------- FOR THE PERIOD ENDED
2000 1999 MAY 31, 1998
---------------------------------------- --------------------------- -------------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B CLASS I 2 CLASS A 2 CLASS B 2
------- ------- ------- --------- ------- ------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............. $ 10.91 $ 10.87 $ 10.83 $15.37 $ 10.86 $10.82 $10.83 $ 10.00 $10.00 $ 9.30
-------- ------- ------- ------ -------- ------ ------ -------- ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/
(loss) ................ 0.01 (0.03) (0.10) (0.04) (0.01) (0.01) (0.07) 0.08 0.04 0.05
Net gain/(loss) on
securities (realized and
unrealized) ........... 4.23 4.21 4.17 (0.50) 0.11 0.10 0.08 0.79 0.79 1.48
-------- ------- ------- ------ -------- ------ ------ -------- ------ ------
Total from investment
operations ....... 4.24 4.18 4.07 (0.54) 0.10 0.09 0.01 0.87 0.83 1.53
-------- ------- ------- ------ -------- ------ ------ -------- ------ ------
LESS DISTRIBUTIONS
Dividends from net
investment income ..... (0.03) (0.01) (0.00) (0.00) (0.05) (0.04) (0.01) (0.01) (0.01) (0.00)
Distributions from net
realized capital gains (0.07) (0.07) (0.07) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
-------- ------- ------- ------ -------- ------ ------ -------- ------ ------
Total distributions . (0.10) (0.08) (0.07) (0.00) (0.05) (0.04) (0.01) (0.01) (0.01) (0.00)
-------- ------- ------- ------ -------- ------ ------ -------- ------ ------
Net asset value, end of
period ................ $ 15.05 $ 14.97 $ 14.83 $14.83 $ 10.91 $10.87 $10.83 $ 10.86 $10.82 $10.83
======== ======= ======= ====== ======== ====== ====== ======== ====== ======
TOTAL RETURN 38.90% 38.50%4 37.61%4 (3.51)%3,4 0.95% 0.84%4 0.10%4 8.76%3 8.28%3,4 16.45%3,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............ $425,328 $ 3,618 $ 623 $ 165 $199,205 $1,127 $ 42 $135,942 $ 276 $ 1
Ratio of expenses to
average net assets .... 1.43% 1.68% 2.39% 2.39%1 1.43% 1.68% 2.43% 1.09%1 1.39%1 2.08%1
Ratio of net investment
income/(loss) to
average net assets ... 0.06% (0.19)% (0.90)% (0.90)%1 0.12% (0.04)% (0.80)% 1.19%1 1.49%1 0.59%1
Ratio of expenses to
average net assets
before fee waivers .... 1.49% 1.74% 2.39% 2.39%1 1.43% 1.68% 2.43% 1.24%1 1.47%1 2.14%1
Ratio of net investment
income/ (loss) to
average net assets
before fee waivers .... 0.00% (0.25)% (0.90)% (0.90)%1 0.12% (0.04)% (0.80)% 1.04%1 1.41%1 0.53%1
Portfolio turnover rate 124% 124% 124% 124% 78% 78% 78% 28% 28% 28%
<FN>
1 ANNUALIZED.
2 CLASS I, CLASS A, CLASS B, AND CLASS C COMMENCED OPERATIONS ON AUGUST 1, 1997,
AUGUST 1, 1997, JANUARY 6, 1998 AND JANUARY 5, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
29
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA SMALL CAP GROWTH FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
------------------------------------------------------------------- FOR THE PERIOD ENDED
2000 1999 MAY 31, 1998
------------------------------------- ---------------------------- -------------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B CLASS I 2 CLASS A 2 CLASS B 2
------- ------- ------- --------- ------- ------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................ $ 10.14 $10.11 $10.01 $16.20 $ 11.69 $11.68 $11.66 $ 10.00 $10.00 $10.64
-------- ------ ------ ------ ------- ------ ------ ------- ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income/(loss) ........... (0.04)5 (0.07)5 (0.17)5 (0.07)5 (0.03)5 (0.05)5 (0.10)5 0.01 0.01 (0.01)
Net gain/(loss) on
securities (realized and
unrealized) ............. 4.81 4.77 4.74 (1.56) (1.41) (1.41) (1.44) 1.72 1.71 1.03
-------- ------ ------ ------ ------- ------ ------ ------- ------ ------
Total from investment
operations ......... 4.77 4.70 4.57 (1.63) (1.44) (1.46) (1.54) 1.73 1.72 1.02
-------- ------ ------ ------ ------- ------ ------ ------- ------ ------
LESS DISTRIBUTIONS
Dividends from net
investment income ....... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.01) (0.01) (0.00)
Distributions from net
realized capital gains .. (0.00) (0.00) (0.00) (0.00) (0.11) (0.11) (0.11) (0.03) (0.03) (0.00)
-------- ------ ------ ------ ------- ------ ------ ------- ------ ------
Total distributions ... (0.00) (0.00) (0.00) (0.00) (0.11) (0.11) (0.11) (0.04) (0.04) (0.00)
-------- ------ ------ ------ ------- ------ ------ ------- ------ ------
Net asset value, end of
period ................... $ 14.91 $14.81 $14.58 $14.57 $ 10.14 $10.11 $10.01 $ 11.69 $11.68 $11.66
======== ====== ====== ====== ======= ====== ====== ======= ====== ======
TOTAL RETURN ............... 47.04% 46.49%4 45.65%4 (10.06)%3,4(12.36)% (12.54)%4 (13.26)%4 17.35%3 17.18%3,4 9.59%3,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) .............. $157,306 $2,710 $ 372 $ 77 $80,145 $1,089 $ 139 $54,476 $ 331 $ 1
Ratio of expenses to
average net assets ...... 1.23% 1.48% 2.19% 2.19%1 1.27% 1.51% 2.23% 0.98%1 1.23%1 1.92%1
Ratio of net investment
income/(loss) to average
net assets .............. (0.28)% (0.53)% (1.24)% (1.24)%1 (0.27)% (0.51)% (1.23)% 0.14%1 (0.32)%1 (0.87)%1
Ratio of expenses to
average net assets
before fee waivers ...... 1.29% 1.54% 2.19% 2.19%1 1.27% 1.51% 2.23% 1.09%1 1.34%1 3.06%1
Ratio of net investment
income/(loss) to
average net assets before
fee waivers ............. (0.34)% (0.59)% (1.24)% (1.24)%1 (0.27)% (0.51)% (1.23)% 0.03%1 (0.43)%1 (2.01)%1
Portfolio turnover rate .. 155% 155% 155% 155% 159% 159% 159% 31% 31% 31%
<FN>
1 ANNUALIZED.
2 CLASS I, CLASS A, CLASS B AND CLASS C COMMENCED OPERATIONS ON AUGUST 1, 1997,
AUGUST 1, 1997, JANUARY 6, 1998 AND JANUARY 20, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
5 CALCULATED BASED UPON AVERAGE SHARES OUTSTANDING.
</FN>
</TABLE>
See Accompanying Notes
30
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA SMALL CAP VALUE FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
---------------------------------------------------------------------
2000 1999
-------------------------------------- -----------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B
------- ------- ------- --------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ......... $ 13.65 $13.31 $13.19 $13.07 $ 15.72 $ 15.47 $ 15.42
-------- ------ ------ ------ -------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income/(loss) .............. 0.27 0.27 0.14 0.01 0.09 0.06 (0.03)
Net gain/(loss) on
securities (realized
and unrealized) ............ 1.45 1.38 1.41 1.54 (0.78) (0.85) (0.87)
-------- ------ ------ ------ -------- ------- -------
Total from investment
operations ............ 1.72 1.65 1.55 1.55 (0.69) (0.79) (0.90)
-------- ------ ------ ------ -------- ------- -------
LESS DISTRIBUTIONS
Dividends from net
investment
income ..................... (0.22) (0.19) (0.12) (0.00) (0.05) (0.04) (0.00)
Dividends in excess
of net investment
income ..................... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Distributions from
net realized capital
gains ...................... (0.00) (0.00) (0.00) (0.00) (1.33) (1.33) (1.33)
-------- ------ ------ ------ -------- ------- -------
Total distributions ...... (0.22) (0.19) (0.12) (0.00) (1.38) (1.37) (1.33)
-------- ------ ------ ------ -------- ------- -------
Net asset value, end of
period ..................... $ 15.15 $14.77 $14.62 $14.62 $ 13.65 $ 13.31 $ 13.19
======== ====== ====== ====== ======== ======= =======
TOTAL RETURN .................. 12.87% 12.59%4 11.87%4 11.86%3,4 (3.67)% (4.38)%4 (5.13)%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) .......... $354,347 $9,727 $ 742 $ 68 $270,382 $11,542 $ 515
Ratio of expenses to
average net assets ......... 1.21% 1.46% 2.17% 2.17%1 1.12% 1.38% 2.08%
Ratio of net investment
income/(loss) to
average net assets ......... 1.97% 1.72% 1.01% 1.01%1 0.70% 0.44% (0.26)%
Ratio of expenses to
average net assets
before fee waivers ......... 1.27% 1.52% 2.17% 2.17%1 1.12% 1.38% 2.08%
Ratio of net investment
income/(loss) to
average net assets
before fee waivers ......... 1.91% 1.66% 1.01% 1.01%1 0.70% 0.44% (0.26)%
Portfolio turnover rate ..... 120% 120% 120% 120% 79% 79% 79%
FOR THE YEAR ENDED MAY 31,
--------------------------------------------------------------------------
1998 1997 1996
-------------------------------- ------------------ ------------------
CLASS I CLASS A CLASS B 2 CLASS I CLASS A CLASS I CLASS A
-------- ------- --------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ......... $ 15.15 $ 14.95 $ 15.28 $ 13.10 $ 12.94 $ 11.38 $11.26
-------- ------- ------- -------- ------- ------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income/(loss) .............. 0.06 0.01 0.00 0.09 0.08 0.08 0.06
Net gain/(loss) on
securities (realized
and unrealized) ............ 2.87 2.84 0.14 2.90 2.83 2.41 2.37
-------- ------- ------- -------- ------- ------- ------
Total from investment
operations ............ 2.93 2.85 0.14 2.99 2.91 2.49 2.43
-------- ------- ------- -------- ------- ------- ------
LESS DISTRIBUTIONS
Dividends from net
investment
income ..................... (0.07) (0.04) (0.00) (0.09) (0.05) (0.08) (0.06)
Dividends in excess
of net investment
income ..................... (0.00) (0.00) (0.00) (0.00) (0.00) (0.02) (0.02)
Distributions from
net realized capital
gains ...................... (2.29) (2.29) (0.00) (0.85) (0.85) (0.67) (0.67)
-------- ------- ------- -------- ------- ------- ------
Total distributions ...... (2.36) (2.33) (0.00) (0.94) (0.90) (0.77) (0.75)
-------- ------- ------- -------- ------- ------- ------
Net asset value, end of
period ..................... $ 15.72 $ 15.47 $ 15.42 $ 15.15 $ 14.95 $ 13.10 $12.94
======== ======= ======= ======== ======= ======= ======
TOTAL RETURN .................. 19.82% 19.51%4 19.12%1,4 23.61% 23.26%4 22.64% 22.28%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) .......... $284,295 $10,634 $ 61 $199,311 $ 4,929 $99,294 $4,702
Ratio of expenses to
average net assets ......... 0.98% 1.23% 1.92%1 0.97% 1.22% 1.05% 1.30%
Ratio of net investment
income/(loss) to
average net assets ......... 0.43% 0.19% (0.48)%1 0.83% 0.57% 0.83% 0.58%
Ratio of expenses to
average net assets
before fee waivers ......... 0.98% 1.23% 1.92%1 0.97% 1.22% 1.06% 1.32%
Ratio of net investment
income/(loss) to
average net assets
before fee waivers ......... 0.43% 0.19% (0.48)%1 0.83% 0.51% 0.82% 0.56%
Portfolio turnover rate ..... 89% 89% 89% 64% 64% 106% 106%
<FN>
1 ANNUALIZED.
2 CLASS B AND CLASS C COMMENCED OPERATIONS ON JANUARY 6, 1998 AND JANUARY 27, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
31
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA TAX MANAGED EQUITY FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
------------------------------------------------------------------------
2000 1999
------------------------------------------- ----------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B
------- ------- ------- --------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ............... $ 12.13 $ 12.16 $ 12.12 $14.01 $ 9.93 $ 9.93 $ 9.93
-------- -------- ------- ------ -------- ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/
(loss) ............... 0.03 0.00 (0.07) (0.03) 0.05 0.04 (0.02)
Net gain/(loss) on
securities (realized and
unrealized) ............ 2.16 2.18 2.12 0.18 2.21 2.24 2.23
-------- -------- ------- ------ -------- ------ ------
Total from investment
operations ......... 2.19 2.18 2.05 0.15 2.26 2.28 2.21
-------- -------- ------- ------ -------- ------ ------
LESS DISTRIBUTIONS
Dividends from net
investment income ...... (0.02) (0.00) (0.00) (0.00) (0.05) (0.04) (0.01)
Distributions from net
realized capital gains (0.01) (0.01) (0.01) (0.00) (0.01) (0.01) (0.01)
-------- -------- ------- ------ -------- ------ ------
Total distributions .. (0.03) (0.01) (0.01) (0.00) (0.06) (0.05) (0.02)
-------- -------- ------- ------ -------- ------ ------
Net asset value, end of
period ................ $ 14.29 $ 14.33 $ 14.16 $14.16 $ 12.13 $12.16 $12.12
======== ======== ======= ====== ======== ====== ======
TOTAL RETURN .............. 18.06% 18.01%4 16.95%4 1.07%3,4 22.82% 23.03%4 22.31%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $257,548 $ 17,372 $11,135 $ 453 $241,501 $7,353 $5,377
Ratio of expenses to
average net assets ..... 0.95% 1.20% 1.91% 1.91%1 0.83% 1.09% 1.79%
Ratio of net investment
income/ (loss) to
average net assets ..... 0.19% (0.06)% (0.77)% (0.77)%1 0.37% 0.11% (0.59)%
Ratio of expenses to
average net assets
before fee waivers ..... 1.01% 1.26% 1.91% 1.91%1 1.01% 1.27% 1.97%
Ratio of net investment
income/ (loss) to
average net assets
before fee waivers ..... 0.13% (0.12)% (0.77)% (0.77)%1 0.19% (0.07)% (0.77)%
Portfolio turnover rate . 3% 3% 3% 3% 5% 5% 5%
FOR THE PERIOD ENDED
MAY 31, 1998
------------------------------------
CLASS I 2 CLASS A 2 CLASS B 2
--------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning
of period ............... $ 10.00 $ 10.10 $ 10.21
-------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/
(loss) ............... (0.00) (0.00) (0.00)
Net gain/(loss) on
securities (realized and
unrealized) ............ (0.07) (0.17) (0.28)
-------- ------- -------
Total from investment
operations ......... (0.07) (0.17) (0.28)
-------- ------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income ...... (0.00) (0.00) (0.00)
Distributions from net
realized capital gains (0.00) (0.00) (0.00)
-------- ------- -------
Total distributions .. (0.00) (0.00) (0.00)
-------- ------- -------
Net asset value, end of
period ................ $ 9.93 $ 9.93 $ 9.93
======== ======= =======
TOTAL RETURN .............. (4.81)%1 (23.63)%1,4 (32.24)%1,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $158,867 $ 10 $ 85
Ratio of expenses to
average net assets ..... 0.29%1 0.54%1 1.23%1
Ratio of net investment
income/ (loss) to
average net assets ..... 0.91%1 0.63%1 0.43%1
Ratio of expenses to
average net assets
before fee waivers ..... 1.02%1 1.24%1 1.98%1
Ratio of net investment
income/ (loss) to
average net assets
before fee waivers ..... 0.18%1 (0.07)%1 1.18%1
Portfolio turnover rate . 0% 0% 0%
<FN>
1 ANNUALIZED.
2 CLASS I, CLASS A, CLASS B AND CLASS C COMMENCED OPERATIONS ON APRIL 9, 1998,
MAY 11, 1998, MAY 4, 1998 AND JANUARY 10, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
32
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA BALANCED ALLOCATION FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE PERIOD ENDED
MAY 31, 2000 MAY 31, 1999
---------------------------------------------- ------------------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I 2 CLASS A 2 CLASS B 2
------- ------- ------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 10.31 $10.31 $10.33 $11.88 $ 10.00 $ 9.74 $ 9.82
------- ------ ------ ------ ------- ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ............... 0.26 0.23 0.15 0.02 0.18 0.14 0.10
Net gain on securities (realized and
unrealized) ....................... 1.35 1.35 1.36 (0.20) 0.28 0.57 0.51
------- ------ ------ ------ ------- ------ ------
Total from investment
operations ....................... 1.61 1.58 1.51 (0.18) 0.46 0.71 0.61
------- ------ ------ ------ ------- ------ ------
LESS DISTRIBUTIONS
Dividends from net investment
income ............................ (0.24) (0.21) (0.14) (0.00) (0.15) (0.14) (0.10)
------- ------ ------ ------ ------- ------ ------
Total distributions ............... (0.24) (0.21) (0.14) (0.00) (0.15) (0.14) (0.10)
------- ------ ------ ------ ------- ------ ------
Net asset value, end of period ......... $ 11.68 $11.68 $11.70 $11.70 $ 10.31 $10.31 $10.33
======= ====== ====== ====== ======= ====== ======
TOTAL RETURN ........................... 15.72% 15.48%4 14.79%4 (1.52)%3,4 4.57%3 7.26%3,4 6.07%3,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $69,517 $3,965 $ 691 $ 3 $85,027 $1,466 $ 385
Ratio of expenses to average net
assets ............................ 1.01% 1.26% 1.97% 1.97%1 1.06%1 1.31%1 2.02%1
Ratio of net investment income to
average net assets ................ 2.20% 1.95% 1.24% 1.24%1 2.25%1 2.50%1 1.29%1
Ratio of expenses to average net
assets before fee waivers ....... 1.07% 1.32% 1.97% 1.97%1 1.06%1 1.31%1 2.02%1
Ratio of net investment income to
average net assets before fee
waivers ........................... 2.14% 1.89% 1.24% 1.24%1 2.25%1 2.50%1 1.29%1
Portfolio turnover rate ............. 182% 182% 182% 182% 116% 116% 116%
<FN>
1 ANNUALIZED.
2 CLASS I, CLASS A, CLASS B AND CLASS C COMMENCED OPERATIONS ON JULY 10, 1998,
JULY 31, 1998, NOVEMBER 11, 1998 AND APRIL 20, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
33
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA BOND FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
----------------------------------------------------------------------
2000 1999
--------------------------------------- -----------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B
-------- ------- ------- --------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ............................. $ 9.96 $ 9.98 $ 9.97 $ 9.52 $ 10.27 $ 10.27 $10.26
-------- ------ ------ ------ -------- ------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ................ 0.61 0.59 0.52 0.19 0.56 0.54 0.47
Net gain/(loss) on securities
(realized and unrealized) .......... (0.59) (0.58) (0.59) (0.14) (0.17) (0.15) (0.15)
-------- ------ ------ ------ -------- ------- ------
Total from investment
operations ...................... 0.02 0.01 (0.07) 0.05 0.39 0.39 0.32
-------- ------ ------ ------ -------- ------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income ............................. (0.61) (0.59) (0.52) (0.19) (0.56) (0.54) (0.47)
Distributions from net realized
capital gains ...................... (0.00) (0.00) (0.00) (0.00) (0.14) (0.14) (0.14)
Distributions in excess of net
realized capital gains ............. (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
-------- ------ ------ ------ -------- ------- ------
Total distributions ............... (0.61) (0.59) (0.52) (0.19) (0.70) (0.68) (0.61)
-------- ------ ------ ------ -------- ------- ------
Net asset value, end of period .......... $ 9.37 $ 9.40 $ 9.38 $ 9.38 $ 9.96 $ 9.98 $ 9.97
======== ====== ====== ====== ======== ======= ======
TOTAL RETURN ............................ 0.24% 0.11%4 (0.71)%4 0.52%3,4 3.82% 3.77%4 3.06%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) .......................... $618,172 $3,787 $ 558 $ 40 $758,713 $ 2,804 $ 725
Ratio of expenses to average
net assets .......................... 0.73% 0.98% 1.69% 1.69%1 0.70% 0.96% 1.66%
Ratio of net investment income to
average net assets .................. 6.32% 6.07% 5.36% 5.36%1 5.44% 5.18% 4.48%
Ratio of expenses to average net
assets before fee waivers ........... 0.79% 1.04% 1.69% 1.69%1 0.70% 0.96% 1.66%
Ratio of net investment income to
average net assets before fee
waivers ............................. 6.26% 6.01% 5.36% 5.36%1 5.44% 5.18% 4.48%
Portfolio turnover rate ............... 162% 162% 162% 162% 270% 270% 270%
FOR THE YEAR ENDED MAY 31, FOR THE FOR THE
----------------------------------------------------- PERIOD YEAR
1998 1997 ENDED ENDED
------------------------------ --------------------- MAY 31, APRIL 30,
CLASS I CLASS A CLASS B 2 CLASS I 5 CLASS A 2 1996 5 1996 5
------- ------- --------- --------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ............................. $ 10.02 $ 10.02 $10.35 $ 9.97 $ 9.97 $ 10.04 $ 10.02
-------- ------- ------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ................ 0.59 0.56 0.47 0.59 0.41 0.05 0.64
Net gain/(loss) on securities
(realized and unrealized) .......... 0.25 0.25 (0.09) 0.13 0.13 (0.07) 0.07
-------- ------- ------ ------- ------- ------- -------
Total from investment
operations ...................... 0.84 0.81 0.38 0.72 0.54 (0.02) 0.71
-------- ------- ------ ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment
income ............................. (0.59) (0.56) (0.47) (0.59) (0.41) (0.05) (0.64)
Distributions from net realized
capital gains ...................... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.05)
Distributions in excess of net
realized capital gains ............. (0.00) (0.00) (0.00) (0.08) (0.08) (0.00) (0.00)
-------- ------- ------ ------- ------- ------- -------
Total distributions ............... (0.59) (0.56) (0.47) (0.67) (0.49) (0.05) (0.69)
-------- ------- ------ ------- ------- ------- -------
Net asset value, end of period .......... $ 10.27 $ 10.27 $10.26 $ 10.02 $ 10.02 $ 9.97 $ 10.04
======== ======= ====== ======= ======= ======= =======
TOTAL RETURN ............................ 8.55% 8.29%4 8.36%3,4 7.41% 7.22%3,4 (0.19)%3,4 7.09%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) .......................... $132,620 $ 161 $ 1 $91,161 $ 23 $88,829 $89,901
Ratio of expenses to average
net assets .......................... 0.80% 1.05% 1.74%1 0.83% 1.07%1 0.85%1 0.85%
Ratio of net investment income to
average net assets .................. 5.72% 5.52% 2.71%1 5.83% 5.64%1 5.88%1 6.20%
Ratio of expenses to average net
assets before fee waivers ........... 0.80% 1.05% 1.74%1 0.96% 1.07%1 1.25%1 1.25%
Ratio of net investment income to
average net assets before fee
waivers ............................. 5.72% 5.52% 2.71%1 5.71% 5.64%1 5.48%1 5.80%
Portfolio turnover rate ............... 220% 220% 220% 96% 96% 2% 94%
<FN>
1 ANNUALIZED.
2 CLASS A, CLASS B AND CLASS C COMMENCED OPERATIONS ON SEPTEMBER 11, 1996,
JANUARY 6, 1998 AND JANUARY 27, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
5 ACTIVITY FOR THE PERIOD PRESENTED INCLUDES THAT OF A PREDECESSOR FUND THROUGH
SEPTEMBER 6, 1996. DURING 1996, THE PREDECESSOR FUND CHANGED FISCAL YEAR END
FROM APRIL 30 TO MAY 31.
</FN>
</TABLE>
See Accompanying Notes
34
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA ENHANCED INCOME FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
----------------------------------------------------------------------------
2000 1999 1998
-------------------------------------- ---------------- -----------------
CLASS I CLASS A CLASS B 2 CLASS C 2 CLASS I CLASS A CLASS I CLASS A
------- ------- --------- --------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .................. $ 9.96 $ 9.99 $9.90 $ 9.85 $ 10.06 $ 10.08 $ 9.99 $ 10.00
------- ------ ----- ------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ...... 0.57 0.56 0.39 0.18 0.56 0.56 0.57 0.57
Net gain/(loss) on securities
(realized and unrealized) (0.26) (0.24) (0.17) (0.12) (0.05) (0.05) 0.08 0.09
------- ------ ----- ------ ------- ------- ------- -------
Total from investment
operations .......... 0.31 0.32 0.22 0.06 0.51 0.51 0.65 0.66
------- ------ ----- ------ ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income ........ (0.57) (0.57) (0.39) (0.18) (0.56) (0.55) (0.57) (0.57)
Dividends in excess of net
investment income ........ (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Distributions of net realized
capital gains ............ (0.00) (0.00) (0.00) (0.00) (0.05) (0.05) (0.01) (0.01)
------- ------ ----- ------ ------- ------- ------- -------
Total distributions ...... (0.57) (0.57) (0.39) (0.18) (0.61) (0.60) (0.58) (0.58)
------- ------ ----- ------ ------- ------- ------- -------
Net asset value, end
of period .................. $ 9.70 $ 9.74 $9.73 $ 9.73 $ 9.96 $ 9.99 $ 10.06 $ 10.08
======= ====== ===== ====== ======= ======= ======= =======
TOTAL RETURN .................. 3.22% 3.47%4 2.22%3,4 0.56%3,4 5.14% 4.94%4 6.68% 6.68%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............... $93,652 $ 873 $ 180 $ 18 $72,291 $ 550 $71,888 $ 559
Ratio of expenses to average
net assets ............... 0.54% 0.64% 1.54%1 1.54%1 0.43% 0.53% 0.33% 0.41%
Ratio of net investment income
to average net assets .... 5.84% 5.74% 4.84%1 4.84%1 5.49% 5.39% 5.69% 5.65%
Ratio of expenses to average
net assets before fee waivers 0.74% 0.84% 1.64%1 1.64%1 0.65% 0.75% 0.69% 0.80%
Ratio of net investment
income to average net assets
before fee waivers ....... 5.64% 5.54%1 4.74%1 4.74%1 5.27% 5.17% 5.33% 5.26%
Portfolio turnover rate .... 90% 90% 90% 90% 190% 190% 135% 135%
FOR THE YEAR ENDED MAY 31,
--------------------------------------
1997 1996
------------------ -----------------
CLASS I CLASS A CLASS I CLASS A
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .................. $ 10.01 $ 10.02 $ 10.16 $10.18
------- ------- ------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ...... 0.58 0.57 0.58 0.56
Net gain/(loss) on securities
(realized and unrealized) 0.01 0.01 (0.05) (0.05)
------- ------- ------- ------
Total from investment
operations .......... 0.59 0.58 0.53 0.51
------- ------- ------- ------
LESS DISTRIBUTIONS
Dividends from net
investment income ........ (0.58) (0.57) (0.58) (0.56)
Dividends in excess of net
investment income ........ (0.00) (0.00) (0.10) (0.11)
Distributions of net realized
capital gains ............ (0.03) (0.03) (0.00) (0.00)
------- ------- ------- ------
Total distributions ...... (0.61) (0.60) (0.68) (0.67)
------- ------- ------- ------
Net asset value, end
of period .................. $ 9.99 $ 10.00 $ 10.01 $10.02
======= ======= ======= ======
TOTAL RETURN .................. 6.02% 5.91%4 5.36% 5.13%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............... $61,031 $ 2,051 $66,918 $1,718
Ratio of expenses to average
net assets ............... 0.21% 0.31% 0.23% 0.33%
Ratio of net investment income
to average net assets .... 5.74% 5.63% 5.72% 5.55%
Ratio of expenses to average
net assets before fee waivers 0.66% 0.75% 0.70% 0.80%
Ratio of net investment
income to average net assets
before fee waivers ....... 5.29% 5.18% 5.25% 5.08%
Portfolio turnover rate .... 225% 225% 98% 98%
<FN>
1 ANNUALIZED.
2 CLASS B AND CLASS C COMMENCED OPERATIONS ON AUGUST 11, 1999 AND JANUARY 27, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
35
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA GNMA FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
---------------------------------------------------------------------------------------------------
2000 1999 1998 1997
-------------------------------------- ----------------- ----------------- --------------------
CLASS I CLASS A CLASS B 2 CLASS C 2 CLASS I CLASS A CLASS I CLASS A CLASS I 5 CLASS A 2
------- ------- --------- --------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................. $ 10.10 $10.10 $ 9.76 $ 9.72 $ 10.36 $10.36 $ 10.15 $10.15 $ 10.03 $10.02
-------- ------ ------- ------- ------- ------ ------- ------ ------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income ..... 0.59 0.57 0.40 0.18 0.61 0.59 0.61 0.58 0.65 0.45
Net gain/(loss) on
securities (realized
and unrealized) ......... (0.36) (0.35) (0.01) 0.03 (0.20) (0.20) 0.31 0.31 0.22 0.23
-------- ------ ------- ------- ------- ------ ------- ------ ------- ------
Total from investment
operations ............ 0.23 0.22 0.39 0.21 0.41 0.39 0.92 0.89 0.87 0.68
-------- ------ ------- ------- ------- ------ ------- ------ ------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income .................. (0.59) (0.57) (0.40) (0.18) (0.60) (0.58) (0.61) (0.58) (0.65) (0.45)
Dividends from net realized
capital gains ........... (0.00) (0.00) (0.00) (0.00) (0.07) (0.07) (0.10) (0.10) (0.01) (0.01)
Distributions in excess
of net realized
capital gains ........... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.09) (0.09)
-------- ------ ------- ------- ------- ------ ------- ------ ------- ------
Total distributions ..... (0.59) (0.57) (0.40) (0.18) (0.67) (0.65) (0.71) (0.68) (0.75) (0.55)
-------- ------ ------- ------- ------- ------ ------- ------ ------- ------
Net asset value, end of period $ 9.74 $ 9.75 $ 9.75 $ 9.75 $ 10.10 $10.10 $ 10.36 $10.36 $ 10.15 $10.15
======== ====== ======= ======= ======= ====== ======= ====== ======= ======
TOTAL RETURN 2.48% 2.33%4 4.07%3,4 2.16%3,4 4.02% 3.77%4 9.17% 8.90%4 9.03% 8.83%1,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) .............. $119,653 $1,231 $ 161 $ 84 $96,808 $1,497 $83,624 $ 549 $64,501 $ 128
Ratio of expenses to average
net assets .............. 0.80% 1.05% 1.76%1 1.76%1 0.78% 1.03% 0.84% 1.09% 0.86% 1.12%1
Ratio of net investment
income to average
net assets .............. 6.04% 5.79% 5.08%1 5.08%1 5.92% 5.67% 5.83% 5.54% 6.45% 6.17%1
Ratio of expenses to
average net assets
before fee waivers ...... 0.86% 1.11% 1.76%1 1.76%1 0.78% 1.03% 0.84% 1.09% 1.01% 1.12%1
Ratio of net investment
income to average net
assets before fee waivers 5.98% 5.73% 5.08%1 5.08%1 5.92% 5.67% 5.83% 5.54% 6.30% 6.17%1
Portfolio turnover rate ... 79% 79% 79% 79% 85% 85% 291% 291% 57% 57%
FOR THE FOR THE
PERIOD YEAR
ENDED ENDED
MAY 31, APRIL 30,
1996 5 1996 5
------- -------
<S> <C> <C>
Net asset value, beginning
of period ................. $ 10.12 $ 10.16
------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income ..... 0.05 0.66
Net gain/(loss) on
securities (realized
and unrealized) ......... (0.09) 0.14
------- -------
Total from investment
operations ............ (0.04) 0.80
------- -------
LESS DISTRIBUTIONS
Dividends from net investment
income .................. (0.05) (0.66)
Dividends from net realized
capital gains ........... (0.00) (0.18)
Distributions in excess
of net realized
capital gains ........... (0.00) (0.00)
------- -------
Total distributions ..... (0.05) (0.84)
------- -------
Net asset value, end of period $ 10.03 $ 10.12
======= =======
TOTAL RETURN (0.35)%3,4 7.97%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) .............. $60,532 $62,161
Ratio of expenses to average
net assets .............. 0.85%1 0.85%
Ratio of net investment
income to average
net assets .............. 6.33%1 6.30%
Ratio of expenses to
average net assets
before fee waivers ...... 1.28%1 1.29%
Ratio of net investment
income to average net
assets before fee waivers 5.90%1 5.86%
Portfolio turnover rate ... 1% 149%
</TABLE>
1 ANNUALIZED.
2 CLASS A, CLASS B AND CLASS C COMMENCED OPERATIONS ON SEPTEMBER 11, 1996,
AUGUST 11, 1999 AND JANUARY 27, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
5 ACTIVITY FOR THE PERIOD PRESENTED INCLUDES THAT OF THE PREDECESSOR FUND
THROUGH SEPTEMBER 6, 1996. DURING 1996, THE PREDECESSOR FUND CHANGED ITS
FISCAL YEAR-END FROM APRIL 30 TO MAY 31.
See Accompanying Notes
36
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA INTERMEDIATE BOND FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
------------------------------------------------------------------------------
2000 1999
-------------------------------------------- -------------------------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A CLASS B
------- ------- ------- --------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............. $ 10.39 $ 10.41 $ 10.41 $ 9.91 $ 10.59 $ 10.63 $ 10.63
-------- ------- -------- ------- -------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .. 0.64 0.61 0.54 (0.00) 0.56 0.54 0.45
Net gain/ (loss) on
securities (realized
and unrealized) ...... (0.48) (0.48) (0.47) (0.02) (0.14) (0.16) (0.15)
-------- ------- -------- ------- -------- ------- -------
Total from investment
operations ........ 0.16 0.13 0.07 (0.16) 0.42 0.38 0.30
-------- ------- -------- ------- -------- ------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income .... (0.64) (0.61) (0.54) (0.00) (0.56) (0.54) (0.46)
Distributions from net
realized capital gains (0.01) (0.01) (0.01) (0.00) (0.06) (0.06) (0.06)
Distributions in excess
of net realized
capital gains ........ (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
-------- ------- -------- ------- -------- ------- -------
Total distributions .. (0.65) (0.62) (0.55) (0.00) (0.62) (0.60) (0.52)
-------- ------- -------- ------- -------- ------- -------
Net asset value, end
of period .............. $ 9.90 $ 9.92 $ 9.93 $ 9.93 $ 10.39 $ 10.41 $ 10.41
======== ======= ======== ======= ======== ======= =======
TOTAL RETURN .............. 1.50% 1.25%4 0.64%4 0.22%3,4 3.98% 3.54%4 2.83%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) .... $294,998 $ 3,874 $ 733 $ 191 $313,368 $ 5,129 $ 709
Ratio of expenses
to average
net assets ........... 0.58% 0.83% 1.54% 1.54%1 0.61% 0.86% 1.57%
Ratio of net investment
income to average
net assets ........... 6.22% 5.97% 5.26% 5.26%1 5.21% 4.96% 4.25%
Ratio of expenses
to average net
assets before
fee waivers .......... 0.79% 1.04% 1.69% 1.69%1 0.75% 1.00% 1.71%
Ratio of net investment
income to average
net assets before
fee waivers .......... 6.01% 5.76% 5.11% 5.11%1 5.07% 4.82% 4.11%
Portfolio turnover rate 201% 201% 201% 201% 256% 256% 256%
FOR THE YEAR ENDED MAY 31,
-------------------------------
1998 1997 1996
------------------------------- --------------------- -------------------
CLASS I CLASS A CLASS B 2 CLASS I CLASS A CLASS I CLASS A
------- ------- --------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............. $ 10.37 $ 10.42 $ 10.70 $ 10.30 $ 10.35 $ 10.54 $ 10.60
-------- -------- -------- -------- ------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .. 0.60 0.58 0.20 0.60 0.57 0.61 0.59
Net gain/ (loss) on
securities (realized
and unrealized) ...... 0.22 0.21 (0.07) 0.07 0.07 (0.22) (0.23)
-------- -------- -------- -------- ------- -------- -------
Total from investment
operations ........ 0.82 0.79 0.13 0.67 0.64 0.39 0.36
-------- -------- -------- -------- ------- -------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income .... (0.60) (0.58) (0.20) (0.60) (0.57) (0.61) (0.59)
Distributions from net
realized capital gains (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Distributions in excess
of net realized
capital gains ........ (0.00) (0.00) (0.00) (0.00) (0.00) (0.02) (0.02)
-------- -------- -------- -------- ------- -------- -------
Total distributions .. (0.60) (0.58) (0.20) (0.60) (0.57) (0.63) (0.61)
-------- -------- -------- -------- ------- -------- -------
Net asset value, end
of period .............. $ 10.59 $ 10.63 $ 10.63 $ 10.37 $ 10.42 $ 10.30 $ 10.35
======== ======== ======== ======== ======= ======== =======
TOTAL RETURN .............. 8.09% 7.71%4 7.39%1,4 6.63% 6.36%4 3.79% 3.44%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) .... $166,710 $ 3,288 $ 2 $121,271 $ 3,720 $111,240 $ 6,216
Ratio of expenses
to average
net assets ........... 0.65% 0.91% 1.60%1 0.70% 0.96% 0.80% 1.04%
Ratio of net investment
income to average
net assets ........... 5.71% 5.48% 3.38%1 5.76% 5.52% 5.78% 5.50%
Ratio of expenses
to average net
assets before
fee waivers .......... 0.80% 1.06% 1.49%1 0.79% 1.05% 0.82% 1.06%
Ratio of net investment
income to average
net assets before
fee waivers .......... 5.56% 5.33% 3.49%1 5.66% 5.44% 5.76% 5.48%
Portfolio turnover rate 160% 160% 160% 217% 217% 45% 45%
<FN>
1 ANNUALIZED.
2 CLASS B AND CLASS C COMMENCED OPERATIONS ON JANUARY 6, 1998 AND MAY 30, 2000, RESPECTIVELY.
3 TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
37
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA TOTAL RETURN ADVANTAGE FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-----------------------------------------------------------------------------
2000 1999 1998
--------------------------------- ------------------ --------------------
CLASS I CLASS A CLASS B2 CLASS I CLASS A CLASS I CLASS A
------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .................. $ 9.99 $ 9.98 $ 9.73 $ 10.25 $ 10.25 $ 9.89 $ 9.89
-------- -------- ------- -------- ------- -------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ...... 0.60 0.57 0.39 0.58 0.56 0.64 0.61
Net gain/ (loss) on securities
(realized and unrealized) (0.45) (0.44) (0.19) (0.22) (0.23) 0.36 0.36
-------- -------- ------- -------- ------- -------- ------
Total from investment
operations ............. 0.15 0.13 0.20 0.36 0.33 1.00 0.97
-------- -------- ------- -------- ------- -------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income ................... (0.60) (0.57) (0.37) (0.58) (0.56) (0.64) (0.61)
Dividends in excess of net
investment income ........ (0.00) (0.01) (0.00) (0.00) (0.00) (0.00) (0.00)
Distributions from net realized
capital gains ............ (0.06) (0.06) (0.06) (0.04) (0.04) (0.00) (0.00)
Distributions in excess of net
realized capital gains ... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
-------- -------- ------- -------- ------- -------- ------
Total distributions ...... (0.66) (0.64) (0.43) (0.62) (0.60) (0.64) (0.61)
-------- -------- ------- -------- ------- -------- ------
Net asset value, end of period $ 9.48 $ 9.47 $ 9.50 $ 9.99 $ 9.98 $ 10.25 $10.25
======== ======== ======= ======== ======= ======== ======
TOTAL RETURN .................. 1.78% 1.41%4 2.17%3,4 3.54% 3.18%4 10.35% 10.08%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) ........ $331,026 $ 5,035 $ 1 $328,417 $ 4,686 $296,075 $ 640
Ratio of expenses to average
net assets0.48% .......... 0.73% 1.47%1 0.45% 0.69% 0.31% 0.54% 0.16%
Ratio of net investment
income to average
net assets ............... 6.17% 5.92% 5.18%1 5.72% 5.48% 6.29% 6.14%
Ratio of expenses to
average net assets
before fee waivers ....... 0.77% 1.02% 1.67%1 0.65% 0.89% 0.72% 0.97%
Ratio of net investment income
to average net assets
before fee waivers ....... 5.88% 5.63% 4.98%1 5.52% 5.28% 5.88% 5.71%
Portfolio turnover rate .... 121% 121% 121% 142% 142% 170% 170%
FOR THE YEAR ENDED MAY 31,
--------------------------------------------
1997 1996
------------------- --------------------
CLASS I CLASS A CLASS I CLASS A
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .................. $ 9.88 $ 9.87 $ 10.55 $ 10.54
-------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ...... 0.67 0.64 0.70 5 0.62 5
Net gain/ (loss) on securities
(realized and unrealized) 0.15 0.16 (0.24) (0.22)
-------- ------- -------- -------
Total from investment
operations ............. 0.82 0.80 0.46 0.40
-------- ------- -------- -------
LESS DISTRIBUTIONS
Dividends from net investment
income ................... (0.67) (0.64) (0.70) (0.62)
Dividends in excess of net
investment income ........ (0.00) (0.00) (0.12) (0.14)
Distributions from net realized
capital gains ............ (0.00) (0.00) (0.31) (0.31)
Distributions in excess of net
realized capital gains ... (0.14) (0.14) (0.00) (0.00)
-------- ------- -------- -------
Total distributions ...... (0.81) (0.78) (1.13) (1.07)
-------- ------- -------- -------
Net asset value, end of period $ 9.89 $ 9.89 $ 9.88 $ 9.87
======== ======= ======== =======
TOTAL RETURN .................. 8.51% 8.35%4 4.22% 3.74%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) ........ $259,228 $ 2,186 $280,401 $ 2,040
Ratio of expenses to average
net assets0.48% .......... 0.41% 0.13% 0.36%
Ratio of net investment
income to average
net assets ............... 6.70% 6.46% 6.67% 6.12%
Ratio of expenses to
average net assets
before fee waivers ....... 0.71% 0.96% 0.69% 0.89%
Ratio of net investment income
to average net assets
before fee waivers ....... 6.15% 5.91% 6.11% 5.59%
Portfolio turnover rate .... 169% 169% 268% 268%
<FN>
1 ANNUALIZED.
2 CLASS B COMMENCED OPERATIONS ON SEPTEMBER 29, 1999.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
5 CALCULATED BASED UPON AVERAGE SHARES OUTSTANDING.
</FN>
</TABLE>
See Accompanying Notes
38
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA NATIONAL TAX EXEMPT BOND FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31, FOR THE
---------------------------------------------------------------------------- PERIOD ENDED
2000 1999 MAY 31, 1998
----------------------------------------- ------------------------------- ------------
CLASS I CLASS A CLASS B CLASS C 2 CLASS I CLASS A 2 CLASS B 2 CLASS I 2
------- ------- ------- --------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period .............. $ 9.96 $ 9.97 $9.96 $9.52 $ 10.03 $10.04 $10.23 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income ............ 0.42 0.41 0.34 0.03 0.45 0.41 0.13 0.07
Net gain/(loss) on securities
(realized and unrealized) ...... (0.45) (0.42) (0.45) (0.02) (0.04) (0.04) (0.26) 0.03
------- ------ ----- ----- -------- ------ ------ -------
Total from investment
operations ................... (0.03) (0.01) (0.11) 0.01 0.41 0.37 (0.13) 0.10
------- ------ ----- ----- -------- ------ ------ -------
LESS DISTRIBUTIONS
Dividends from net investment
income ......................... (0.42) (0.41) (0.34) (0.03) (0.45) (0.41) (0.14) (0.07)
Distribution from net realized
capital gains .................. (0.01) (0.01) (0.01) (0.00) (0.03) (0.03) (0.00) (0.00)
------- ------ ----- ----- -------- ------ ------ -------
Total distributions ............ (0.43) (0.42) (0.35) (0.03) (0.48) (0.44) (0.14) (0.07)
------- ------ ----- ----- -------- ------ ------ -------
Net asset value, end of period ...... $ 9.50 $ 9.54 $9.50 $9.50 $ 9.96 $ 9.97 $ 9.96 $ 10.03
======= ====== ===== ===== ======== ====== ====== =======
TOTAL RETURN ........................ (0.24)% (0.02)%4 (1.05)%4 0.09%3,4 4.07% 3.67%3,4 (1.22)%3,4 7.03%1
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ..................... $95,634 $4,009 $ 224 $ 0 $100,638 $4,205 $ 275 $80,259
Ratio of expenses to average
net assets ..................... 0.54% 0.64% 1.35% 1.50%1 0.36% 0.46%1 1.17%1 0.33%1
Ratio of net investment
income to average net
assets ......................... 4.37% 4.27% 3.56% 3.41%1 4.39% 4.29%1 3.58%1 4.62%1
Ratio of expenses to average
net assets before fee
waivers ........................ 0.81% 0.91% 1.56% 1.65%1 0.87% 0.97%1 1.68%1 0.87%1
Ratio of net investment
income to average net
assets before fee waivers ...... 4.10% 4.00% 3.35% 3.26%1 3.88% 3.78%1 3.07%1 4.08%1
Portfolio turnover rate .......... 65% 65% 65% 65% 23% 23% 23% 0%
<FN>
1 ANNUALIZED.
2 CLASS I, CLASS A, CLASS B AND CLASS C COMMENCED OPERATIONS ON APRIL 9, 1998,
JUNE 19, 1998, JANUARY 29, 1999, AND FEBRUARY 24, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
39
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA OHIO TAX EXEMPT BOND FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-----------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------ ----------------- ------------------ ---------------- ----------------
CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ............ $ 11.03 $11.00 $ 11.13 $11.09 $ 10.86 $10.82 $ 10.70 $10.66 $ 10.74 $10.70
-------- ------ -------- ------ -------- ------ ------- ------ ------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .......... 0.48 0.47 0.53 0.52 0.51 0.51 0.51 0.51 0.50 0.50
Net gain/(loss) on securities
(realized and unrealized) .... (0.53) (0.53) (0.09) (0.08) 0.28 0.28 0.16 0.16 (0.04) (0.04)
-------- ------ -------- ------ -------- ------ ------- ------ ------- ------
Total from investment
operations ................. (0.05) (0.06) 0.44 0.44 0.79 0.79 0.67 0.67 0.46 0.46
-------- ------ -------- ------ -------- ------ ------- ------ ------- ------
LESS DISTRIBUTIONS
Dividends from net
investment income ............ (0.48) (0.47) (0.53) (0.52) (0.51) (0.51) (0.51) (0.51) (0.50) (0.50)
Distributions from net realized
capital gains ................ (0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.00) (0.00) (0.00) (0.00)
-------- ------ -------- ------ -------- ------ ------- ------ ------- ------
Total distributions .......... (0.49) (0.48) (0.54) (0.53) (0.52) (0.52) (0.51) (0.51) (0.50) (0.50)
-------- ------ -------- ------ -------- ------ ------- ------ ------- ------
Net asset value,
end of period .................. $ 10.49 $10.46 $ 11.03 $11.00 $ 11.13 $11.09 $ 10.86 $10.82 $ 10.70 $10.66
======== ====== ======== ====== ======== ====== ======= ====== ======= ======
TOTAL RETURN ...................... (0.40)% (0.51)%1 3.94% 3.93%1 7.43% 7.39%1 6.37% 6.38%1 4.36% 4.35%1
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ................... $166,164 $5,173 $205,365 $4,808 $165,395 $4,037 $91,366 $3,535 $82,886 $2,869
Ratio of expenses to average
net assets ................... 0.52% 0.62% 0.28% 0.38% 0.25% 0.25% 0.24% 0.24% 0.26% 0.26%
Ratio of net investment income
to average net assets ........ 4.52% 4.42% 4.77% 4.67% 4.67% 4.59% 4.71% 4.71% 4.68% 4.68%
Ratio of expenses to average net
assets before fee waivers .... 0.80% 0.90% 0.78% 0.88% 0.80% 0.80% 0.79% 0.79% 0.83% 0.83%
Ratio of net investment income
to average net assets
before fee waivers ........... 4.24% 4.14% 4.27% 4.17% 4.12% 4.04% 4.16% 4.16% 4.11% 4.11%
Portfolio turnover rate ........ 31% 31% 19% 19% 15% 15% 23% 23% 10% 10%
<FN>
1 TOTAL RETURN EXCLUDES SALES CHARGE.
</FN>
</TABLE>
See Accompanying Notes
40
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA PENNSYLVANIA MUNICIPAL BOND FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
---------------------------------------------------------------------------------------
2000 1999 1998 1997
--------------------------- ---------------- ---------------- --------------------
CLASS I CLASS A CLASS C 2 CLASS I CLASS A CLASS I CLASS A CLASS I 5 CLASS A 2
------- ------- --------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ................... $ 10.39 $10.40 $9.95 $ 10.45 $10.45 $ 10.22 $10.22 $ 10.08 $10.13
------- ------ ----- ------- ------ ------- ------ ------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .... 0.45 0.44 0.13 0.51 0.48 0.46 0.45 0.44 0.31
Net gain/(loss) on
securities (realized and
unrealized) ............ (0.46) (0.45) (0.14) (0.07) (0.04) 0.24 0.24 0.17 0.12
------- ------ ----- ------- ------ ------- ------ ------- ------
Total from investment
operations ........... (0.01) (0.01) (0.01) 0.44 0.44 0.70 0.69 0.61 0.43
------- ------ ----- ------- ------ ------- ------ ------- ------
LESS DISTRIBUTIONS
Dividends from net
investment income ..... (0.47) (0.46) (0.03) (0.49) (0.48) (0.46) (0.45) (0.44) (0.31)
Distributions from net
realized capital gains . (0.02) (0.02) (0.00) (0.01) (0.01) (0.00) (0.00) (0.02) (0.02)
Distributions in excess of
net realized capital
gains .................. (0.00) (0.00) (0.00) (0.00) (0.00) (0.01) (0.01) (0.01) (0.01)
------- ------ ----- ------- ------ ------- ------ ------- ------
Total distributions .... (0.49) (0.48) (0.03) (0.50) (0.49) (0.47) (0.46) (0.47) (0.34)
------- ------ ----- ------- ------ ------- ------ ------- ------
Net asset value, end of
period ................... $ 9.89 $ 9.91 $9.91 $ 10.39 $10.40 $ 10.45 $10.45 $ 10.22 $10.22
======= ====== ===== ======= ====== ======= ====== ======= ======
TOTAL RETURN (0.06)% (0.05)%4 (0.06)%3,4 4.21% 4.21%4 6.95% 6.84%4 6.21% 6.13%1,4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............ $45,021 $ 216 $ 0 $40,171 $ 218 $38,753 $ 125 $36,769 $ 81
Ratio of expenses to
average net assets ..... 0.53% 0.63% 1.53%1 0.48% 0.58% 0.69% 0.77% 0.87% 0.99%1
Ratio of net investment
income to average net
assets ................. 4.55% 4.45% 3.55%1 4.80% 4.70% 4.40% 4.32% 4.35% 4.26%1
Ratio of expenses to
average net assets
before fee waivers ..... 0.84% 0.94% 1.68%1 0.83% 0.93% 0.84% 0.94% 1.02% 1.00%1
Ratio of net investment
income to average net
assets before fee
waivers ................ 4.24% 4.14% 3.40%1 4.45% 4.35% 4.25% 4.15% 4.20% 4.25%1
Portfolio turnover rate .. 38% 38% 38% 15% 15% 20% 20% 42% 42%
FOR THE FOR THE
PERIOD YEAR
ENDED ENDED
MAY 31, APRIL 30,
1996 5 1996 5
------ ------
Net asset value, beginning of
<S> <C> <C>
period ................... $ 10.12 $ 10.04
------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .... 0.04 0.43
Net gain/(loss) on
securities (realized and
unrealized) ............ (0.04) 0.08
------- -------
Total from investment
operations ........... 0.00 0.51
------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income ..... (0.04) (0.43)
Distributions from net
realized capital gains . (0.00) (0.00)
Distributions in excess of
net realized capital
gains .................. (0.00) (0.00)
------- -------
Total distributions .... (0.04) (0.43)
------- -------
Net asset value, end of
period ................... $ 10.08 $ 10.12
======= =======
TOTAL RETURN (0.03)%1,4 5.06%4
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............ $38,733 $38,809
Ratio of expenses to
average net assets ..... 0.85%1 0.85%
Ratio of net investment
income to average net
assets ................. 4.32%1 4.16%
Ratio of expenses to
average net assets
before fee waivers ..... 1.31%1 1.24%
Ratio of net investment
income to average net
assets before fee
waivers ................ 3.86%1 3.77%
Portfolio turnover rate .. 0% 22%
<FN>
1 ANNUALIZED.
2 CLASS A AND CLASS C COMMENCED OPERATIONS ON SEPTEMBER 11, 1996 AND FEBRUARY 24, 2000, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 TOTAL RETURN EXCLUDES SALES CHARGE.
5 ACTIVITY FOR THE PERIOD PRESENTED INCLUDES THAT OF THE PREDECESSOR FUND
THROUGH SEPTEMBER 6, 1996. DURING 1996, THE PREDECESSOR FUND CHANGED ITS FISCAL
YEAR END FROM APRIL 30 TO MAY 31.
</FN>
</TABLE>
See Accompanying Notes
41
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA GOVERNMENT MONEY MARKET FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-------------------------------------------------------------------------------------
2000 1999 1998 1997
------------------ ------------------ -------------------- -----------------
CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ---------- -------- ---------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .... 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS
Dividends from net
investment income ...... (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05)
-------- -------- ---------- -------- ---------- -------- -------- --------
Net asset value, end of
period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ========== ======== ========== ======== ======== ========
TOTAL RETURN ................ 5.30% 5.14% 4.86% 4.70% 5.30% 5.17% 5.15% 5.04%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $947,831 $521,688 $1,094,979 $565,095 $1,137,078 $247,281 $811,662 $159,129
Ratio of expenses to
average net assets ..... 0.39% 0.54% 0.42% 0.57% 0.40% 0.52% 0.36% 0.47%
Ratio of net investment
income to average
net assets ............. 5.14% 4.99% 4.76% 4.61% 5.17% 5.05% 5.03% 4.93%
Ratio of expenses to
average net assets before
fee waivers ............ 0.55% 0.70% 0.52% 0.67% 0.50% 0.62% 0.46% 0.57%
Ratio of net investment
income to average net
assets before fee waivers 4.98% 4.83% 4.66% 4.51% 5.07% 4.95% 4.93% 4.83%
FOR THE YEAR ENDED MAY 31,
-------------------------
1996
-----------------
CLASS I CLASS A
------- -------
<S> <C> <C>
Net asset value, beginning
of period ................ $ 1.00 $ 1.00
-------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .... 0.05 0.05
LESS DISTRIBUTIONS
Dividends from net
investment income ...... (0.05) (0.05)
-------- --------
Net asset value, end of
period ................. $ 1.00 $ 1.00
======== ========
TOTAL RETURN ................ 5.41% 5.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $741,894 $131,194
Ratio of expenses to
average net assets ..... 0.36% 0.46%
Ratio of net investment
income to average
net assets ............. 5.27% 5.13%
Ratio of expenses to
average net assets before
fee waivers ............ 0.47% 0.57%
Ratio of net investment
income to average net
assets before fee waivers 5.16% 5.02%
</TABLE>
See Accompanying Notes
42
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA MONEY MARKET FUND
================================================================================
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
--------------------------------------------------------------------------
2000 1999
-------------------------------- ---------------------------------
CLASS I CLASS A CLASS B CLASS I CLASS A CLASS B
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- -------- ---------- ---------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .... 0.05 0.05 0.04 0.05 0.05 0.04
LESS DISTRIBUTIONS
Dividends from net
investment income ...... (0.05) (0.05) (0.04) (0.05) (0.05) (0.04)
---------- ---------- -------- ---------- ---------- --------
Net asset value,
end of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ======== ========== ========== ========
TOTAL RETURN ................ 5.41% 5.25% 4.50% 4.96% 4.82% 4.21%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $2,342,230 $1,717,661 $ 249 $2,133,839 $1,360,644 $ 27
Ratio of expenses to
average net assets ..... 0.40% 0.55% 1.26% 0.42% 0.56% 1.27%
Ratio of net investment
income to average
net assets ............. 5.29% 5.14% 4.43% 4.82% 4.68% 3.97%
Ratio of expenses to
average net assets before
fee waivers ............ 0.56% 0.71% 1.36% 0.52% 0.66% 1.37%
Ratio of net investment
income to average net
assets before
fee waivers ............ 5.13% 4.98% 4.33% 4.72% 4.58% 3.87%
FOR THE YEAR ENDED MAY 31,
---------------------------------------------------------------------------------
1998 1997 1996
------------------------------ -------------------- --------------------
CLASS I CLASS A CLASS B2 CLASS I CLASS A CLASS I CLASS A
------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- -------- ------- ---------- -------- ---------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .... 0.05 0.05 0.05 0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS
Dividends from net
investment income ...... (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05)
---------- -------- ------- ---------- -------- ---------- --------
Net asset value,
end of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ======== ======= ========== ======== ========== ========
TOTAL RETURN ................ 5.39% 5.26% 5.04%1 5.19% 5.09% 5.45% 5.35%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $1,911,689 $696,893 $ 5 $1,943,021 $346,172 $1,344,414 $343,087
Ratio of expenses to
average net assets ..... 0.38% 0.51% 1.22%1 0.37% 0.47% 0.37% 0.47%
Ratio of net investment
income to average
net assets ............. 5.27% 5.14% 4.39%1 5.07% 4.97% 5.30% 5.18%
Ratio of expenses to
average net assets before
fee waivers ............ 0.48% 0.61% 1.27%1 0.47% 0.57% 0.48% 0.58%
Ratio of net investment
income to average net
assets before
fee waivers ............ 5.17% 5.08% 4.31%1 4.97% 4.87% 5.19% 5.07%
<FN>
1 ANNUALIZED.
2 CLASS B COMMENCED OPERATIONS JANUARY 5, 1998.
</FN>
</TABLE>
See Accompanying Notes
43
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA OHIO MUNICIPAL MONEY MARKET FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE PERIOD ENDED
MAY 31, 2000 MAY 31, 1999
-------------------------- ---------------------------
CLASS I CLASS A CLASS I 2 CLASS A 2
------- ------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ......................................... 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Dividends from net investment income .......................... (0.03) (0.03) (0.02) (0.02)
-------- ------- ------- -------
Net asset value, end of period .................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= =======
TOTAL RETURN .................................................... 3.28% 3.13% 2.01%3 1.50%3
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ......................... $129,475 $29,458 $99,342 $11,019
Ratio of expenses to average net assets ...................... 0.35% 0.50% 0.35%1 0.50%1
Ratio of net investment income to average net assets ......... 3.26% 3.11% 2.77%1 2.62%1
Ratio of expenses to average net assets before
fee waivers ................................................ 0.61% 0.76% 0.55%1 0.70%1
Ratio of net investment income to average net assets
before fee waivers ......................................... 3.00% 2.85% 2.57%1 2.42%1
<FN>
1 ANNUALIZED.
2 CLASS I AND CLASS A COMMENCED OPERATIONS ON SEPTEMBER 15, 1998 AND NOVEMBER 2, 1998, RESPECTIVELY.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
</FN>
</TABLE>
See Accompanying Notes
44
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA PENNSYLVANIA TAX EXEMPT MONEY MARKET FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR YEAR ENDED MAY 31,
------------------------------------------------------------------------------
2000 1999 1998 1997
---------------- ---------------- ---------------- --------------------
CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A CLASS I 4 CLASS A 2
------- ------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income ................. 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02
LESS DISTRIBUTIONS
Dividends from net
investment
income ................. (0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.02)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end
of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN ................ 3.31% 3.15% 2.92% 2.76% 3.41% 3.29% 3.26% 3.18%1
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $94,299 $57,941 $77,214 $53,822 $73,264 $33,375 $60,876 $20,830
Ratio of expenses to
average net
assets ................. 0.33% 0.48% 0.34% 0.49% 0.34% 0.46% 0.41% 0.46%1
Ratio of net investment
income to average
net assets ............. 3.26% 3.11% 2.82% 2.67% 3.35% 3.23% 3.20% 3.27%1
Ratio of expenses to
average net assets
before fee waivers ..... 0.64% 0.79% 0.59% 0.74% 0.58% 0.71% 0.74% 0.71%1
Ratio of net investment
income to average
net assets before
fee waivers ............ 2.95% 2.80% 2.57% 2.42% 3.11% 2.98% 2.87% 3.02%1
FOR THE FOR THE
PERIOD ENDED YEAR ENDED
MAY 31, 1996 4 APRIL 30, 1996 4
-------------- ----------------
<S> <C> <C>
Net asset value,
beginning of period ...... $ 1.00 $ 1.00
------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income ................. 0.00 0.03
LESS DISTRIBUTIONS
Dividends from net
investment
income ................. (0.00) (0.03)
------- -------
Net asset value, end
of period ................ $ 1.00 $ 1.00
======= =======
TOTAL RETURN ................ 0.28%3 3.36%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $68,742 $70,422
Ratio of expenses to
average net
assets ................. 0.55%1 0.55%
Ratio of net investment
income to average
net assets ............. 3.24%1 3.29%
Ratio of expenses to
average net assets
before fee waivers ..... 0.97%1 0.96%
Ratio of net investment
income to average
net assets before
fee waivers ............ 2.82%1 2.88%
<FN>
1 ANNUALIZED.
2 CLASS A COMMENCED OPERATIONS ON SEPTEMBER 11, 1996.
3 TOTAL RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
4 ACTIVITY FOR THE PERIOD PRESENTED INCLUDES THAT OF THE PREDECESSOR FUND
THROUGH SEPTEMBER 6, 1996. DURING 1996, THE PREDECESSOR FUND CHANGED ITS FISCAL
YEAR END FROM APRIL 30 TO MAY 31.
</FN>
</TABLE>
See Accompanying Notes
45
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA TAX EXEMPT MONEY MARKET FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
---------------- ----------------- ----------------- ----------------- -----------------
CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- ------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .... 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03
LESS DISTRIBUTIONS
Dividends from net
investment income ...... (0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03)
-------- -------- -------- -------- -------- -------- -------- ------- -------- -------
Net asset value, end
of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ======= ======== =======
TOTAL RETURN ................ 3.30% 3.14% 3.00% 2.85% 3.40% 3.27% 3.23% 3.12% 3.40% 3.29%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............. $327,185 $219,568 $434,178 $190,469 $418,953 $132,548 $370,679 $71,917 $261,808 $85,928
Ratio of expenses to
average net assets ..... 0.32% 0.47% 0.30% 0.44% 0.30% 0.42% 0.29% 0.39% 0.30% 0.40%
Ratio of net investment
income to average
net assets ............. 3.24% 3.09% 2.92% 2.78% 3.32% 3.20% 3.18% 3.08% 3.33% 3.23%
Ratio of expenses to
average net assets
before fee waivers ..... 0.58% 0.73% 0.50% 0.64% 0.50% 0.62% 0.49% 0.59% 0.51% 0.61%
Ratio of net investment
income to average net
assets before fee
waivers ................ 2.98% 2.83% 2.72% 2.58% 3.12% 3.00% 2.98% 2.88% 3.12% 3.02%
</TABLE>
See Accompanying Notes
46
<PAGE>
FINANCIAL HIGHLIGHTS
ARMADA TREASURY MONEY MARKET FUND
================================================================================
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
---------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
----------------- ------------------ ------------------ ------------------ ------------------
CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A CLASS I CLASS A
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- -------- ------- -------- ------ -------- ------ -------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income ..... 0.05 0.04 0.04 0.04 0.05 0.05 0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS
Dividends from net
investment income ....... (0.05) (0.04) (0.04) (0.04) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05)
-------- ------- -------- ------- -------- ------ -------- ------ -------- ------
Net asset value, end
of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======== ======= ======== ====== ======== ====== ======== ======
TOTAL RETURN ................. 4.75% 4.59% 4.39% 4.23% 4.95% 4.82% 4.89% 4.79% 5.07% 4.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) .............. $409,169 $79,713 $346,092 $83,020 $359,605 $7,222 $276,327 $5,680 $312,255 $4,355
Ratio of expenses to
average net assets ...... 0.42% 0.57% 0.41% 0.55% 0.39% 0.51% 0.37% 0.47% 0.41% 0.52%
Ratio of net investment
income to average
net assets .............. 4.65% 4.50% 4.35% 4.21% 4.84% 4.71% 4.79% 4.68% 4.88% 4.77%
Ratio of expenses to
average net assets
before fee waivers ...... 0.53% 0.68% 0.46% 0.60% 0.44% 0.56% 0.42% 0.52% 0.47% 0.58%
Ratio of net investment
income to average net
assets before fee
waivers ................. 4.54% 4.39% 4.30% 4.16% 4.79% 4.66% 4.74% 4.63% 4.82% 4.71%
</TABLE>
See Accompanying Notes
47
<PAGE>
STATEMENT OF NET ASSETS
ARMADA CORE EQUITY FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 98.8%
AUTOMOTIVE -- 0.9%
SPX* ....................................... 13,090 $ 1,379
-------
BANKS -- 3.0%
Chase Manhattan ............................ 22,460 1,677
Comerica ................................... 29,580 1,497
Commerce Bancshares ........................ 35,675 1,240
-------
4,414
-------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 1.5%
Interpublic Group of Companies# ............ 52,710 2,263
-------
BUILDING & CONSTRUCTION SUPPLIES -- 1.6%
Centex ..................................... 9,000 187
Masco ...................................... 108,920 2,144
-------
2,331
-------
BUSINESS SERVICES -- 8.2%
Automatic Data Processing .................. 88,320 4,852
Cintas# .................................... 40,680 1,790
Computer Sciences* ......................... 32,700 3,137
Fiserv*# ................................... 48,340 2,260
-------
12,039
-------
CHEMICALS -- 2.5%
E.I. DuPont de Nemours ..................... 32,295 1,582
Praxair .................................... 51,260 2,153
-------
3,735
-------
COMMUNICATIONS EQUIPMENT -- 1.7%
Tellabs* ................................... 37,780 2,453
-------
COMPUTER HARDWARE -- 3.5%
Cisco Systems*# ............................ 91,748 5,224
-------
COMPUTER SOFTWARE -- 3.6%
Microsoft* ................................. 58,870 3,683
Siebel Systems* ............................ 13,300 1,556
-------
5,239
-------
DIVERSIFIED MANUFACTURING -- 3.3%
General Electric ........................... 93,690 4,930
-------
DRUGS & HEALTH CARE -- 7.6%
Bristol-Myers Squibb ....................... 48,300 2,659
Johnson & Johnson .......................... 27,860 2,493
Merck ...................................... 47,660 3,557
Pfizer ..................................... 54,770 2,441
-------
11,150
-------
FINANCIAL SERVICES -- 4.4%
Associates First Capital, Cl A ............. 50,040 1,373
Citigroup .................................. 42,125 2,620
Fannie Mae ................................. 42,210 2,538
-------
6,531
-------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
FOOD & BEVERAGE -- 0.5%
Coca Cola .................................. 13,750 $ 734
-------
INSURANCE -- 8.2%
American General ........................... 23,850 1,528
American International Group ............... 42,143 4,744
Marsh & McLennan ........................... 6,750 743
MGIC Investment ............................ 27,210 1,349
PMI Group .................................. 25,015 1,269
Radian Group ............................... 44,520 2,449
-------
12,082
-------
MACHINERY -- 4.3%
Caterpillar ................................ 35,050 1,341
Deere# ..................................... 62,840 2,612
Ingersoll Rand ............................. 53,890 2,455
-------
6,408
-------
MEDICAL & MEDICAL SERVICES -- 2.5%
Medtronic .................................. 70,386 3,634
-------
METALS & MINING -- 1.1%
Alcoa ...................................... 26,530 1,550
-------
OFFICE & BUSINESS EQUIPMENT -- 2.1%
Lexmark International, Cl A* ............... 14,960 1,043
Pitney Bowes ............................... 45,900 1,997
-------
3,040
-------
PAPER & FOREST PRODUCTS -- 2.9%
Champion International ..................... 36,100 2,635
Willamette Industries ...................... 48,300 1,570
-------
4,205
-------
PETROLEUM & FUEL PRODUCTS -- 1.9%
Schlumberger ............................... 32,290 2,375
Transocean Sedco Forex ..................... 7,142 351
-------
2,726
-------
PETROLEUM REFINING -- 6.6%
Chevron .................................... 23,110 2,136
Exxon Mobil ................................ 70,534 5,876
Texaco ..................................... 30,620 1,759
-------
9,771
-------
RETAIL -- 11.3%
Costco Wholesale* .......................... 43,200 1,380
CVS# ....................................... 51,030 2,220
Home Depot ................................. 67,320 3,286
Safeway* ................................... 40,450 1,866
Target ..................................... 42,730 2,679
Wal-Mart ................................... 51,060 2,942
Walgreen ................................... 81,960 2,326
-------
16,699
-------
See Accompanying Notes
48
<PAGE>
STATEMENT OF NET ASSETS
ARMADA CORE EQUITY FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
SEMI-CONDUCTORS/INSTRUMENTS -- 13.0%
Altera*# .......................... 45,610 $ 3,917
Applied Materials* ................ 44,080 3,681
Applied Micro Circuits* ........... 19,120 1,898
Intel ............................. 43,880 5,471
Maxim Integrated Products*# ....... 48,980 3,107
Vitesse Semiconductor*# ........... 21,730 1,100
----------
19,174
----------
TELEPHONE & TELECOMMUNICATION -- 2.6%
SBC Communications ................ 37,410 1,634
Worldcom* ......................... 57,185 2,152
----------
3,786
----------
TOTAL COMMON STOCK
(Cost $106,766) .............................. 145,497
----------
CASH EQUIVALENT -- 1.3%
Goldman Sachs Financial Square
Prime Obligation Money Market
Fund ............................. 1,894,766 1,895
----------
TOTAL CASH EQUIVALENT
(Cost $1,895) ................................ 1,895
----------
TOTAL INVESTMENTS -- 100.1%
(Cost $108,661) .............................. 147,392
==========
OTHER ASSETS AND LIABILITIES,
NET -- (0.1%) ................................ (197)
----------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value) based on
9,487,554 outstanding shares of
beneficial interest .......................... $ 92,654
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
280,201 outstanding shares of
beneficial interest .......................... 3,804
Portfolio Shares of Class B (unlimited
authorization -- no par value) based on
125,808 outstanding shares of
beneficial interest .......................... 1,704
Portfolio Shares of Class C (unlimited
authorization -- no par value) based on
139 outstanding shares of
beneficial interest .......................... 2
Accumulated net realized gain on
investments .................................. 10,300
Net unrealized appreciation on
investments .................................. 38,731
----------
TOTAL NET ASSETS -- 100.0% ...................... $ 147,195
==========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................. $14.88
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A ................... $14.80
==========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($14.80 / 94.5%) ............ $15.66
==========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B ................... $14.62
==========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C ................... $14.63
==========
------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
CL--CLASS
See Accompanying Notes
49
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY GROWTH FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 96.5%
AEROSPACE -- 0.4%
United Technologies ....................... 91,489 $ 5,529
---------
BANKS -- 4.0%
Bank of New York# ......................... 290,000 13,612
MBNA ...................................... 614,388 17,126
Northern Trust ............................ 129,051 8,493
State Street .............................. 156,565 17,457
---------
56,688
---------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 1.2%
Omnicom Group ............................. 201,927 16,949
---------
BUSINESS SERVICES -- 1.8%
Automatic Data Processing ................. 341,840 18,780
Concord EFS*# ............................. 314,950 7,638
---------
26,418
---------
CABLE TELEVISION -- 1.1%
Comcast, Cl A Special* .................... 415,674 15,744
---------
CHEMICALS -- 1.6%
Avery Dennison ............................ 143,550 8,792
Pharmacia ................................. 258,184 13,409
---------
22,201
---------
COMMUNICATIONS EQUIPMENT -- 5.5%
ADC Telecommunications*# .................. 329,520 22,140
Lucent Technologies ....................... 343,445 19,705
Nortel Networks# .......................... 481,180 26,134
Qualcomm* ................................. 173,142 11,492
---------
79,471
---------
COMPUTER HARDWARE -- 6.2%
Cisco Systems*# ........................... 815,624 46,440
EMC* ...................................... 252,823 29,406
Sun Microsystems* ......................... 178,712 13,694
---------
89,540
---------
COMPUTER SOFTWARE -- 2.5%
BMC Software* ............................. 27,850 1,225
Microsoft* ................................ 561,824 35,149
---------
36,374
---------
COMPUTERS -- 1.9%
Hewlett Packard ........................... 40,337 4,846
International Business
Machines# ................................ 209,774 22,511
---------
27,357
---------
DIVERSIFIED MANUFACTURING -- 5.3%
General Electric .......................... 1,207,667 63,554
Minnesota Mining &
Manufacturing ............................ 143,550 12,309
---------
75,863
---------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
DRUGS & HEALTH CARE -- 10.5%
Amgen* .................................... 200,000 $ 12,725
Bristol-Myers Squibb ...................... 330,356 18,190
Johnson & Johnson# ........................ 125,418 11,225
Lilly (Eli) ............................... 44,022 3,351
Merck ..................................... 253,605 18,925
Pfizer# ................................... 693,538 30,906
Schering-Plough ........................... 394,381 19,078
Warner-Lambert# ........................... 301,455 36,815
---------
151,215
---------
ENTERTAINMENT -- 0.9%
AT&T-Liberty Media, Cl A* ................. 302,795 13,418
---------
FINANCIAL SERVICES -- 3.8%
American Express .......................... 356,295 19,173
Citigroup ................................. 311,455 19,369
Fannie Mae ................................ 155,991 9,379
Freddie Mac ............................... 143,550 6,388
---------
54,309
---------
FOOD & BEVERAGE -- 1.4%
Coca Cola# ................................ 47,850 2,554
PepsiCo ................................... 429,615 17,480
---------
20,034
---------
HOUSEHOLD PRODUCTS -- 2.0%
Colgate Palmolive ......................... 281,025 14,789
Procter & Gamble .......................... 203,078 13,505
---------
28,294
---------
INSURANCE -- 3.7%
American International Group# ............. 356,794 40,162
Marsh & McLennan .......................... 115,700 12,734
---------
52,896
---------
MEDICAL & MEDICAL SERVICES -- 1.1%
Medtronic ................................. 298,201 15,395
---------
MISCELLANEOUS MANUFACTURING -- 2.7%
Tyco International ........................ 819,767 38,580
---------
MOTORCYCLE & MOTOR SCOOTER -- 1.2%
Harley-Davidson# .......................... 444,622 16,562
---------
OFFICE & BUSINESS EQUIPMENT -- 1.6%
Lexmark International, Cl A* .............. 174,400 12,164
Pitney Bowes .............................. 263,799 11,475
---------
23,639
---------
PAPER & FOREST PRODUCTS -- 0.7%
International Paper# ...................... 292,842 10,195
---------
PERSONAL CARE -- 0.2%
Gillette# ................................. 103,410 3,451
---------
See Accompanying Notes
50
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY GROWTH FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
PETROLEUM & FUEL PRODUCTS -- 2.6%
Burlington Resources .............. 206,034 $ 9,426
Schlumberger ...................... 376,101 27,667
----------
37,093
----------
PETROLEUM REFINING -- 5.4%
Chevron ........................... 178,959 16,543
Coastal ........................... 285,390 17,516
Conoco, Cl B ...................... 500,358 14,260
Exxon Mobil ....................... 347,294 28,934
----------
77,253
----------
PRINTING & PUBLISHING -- 1.6%
Time Warner ....................... 296,670 23,418
----------
RETAIL -- 3.1%
Costco Wholesale*# ................ 406,916 12,996
Radioshack# ....................... 347,391 14,742
Target ............................ 270,352 16,948
----------
44,686
----------
RETAIL DRUG STORES -- 0.7%
Walgreen .......................... 338,778 9,613
----------
RETAIL FOOD CHAINS -- 1.1%
Kroger* ........................... 110,731 2,201
Safeway*# ......................... 303,369 13,993
----------
16,194
----------
RETAIL STORES -- 4.3%
Home Depot ........................ 506,298 24,714
Lowe's ............................ 109,098 5,080
Wal-Mart# ......................... 542,619 31,268
----------
61,062
----------
SEMI-CONDUCTORS/INSTRUMENTS -- 9.7%
Altera*# .......................... 184,110 15,810
Analog Devices* ................... 263,240 20,270
Applied Materials* ................ 193,820 16,184
Intel# ............................ 470,435 58,657
Texas Instruments# ................ 395,532 28,577
----------
139,498
----------
TELEPHONE & TELECOMMUNICATION -- 6.2%
Alltel ............................ 268,917 17,597
BellSouth ......................... 233,508 10,902
GTE ............................... 187,572 11,864
Motorola .......................... 50,000 4,688
SBC Communications ................ 464,528 20,294
Vodafone Air Touch, ADR# .......... 239,250 10,961
Worldcom* ......................... 351,271 13,217
----------
89,523
----------
WHOLESALE -- 0.5%
Sysco# ............................ 158,339 6,640
----------
TOTAL COMMON STOCK
(Cost $896,058) .............................. 1,385,102
----------
NUMBER VALUE
OF SHARES (000)
--------- -----
CASH EQUIVALENT -- 3.5%
Fidelity Domestic Money Market
Fund ............................ 49,522,628 $ 49,523
----------
TOTAL CASH EQUIVALENT
(Cost $49,523) ................................ 49,523
----------
TOTAL INVESTMENTS -- 100.0%
(Cost $945,581) ............................... 1,434,625
==========
OTHER ASSETS AND LIABILITIES,
NET -- 0.0% ................................... 366
----------
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value) based on
43,302,522 outstanding shares of
beneficial interest ........................... 754,595
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
6,259,636 outstanding shares of
beneficial interest ........................... 135,321
Portfolio Shares of Class B (unlimited
authorization -- no par value) based on
130,839 outstanding shares of
beneficial interest ........................... 3,558
Portfolio Shares of Class C (unlimited
authorization -- no par value) based on
9,249 outstanding shares of
beneficial interest ........................... 264
Accumulated net realized gain on
investments ................................... 52,209
Net unrealized appreciation on investments ..... 489,044
----------
TOTAL NET ASSETS -- 100.0% ....................... $1,434,991
==========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I .............................. $28.89
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A .................... $28.76
==========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($28.76 / 94.5%) ............. $30.43
==========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B .................... $28.37
==========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C .................... $28.38
==========
--------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
ADR--AMERICAN DEPOSITORY RECEIPT
CL--CLASS
See Accompanying Notes
51
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INCOME FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 96.2%
AEROSPACE -- 4.3%
General Dynamics# ..................... 144,400 $ 8,529
Northrop Grumman# ..................... 119,653 9,168
United Technologies ................... 71,500 4,321
-------
22,018
-------
AUTOMOTIVE -- 3.1%
Ford .................................. 104,500 5,075
General Motors# ....................... 54,400 3,842
Genuine Parts# ........................ 178,700 4,266
TRW ................................... 59,400 2,881
-------
16,064
-------
BANKS -- 11.8%
Bank of America ....................... 180,239 10,015
Charter One Financial ................. 420,500 9,566
Comerica .............................. 98,900 5,007
PNC Financial Services Group .......... 151,500 7,632
Southtrust ............................ 332,300 8,993
SunTrust# ............................. 161,700 9,662
UnionBanCal ........................... 266,800 9,138
-------
60,013
-------
BUILDING & CONSTRUCTION SUPPLIES -- 1.0%
Masco ................................. 180,500 3,554
Sherwin Williams ...................... 64,300 1,495
-------
5,049
-------
CHEMICALS -- 2.3%
Dow Chemical# ......................... 64,084 6,861
E.I. DuPont de Nemours ................ 52,000 2,548
RPM# .................................. 241,050 2,350
-------
11,759
-------
COMPUTERS -- 1.9%
Hewlett Packard ....................... 40,800 4,901
International Business Machines ....... 46,200 4,958
-------
9,859
-------
DIVERSIFIED MANUFACTURING -- 1.7%
Emerson Electric ...................... 66,400 3,918
Minnesota Mining & Manufacturing ...... 56,400 4,836
-------
8,754
-------
DRUGS & HEALTH CARE -- 1.1%
American Home Products ................ 100,000 5,387
-------
ELECTRICAL SERVICES -- 3.5%
Consolidated Edison ................... 73,640 2,402
Dominion Resources of
Virginia ............................. 102,329 4,682
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
ELECTRICAL SERVICES -- CONTINUED
Duke Energy ........................... 64,500 $ 3,757
FPL Group ............................. 65,000 3,217
LG&E Energy ........................... 113,500 2,689
TXU ................................... 34,700 1,241
-------
17,988
-------
FINANCIAL SERVICES -- 4.3%
Citigroup ............................. 117,800 7,326
Fannie Mae ............................ 139,200 8,369
Freddie Mac ........................... 138,200 6,150
-------
21,845
-------
FOOD & BEVERAGE -- 3.6%
Flowers Industries .................... 228,100 4,120
General Mills ......................... 213,400 8,469
Sara Lee .............................. 314,100 5,654
-------
18,243
-------
GAS & NATURAL GAS -- 2.7%
Enron ................................. 158,500 11,551
KeySpan# .............................. 69,600 2,123
-------
13,674
-------
HANDTOOLS & GENERAL HARDWARE -- 1.8%
Fortune Brands ........................ 226,200 6,023
Snap-On Tools ......................... 125,200 3,216
-------
9,239
-------
HOUSEHOLD PRODUCTS -- 0.4%
Maytag ................................ 63,700 2,086
-------
INSURANCE -- 6.3%
Allstate .............................. 107,100 2,838
Chubb ................................. 80,061 5,604
Cigna ................................. 71,700 6,368
Marsh & McLennan ...................... 67,500 7,429
Metlife*# ............................. 340,500 6,980
St. Paul .............................. 79,400 2,977
-------
32,196
-------
MACHINERY -- 1.6%
Caterpillar ........................... 64,300 2,459
Deere ................................. 72,400 3,009
Pall .................................. 128,400 2,696
-------
8,164
-------
MEDICAL & MEDICAL SERVICES -- 1.0%
Baxter International .................. 80,400 5,347
-------
METALS & MINING -- 2.3%
Alcoa ................................. 134,400 7,854
USX-U.S. Steel Group .................. 181,200 4,088
-------
11,942
-------
See Accompanying Notes
52
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INCOME FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
MISCELLANEOUS MANUFACTURING -- 0.5%
Textron ........................... 41,500 $ 2,604
----------
OFFICE & BUSINESS EQUIPMENT -- 2.3%
Pitney Bowes ...................... 134,700 5,859
Xerox ............................. 213,700 5,797
----------
11,656
----------
PAPER & FOREST PRODUCTS -- 2.5%
Bowater ........................... 25,600 1,323
Kimberly-Clark .................... 65,100 3,939
Temple-Inland ..................... 42,100 2,092
Westvaco .......................... 82,500 2,485
Weyerhaeuser ...................... 62,100 3,082
----------
12,921
----------
PETROLEUM & FUEL PRODUCTS -- 1.0%
Burlington Resources .............. 106,600 4,877
----------
PETROLEUM REFINING -- 13.1%
BP Amoco, ADR ..................... 185,484 10,086
Chevron ........................... 118,900 10,991
Conoco, Cl B ...................... 210,000 5,985
Exxon Mobil ....................... 211,381 17,611
Royal Dutch Petroleum,
NY Shares ........................ 113,500 7,087
Texaco ............................ 160,100 9,196
Ultramar Diamond Shamrock ......... 234,400 6,080
----------
67,036
----------
PRINTING & PUBLISHING -- 1.0%
Knight-Ridder# .................... 44,500 2,358
New York Times, Cl A .............. 65,900 2,529
----------
4,887
----------
PROFESSIONAL SERVICES -- 2.8%
Dun & Bradstreet .................. 169,900 5,224
Halliburton ....................... 174,900 8,920
----------
14,144
----------
REAL ESTATE INVESTMENT TRUSTS -- 3.7%
Arden Realty ...................... 267,600 6,155
Developers Diversified Realty ..... 170,700 2,464
Duke-Weeks Realty# ................ 271,700 5,859
Kimco Realty# ..................... 66,100 2,677
Mack-Cali Realty .................. 71,700 1,936
----------
19,091
----------
RETAIL -- 3.0%
Intimate Brands ................... 140,990 3,322
May Department Stores ............. 183,000 5,501
Nordstrom ......................... 88,200 2,216
Sears Roebuck ..................... 110,600 4,085
----------
15,124
----------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
SPECIALTY MACHINERY -- 1.6%
Cooper Industries ................. 84,100 $ 2,817
Hubbell, Cl B ..................... 97,400 2,569
Thomas & Betts .................... 105,900 3,005
----------
8,391
----------
STEEL & STEEL WORKS -- 0.3%
Nucor ............................. 40,200 1,563
----------
TELEPHONE & TELECOMMUNICATION -- 8.7%
AT&T .............................. 277,250 9,617
Bell Atlantic ..................... 83,940 4,438
BellSouth ......................... 188,100 8,782
GTE ............................... 173,800 10,993
SBC Communications ................ 240,685 10,515
----------
44,345
----------
TOBACCO -- 0.7%
UST ............................... 215,700 3,586
----------
UTILITIES -- 0.3%
American Water Works .............. 64,700 1,512
----------
TOTAL COMMON STOCK
(Cost $431,963) .............................. 491,364
----------
PREFERRED STOCK -- 1.7%
FINANCIAL SERVICES -- 1.3%
American General Delaware,
CV to 1.2288 Shares .............. 81,795 6,462
----------
PAPER & FOREST PRODUCTS -- 0.4%
International Paper,
CV to .9259 Shares* .............. 46,386 1,919
----------
TOTAL PREFERRED STOCK
(Cost $8,040) ................................ 8,381
----------
CASH EQUIVALENT -- 2.0%
Fidelity Domestic Money Market
Fund ............................ 10,325,576 10,326
----------
TOTAL CASH EQUIVALENT
(Cost $10,326) ............................... 10,326
----------
TOTAL INVESTMENTS -- 99.9%
(Cost $450,329) .............................. 510,071
==========
OTHER ASSETS AND LIABILITIES,
NET -- 0.1% .................................. 596
----------
See Accompanying Notes
53
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INCOME FUND
================================================================================
MAY 31, 2000
VALUE
(000)
----------
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value) based on
31,207,702 outstanding shares of
beneficial interest ........................... $427,269
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
566,935 outstanding shares of
beneficial interest ........................... 9,657
Portfolio Shares of Class B (unlimited
authorization -- no par value) based on
85,214 outstanding shares of
beneficial interest ........................... 1,438
Portfolio Shares of Class C (unlimited
authorization -- no par value) based on
6,623 outstanding shares
of beneficial interest ........................ 103
Undistributed net investment income ............ 2,389
Accumulated net realized gain
on investments ................................ 10,069
Net unrealized appreciation on investments ..... 59,742
--------
TOTAL NET ASSETS -- 100.0% ....................... $510,667
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I .............................. $16.03
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A .................... $16.00
========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($16.00 / 94.5%) ............. $16.93
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B .................... $15.93
========
NET ASSET VALUE AND OFFERING
PRICE PER SHAR -- CLASS C ..................... $15.93
========
---------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
ADR--AMERICAN DEPOSITORY RECEIPT
CL--CLASS
CV--CONVERTIBLE
See Accompanying Notes
54
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INDEX FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 93.6%
AEROSPACE -- 0.5%
General Dynamics ........................... 5,567 $ 329
Lockheed Martin ............................ 11,077 271
Northrop Grumman# .......................... 1,947 149
Raytheon, Cl B ............................. 9,464 222
United Technologies ........................ 13,549 819
-------
1,790
-------
AIR TRANSPORTATION -- 0.3%
AMR* ....................................... 4,253 121
Delta Air Lines ............................ 4,030 207
FedEx* ..................................... 8,331 295
Southwest Airlines ......................... 14,135 271
US Airways* ................................ 1,993 85
-------
979
-------
AIRCRAFT -- 0.3%
Boeing ..................................... 24,676 964
-------
APPAREL/TEXTILES -- 0.1%
Liz Claiborne .............................. 1,731 68
Russell .................................... 902 20
Springs Industries, Cl A ................... 471 22
Vanity Fair ................................ 3,345 96
-------
206
-------
ATHLETIC FOOTWEAR -- 0.1%
Nike, Cl B ................................. 7,906 339
-------
AUTOMOTIVE -- 1.1%
Dana ....................................... 4,665 120
Delphi# .................................... 15,850 286
Eaton ...................................... 2,008 146
Ford ....................................... 33,963 1,649
General Motors# ............................ 18,122 1,280
Genuine Parts# ............................. 5,038 120
Navistar International* .................... 1,887 61
Paccar ..................................... 2,197 92
TRW ........................................ 3,396 165
-------
3,919
-------
BANKS -- 5.1%
Amsouth .................................... 11,070 200
Bank of America ............................ 48,711 2,707
Bank of New York ........................... 20,614 968
Bank One ................................... 33,221 1,098
BB&T ....................................... 8,621 253
Chase Manhattan ............................ 23,446 1,751
Comerica ................................... 4,384 222
Fifth Third Bancorp ........................ 8,651 588
First Union ................................ 26,454 931
Firstar .................................... 27,683 708
Fleet Boston Financial ..................... 25,928 980
Golden West Financial ...................... 4,674 195
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK-- CONTINUED
BANKS-- CONTINUED
Huntington Bancshares ...................... 6,469 $ 125
Keycorp .................................... 12,607 265
MBNA ....................................... 22,493 627
Mellon Financial ........................... 14,494 559
National City .............................. 17,361 347
Northern Trust ............................. 6,260 412
Old Kent Financial ......................... 3,509 117
PNC Financial Services Group ............... 8,651 436
Regions Financial .......................... 6,347 144
Southtrust ................................. 4,693 127
State Street ............................... 4,538 506
Summit Bancorp ............................. 4,996 143
SunTrust# .................................. 9,047 541
Synovus .................................... 7,508 150
U.S. Bancorp ............................... 20,574 535
Union Planters ............................. 4,034 126
Wachovia ................................... 5,667 392
Washington Mutual .......................... 16,268 468
Wells Fargo ................................ 46,354 2,098
-------
18,719
-------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 0.7%
Clear Channel
Communications*# .......................... 9,462 708
Interpublic Group of
Companies# ................................ 7,929 340
Mediaone Group* ............................ 16,950 1,132
Omnicom Group .............................. 4,979 418
Young & Rubicam* ........................... 2,027 97
-------
2,695
-------
BUILDING & CONSTRUCTION -- 0.1%
Fluor ...................................... 2,126 69
Pulte ...................................... 1,212 27
Vulcan Materials ........................... 2,806 131
-------
227
-------
BUILDING & CONSTRUCTION SUPPLIES -- 0.1%
Centex ..................................... 1,676 35
Masco ...................................... 12,376 244
McDermott International .................... 1,663 17
Owens Corning .............................. 1,538 24
Sherwin Williams ........................... 4,790 111
-------
431
-------
BUSINESS SERVICES -- 1.3%
Autodesk ................................... 1,628 61
Automatic Data Processing .................. 17,279 949
See Accompanying Notes
55
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INDEX FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
BUSINESS SERVICES -- CONTINUED
Cabletron Systems* .................... 4,805 $ 110
Cendant* .............................. 20,324 269
Ceridian* ............................. 4,062 98
Computer Associates
International ........................ 15,061 776
Computer Sciences* .................... 4,409 423
Compuware*# ........................... 10,010 102
Deluxe ................................ 2,138 53
Ecolab ................................ 3,631 139
Electronic Data Systems ............... 12,931 832
First Data ............................ 12,159 682
Novell* ............................... 9,423 78
Parametric Technology* ................ 7,553 80
Peoplesoft* ........................... 6,513 90
Shared Medical Systems ................ 747 54
-------
4,796
-------
CABLE TELEVISION -- 0.3%
Comcast, Cl A Special* ................ 24,141 914
-------
CANNED SPECIALTIES -- 0.1%
Campbell Soup ......................... 12,258 380
-------
CHEMICALS -- 1.5%
Air Products & Chemicals .............. 6,433 223
Avery Dennison ........................ 3,198 196
Dow Chemical .......................... 6,184 662
E.I. DuPont de Nemours ................ 28,989 1,420
Eastman Chemical ...................... 2,195 100
FMC* .................................. 907 55
Great Lakes Chemical .................. 1,652 46
Hercules .............................. 2,972 49
Pharmacia ............................. 34,507 1,792
PPG Industries ........................ 4,868 241
Praxair ............................... 4,477 188
Rohm & Haas ........................... 6,097 208
Union Carbide ......................... 3,728 204
W.R. Grace & Company* ................. 1,989 25
-------
5,409
-------
COMBINATION UTILITIES -- 0.2%
Entergy ............................... 6,924 201
PECO Energy ........................... 5,245 230
PG&E .................................. 10,772 279
-------
710
-------
COMMUNICATIONS EQUIPMENT -- 3.4%
ADC Telecommunications* ............... 7,651 514
Andrew* ............................... 2,302 81
ITT Industries ........................ 2,466 85
Lucent Technologies ................... 89,415 5,130
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK-- CONTINUED
COMMUNICATIONS EQUIPMENT -- CONTINUED
Nortel Networks ....................... 80,750 $ 4,386
Qualcomm* ............................. 20,626 1,369
Scientific-Atlanta .................... 4,240 239
Tellabs* .............................. 10,851 705
-------
12,509
-------
COMPUTER COMMUNICATIONS EQUIPMENT -- 0.1%
3Com* ................................. 10,188 426
Adaptec* .............................. 2,914 57
-------
483
-------
COMPUTER HARDWARE -- 5.2%
Cisco Systems* ........................ 191,320 10,893
Comverse Technology* .................. 4,106 375
EMC* .................................. 28,794 3,349
Gateway*# ............................. 8,745 433
Seagate Technology* ................... 6,426 373
Silicon Graphics* ..................... 5,357 35
Sun Microsystems* ..................... 44,123 3,381
Unisys* ............................... 8,536 232
-------
19,071
-------
COMPUTER SERVICES -- 0.3%
Network Appliance* .................... 8,200 529
Solectron*# ........................... 16,588 548
-------
1,077
-------
COMPUTER SOFTWARE -- 4.9%
Adobe Systems ......................... 3,445 388
BMC Software* ......................... 6,675 294
Citrix Systems*# ...................... 5,106 269
Microsoft* ............................ 145,841 9,124
Oracle* ............................... 79,254 5,696
Siebel Systems* ....................... 6,073 711
Veritas Software*# .................... 10,897 1,270
-------
17,752
-------
COMPUTERS -- 3.7%
Apple Computer*# ...................... 4,513 379
Compaq Computer ....................... 47,691 1,252
Dell Computer* ........................ 71,282 3,074
Hewlett Packard ....................... 28,344 3,405
International Business
Machines ............................. 50,833 5,455
-------
13,565
-------
CONTAINERS & PACKAGING -- 0.1%
Ball .................................. 855 25
Crown Cork & Seal ..................... 3,439 59
Newell Rubbermaid# .................... 7,907 208
See Accompanying Notes
56
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INDEX FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
CONTAINERS & PACKAGING -- CONTINUED
Owens-Illinois* ................. 4,442 $ 50
-------
342
-------
DIVERSIFIED MANUFACTURING -- 4.8%
Emerson Electric ................ 12,190 719
General Electric ................ 276,039 14,527
Honeywell International ......... 22,113 1,209
Minnesota Mining &
Manufacturing .................. 11,317 970
-------
17,425
-------
DRUGS & HEALTH CARE -- 8.2%
Abbott Laboratories ............. 42,483 1,729
Alza*# .......................... 2,844 145
American Home Products .......... 36,668 1,975
Amgen* .......................... 28,594 1,819
Biogen* ......................... 3,972 216
Bristol-Myers Squibb ............ 55,747 3,070
Johnson & Johnson ............... 38,793 3,472
Lilly (Eli) ..................... 30,687 2,336
Merck ........................... 65,902 4,918
Millipore ....................... 1,259 91
Pfizer .......................... 108,755 4,846
Schering-Plough ................. 41,184 1,992
Warner-Lambert .................. 23,930 2,922
Watson Pharmaceuticals* ......... 2,685 118
-------
29,649
-------
ELECTRICAL SERVICES -- 1.6%
AES*# ........................... 5,408 472
Ameren .......................... 3,849 141
American Electric Power ......... 5,416 193
Carolina Power & Light .......... 4,477 154
Central & South West ............ 5,966 124
Cinergy ......................... 4,457 119
CMS Energy ...................... 3,340 76
Consolidated Edison ............. 6,200 202
Constellation Energy Group ...... 4,195 144
Dominion Resources .............. 6,340 290
DTE Energy ...................... 4,069 141
Duke Energy ..................... 10,227 596
Edison International ............ 9,741 208
First Energy .................... 6,575 165
Florida Progress ................ 2,755 137
FPL Group ....................... 5,029 249
GPU ............................. 3,544 100
Molex ........................... 6,176 301
New Century Energies ............ 3,229 109
Niagara Mohawk Holdings* ........ 5,257 77
Northern States Power ........... 4,319 96
Pinnacle West Capital ........... 2,379 85
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
ELECTRICAL SERVICES -- CONTINUED
PPL ............................. 4,597 $ 109
Public Service Enterprise ....... 6,158 229
Reliant Energy .................. 8,300 237
Sempra Energy ................... 6,743 127
Southern ........................ 19,290 500
TXU ............................. 7,755 277
Unicom .......................... 6,095 254
-------
5,912
-------
ENTERTAINMENT -- 0.7%
Mirage Resorts* ................. 5,653 118
Walt Disney ..................... 57,858 2,441
-------
2,559
-------
ENVIRONMENTAL SERVICES -- 0.1%
Allied Waste Industries* ........ 5,284 54
Waste Management ................ 17,368 354
-------
408
-------
FINANCIAL SERVICES -- 5.0%
American Express ................ 37,875 2,038
Associates First Capital, Cl A .. 20,424 560
Bear Stearns .................... 3,467 137
Capital One ..................... 5,544 262
Charles Schwab .................. 34,372 988
Citigroup ....................... 94,817 5,896
Countrywide Credit .............. 3,165 97
Equifax ......................... 4,061 112
Fannie Mae ...................... 28,756 1,729
Franklin Resources .............. 7,074 212
Freddie Mac ..................... 19,503 868
Household International ......... 13,532 636
J.P. Morgan ..................... 4,954 638
Lehman Brothers ................. 3,360 259
Merrill Lynch ................... 10,354 1,021
Morgan Stanley, Dean Witter,
Discover ....................... 31,201 2,245
Painewebber Group ............... 4,119 185
SLM Holding ..................... 4,537 153
T. Rowe Price ................... 3,643 139
-------
18,175
-------
FOOD & BEVERAGE -- 3.3%
Adolph Coors, Cl B .............. 1,032 58
Anheuser Busch .................. 13,143 1,019
Archer-Daniels-Midland .......... 17,437 208
Bestfoods ....................... 7,825 505
Brown-Forman, Cl B .............. 1,922 112
Coca Cola ....................... 69,263 3,697
Coca-Cola Enterprises ........... 11,917 204
Conagra ......................... 13,647 315
General Mills ................... 8,597 341
See Accompanying Notes
57
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INDEX FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
FOOD & BEVERAGE -- CONTINUED
H.J. Heinz ........................... 10,055 $ 394
Hershey Foods ........................ 3,928 204
Kellogg .............................. 11,365 345
Nabisco Group Holdings ............... 9,150 200
PepsiCo .............................. 41,107 1,673
Quaker Oats .......................... 3,754 276
Ralston Purina ....................... 9,301 173
Sara Lee ............................. 25,282 455
Seagram .............................. 12,120 578
Unilever, NY Shares .................. 16,036 815
Wm. Wrigley, Jr ...................... 3,267 262
-------
11,834
-------
FURNITURE/HOME APPLIANCE -- 0.0%
National Service Industries .......... 1,132 25
-------
GAMES, TOYS & CHILDREN'S VEHICLES -- 0.1%
Hasbro ............................... 5,473 90
Mattel ............................... 11,783 160
-------
250
-------
GAS & NATURAL GAS -- 0.7%
Columbia Energy Group ................ 2,310 149
Eastern Enterprises .................. 751 46
El Paso Energy ....................... 6,466 333
Enron ................................ 20,004 1,458
Nicor ................................ 1,324 49
ONEOK ................................ 887 26
Peoples Energy ....................... 996 34
Williams ............................. 12,175 506
-------
2,601
-------
GLASS PRODUCTS -- 0.4%
Corning .............................. 7,706 1,491
-------
HANDTOOLS & GENERAL HARDWARE -- 0.1%
Fortune Brands ....................... 4,696 125
Snap-On Tools ........................ 1,927 50
Stanley Works ........................ 2,487 67
-------
242
-------
HOTELS & LODGING -- 0.1%
Harrah's Entertainment* .............. 3,597 71
Hilton Hotels ........................ 5,746 49
Marriott International, Cl A ......... 6,979 253
-------
373
-------
HOUSEHOLD FURNITURE & FIXTURES -- 0.0%
Leggett & Platt ...................... 5,963 120
-------
HOUSEHOLD PRODUCTS -- 1.1%
Clorox ............................... 6,616 262
Colgate Palmolive .................... 16,360 861
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
HOUSEHOLD PRODUCTS -- CONTINUED
Danaher .............................. 3,986 $ 192
Maytag ............................... 2,483 81
Procter & Gamble ..................... 36,590 2,433
Whirlpool ............................ 2,127 121
-------
3,950
-------
INFORMATION RETRIEVAL SERVICES -- 1.4%
America Online* ...................... 63,815 3,382
Yahoo!* .............................. 14,791 1,672
-------
5,054
-------
INSTRUMENTS & CONTROLS -- 0.0%
Johnson Controls ..................... 2,393 136
-------
INSURANCE -- 3.1%
Aetna ................................ 3,847 257
Aflac ................................ 7,455 385
Allstate ............................. 22,309 591
American General ..................... 7,014 449
American International Group ......... 43,432 4,889
Aon .................................. 7,181 252
Chubb ................................ 4,946 346
Cigna ................................ 4,961 441
Cincinnati Financial ................. 4,643 186
Conseco .............................. 9,175 57
Hartford Financial ................... 6,395 378
Humana* .............................. 4,704 26
Jefferson-Pilot ...................... 2,965 203
Lincoln National ..................... 5,618 218
Loews ................................ 3,037 200
Marsh & McLennan ..................... 7,374 812
MBIA ................................. 2,808 162
MGIC Investment ...................... 3,104 154
Progressive .......................... 2,045 192
Providian Financial .................. 3,977 354
Safeco ............................... 3,697 91
St. Paul ............................. 6,351 238
Torchmark ............................ 3,752 102
UnumProvident ........................ 6,683 152
-------
11,135
-------
LEASING & RENTING -- 0.0%
Ryder System ......................... 1,982 38
-------
LEISURE & RECREATIONAL PRODUCTS -- 0.0%
Brunswick ............................ 2,584 50
-------
MACHINERY -- 0.5%
Baker Hughes ......................... 9,221 334
Black & Decker ....................... 2,444 89
Briggs & Stratton .................... 655 26
Caterpillar .......................... 9,975 382
Crane ................................ 1,920 51
Cummins Engine ....................... 1,182 38
Deere ................................ 6,556 272
See Accompanying Notes
58
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INDEX FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
MACHINERY -- CONTINUED
Dover ............................... 5,905 $ 275
Ingersoll Rand ...................... 4,651 212
Milacron ............................ 975 15
NACCO Industries, Cl A .............. 215 8
Pall ................................ 3,481 73
Parker-Hannifin ..................... 3,001 125
Timken .............................. 1,737 33
------
1,933
------
MEASURING DEVICES -- 0.1%
Mallinckrodt ........................ 2,009 58
PE Biosystems ....................... 5,697 316
Tektronix ........................... 1,309 70
Thermo Electron* .................... 4,426 82
------
526
------
MEDICAL & MEDICAL SERVICES -- 1.4%
Allergan ............................ 3,708 255
Bausch & Lomb ....................... 1,606 112
Baxter International ................ 8,170 543
Becton Dickinson .................... 7,022 205
Biomet .............................. 3,149 114
Boston Scientific* .................. 11,589 297
C.R. Bard ........................... 1,438 66
Guidant*# ........................... 8,412 426
HCA-- Healthcare .................... 15,841 428
Healthsouth* ........................ 11,995 77
Manor Care* ......................... 3,046 22
Medtronic ........................... 32,654 1,686
St. Jude Medical .................... 2,382 86
Tenet Healthcare* ................... 8,701 223
Unitedhealth Group .................. 4,907 366
Wellpoint Health Networks* .......... 1,873 136
------
5,042
------
METALS & MINING -- 0.3%
Alcan Aluminum ...................... 6,424 211
Alcoa ............................... 12,154 710
Freeport-McMoRan Copper
& Gold, Cl B ....................... 4,586 42
Newmont Mining ...................... 4,699 108
Phelps Dodge ........................ 2,455 110
USX-U.S. Steel Group ................ 2,479 56
------
1,237
------
MISCELLANEOUS BUSINESS SERVICES -- 0.1%
NCR* ................................ 3,025 128
Sapient* ............................ 2,300 230
------
358
------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
MISCELLANEOUS MANUFACTURING -- 0.8%
Illinois Tool Works ................. 8,562 $ 497
Textron ............................. 4,230 265
Tyco International .................. 46,753 2,200
------
2,962
------
MOTORCYCLE & MOTOR SCOOTER -- 0.1%
Harley-Davidson ..................... 9,058 337
------
OFFICE & BUSINESS EQUIPMENT -- 0.3%
Lexmark International, Cl A* ........ 3,627 253
Pitney Bowes ........................ 7,534 328
Xerox ............................... 18,587 504
------
1,085
------
OFFICE FURNITURE & FIXTURES -- 0.0%
IKON Office Solutions ............... 4,184 21
------
OIL FIELD SERVICES -- 0.2%
Halliburton ......................... 12,372 631
------
OIL & GAS EXTRACTION -- 0.1%
USX Marathon ........................ 8,636 235
------
PAPER & FOREST PRODUCTS -- 0.7%
Bemis ............................... 1,468 50
Boise Cascade ....................... 1,601 47
Champion International .............. 2,690 196
Fort James .......................... 6,257 142
Georgia Pacific ..................... 4,818 158
International Paper ................. 11,596 404
Kimberly-Clark ...................... 14,804 896
Louisiana-Pacific ................... 3,024 34
Mead ................................ 2,868 88
Pactiv* ............................. 4,769 43
Potlatch ............................ 811 31
Temple-Inland ....................... 1,566 78
Westvaco ............................ 2,809 85
Weyerhaeuser ........................ 5,227 259
Willamette Industries ............... 3,130 102
------
2,613
------
PERSONAL CARE -- 0.4%
Avon ................................ 7,545 312
Gillette ............................ 30,592 1,021
International Flavors &
Fragrances ......................... 2,991 102
------
1,435
------
PETROLEUM & FUEL PRODUCTS -- 0.9%
Amerada Hess ........................ 2,539 169
Anadarko Petroleum .................. 3,573 190
Apache .............................. 3,191 194
Burlington Resources ................ 4,485 205
See Accompanying Notes
59
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INDEX FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
PETROLEUM & FUEL PRODUCTS -- CONTINUED
Kerr-McGee# ....................................... 2,331 $ 139
Occidental Petroleum .............................. 9,543 226
Phillips Petroleum ................................ 7,105 407
Rowan Companies* .................................. 2,222 69
Schlumberger ...................................... 15,336 1,128
Transocean Sedco Forex ............................ 5,567 274
Union Pacific Resources ........................... 7,064 167
-------
3,168
-------
PETROLEUM REFINING -- 4.4%
Ashland ........................................... 2,025 71
Chevron ........................................... 18,400 1,701
Coastal ........................................... 5,985 367
Conoco, Cl B ...................................... 17,605 502
Exxon Mobil ....................................... 97,211 8,099
Royal Dutch Petroleum,
NY Shares ........................................ 60,156 3,756
Sunoco# ........................................... 2,542 82
Texaco ............................................ 15,502 890
Tosco ............................................. 4,378 134
Unocal ............................................ 6,799 261
-------
15,863
-------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.2%
Eastman Kodak ..................................... 8,890 531
Polaroid .......................................... 1,244 24
-------
555
-------
PRECIOUS METALS -- 0.1%
Barrick Gold# ..................................... 10,887 197
Homestake Mining .................................. 7,299 49
Placer Dome ....................................... 9,132 75
-------
321
-------
PRINTING & PUBLISHING -- 2.0%
American Greetings, Cl A .......................... 1,926 36
Dow Jones ......................................... 2,566 174
Gannett ........................................... 7,859 509
Knight-Ridder ..................................... 2,237 119
McGraw-Hill ....................................... 5,529 284
Meredith .......................................... 1,459 44
New York Times, Cl A .............................. 4,920 189
R.R. Donnelley & Sons ............................. 3,597 89
Time Warner# ...................................... 36,373 2,871
Times Mirror, Cl A ................................ 1,992 192
Tribune ........................................... 6,642 256
Viacom, Cl B* ..................................... 42,745 2,650
-------
7,413
-------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
PROFESSIONAL SERVICES -- 0.2%
Dun & Bradstreet .................................. 4,519 $ 139
H & R Block ....................................... 2,736 84
IMS Health ........................................ 8,837 146
Paychex ........................................... 10,338 362
Perkinelmer ....................................... 1,282 67
-------
798
-------
RAILROADS -- 0.3%
Burlington Northern Santa Fe ...................... 13,140 310
Kansas City Southern .............................. 3,100 208
Norfolk Southern .................................. 10,673 190
Union Pacific ..................................... 6,943 294
-------
1,002
-------
REAL ESTATE -- 0.0%
Kaufman & Broad Home# ............................. 1,347 23
-------
RESTAURANTS -- 0.4%
Darden Restaurants ................................ 3,715 64
McDonald's ........................................ 38,013 1,361
Tricon Global Restaurants* ........................ 4,308 126
Wendy's International ............................. 3,431 67
-------
1,618
-------
RETAIL -- 5.5%
Alberto-Culver, Cl B .............................. 1,522 40
Albertson's ....................................... 11,753 430
Autozone* ......................................... 4,231 118
Bed Bath & Beyond* ................................ 3,916 144
Best Buy* ......................................... 5,699 365
Circuit City ...................................... 5,607 279
Consolidated*# .................................... 3,082 40
Costco Wholesale* ................................. 12,367 395
CVS# .............................................. 10,988 478
Dillards, Cl A .................................... 2,995 45
Dollar General .................................... 7,238 127
Federated Department Stores* ...................... 5,834 225
Gap ............................................... 24,072 844
Great Atlantic & Pacific Tea ...................... 1,075 20
Harcourt General .................................. 1,995 79
Home Depot ........................................ 64,613 3,154
J.C. Penney ....................................... 7,435 135
Kmart* ............................................ 13,850 118
Kohls* ............................................ 9,130 472
Kroger* ........................................... 23,239 462
Limited ........................................... 11,996 289
Longs Drug Stores ................................. 1,101 22
Lowe's ............................................ 10,692 498
May Department Stores ............................. 9,374 282
Nordstrom ......................................... 3,957 99
Office Depot*# .................................... 11,079 78
Radioshack ........................................ 5,420 230
See Accompanying Notes
60
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INDEX FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
RETAIL -- CONTINUED
Rite Aid .......................... 7,264 $ 50
Safeway* .......................... 14,334 661
Sears Roebuck ..................... 10,702 395
Staples* .......................... 13,045 192
Target ............................ 12,421 779
TJX Companies ..................... 9,005 195
Toys `R' Us* ...................... 6,981 110
Wal-Mart .......................... 124,845 7,194
Walgreen .......................... 28,152 799
Winn Dixie Stores ................. 4,169 66
-------
19,909
-------
RUBBER & PLASTIC -- 0.1%
Armstrong Holdings ................ 1,125 19
B.F. Goodrich ..................... 3,076 109
Cooper Tire & Rubber .............. 2,128 26
Goodyear Tire & Rubber ............ 4,383 109
Reebok International .............. 1,574 22
Sealed Air* ....................... 2,347 131
Tupperware ........................ 1,616 36
-------
452
-------
SEMI-CONDUCTORS/INSTRUMENTS -- 6.3%
Advanced Micro Devices* ........... 4,131 336
Altera*# .......................... 5,965 512
American Power Conversion* ........ 5,200 184
Analog Devices* ................... 10,388 800
Applied Materials* ................ 20,992 1,753
Conexant Systems*# ................ 6,097 229
Intel ............................. 93,617 11,673
KLA-Tencor* ....................... 4,902 243
Linear Technology ................. 8,123 480
LSI Logic*# ....................... 8,236 434
Maxim Integrated Products*# ....... 7,712 489
Micron Technology*# ............... 15,096 1,056
National Semiconductor* ........... 4,668 251
Teradyne* ......................... 5,236 450
Texas Instruments ................. 45,398 3,280
Xilinx* ........................... 9,530 725
-------
22,895
-------
SPECIALTY CHEMICALS -- 0.0%
Sigma Aldrich ..................... 2,830 94
-------
SPECIALTY MACHINERY -- 0.1%
Cooper Industries ................. 2,655 89
Rockwell International ............ 5,381 221
Thomas & Betts .................... 1,586 45
-------
355
-------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
STEEL & STEEL WORKS -- 0.1%
Allegheny Technologies ............ 2,693 $ 61
Bethlehem Steel* .................. 3,666 14
Engelhard ......................... 3,533 62
Inco .............................. 5,386 88
Nucor ............................. 2,451 95
Worthington Industries ............ 2,610 32
-------
352
-------
TELEPHONE & TELECOMMUNICATION -- 6.8%
Alltel ............................ 8,456 553
AT&T .............................. 89,657 3,110
Bell Atlantic# .................... 43,560 2,303
BellSouth ......................... 52,931 2,471
Centurytel# ....................... 3,912 106
Global Crossing* .................. 21,668 543
GTE ............................... 27,632 1,748
Motorola .......................... 19,802 1,856
Nextel, Cl A* ..................... 10,197 945
SBC Communications ................ 95,812 4,186
Sprint (FON Group) ................ 24,289 1,469
Sprint (PCS )*# ................... 24,896 1,382
US West ........................... 14,149 1,019
Worldcom* ......................... 78,467 2,952
-------
24,643
-------
TESTING LABORATORIES -- 0.0%
Quintiles Transnational* .......... 3,536 52
-------
TOBACCO -- 0.5%
Philip Morris ..................... 67,349 1,759
UST ............................... 4,922 82
-------
1,841
-------
TRANSPORTATION SERVICES -- 0.1%
CSX ............................... 6,099 133
Sabre Holdings .................... 3,366 97
-------
230
-------
TRAVEL -- 0.1%
Carnival, Cl A .................... 17,164 466
-------
WHOLESALE -- 0.3%
Cardinal Health ................... 7,547 490
McKesson HBOC ..................... 7,888 130
Supervalu ......................... 3,887 81
Sysco ............................. 9,305 390
W.W. Grainger ..................... 2,618 105
-------
1,196
-------
TOTAL COMMON STOCK
(Cost $276,258) ............................ 340,365
-------
See Accompanying Notes
61
<PAGE>
STATEMENT OF NET ASSETS
ARMADA EQUITY INDEX FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
REGISTERED INVESTMENT COMPANY -- 4.9%
S&P Depository Receipt# 125,200 $ 17,837
--------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $16,924) ................................ 17,837
--------
CASH EQUIVALENT -- 1.5%
Goldman Sachs Financial Square
Prime Obligation Money Market
Fund ............................. 5,504,236 5,504
--------
TOTAL CASH EQUIVALENT
(Cost $5,504) .............................. 5,504
--------
TOTAL INVESTMENTS -- 100.0%
(Cost $298,686) ............................ 363,706
========
OTHER ASSETS AND LIABILITIES,
NET -- 0.0% ................................ (15)
--------
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value) based on
28,943,216 outstanding shares of
beneficial interest ........................ 300,485
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
675,278 outstanding shares of
beneficial interest ........................ 7,673
Portfolio Shares of Class B (unlimited
authorization -- no par value) based on
42,923 outstanding shares of
beneficial interest ........................ 527
Portfolio Shares of Class C (unlimited
authorization -- no par value) based on
22,705 outstanding shares of
beneficial interest ........................ 281
Undistributed net investment income ......... 695
Accumulated net realized loss
on investments ............................. (11,180)
Net unrealized appreciation on investments
and futures ................................ 65,210
--------
TOTAL NET ASSETS -- 100.0% .................... $363,691
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ........................... $12.25
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A ................. $12.22
========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($12.22 / 96.25%) ......... $12.70
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B ................. $12.20
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C ................. $12.20
========
------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
CL--CLASS
See Accompanying Notes
62
<PAGE>
STATEMENT OF NET ASSETS
ARMADA INTERNATIONAL EQUITY FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
FOREIGN COMMON STOCK -- 95.8%
AUSTRALIA -- 1.0%
National Australia Bank*# ........... 281,444 $ 4,209
National Australia Bank, ADR ........ 4,000 297
-------
4,506
-------
AUSTRIA -- 0.8%
Mayr Melnhof Karton* ................ 74,803 3,576
-------
CANADA -- 0.5%
Talisman Energy* .................... 60,400 1,959
-------
DENMARK -- 1.1%
Novo-Nordisk, Series B .............. 27,642 4,600
-------
FINLAND -- 3.4%
Nokia, ADR .......................... 235,922 12,268
Sonera Oyj .......................... 44,006 2,240
-------
14,508
-------
FRANCE -- 18.3%
Alcatel ............................. 106,000 5,892
Altran Technologies ................. 17,999 4,066
Aventis ............................. 78,656 5,139
Axa# ................................ 54,621 8,089
Bouygues* ........................... 4,752 2,957
Castorama Dubois Investisse ......... 46,090 11,707
Coflexip Stena Offshore ............. 16,913 1,988
France Telecom ...................... 24,543 3,600
L'Oreal* ............................ 5,600 3,876
Luis Vuitton Moet-Hennessy* ......... 10,159 4,163
Societe Television Francaise ........ 2,816 1,821
STMicroelectronics# ................. 35,220 2,109
Thomson Multimedia* ................. 40,689 4,252
Total Fina Elf, ADR ................. 9,219 728
Total Fina Elf, Cl B# ............... 66,442 10,519
Valeo ............................... 73,186 3,725
Vivendi# ............................ 39,335 4,240
-------
78,871
-------
GERMANY -- 8.7%
Allianz*# ........................... 14,163 5,137
Bayerishe Hypo-und
Vereinsbank ........................ 35,201 2,300
Brainpool TV* ....................... 5,333 490
Consors Discount-Broker*# ........... 15,612 1,478
Deutsche Bank# ...................... 64,552 5,010
Deutsche Telekom# ................... 140,206 8,805
Epcos* .............................. 32,108 3,957
Infineon Technologies*# ............. 17,073 1,122
Infineon Technologies, ADR* ......... 2,562 161
Muenchener Rueckversicher* .......... 12,178 3,596
Siemens# ............................ 36,867 5,487
-------
37,543
-------
NUMBER VALUE
OF SHARES (000)
--------- -----
FOREIGN COMMON STOCK -- CONTINUED
HONG KONG -- 3.5%
Cheung Kong* ........................ 220,926 $ 2,020
China Telecom* ...................... 550,942 4,119
HSBC Holdings* ...................... 223,462 2,466
Hutchison Whampoa* .................. 315,422 3,643
Johnson Electric Holdings* .......... 371,702 2,755
-------
15,003
-------
IRELAND -- 0.5%
Parthus Technologies* ............... 39,200 96
Ryanair Holdings* ................... 257,508 2,081
-------
2,177
-------
ITALY -- 4.7%
Assicurazioni Generali# ............. 118,181 3,578
Bipop-Carire # ...................... 321,310 2,930
Bulgari* ............................ 259,652 3,261
Saipem* ............................. 626,603 3,148
Telecom Italia*# .................... 147,746 2,050
Telecom Italia, ADR ................. 19,700 2,736
Telecom Italia Mobile*# ............. 242,146 2,535
-------
20,238
-------
JAPAN -- 15.1%
Canon* .............................. 53,000 2,440
Chugai Pharmaceutical*# ............. 362,019 6,198
Fanuc ............................... 18,490 1,611
Fuji Bank* .......................... 523,157 4,044
NEC*# ............................... 269,364 6,824
Nikko Securities .................... 194,861 1,805
NTT Docomo* ......................... 247 6,372
Sanyo Electric ...................... 398,000 2,940
Sekisui House* ...................... 418,047 4,066
Seven-Eleven ........................ 21,841 1,932
SMC ................................. 16,289 2,855
Softbank# ........................... 3,506 537
Softbank-- New ...................... 7,011 1,051
Sony*# .............................. 48,055 4,348
Takeda Chemical Industries* ......... 119,303 8,137
Tokyo Electron ...................... 20,448 2,789
Toyota Motor* ....................... 132,939 6,033
Yahoo Japan* ........................ 3 985
-------
64,967
-------
MEXICO -- 0.5%
Cemex, ADR* ......................... 95,258 2,018
-------
NETHERLANDS -- 7.0%
Aegon ............................... 79,668 2,887
Heineken*# .......................... 78,078 4,029
ING Groep* .......................... 64,989 3,905
Philips Electronics ................. 176,764 7,929
Qiagen* ............................. 8,900 1,356
See Accompanying Notes
63
<PAGE>
STATEMENT OF NET ASSETS
ARMADA INTERNATIONAL EQUITY FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
FOREIGN COMMON STOCK -- CONTINUED
NETHERLANDS -- CONTINUED
Royal Dutch Petroleum* ........ 57,871 $ 3,582
Royal Dutch Petroleum,
NY Shares .................... 11,800 737
Unilever ...................... 111,271 5,679
---------
30,104
---------
NORWAY -- 1.9%
Norsk Hydro* .................. 111,765 4,319
Tomra Systems ................. 184,200 3,918
---------
8,237
---------
SINGAPORE -- 2.1%
City Developments ............. 553,017 1,852
DBS Group Holdings ............ 358,989 3,586
Singapore Press Holdings* ..... 238,493 3,594
---------
9,032
---------
SOUTH KOREA -- 1.4%
Korea Electric Power, ADR ..... 92,590 1,447
Samsung Electronics,
GDR .......................... 14,068 2,268
SK Telecom, ADR ............... 57,700 2,312
---------
6,027
---------
SPAIN -- 2.0%
Banco Santander Central
Hispano ...................... 217,154 2,139
Endesa* ....................... 105,620 2,200
Telefonica de Espana, ADR ..... 30,704 1,869
Telefonica* ................... 97,516 2,011
Terra Networks* ............... 9,876 454
---------
8,673
---------
SWEDEN -- 1.3%
Ericsson, ADR ................. 269,040 5,515
---------
SWITZERLAND -- 6.5%
Adecco ........................ 2,344 1,858
Credit Suisse Group*# ......... 15,967 2,993
Holderbank Financiere Glarus* . 3,719 4,380
Julius Baer Holdings .......... 1,420 5,112
Nestle*# ...................... 2,280 4,369
Novartis* ..................... 3,466 5,136
Roche Holding*# ............... 384 4,067
---------
27,915
---------
TAIWAN -- 1.0%
Taiwan Semiconductor, ADR* .... 119,120 4,206
---------
NUMBER OF
MATURITY SHARES/ VALUE
DATE PAR (000) (000)
-------- --------- -----
FOREIGN COMMON STOCK -- CONTINUED
UNITED KINGDOM -- 14.5%
Abbey National ................ 222,573 $ 2,970
Amvescap ...................... 233,001 3,066
Barclays ...................... 173,314 4,522
Bass .......................... 145,694 1,598
BOC Group ..................... 88,029 1,242
BP Amoco ...................... 468,772 4,280
BP Amoco, ADR ................. 57,322 3,117
British Telecom ............... 97 1
Colt Telecom Group* ........... 36,153 1,280
Compass Group ................. 230,332 2,588
Diageo* ....................... 646,538 5,549
Energis* ...................... 61,723 2,352
Glaxo Wellcome ................ 30 1
Invensys ...................... 654,288 2,258
Marconi ....................... 174,570 2,108
National Grid Group ........... 453,323 3,503
Pearson ....................... 158,683 4,800
Scottish Power ................ 332,560 2,644
SmithKline Beecham ............ 155,923 1,998
Standard Chartered ............ 121,027 1,563
Vodafone Group ................ 2,351,683 10,761
---------
62,201
---------
TOTAL FOREIGN COMMON STOCK
(Cost $350,379) .......................... 411,876
---------
CASH EQUIVALENTS -- 4.9%
Goldman Sachs Financial Square
Premium Money Market
Fund ........................ 16,989,962 16,989
Ford Motor Credit Commercial Paper
6.540% ............ 06/07/00 $ 4,000 3,996
---------
TOTAL CASH EQUIVALENTS
(Cost $20,982) ........................... 20,985
---------
TOTAL INVESTMENTS -- 100.7%
(Cost $371,361) .......................... 432,861
=========
OTHER ASSETS AND LIABILITIES,
NET -- (0.07)% ........................... (3,127)
---------
See Accompanying Notes
64
<PAGE>
STATEMENT OF NET ASSETS
ARMADA INTERNATIONAL EQUITY FUND
================================================================================
MAY 31, 2000
VALUE
(000)
--------
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value) based on
28,264,512 outstanding shares of
beneficial interest $336,454
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
241,735 outstanding shares of
beneficial interest 3,132
Portfolio Shares of Class B (unlimited
authorization -- no par value) based on
41,993 outstanding shares of
beneficial interest 627
Portfolio Shares of Class C (unlimited
authorization -- no par value) based on
11,105 outstanding shares of
beneficial interest 174
Accumulated net realized gain on
investments 28,253
Distributions in excess of net
investment income (276)
Net unrealized appreciation on investments 61,500
Net unrealized appreciation of foreign
currency and translation of other assets and
liabilities in foreign currency investments 17
Net unrealized depreciation on futures (147)
--------
TOTAL NET ASSETS -- 100.0% $429,734
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I $15.05
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $14.97
========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($14.97 / 94.5%) $15.84
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B $14.83
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C $14.83
========
----------------------------------------
* NON INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
ADR--AMERICAN DEPOSITORY RECEIPT
CL--CLASS
GDR--GLOBAL DEPOSITORY RECEIPT
At May 31, 2000, sector diversification of the Portfolio was
as follows:
% OF
SECTOR DIVERSIFICATION NET ASSETS VALUE
---------------------- ---------- -----
COMMON STOCK
Telecommunications 12.4% $53,101
Banking 8.9% 38,339
Pharmaceuticals 8.5% 36,517
Oil & Gas 7.0% 30,056
Consumer Goods 6.2% 26,571
Electronic Equipment 6.2% 26,524
Financial Services 5.6% 24,243
Communications 4.1% 17,783
News Media 3.9% 16,597
Beverages 3.6% 15,338
Insurance 3.5% 15,198
Real Estate 2.4% 10,473
Electrical Services 2.3% 9,794
Automotive 2.3% 9,757
Semiconductors 2.1% 9,105
Computers 2.0% 8,412
Food Product Retailer 1.6% 6,957
Industrial Manufacturing 1.6% 6,773
Durable Goods 1.3% 5,679
Power Distribution 1.3% 5,487
Cement 1.0% 4,380
Chemicals 1.0% 4,319
Water Supply 1.0% 4,239
Engineering Services 0.9% 4,066
General Building Contractors 0.9% 4,066
Business Services 0.8% 3,458
Jewelry 0.8% 3,261
Communication Equipment 0.7% 3,171
Machinery 0.6% 2,755
Transportation 0.5% 2,081
Heavy Construction 0.5% 2,018
Commercial Physical &
Biological 0.3% 1,358
------ --------
TOTAL COMMON STOCK 95.8% 411,876
CASH EQUIVALENTS 4.9% 20,985
------ --------
TOTAL INVESTMENTS 100.7% 432,861
------ --------
OTHER ASSETS AND
LIABILITIES, NET (0.7)% (3,127)
------ --------
NET ASSETS 100.0% $429,734
====== ========
See Accompanying Notes
65
<PAGE>
STATEMENT OF NET ASSETS
ARMADA SMALL CAP GROWTH FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 86.6%
AIR TRANSPORTATION -- 1.0%
Atlas Air*# ................................ 47,350 $ 1,533
-------
BANKS -- 1.0%
Cullen/Frost Bankers ....................... 59,750 1,583
-------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 1.3%
Citadel Communications* .................... 24,250 972
Spanish Broadcasting Systems,
Cl A*# .................................... 69,400 1,180
-------
2,152
-------
BUILDING & CONSTRUCTION SUPPLIES -- 1.7%
Insituform Technologies* ................... 31,750 1,097
Trex*# ..................................... 37,000 1,646
-------
2,743
-------
BUSINESS SERVICES -- 0.5%
American Management
Systems*# ................................. 22,500 842
-------
COMMUNICATIONS EQUIPMENT -- 7.5%
Audiocodes* ................................ 15,000 1,096
C-COR.net* ................................. 48,050 1,057
Commscope* ................................. 83,700 3,233
Digital Microwave*# ........................ 34,750 971
Mercury Computer Systems* .................. 39,450 1,238
Sawtek*# ................................... 38,250 2,460
Tut Systems*# .............................. 14,850 768
ViaSat* .................................... 28,500 1,115
-------
11,938
-------
COMPUTER COMMUNICATIONS EQUIPMENT -- 5.3%
Act Manufacturing*# ........................ 46,500 1,465
Anadigics* ................................. 37,000 1,283
Optimal Robotics* .......................... 46,350 1,559
Paradyne Networks* ......................... 39,000 1,097
Rsa Security*# ............................. 28,700 1,652
Sonicwall* ................................. 23,100 1,392
-------
8,448
-------
COMPUTER DESIGN & PROGRAMMING -- 0.7%
Igate Capital* ............................. 75,000 1,177
-------
COMPUTER SERVICES -- 0.9%
Advanced Digital Information* .............. 50,250 641
Intranet Solutions*# ....................... 24,400 485
Psw Technologies * ......................... 30,800 296
-------
1,422
-------
COMPUTER SOFTWARE -- 6.2%
Allaire* ................................... 18,500 769
Broadvision* ............................... 37,050 1,327
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
COMPUTER SOFTWARE -- CONTINUED
Iona Technologies* ......................... 24,000 $ 1,048
Level 8 Systems* ........................... 24,650 485
Mercury Interactive* ....................... 19,800 1,678
Micromuse* ................................. 10,500 1,045
Novadigm* .................................. 43,250 560
Onyx Software*# ............................ 39,550 672
Remedy* .................................... 40,600 1,685
Visual Networks*# .......................... 14,450 717
-------
9,986
-------
DRUGS & HEALTH CARE -- 2.4%
Barr Laboratories* ......................... 36,000 1,948
Tanox*# .................................... 37,000 1,871
-------
3,819
-------
ELECTRONICS -- 3.5%
CTS ........................................ 28,350 1,565
Gentex*# ................................... 85,300 2,644
Titan* ..................................... 36,600 1,313
-------
5,522
-------
ENTERTAINMENT -- 1.2%
Macrovision* ............................... 26,400 1,845
-------
FINANCIAL SERVICES -- 1.7%
Dain Rauscher .............................. 17,500 1,043
Metris ..................................... 44,350 1,641
-------
2,684
-------
GAS & NATURAL GAS -- 2.4%
Nicor# ..................................... 63,500 2,330
Southwest Gas .............................. 79,100 1,518
-------
3,848
-------
MEASURING DEVICES -- 0.5%
Molecular Devices* ......................... 16,100 859
-------
MEDICAL & MEDICAL SERVICES -- 9.9%
Arthrocare*# ............................... 8,850 754
Aspect Medical Systems*# ................... 18,000 513
Avigen*# ................................... 19,000 565
Caliper Technologies* ...................... 20,000 821
Cardiodynamics
International*# ........................... 175,000 1,017
Cytyc*# .................................... 30,000 1,506
Datascope .................................. 38,200 1,437
Endocare* .................................. 62,700 1,082
Hooper Holmes .............................. 150,000 1,538
Human Genome Sciences*# .................... 10,250 899
Incyte Pharmaceuticals* .................... 22,550 1,190
Millennium Pharmaceutical*# ................ 20,600 1,723
See Accompanying Notes
66
<PAGE>
STATEMENT OF NET ASSETS
ARMADA SMALL CAP GROWTH FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
MEDICAL & MEDICAL SERVICES -- CONTINUED
PolyMedica*# .......................... 42,250 $ 1,125
Priority Healthcare, Cl B* ............ 33,750 1,721
----------
15,891
----------
MISCELLANEOUS BUSINESS SERVICES -- 0.4%
Sequoia Software# ..................... 17,000 115
VerticalNet* .......................... 15,000 481
----------
596
----------
PETROLEUM & FUEL PRODUCTS -- 8.9%
Cal Dive International* ............... 30,750 1,416
Cross Timbers Oil ..................... 67,000 1,361
Global Industries* .................... 180,350 3,179
Pride International* .................. 119,000 3,027
UTI Energy* ........................... 62,000 2,651
Veritas DGC* .......................... 93,000 2,569
----------
14,203
----------
PHARMACEUTICALS -- 2.3%
King Pharmaceuticals*# ................ 47,100 2,520
Sicor*# ............................... 145,400 1,245
----------
3,765
----------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.6%
Concord Camera* ....................... 61,200 1,037
----------
PRINTING & PUBLISHING -- 0.5%
Valassis Communications* .............. 25,450 840
----------
PROFESSIONAL SERVICES -- 0.8%
Corporate Executive Board* ............ 24,150 1,322
----------
RESTAURANTS -- 1.6%
Jack in the Box*# ..................... 101,850 2,527
----------
RETAIL -- 5.3%
99 Cents Only Stores*# ................ 32,400 1,164
BJ's Wholesale Club* .................. 52,700 1,634
Michaels Stores*# ..................... 45,500 1,948
Rex Stores*# .......................... 33,000 697
Too* .................................. 58,200 1,491
Tweeter Home Entertainment
Group* ............................... 56,100 1,634
----------
8,568
----------
SEMI-CONDUCTORS/INSTRUMENTS -- 11.9%
ASM International* .................... 52,500 1,358
Asyst Technologies* ................... 25,800 1,042
Burr-Brown*# .......................... 40,100 2,283
Credence Systems* ..................... 30,600 1,673
Cymer*# ............................... 26,600 840
Exar* ................................. 31,800 2,186
NUMBER OF
SHARES/ VALUE
PAR (000) (000)
--------- -----
COMMON STOCK -- CONTINUED
SEMI-CONDUCTORS/INSTRUMENTS -- CONTINUED
Flextronics International* ............ 22,620 $ 1,231
Integrated Device Technology* ......... 33,150 1,573
Integrated Silicon Solutions* ......... 54,500 1,618
Metalink Limited*# .................... 45,000 1,125
Netsilicon*# .......................... 27,050 389
PRI Automation, Cl A*# ................ 21,450 1,102
Silicon Storage Technology* ........... 13,700 1,017
Transwitch* ........................... 16,500 1,033
Zoran*# ............................... 15,700 616
----------
19,086
----------
TELEPHONE & TELECOMMUNICATION -- 5.7%
Alamosa Pcs Holdings* ................. 63,050 946
ICG Communications*# .................. 68,400 1,287
Intermedia Communications*# ........... 43,300 1,083
Leap Wireless International* .......... 33,000 1,452
Mastec* ............................... 35,450 2,424
SBA Communications* ................... 53,450 1,991
----------
9,183
----------
TRANSPORTATION -- 0.9%
CH Robinson Worldwide ................. 33,200 1,492
----------
TOTAL COMMON STOCK
(Cost $112,370) .................................. 138,911
----------
REPURCHASE AGREEMENT -- 9.7%
Prudential
6.400% (dated 05/31/00,
matures 06/01/00, repurchase
price $15,502,756;
collateralized by various
FNMA obligations:
total value $15,858,739) ............ $ 15,500 15,500
----------
TOTAL REPURCHASE AGREEMENT
(Cost $15,500) ................................... 15,500
----------
CASH EQUIVALENT -- 3.5%
Goldman Sachs Financial Square
Prime Obligation Money Market
Fund ................................ 5,730,665 5,731
----------
TOTAL CASH EQUIVALENT
(Cost $5,731) .................................... 5,731
----------
TOTAL INVESTMENTS -- 99.8%
(Cost $133,601) .................................. 160,142
==========
OTHER ASSETS AND LIABILITIES,
NET -- 0.2% ...................................... 323
----------
See Accompanying Notes
67
<PAGE>
STATEMENT OF NET ASSETS
ARMADA SMALL CAP GROWTH FUND
================================================================================
MAY 31, 2000
VALUE
(000)
--------
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value) based on
10,553,452 outstanding shares of
beneficial interest ............................ $122,523
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
182,994 outstanding shares of
beneficial interest ............................ 2,136
Portfolio Shares of Class B (unlimited
authorization -- no par value) based on
25,481 outstanding shares of
beneficial interest ............................ 327
Portfolio Shares of Class C (unlimited
authorization -- no par value) based on
5,297 outstanding shares of
beneficial interest ............................ 81
Accumulated net realized gain
on investments ................................. 9,297
Net unrealized appreciation
on investments
and futures .................................... 26,101
--------
TOTAL NET ASSETS -- 100.0% ........................ $160,465
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................... $14.91
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A ..................... $14.81
========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($14.81 / 94.5%) .............. $15.67
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B ..................... $14.58
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C ..................... $14.57
========
------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
CL--CLASS
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
See Accompanying Notes
68
<PAGE>
STATEMENT OF NET ASSETS
ARMADA SMALL CAP VALUE FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 91.8%
AEROSPACE & DEFENSE -- 0.8%
Alliant Techsystems* ............. 43,500 $ 3,001
-------
AUTOMOTIVE PARTS & EQUIPMENT -- 1.0%
Borg-Warner Automotive ........... 37,400 1,487
Tower Automotive*# ............... 155,100 2,152
-------
3,639
-------
BANKS -- 6.1%
Amcore Financial ................. 181,000 3,507
Associated Bancorp ............... 82,390 2,097
Bancwest ......................... 187,300 3,500
First Midwest Bancorp ............ 129,900 3,247
Fulton Financial ................. 61,800 1,267
Pacific Century Financial# ....... 201,200 4,527
TCF Financial .................... 150,800 3,949
-------
22,094
-------
BUSINESS SERVICES -- 1.4%
American Management
Systems*# ....................... 71,000 2,658
Complete Business
Solutions*# ..................... 103,400 2,326
-------
4,984
-------
CHEMICALS -- 1.4%
Cambrex .......................... 50,800 2,140
Geon ............................. 144,000 3,096
-------
5,236
-------
COAL MINING -- 0.6%
ConsoL Energy .................... 170,000 2,125
-------
COMMUNICATIONS EQUIPMENT -- 1.7%
Andrew* .......................... 84,000 2,950
Harman International
Industries ...................... 59,000 3,415
-------
6,365
-------
COMPUTER HARDWARE -- 0.5%
Maxtor*# ......................... 176,000 1,837
-------
COMPUTER SOFTWARE -- 1.2%
Hyperion Solutions*# ............. 102,400 3,213
Mapics* .......................... 194,700 998
-------
4,211
-------
CONSUMER GOODS & SERVICES -- 0.7%
Pennzoil-Quaker State ............ 242,800 2,671
-------
CONTAINERS & PACKAGING -- 0.7%
American National Can Group ...... 160,998 2,707
-------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
DRUGS & HEALTH CARE -- 1.5%
Bindley Western Industries# ...... 281,900 $ 5,374
-------
ELECTRICAL SERVICES -- 4.1%
El Paso Electric* ................ 319,900 3,799
Hawaiian Electric Industries# .... 113,700 4,015
Minnesota Power & Light .......... 222,000 4,093
RGS Energy Group# ................ 133,100 3,194
-------
15,101
-------
ELECTRONICS -- 1.2%
Arrow Electronics* ............... 56,600 1,985
Avnet ............................ 25,000 1,730
Nu Horizons Electronics* ......... 28,600 493
-------
4,208
-------
FINANCIAL SERVICES -- 1.0%
Neuberger Berman ................. 104,200 3,654
-------
FOOD & BEVERAGE -- 2.2%
Canandaigua Brands, Cl A*# ....... 72,800 3,813
Flowers Industries ............... 122,700 2,216
IBP .............................. 132,900 2,193
-------
8,222
-------
GAMBLING -- 1.0%
Pinnacle Entertainment* .......... 200,000 3,813
-------
GAS & NATURAL GAS -- 2.2%
MDU Resources .................... 177,000 4,038
Peoples Energy ................... 119,800 4,066
-------
8,104
-------
HEALTH & ALLIED SERVICES -- 2.0%
First Health Group* .............. 124,800 4,368
Mid Atlantic Medical Services * .. 234,100 2,897
-------
7,265
-------
HUMAN RESOURCES -- 0.5%
Interim Services*# ............... 85,900 1,729
-------
INSURANCE -- 6.8%
American Financial Group* ........ 164,600 4,599
Everest Reinsurance .............. 124,800 4,243
FPIC Insurance Group*# ........... 274,500 3,534
PMI Group ........................ 45,800 2,324
Radian Group ..................... 91,500 5,033
Renaissance Reinsurance .......... 74,300 3,218
Triad Guaranty* .................. 100,000 1,850
-------
24,801
-------
INSURANCE - LIFE -- 0.8%
Kansas City Life ................. 37,200 1,107
Mony Group ....................... 48,600 1,801
-------
2,908
-------
See Accompanying Notes
69
<PAGE>
STATEMENT OF NET ASSETS
ARMADA SMALL CAP VALUE FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
INSURANCE - PROPERTY AND CASUALTY -- 2.2%
Commerce Group ........................ 52,500 $ 1,424
Harleysville Group .................... 199,500 3,367
Selective Insurance Group ............. 180,300 3,324
-------
8,115
-------
LEISURE & RECREATIONAL PRODUCTS -- 0.6%
Brunswick ............................. 116,500 2,243
-------
MACHINERY -- 3.3%
AGCO .................................. 286,300 3,579
Manitowoc# ............................ 129,700 4,240
Pall .................................. 201,200 4,225
-------
12,044
-------
MACHINERY EQUIPMENT -- 1.1%
Harris ................................ 125,600 3,839
-------
MARINE TRANSPORTATION -- 0.7%
Alexander & Baldwin ................... 104,000 2,405
-------
MEDICAL & MEDICAL SERVICES -- 5.0%
Cooper ................................ 131,800 4,547
Foundation Health Systems,
Cl A* ................................ 355,100 4,261
Lifepoint Hospitals* .................. 203,000 4,352
Provantage Health Services* ........... 178,500 2,164
Province Healthcare* .................. 104,300 2,933
-------
18,257
-------
METAL/FABRICATE HARDWARE -- 0.5%
Century Aluminum ...................... 166,400 1,695
-------
METALS & MINING -- 0.6%
Southern Peru Copper .................. 172,300 2,154
-------
NEWSPAPER PUBLISHING -- 0.5%
McClatchy, Cl A ....................... 61,000 1,876
-------
OIL & GAS -- 3.1%
Helmerich & Payne ..................... 186,700 6,955
Ocean Energy* ......................... 298,200 4,473
-------
11,428
-------
PAPER & FOREST PRODUCTS -- 2.5%
Abitibi-Consolidated .................. 398,900 4,213
Rayonier .............................. 100,100 4,029
Rock Tennessee, Cl A .................. 100,000 956
-------
9,198
-------
PAPER & PAPER PRODUCTS -- 1.1%
Packaging Corporation
of America* .......................... 352,300 4,051
-------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
PETROLEUM & FUEL PRODUCTS -- 4.1%
Barrett Resources*# ................... 121,700 $ 4,815
Equitable Resources ................... 141,300 7,030
Swift Energy* ......................... 116,100 2,982
-------
14,827
-------
PETROLEUM REFINING -- 3.9%
Murphy Oil ............................ 65,700 4,262
Sunoco# ............................... 155,555 5,026
Valero Energy ......................... 165,000 4,826
-------
14,114
-------
REAL ESTATE INVESTMENT TRUSTS -- 10.8%
Arden Realty .......................... 135,900 3,126
Charles E. Smith Residential
Realty ............................... 104,400 3,948
Developers Diversified Realty ......... 229,200 3,309
Essex Property Trust .................. 93,200 3,711
First Industrial Realty Trust ......... 142,800 4,150
Gables Residential Trust .............. 70,000 1,724
General Growth Properties# ............ 138,600 4,383
Great Lakes ........................... 175,000 2,942
Highwoods Properties .................. 121,100 2,914
Koger Equity .......................... 125,000 2,234
Mack-Cali Realty ...................... 111,400 3,008
Summit Properties ..................... 177,100 3,763
Thornburg Mortgage Asset* ............. 41,700 331
-------
39,543
-------
RESTAURANTS -- 0.9%
Rare Hospitality* ..................... 118,300 3,238
-------
RETAIL -- 1.2%
Charming Shoppes*# .................... 368,300 2,164
Zale* ................................. 60,000 2,280
-------
4,444
-------
SEMI-CONDUCTORS/CAPITAL EQUIPMENT -- 2.3%
Kulicke & Soffa Industries*# .......... 22,500 1,132
Robotic Vision Systems* ............... 260,000 3,071
Silicon Valley Group* ................. 80,100 2,133
Ultratech Stepper* .................... 144,300 2,020
-------
8,356
-------
SEMI-CONDUCTORS/INSTRUMENTS -- 2.0%
Integrated Device Technology* ......... 114,600 5,436
Photronics* ........................... 74,800 1,795
-------
7,231
-------
SHIPBUILDING -- 1.2%
Newport News Shipbuilding# ............ 130,700 4,321
-------
See Accompanying Notes
70
<PAGE>
STATEMENT OF NET ASSETS
ARMADA SMALL CAP VALUE FUND
================================================================================
MAY 31, 2000
NUMBER OF
SHARES/ VALUE
PAR (000) (000)
--------- -----
COMMON STOCK -- CONTINUED
TELEPHONE & TELECOMMUNICATION -- 1.0%
Brightpoint* ...................... 300,000 $ 3,506
-----------
TESTING LABORATORIES -- 0.9%
Quest Diagnostics* ................ 48,500 3,243
-----------
TRUCKING -- 1.2%
Arkansas Best*# ................... 243,500 2,679
USFreightways ..................... 65,200 1,789
-----------
4,468
-----------
WHOLESALE -- 1.7%
Performance Food Group* ........... 78,300 2,476
United Stationers ................. 119,700 3,830
-----------
6,306
-----------
TOTAL COMMON STOCK
(Cost $292,486) ............................... 334,951
-----------
PREFERRED STOCK -- 0.4%
FINANCIAL SERVICES -- 0.4%
Thornburg Mortgage Asset,
CV to 1.0000 Shares .............. 74,500 1,499
-----------
TOTAL PREFERRED STOCK
(Cost $1,964) ................................. 1,499
-----------
CASH EQUIVALENT -- 4.0%
Fidelity Domestic Money Market
Fund ............................ 14,502,522 14,503
-----------
TOTAL CASH EQUIVALENT
(Cost $14,503) ................................. 14,503
-----------
REPURCHASE AGREEMENT -- 3.1%
Prudential
6.400% (dated 05/31/00,
matures 06/01/00, repurchase
price $11,302,009;
collateralized by various
FNMA obligations:
total value $11,544,174) ........ $ 11,300 11,300
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $11,300) ................................. 11,300
-----------
TOTAL INVESTMENTS -- 99.3%
(Cost $320,253) ................................ 362,253
===========
OTHER ASSETS AND LIABILITIES,
NET -- 0.7% .................................... 2,631
-----------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value) based on
23,387,594 outstanding shares of
beneficial interest ............................ $ 313,224
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
658,595 outstanding shares of
beneficial interest ............................ 8,753
Portfolio Shares of Class B (unlimited
authorization -- no par value) based on
50,745 outstanding shares of
beneficial interest ............................ 659
Portfolio Shares of Class C (unlimited
authorization -- no par value) based on
4,650 outstanding shares of
beneficial interest ............................ 67
Undistributed net investment income ............. 2,594
Accumulated net realized gain
on investments ................................. 138
Net unrealized appreciation on investments
and futures .................................... 39,449
-----------
TOTAL NET ASSETS -- 100.0% ........................ $ 364,884
===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE
PER SHARE -- CLASS I ........................... $15.15
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A ..................... $14.77
===========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($14.77 / 94.5%) .............. $15.63
===========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B ..................... $14.62
===========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C ..................... $14.62
===========
------------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
CL--CLASS
CV--CONVERTIBLE
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
See Accompanying Notes
71
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TAX MANAGED EQUITY FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 98.1%
AIR TRANSPORTATION -- 0.1%
Southwest Airlines ........................ 18,000 $ 345
-------
BANKS -- 7.6%
Northern Trust ............................ 32,000 2,106
State Street .............................. 89,000 9,923
SunTrust# ................................. 8,000 478
Wachovia .................................. 35,600 2,461
Wells Fargo ............................... 148,000 6,697
-------
21,665
-------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 1.1%
Omnicom Group ............................. 39,000 3,274
-------
BUSINESS SERVICES -- 3.6%
Automatic Data Processing ................. 188,000 10,328
-------
CHEMICALS -- 0.3%
Air Products & Chemicals .................. 9,000 312
Avery Dennison ............................ 10,000 612
-------
924
-------
COMMUNICATIONS EQUIPMENT -- 3.2%
Lucent Technologies ....................... 60,000 3,442
Nortel Networks ........................... 66,000 3,585
Qualcomm* ................................. 32,000 2,124
-------
9,151
-------
COMPUTER HARDWARE -- 4.8%
Cisco Systems*# ........................... 145,900 8,307
EMC* ...................................... 10,000 1,163
Sun Microsystems* ......................... 56,000 4,291
-------
13,761
-------
COMPUTER SOFTWARE -- 1.3%
Microsoft* ................................ 60,600 3,791
-------
COMPUTERS -- 3.5%
Compaq Computer ........................... 12,500 328
Dell Computer* ............................ 20,000 862
Hewlett Packard ........................... 73,000 8,769
-------
9,959
-------
DIVERSIFIED MANUFACTURING -- 7.4%
Emerson Electric .......................... 70,200 4,142
General Electric .......................... 293,700 15,456
Minnesota Mining & Manufacturing 17,600 1,509
-------
21,107
-------
DRUGS & HEALTH CARE -- 16.6%
Abbott Laboratories ....................... 190,000 7,731
American Home Products .................... 10,000 539
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
DRUGS & HEALTH CARE -- CONTINUED
Bristol-Myers Squibb ...................... 152,880 $ 8,418
Johnson & Johnson ......................... 13,500 1,208
Merck ..................................... 96,000 7,164
Pfizer# ................................... 276,000 12,299
Schering-Plough ........................... 209,400 10,130
-------
47,489
-------
ENTERTAINMENT -- 1.9%
Walt Disney ............................... 126,750 5,347
-------
FINANCIAL SERVICES -- 0.2%
Fannie Mae ................................ 11,000 661
-------
FOOD & BEVERAGE -- 3.9%
Anheuser Busch ............................ 5,000 388
Coca Cola ................................. 42,300 2,258
PepsiCo ................................... 210,500 8,565
-------
11,211
-------
HOLDING COMPANIES -- 1.0%
Berkshire Hathaway, Cl A* ................. 47 2,754
-------
HOUSEHOLD PRODUCTS -- 1.1%
Procter & Gamble .......................... 47,000 3,126
-------
INFORMATION RETRIEVAL SERVICES -- 0.9%
America Online* ........................... 48,000 2,544
-------
INSURANCE -- 5.6%
American International Group .............. 124,788 14,046
Chubb ..................................... 30,000 2,100
-------
16,146
-------
MEDICAL & MEDICAL SERVICES -- 0.3%
Medtronic ................................. 14,400 743
-------
MOTORCYCLE & MOTOR SCOOTER -- 3.1%
Harley-Davidson ........................... 235,200 8,761
-------
OFFICE & BUSINESS EQUIPMENT -- 2.3%
Pitney Bowes .............................. 153,000 6,656
-------
PETROLEUM & FUEL PRODUCTS -- 1.4%
Schlumberger .............................. 50,000 3,678
Transocean Sedco Forex .................... 9,680 476
-------
4,154
-------
PETROLEUM REFINING -- 4.7%
BP Amoco, ADR ............................. 87,868 4,778
Exxon Mobil ............................... 65,201 5,432
Royal Dutch Petroleum,
NY Shares ................................ 52,400 3,272
-------
13,482
-------
See Accompanying Notes
72
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TAX MANAGED EQUITY FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
RESTAURANTS -- 0.8%
McDonald's ........................ 64,000 $ 2,292
---------
RETAIL -- 7.0%
Home Depot ........................ 274,500 13,399
Staples* .......................... 45,000 664
Target ............................ 13,300 834
Wal-Mart .......................... 89,000 5,129
---------
20,026
---------
SEMI-CONDUCTORS/INSTRUMENTS -- 8.7%
Intel ............................. 164,000 20,449
Texas Instruments ................. 64,000 4,624
---------
25,073
---------
TELEPHONE & TELECOMMUNICATION -- 5.7%
BellSouth ......................... 89,000 4,155
GTE ............................... 5,500 348
Motorola .......................... 42,000 3,938
SBC Communications ................ 59,795 2,612
US West ........................... 24,800 1,786
Vodafone Air Touch, ADR# .......... 20,000 916
Worldcom* ......................... 70,125 2,638
---------
16,393
---------
TOTAL COMMON STOCK
(Cost $50,891) ............................... 281,163
=========
CASH EQUIVALENT -- 1.8%
Fidelity Domestic Money Market
Fund ............................ 5,066,545 5,067
---------
TOTAL CASH EQUIVALENT
(Cost $5,067) ................................ 5,067
---------
TOTAL INVESTMENTS -- 99.9%
(Cost $55,958) ............................... 286,230
=========
OTHER ASSETS AND LIABILITIES,
NET -- 0.1% .................................. 278
---------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value) based on
18,028,189 outstanding shares of
beneficial interest $ 30,619
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
1,212,239 outstanding shares of
beneficial interest 14,990
Portfolio Shares of Class B (unlimited
authorization -- no par value) based on
786,467 outstanding shares of
beneficial interest 9,783
Portfolio Shares of Class C (unlimited
authorization -- no par value) based on
32,011 outstanding shares of
beneficial interest 444
Undistributed net investment income 152
Accumulated net realized gain
on investments 248
Net unrealized appreciation
on investments 230,272
---------
TOTAL NET ASSETS -- 100.0% $ 286,508
=========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I $14.29
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $14.33
=========
MAXIMUM OFFERING PRICE
PER SHARE -- CLASS A ($14.33 / 94.5%) $15.16
=========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B $14.16
=========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C $14.16
=========
-------------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY PARTIALLY OR FULLY ON LOAN.
ADR--AMERICAN DEPOSITORY RECEIPT
CL--CLASS
See Accompanying Notes
73
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BALANCED ALLOCATION FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 40.3%
AEROSPACE -- 1.5%
General Dynamics ........................... 5,900 $ 348
Northrop Grumman# .......................... 4,700 360
United Technologies ........................ 6,200 375
------
1,083
------
AIR TRANSPORTATION -- 0.0%
Atlas Air* ................................. 750 24
------
AUTOMOTIVE -- 0.9%
General Motors# ............................ 2,800 198
Genuine Parts .............................. 12,300 294
Monaco Coach* .............................. 800 11
TRW ........................................ 2,900 141
------
644
------
BANKS -- 3.0%
Bank of America ............................ 7,200 400
Bank of New York ........................... 2,350 110
Charter One Financial ...................... 12,200 278
Cullen/Frost Bankers ....................... 1,000 26
Imperial Bancorp* .......................... 377 7
MBNA ....................................... 3,900 109
PNC Financial Services Group ............... 7,300 368
Republic Security Financial ................ 2,650 11
Southtrust ................................. 8,700 235
State Street ............................... 1,700 190
SunTrust ................................... 3,700 221
UnionBanCal ................................ 8,700 298
------
2,253
------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 0.2%
Citadel Communications* .................... 400 16
Omnicom Group .............................. 1,400 118
Spanish Broadcasting Systems,
Cl A* ..................................... 600 10
------
144
------
BUILDING & CONSTRUCTION SUPPLIES -- 0.4%
Insituform Technologies* ................... 500 17
Masco ...................................... 11,000 217
Trex* ...................................... 650 29
------
263
------
BUSINESS SERVICES -- 0.4%
American Management
Systems* .................................. 800 30
Automatic Data Processing .................. 3,300 181
Concord EFS* ............................... 2,900 70
------
281
------
CABLE TELEVISION -- 0.3%
Comcast, Cl A Special* ..................... 5,100 193
------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
CHEMICALS -- 1.2%
Avery Dennison ............................. 2,200 $ 135
Dow Chemical ............................... 3,800 407
Pharmacia .................................. 2,600 135
RPM ........................................ 17,800 174
------
851
------
COMMUNICATIONS EQUIPMENT -- 0.9%
ADC Telecommunications* .................... 3,300 222
Advanced Fibre
Communication* ............................ 250 11
C-COR.net* ................................. 800 18
Commscope* ................................. 1,400 54
Digital Microwave* ......................... 600 17
Lucent Technologies ........................ 2,400 138
Mercury Computer Systems* .................. 650 20
Qualcomm* .................................. 1,450 96
Sawtek* .................................... 600 39
Tut Systems* ............................... 250 13
ViaSat* .................................... 150 6
------
634
------
COMPUTER COMMUNICATIONS EQUIPMENT -- 0.1%
Act Manufacturing*# ........................ 750 24
Anadigics* ................................. 300 10
Optimal Robotics* .......................... 750 25
Rsa Security* .............................. 400 23
Sonicwall* ................................. 350 21
------
103
------
COMPUTER DESIGN & PROGRAMMING -- 0.0%
Igate Capital* ............................. 450 7
------
COMPUTER HARDWARE -- 0.7%
Cisco Systems* ............................. 6,000 342
EMC* ....................................... 1,800 209
------
551
------
COMPUTER SERVICES -- 0.1%
Advanced Digital Information* .............. 850 11
Internet Pictures* ......................... 550 5
Intranet Solutions* ........................ 400 8
NetObjects* ................................ 750 6
Preview Systems* ........................... 650 7
Psw Technologies * ......................... 500 5
------
42
------
COMPUTER SOFTWARE -- 0.7%
Allaire* ................................... 200 8
BMC Software* .............................. 1,500 66
Broadvision* ............................... 650 23
Hyperion Solutions* ........................ 500 16
Iona Technologies* ......................... 200 9
See Accompanying Notes
74
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BALANCED ALLOCATION FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
COMPUTER SOFTWARE -- CONTINUED
Level 8 Systems* ................. 400 $ 8
Mercury Interactive* ............. 350 30
Micromuse* ....................... 200 20
Microsoft* ....................... 4,200 263
Novadigm* ........................ 750 10
Onyx Software* ................... 650 11
Remedy* .......................... 650 27
Visual Networks*# ................ 200 10
------
501
------
COMPUTERS -- 0.4%
Hewlett Packard .................. 1,100 132
International Business
Machines ........................ 1,800 193
------
325
------
DIVERSIFIED MANUFACTURING -- 1.1%
General Electric ................. 8,700 458
Minnesota Mining &
Manufacturing ................... 4,400 377
------
835
------
DRUGS & HEALTH CARE -- 1.6%
Amgen* ........................... 1,800 115
Bristol-Myers Squibb ............. 1,400 77
Johnson & Johnson ................ 1,400 125
Lilly (Eli) ...................... 1,100 84
Merck ............................ 2,500 187
Pfizer ........................... 5,250 234
Schering-Plough .................. 2,300 111
Warner-Lambert ................... 1,800 220
------
1,153
------
ELECTRICAL SERVICES -- 0.8%
Consolidated Edison .............. 6,900 225
Dominion Resources ............... 5,100 233
LG&E Energy ...................... 5,300 126
------
584
------
ELECTRONICS -- 0.1%
CTS .............................. 500 28
Gentex* .......................... 1,450 45
Titan* ........................... 350 13
------
86
------
ENTERTAINMENT -- 0.0%
Macrovision* ..................... 450 31
------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
FINANCIAL SERVICES -- 2.2%
Citigroup ........................ 6,300 $ 392
Fannie Mae ....................... 8,750 526
Freddie Mac ...................... 8,550 380
J.P. Morgan ...................... 2,600 335
Metris ........................... 800 30
------
1,663
------
FOOD & BEVERAGE -- 1.0%
Coca Cola ........................ 2,000 107
General Mills .................... 7,800 310
PepsiCo .......................... 4,000 163
Sara Lee ......................... 10,900 196
------
776
------
GAS & NATURAL GAS -- 0.9%
Enron ............................ 8,300 605
Nicor ............................ 800 29
Southwest Gas .................... 600 12
------
646
------
HANDTOOLS & GENERAL HARDWARE -- 0.4%
Fortune Brands ................... 10,700 285
------
HOUSEHOLD PRODUCTS -- 0.1%
Procter & Gamble ................. 1,600 106
------
INSURANCE -- 2.5%
American General ................. 4,100 263
American International Group ..... 2,668 300
Chubb ............................ 6,800 476
Cigna ............................ 4,700 417
Marsh & McLennan ................. 1,300 143
Metlife*# ........................ 11,700 240
------
1,839
------
MACHINERY -- 0.3%
Caterpillar ...................... 5,100 195
------
MEASURING DEVICES -- 0.0%
LTX* ............................. 550 14
------
MEDICAL & MEDICAL SERVICES -- 0.8%
Arthrocare* ...................... 150 13
Aspect Medical Systems* .......... 300 9
Avigen* .......................... 350 10
Baxter International ............. 3,000 200
Cytyc* ........................... 300 15
Datascope ........................ 600 23
Endocare* ........................ 850 15
Hooper Holmes .................... 3,100 32
Human Genome Sciences* ........... 200 18
See Accompanying Notes
75
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BALANCED ALLOCATION FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
MEDICAL & MEDICAL SERVICES -- CONTINUED
Incyte Pharmaceuticals* ............... 250 $ 13
Medtronic ............................. 3,100 160
Millennium Pharmaceutical* ............ 300 25
PolyMedica* ........................... 700 19
Priority Healthcare, Cl B* ............ 550 28
------
580
------
METALS & MINING -- 0.6%
Alcoa ................................. 7,300 427
------
MISCELLANEOUS BUSINESS SERVICES -- 0.0%
VerticalNet* .......................... 250 8
------
MISCELLANEOUS MANUFACTURING -- 0.6%
Textron ............................... 2,800 176
Tyco International .................... 6,100 287
------
463
------
MOTORCYCLE & MOTOR SCOOTER -- 0.2%
Harley-Davidson ....................... 4,300 160
------
OFFICE & BUSINESS EQUIPMENT -- 0.8%
Lexmark International, Cl A* .......... 1,400 98
Pitney Bowes .......................... 7,600 331
Xerox ................................. 7,300 198
------
627
------
PAPER & FOREST PRODUCTS -- 0.7%
International Paper ................... 2,400 84
Kimberly-Clark ........................ 2,000 121
Weyerhaeuser .......................... 6,100 303
------
508
------
PERSONAL CARE -- 0.1%
Gillette .............................. 2,600 87
------
PETROLEUM & FUEL PRODUCTS -- 0.5%
Cal Dive International* ............... 500 23
Global Industries* .................... 3,000 53
Pride International* .................. 2,050 52
Schlumberger .......................... 2,500 184
UTI Energy* ........................... 1,000 43
Veritas DGC* .......................... 1,600 44
------
399
------
PETROLEUM REFINING -- 4.0%
Chevron ............................... 8,500 786
Coastal ............................... 2,300 141
Conoco, Cl B .......................... 12,200 348
Exxon Mobil ........................... 11,450 954
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
PETROLEUM REFINING -- CONTINUED
Texaco ................................ 8,500 $ 488
Ultramar Diamond Shamrock ............. 9,500 246
------
2,963
------
PHARMACEUTICALS -- 0.1%
Coulter Pharmaceutical* ............... 600 11
Gilead Sciences* ...................... 150 8
King Pharmaceuticals* ................. 750 40
Sicor* ................................ 2,400 21
------
80
------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.0%
Concord Camera* ....................... 1,750 30
------
PRINTING & PUBLISHING -- 0.6%
Knight-Ridder# ........................ 3,900 207
Time Warner ........................... 2,550 201
Valassis Communications* .............. 450 15
------
423
------
PROFESSIONAL SERVICES -- 0.3%
Affymetrix*# .......................... 100 12
Corporate Executive Board* ............ 400 22
Dun & Bradstreet ...................... 5,800 178
------
212
------
REAL ESTATE INVESTMENT TRUSTS -- 0.9%
Arden Realty .......................... 10,700 246
Developers Diversified Realty ......... 6,500 94
Duke-Weeks Realty ..................... 15,100 326
------
666
------
RESTAURANTS -- 0.1%
Jack in the Box* ...................... 1,750 43
------
RETAIL -- 2.2%
99 Cents Only Stores* ................. 350 13
BJ's Wholesale Club* .................. 900 28
Costco Wholesale* ..................... 3,100 99
Home Depot ............................ 3,800 185
May Department Stores ................. 9,900 298
Michaels Stores* ...................... 550 24
Nordstrom ............................. 6,100 153
Radioshack ............................ 2,450 104
Rex Stores* ........................... 1,300 27
Safeway* .............................. 3,400 157
Target ................................ 2,300 144
Too* .................................. 1,000 26
Tweeter Home Entertainment
Group* ............................... 900 26
Wal-Mart .............................. 4,000 231
Walgreen .............................. 4,100 116
------
1,631
------
See Accompanying Notes
76
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BALANCED ALLOCATION FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
SEMI-CONDUCTORS/INSTRUMENTS -- 1.9%
Altera* ........................... 2,300 $ 198
Analog Devices* ................... 3,200 246
ASM International* ................ 1,050 27
Asyst Technologies* ............... 550 22
Burr-Brown*# ...................... 650 37
Credence Systems* ................. 700 38
Cymer* ............................ 450 14
Exar* ............................. 500 34
Helix Technology .................. 300 10
Integrated Device Technology* ..... 550 26
Integrated Silicon Solutions* ..... 850 25
Intel ............................. 3,400 424
Metalink Limited* ................. 800 20
Netsilicon* ....................... 500 7
PRI Automation, Cl A* ............. 300 15
Silicon Storage Technology* ....... 300 22
Telaxis Communications* ........... 100 3
Texas Instruments ................. 3,200 231
Transwitch* ....................... 400 25
Zoran* ............................ 250 10
------
1,434
------
SPECIALTY MACHINERY -- 0.7%
Cooper Industries ................. 5,300 178
Hubbell, Cl B ..................... 5,600 148
Thomas & Betts .................... 6,400 182
------
508
------
TELEPHONE & TELECOMMUNICATION -- 3.2%
Alamosa Pcs Holdings* ............. 1,000 15
Alltel ............................ 1,500 98
AT&T .............................. 10,400 361
Audiovox, Cl A* ................... 400 8
BellSouth ......................... 6,600 308
GTE ............................... 9,400 595
Harmonic Lightwaves* .............. 250 11
ICG Communications* ............... 1,150 22
Intermedia Communications* ........ 750 19
Mastec* ........................... 600 41
Motorola .......................... 800 75
SBA Communications* ............... 850 32
SBC Communications ................ 14,848 649
Worldcom* ......................... 3,000 113
------
2,347
------
TOBACCO -- 0.2%
UST ............................... 10,400 173
------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
TRANSPORTATION -- 0.0%
CH Robinson Worldwide ............. 550 $ 25
------
TOTAL COMMON STOCK
(Cost $26,734) ............................ 29,906
------
FOREIGN COMMON STOCK -- 15.2%
AUSTRALIA -- 0.2%
National Australia Bank*# ......... 7,972 119
------
AUSTRIA -- 0.1%
Mayr Melnhof Karton* .............. 1,829 87
------
CANADA -- 0.1%
Talisman Energy* .................. 1,650 54
------
DENMARK -- 0.2%
Novo-Nordisk, Series B ............ 710 118
------
FINLAND -- 0.5%
Nokia, ADR ........................ 6,237 324
Sonera Oyj ........................ 1,195 61
------
385
------
FRANCE -- 2.7%
Alcatel ........................... 3,950 220
Altran Technologies ............... 545 123
Aventis ........................... 2,327 152
Axa Rights* ....................... 1,377 2
Axa# .............................. 1,377 204
Bouygues* ......................... 133 83
Castorama Dubois Investisse ....... 700 178
Coflexip Stena Offshore ........... 418 49
France Telecom .................... 344 50
L'Oreal* .......................... 250 173
Louis Vuitton Moet Hennessy* ...... 196 80
Societe Television Francaise ...... 52 34
STMicroelectronics# ............... 954 57
Thomson Multimedia* ............... 1,113 116
Total Fina Elf*# .................. 1,779 282
Valeo ............................. 2,233 114
Vivendi# .......................... 1,041 112
------
2,029
------
GERMANY -- 1.3%
Allianz*# ......................... 382 139
Bayerishe Hypo-und
Vereinsbank ...................... 967 63
Brainpool TV* ..................... 104 10
Consors Discount-Broker*# ......... 430 41
Deutsche Bank# .................... 1,689 131
Deutsche Telekom# ................. 2,181 137
Epcos* ............................ 850 105
See Accompanying Notes
77
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BALANCED ALLOCATION FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
FOREIGN COMMON STOCK -- CONTINUED
GERMANY -- CONTINUED
Infineon Technologies*# ......... 453 $ 30
Infineon Technologies, ADR* ..... 75 5
Muenchener Rueckversicher* ...... 307 91
Siemens# ........................ 1,253 187
------
939
------
HONG KONG -- 0.5%
Cheung Kong* .................... 6,170 56
China Telecom* .................. 13,237 99
HSBC Holdings* .................. 6,282 69
Hutchison Whampoa* .............. 8,377 97
Johnson Electric Holdings* ...... 10,534 78
------
399
------
IRELAND -- 0.0%
Parthus Technologies* ........... 1,100 3
------
ITALY -- 0.8%
Assicurazioni Generali# ......... 3,168 96
Bipop-Carire .................... 8,110 74
Bulgari* ........................ 6,461 81
Saipem* ......................... 15,321 77
Telecom Italia*# ................ 9,842 137
Telecom Italia Mobile*# ......... 9,216 96
------
561
------
JAPAN -- 2.3%
Canon* .......................... 1,600 74
Chugai Pharmaceutical*# ......... 8,423 144
Fanuc ........................... 246 21
Fuji Bank* ...................... 12,703 98
NEC*# ........................... 6,366 161
Nikko Securities ................ 5,222 48
NTT Docomo* ..................... 7 181
Sanyo Electric .................. 11,000 81
Sekisui House* .................. 13,023 127
Seven-Eleven .................... 361 32
SMC ............................. 715 125
Softbank# ....................... 831 127
Sony*# .......................... 972 88
Takeda Chemical Industries* ..... 2,672 182
Tokyo Electron .................. 672 92
Toyota Motor* ................... 3,512 159
------
1,740
------
MEXICO -- 0.1%
Cemex, ADR* ..................... 2,423 51
------
NETHERLANDS -- 1.0%
Aegon ........................... 1,958 71
Heineken* ....................... 2,073 107
NUMBER VALUE
OF SHARES (000)
--------- -----
FOREIGN COMMON STOCK -- CONTINUED
NETHERLANDS -- CONTINUED
ING Groep* ...................... 1,872 $ 112
Philips Electronics ............. 2,484 111
Qiagen, ADR* .................... 400 61
Royal Dutch Petroleum* .......... 1,966 122
Unilever ........................ 2,750 140
------
724
------
NORWAY -- 0.3%
Norsk Hydro* .................... 3,582 138
Tomra Systems ................... 5,100 108
------
246
------
SINGAPORE -- 0.3%
City Developments ............... 14,271 48
DBS Group Holdings .............. 3,186 32
Development Bank Singapore ...... 6,000 60
Singapore Press Holdings* ....... 6,465 97
------
237
------
SOUTH KOREA -- 0.2%
Korea Electric Power, ADR ....... 2,605 41
Samsung Electronics (B), ADR* ... 350 56
SK Telecom, ADR ................. 1,800 72
------
169
------
SPAIN -- 0.3%
Banco Santander Central
Hispano ........................ 5,399 53
Endesa* ......................... 2,646 55
Telefonica* ..................... 5,308 109
Terra Networks* ................. 288 13
------
230
------
SWEDEN -- 0.2%
Ericsson, ADR ................... 6,092 125
------
SWITZERLAND -- 1.0%
Adecco .......................... 70 55
Credit Suisse Group*# ........... 443 83
Holderbank Financiere Glarus* ... 120 141
Julius Baer Holdings ............ 43 155
Nestle*# ........................ 60 115
Novartis* ....................... 76 113
Roche Holding* .................. 10 106
------
768
------
TAIWAN -- 0.2%
Taiwan Semiconductor, ADR* ...... 3,073 109
------
UNITED KINGDOM -- 2.9%
Abbey National .................. 5,598 75
Amvescap ........................ 5,575 73
See Accompanying Notes
78
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BALANCED ALLOCATION FUND
================================================================================
MAY 31, 2000
NUMBER OF
MATURITY SHARES/ VALUE
DATE PAR (000) (000)
-------- --------- -----
FOREIGN COMMON STOCK -- CONTINUED
UNITED KINGDOM -- CONTINUED
Barclays ............................ 4,222 $ 110
Bass ................................ 3,924 43
BOC Group ........................... 2,558 36
BP Amoco ............................ 12,045 110
BP Amoco, ADR ....................... 9,230 502
British Telecom ..................... 375 5
Colt Telecom Group* ................. 1,049 37
Compass Group ....................... 10,143 114
Diageo* ............................. 17,769 152
Energis* ............................ 1,601 61
Marconi ............................. 4,527 55
National Grid Holdings .............. 12,087 93
Pearson ............................. 3,904 118
Ryanair Holdings* ................... 7,359 59
Scottish Power ...................... 8,346 66
Invensys ............................ 18,439 64
SmithKline Beecham .................. 3,361 43
Standard Chartered .................. 3,194 41
Vodafone Group ...................... 65,367 299
----------
2,156
----------
TOTAL FOREIGN COMMON STOCK
(Cost $10,009) ............................. 11,249
----------
CORPORATE BONDS -- 7.1%
BANKS -- 1.4%
Bank of America
7.875% ............ 05/16/05 $ 470 469
First Chicago Bank One
6.875% ............ 06/15/03 310 300
First Union
6.950% ............ 11/01/04 325 314
----------
1,083
----------
BUILDING & CONSTRUCTION -- 0.6%
Armstrong World
7.450% ............ 05/15/29 455 307
Halliburton
5.625% ............ 12/01/08 175 153
----------
460
----------
COMPUTER SOFTWARE -- 0.6%
Computer Associates International
6.250% ............ 04/15/03 470 442
----------
ELECTRICAL SERVICES -- 0.3%
Western Resources
6.875% ............ 08/01/04 260 218
----------
FINANCIAL SERVICES -- 0.4%
Ford Motor Credit
7.375% ............ 10/28/09 320 305
----------
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
CORPORATE BONDS -- CONTINUED
FOREIGN -- 0.7%
Saskatchewan
8.000% ............ 07/15/04 $ 500 $ 504
----------
INSURANCE -- 0.4%
Conseco
8.750% ............ 02/09/04 310 214
Fairfax Financial Holdings
7.375% ............ 04/15/18 115 82
----------
296
----------
LEISURE -- 0.5%
Hasbro
7.950% ............ 03/15/03 365 363
----------
REAL ESTATE INVESTMENT TRUSTS -- 1.0%
Arden Realty (A)
8.875% ............ 03/01/05 325 317
United Dominion Realty
8.625% ............ 03/15/03 440 436
----------
753
----------
RETAIL -- 0.4%
J.C. Penney
6.125% ............ 11/15/03 30 26
7.600% ............ 04/01/07 320 269
----------
295
----------
STEEL & STEEL WORKS -- 0.3%
Worthington Industries
6.700% ............ 12/01/09 240 217
----------
WHOLESALE -- 0.5%
Arrow Electronic
6.875% ............ 06/01/18 405 352
----------
TOTAL CORPORATE BONDS
(Cost $5,692) .............................. 5,288
----------
ASSET BACKED SECURITIES -- 4.7%
Capital One Master Trust,
Series 2000-1, Cl A
7.100% ............ 04/17/06 405 401
Champion Home Equity Loan Trust,
Series 1997-2, Cl A5
6.710% ............ 09/25/29 160 153
DVI Receivables, Series 2000-1, Cl A4
7.780% ............ 06/14/08 300 299
First Security Auto Owner Trust,
Series 1999-1, Cl A4
5.740% ............ 06/15/04 400 388
Flagship Auto Receivables Owner Trust,
Series 1999-2, Cl A3
6.835% ............ 11/18/04 135 133
See Accompanying Notes
79
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BALANCED ALLOCATION FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ------ -----
ASSET BACKED SECURITIES -- CONTINUED
IMC Home Equity Loan Trust,
Series 1997-7, Cl A5
6.760% ............. 10/20/20 $ 560 $ 546
Metris Master Trust,
Series 1997-1, Cl A
6.870% ............. 10/20/05 310 307
New Century Home Equity
Loan Trust,
Series 1997-NC6,
Cl A6
7.010% ............. 05/25/26 380 363
Residential Funding
Mortgage
Securities I,
Series 2000-HI1,
Cl AI2
7.580% ............. 09/25/10 350 346
Saxon Asset Security Trust,
Series 1999-3, Cl AF6
7.525% ............. 06/25/14 295 287
Vanderbilt Mortgage
Finance,
Series 2000-B, Cl A3
8.255% ............. 05/07/17 290 289
----------
TOTAL ASSET BACKED SECURITIES
(Cost $3,583) 3,512
----------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 2.5%
Credit Suisse First
Boston Mortgage
Securities, Series
1997-C1, Cl A1C
7.240% ............. 04/20/07 410 397
PNC Trust, Series 1998-7,
Cl A5
6.750% ............. 09/25/28 230 208
Prudential Securities
Secured Financing,
Series 1998-C1, Cl A1B
6.506% ............. 07/15/08 340 312
Prudential Securities
Secured Financing,
Series 1998-C1, Cl A1A3
6.350% ............. 09/15/07 490 455
Prudential Securities
Secured Financing,
Series 1999-NRF1, Cl A2
6.480% ............. 01/15/09 65 59
Residential Asset
Securitization Trust,
Series 2000-A3, Cl A2
8.000% ............. 05/25/30 423 420
----------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $1,915) 1,851
----------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 11.5%
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 0.3%
7.000% ............. 11/01/28 $ 273 $ 260
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 4.3%
6.000% .. 08/01/28 - 02/01/29 2,739 2,461
7.000% ............. 09/01/27 743 708
----------
3,169
----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 5.8%
6.500% .. 04/15/29 - 08/15/29 2,271 $ 2,126
7.500% .. 09/15/02 - 12/15/29 1,963 1,931
8.000% ............. 01/15/30 230 230
----------
4,287
----------
UNITED STATES DEPARTMENT OF VETERAN AFFAIRS -- 1.1%
6.500% ............. 06/15/25 460 424
7.250% ............. 12/15/15 376 375
----------
799
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $8,924) ............................... 8,515
----------
U.S. TREASURY OBLIGATIONS -- 9.1%
U.S. TREASURY BOND -- 3.3%
6.250%# ............ 08/15/23 2,455 2,425
----------
U.S. TREASURY NOTES -- 5.8%
6.125%# ............ 08/15/07 310 303
6.250%# ............ 10/31/01 4,015 3,988
----------
4,291
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $6,691) ............................... 6,716
----------
CASH EQUIVALENT -- 3.9%
Goldman Sachs Financial Square
Prime Obligation Money Market
Fund ........................... 2,870,820 2,871
----------
TOTAL CASH EQUIVALENT
(Cost $2,871) ............................... 2,871
----------
See Accompanying Notes
80
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BALANCED ALLOCATION FUND
================================================================================
MAY 31, 2000
PAR VALUE
(000) (000)
----- -----
REPURCHASE AGREEMENT -- 5.5%
Prudential
6.400% (dated 05/31/00,
matures 06/01/00, repurchase
price $4,100,729; collateralized
by various FHLMC obligations:
total value $4,213,271) ........... $4,100 $ 4,100
----------
TOTAL REPURCHASE AGREEMENT
(Cost $4,100) .............................. 4,100
----------
TOTAL INVESTMENTS -- 99.8%
(Cost $70,519) ............................. 74,008
==========
OTHER ASSETS AND LIABILITIES,
NET -- 0.2% ................................ 168
----------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 5,953,776 outstanding shares of
beneficial interest ........................ $ 59,151
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 339,609 outstanding shares of
beneficial interest ........................ 3,525
Portfolio Shares of Class B
(unlimited authorization -- no par value)
based on 59,036 outstanding shares of
beneficial interest ........................ 639
Portfolio Shares of Class C
(unlimited authorization -- no par value)
based on 281 outstanding shares of
beneficial interest ........................ 3
Undistributed net investment income ......... 392
Accumulated net realized gain
on investments ............................. 6,980
Net unrealized appreciation on
investments foreign currency and
translation of other assets and liabilities
in foreign currency ........................ 3,486
----------
TOTAL NET ASSETS -- 100.0% .................... $ 74,176
==========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ........................... $11.68
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A ................. $11.68
==========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($11.68 / 95.25%) ......... $12.26
==========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B ................. $11.70
==========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C ................. $11.70
==========
------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
(A) PRIVATE PLACEMENT SECURITY
ADR--AMERICAN DEPOSITORY RECEIPT
CL--CLASS
FHLMC--FEDERAL HOME LOAN MORTGAGE CORPORATION
See Accompanying Notes
81
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
CORPORATE BONDS -- 22.9%
BANKS -- 2.5%
First Chicago Bank One
6.875% ............ 06/15/03 $ 7,000 $ 6,781
First Union
6.950% ............ 11/01/04 7,970 7,701
Inter-American
Development Bank
7.375% ............ 01/15/10 1,200 1,192
------------
15,674
------------
BUILDING & CONSTRUCTION -- 1.8%
Armstrong World
7.450% ............ 05/15/29 13,725 9,264
Pulte
7.000% ............ 12/15/03 2,035 1,913
------------
11,177
------------
CONSULTING SERVICES -- 0.1%
Comdisco
6.000% ............ 01/30/02 840 811
------------
ELECTRICAL SERVICES -- 0.9%
Western Resources
6.875% ............ 08/01/04 6,850 5,754
------------
FINANCIAL SERVICES -- 1.8%
Ford Motor Credit Global
6.700% ............ 07/16/04 11,290 10,810
Sallie Mae
7.300% ............ 08/01/09 500 492
------------
11,302
------------
FOOD & BEVERAGE -- 0.2%
Kraft
8.500% ............ 02/15/17 1,313 1,326
------------
INSURANCE -- 3.7%
Anthem Insurance (B)
9.125% ............ 04/01/10 13,000 11,814
Conseco
8.750% ............ 02/09/04 7,750 5,347
Fairfax Financial Holdings
7.375% ............ 04/15/18 7,950 5,664
------------
22,825
------------
LEISURE -- 1.3%
Hasbro
7.950% ............ 03/15/03 8,225 8,181
------------
METAL PROCESSORS & FABRICATION -- 1.1%
Precision Castparts (B)
8.750% ............ 03/15/05 6,700 6,650
------------
CORPORATE BONDS -- CONTINUED
REAL ESTATE INVESTMENT TRUSTS -- 4.1%
Arden Realty (B)
8.875% ............ 03/01/05 $7,130 $ 6,952
EOP Operating
8.375% ............ 03/15/06 6,200 6,122
Prime Property Funding,
Series II (B)
6.800% ............ 08/15/02 10,000 9,700
United Dominion Realty
8.625% ............ 03/15/03 2,550 2,527
------------
25,301
------------
RETAIL -- 2.4%
J.C. Penney
6.125% ............ 11/15/03 2,830 2,487
7.600% ............ 04/01/07 15,070 12,659
------------
15,146
------------
STEEL & STEEL WORKS -- 0.5%
Worthington Industries
6.700% ............ 12/01/09 3,200 2,892
------------
WHOLESALE -- 2.5%
Arrow Electronic
6.875% ............ 06/01/18 9,745 8,447
Universal
8.500% ............ 02/28/03 6,775 6,899
------------
15,346
------------
TOTAL CORPORATE BONDS
(Cost $152,558) .......................... 142,385
------------
ASSET BACKED SECURITIES -- 17.3%
Amresco Residential
Mortgage, Series 1997-1,
Cl B1A (A)
4.710% ............ 03/25/27 4,860 4,757
Amresco Securitized Net
Interest Margin,
Series 1999-1A, Cl A
9.100% ............ 09/27/29 7,317 6,732
Capital One Master Trust,
Series 2000-1, Cl A
7.100% ............ 04/17/06 11,335 11,232
Champion Home Equity
Loan Trust,
Series 1997-2, Cl A5
6.710% ............ 09/25/29 3,900 3,720
Continental Auto
Receivables,
Series 2000-A, Cl A3
7.380% ............ 02/15/04 6,750 6,725
DVI Receivables,
Series 2000-1, Cl A4
7.780% ............ 06/14/08 2,000 1,992
See Accompanying Notes
82
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
ASSET BACKED SECURITIES -- CONTINUED
Export Funding Trust,
Series 1995-A, Cl A
8.210% ............. 12/29/06 $ 2,146 $ 2,178
First Security Auto Owner Trust,
Series 1999-1, Cl A4
5.740% ............. 06/15/04 9,970 9,669
Flagship Auto Receivables Owner
Trust, Series 1999-2, Cl A3
6.835% ............. 11/18/04 3,250 3,206
IMC Home Equity Loan Trust,
Series 1997-7, Cl A5
6.760% ............. 10/20/20 12,810 12,496
Metris Master Trust, Series 1997-1,
Cl A
6.870% ............. 10/20/05 6,860 6,794
New Century Home Equity Loan
Trust, Series 1997-NC6, Cl A6
7.010% ............. 05/25/26 9,000 8,603
Option One Mortgage Loan Trust,
Series 2000-1, Cl M2 (A)
6.940% ............. 04/25/30 2,444 2,439
Pegasus Aviation Lease Securitization,
Series 1999-1, Cl A1 (B)
6.300% ............. 03/25/29 6,804 6,489
Residential Funding Mortgage
Securities I, Series 2000-HI1, Cl AI2
7.580% ............. 09/25/10 7,526 7,447
Saxon Asset Security Trust,
Series 1999-3, Cl AF6
7.525% ............. 06/25/14 7,303 7,111
Turkey Trust, Series T-3
9.625% ............. 05/15/02 188 191
Vanderbilt Mortgage Finance,
Series 2000-B, Cl A3
8.255% ............. 05/07/17 5,880 5,865
------------
TOTAL ASSET BACKED SECURITIES
(COST $110,068) ........................... 107,646
------------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 14.2%
Credit Suisse First Boston Mortgage
Securities, Series 1997-C1, Cl A1C
7.240% ............. 04/20/07 7,500 7,264
GE Capital Mortgage Services,
Series 1999-15, Cl A1
6.750% ............. 08/25/29 7,179 6,888
Housing Securities,
Series 1993-G, Cl G9
7.500% ............. 01/25/09 3,829 3,786
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COLLATERALIZED MORTGAGE
OBLIGATIONS -- CONTINUED
PNC Trust, Series 1998-7, Cl A5
6.750% ............. 09/25/28 $ 2,997 $ 2,718
Prudential Securities Secured
Financing, Series 1998-C1, Cl A1A3
6.350% ............. 09/15/07 12,190 11,316
Prudential Securities Secured
Financing, Series 1998-C1, Cl A1B
6.506% ............. 07/15/08 11,180 10,259
Prudential Securities Secured
Financing, Series 1999-NRF1, Cl A2
6.480% ............. 01/15/09 2,625 2,395
Residential Accredit Loans,
Series 1998-QS7, Cl NB4
6.750% ............. 07/25/28 13,684 12,426
Residential Accredit Loans,
Series 1999-QS3, Cl A8
6.500% ............. 03/25/29 27 24
Residential Asset Securitization
Trust, Series 2000-A3, Cl A2
8.000% ............. 05/25/30 9,765 9,695
Residential Funding Mortgage
Securities I, Series 1993-S44,
Cl A3 (A)
6.740% ............. 11/25/23 1,969 1,973
Structured Asset Sales,
Series 1994-5, Cl A
7.000% ............. 07/25/24 20,864 19,625
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $91,202) ............................. 88,369
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 25.5%
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 2.5%
6.500% ..... 10/01/07 - 11/01/10 1,444 1,382
7.000% ..... 11/01/10 - 11/01/28 10,704 10,263
7.500% ..... 07/01/10 - 05/01/17 1,636 1,621
8.000% ............... 07/01/25 1,964 1,972
8.500% ..... 05/01/06 - 06/01/17 292 301
9.250% ............... 12/01/02 26 27
9.400% ............... 09/15/08 19 19
------------
15,585
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 9.1%
6.000% ..... 07/01/28 - 02/01/29 33,988 30,616
6.500% ..... 12/01/08 - 08/01/29 815 780
7.500% ..... 12/01/07 - 10/01/29 25,156 24,543
8.500% ............... 11/01/09 66 67
9.000% ............... 07/01/09 34 35
See Accompanying Notes
83
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- CONTINUED
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- CONTINUED
9.250% ................. 11/15/01 $ 595 $ 605
9.500% ................. 05/01/18 88 92
------------
56,738
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 10.9%
6.500% ...... 09/15/28 - 08/15/29 29,623 27,736
7.000% ...... 11/15/23 - 06/15/29 2,023 1,947
7.500% ...... 08/15/22 - 05/15/30 32,935 32,384
8.000% ...... 03/15/08 - 01/15/30 4,752 4,768
8.250% ...... 04/20/17 - 07/20/17 149 151
8.500% ...... 05/15/21 - 08/15/22 806 827
9.000% ................ 02/20/19 120 123
9.500% ................ 06/15/19 63 67
------------
68,003
------------
UNITED STATES DEPARTMENT OF VETERAN AFFAIRS -- 3.0%
6.500% ................ 06/15/25 11,150 10,286
7.250% ................ 12/15/15 8,600 8,567
------------
18,853
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $166,082) ........................... 159,179
------------
U.S. TREASURY OBLIGATIONS -- 19.1%
U.S. TREASURY BOND -- 8.9%
6.250%# ................ 08/15/23 55,975 55,293
------------
U.S. TREASURY INFLATIONARY PROTECTION SECURITY -- 2.4%
3.625%# ................ 04/15/28 15,839 14,896
------------
U.S. TREASURY NOTES -- 7.8%
6.250%# ................ 10/31/01 44,915 44,614
6.500%# ................ 05/15/05 4,160 4,148
------------
48,762
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $118,059) ........................... 118,951
------------
NUMBER VALUE
OF SHARES (000)
--------- -----
CASH EQUIVALENT -- 0.5%
Goldman Sachs Financial Square
Government Money Market
Fund ........................... 3,054,452 $ 3,054
------------
TOTAL CASH EQUIVALENT
(Cost $3,054) ............................. 3,054
------------
TOTAL INVESTMENTS -- 99.5%
(Cost $641,023) ........................... 619,584
============
OTHER ASSETS AND LIABILITIES,
NET -- 0.5% ............................... 2,973
------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 65,972,098 outstanding shares of
beneficial interest ....................... 678,178
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 402,987 outstanding shares of
beneficial interest ....................... 4,085
Portfolio Shares of Class B
(unlimited authorization -- no par value)
based on 59,545 outstanding shares of
beneficial interest ....................... 631
Portfolio Shares of Class C
(unlimited authorization -- no par value)
based on 4,309 outstanding shares of
beneficial interest ....................... 41
Undistributed net investment income ........ 2
Accumulated net realized loss
on investments ............................ (38,941)
Net unrealized depreciation
on investments ............................ (21,439)
------------
TOTAL NET ASSETS -- 100.0% ................... $ 622,557
============
See Accompanying Notes
84
<PAGE>
STATEMENT OF NET ASSETS
ARMADA BOND FUND
================================================================================
MAY 31, 2000
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I $9.37
============
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $9.40
============
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.40 / 95.25%) $9.87
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B $9.38
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C $9.38
============
------------------------------------------------
# SECURITY FULLY OR PARTIALLY ON LOAN.
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MAY 31, 2000.
(B) PRIVATE PLACEMENT SECURITY
CL--CLASS
See Accompanying Notes
85
<PAGE>
STATEMENT OF NET ASSETS
ARMADA ENHANCED INCOME FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
CORPORATE BONDS -- 46.8%
BANKS -- 1.5%
First Union
8.125% ............ 06/24/02 $ 1,400 $ 1,410
------------
BEAUTY PRODUCTS -- 1.8%
Dial
6.625% ............ 06/15/03 1,800 1,728
------------
BUILDING & CONSTRUCTION -- 1.8%
Centex, MTN (A)
6.540% ............ 07/27/00 1,700 1,698
------------
COMPUTER SOFTWARE -- 1.0%
Computer Associates International
6.250% ............ 04/15/03 1,025 965
------------
CONSULTING SERVICES -- 1.3%
Comdisco
5.950% ............ 04/30/02 1,235 1,186
------------
DEFENSE -- 1.2%
Raytheon
5.950% ............ 03/15/01 1,100 1,086
------------
ELECTRICAL SERVICES -- 2.2%
Western Resources
6.875% ............ 08/01/04 2,500 2,100
------------
FINANCIAL SERVICES -- 4.3%
Case Credit
6.120% ............ 08/01/01 1,000 975
Centerpoint Properities,
MTN
7.900% ............ 01/15/03 2,200 2,159
Ford Motor Credit
6.550% ............ 09/10/02 1,000 977
------------
4,111
------------
FOREIGN BOND -- 1.9%
Hydro Quebec (A)
6.250% ............ 07/31/02 1,850 1,836
------------
GAS & NATURAL GAS -- 0.2%
Exxon Mobil
8.375% ............ 02/12/01 150 151
------------
INDUSTRIAL -- 0.5%
Monsanto
7.090% ............ 12/15/00 420 420
------------
INSURANCE -- 1.7%
Conseco
7.875% ............ 12/15/00 2,000 1,600
------------
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
CORPORATE BONDS -- CONTINUED
LEISURE -- 1.4%
Hasbro
7.950% ............ 03/15/03 $ 1,280 $ 1,274
------------
OFFICE EQUIPMENT -- 0.3%
Xerox, MTN
5.250% ............ 12/15/03 300 275
------------
PAPER & PAPER PRODUCTS -- 4.7%
Champion International
9.700% ............ 05/01/01 1,500 1,521
Temple-Inland
7.250% ............ 09/15/04 3,000 2,906
------------
4,427
------------
REAL ESTATE INVESTMENT TRUSTS -- 9.4%
Carramerica Realty
6.625% ............ 10/01/00 3,815 3,798
Franchise Financial
7.000% ............ 11/30/00 1,810 1,800
Prime Property Funding,
Series II (B)
6.800% ............ 08/15/02 1,000 970
7.000% ............ 08/15/04 1,370 1,300
Weingarten Realty
6.000% ............ 08/10/01 1,045 1,020
------------
8,888
------------
RETAIL -- 4.3%
Dillard
6.310% ............ 08/01/02 2,250 2,080
J.C. Penney
6.125% ............ 11/15/03 1,000 879
7.250% ............ 04/01/02 1,200 1,149
------------
4,108
------------
RUBBER & PLASTIC -- 2.4%
Armstrong World
6.350% ............ 08/15/03 2,660 2,308
------------
TRANSPORTATION -- 1.5%
General American Transportation
10.125% ............ 03/15/02 1,400 1,449
------------
TRUCKING -- 1.8%
JB Hunt Transport
6.000% ............ 12/12/00 1,750 1,741
------------
WHOLESALE -- 1.6%
Universal
8.500% ............ 02/28/03 1,510 1,538
------------
TOTAL CORPORATE BONDS
(Cost $45,736) ............................ 44,299
------------
See Accompanying Notes
86
<PAGE>
STATEMENT OF NET ASSETS
ARMADA ENHANCED INCOME FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
ASSET BACKED SECURITIES -- 32.4%
AESOP Funding, Series 1997-1,
Cl A1
6.220% ............ 10/20/01 $ 763 $ 762
Americredit Receivables Trust,
Series 2000-A, Cl A3
7.150% ............ 08/05/04 1,075 1,071
Amresco Residential Mortgage,
Series 1997-1, Cl B1A (A)
4.710% ............ 03/25/27 1,216 1,190
Capital Equipment,
Series 1997-1, Cl A4
6.190% ............ 02/15/02 2,205 2,165
Champion Home Equity Loan,
Series 1998-1, Cl A2 (D)
8.120% ............ 09/25/01 6,000 564
Citibank Credit Card Master Trust,
Series 1996-1, Cl A (C)
0.000% ............ 02/07/03 1,260 1,199
Countrywide Home Loans,
Series 1997-8, Cl A2
6.750% ............ 01/25/28 2,910 2,879
Discover Card Master Trust I,
Series 1998-4A, Cl A
5.750% ............ 10/16/03 1,060 1,044
Empire Funding,
Series 1999-1, Cl A3
6.440% ............ 04/25/13 1,500 1,444
Flagship Auto Receivables
Owner Trust,
Series 1999-2, Cl A3
6.835% ............ 11/18/04 3,000 2,960
Green Tree Home Equity
Loan Trust, Series 1999-D,
Cl A-7 (D)
6.500% ............ 09/15/30 50,000 2,680
Household Automobile
Revolving Trust I,
Series 1998-1 Cl A3 (A)
6.330% ............ 07/17/03 1,153 1,154
Merrill Lynch Mortgage
Investors, Series 1998-GN1,
Cl A1
7.110% ............ 08/25/27 18 18
Metlife Capital Equipment
Loan Trust,
Series 1997-A, Cl A
6.850% ............ 05/20/08 910 895
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
ASSET BACKED SECURITIES -- CONTINUED
Metris Master Trust,
Series 1997-1, Cl A
6.870% ............ 10/20/05 $ 980 $ 970
New Century Home Equity
Loan Trust, Series 1997-NC6,
Cl A6
7.010% ............ 05/25/26 1,500 1,434
Pegasus Aviation Lease
Securitization, Series 1999-1,
Cl A1 (B)
6.300% ............ 03/25/29 1,276 1,217
PNC Student Loan Trust I,
Series 1997-2, Cl A4
6.446% ............ 01/25/02 915 911
Sears Credit Account Master
Trust, Series 1996-4, Cl A
6.450% ............ 10/16/06 790 778
Union Acceptance,
Series 1999-B, Cl A4
6.110% ............ 09/08/05 1,295 1,260
Westo, Series 1999-A, Cl A4
5.700% ............ 11/20/03 2,750 2,661
World Omni Automobile
Lease Securitization Trust,
Series 1997, Cl A3 (B)
5.962% ............ 08/14/01 1,410 1,398
------------
TOTAL ASSET BACKED SECURITIES
(Cost $31,010) ............................. 30,654
------------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 4.2%
Evans Withycombe, Series 1, Cl A1
7.980% ............ 08/01/01 1,395 1,410
Merrill Lynch Mortgage Investors,
Series 1996-C1, Cl A1
7.150% ............ 04/25/28 1,026 1,011
Residential Asset Securitization Trust,
Series 1997-A1, Cl A1
7.000% ............ 03/25/27 302 301
Residential Asset Securitization Trust,
Series 2000-A3, Cl A2
8.000% ............ 05/25/30 1,280 1,271
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $4,058) .............................. 3,993
------------
See Accompanying Notes
87
<PAGE>
STATEMENT OF NET ASSETS
ARMADA ENHANCED INCOME FUND
================================================================================
MAY 31, 2000
NUMBER OF
SHARES/ VALUE
MATURITY PAR (000) (000)
-------- --------- -----
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 4.4%
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 0.7%
6.250% ............. 10/15/02 $ 645 $ 631
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 2.0%
5.000% ............. 11/18/20 631 623
7.500% ............. 07/01/08 1,265 1,252
------------
1,875
------------
SMALL BUSINESS ADMINISTRATION -- 0.2%
9.725% ............. 04/25/09 205 219
------------
UNITED STATES DEPARTMENT OF VETERAN AFFAIRS -- 1.5%
6.500% ............. 01/15/06 1,500 1,442
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $4,263) 4,167
------------
U.S. TREASURY OBLIGATIONS -- 9.2%
U.S. TREASURY NOTES -- 9.2%
5.750% ............. 11/15/00 1,300 1,297
6.250%# ............ 10/31/01 4,440 4,410
6.500%# ............ 05/15/05 3,030 3,021
------------
8,728
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $8,736) ............................... 8,728
------------
CASH EQUIVALENT -- 1.6%
Fidelity Domestic Money Market
Fund ............................ 1,552,495 1,552
------------
TOTAL CASH EQUIVALENT
(Cost $1,552) ............................... 1,552
------------
TOTAL INVESTMENTS -- 98.6%
(Cost $95,355) .............................. 93,393
============
OTHER ASSETS AND LIABILITIES,
NET -- 1.4% ................................. 1,330
------------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 9,651,348 outstanding shares of
beneficial interest ......................... $ 96,469
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 89,671 outstanding shares of
beneficial interest ......................... 905
Portfolio Shares of Class B
(unlimited authorization -- no par value)
based on 18,500 outstanding shares of
beneficial interest ......................... 183
Portfolio Shares of Class C
(unlimited authorization -- no par value)
based on 1,841 outstanding shares of
beneficial interest ......................... 18
Distributions in excess of net investment
income ...................................... (18)
Accumulated net realized loss on
investments ................................. (872)
Net unrealized depreciation on
investments ................................. (1,962)
------------
TOTAL NET ASSETS -- 100.0% ..................... $ 94,723
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................ $9.70
============
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A .................. $9.74
============
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.74 / 97.25%) ........... $10.02
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B .................. $9.73
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C .................. $9.73
============
------------------------------------------------
# SECURITY FULLY OR PARTIALLY ON LOAN.
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MAY 31, 2000.
(B) PRIVATE PLACEMENT SECURITY
(C) PRINCIPAL ONLY SECURITY
(D) INTEREST ONLY SECURITY
CL--CLASS
MTN--MEDIUM TERM NOTE
See Accompanying Notes
88
<PAGE>
STATEMENT OF NET ASSETS
ARMADA GNMA FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 2.4%
Credit Suisse First Boston
Mortgage Securities,
Series 1997-C1, Cl A1C
7.240% ................ 04/20/07 $ 1,100 $ 1,065
Residential Funding Mortgage
Securities I, Series 1992-S31,
Cl A5
7.500% ............... 09/25/07 1,852 1,834
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $3,011) ............................... 2,899
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 86.1%
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.8%
6.500% ..... 12/01/12 - 02/01/28 1,008 940
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 84.5%
6.000% ..... 07/15/28 - 01/15/29 17,936 16,258
6.500% ..... 05/15/28 - 02/20/30 27,003 25,354
7.000% ..... 12/15/10 - 09/15/29 23,061 22,213
7.250% .............. 11/15/04 77 76
7.500% ..... 05/15/22 - 12/15/29 20,818 20,541
8.000% ..... 03/15/17 - 04/15/30 11,195 11,235
8.500% ..... 01/15/17 - 02/15/23 3,635 3,731
8.750% .............. 06/15/25 63 65
9.000% ..... 05/15/09 - 11/15/24 2,826 2,930
------------
102,403
------------
UNITED STATES DEPARTMENT OF VETERAN AFFAIRS -- 0.8%
6.500% ................ 06/15/25 1,000 923
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost $107,052) ............................ 104,266
------------
U.S. TREASURY OBLIGATIONS -- 9.6%
U.S. TREASURY NOTES -- 9.6%
6.125% ............. 08/15/07 730 714
6.250% ............. 10/31/01 7,000 6,953
6.500% ............. 05/15/05 4,000 3,988
------------
11,655
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $11,671) ............................. 11,655
------------
NUMBER VALUE
OF SHARES (000)
--------- -----
CASH EQUIVALENT -- 1.7%
Goldman Sachs Financial Square
Government Money Market
Fund ............................ 2,104,880 $ 2,105
------------
TOTAL CASH EQUIVALENT
(Cost $2,105) .............................. 2,105
------------
TOTAL INVESTMENTS -- 99.8%
(Cost $123,839) ............................ 120,925
============
OTHER ASSETS AND LIABILITIES,
NET -- 0.2% ................................ 204
------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 12,286,919 outstanding shares of
beneficial interest ........................ 123,975
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 126,252 outstanding shares of
beneficial interest ........................ 1,313
Portfolio Shares of Class B
(unlimited authorization -- no par value)
based on 16,532 outstanding shares of
beneficial interest ........................ 162
Portfolio Shares of Class C
(unlimited authorization -- no par value)
based on 8,604 outstanding shares of
beneficial interest ........................ 84
Distributions in excess of net investment
income ..................................... (74)
Accumulated net realized loss on
investments ................................ (1,417)
Net unrealized depreciation on
investments ................................ (2,914)
------------
TOTAL NET ASSETS -- 100.0% .................... $ 121,129
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ........................... $9.74
============
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A ................. $9.75
============
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.75 / 95.25%) .......... $10.24
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B ................. $9.75
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C ................. $9.75
============
-------------------------
CL--CLASS
See Accompanying Notes
89
<PAGE>
STATEMENT OF NET ASSETS
ARMADA INTERMEDIATE BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
CORPORATE BONDS -- 33.5%
BANKS -- 1.2%
First Union
6.950% ............. 11/01/04 $ 3,375 $ 3,261
Huntington National
7.625% ............. 01/15/03 500 494
------------
3,755
------------
CONSULTING SERVICES -- 1.4%
Comdisco
6.000% ............. 01/30/02 4,210 4,063
------------
ELECTRICAL SERVICES -- 2.5%
Western Resources
6.875% ............. 08/01/04 9,110 7,652
------------
FINANCIAL SERVICES -- 1.7%
Ikon Capital
6.730% ............. 06/15/01 5,000 4,887
US Leasing International
6.625% ............. 05/15/03 300 291
------------
5,178
------------
INSURANCE -- 2.6%
Anthem Insurance# (B)
9.125% ............. 04/01/10 6,000 5,453
Conseco
8.750% ............. 02/09/04 3,000 2,070
Saint Paul
6.170% ............. 01/15/01 300 297
------------
7,820
------------
LEISURE -- 1.3%
Hasbro
7.950% ............. 03/15/03 3,835 3,815
------------
METAL PROCESSORS & FABRICATION -- 1.7%
Precision Castparts (B)
8.750% ............. 03/15/05 5,000 4,962
------------
METALS & MINING -- 1.0%
Crown Cork & Seal
6.750% ............. 12/15/03 3,300 3,123
------------
PETROLEUM REFINING -- 1.8%
Sunoco
7.125% ............. 03/15/04 5,490 5,325
------------
PRINTING & PUBLISHING -- 1.2%
Scholastic
7.000% ............. 12/15/03 3,600 3,487
------------
CORPORATE BONDS -- CONTINUED
REAL ESTATE INVESTMENT TRUSTS -- 7.4%
Arden Realty (B)
8.875% ............. 03/01/05 $ 6,675 $ 6,508
EOP Operating
8.375% ............. 03/15/06 1,950 1,926
Federal Realty Investors Trust
6.990% ............. 03/10/06 1,550 1,398
Prime Property Funding,
Series II (B)
6.800% ............. 08/15/02 5,180 5,024
7.000% ............. 08/15/04 625 593
United Dominion Realty
8.625% ............. 03/15/03 6,760 6,698
------------
22,147
------------
RETAIL -- 3.1%
J.C. Penney
6.500% ............. 06/15/02 3,470 3,253
7.600%# ............ 04/01/07 7,175 6,027
------------
9,280
------------
RUBBER & PLASTIC -- 1.9%
Armstrong World
6.350% ............. 08/15/03 6,740 5,847
------------
STEEL & STEEL WORKS -- 0.5%
Worthington Industries
6.700% ............. 12/01/09 1,800 1,627
------------
TAXABLE MUNICIPAL OBLIGATION -- 0.1%
Westview School (C)
6.400% ............. 09/01/05 200 185
------------
TELEPHONE & TELECOMMUNICATION -- 0.2%
AT&T
5.625% ............. 03/15/04 500 467
------------
TRUCKING -- 2.3%
JB Hunt Transport
6.000% ............. 12/12/00 3,200 3,184
Ryder System
6.600% ............. 11/15/05 4,000 3,620
------------
6,804
------------
WHOLESALE -- 1.6%
Universal
8.500% ............. 02/28/03 4,725 4,812
------------
TOTAL CORPORATE BONDS
(Cost $105,834) ............................ 100,349
------------
See Accompanying Notes
90
<PAGE>
STATEMENT OF NET ASSETS
ARMADA INTERMEDIATE BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
ASSET BACKED SECURITIES -- 27.8%
Americredit Receivables Trust,
Series 2000-A, Cl A3
7.150% ............. 08/05/04 $ 3,610 $ 3,598
Amresco Residential Mortgage,
Series 1997-1, Cl B1A (A)
4.710% ............. 03/25/27 2,432 2,380
Amresco Securitized Net Interest
Margin, Series 1999-1A, Cl A
9.100% ............. 09/27/29 3,085 2,838
Case Equipment Loan Trust,
Series 1998-C, Cl A4
5.610% ............. 04/15/05 7,950 7,719
Contimortgage Home Equity
Loan Trust, Series 1998-2, Cl A6
6.360% ............. 11/15/19 3,575 3,396
Contimortgage Home Equity Loan
Trust, Series 1999-3, Cl A5
7.360% ............. 10/25/26 4,550 4,349
Green Tree Recreational Equipment,
Series 1997-D, Cl A1
6.900% ............. 03/15/29 5,058 4,961
IMC Home Equity Loan Trust,
Series 1997-7, Cl A5
6.760% ............. 10/20/20 4,220 4,117
Oakwood Mortgage Investors,
Series 1997-D, Cl A3
6.500% ............. 02/15/28 5,000 4,906
Option One Mortgage Loan Trust,
Series 2000-1, Cl M1
6.320% ............. 04/25/30 6,653 6,646
Orix Credit Alliance Owner Trust,
Series 2000-A, Cl A3
7.120% ............. 05/15/04 4,470 4,439
Pegasus Aviation Lease Securitization,
Series 1999-1, Cl A1 (B)
6.300% ............. 03/25/29 2,211 2,109
Pennsylvania Power & Light Transition,
Series 1999-1, Cl A6
6.960% ............. 12/26/07 3,310 3,222
Providian Master Trust,
Series 1999-2, Cl A
6.600% ............. 04/16/07 4,800 4,710
Providian Master Trust,
Series 2000-1, Cl A
7.490% ............. 08/17/09 4,755 4,728
Residential Funding Mortgage
Obligation, Series 1999-HI1, Cl A3
6.310% ............. 08/25/13 7,800 7,596
Residential Funding Mortgage
Obligation, Series 1999-HI6, Cl A3
7.340% ............. 08/25/12 3,250 3,197
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
ASSET BACKED SECURITIES -- CONTINUED
The Money Store Home Equity Trust,
Series 1993-C, Cl A3
5.750% ............. 10/15/22 $ 2,875 $ 2,781
UCFC Manufactured Housing Contract,
Series 1997-3, Cl A2
6.360% ............. 02/15/11 2,020 1,997
Union Acceptance,
Series 1999-B, Cl A4
6.110% ............. 09/08/05 3,885 3,780
------------
TOTAL ASSET BACKED SECURITIES
(Cost $85,209) ............................. 83,469
------------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 11.4%
Credit Suisse First Boston Mortgage
Securities, Series 1997-C1, Cl A1C
7.240% ............. 04/20/07 3,000 2,906
FHLMC Structured Pass Through,
Series T-8, Cl A5
7.000% ............. 06/15/15 2,970 2,936
Housing Securities,
Series 1994-I, Cl A15
7.500% ............. 03/25/09 2,952 2,910
Merrill Lynch Mortgage Investors,
Series 1996-C1, Cl A1
7.150% ............. 04/25/28 3,031 2,985
Midland Realty Acceptance,
Series 1996-C2, Cl A2
7.233% ............. 01/25/29 6,240 6,045
Norwest Asset Securities,
Series 1998-18, Cl A4
6.250% ............. 08/25/28 6,380 5,561
Prudential Securities Secured
Financing, Series 1998-C1,
Cl A1B
6.506% ............. 07/15/08 4,045 3,712
Prudential Securities Secured
Financing, Series 1999-NRF1,
Cl A2
6.480% ............. 01/15/09 3,000 2,737
Residential Asset Securitization
Trust, Series 2000-A3, Cl A2
8.000% ............. 05/25/30 4,420 4,388
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $35,487) ............................. 34,180
------------
See Accompanying Notes
91
<PAGE>
STATEMENT OF NET ASSETS
ARMADA INTERMEDIATE BOND FUND
================================================================================
MAY 31, 2000
NUMBER OF
SHARES/ VALUE
MATURITY PAR (000) (000)
-------- --------- -----
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 4.9%
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 0.0%
8.250% ................ 06/01/06 $ 14 $ 14
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.7%
6.500% ................ 01/01/28 2,402 2,231
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 2.9%
6.500% ................ 06/15/29 49 46
7.500% ..... 01/15/30 - 02/15/30 8,697 8,546
9.000% ................ 05/15/16 31 32
------------
8,624
------------
UNITED STATES DEPARTMENT OF VETERAN AFFAIRS -- 1.3%
6.500% ................ 12/15/24 4,220 3,888
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost $15,045) ............................. 14,757
------------
U.S. TREASURY OBLIGATIONS -- 20.5%
U.S. TREASURY INFLATIONARY PROTECTION SECURITY -- 7.1%
3.625%# .... 01/15/08 - 04/15/28 22,190 21,185
------------
U.S. TREASURY NOTES -- 13.4%
6.125%# ............... 08/15/07 17,715 17,325
6.250%# ............... 10/31/01 22,155 22,006
6.500%# ............... 05/15/05 940 937
------------
40,268
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $61,537) ............................ 61,453
------------
CASH EQUIVALENT -- 1.3%
Fidelity Domestic Money
Market Fund ..................... 3,749,340 3,749
------------
TOTAL CASH EQUIVALENT
(Cost $3,749) .............................. 3,749
------------
TOTAL INVESTMENTS -- 99.4%
(Cost $306,861) ............................ 297,957
============
OTHER ASSETS AND LIABILITIES,
NET -- 0.6% ................................ 1,839
------------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 29,782,786 outstanding shares of
beneficial interest ........................ $ 314,774
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 390,590 outstanding shares of
beneficial interest ........................ 4,433
Portfolio Shares of Class B
(unlimited authorization -- no par value)
based on 73,800 outstanding shares of
beneficial interest ........................ 782
Portfolio Shares of Class C
(unlimited authorization -- no par value)
based on 19,260 outstanding shares of
beneficial interest ........................ 191
Undistributed net investment income ......... 8
Accumulated net realized loss on
investments ................................ (11,488)
Net unrealized depreciation on
investments ................................ (8,904)
------------
TOTAL NET ASSETS -- 100.0% .................... $ 299,796
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ........................... $9.90
============
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A ................. $9.92
============
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.92 / 95.25%) .......... $10.41
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B ................. $9.93
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C ................. $9.93
============
--------------------------------
# SECURITY FULLY OR PARTIALLY ON LOAN.
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MAY 31, 2000.
(B) PRIVATE PLACEMENT SECURITY.
(C) CERTIFICATE OF PARTICIPATION.
CL--CLASS
FHLMC--FEDERAL HOME LOAN MORTGAGE CORPORATION
See Accompanying Notes
92
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TOTAL RETURN ADVANTAGE FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
CORPORATE BONDS -- 34.4%
AGRICULTURE -- 0.8%
Cargill (A)
6.150% ............. 02/25/08 $ 3,050 $ 2,674
------------
AIR TRANSPORTATION -- 0.8%
Delta Air Lines
8.300% ............. 12/15/29 1,545 1,307
Federal Express
6.720% ............. 01/15/22 1,667 1,498
------------
2,805
------------
AUTOMOTIVE -- 2.6%
Daimler Chrysler
7.125% ............. 03/01/02 2,850 2,836
Ford Motor Credit
6.375% ............. 02/01/29 3,125 2,516
6.550% ............. 09/10/02 750 733
7.375% ............. 10/28/09 2,625 2,505
------------
8,590
------------
BANKS -- 5.6%
BankAmerica
7.875% ............. 12/01/02 3,600 3,609
Chase Manhattan
6.375% ............. 02/15/08 3,200 2,896
Citicorp
7.125% ............. 09/01/05 4,000 3,865
First Union
7.125% ............. 10/15/06 4,400 4,185
Fleet Financial
6.375% ............. 05/15/08 1,175 1,058
6.500% ............. 03/15/08 2,775 2,508
Nationsbank
7.000% ............. 09/15/01 815 808
------------
18,929
------------
BROKERAGE -- 1.1%
Lehman Brothers
6.625% ............. 04/01/04 3,800 3,582
------------
CABLE & MEDIA -- 1.0%
Time Warner Entertainment
10.150% ............. 05/01/12 3,080 3,458
------------
CHEMICAL & ALLIED PRODUCTS -- 0.8%
Monsanto
6.600% ............. 12/01/28 3,090 2,639
------------
CONSULTING SERVICES -- 1.0%
CSC Enterprises (A)
6.500% ............. 11/15/01 3,365 3,330
------------
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
CORPORATE BONDS -- CONTINUED
CONSUMER FINANCE -- 0.9%
Household Finance
5.875% ............. 02/01/09 $ 3,400 $ 2,886
------------
DEFENSE -- 0.7%
Raytheon
5.950% ............. 03/15/01 2,500 2,469
------------
INSURANCE -- 3.0%
Lumbermans Mutual Casualty (A)
8.300% ............. 12/01/37 700 534
Metropolitan Life (A)
7.000% ............. 11/01/05 5,860 5,604
Nationwide (A)
9.875% ............. 02/15/25 4,000 3,986
------------
10,124
------------
OIL & GAS -- 1.3%
Atlantic Richfield
9.875% ............. 03/01/16 1,900 2,290
Conoco
6.950% ............. 04/15/29 2,550 2,254
------------
4,544
------------
REAL ESTATE INVESTMENT TRUSTS -- 0.5%
Mack-Cali Realty
7.000% ............. 03/15/04 1,650 1,559
------------
RETAIL -- 1.5%
Safeway
7.250% ............. 09/15/04 2,420 2,356
Target
7.500% ............. 02/15/05 2,700 2,690
------------
5,046
------------
SPECIALTY CHEMICALS -- 1.7%
Engelhard
7.000% ............. 08/01/01 5,600 5,558
------------
TECHNOLOGY -- 0.9%
Applied Material
7.125% ............. 10/15/17 3,475 3,056
------------
TELEPHONE & TELECOMMUNICATION -- 4.4%
GTE Northwest
5.550% ............. 10/15/08 2,600 2,213
Sprint Capital
6.875% ............. 11/15/28 5,410 4,551
Telephone & Data Systems
7.000% ............. 08/01/06 5,500 5,101
Worldcom
6.400% ............. 08/15/05 3,100 2,910
------------
14,775
------------
See Accompanying Notes
93
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TOTAL RETURN ADVANTAGE FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
CORPORATE BONDS -- CONTINUED
UTILITIES-ELECTRIC -- 2.3%
Consolidated Edison
6.450% ............. 12/01/07 $ 3,350 $ 3,049
Pennsylvania Power & Light
6.125% ............. 05/01/01 3,550 3,501
Puget Sound Energy
6.740% ............. 06/15/18 1,525 1,316
------------
7,866
------------
YANKEE -- 3.5%
Ahold Financial
6.250% ............. 05/01/09 4,200 3,644
City of Naples
7.520% ............. 07/15/06 4,002 3,956
Quebec Province
8.625% ............. 01/19/05 3,875 4,022
------------
11,622
------------
TOTAL CORPORATE BONDS
(Cost $124,067) ............................ 115,512
------------
ASSET BACKED SECURITIES -- 29.6%
COMMERCIAL MORTGAGE -- 9.6%
Bear Stearns Commercial Mortgage
Securities, Series 1998-C1, Cl A2
6.440% ............. 06/16/08 5,000 4,588
Bear Stearns Commercial Mortgage
Securities, Series 1999-C1, Cl A2
6.020% ............. 02/14/09 3,105 2,759
First Union Lehman Brothers Trust,
Series 1998, Cl A2
6.560% ............. 11/18/08 8,630 7,987
Morgan Stanley Capital,
Series 1999-WF1, Cl A2
6.210% ............. 09/15/08 10,320 9,323
Nationslink Funding,
Series 1999-1, Cl A2
6.316% ............. 11/20/08 8,375 7,647
------------
32,304
------------
CREDIT CARDS -- 9.6%
Discover Card Master Trust,
Series 1999-6, Cl A
6.850% ............. 01/15/05 16,454 16,006
MBNA Master Credit Card Trust,
Series 1997-F, Cl A
6.600% ............. 11/15/04 4,405 4,335
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
ASSET BACKED SECURITIES -- CONTINUED
CREDIT CARDS -- CONTINUED
MBNA Master Credit Card Trust,
Series 1999-B, Cl C (A)
6.650% ............. 08/15/11 $ 2,780 $ 2,456
MBNA Master Credit Card Trust,
Series 1999-J, Cl B
7.400% ............. 02/15/12 2,200 2,135
Sears Credit, Series 1999-3, Cl A
6.450% ............. 11/17/09 7,635 7,293
------------
32,225
------------
HOME EQUITY -- 0.8%
Merrill Lynch Mortgage Investors,
Series 1998-GN1, Cl A1
7.110% ............. 08/25/27 2,684 2,637
------------
MANUFACTURED HOUSING -- 0.7%
Green Tree Financial,
Series 1997-5, Cl A5-MH
6.620% ............. 05/15/29 2,535 2,453
------------
MISCELLANEOUS-- 8.9%
Comed Trust Financial Stranded Asset,
Series 1998-1, Cl A6
5.630% ............. 06/25/09 7,365 6,636
Nissan Auto Lease, Cl-A3
7.800% ............. 05/20/03 6,980 7,029
PNC Student Loan Trust I,
Series 1997-2, Cl A6
6.572% ............. 01/25/04 2,870 2,812
Peco Energy,
Series 2000-A, Cl A-4
7.650% ............. 03/01/10 7,850 7,732
Railcar Leasing,
Series 1997-1, Cl A2-EQ (A)
7.125% ............. 01/15/13 5,895 5,682
------------
29,891
------------
TOTAL ASSET BACKED SECURITIES
(Cost $102,609) ............................ 99,510
------------
MORTGAGE PASS THROUGH OBLIGATIONS -- 0.1%
Thirty-Seventh FHA Insurance Project
7.430% ............. 05/01/22 413 406
------------
TOTAL MORTGAGE PASS THROUGH
OBLIGATIONS
(Cost $413) ................................ 406
------------
See Accompanying Notes
94
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TOTAL RETURN ADVANTAGE FUND
================================================================================
MAY 31, 2000
NUMBER OF
SHARES/ VALUE
MATURITY PAR (000) (000)
-------- --------- -----
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 0.0%
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 0.0%
7.500% ............... 12/01/10 $ 59 $ 59
8.750% ............... 05/01/08 3 3
------------
62
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 0.0%
10.500% ............... 11/15/00 2 2
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost $62) ................................. 64
------------
U.S. TREASURY OBLIGATIONS -- 33.0%
U.S. TREASURY BONDS -- 14.6%
7.500%# .............. 11/15/16 18,135 20,067
8.125%# .............. 08/15/21 24,105 28,890
------------
48,957
------------
U.S. TREASURY NOTES -- 18.4%
5.375% ............... 06/30/03 6,650 6,419
5.875%# .............. 11/30/01 49,920 49,300
6.500%# .... 05/15/05 - 08/15/05 5,090 5,069
7.250%# .............. 05/15/04 1,160 1,183
------------
61,971
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $111,192) ............................ 110,928
------------
CASH EQUIVALENT -- 1.9%
Fidelity Domestic Money Market
Fund ............................ 6,421,843 6,422
------------
TOTAL CASH EQUIVALENT
(Cost $6,422) .............................. 6,422
------------
TOTAL INVESTMENTS -- 99.0%
(Cost $344,765) ............................ 332,842
============
OTHER ASSETS AND LIABILITIES,
NET -- 1.0% ............................... 3,220
------------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 34,909,345 outstanding shares of
beneficial interest ........................ $ 351,066
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 531,780 outstanding shares of
beneficial interest ........................ 5,445
Portfolio Shares of Class B
(unlimited authorization -- no par value)
based on 56 outstanding shares of
beneficial interest 1
Distributions in excess of net investment
income (151)
Accumulated net realized loss on
investments (8,376)
Net unrealized depreciation on
investments (11,923)
------------
TOTAL NET ASSETS -- 100.0% $ 336,062
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I $9.48
============
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $9.47
============
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.47 / 95.25%) $9.94
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B $9.50
============
------------------------------------------------
# SECURITY FULLY OR PARTIALLY ON LOAN.
(A) PRIVATE PLACEMENT SECURITY
CL--CLASS
See Accompanying Notes
95
<PAGE>
STATEMENT OF NET ASSETS
ARMADA NATIONAL TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- 97.1%
ALASKA -- 0.1%
Alaska Housing Finance Agency
(RB) (MBIA) Series A
4.950% ............ 06/01/02 $ 70 $ 70
5.050% ............ 12/01/03 65 65
------------
135
------------
ARIZONA -- 1.0%
Maricopa County Industrial
Development Authority,
Madera Pointe Apartments
Project (RB) (FSA) Series A
5.300% ............ 06/01/06 1,000 990
------------
ARKANSAS -- 0.2%
Pulaski County, Health Facilities
Board, Catholic Health Initiatives (RB)
Series A
4.150% ............ 12/01/00 250 249
------------
CALIFORNIA -- 1.0%
San Francisco, City & County
(GO) (FGIC) Series 1
5.000% ............ 06/15/10 1,000 992
------------
COLORADO -- 1.0%
Colorado Water Reservation
Power Development Authority (RB)
Series A
6.300% ............ 09/01/14 1,000 1,035
------------
CONNECTICUT -- 1.0%
Connecticut State (GO) Series B
5.500% ............ 03/15/11 1,000 1,007
------------
DELAWARE -- 1.3%
Delaware Transportation Authority,
Transportation System Revenue
(RB) (AMBAC)
6.000% ............ 07/01/06 1,250 1,302
------------
FLORIDA -- 6.4%
Dade County School District (GO)
6.500% ............ 02/15/06 1,630 1,732
Florida Department of
Transportation (GO)
6.000% ............ 07/01/07 1,000 1,045
Gulf Breeze, Capital Funding
(RB) (MBIA) Series B
5.300% ............ 12/01/17 1,000 946
Jacksonville, Excise Tax Revenue (RB)
6.500% ............ 10/01/08 2,600 2,727
------------
6,450
------------
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
GEORGIA -- 3.3%
Fulton County, Housing Authority,
Single Family (RB) (GNMA)
Series A
5.100% ............ 03/01/03 $ 30 $ 30
5.300% ............ 03/01/05 30 30
Georgia (GO)
6.600% ............ 04/01/05 2,000 2,130
Georgia (GO) Series B
6.650% ............ 03/01/09 1,000 1,094
------------
3,284
------------
ILLINOIS -- 1.0%
Illinois, Sales Tax (RB) Series Q
6.000% ............ 06/15/12 1,000 1,037
------------
INDIANA -- 4.2%
East Chicago, Elementary School
Building (RB) (A)
6.250% ............ 01/05/16 1,750 1,789
Hamilton School Building,
First Mortgage (RB) (A)
4.400% ............ 07/15/01 100 99
Hammond Multi-School
Building (RB) Series B
6.000% ............ 01/15/18 1,000 1,014
IPS School Building Corporation,
Prerefunded 07/15/04 @102 (RB)
6.150% ............ 01/15/16 1,200 1,264
------------
4,166
------------
MARYLAND -- 2.1%
Montgomery County (GO)
Series A
5.700% ............ 07/01/05 1,000 1,029
Prince Georges County
(GO) (MBIA) Series A
6.000% ............ 03/15/06 1,000 1,044
------------
2,073
------------
MASSACHUSETTS -- 5.2%
Massachusetts Bay Transportation
Authority (RB) Series A
5.750% ............ 03/01/18 655 645
Massachusetts Bay Transportation
Authority, General Transportation
System (RB) (A) Series A
5.800% ............ 03/01/11 1,000 1,027
See Accompanying Notes
96
<PAGE>
STATEMENT OF NET ASSETS
ARMADA NATIONAL TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
MASSACHUSETTS -- CONTINUED
Massachusetts Bay Transportation
Authority, Prerefunded
03/01/05 @ 102 (RB) Series A
5.750% ............. 03/01/05 $ 2,385 $ 2,483
Massachusetts
(GO) (FGIC) Series A
5.750% ............. 08/01/08 1,000 1,031
------------
5,186
------------
MICHIGAN -- 10.7%
Detroit Local Development Finance
Authority (RB) Series A
5.500% ............. 05/01/03 1,065 1,070
Grand Rapids Community College
(GO) (MBIA) (A)
5.900% ............. 05/01/03 2,000 2,072
Michigan Municipal Bond
Authority (RB)
6.000% ............. 10/01/07 2,000 2,090
Michigan State Strategic Fund
Limited Obligation, Consumers
Power Company (RB)
5.800% ............. 06/15/10 2,000 2,030
Michigan Underground Storage
Tank (RB) Series I
6.000% ............. 05/01/04 2,000 2,060
Redford School District
(GO) (AMBAC) Series I
5.500% ............. 05/01/06 1,315 1,336
------------
10,658
------------
MINNESOTA -- 1.2%
Minnesota (GO)
6.000% ............. 05/01/06 1,000 1,044
Minnesota Housing Finance
Agency, Residential Housing (RB)
4.750% ............. 07/01/01 200 200
------------
1,244
------------
MISSOURI -- 1.6%
Kansas City (GO)
6.000% ............. 02/01/04 1,535 1,581
------------
NEVADA -- 3.2%
Henderson (GO) (MBIA) Series A
6.500% ............. 06/01/07 1,000 1,071
Nevada Municipal Bond Bank
Project No 38-39 (GO) (ETM)
Series A
6.300% ............. 07/01/04 1,000 1,034
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
NEVADA -- CONTINUED
Nevada (GO) Series A-1
6.000% ............. 05/15/09 $ 1,000 $ 1,042
------------
3,147
------------
NEW JERSEY -- 2.1%
New Jersey State Transportation
Trust Fund (RB) (AMBAC)
Series B
6.000% ............. 06/15/05 2,000 2,075
------------
NEW YORK -- 2.2%
New York City, Municipal
Assistance Authority (RB)
Series J
6.000% ............. 07/01/04 1,000 1,032
New York Power Authority,
Prerefunded 01/01/10 @ 100 (RB)
7.000% ............. 01/01/10 1,000 1,122
------------
2,154
------------
OHIO -- 18.3%
Butler County Sewer Systems
(RB) (AMBAC)
4.600% ............. 12/01/09 1,540 1,434
4.600% ............. 12/01/10 1,520 1,395
Butler County
Transportation Improvement
(RB) (FSA) Series A
5.500% ............. 04/01/09 1,150 1,166
6.000% ............. 04/01/10 1,000 1,045
Cleveland, Non Tax Revenue
Cleveland Stadium (RB)
Series A
6.000% ............. 11/15/10 995 1,045
Cleveland, Non Tax Revenue
Cleveland Stadium (RB) (B)
Series B
0.000% ............. 12/01/15 820 325
Cleveland Public Power System
(RB) (MBIA) (B)
0.000% ............. 12/01/16 815 302
Cleveland Water Works
(RB) (MBIA) Series G
5.500% ............. 01/01/09 1,000 1,013
Hamilton County Hospital Facility,
Children's Hospital (RB) (MBIA)
Series G
5.375% ............. 05/15/13 1,100 1,070
See Accompanying Notes
97
<PAGE>
STATEMENT OF NET ASSETS
ARMADA NATIONAL TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Hudson Local School District
(GO) (FGIC) (B)
0.000% ............. 12/15/10 $ 1,000 $ 559
Ohio Housing Finance Agency,
Single Family Mortgage, (RB)
Prerefunded 01/15/13 @ 81.879
5.350% ............. 09/01/04 190 190
Ohio Public Facilities,
Development Authority
(RB) (B)
0.000% ............. 01/15/15 1,920 756
Ohio Public Facilities,
Higher Education (RB)
(AMBAC) Series II-A
4.250% ............. 12/01/07 1,000 940
Ohio Turnpike Commission
(RB) Series A
5.500% ............. 02/15/17 1,500 1,472
Ohio Turnpike Commission
(RB) (FGIC) Series A
5.500% ............. 02/15/18 1,000 975
5.625% ............. 06/01/06 2,000 2,045
Ohio Water Development Authority
(RB) (MBIA)
5.000% ............. 06/01/09 1,000 971
Wyoming City School District
(FGIC) Series B
5.750% ............. 12/01/15 740 756
5.750% 12/01/16 800 815
------------
18,274
------------
OREGON -- 1.5%
Lane County School District No 4j
Eugene (GO)
6.000% ............. 01/01/04 1,435 1,476
------------
PENNSYLVANIA -- 0.1%
Pennsylvania Higher Educational Facility
Authority, Philadelphia College
Osteopathic (RB)
4.450% ............. 12/01/01 100 99
------------
RHODE ISLAND -- 1.4%
Convention Center Authority,
Prerefunded 05/15/01 @ 102
(RB) (MBIA) Series A
6.700% ............. 05/15/01 1,310 1,358
------------
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
SOUTH CAROLINA -- 3.0%
Charleston County, Public
Improvement (GO)
6.000% ............. 09/01/09 $ 1,000 $ 1,050
South Carolina Public Service
Authority (RB) (FGIC) Series B
5.875% ............. 01/01/23 2,000 1,953
------------
3,003
------------
TENNESSEE -- 2.9%
Memphis (GO)
6.000% ............. 11/01/03 1,290 1,329
Nashville & Davidson County,
Metropolitan Government (GO)
6.000% ............. 12/01/10 1,500 1,577
------------
2,906
------------
TEXAS -- 6.6%
Conroe Independent School
District (GO) (A)
5.500% ............. 02/15/15 2,500 2,428
Harris County Toll Roads
Revenue (RB)
6.500% ............. 08/15/15 2,000 2,068
Plano Independent School District (GO) (A)
6.000% ............. 02/15/06 1,000 1,036
5.900% ............. 02/15/10 1,000 1,019
------------
6,551
------------
UTAH -- 4.2%
Intermountain Power Agency,
Power Supply (RB) (FSA)
Series F
6.250% ............. 07/01/09 2,000 2,115
Utah State (GO) Series E
5.500% ............. 07/01/04 2,000 2,033
------------
4,148
------------
VERMONT -- 2.0%
Vermont Municipal Bond Bank
Project (RB) Series 2
5.500% ............. 12/01/10 2,000 2,015
------------
VIRGINIA -- 1.0%
Richmond, Public Improvement,
Prerefunded 01/15/01 @ 102 (GO)
Series A
6.250% ............. 01/15/01 1,000 1,029
------------
See Accompanying Notes
98
<PAGE>
STATEMENT OF NET ASSETS
ARMADA NATIONAL TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
NUMBER OF
SHARES/ VALUE
MATURITY PAR (000) (000)
-------- --------- -----
MUNICIPAL BONDS -- CONTINUED
WASHINGTON -- 3.9%
King County Unlimited Tax (GO)
6.100% ............. 12/01/01 $ 1,000 $ 1,000
Seattle Water System Revenue (RB)
5.000% ............. 12/01/03 1,000 1,003
Washington (GO)
6.500% ............. 09/01/01 1,900 1,936
------------
3,939
------------
WISCONSIN -- 3.4%
Wisconsin, Prerefunded
05/01/02 @ 100 (GO) Series A
6.300% ............. 05/01/02 3,275 3,357
------------
TOTAL MUNICIPAL BONDS
(Cost $98,036) .............................. 96,920
------------
CASH EQUIVALENT -- 1.7%
Federated Tax-Free Money
Market Fund ..................... 1,727,146 1,727
------------
TOTAL CASH EQUIVALENT
(Cost $1,727) ............................... 1,727
------------
TOTAL INVESTMENTS -- 98.8%
(Cost $99,763) .............................. 98,647
============
OTHER ASSETS AND LIABILITIES,
NET -- 1.2% ................................. 1,220
------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 10,062,657 outstanding shares of
beneficial interest ......................... 98,400
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 420,467 outstanding shares of
beneficial interest ......................... 4,314
Portfolio Shares of Class B
(unlimited authorization -- no par value)
based on 23,559 outstanding shares of
beneficial interest ......................... 241
Portfolio Shares of Class C
(unlimited authorization -- no par value)
based on 11 outstanding shares of
beneficial interest ......................... (1)
Distributions in excess of net income ........ (11)
Accumulated net realized loss on
investments ................................. (1,960)
Net unrealized depreciation on
investments ................................. (1,116)
------------
TOTAL NET ASSETS -- 100.0% ..................... $ 99,867
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................ $9.50
============
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A .................. $9.54
============
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.54 / 95.25%) ........... $10.02
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B .................. $9.50
============
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C .................. $9.50
============
------------------------------------------------
(A) SECURITY IS BACKED BY A LETTER OF CREDIT BACKED BY A
MAJOR FINANCIAL INSTITUTION.
(B) ZERO COUPON BOND
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
ETM--ESCROW TO MATURITY
FGIC--FEDERAL GUARANTY INSURANCE COMPANY
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA--FEDERAL SECURITY ASSURANCE
GNMA--GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO--GENERAL OBLIGATION
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
RB--REVENUE BOND
See Accompanying Notes
99
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- 100.8%
OHIO -- 99.6%
Akron (GO)
6.000% ............. 12/01/12 $1,000 $ 1,042
Akron Economic
Development (RB) (MBIA)
5.750% ............. 12/01/09 1,680 1,735
6.000% ............. 12/01/12 935 979
Akron Sewer System
(RB) (MBIA)
5.650% ............. 12/01/08 560 573
Akron Waterworks
(RB) (FGIC)
5.150% ............. 03/01/01 500 502
Akron Waterworks
(RB) (MBIA)
4.900% ............. 03/01/08 1,500 1,455
Allen County
(GO) (AMBAC)
4.950% ............. 12/01/04 500 497
Ashland City School District
(GO) (AMBAC)
4.950% ............. 12/01/07 345 339
5.000% ............. 12/01/08 250 245
5.100% ............. 12/01/09 245 241
Avon Lake City School District
(GO) (AMBAC)
5.800% ............. 12/01/12 1,000 1,021
Avon Lake City School District
(GO) (FGIC)
5.750% ............. 12/01/14 2,165 2,195
Bay Village City School District,
Prerefunded 12/01/00 @ 102 (GO)
7.350% ............. 12/01/11 200 206
Beavercreek Local School
District (GO) (FGIC)
5.250% ............. 12/01/07 1,130 1,133
Belefontaine School City
District (GO)
5.750% ............. 12/01/18 505 502
Big Walnut Local School
District (AMBAC)
6.900% ............. 06/01/00 235 235
7.000% ............. 06/01/01 220 225
Brown County (GO) (AMBAC)
5.200% ............. 12/01/04 455 457
Butler County, Sewer Systems,
Prerefunded 12/01/02 @101
(RB) (AMBAC)
6.000% ............. 12/01/04 500 517
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Celina City School District
(GO) (FGIC)
5.250% ............. 12/01/20 $1,750 $ 1,612
Centerville City School District
(GO) (FGIC)
5.500% ............. 12/01/07 500 509
Centerville City School District
(GO) (MBIA)
5.650% ............. 12/01/18 500 491
Chesapeake Union,
Exempted Village School
District (GO) (AMBAC)
6.250% ............. 12/01/22 1,000 1,026
Clermont County,
Waterworks (RB) (AMBAC)
5.300% ............. 12/01/05 500 504
Cleveland Heights (GO)
5.400% ............. 12/01/00 900 903
Cleveland Non Tax Revenue,
Cleveland Stadium
(RB) (AMBAC) (B) Series A
0.000% ............. 12/01/09 825 484
0.000% ............. 12/01/18 820 264
Cleveland Non Tax Revenue,
Cleveland Stadium
(RB) (AMBAC) (B) Series B
0.000% ............. 12/01/07 810 541
0.000% ............. 12/01/10 815 447
0.000% ............. 12/01/13 815 374
0.000% ............. 12/01/19 815 244
Cleveland Waterworks
(RB) (MBIA) Series G
5.400% ............. 01/01/06 500 505
Cleveland Waterworks
(RB) (MBIA) Series H
5.625% ............. 01/01/13 3,000 3,015
Cleveland Waterworks
(RB) Series F-92, Class A
5.900% ............. 01/01/01 500 503
Cleveland Waterworks
(RB) Series H
6.000% ............. 01/01/06 2,000 2,072
Cleveland Waterworks,
Prerefunded 01/01/02 @ 102
(RB) (AMBAC) Series F-92,
Class A
6.500% ............. 01/01/02 1,000 1,042
See Accompanying Notes
100
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Cleveland, Regional Sewer
District Water, Prerefunded
05/15/04 @ 100 (RB)
6.750% ............. 04/01/07 $ 600 $ 635
Columbus (GO)
5.300% ............. 05/01/03 1,000 1,009
Columbus City, School District,
Prerefunded 12/01/00 @ 102
(GO) (FGIC) Series A
7.000% ............. 12/01/11 100 103
Columbus City, School District,
Prerefunded 12/01/02 @ 102
(GO) (FGIC)
6.650% ............. 12/01/02 900 952
Columbus, Sewer (RB)
6.200% ............. 06/01/04 1,500 1,562
Columbus, Water System (GO)
5.800% ............. 02/15/01 500 504
Columbus, Water System (RB)
6.000% ............. 11/01/02 330 341
Cuyahoga County (GO)
5.650% ............. 05/15/18 500 490
Cuyahoga County Economic
Develompment Authority
(RB) Series B
5.300% ............. 12/01/29 1,000 962
Cuyahoga County Hospital
Authority, Cleveland Clinic
Foundation (RB) Series C
6.000% ............. 11/15/03 890 910
6.125% ............. 11/15/04 840 865
Cuyahoga County Hospital
Authority, University Hospital
System Health Project
(RB) (MBIA) Series A
6.000% ............. 01/15/06 1,000 1,031
Cuyahoga County Hospital
Authority, University Hospital
System Health Project (RB)
Series B
6.000% ............. 01/15/03 400 407
Cuyahoga County Hospital
Autority, University Hospital
System Health Project
(RB) (MBIA) Series A
5.250% ............. 01/15/08 2,000 1,985
Cuyahoga County, Prerefunded
10/01/01 @ 102 (GO)
7.000% ............. 10/01/13 100 104
Dayton Airport (RB) (AMBAC)
5.400% ............. 12/01/06 1,000 1,011
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Delaware City School
District (GO) (FGIC)
5.250% ............. 12/01/06 $ 770 $ 774
Delaware County (GO)
5.250% ............. 12/01/06 500 504
Delaware County (GO)
Callable 12/01/10 @101
6.000% ............. 12/01/13 575 594
6.000% ............. 12/01/12 545 568
Delphos, Sewer System,
Prerefunded 09/01/00 @ 102
(RB) (FSA)
7.200% ............. 09/01/10 200 205
Forest Hills Local School
District (GO) (MBIA)
6.000% ............. 12/01/08 1,210 1,272
6.000% ............. 12/01/09 830 873
Franklin County (GO)
5.050% ............. 12/01/05 2,000 1,997
5.450% ............. 12/01/09 1,000 1,007
5.500% ............. 12/01/11 745 748
Franklin County, Prerefunded
12/01/01 @ 102 (GO)
6.000% ............. 12/01/03 500 517
6.300% ............. 12/01/09 250 259
Franklin County Hospital
Authority Children's
Hospital (RB) Series A
6.000% ............. 11/01/06 1,035 1,061
Franklin County Hospital
Authority, Doctors
Healthcare (RB) Series A
4.750% ............. 12/01/03 1,810 1,701
Franklin County Hospital
Authority, US Health Group
(RB) (A) Series B
4.500% ............. 12/01/20 1,000 1,000
Greene County Water Works
Systems (RB) (AMBAC)
5.300% ............. 12/01/05 500 504
Hamilton City School District
(GO) Series A
6.150% ............. 12/01/13 1,000 1,051
Hamilton County (GO)
5.000% ............. 12/01/08 675 664
5.100% ............. 12/01/11 1,025 997
5.125% ............. 12/01/08 1,000 992
5.500% ............. 12/01/07 240 245
5.750% ............. 12/01/01 250 253
See Accompanying Notes
101
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Hamilton County Sewer System
(RB) (ETM) Series A
6.300% ............. 12/01/01 $ 35 $ 36
Hamilton County Sewer System
(RB) (FGIC) Series A
5.000% ............. 12/01/17 1,000 896
Hamilton County Sewer System
(RB) Series A
6.200% ............. 12/01/00 1,000 1,008
6.300% ............. 12/01/01 65 66
Hancock County (GO)
5.750% ............. 12/01/16 500 502
Hilliard City School District
(GO) (FGIC)
6.150% ............. 12/01/01 625 637
Hilliard City School District,
Prerefunded 12/01/01 @ 102 (GO)
5.900% ............. 12/01/04 1,000 1,032
Holmesville Sewer Authority
(RB) (A)
5.550% ............. 03/01/02 1,055 1,058
Hudson Local School District
(GO) (FGIC)
5.000% ............. 12/15/02 500 502
Kenston Local School
District (GO)
5.550% ............. 12/01/03 500 509
Kent State University, General
Receipts (RB) (AMBAC)
6.150% ............. 05/01/04 250 260
Kettering, Prerefunded
12/01/00 @ 102 (GO)
7.200% ............. 12/01/02 480 495
Lakewood (GO)
4.900% ............. 12/01/11 1,070 1,004
Lakewood, Prerefunded
12/01/02 @ 102 (GO)
6.500% ............. 12/01/02 1,500 1,579
Lakota Local School District
(GO) (AMBAC)
5.700% ............. 12/01/05 250 257
Lakota Local School District
(GO) (FGIC)
5.000% ............. 12/01/12 1,000 944
Lakota School District, Prerefunded
12/01/00 @ 101 (GO)
7.000% ............. 12/01/03 200 204
Licking County (GO) (FGIC)
7.000% ............. 12/01/02 100 105
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Loveland City School
District (GO)
6.000% ............. 12/01/00 $ 250 $ 252
Lucas County, Hospital,
Mercy Hospital (ETM) (RB)
6.000% ............. 09/01/04 140 140
Magnolia Waterworks (RB)
5.600% ............. 10/01/01 750 751
Mahoning Valley Water
Sanitation (RB)
7.750% ............. 05/15/14 485 537
Mansfield City School
District (GO)
6.250% ............. 12/01/07 1,000 1,066
6.250% ............. 12/01/09 1,000 1,071
Marysville Exempted
Village School District
(GO) (AMBAC)
5.100% ............. 12/01/04 500 501
Mason City School District
(GO) (FGIC)
5.200% ............. 12/01/08 865 862
Massillion Ohio (GO)
5.250% ............. 03/01/02 750 752
Massillon City School District,
Prerefunded 12/01/00 @ 102
(GO) (AMBAC)
6.950% ............. 12/01/03 300 309
7.000% ............. 12/01/04 150 155
Miami University General
Receipts (RB)
5.400% ............. 12/01/05 1,000 1,002
Miamisburg, Sewer System
(RB) (AMBAC)
5.000% ............. 11/15/08 500 491
Middleberg Heights Hospital
Revenue, Southwest
General (RB)
6.750% ............. 08/15/06 1,400 1,503
Middletown Ohio (GO) (FGIC)
5.750% ............. 12/01/12 650 665
5.750% ............. 12/01/13 640 650
Montgomery County (GO)
Series A
4.300% ............. 12/01/02 1,000 970
Montgomery County
Solid Waste (RB) (MBIA)
5.125% ............. 11/01/08 500 495
5.300% ............. 11/01/07 1,000 1,004
5.350% ............. 11/01/10 900 897
See Accompanying Notes
102
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Montgomery County Water
(RB) (AMBAC)
5.250% ............. 11/15/06 $ 500 $ 502
Montgomery County,
Catholic Health Initiatives (RB)
Series A
5.000% ............. 12/01/08 1,000 940
5.000% ............. 12/01/09 1,000 934
Montgomery County,
Sisters of Charity Health Care
(RB) (MBIA) Series A
6.500% ............. 05/15/08 300 311
Newark (GO) (AMBAC)
5.450% ............. 12/01/02 1,000 1,014
North Canton City School
District (GO) (AMBAC)
5.250% ............. 12/01/01 500 504
5.750% ............. 12/01/06 250 258
North Royalton City School
District (GO) (MBIA)
6.625% ............. 12/01/06 1,885 2,036
Northeast Ohio Regional Sewer
District Wastewater, Prerefunded
11/15/01 @ 101 (RB) (AMBAC)
6.400% ............. 11/15/03 250 257
Northeast Ohio Regional Sewer
District Wastewater, Prerefunded
11/01/01 @ 101 (RB) (AMBAC)
6.500% ............. 11/15/08 250 258
Northeast Ohio Regional Sewer
District Wastewater, Prerefunded
11/15/01 @ 101 (RB) (AMBAC)
6.500% ............. 11/15/01 500 516
Oak Hills Local School District (GO)
5.650% ............. 12/01/07 350 360
Ohio, Prerefunded
08/01/05 @ 102 (GO)
6.200% ............. 08/01/12 860 913
Ohio (GO) Series R
5.150% ............. 09/01/01 500 502
Ohio, Air Quality Development
Authority, Buckeye Power
Project (RB)
5.250% ............. 08/01/07 400 392
Ohio Building Authority (RB) (AMBAC)
Series A
5.500% ............. 04/01/14 1,500 1,479
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Ohio Building Authority Facilities,
Adult Correctional Building Fund
(RB) (AMBAC) Series A
6.000% ............. 04/01/06 $1,930 $ 2,002
6.125% ............. 10/01/09 1,300 1,360
Ohio Building Authority Facilities,
Highway Safety Building (RB) (MBIA)
Series A
5.400% ............. 10/01/02 250 253
Ohio Building Authority Facilities,
James Rhodes Project (RB)
Series A
5.900% ............. 06/01/00 500 500
Ohio Building Authority Facilities,
Juvenile Correctional Building (RB)
Series A
5.800% ............. 10/01/02 250 255
Ohio Building Authority Facilities,
State Arts Building (RB)
Series A
5.200% ............. 10/01/04 500 502
Ohio Capital Corporation For Housing,
Housing & Urban Development (RB)
Series D
5.350% ............. 02/01/09 650 630
Ohio Department of Administrative
Services (RB) (AMBAC)
5.000% ............. 12/15/12 1,210 1,137
Ohio Higher Educational Facility
(RB) (AMBAC) Series II-B
5.875% ............. 12/01/01 500 508
Ohio Higher Educational Facility (RB)
Series A
5.000% ............. 07/01/18 600 529
Ohio Higher Educational Facility,
Case Western Reserve University Project,
Prerefunded 10/01/00 @ 102 (RB)
Series B
7.125% ............. 10/01/14 60 62
Ohio Higher Educational Facility,
Case Western University (RB)
Series C
5.000% ............. 10/01/10 905 865
Ohio Higher Educational Facility,
Denison University Project (RB)
5.250% ............. 11/01/09 1,000 981
Ohio Higher Educational Facility,
University of Dayton (RB)
Series II-B
5.875% ............. 12/01/04 250 257
See Accompanying Notes
103
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Ohio Housing Financial Agency,
Single Family Mortgage (RB)
Series A
6.375% ............. 04/01/17 $ 70 $ 71
Ohio Housing Financial Agency,
Single Family Mortgage (RB)
Series F
7.400% ............. 03/01/05 35 36
7.400% ............. 09/01/05 30 31
7.600% ............. 09/01/16 95 97
Ohio Infrastructure Improvement (GO)
Series A
5.750% ............. 02/01/12 1,000 1,024
Ohio Public Facilities
Higher Education (RB) (AMBAC)
Series II-A
5.200% ............. 05/01/06 500 500
5.200% ............. 05/01/07 775 774
Ohio Public Facilities
Higher Education (RB) (AMBAC)
Series II-B
5.700% ............. 11/01/03 1,000 1,021
Ohio Public Facilities
Higher Education (RB)
Series II-A
5.500% ............. 12/01/00 500 502
Ohio Public Facilities
Mental Health (RB) (FSA)
Series II-A
5.000% ............. 12/01/02 1,500 1,500
Ohio State (GO)
5.000% ............. 08/01/00 500 500
5.200% ............. 08/01/08 1,000 997
6.600% ............. 09/01/03 150 157
Ohio State (GO) Series A
5.400% ............. 10/01/07 1,370 1,382
Ohio Turnpike Commission (RB)
Series A
6.000% ............. 02/15/07 4,100 4,264
Ohio University
General Receipts (RB)
Series A2
5.150% ............. 12/01/00 250 251
5.400% ............. 12/01/02 1,500 1,515
Ohio Water Development Authority
(RB) (AMBAC)
6.000% ............. 06/01/07 1,715 1,786
Ohio Water Development Authority,
Fresh Water (RB) (AMBAC)
5.400% ............. 12/01/04 510 516
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Ohio Water Development Authority,
Pollution Control Facilities (RB)
5.900% ............. 06/01/00 $ 500 $ 500
5.900% ............. 12/01/02 320 328
Ohio Water Development Authority,
Pure Water (RB) (AMBAC)
5.600% ............. 06/01/07 1,500 1,532
Ohio Water Development Authority,
Pure Water (RB) (AMBAC)
Series I
7.250% ............. 12/01/08 500 538
Ohio Water Development Authority,
Pure Water (RB) (MBIA)
5.500% ............. 06/01/01 200 202
5.500% ............. 12/01/01 1,000 1,011
5.550% ............. 06/01/04 1,000 1,016
5.750% ............. 12/01/05 500 512
Ohio Water Development Authority,
Safe Water (RB) (AMBAC)
6.000% ............. 12/01/06 1,075 1,119
Ontario Local School
District (GO) (FSA)
4.800% ............. 12/01/11 790 733
4.900% ............. 12/01/12 630 585
Ottawa County
(GO) (MBIA)
5.400% ............. 09/01/11 500 500
Parma City School
District (GO)
5.550% ............. 12/01/04 200 199
5.550% ............. 12/01/05 290 288
5.550% ............. 12/01/06 305 301
Parma City School
District (TAN)
4.600% ............. 12/01/03 1,360 1,309
4.600% ............. 12/01/04 1,360 1,297
Perrysburg Exempted
Village School District
(GO) (FSA) Series B
5.750% ............. 12/01/12 1,225 1,262
Portage County (GO)
5.100% ............. 12/01/12 2,500 2,388
6.000% ............. 12/01/03 915 945
Portage County, Hospital Facility
Authority, Robinson Memorial
(RB) (MBIA)
5.625% ............. 11/15/07 1,000 1,016
See Accompanying Notes
104
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Richland County (GO) (AMBAC)
5.200% ............. 12/01/08 $ 515 $ 513
Sandusky County, Hospital
Facility (RB)
4.900% ............. 01/01/05 500 462
Southwest Licking Local School
District (GO) (FGIC)
5.750% ............. 12/01/15 550 562
5.750% ............. 12/01/16 400 408
Springfield Local School
District (GO)
6.100% ............. 12/01/03 250 258
Stow City School District (GO)
9.125% ............. 12/01/06 580 699
Strongsville (GO)
5.900% ............. 12/01/15 1,575 1,605
Strongsville City School District
(GO) (MBIA)
5.150% ............. 12/01/08 1,000 994
5.200% ............. 12/01/09 670 665
Summit County (GO)
6.000% ............. 12/01/09 790 830
6.250% ............. 12/01/11 1,235 1,325
Toledo (GO)
7.375% ............. 12/01/01 100 104
Twin City Water & Sewer Distributions,
Ohio Water Source (RB)
5.700% ............. 10/01/01 2,500 2,506
University of Akron, General Receipts
(RB) (AMBAC)
6.000% ............. 01/01/07 800 835
University of Cincinnati, General Receipts
(RB) Series G
7.000% ............. 06/01/11 500 519
University of Cincinnati, General Receipts
(RB) Series R6
5.350% ............. 06/01/08 1,000 994
University of Cincinnati, General Receipts
(RB) Series T
5.500% ............. 06/01/11 1,110 1,098
University of Toledo General Receipts
(RB) (FGIC) Series A
5.300% ............. 06/01/01 175 176
5.750% ............. 12/01/08 1,950 1,987
Upper Arlington (GO)
6.200% ............. 12/01/01 270 275
Upper Arlington, City School District
(GO) (MBIA)
6.000% ............. 12/01/05 1,170 1,218
Vandalia (GO)
5.350% ............. 12/01/09 505 508
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Washington County, Hospital
Facilities, Marietta Area
Healthcare (RB) (FSA)
5.375% ............. 09/01/18 $1,500 $ 1,401
West Clermont Local School
District (GO) (AMBAC)
5.650% ............. 12/01/08 1,030 1,056
West Geauga Local School
District (GO) (AMBAC)
5.650% ............. 11/01/06 1,000 1,026
Westerville (GO)
5.250% ............. 12/01/12 1,205 1,179
5.250% ............. 12/01/13 1,600 1,554
Westlake (GO)
5.300% ............. 12/01/03 500 505
Westlake City School District (GO)
6.200% ............. 12/01/06 1,635 1,731
Wilmington City School District
(GO) (FGIC)
5.350% ............. 12/01/00 225 226
Worthington City School District
(GO) (FGIC)
5.800% ............. 12/01/01 1,200 1,218
5.850% ............. 12/01/02 500 512
Wright State University General
Receipts (RB) (AMBAC)
4.900% ............. 05/01/05 500 495
Wyoming City School District
(GO) (FGIC) Series B
5.750% ............. 12/01/13 135 139
5.750% ............. 12/01/14 690 706
5.750% ............. 12/01/17 400 406
------------
170,676
------------
PUERTO RICO -- 1.2%
Commonwealth of Puerto Rico,
Prerefunded 07/01/00 @ 102
(GO) (FGIC)
7.200% ............. 07/01/03 500 511
Puerto Rico, Electric Power Authority
(RB) (MBIA)
6.500% ............. 07/01/06 1,000 1,078
Puerto Rico, Multi-Family Housing
Finance Corporation (RB) (C)
7.300% ............. 10/01/06 185 188
7.400% ............. 04/01/07 200 203
------------
1,980
------------
TOTAL MUNICIPAL BONDS
(Cost $175,234) ............................. 172,656
------------
See Accompanying Notes
105
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO TAX EXEMPT BOND FUND
================================================================================
MAY 31, 2000
NUMBER OF VALUE
SHARES (000)
--------- -------
CASH EQUIVALENT -- 1.0%
Federated Ohio Municipal
Cash Trust 1,767,766 $ 1,768
------------
TOTAL CASH EQUIVALENT
(Cost $1,768) ............................... 1,768
------------
TOTAL INVESTMENTS -- 101.8%
(Cost $177,002) ............................. 174,424
============
OTHER ASSETS AND LIABILITIES,
NET -- (1.8%) ............................... (3,087)
------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 15,836,284 outstanding shares of
beneficial interest ......................... 171,792
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 494,593 outstanding shares of
beneficial interest ......................... 5,219
Undistributed net investment income .......... 4
Accumulated net realized loss on
investments ................................. (3,100)
Net unrealized depreciation on
investments ................................. (2,578)
------------
TOTAL NET ASSETS -- 100.0% ..................... $ 171,337
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................ $10.49
============
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A .................. $10.46
============
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($10.46 / 97%) ............. $10.78
============
------------------------------------------------
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED IN
THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT
ON MAY 31, 2000.
(B) ZERO COUPON BOND
(C) SECURITY IS BACKED BY A LETTER OF CREDIT BACKED BY A
MAJOR FINANCIAL INSTITUTION.
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
ETM--ESCROWED TO MATURITY
FGIC--FEDERAL GUARANTY INSURANCE COMPANY
FSA--FEDERAL SECURITY ASSURANCE
GO--GENERAL OBLIGATION
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
RB--REVENUE BOND
TAN--TAX ANTICIPATION NOTE
See Accompanying Notes
106
<PAGE>
STATEMENT OF NET ASSETS
ARMADA PENNSYLVANIA MUNICIPAL BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- 98.5%
PENNSYLVANIA -- 97.3%
Allegheny County Higher Education
Building Authority, Duquesne University
Project (RB) (AMBAC)
6.500% ............. 03/01/10 $ 380 $ 411
Allegheny County Higher Education
Community College (RB) (MBIA)
5.800% ............. 06/01/13 1,000 1,007
Allegheny County Hospital
Development Authority,
Magee Woman's Hospital
Project (RB) (ETM) Series O
10.125% ............. 10/01/02 80 84
Allegheny County Industrial
Development Authority (RB)
5.250% ............. 12/01/14 630 631
Allegheny County Port Authority
Special Revenue (RB) (MBIA)
6.250% ............. 03/01/17 685 707
Allegheny County Sanitation
Authority Sewer (RB)
5.500% ............. 12/01/08 265 267
Allegheny County Sanitation
Authority Sewer (RB) (FGIC) (A)
0.000% ............. 12/01/08 2,000 1,255
Ambridge Area School District
(GO) (FGIC)
4.750% ............. 11/01/08 500 476
Bradford County School District,
Partially Prerefunded
10/01/05 @ 100 (GO) (FGIC)
5.250% ............. 10/01/05 1,000 997
Bucks County Community College
Authority, College Building (RB)
5.300% ............. 06/15/10 100 99
Butler County Sewer Authority,
Prerefunded 01/01/04 @100 (RB)
7.250% ............. 01/01/04 105 110
Dauphin County
General Authority (RB) (AMBAC)
5.400% ............. 06/01/26 800 808
Delaware River Port Authority (RB)
5.500% ............. 01/01/10 500 507
Delaware River Port Authority,
Pennsylvania & New Jersey Bridges
Project (RB) (AMBAC) (ETM)
6.000% ............. 01/15/10 535 546
Delaware Valley Regional Finance
Authority (RB) (AMBAC)
Series A
5.900% ............. 04/15/16 1,000 1,006
Elizabeth Forward School District (GO)
5.450% ............. 09/01/08 170 170
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Erie County Prison Authority Lease,
Prerefunded 11/01/01 @100
(RB) (MBIA)
6.600% ............. 11/01/01 $1,000 $ 1,022
Fairview School District
(GO) (FGIC)
6.000% ............. 02/15/07 1,140 1,186
Gettysburg College (RB) (MBIA)
5.375% 08/15/13 1,000 985
Indiana County Industrial
Development Authority,
Pollution Control Revenue,
New York Electric & Gas (MBIA)
Series A
6.000% ............. 06/01/06 1,000 1,039
Lehigh County Industrial
Development Authority,
Pollution Control Revenue,
Pennsylvania Power & Light
Project (MBIA) Series A
6.400% ............. 11/01/21 2,250 2,295
Lycoming County Authority
College of Technology (AMBAC)
5.400% ............. 11/01/08 1,000 1,003
Middletown Township
Bucks County (RB) (ETM)
6.100% ............. 10/01/00 35 35
Monroeville County Hospital
Authority, East Suburban Health
Center Project, Prerefunded
07/01/04 @ 100 (RB)
7.600% ............. 07/01/08 850 910
Montgomery County
Higher Education & Health (RB)
5.900% ............. 11/15/06 190 190
6.000% ............. 11/15/07 105 105
Montgomery County
Higher Education & Health
Authority (CONNIE LEE)
6.500% ............. 12/15/22 200 207
Montgomery County Hospital
Authority, Suburban General
Hospital Project (RB) (ETM)
7.750% ............. 05/01/02 60 61
Moon Area School District
(GO) ( FGIC) (A) Series A
0.000% ............. 11/15/11 1,520 798
Parkland School District (GO) (FGIC)
5.375% ............. 09/01/14 1,000 978
Pennsylvania State (GO)
6.375% ............. 09/15/11 1,000 1,035
See Accompanying Notes
107
<PAGE>
STATEMENT OF NET ASSETS
ARMADA PENNSYLVANIA MUNICIPAL BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Pennsylvania State (GO) (AMBAC)
Series 1
5.125% ............. 03/15/12 $1,475 $ 1,423
Pennsylvania State Financing
Authority, Municipal Capital
Improvements Program (RB)
6.600% ............. 11/01/09 1,000 1,055
Pennsylvania State Higher Education
Assistance Authority (RB) (FGIC)
Series A
6.800% ............. 12/01/00 685 692
Pennsylvania State Higher Education
Facilities Authority, University of
Pennsylvania Project (RB)
6.500% ............. 09/01/04 250 264
Pennsylvania State Higher Education
Facilities Authority, University of
Pennsylvania Project (RB)
Series A
5.550% ............. 09/01/09 1,300 1,308
Pennsylvania State Housing
Financial Agency (RB)
6.550% ............. 10/01/03 150 154
Pennsylvania State
Industrial Development
Authority (RB) (AMBAC)
6.000% ............. 01/01/12 1,000 1,024
Pennsylvania State
Industrial Economic
Development Authority
(RB) (AMBAC) Series 94
5.800% ............. 07/01/09 700 721
Pennsylvania State
Infrastructure Investment
Authority, Pennvest (RB)
Series B
6.450% ............. 09/01/04 1,500 1,569
Pennsylvania State
Intergovernmental Cooperative
Authority, Special Tax,
City of Philadelphia Funding
Program, Prerefunded
06/15/02 (RB)
6.800% ............. 06/15/02 500 518
Pennsylvania State Turnpike
Commission (RB) (FGIC)
Series O
5.250% ............. 12/01/01 1,010 1,016
Pennsylvania State University (RB)
6.250% ............. 03/01/11 1,000 1,036
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Philadelphia Gas Works
(RB) (FSA) Series 14
6.250% ............. 07/01/08 $ 300 $ 316
Philadelphia Gas Works,
Prerefunded 06/15/01 @102 (RB)
Series 13
7.700% ............. 06/15/01 460 482
Philadelphia Hospital & Higher
Educational Facilities Authority
Revenue, Children's Hospital,
Prerefunded 02/15/02 @ 102 (RB)
Series A
6.500% ............. 02/15/02 200 209
Philadelphia Hospital Authority,
Thomas Jefferson University
Hospital (RB) (ETM)
7.000% ............. 07/01/08 205 219
Philadelphia Hospital Authority,
Graduate Hospital Project
(RB) (ETM)
7.000% ............. 07/01/10 365 386
Philadelphia Water & Waste Water
Authority (RB) (MBIA)
5.500% ............. 06/15/07 1,500 1,519
6.250% ............. 08/01/08 500 531
6.250% ............. 08/01/11 200 213
Philadelphia Water & Waste Water
Authority (RB) (MBIA) Series 95
6.750% ............. 08/01/03 200 210
Pittsburgh (GO) (MBIA)
Series A
5.500% ............. 09/01/06 955 968
Pittsburgh Public Parking Authority
(RB) (AMBAC)
6.000% ............. 12/01/09 945 992
Scranton-Lackawanna
Health & Welfare, Moses Taylor
Hospital (ETM) (RB)
6.625% ............. 07/01/09 465 481
Seneca Valley School District,
Prerefunded 07/01/02 @100
(GO) (FGIC) Series A
5.700% ............. 07/01/06 1,000 1,015
Somerset County (GO) (AMBAC)
5.000% ............. 10/01/14 550 503
Spring Township
Municipal Authority (AMBAC)
5.600% ............. 12/01/09 150 150
See Accompanying Notes
108
<PAGE>
STATEMENT OF NET ASSETS
ARMADA PENNSYLVANIA MUNICIPAL BOND FUND
================================================================================
MAY 31, 2000
NUMBER OF
SHARES/ VALUE
MATURITY PAR (000) (000)
-------- --------- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
State Public School Building
Authority, Montgomery County
Community College (RB)
4.600% ............. 05/01/12 $ 160 $ 143
Swathmore Borough Authority,
Swarthmore College (RB)
6.000% ............. 09/15/06 700 725
Tyrone School District, Prerefunded
09/15/07 @ 100 (GO) (MBIA)
5.700% ............. 09/15/08 1,000 1,010
Union County Higher Educational
Facilities Financing Authority,
Bucknell University Project
(RB) (MBIA)
6.200% ............. 04/01/06 1,000 1,028
West Mifflin Sewer Authority
(RB) (MBIA)
5.000% ............. 08/01/14 250 229
West Whiteland Municipal Sewer
Authority (RB) (ETM)
6.400% ............. 09/15/13 240 257
Westmoreland County Municipal
Authority (RB) (FGIC) (ETM)
2.000% ............. 07/01/07 500 396
Westmoreland County Municipal
Authority (RB) (FGIC) (ETM) (A)
0.000% ............. 07/01/08 500 319
----------
44,011
----------
PUERTO RICO -- 1.2%
Commonwealth of Puerto Rico
(GO) (MBIA)
6.250% ............. 07/01/09 500 541
----------
TOTAL MUNICIPAL BONDS
(Cost $44,888) .............................. 44,552
----------
CASH EQUIVALENT -- 0.3%
Federated Pennsylvania
Cash Trust ........................ 159,341 159
----------
TOTAL CASH EQUIVALENT
(Cost $159) ................................. 159
----------
TOTAL INVESTMENTS -- 98.8%
(Cost $45,047) .............................. 44,711
==========
OTHER ASSETS AND LIABILITIES,
NET -- 1.2% ................................. 526
----------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 4,550,506 outstanding shares of
beneficial interest ......................... $ 45,575
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 21,791 outstanding shares of
beneficial interest ......................... 225
Portfolio Shares of Class C
(unlimited authorization -- no par value)
based on 10 outstanding shares of
beneficial interest ......................... (1)
Accumulated net realized loss on
investments ................................. (226)
Net unrealized depreciation on
investments ................................. (336)
----------
TOTAL NET ASSETS -- 100.0% ..................... $ 45,237
==========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................ $9.89
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A .................. $9.91
==========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.91 / 97%) .............. $10.22
==========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C .................. $9.91
==========
------------------------------------------------
(A) ZERO COUPON BOND
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
ETM--ESCROW TO MATURITY
FGIC--FEDERAL GUARANTY INSURANCE CORPORATION
FSA--FINANCIAL SECURITY ASSURANCE
GO--GENERAL OBLIGATION
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
RB--REVENUE BOND
See Accompanying Notes
109
<PAGE>
STATEMENT OF NET ASSETS
ARMADA GOVERNMENT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 84.5%
FEDERAL FARM CREDIT BANK -- 13.6%
Federal Farm Credit Bank+
5.800% ............. 06/14/00 $ 10,000 $ 9,979
5.840% ............. 07/14/00 7,288 7,237
5.870% ............. 08/02/00 11,560 11,443
5.970% ............. 06/13/00 12,000 11,976
5.980% ............. 06/15/00 6,900 6,883
6.360% ............. 07/11/00 15,000 14,894
6.380% ............. 07/05/00 16,065 15,968
6.410% ............. 07/18/00 15,000 14,874
6.420% ............. 07/07/00 14,800 14,705
6.450% ............. 07/10/00 29,000 28,799
6.450% ............. 08/10/00 20,000 19,749
6.470% ............. 07/17/00 10,000 9,918
6.510% ............. 08/18/00 7,587 7,482
Federal Farm Credit Bank (A)
6.332% ............. 02/01/01 15,500 15,509
Federal Farm Credit Bank MTN
5.730% ............. 06/01/00 10,000 10,000
---------
199,416
---------
FEDERAL HOME LOAN BANK -- 21.1%
Federal Home Loan Bank+
5.890% ............. 08/02/00 10,000 9,899
5.890% ............. 08/16/00 10,000 9,876
5.935% ............. 06/09/00 15,000 14,980
5.940% ............. 08/11/00 10,000 9,883
5.960% ............. 07/12/00 10,000 9,934
5.980% ............. 06/21/00 31,900 31,794
5.990% ............. 06/14/00 30,000 29,934
6.000% ............. 06/16/00 4,795 4,783
6.045% ............. 09/08/00 10,000 9,834
6.100% ............. 06/28/00 10,000 9,954
6.110% ............. 09/27/00 10,000 9,800
6.130% ............. 06/02/00 10,000 9,998
6.150% ............. 07/12/00 15,000 14,896
6.180% ............. 07/31/00 10,000 9,899
6.190% ............. 07/26/00 15,000 14,860
6.200% ............. 07/28/00 15,000 14,853
6.210% ............. 03/21/01 10,000 9,495
6.330% ............. 06/30/00 12,000 11,939
6.335% ............. 06/16/00 10,000 9,974
6.380% ............. 07/14/00 15,000 14,886
6.385% ............. 07/21/00 10,000 9,911
Federal Home Loan Bank (A)
6.303% ............. 06/09/00 10,000 10,000
6.343% ............. 07/14/00 10,000 10,000
6.393% ............. 06/01/00 10,000 10,000
6.790% ............. 10/06/00 10,000 9,998
---------
311,380
---------
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- CONTINUED
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 21.8%
Federal Home Loan Mortgage Corporation+
5.810% ............. 07/20/00 $ 45,000 $ 44,633
5.950% ............. 06/01/00 22,000 22,000
5.950% ............. 06/15/00 30,000 29,931
5.960% ............. 06/06/00 20,000 19,983
5.980% ............. 06/22/00 21,050 20,976
6.015% ............. 06/29/00 15,000 14,930
6.025% ............. 06/20/00 15,000 14,952
6.030% ............. 07/06/00 15,523 15,433
6.030% ............. 07/11/00 10,000 9,933
6.030% ............. 09/14/00 20,000 19,649
6.070% ............. 09/14/00 10,000 9,823
6.090% ............. 07/13/00 10,000 9,930
6.090% ............. 07/27/00 20,000 19,805
6.170% ............. 10/12/00 10,000 9,772
6.310% ............. 08/03/00 20,000 19,778
6.350% ............. 06/27/00 10,000 9,955
6.610% ............. 11/09/00 30,021 29,137
---------
320,620
---------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 23.1%
Federal National Mortgage Association+
3.050% ............... 11/02/00 10,000 9,722
3.060% ............. 11/16/00 10,000 9,688
5.800% ............. 07/20/00 30,000 29,755
5.810% ............. 06/06/00 9,670 9,662
5.820% ............. 07/13/00 35,000 34,753
5.820% ............. 07/27/00 10,000 9,909
5.850% ............. 06/01/00 15,000 15,000
5.875% ............. 08/10/00 20,000 19,771
5.950% ............. 06/08/00 35,000 34,960
5.965% ............. 06/15/00 21,000 20,951
5.980% ............. 06/22/00 10,000 9,965
5.900% ............. 08/03/00 10,000 9,897
5.920% ............. 08/31/00 10,000 9,850
5.940% ............. 08/17/00 30,000 29,605
5.940% ............. 08/24/00 10,000 9,861
6.120% ............. 09/21/00 20,000 19,621
6.150% ............. 10/05/00 19,000 18,591
6.170% ............. 10/12/00 10,000 9,772
6.320% ............. 10/26/00 18,000 17,534
Federal National Mortgage Association (A)
6.015% ............. 08/02/00 10,000 9,999
---------
338,866
---------
STUDENT LOAN MARKETING ASSOCIATION -- 4.9%
Student Loan Marketing Association (A)
6.333% ............. 03/09/01 15,000 15,006
6.573% ............. 10/27/00 20,000 19,993
See Accompanying Notes
110
<PAGE>
STATEMENT OF NET ASSETS
ARMADA GOVERNMENT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- CONTINUED
STUDENT LOAN MARKETING ASSOCIATION -- CONTINUED
Student Loan Marketing Association, MTN (A)
6.593% ............. 08/10/00 $ 10,000 $ 9,999
6.593% ............. 11/13/00 12,000 11,999
6.593% ............. 11/15/00 15,000 14,997
------------
71,994
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost $1,242,276) ........................... 1,242,276
------------
REPURCHASE AGREEMENTS -- 16.5%
Credit Suisse First Boston
6.530% (dated 05/31/00,
matures 06/01/00, repurchase
price $145,026,301; collateralized
by various FHLMC obligations:
total value $149,052,415) .......... 145,000 145,000
Prudential
6.520% (dated 05/31/00, matures
06/01/00, repurchase price
$50,009,056; collateralized by
various FHLMC, FNMA and
GNMA obligations: total
value $51,000,000) ................. 50,000 50,000
Salomon Smith Barney
6.500% (dated 05/31/00, matures
06/01/00, repurchase price
$48,029,670; collateralized by
various FHLMC and FNMA
obligations: total
value $49,134,728) ................. 48,021 48,021
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $243,021) 243,021
------------
NUMBER VALUE
OF SHARES (000)
--------- -----
CASH EQUIVALENT -- 0.1%
Goldman Sachs Financial Square
Government Money Market
Fund ............................ 1,000,000 $ 1,000
------------
TOTAL CASH EQUIVALENT
(Cost $1,000) ............................... 1,000
------------
TOTAL INVESTMENTS -- 101.1%
(Cost $1,486,297)* .......................... 1,486,297
============
OTHER ASSETS AND LIABILITIES,
NET -- (1.1%) ............................... (16,778)
------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 947,841,248 outstanding shares of
beneficial interest ......................... 947,841
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 521,688,454 outstanding shares of
beneficial interest ......................... 521,689
Distributions in excess of net investment
income ...................................... (8)
Accumulated net realized loss on
investments ................................. (3)
------------
TOTAL NET ASSETS -- 100.0% ..................... $ 1,469,519
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................ $1.00
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A ............................ $1.00
============
------------------------------------------------
* ALSO COST FOR FEDERAL INCOME TAX PURPOSES.
+ EFFECTIVE YIELD
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MAY 31, 2000. THE MATURITY DATE SHOWN IS THE LONGER
OF THE NEXT RESET DATE OR THE DATE IN WHICH THE PRINCIPAL AMOUNT CAN BE
RECOVERED THROUGH DEMAND.
FHLMC--FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA--GOVERNMENTAL NATIONAL MORTGAGE ASSOCIATION
MTN--MEDIUM TERM NOTE
See Accompanying Notes
111
<PAGE>
STATEMENT OF NET ASSETS
ARMADA MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COMMERCIAL PAPER+ -- 83.0%
AUTOMOTIVE -- 7.6%
Daimler Chrysler
5.840% ............. 06/14/00 $ 15,000 $ 14,968
5.930% ............. 06/01/00 15,000 15,000
6.120% ............. 06/28/00 15,000 14,931
6.220% ............. 09/27/00 15,000 14,694
6.670% ............. 08/30/00 15,000 14,750
6.790% ............. 01/17/01 15,000 14,349
Ford Motor Credit
5.910% ............. 06/08/00 15,000 14,983
6.350% ............. 06/01/00 100,000 100,000
GMAC
5.900% ............. 06/08/00 30,000 29,965
5.900% ............. 07/25/00 15,000 14,867
5.970% ............. 08/09/00 15,000 14,828
6.100% ............. 06/29/00 15,000 14,929
6.150% ............. 07/12/00 10,000 9,930
6.220% ............. 07/19/00 15,000 14,876
Paccar
6.440% ............. 08/15/00 5,000 5,001
------------
308,071
------------
BANKS -- 19.3%
Abbey National
6.050% ............. 08/15/00 15,000 14,811
6.080% ............. 06/27/00 15,000 14,934
6.110% ............. 07/07/00 15,000 14,908
6.240% ............. 09/27/00 15,000 14,693
6.340% ............. 12/22/00 15,000 14,461
ABN Amro
5.990% ............. 08/15/00 15,000 14,813
6.130% ............. 10/27/00 15,000 14,622
Anz, Delaware
5.950% ............. 07/06/00 15,000 14,913
6.100% ............. 06/26/00 15,000 14,936
Cregem
6.100% ............. 10/25/00 15,000 14,629
6.220% ............. 12/13/00 15,500 14,978
6.690% ............. 12/13/00 15,000 14,456
Den Danske
5.850% ............. 06/16/00 15,000 14,963
5.970% ............. 06/08/00 15,000 14,983
6.040% ............. 08/10/00 15,000 14,824
6.110% ............. 07/07/00 30,000 29,817
6.710% ............. 11/20/00 15,000 14,519
Deutsche Bank Financial
5.870% ............. 06/28/00 15,000 14,934
5.900% ............. 07/26/00 30,000 29,723
5.970% ............. 06/08/00 15,000 14,983
6.120% ............. 07/06/00 30,000 29,821
6.570% ............. 07/19/00 15,000 14,869
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COMMERCIAL PAPER+ -- CONTINUED
BANKS -- CONTINUED
ING Insurance
6.090% ............. 06/19/00 $ 15,000 $ 14,954
6.130% ............. 07/05/00 15,000 14,913
6.280% ............. 07/06/00 15,000 14,908
6.550% ............. 08/09/00 15,000 14,812
6.620% ............. 08/16/00 15,000 14,790
6.650% ............. 08/28/00 20,000 19,675
Royal Bank of Canada
5.960% ............. 10/23/00 15,000 14,642
6.100% ............. 07/05/00 25,000 24,856
Svenska Handlesbanken
5.900% ............. 06/15/00 10,000 9,977
5.900% ............. 06/20/00 15,000 14,953
5.940% ............. 07/18/00 15,000 14,884
6.000% ............. 07/05/00 5,000 4,972
6.120% ............. 07/12/00 15,000 14,895
6.160% ............. 09/20/00 15,000 14,715
6.220% ............. 09/27/00 15,000 14,694
6.240% ............. 10/11/00 15,000 14,657
Toronto Dominion
5.900% ............. 06/01/00 20,000 20,000
5.900% ............. 07/25/00 15,000 14,867
6.000% ............. 10/20/00 15,000 14,648
6.010% ............. 08/07/00 15,000 14,832
6.675% ............. 11/15/00 15,000 14,536
UBS Financial
6.100% ............. 07/05/00 25,000 24,856
6.770% ............. 06/01/00 75,000 75,000
------------
786,626
------------
CHEMICALS -- 0.6%
Great Lakes Chemical
6.500% ............. 06/27/00 25,000 24,883
------------
CHEMICALS & ALLIED PRODUCTS -- 4.0%
Akzo Nobel
6.050% ............. 08/01/00 20,000 19,795
6.090% ............. 06/19/00 15,000 14,954
6.120% ............. 08/07/00 15,000 14,829
6.120% ............. 09/11/00 15,500 15,231
6.150% ............. 07/07/00 15,000 14,908
6.180% ............. 07/20/00 15,000 14,874
6.220% ............. 09/05/00 14,750 14,505
Clorox
6.100% ............. 06/28/00 15,000 14,931
Henkel
5.900% ............. 07/12/00 14,000 13,906
6.000% ............. 07/24/00 9,000 8,921
Monsanto
5.950% ............. 06/01/00 15,000 15,000
------------
161,854
------------
See Accompanying Notes
112
<PAGE>
STATEMENT OF NET ASSETS
ARMADA MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COMMERCIAL PAPER+ -- CONTINUED
COMMUNICATIONS EQUIPMENT -- 1.6%
Bell Atlantic
6.420% ............. 07/10/00 $ 15,000 $ 14,896
6.550% ............. 07/20/00 15,000 14,866
6.580% ............. 07/31/00 20,000 19,781
SBC Communications
6.684% ............. 05/15/01 15,000 14,999
------------
64,542
------------
DIVERSIFIED -- 3.3%
Bass Financial
6.090% ............. 07/06/00 15,000 14,911
6.500% ............. 06/28/00 8,665 8,623
6.570% ............. 08/09/00 15,000 14,811
General Electric Capital
5.970% ............. 08/03/00 15,000 14,843
5.980% ............. 07/20/00 15,000 14,878
5.990% ............. 06/14/00 1,750 1,746
5.990% ............. 07/06/00 15,000 14,913
6.000% ............. 06/14/00 13,250 13,221
6.060% ............. 08/03/00 10,000 9,894
6.170% ............. 09/20/00 10,000 9,810
6.240% ............. 09/27/00 15,000 14,693
------------
132,343
------------
DRUGS & HEALTH CARE -- 0.8%
American Home Product
6.500% ............. 06/28/00 20,000 19,903
Pharmacia
6.620% ............. 07/17/00 11,380 11,284
------------
31,187
------------
ELECTRICAL SERVICES -- 2.9%
National Rural Utilities Cooperative
6.100% ............. 09/12/00 15,000 14,738
6.110% ............. 07/07/00 15,000 14,908
6.120% ............. 07/19/00 15,000 14,878
6.150% ............. 07/18/00 14,757 14,639
6.200% ............. 10/12/00 15,000 14,656
6.600% ............. 01/10/01 15,000 14,387
6.700% ............. 01/09/01 15,000 14,380
Southern Calf Edison
6.530% ............. 07/12/00 15,000 14,888
------------
117,474
------------
ELECTRONICS & OTHER ELECTRICAL EQUIPMENT -- 3.0%
ABB Treasury Center USA
6.500% ............. 06/21/00 20,000 19,928
6.770% ............. 06/01/00 100,000 100,000
------------
119,928
------------
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COMMERCIAL PAPER+ -- CONTINUED
FABRICATED METAL PRODUCTS -- 0.2%
Stanley Works
5.930% ............. 06/05/00 $ 10,000 $ 9,993
------------
FINANCIAL CONDUIT -- 7.4%
Delaware Funding
6.050% ............. 06/14/00 10,000 9,978
6.090% ............. 06/23/00 15,000 14,944
6.110% ............. 07/06/00 15,000 14,911
6.220% ............. 07/26/00 15,000 14,857
6.530% ............. 07/10/00 15,000 14,894
Fountain Square
5.950% ............. 06/01/00 9,926 9,926
6.140% ............. 07/03/00 7,165 7,126
6.200% ............. 07/24/00 15,000 14,863
6.550% ............. 07/31/00 15,000 14,836
6.560% ............. 06/19/00 7,256 7,232
6.570% ............. 06/29/00 15,000 14,923
6.650% ............. 08/15/00 10,820 10,670
Preferred Receivables
6.160% ............. 07/20/00 15,000 14,874
6.220% ............. 07/25/00 15,000 14,860
6.280% ............. 06/12/00 15,000 14,971
6.580% ............. 07/03/00 20,000 19,883
6.680% ............. 08/28/00 5,000 4,918
Southern
6.530% ............. 06/01/00 65,000 65,000
6.530% ............. 06/22/00 16,450 16,387
------------
300,057
------------
FINANCIAL SERVICES -- 15.8%
Centric Funding
6.130% ............. 07/10/00 15,000 14,900
6.150% ............. 08/17/00 10,000 9,869
6.520% ............. 06/09/00 17,000 16,975
6.520% ............. 06/19/00 10,800 10,765
6.650% ............. 08/11/00 15,800 15,593
6.650% ............. 08/22/00 12,700 12,508
6.650% ............. 08/23/00 3,000 2,954
6.120% ............. 07/10/00 15,000 14,901
Corporate Asset Funding
6.600% ............. 08/07/00 15,000 14,816
6.650% ............. 08/23/00 15,000 14,770
Cxc
6.150% ............. 06/07/00 20,000 19,980
6.200% ............. 07/12/00 15,000 14,894
6.640% ............. 08/08/00 15,000 14,812
6.720% ............. 11/15/00 15,000 14,532
See Accompanying Notes
113
<PAGE>
STATEMENT OF NET ASSETS
ARMADA MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COMMERCIAL PAPER+ -- CONTINUED
FINANCIAL SERVICES -- CONTINUED
Dresdner US Financial
5.900% ............. 07/10/00 $15,000 $ 14,904
5.920% ............. 06/01/00 10,000 10,000
5.940% ............. 06/06/00 15,000 14,988
6.440% ............. 08/01/00 15,000 14,836
6.580% ............. 01/26/01 15,000 14,345
Galaxy Funding
6.100% ............. 06/14/00 15,000 14,967
6.150% ............. 07/05/00 15,000 14,913
6.170% ............. 07/12/00 30,000 29,789
6.310% ............. 10/11/00 15,000 14,653
6.680% ............. 08/16/00 15,000 14,789
6.700% ............. 08/18/00 10,000 9,855
Household Finance
6.110% ............. 07/12/00 25,000 24,826
6.650% ............. 08/30/00 15,000 14,751
Merrill Lynch
6.110% ............. 07/12/00 30,000 29,791
6.130% ............. 07/26/00 15,000 14,860
6.160% ............. 08/09/00 15,000 14,823
6.170% ............. 07/19/00 15,000 14,877
6.650% ............. 08/23/00 30,000 29,540
Morgan Stanley Dean Witter
6.780% ............. 06/01/00 50,000 50,000
New Center Asset Trust
6.090% ............. 06/20/00 15,000 14,952
Salomon Smith Barney
6.600% ............. 07/20/00 25,000 24,775
6.640% ............. 08/16/00 20,000 19,720
Three Rivers Funding
6.530% ............. 06/29/00 10,000 9,949
Transamerica Financial
5.920% ............. 07/06/00 5,050 5,021
5.970% ............. 06/05/00 15,000 14,990
----------
643,183
----------
FOOD & BEVERAGE -- 1.8%
Pepsico
6.730% ............. 06/01/00 73,000 73,000
----------
FOOD & KINDRED PRODUCTS -- 1.8%
Archer Daniels Midland
6.120% ............. 07/06/00 28,825 28,654
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COMMERCIAL PAPER+ -- CONTINUED
FOOD & KINDRED PRODUCTS -- CONTINUED
Diageo
5.880% ............. 07/24/00 $ 15,000 $ 14,870
5.980% ............. 08/17/00 15,000 14,808
6.000% ............. 10/18/00 15,000 14,653
----------
72,985
----------
GLASS PRODUCTS -- 1.2%
Guardian Industries
5.950% ............. 06/06/00 10,000 9,992
6.000% ............. 07/12/00 5,000 4,966
6.030% ............. 07/26/00 10,000 9,908
6.050% ............. 08/07/00 15,000 14,831
6.150% ............. 07/14/00 9,850 9,778
----------
49,475
----------
HOUSEHOLD PRODUCTS -- 2.8%
American Home Products
6.550% ............. 07/12/00 15,000 14,888
Gilfin
6.770% ............. 06/01/00 100,000 100,000
----------
114,888
----------
INSURANCE -- 3.1%
Allianz of America
6.120% ............. 07/06/00 15,000 14,911
6.620% ............. 08/16/00 21,800 21,495
Prudential Funding
5.860% ............. 06/28/00 15,000 14,934
5.900% ............. 07/12/00 15,000 14,899
5.910% ............. 07/26/00 15,000 14,865
5.970% ............. 08/03/00 15,000 14,843
6.060% ............. 06/21/00 15,000 14,950
6.170% ............. 08/30/00 15,000 14,748
----------
125,645
----------
MACHINERY & EQUIPMENT -- 0.4%
Caterpillar
6.250% ............. 09/29/00 15,000 14,688
----------
PETROLEUM & FUEL PRODUCTS -- 2.5%
Baker Hughes
6.810% ............. 06/01/00 100,000 100,000
----------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 1.4%
Eastman Kodak
6.090% ............. 06/22/00 15,000 14,947
6.540% ............. 08/02/00 14,000 13,842
6.570% ............. 08/10/00 15,000 14,808
6.620% ............. 08/17/00 15,000 14,788
----------
58,385
----------
See Accompanying Notes
114
<PAGE>
STATEMENT OF NET ASSETS
ARMADA MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
COMMERCIAL PAPER+ -- CONTINUED
STEEL & STEEL WORKS -- 1.5%
Alcoa
6.650% ............. 08/09/00 $ 20,000 $ 19,745
6.650% ............. 08/16/00 20,000 19,719
Rio Tinto America
6.490% ............. 06/21/00 20,000 19,928
------------
59,392
------------
TOTAL COMMERCIAL PAPER+
(Cost $3,368,595) ........................... 3,368,595
------------
YANKEE CERTIFICATES OF DEPOSIT -- 2.8%
Bancone
6.380% ............. 09/20/00 15,000 15,000
Monogram Bank
6.410% ............. 09/20/00 20,000 20,000
Societe Generale, NY
6.530% ............. 01/16/01 15,000 14,996
6.550% ............. 01/31/01 15,000 14,996
UBS Stamford
5.600% ............. 06/14/00 10,000 10,000
6.275% ............. 12/18/00 15,000 14,996
Westdeutsche Land
6.030% ............. 06/01/00 25,000 25,000
------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT
(Cost $114,988) ............................. 114,988
------------
CERTIFICATES OF DEPOSIT -- 2.2%
Bank America
6.710% ............. 08/15/00 15,000 15,000
Bank of New York, NY
7.220% ............. 05/09/01 15,000 14,996
First Union National Bank
6.890% ............. 05/22/01 25,000 25,000
LaSalle National Bank
7.020% ............. 11/20/00 20,000 20,001
National Westminster
7.230% ............. 05/09/01 15,000 14,996
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $89,993) .............................. 89,993
------------
FLOATING RATE NOTES (A) -- 2.2%
American Home Products
6.130% ............. 07/10/00 15,000 15,000
AT&T
6.240% ............. 07/13/00 15,000 14,999
Ciesco
6.150% ............. 08/17/00 15,000 14,999
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
FLOATING RATE NOTES (A) -- CONTINUED
Comerica
6.153% ............. 09/01/00 $ 15,000 $ 14,998
Daimler Chrysler
6.304% ............. 07/06/00 15,000 14,998
Travelers Funding
6.624% ............. 08/17/00 15,000 15,000
------------
TOTAL FLOATING RATE NOTES
(Cost $89,994) 89,994
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS-- 2.6%
Student Loan Marketing Association, MTN (A)
6.573% ............. 10/27/00 30,000 29,989
6.593% ............. 08/10/00 25,000 24,999
6.593% ............. 11/15/00 50,000 49,989
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $104,977) ............................. 104,977
------------
REPURCHASE AGREEMENTS -- 7.5%
Credit Suisse First Boston 6.530%
(dated 05/31/00, matures 06/01/00,
repurchase price $180,032,650;
collateralized by various FHLMC,
FNMA and GNMA obligations: total
value $184,937,839) ............... 180,000 180,000
Prudential
6.520% (dated 05/31/00, matures
06/01/00, repurchase price
$60,010,867; collateralized by
various FHLMC, FNMA and
GNMA obligations: total
value $61,200,001) ................ 60,000 60,000
Salomon Smith Barney
6.500% (dated 05/31/00, matures
06/01/00, repurchase price
$60,968,006; collateralized by
various FHLMC and FNMA
obligations: total value
$62,463,091) ...................... 60,957 60,957
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $300,957) ............................. 300,957
------------
See Accompanying Notes
115
<PAGE>
STATEMENT OF NET ASSETS
ARMADA MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
CASH EQUIVALENT -- 0.1%
Goldman Sachs Financial Square
Money Market Fund ................ 5,000,000 $ 5,000
------------
TOTAL CASH EQUIVALENT
(Cost $5,000) ............................... 5,000
------------
TOTAL INVESTMENTS -- 100.4%
(Cost $4,074,504)* .......................... 4,074,504
============
OTHER ASSETS AND LIABILITIES,
NET -- (0.4%) ............................... (14,364)
------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 2,342,434,499 outstanding shares of
beneficial interest ......................... 2,342,411
Portfolio Shares of Class A (unlimited
authorization -- no par value) based on
1,717,628,537 outstanding shares of
beneficial interest ......................... 1,717,629
Portfolio Shares of Class B
(unlimited authorization-- no par value)
based on 249,493 outstanding shares of
beneficial interest ......................... 250
Distributions in excess of net investment
income ...................................... (141)
Accumulated net realized loss on
investments ................................. (9)
------------
TOTAL NET ASSETS -- 100.0% $ 4,060,140
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I $1.00
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A $1.00
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS B $1.00
============
------------------------------------------------
* ALSO COST FOR FEDERAL INCOME TAX PURPOSES.
+ EFFECTIVE YIELD
(A) VARIABLE RATE SECURITY -- THE RATE ON THE STATEMENT OF NET ASSETS IS
THE RATE IN EFFECT ON MAY 31, 2000. THE MATURITY DATE SHOWN IS THE LONGER OF
THE NEXT RESET DATE OR THE DATE IN WHICH THE PRINCIPAL AMOUNT MAY BE
RECOVERED THROUGH DEMAND.
FHLMC--FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA--GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN--MEDIUM TERM NOTE
See Accompanying Notes
116
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO MUNICIPAL MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- 98.8%
OHIO -- 97.0%
Akron Ohio Special
Assessment Note
4.360% ............. 12/15/00 $1,865 $ 1,867
Allen County (BAN)
4.250% ............. 09/14/00 645 645
Allen County,
Health Care Facilities,
Mennonite Memorial
Home Project (RB) (A)
4.250% ............. 06/01/00 3,290 3,290
Bellbrook County (BAN)
4.250% ............. 10/20/00 1,000 1,001
Butler County (BAN)
4.250% ............. 09/27/00 1,225 1,227
Canton Ohio (BAN)
3.910% ............. 06/08/00 2,625 2,625
Centerville Healthcare (RB) (A)
4.250% ............. 06/07/00 6,400 6,400
Chardon Ohio (BAN)
4.299% ............. 02/22/01 1,500 1,500
Chillicothe (BAN)
4.210% ............. 09/15/00 675 676
Cincinnati & Hamilton Counties,
Ohio Port Authority
Economic Development,
Kenwood Office Association
Project (RB) (A)
4.450% ............. 06/01/00 3,700 3,700
Cleveland Heights (BAN)
3.820% ............. 08/25/00 1,035 1,035
Columbus (GO) (A) Series 1
4.150% ............. 06/01/00 4,000 4,000
Columbus Sewer
Authority (RB) (A) (B)
4.250% ............. 06/01/00 4,600 4,600
Cuyahoga County
(RB) (A) (B)
4.350% ............. 06/01/00 4,425 4,425
Cuyahoga County Hospital
(RB) (AMBAC) (A)
4.350% ............. 06/01/00 2,400 2,400
Cuyahoga County,
Health Care Weekly (RB) (A)
4.400% ............. 06/02/00 1,250 1,250
Cuyahoga County,
Hospital Facilities Authority,
Cleveland Clinic Foundation
(RB) (A) (B) Series 1997-D
4.350% ............. 06/01/00 2,480 2,480
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Cuyahoga County,
Hospital Facilities Authority,
Cleveland Clinic Foundation
(RB) (A) Series 1996-A
4.100% ............. 06/07/00 $2,000 $ 2,000
Cuyahoga County,
Hospital Facilities Authority,
Cleveland Clinic Foundation
(RB) (A) Series A
4.150% ............. 06/07/00 1,000 1,000
Cuyahoga County,
Industrial Development Authority,
Allen Group Project (RB) (A)
3.950% ............. 06/07/00 1,600 1,600
Eastlake (GO) (BAN)
4.500% ............. 07/27/00 350 350
Euclid County
School District (BAN)
3.700% ............. 07/28/00 2,055 2,056
Evandale, Industrial
Development Authority (RB) (A)
3.900% ............. 06/07/00 3,900 3,900
Fairborn Ohio (BAN)
4.420% ............. 03/22/01 1,100 1,101
Fairfield (BAN)
3.900% ............. 08/24/00 1,900 1,901
Franklin County,
Hospital Authority,
Holy Cross Health
System (RB) (A)
4.400% ............. 06/01/01 3,300 3,300
Highland Heights
Ohio (BAN)
4.750% ............. 03/14/01 1,000 1,003
Hilliard, Ohio
School District (BAN)
4.980% ............. 02/23/01 2,400 2,405
Hudson City, Ohio (GO)
4.400% ............. 12/01/00 505 505
4.600% ............. 05/09/01 1,300 1,303
Indian Hill,
Ohio Educational
Revenue Authority
Cincinnati County
Day School Project, (RB)(A)
Series A
4.500% ............. 06/01/00 2,380 2,380
Kent City (GO) (BAN)
4.750% ............. 07/20/00 525 526
Lancaster Ohio (BAN)
4.550% ............. 04/26/01 1,300 1,303
See Accompanying Notes
117
<PAGE>
STATEMENT OF NET ASSETS
ARMADA OHIO MUNICIPAL MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Lima Memorial Hospital
(RB) (A) Series 1996
4.400% ............. 06/01/00 $2,010 $ 2,010
Lorain County,
Industrial Development Authority,
Regional Medical Center (RB) (A)
4.300% ............. 06/07/00 2,150 2,150
Lucas County,
Facility Improvement (RB) (A)
4.200% ............. 06/07/00 900 900
Marion City
School District (BAN)
4.780% ............. 08/17/00 1,000 1,001
Marysville Ohio,
Vehicle & Equipment (BAN)
4.610% ............. 03/15/01 250 250
Medina County (BAN)
4.125% ............. 08/31/00 195 195
Medina County Ohio (RB) (A)
4.400% ............. 06/01/00 995 995
Medina County,
Construction Note (GO)
3.500% ............. 06/15/00 1,000 1,000
Mentor (GO) (BAN)
3.850% ............. 08/03/00 685 685
Miamisburg (BAN)
4.200% ............. 09/22/00 530 531
Middleburg Heights City (GO)
3.850% ............. 08/10/00 1,200 1,200
Muskingum County (BAN)
4.250% ............. 11/30/00 505 506
Newark Ohio (BAN)
4.500% ............. 03/09/01 695 696
Newark Ohio
Local School District (BAN)
4.850% ............. 05/03/01 2,800 2,809
Ohio Air Quality (A)
4.300% ............. 06/07/00 4,075 4,075
Ohio Air Quality (TECP) (FGIC)
3.650% ............. 06/14/00 2,500 2,500
3.850% ............. 06/15/00 1,000 1,000
4.000% ............. 08/10/00 4,000 4,000
4.250% ............. 10/05/00 2,115 2,115
Ohio School District,
1999 Cash Flow
Borrowing Program (AN)
4.140% ............. 06/30/00 1,000 1,001
Ohio State, Infrastructure (RB)
4.750% ............. 12/15/00 2,000 2,007
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Ohio State,
Parks & Recreation (RB)
4.500% ............. 12/01/00 $ 700 $ 701
Ohio State,
Pollution Control (RB) (A)
4.300% ............. 06/01/00 2,000 2,000
Ohio State Air Quality
Development Authority,
Series A (A)
4.350% ............. 06/01/00 5,000 5,000
Ohio State
Common Schools Facilities
Authority (GO) Series A
5.000% ............. 06/15/01 800 802
Ohio State,
Air Quality Development
Authority, Cincinnati Gas &
Electric Project (RB) (A)
Series 1985-A
4.450% ............. 06/01/00 1,000 1,000
Ohio State, Air Quality
Development Authority,
Timken Project (RB) (A)
4.300% ............. 06/07/00 2,000 2,000
Ohio State,
Environmental Association,
U.S. Steel (RB) (A)
4.450% ............. 06/04/00 1,000 1,000
Ohio State,
Higher Educational Facilities,
Kenyon College (RB) (A)
4.300% ............. 06/07/00 3,700 3,700
Ohio State,
Higher Educational Facilities,
Mount Union College
Project (RB) (A)
4.300% ............. 06/01/00 1,330 1,330
Ohio State,
Water Development Authority,
Cleveland Electric Project (RB) (A)
Series B
4.200% ............. 06/07/00 4,000 4,000
Orange County
School District (BAN)
3.640% ............. 07/20/00 2,300 2,301
Pike Delta
School District (BAN)
4.750% ............. 12/14/00 1,800 1,805
Sandusky Ohio (BAN)
5.125% ............. 09/14/00 860 862
See Accompanying Notes
118
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
ARMADA OHIO MUNICIPAL MONEY MARKET FUND
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Scioto County, Veteran Hospital Administration,
Central Capital Asset Financing
Program (RB) (AMBAC) (A) (B)
Series G
4.200% ............. 06/07/00 $1,000 $ 1,000
Southwestern City
School District (BAN)
4.125% ............. 06/13/00 500 500
Streetsboro
School District (BAN)
4.750% ............. 04/27/01 1,000 1,003
Sylvania City
School District (GO)
4.850% ............. 12/14/00 800 803
Teays Valley
School District (BAN)
4.750% ............. 06/15/00 1,000 1,000
Toledo City Service (A)
4.250% ............. 06/01/00 2,400 2,400
Toledo City,
Services Special Assessment
Note (RB) (A)
4.250% ............. 06/01/00 6,220 6,220
University of Cinncinnati (BAN)
4.250% ............. 12/21/00 500 500
5.250% ............. 03/01/01 520 522
Warren County
Industrial Development
Authority (A)
4.400% ............. 06/01/00 1,670 1,670
Warren County,
Healthcare Facilities,
Otterbein Homes (RB) (A)
4.350% ............. 06/01/00 3,900 3,900
Warren County,
Industrial Development Authority,
Cincinnati Electric
Project (RB) (A)
4.450% ............. 06/07/00 4,000 4,000
Wooster, Industrial Development
Authority, Allen Group
Project (RB) (A)
4.250% ............. 06/07/00 2,800 2,800
------------
154,199
------------
PUERTO RICO -- 1.8%
Commonwealth, Government
Development (RB) (MBIA) (A)
3.400% ............. 06/07/00 2,900 2,900
------------
TOTAL MUNICIPAL BONDS
(Cost $157,099) ............................. 157,099
------------
NUMBER VALUE
OF SHARES (000)
--------- -----
CASH EQUIVALENTS -- 0.6%
Blackrock Funds Ohio Municipal
Money Market Portfolio ............. 700,000 $ 700
Federated Ohio Municipal
Cash Trust ......................... 247,678 248
------------
TOTAL CASH EQUIVALENTS
(Cost $948) ................................. 948
------------
TOTAL INVESTMENTS -- 99.4%
(Cost $158,047)* ............................ 158,047
============
OTHER ASSETS AND LIABILITIES,
NET -- 0.6% ................................. 886
------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization-- no par value)
based on 129,479,060 outstanding shares of
beneficial interest ......................... 129,479
Portfolio Shares of Class A
(unlimited authorization-- no par value)
based on 29,454,634 outstanding shares of
beneficial interest ......................... 29,455
Distributions in excess of net investment
income ...................................... (1)
------------
TOTAL NET ASSETS -- 100.0% ..................... $ 158,933
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................ $1.00
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A ............................ $1.00
============
------------------------------------------------
* ALSO COST FOR FEDERAL INCOME TAX PURPOSES.
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MAY 31, 2000. THE MATURITY DATE SHOWN IS THE
SHORTER OF THE NEXT RESET DATE OR THE DATE IN WHICH THE PRINCIPAL AMOUNT
MAY BE RECOVERED THROUGH DEMAND.
(B) SECURITIES ARE BACKED BY A LETTER OF CREDIT BY A MAJOR FINANCIAL
INSTITUTION.
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
AN--ANTICIPATION NOTE
BAN--BOND ANTICIPATION NOTE
FGIC--FEDERAL GUARANTY INSURANCE CORPORATION
GO--GENERAL OBLIGATION
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
RB--REVENUE BOND
TECP--TAX EXEMPT COMMERCIAL PAPER
See Accompanying Notes
119
<PAGE>
STATEMENT OF NET ASSETS
ARMADA PENNSYLVANIA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- 99.3%
PENNSYLVANIA -- 99.3%
ABN Amro Munitops,
Port Authority of
Allegheny County (TECP)
Series 1999-16
4.600% ............. 10/11/00 $4,000 $ 4,000
Allegheny County
Higher Education Building
Authority, University of
Pittsburgh Project
(RB) (A) (B) Series 1985 B
4.250% ............. 06/01/00 1,080 1,080
Allegheny County Industrial
Development Authority
(RB) (A) (B)
4.450% ............. 06/01/00 1,750 1,750
Allegheny County Industrial
Development Authority,
Longwood Oakmont Project
(RB) (A) (B) Series A
4.400% ............. 06/01/00 2,800 2,800
Allegheny County Industrial
Development Authority,
Longwood Oakmont Project
(RB) (A) (B) Series B
4.400% ............. 06/01/00 2,100 2,100
Allegheny County Industrial
Development Authority,
Longwood Oakmont Project
(RB) (A) (B) Series C
4.400% ............. 06/01/00 3,700 3,700
Allegheny County Industrial
Development Authority,
USX Project (RB) (B)
4.250% ............. 06/01/00 6,000 6,000
Allegheny County
Port Authority (AN)
4.000% ............. 06/30/00 2,000 2,001
Beaver County,
Pollution Control Revenue,
Atlantic Richfield Project
(RB) (A) (B)
4.050% ............. 06/07/00 2,000 2,000
Beaver County
Industrial Development Authority,
Duquesne Light (TECP) (AMBAC)
Series D
3.850% ............. 06/15/00 2,600 2,600
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Beaver County
Industrial Development Authority,
Duquesne Light (TECP) (AMBAC)
Series E
3.950% ............. 07/06/00 $4,000 $ 4,000
Bucks County
Industrial Development Authority,
Edgecomb Metals Project
(RB) (A) (B)
4.250% ............. 06/01/00 2,500 2,500
4.250% ............. 06/01/00 2,500 2,500
Bucks County
Industrial Development Authority
(TECP)
4.250% ............. 10/05/00 3,250 3,250
Chester County
Industrial Development Authority,
Archdiocese of Philadelphia
Project (A) (B) Series 1997
4.350% ............. 06/01/00 1,180 1,180
Dallastown Area
School District Series
(FGIC) (A) (B)
4.380% ............. 06/01/00 2,000 2,000
Delaware County
Industrial Development Authority,
Scott Paper Project (RB) (A) (B)
4.250% ............. 06/07/00 2,600 2,600
Delaware County
Industrial Development Authority,
Scott Paper Project (RB) (A) (B)
Series 1984-A
4.250% ............. 06/07/00 1,900 1,900
Delaware County
Industrial Development Authority,
UPS Project (RB) (A) (B)
Series 1985
4.300% ............. 06/01/00 2,500 2,500
Delaware Valley
Industrial Finance Authority,
Local Government (RB) (A) (B)
Series D
4.100% ............. 06/07/00 2,700 2,700
Emmaus General
Authority (RB) (FSA) (A) (B)
4.150% ............. 06/07/00 3,000 3,000
Ephrata Area
School District (GO) (FGIC)
4.500% ............. 10/15/00 1,035 1,036
See Accompanying Notes
120
<PAGE>
STATEMENT OF NET ASSETS
ARMADA PENNSYLVANIA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Iroquois School District (GO)
4.500% ............. 06/01/00 $2,500 $ 2,500
Lancaster Higher Education
Authority, Franklin & Marshall
College Project (RB) (A) (B)
Series 1997
4.400% ............. 06/01/00 3,980 3,980
Lehigh County, Callable
08/01/00 @102 (GO) (FGIC)
6.900% ............. 08/01/01 2,500 2,563
Lehigh County (RB) (MBIA)
(A) (B) Series B
4.350% ............. 06/01/00 900 900
Mercersburg General Purpose
Authority, Mercersburg College
Project (RB) (A) (B) Series 1997
4.300% ............. 06/07/00 1,000 1,000
Middletown Township,
Callable 09/01/00 @ 100 (GO) (MBIA)
4.300% ............. 09/01/00 160 160
Montgomery County
Industrial Development Authority,
Peco Energy (TECP)
4.000% ............. 06/08/00 3,000 3,000
Montgomery County,
Pollution Control Revenue (TECP)
Series 1994-A
4.600% ............. 07/20/00 2,000 2,000
4.300% ............. 08/16/00 2,500 2,500
New Castle Hospital
Revenue Authority,
Jameson Memorial Hospital
Project (RB) (A) (B)
4.250% ............. 06/07/00 2,600 2,600
Norristown (TRAN)
4.250% ............. 12/28/00 1,500 1,500
Northampton County
Higher Education Authority,
Lafayette College (RB) (A) (B)
Series B
4.400% ............. 06/01/00 1,500 1,500
Northeast Pennsylvania Hospital
Authority, Central Service
Capital Access (TECP) (MBIA)
3.850% ............. 06/14/00 1,000 1,000
Northern Cambria
School District (GO) (AMBAC)
5.100% ............. 09/01/00 300 301
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Northern York County
School District (GO) (FGIC)
4.000% ............. 11/15/00 $ 240 $ 240
Old Forge School District (TRAN)
4.300% ............. 06/30/00 1,572 1,572
Pen Argyl School District (TRAN)
3.750% ............. 06/30/00 1,700 1,700
Pennsylvania Housing Finance
Agency (RB)
4.950% ............. 01/01/01 2,000 2,001
Pennsylvania Infrastructure
Authority (RB) (MBIA)
4.500% ............. 09/01/00 2,895 2,898
Pennsylvania Intergovernal
Cooperation Authority,
City of Philadelphia Funding
Program (RB) (FGIC)
Series 1992
6.000% ............. 06/15/00 2,000 2,002
Pennsylvania (GO) (MBIA)
4.800% ............. 06/15/00 200 200
Pennsylvania Higher
Educational Assistance Agency,
Student Loan (RB)
4.625% ............. 12/01/00 500 501
Pennsylvania Higher Educational
Authority, Association of
Independent Colleges,
Messiah College (TECP)
3.800% ............. 11/01/00 3,000 3,000
Pennsylvania Higher Educational
Authority, Association of
Independent Colleges,
Mullenburg College (TECP)
4.350% ............. 05/01/01 1,000 1,000
Pennsylvania Higher Educational
Authority, Carnegie Mellon
University Project (RB) (A) (B)
Series 1995-C
4.350% ............. 06/01/00 1,000 1,000
Pennsylvania Higher Educational
Authority, Council of
Independent Colleges (RB) (A)
4.250% ............. 04/01/01 2,500 2,500
See Accompanying Notes
121
<PAGE>
STATEMENT OF NET ASSETS
ARMADA PENNSYLVANIA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Pennsylvania Higher Educational
Authority, Medical College,
Prerefunded 03/01/01 @ 102
(RB) Series A
7.375% ............. 03/01/01 $2,000 $ 2,083
Pennsylvania Higher Educational
Authority, University of Pennsylvania,
Health Services Project (RB) (A) (B)
Series B
4.300% ............. 06/07/00 1,000 1,000
Pennsylvania Higher Educational
Authority, University of Pennsylvania,
Health Services Project (RB) (A) (B)
Series C
4.300% ............. 06/07/00 6,000 6,000
Pennsylvania Higher Educational
Authority, Valley Forge Academy
(TECP) (A)
3.800% ............. 11/01/00 2,000 2,000
Pennsylvania State (TECP)
Series 1997-A
3.950% ............. 07/21/00 1,000 1,000
4.100% ............. 07/28/00 1,000 1,000
4.600% ............. 08/31/00 1,000 1,000
Pennsylvania State Turnpike
Commission (RB) (A) (B)
Series Q
4.350% ............. 06/01/00 1,400 1,400
Pennsylvania State Turnpike
Commission (RB) (A) (B)
Series Q
4.350% ............. 06/01/00 2,000 2,000
Pennsylvania State University (RB)
4.950% ............. 08/15/00 500 501
Philadelphia (TRAN) (A)
Series A
4.250% ............. 06/30/00 2,000 2,001
Philadelphia Industrial Development
Authority, Chemical Heritage
Foundation Project (RB) (A) (B)
4.350% ............. 06/01/00 1,000 1,000
Philadelphia Industrial Development
Authority, Fox Chase Cancer Center
Project (RB) (A) (B) Series 1997
4.350% ............. 06/01/00 3,100 3,100
Philadelphia, Hospital &
Higher Educational Facility
Authority, Children's Hospital
Project (RB) (A) (B)
Series 1996-A
4.350% ............. 06/01/00 2,100 2,100
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Sayre, Healthcare Facility Authority,
VHA Capital Financing Project
(RB) (AMBAC) (A) (B)
Series 1985-I
4.150% ............. 06/07/00 $2,700 $ 2,700
Sayre, Healthcare Facility Authority,
VHA Capital Financing Project
(RB) (AMBAC) (A) (B)
Series 1985-M
4.150% ............. 06/07/00 1,000 1,000
Scranton-Lackawanna,
Health & Welfare Authority,
University of Scranton (RB) (A)
3.900% ............. 11/01/00 1,615 1,615
Shaler Area School District
(GO) (FSA) Series B
3.750% ............. 09/01/00 600 600
State, Pittsburgh Urban Mortgage
Redevelopment Authority,
Callable 04/01/00 @ 100
(RB) Series 1999
3.545% ............. 08/15/00 1,045 1,045
State College Area School
District (GO) (FSA)
4.400% ............. 03/01/01 300 301
Temple University Funding
(RB) Series 2000
4.252% ............. 05/10/01 2,000 2,014
Venango, Pollution Control
Revenue (RB) (A) (B)
4.450% ............. 06/07/00 895 895
Washington County, Authority
Lease (RB) (A) (B)
Series 1985
4.350% ............. 06/07/00 3,730 3,730
York County Industrial
Development Authority,
Peco Energy Project (RB) (A) (B)
Series A
4.300% ............. 06/01/00 6,800 6,800
York County Industrial
Development Authority,
Public Service Electric & Gas
Project (RB) (MBIA) (A) (B)
Series 1995-A
3.900% ............. 06/07/00 3,000 3,000
------------
151,200
------------
TOTAL MUNICIPAL BONDS
(Cost $151,200) ............................. 151,200
------------
See Accompanying Notes
122
<PAGE>
STATEMENT OF NET ASSETS
ARMADA PENNSYLVANIA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- ------
CASH EQUIVALENTS -- 0.2%
Blackrock Pennsylvania Municipal
Money Market Fund .................. 100,000 $ 100
Federated Pennsylvania
Cash Trust ......................... 249,204 249
------------
TOTAL CASH EQUIVALENTS
(Cost $349) ................................. 349
============
TOTAL INVESTMENTS -- 99.5%
(Cost $151,549)* ............................ 151,549
============
OTHER ASSETS AND LIABILITIES,
NET -- 0.5% ................................. 691
------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization-- no par value)
based on 94,295,123 outstanding shares of
beneficial interest ......................... 94,295
Portfolio Shares of Class A
(unlimited authorization-- no par value)
based on 57,956,708 outstanding shares of
beneficial interest ......................... 57,957
Undistributed net investment income .......... 1
Accumulated net realized loss on
investments ................................. (13)
------------
TOTAL NET ASSETS -- 100.0% ..................... $ 152,240
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I $1.00
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A $1.00
============
------------------------------------------------
* ALSO COST FOR FEDERAL INCOME TAX PURPOSES.
(A) SECURITIES ARE BACKED BY A LETTER OF CREDIT BACKED BY A MAJOR FINANCIAL
INSTITUTION.
(B) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MAY 31, 2000. THE MATURITY DATE SHOWN IS THE LONGER
OF THE NEXT RESET DATE OR THE DATE IN WHICH THE PRINCIPAL AMOUNT CAN BE
RECOVERED THROUGH DEMAND.
AN--ANTICIPATION NOTE
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
FGIC--FEDERAL GUARANTY INSURANCE COMPANY
FSA--FINANCIAL SECURITY ASSURANCE
GO--GENERAL OBLIGATION
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
RB--REVENUE BOND
TECP--TAX EXEMPT COMMERCIAL PAPER
TRAN--TAX AND REVENUE ANTICIPATION NOTE
See Accompanying Notes
123
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- 99.6%
ALASKA -- 2.3%
Valdez Marine Terminal,
Arco Transportation Project,
Series 1994-A
5.600% ............. 06/02/00 $ 3,300 $ 3,300
Valdez Marine Terminal,
Arco Project (TECP)
Series C
5.550% ............. 06/09/00 3,000 3,000
Valdez Marine Terminal,
Arco Transportation Project
(RB) (A) (B) Series 1994-B
4.200% ............. 06/07/00 6,000 6,000
------------
12,300
------------
ARIZONA -- 4.8%
Maricopa County,
Pollution Control Revenue,
Southern California Edison (RB)
Series E
4.750% ............. 07/12/00 2,000 2,000
Maricopa County,
Pollution Control Revenue,
Southern California Edison
Project (TECP)
4.000% ............. 07/21/00 6,600 6,600
Maricopa County,
Pollution Control Revenue,
Southern California Edison
Project (TECP) Series F
3.800% ............. 07/26/00 4,350 4,350
Salt River Project, Agriculture
Improvement & Power
Distribution (TECP) Series B
4.600% ............. 07/18/00 6,000 6,000
Salt River Project, Agriculture
Improvement & Power,
District of Arizona (TECP)
3.750% ............. 06/16/00 5,000 5,000
Salt River Project, Agriculture
Improvement & Power,
District of Arizona (TECP)
Series B
4.000% ............. 07/20/00 2,200 2,200
------------
26,150
------------
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
COLORADO -- 1.9%
Colorado State,
Health Facilities Authority,
North Colorado Medical
Center (RB) (A) (B)
4.250% ............. 06/01/00 $ 4,300 $ 4,300
Westminster, Industrial
Development Ball
Project (RB) (A)
4.300% ............. 06/07/00 6,000 6,000
------------
10,300
------------
DISTRICT OF COLUMBIA -- 0.5%
District of Columbia,
George Washington
University (RB) (A)
Series 1999 B
4.600% ............. 06/07/00 3,000 3,000
------------
FLORIDA -- 1.8%
Jacksonville, Pollution Control
Revenue, Power & Light
Company Project (TECP)
3.850% ............. 06/27/00 3,000 3,000
3.900% ............. 06/29/00 5,810 5,810
Jacksonville, Pollution Control
Revenue, Power & Light
Company Project (TECP)
Series 1994
4.000% ............. 07/20/00 1,300 1,300
------------
10,110
------------
GEORGIA -- 2.6%
Municipal Electric
Authority of Georgia (TECP)
4.000% ............. 06/12/00 3,157 3,157
Municipal Electric
Authority of Georgia,
Sub Project 1 (TECP)
Series B
4.000% ............. 08/15/00 5,000 5,000
State of Georgia,
Trust Receipts (GO) (A) (B)
Series 128
4.380% ............. 06/01/00 6,000 6,000
------------
14,157
------------
See Accompanying Notes
124
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
ILLINOIS -- 9.8%
Illinois State, Educational
Facilities Authority Lake Forest
Open Lands Project (RB) (A)
4.250% ............. 06/07/00 $ 7,000 $ 7,000
Illinois State, Educational
Facilities Authority,
Art Institute of Chicago
Cultural Project (RB) (A) (B)
4.300% ............. 06/07/00 7,500 7,500
Illinois State, Educational
Facilities Authority,
National Louis University
(RB) (A) Series B
4.300% ............. 06/01/00 3,000 3,000
Illinois State, Educational
Facilities Authority,
Northwestern University
(RB) (A) (B)
4.300% ............. 06/07/00 8,736 8,736
Illinois State, Health Facilities
Authority, Advocate Healthcare
Network (RB) (A) (B) Series B
4.250% ............. 06/07/00 4,820 4,820
Illinois State, Health Facilities
Authority, Northwestern
Memorial Hospital Project (RB) (A)
4.350% ............. 06/01/00 5,000 5,000
Illinois State, Hospital Development
Finance Authority,
Palos Community Hospital
(RB) (A) (B) Series 1994-2
4.350% ............. 06/01/00 10,400 10,400
Illinois State, Trust Receipts
(GO) (A) (B) Series 133
4.400% ............. 06/01/00 5,000 5,000
University of Chicago,
Illinois Education Facilities (TECP)
4.750% ............. 01/26/01 2,000 2,000
------------
53,456
------------
INDIANA -- 6.5%
Indiana State, Health Facilities
Finance Authority, Capital
Access (RB) (A) (B) Series 1991
4.250% ............. 06/07/00 6,400 6,400
Indiana State, Health Facilities
Finance Authority, Capital
Access (RB) (A) (B) Series 1998
4.250% ............. 06/07/00 7,350 7,350
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
INDIANA -- CONTINUED
Indiana State, Hospital Equipment
Finance Authority (RB) (A) (B)
4.250% ............. 06/07/00 $ 2,400 $ 2,400
Purdue University, Indiana Universities
Trustees Student Fee (RB) (A) (B)
Series H
4.150% ............. 06/07/00 5,300 5,300
Purdue University, Indiana Universities
Trustees Student Fee (RB) (A) (B)
Series O
4.150% ............. 06/07/00 5,850 5,850
Sullivan Hoosier Energy Rural (TECP)
Series L2
3.600% ............. 06/16/00 4,700 4,700
3.800% ............. 07/28/00 3,400 3,400
------------
35,400
------------
KENTUCKY -- 1.8%
Kentucky State, Interlocal School
Transportation Association (TRAN)
4.000% ............. 06/30/00 5,000 5,002
Owensboro Davies County,
Regional Water Agency (RB)
Series A
4.400% ............. 09/01/00 4,765 4,771
------------
9,773
------------
MASSACHUSETTS -- 0.7%
Worchester (BAN)
4.500% ............. 08/30/00 4,000 4,004
------------
MICHIGAN -- 3.6%
Bellevue, Community School (GO)
4.375% ............. 08/31/00 2,000 2,003
Detroit, Sewer Dispense
(RB) (A) Series A
4.100% ............. 06/07/00 6,000 6,000
Michigan State, Building
Authority (TECP) (A)
Series 2
4.700% ............. 07/13/00 2,000 2,000
Michigan State, Clean Air
Initiatives (TECP) (A)
Series A
4.370% ............. 06/01/00 5,000 5,000
Michigan State, Detroit Edison
Project (RB) (A)
4.350% ............. 06/01/00 2,000 2,000
Mount Morris, Consolidated
School District State (AN)
4.050% ............. 08/30/00 2,500 2,502
------------
19,505
------------
See Accompanying Notes
125
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
MINNESOTA -- 7.1%
Becker, Pollution Control Revenue,
Northern States Power (TECP)
4.000% ............. 07/20/00 $ 8,200 $ 8,200
Minneapolis (GO) (A) (B)
4.100% ............. 06/01/00 7,075 7,075
Minneapolis University
Gateway Project (GO) (A)
4.150% ............. 06/01/00 8,350 8,350
Minnesota School District (TRAN)
4.750% ............. 02/16/01 4,500 4,518
Minnesota State,
School District (TRAN)
3.450% ............. 08/15/00 3,400 3,400
Olmsted County,
Human Services Campus
Infrastructure (RB) (A) (B)
4.150% ............. 06/01/00 7,430 7,430
------------
38,973
------------
MISSISSIPPI -- 0.8%
Jackson County Water System,
Chevron Project (GO)
3.900% ............. 08/01/00 4,400 4,400
------------
MISSOURI -- 0.5%
Missouri State,
Health & Educational Facility
Authority (RB) (A) Series D
4.250% ............. 06/01/00 3,000 3,000
------------
NEVADA -- 0.3%
Clarke County,
University of Nevada Las Vegas,
Development Project (RB) (A) (B)
4.250% ............. 06/01/00 1,545 1,545
------------
NEW YORK -- 1.5%
New York City, Municipal
Water Authority (TECP)
Series 5-A
4.750% ............. 08/31/00 3,000 3,000
New York (GO) (A) Series J2
3.950% ............. 06/07/00 5,000 5,000
------------
8,000
------------
NORTH CAROLINA -- 6.7%
North Carolina State University,
Raleigh Centennial Campus (RB) (A)
Series A
4.200% ............. 06/07/00 5,000 5,000
MUNICIPAL BONDS -- CONTINUED
NORTH CAROLINA -- CONTINUED
North Carolina State,
Educational Facilities,
Bowman Gray School of Medicine
Project (RB) (A) (B)
4.250% ............. 06/01/00 $10,600 $ 10,600
Raleigh Durham, Airport
Authority, American Airlines
Project (RB) (A)
4.350% ............. 06/01/00 2,700 2,700
Wake County, Industrial
Facilities & Pollution
Control (RB) (A)
4.500% ............. 06/01/00 10,000 10,000
Winston-Salem, Municipal
Leasing (RB) (A) (B)
4.500% ............. 06/01/00 8,300 8,300
------------
36,600
------------
OHIO -- 15.6%
Ansonia
Local School District (BAN)
4.600% ............. 07/31/00 2,563 2,565
Avon Lake (BAN)
4.750% ............. 03/29/01 2,050 2,057
Cardinal Ohio
Local School District (BAN)
4.500% ............. 06/15/00 4,700 4,701
Columbus Sewer & Water
Improvements (RB) (A) (B)
Series 1995-1
4.150% ............. 06/04/00 1,300 1,300
Columbus Sewer
Authority (RB) (A) (B)
4.250% ............. 06/01/00 4,200 4,200
Cuyahoga County,
Hospital Facilities Authority,
Cleveland Clinic Foundation
(RB) (A) (B) Series 1997-D
4.350% ............. 06/01/00 5,000 5,000
Eastern Ohio, Regional
Wastewater Authority (BAN)
4.240% ............. 11/30/00 3,500 3,504
Lima City School District (BAN)
4.650% ............. 08/01/00 6,000 6,004
Madison Ohio
Local School District (BAN)
4.600% ............. 02/01/01 2,770 2,775
See Accompanying Notes
126
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
OHIO-- CONTINUED
Mahoning County,
Hospital Facilities Authority,
Forum Health System,
(RB) (MBIA) (A) (B)
4.390% ............. 06/01/00 $ 6,600 $ 6,600
Mayfield Village (GO) (BAN)
4.000% ............. 09/27/00 4,500 4,502
Muskingum County,
Juvenile Detention
Center (GO) (BAN)
5.150% ............. 06/01/01 2,650 2,656
Muskingum County,
Various Purpose (GO) (BAN)
3.750% ............. 06/01/00 2,650 2,650
4.050% ............. 09/20/00 1,980 1,981
Ohio State University (RB) (A)
3.900% ............. 06/07/00 1,000 1,000
Ohio State University
General Receipts (RB) (A)
4.300% ............. 06/01/00 3,880 3,880
Ohio State, Higher
Education Authority,
Lake Erie Project (RB) (A) (B)
4.350% ............. 06/01/00 4,610 4,610
Ohio State, Water Development
Authority, Cleveland Electric
Project (RB) (A) Series B
4.200% ............. 06/07/00 1,200 1,200
Olentangy School District (BAN)
4.875% ............. 09/15/00 2,000 2,003
Saint Mary (BAN)
3.700% ............. 06/13/00 1,570 1,570
Scioto County, V.H.A. Central
Capital Asset Financing
Program, Series F (AMBAC) (A)
4.200% ............. 06/07/00 2,030 2,030
Shaker Heights (GO) (BAN)
5.000% ............. 05/31/01 3,935 3,941
Streetsboro School District (BAN)
4.750% ............. 04/27/01 4,000 4,010
Summit County (GO) (BAN)
3.800% ............. 06/01/00 8,000 8,000
5.500% ............. 05/31/01 2,408 2,424
------------
85,163
------------
PENNSYLVANIA -- 7.5%
Allegheny County, Industrial Development
Authority, USX Project (RB) (A) (B)
4.250% 06/01/00 5,000 5,000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Allegheny County,
Residential Finance Authority,
Mortgage Notes (RB)
Series GG-1
3.900% ............. 10/01/00 $ 4,755 $ 4,755
Delaware County,
Industrial Development Authority,
UPS Project (RB) (A) (B)
Series 1985
4.300% ............. 06/01/00 1,500 1,500
Mercersburg, General Purpose
Authority, Mercersburg College
Project (RB) (A) (B) Series 1997
4.300% ............. 06/07/00 8,000 8,000
Montgomery County, Industrial
Development Authority,
Peco Energy (TECP)
4.000% ............. 06/08/00 3,400 3,400
Montour County,
Health System Authority,
Geisinger Authority (A)
Series 1998 B
4.350% ............. 06/01/00 5,000 5,000
New Castle, Pennsylvania
Hospital Revenue Authority,
Jameson Memorial Hospital
Project (RB) (A) (B)
4.250% ............. 06/07/00 2,000 2,000
Northampton County,
Higher Education Authority,
Lafayette College (RB) (A) (B)
Series B
4.400% ............. 06/01/00 2,000 2,000
Quakertown, General Authority
(RB) (A) Series A
4.150% ............. 06/06/00 2,445 2,445
Quakertown, Hospital Facilities
Authority (RB) (A) (B)
4.150% ............. 06/06/00 4,000 4,000
Sayre, Healthcare Center
Facility Authority
(RB) (AMBAC) (A) (B)
4.150% ............. 06/07/00 3,000 3,000
University of Pennsylvania (GO) (A) (B)
4.300% ............. 06/07/00 100 100
------------
41,200
------------
SOUTH CAROLINA -- 0.7%
South Carolina Public Service,
Santee Cooper (TECP)
4.250% ............. 07/17/00 4,000 4,000
------------
See Accompanying Notes
127
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TAX EXEMPT MONEY MARKET FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
TENNESSEE -- 2.0%
Metropolitan Government of
Nashville & Davidson County,
Health & Education Facilities Board,
Vanderbilt University (RB) (A) (B)
Series A
4.300% ............. 06/01/00 $ 1,000 $ 1,000
Tennessee State School
Bond Authority
(TECP) Series A
4.750% ............. 07/13/00 2,000 2,000
Tennessee State (GO) (A) (B)
Series 108
5.000% ............. 06/01/00 2,000 2,000
Tennessee State School
Bond Authority (TECP)
Series A
3.700% ............. 06/13/00 5,800 5,800
------------
10,800
------------
TEXAS -- 4.8%
ABN Amro Munitops, FortBend,
Certificate Trust, (B)
Series 1999-6
4.250% ............. 06/07/00 3,000 3,000
Deer Park, Independent
School District (GO)
6.250% ............. 02/15/01 1,000 1,013
Forth Worth (TECP)
4.450% ............. 06/13/00 5,000 5,000
Harris County, Health Facilities
Development, Methodist Hospital
Project (RB) (A) Series A
4.350% ............. 06/01/00 1,000 1,000
Houston (TECP) Series 1999a
4.250% ............. 07/18/00 2,000 2,000
Houston (GO) Series B
4.350% ............. 08/14/00 4,000 4,000
Houston, Independent School
District Asbestos Abatement (GO)
4.000% ............. 07/15/00 1,600 1,601
Northside, Independent School
District (GO) Series A
6.375% ............. 08/15/00 700 704
Texas State (TRAN)
4.500% ............. 08/31/00 8,000 8,015
------------
26,333
------------
PAR VALUE
MATURITY (000) (000)
-------- ----- -----
MUNICIPAL BONDS -- CONTINUED
UTAH -- 6.0%
Emery County, Pollution
Control Revenue, Pacificorp
Project (RB) (A) (B)
4.050% ............. 06/07/00 $12,100 $ 12,100
Intermountain Power
Agency (TECP)
3.900% ............. 06/28/00 2,000 2,000
Intermountain Power
Agency (TECP)
Series 1985F
4.050% ............. 06/14/00 3,300 3,300
3.750% ............. 07/28/00 2,500 2,500
Intermountain Power
Agency (TECP)
Series 1997B
3.750% ............. 07/27/00 5,000 5,000
Intermountain Power
Agency (TECP)
Series 97b
4.450% ............. 10/16/00 4,000 4,000
Utah University,
Auxiliary & Campus
Facilities (RB) (A) (B)
Series 1997-A
4.250% ............. 06/07/00 3,850 3,850
------------
32,750
------------
VIRGINIA -- 2.2%
Norfolk Industrial
Development Authority
Pooled Financing Program (TECP)
3.900% ............. 06/23/00 5,000 5,000
Virginia Public School
Authority (RB) (A) (B)
Series 109
4.400% ............. 06/01/00 7,000 7,000
------------
12,000
------------
WASHINGTON-- 3.9%
Chelan County (RB) (A) (B)
4.300% ............. 06/07/00 4,260 4,260
Washington State,
Healthcare Facility Authority,
Fred Hutchinson Cancer
Center (RB) (A)
4.500% ............. 06/01/00 10,000 10,000
See Accompanying Notes
128
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
ARMADA TAX EXEMPT MONEY MARKET FUND
MAY 31, 2000
NUMBER OF
SHARES/ VALUE
MATURITY PAR (000) (000)
-------- --------- -----
MUNICIPAL BONDS -- CONTINUED
WASHINGTON -- CONTINUED
Washington State (GO) (MBIA) (A)
4.250% ............. 06/07/00 $ 5,000 $ 5,000
Washington State, Healthcare
Facility Authority,
Fred Hutchinson Cancer
Research Center (RB) (A) (B)
Series 1991-A
4.500% ............. 06/01/00 2,080 2,080
------------
21,340
------------
WISCONSIN -- 3.7%
Oak Creek, Pollution Control
Revenue, Electric Power
Company Project (RB) (A) (B)
4.350% ............. 06/07/00 3,100 3,100
Wisconsin State (TECP)
Series 1998B
4.000% ............. 06/15/00 4,085 4,085
Wisconsin State (TECP)
Series A
4.000% ............. 06/12/00 6,010 6,010
4.550% ............. 08/10/00 6,850 6,850
------------
20,045
------------
TOTAL MUNICIPAL BONDS
(Cost $544,304) ............................. 544,304
------------
CASH EQUIVALENTS -- 0.8%
Federated Tax-Free
Money Market Fund ................ 1,100,000 1,100
Goldman Sachs Financial Square
Tax-Exempt Money Market
Fund ............................. 3,402,000 3,402
------------
TOTAL CASH EQUIVALENTS
(Cost $4,502) ............................... 4,502
------------
TOTAL INVESTMENTS -- 100.4%
(Cost $548,806)* ............................ 548,806
============
OTHER ASSETS AND LIABILITIES,
NET -- (0.4%) ............................... (2,053)
------------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 327,342,794 outstanding shares of
beneficial interest ......................... $ 327,343
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 219,635,286 outstanding shares of
beneficial interest ......................... 219,635
Distributions in excess of net investment
income ...................................... (200)
Accumulated net realized loss on
investments ................................. (25)
------------
TOTAL NET ASSETS -- 100.0% ..................... $ 546,753
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................ $1.00
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A ............................ $1.00
============
--------------------------------------------
* ALSO COST FOR FEDERAL INCOME TAX PURPOSES.
(A) SECURITIES ARE BACKED BY A LETTER OF CREDIT BY A MAJOR FINANCIAL
INSTITUTION.
(B) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NETASSETS IS
THE RATE IN EFFECT ON MAY 31, 2000. THE MATURITY DATE SHOWN IS THE LONGER OF
THE NEXT RESET DATE OR THE DATE IN WHICH THE PRINCIPAL AMOUNT CAN BE
RECOVERED THROUGH DEMAND.
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
AN--ANTICIPATION NOTE
BAN--BOND ANTICIPATION NOTE
GO--GENERAL OBLIGATION
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
RB--REVENUE BOND
TECP--TAX EXEMPT COMMERCIAL PAPER
TRAN--TAX AND REVENUE ANTICIPATION NOTE
See Accompanying Notes
129
<PAGE>
STATEMENT OF NET ASSETS
ARMADA TREASURY MONEY MARKET FUND
================================================================================
MAY 31, 2000
NUMBER OF
SHARES/ VALUE
MATURITY PAR (000) (000)
-------- --------- -----
U.S. TREASURY OBLIGATIONS -- 91.4%
TREASURY BILLS+ -- 73.0%
United States Treasury Bills
4.424% ............. 06/15/00 $ 25,000 $ 24,946
4.498% ............. 06/29/00 50,000 49,786
4.578% ............. 06/22/00 20,000 19,936
4.641% ............. 07/06/00 25,000 24,865
4.859% ............. 07/13/00 25,000 24,841
4.981% ............. 07/20/00 20,000 19,854
5.061% ............. 07/27/00 5,000 4,960
5.401% ............. 06/01/00 120,000 120,000
5.418% ............. 08/24/00 10,000 9,867
5.500% ............. 08/31/00 5,000 4,926
5.632% ............. 06/08/00 53,000 52,946
--------
356,927
--------
U.S. TREASURY NOTES -- 18.4%
U.S. Treasury Notes
5.125% ............. 08/31/00 45,000 44,877
5.375% ............. 07/31/00 30,000 29,968
4.000% ............. 10/31/00 15,000 14,854
--------
89,699
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $446,626) 446,626
--------
CASH EQUIVALENTS -- 8.8%
Federated U.S. Treasury Cash
Reserve Money Market Fund ........ 21,719,000 21,719
Goldman Sachs Financial Square
Treasury Money Market Fund ....... 21,517,000 21,517
--------
TOTAL CASH EQUIVALENTS
(Cost $43,236) ............................... 43,236
--------
TOTAL INVESTMENTS -- 100.2%
(Cost $489,862)* ............................. $489,862
========
OTHER ASSETS AND LIABILITIES,
NET -- (0.2%) ................................ (980)
--------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization -- no par value)
based on 409,135,863 outstanding shares of
beneficial interest .......................... $409,136
Portfolio Shares of Class A
(unlimited authorization -- no par value)
based on 79,715,514 outstanding shares of
beneficial interest .......................... 79,716
Distributions in excess of net investment
income ....................................... (7)
Accumulated net realized gain on
investments .................................. 37
--------
TOTAL NET ASSETS -- 100.0% ...................... $488,882
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS I ............................. $1.00
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A ............................. $1.00
========
------------------------------------------------
* ALSO COST FOR FEDERAL INCOME TAX PURPOSES.
+ EFFECTIVE YIELD
See Accompanying Notes
130
<PAGE>
This page left intentionally blank.
<PAGE>
FINANCIAL STATEMENTS
ARMADA FUNDS
================================================================================
STATEMENTS OF OPERATIONS (000)
FOR THE YEAR ENDED MAY 31, 2000
<TABLE>
<CAPTION>
CORE EQUITY EQUITY EQUITY INTERNATIONAL
EQUITY FUND GROWTH FUND INCOME FUND INDEX FUND EQUITY FUND
----------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ...................................... $ 1,473 $ 10,915 $ 14,767 $ 4,453 $ 3,988
Interest ....................................... 142 2,704 856 797 1,210
Less: foreign taxes withheld ................... -- (19) (36) (48) (339)
------- -------- -------- -------- -------
Total investment income ........................ 1,615 13,600 15,587 5,202 4,859
------- -------- -------- -------- -------
EXPENSES:
Investment Advisory fees ....................... 1,179 11,127 3,921 1,339 3,743
Less: Fees waived by Investment Adviser ........ -- -- -- (619) --
Administration fees ............................ 110 1,038 366 268 228
12b-1 fees ..................................... 166 1,502 531 384 327
Less: 12b-1 fees waiver ........................ (94) (890) (313) (380) (195)
Transfer Agent fees ............................ 77 172 88 78 77
Custodian fees ................................. 27 121 60 48 317
Professional fees .............................. 17 99 37 32 36
Printing and shareholder reports ............... 1 134 39 33 38
Registration and filing fees ................... 87 32 42 104 63
Trustees' fees ................................. 3 25 9 7 3
Miscellaneous .................................. 1 37 18 5 21
Shareholder servicing fees --
Class A and B Shares ........................ 11 442 30 16 7
------- -------- -------- -------- -------
Total expenses ................................. 1,585 13,839 4,828 1,315 4,665
------- -------- -------- -------- -------
NET INVESTMENT INCOME/(LOSS) ...................... 30 (239) 10,759 3,887 194
------- -------- -------- -------- -------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on
investments sold ............................. 11,743 101,144 21,296 (13,687) 34,358
Net realized gain/(loss) on foreign
currency transactions ....................... -- -- -- -- (337)
Net realized gain on futures ................... -- -- 192 3,689 2,711
Net change in unrealized appreciation/
depreciation on futures ..................... -- -- -- 294 (147)
Net change in unrealized
appreciation/depreciation on foreign
currency and translation of other
assets and liabilities in
foreign currencies .......................... -- -- -- -- (593)
Net change in unrealized appreciation/
depreciation on investments ................. 5,063 146,758 (78,388) 46,184 43,345
------- -------- -------- -------- -------
Net gain/(loss) on investments ................. 16,806 247,902 (56,900) 36,480 79,337
------- -------- -------- -------- -------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ...................... $16,836 $247,663 $(46,141) $ 40,367 $79,531
======= ======== ======== ======== =======
BALANCED
SMALL CAP SMALL CAP TAX MANAGED ALLOCATION
GROWTH FUND VALUE FUND EQUITY FUND FUND BOND FUND
---------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ...................................... $ 143 $ 8,152 $ 2,595 $ 394 $ --
Interest ....................................... 1,105 1,357 584 2,148 49,189
Less: foreign taxes withheld ................... -- -- (23) (11) --
------- ------- ------- ------- --------
Total investment income ........................ 1,248 9,509 3,156 2,531 49,189
------- ------- ------- ------- --------
EXPENSES:
Investment Advisory fees ....................... 1,304 2,992 2,070 593 3,833
Less: Fees waived by Investment Adviser ........ -- -- -- -- --
Administration fees ............................ 91 209 193 55 488
12b-1 fees ..................................... 132 303 333 82 702
Less: 12b-1 fees waiver ........................ (78) (179) (161) (47) (418)
Transfer Agent fees ............................ 62 107 83 54 76
Custodian fees ................................. 25 40 34 43 70
Professional fees .............................. 11 21 24 4 53
Printing and shareholder reports ............... 19 37 34 7 54
Registration and filing fees ................... 19 38 69 5 215
Trustees' fees ................................. 2 5 5 1 11
Miscellaneous .................................. 23 36 7 1 24
Shareholder servicing fees --
Class A and B Shares ........................ 6 28 55 9 11
------- ------- ------- ------- --------
Total expenses ................................. 1,616 3,637 2,746 807 5,119
------- ------- ------- ------- --------
NET INVESTMENT INCOME/(LOSS) ...................... (368) 5,872 410 1,724 44,070
------- ------- ------- ------- --------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on
investments sold ............................. 16,567 7,441 377 8,621 (35,415)
Net realized gain/(loss) on foreign
currency transactions ....................... -- -- -- 21 --
Net realized gain on futures ................... 3,167 1,889 -- 47 --
Net change in unrealized appreciation/
depreciation on futures ..................... (1,414) (2,552) -- -- --
Net change in unrealized
appreciation/depreciation on foreign
currency and translation of other
assets and liabilities in
foreign currencies .......................... -- -- -- (4) --
Net change in unrealized appreciation/
depreciation on investments ................. 20,224 28,022 43,939 1,222 (7,103)
------- ------- ------- ------- --------
Net gain/(loss) on investments ................. 38,544 34,800 44,316 9,907 (42,518)
------- ------- ------- ------- --------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ...................... $38,176 $40,672 $44,726 $11,631 $ 1,552
======= ======= ======= ======= ========
ENHANCED TOTAL RETURN
INCOME INTERMEDIATE ADVANTAGE
FUND GNMA FUND BOND FUND FUND
-------- --------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ...................................... $ -- $ -- $ -- $ --
Interest ....................................... 5,543 7,295 20,966 21,953
Less: foreign taxes withheld ................... -- -- -- --
------- ------- -------- -------
Total investment income ........................ 5,543 7,295 20,966 21,953
------- ------- -------- -------
EXPENSES:
Investment Advisory fees ....................... 391 587 1,693 1,814
Less: Fees waived by Investment Adviser ........ (87) -- (462) (660)
Administration fees ............................ 61 75 216 231
12b-1 fees ..................................... 88 107 312 329
Less: 12b-1 fees waiver ........................ (84) (64) (184) (320)
Transfer Agent fees ............................ 40 40 72 51
Custodian fees ................................. 20 33 59 45
Professional fees .............................. 9 14 28 27
Printing and shareholder reports ............... 7 7 24 26
Registration and filing fees ................... 8 44 20 2
Trustees' fees ................................. 1 2 6 5
Miscellaneous .................................. 17 9 17 20
Shareholder servicing fees --
Class A and B Shares ........................ 1 3 14 15
------- ------- -------- -------
Total expenses ................................. 472 857 1,815 1,585
------- ------- -------- -------
NET INVESTMENT INCOME/(LOSS) ...................... 5,071 6,438 19,151 20,368
------- ------- -------- -------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on
investments sold ............................. (754) (1,412) (11,400) (8,097)
Net realized gain/(loss) on foreign
currency transactions ....................... -- -- -- --
Net realized gain on futures ................... -- -- -- --
Net change in unrealized appreciation/
depreciation on futures ..................... -- -- -- --
Net change in unrealized
appreciation/depreciation on foreign
currency and translation of other
assets and liabilities in
foreign currencies .......................... -- -- -- --
Net change in unrealized appreciation/
depreciation on investments ................. (1,496) (2,148) (3,177) (6,392)
------- ------- -------- -------
Net gain/(loss) on investments ................. (2,250) (3,560) (14,577) (14,489)
------- ------- -------- -------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ...................... $ 2,821 $ 2,878 $ 4,574 $ 5,879
======= ======= ======== =======
</TABLE>
See Accompanying Notes
132 & 133
<PAGE>
FINANCIAL STATEMENTS
ARMADA FUNDS
================================================================================
STATEMENTS OF OPERATIONS (000)
FOR THE YEAR ENDED MAY 31, 2000
<TABLE>
<CAPTION> OHIO PENNSYLVANIA
NATIONAL TAX TAX EXEMPT MUNICIPAL GOVERNMENT
EXEMPT BOND FUND BOND FUND BOND FUND MONEY MARKET FUND
---------------- ---------- ------------ -----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .................................................. $ 5,022 $ 9,751 $2,207 $87,468
------- ------- ------- -------
EXPENSES:
Investment Advisory fees .................................. 564 1,068 239 5,530
Less: Fees waived by Investment Adviser ................... (222) (427) (91) (1,580)
Administration fees ....................................... 72 136 30 1,106
12b-1 fees ................................................ 104 194 43 1,578
Less: 12b-1 fees waiver ................................... (61) (116) (42) (946)
Transfer Agent fees ....................................... 48 47 25 62
Custodian fees ............................................ 22 27 11 172
Professional fees ......................................... 11 17 7 114
Printing and shareholder reports .......................... 8 14 3 103
Registration and filing fees .............................. 3 38 4 31
Trustees' fees ............................................ 1 3 2 23
Miscellaneous ............................................. 1 7 1 33
Shareholder servicing fees -- Class A and B Shares ........ 5 5 -- 857
------- ------- ------- -------
Total expenses ............................................ 556 1,013 232 7,083
------- ------- ------- -------
NET INVESTMENT INCOME ........................................ 4,466 8,738 1,975 80,385
------- ------- ------- -------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on investments sold .............. (1,960) (3,099) (226) --
Net change in unrealized appreciation/depreciation
on investments ......................................... (2,845) (6,636) (1,589) --
------- ------- ------- -------
Net gain/(loss) on investments ............................ (4,805) (9,735) (1,815) --
------- ------- ------- -------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................................. $ (339) $ (997) $ 160 $80,385
======= ======= ======= =======
PENNSYLVANIA
OHIO MUNICIPAL TAX EXEMPT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
----------------- ----------------- -----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ................................................ $217,971 $5,723 $4,773
-------- ------ ------
EXPENSES:
Investment Advisory fees ................................ 13,393 553 533
Less: Fees waived by Investment Adviser ................. (3,828) (316) (333)
Administration fees ..................................... 2,678 111 93
12b-1 fees .............................................. 3,833 158 133
Less: 12b-1 fees waiver ................................. (2,299) (95) (80)
Transfer Agent fees ..................................... 98 52 42
Custodian fees .......................................... 315 28 26
Professional fees ....................................... 222 13 12
Printing and shareholder reports ........................ 237 15 11
Registration and filing fees ............................ 10 13 3
Trustees' fees .......................................... 72 2 3
Miscellaneous ........................................... 638 21 --
Shareholder servicing fees -- Class A and B Shares ...... 2,321 42 78
-------- ------ ------
Total expenses .......................................... 17,690 597 521
-------- ------ ------
NET INVESTMENT INCOME ...................................... 200,281 5,126 4,252
-------- ------ ------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on investments sold ............ 2 -- --
Net change in unrealized appreciation/depreciation
on investments ....................................... -- -- --
-------- ------ ------
Net gain/(loss) on investments .......................... 2 -- --
-------- ------ ------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............................... $200,283 $5,126 $4,252
======== ====== ======
TAX EXEMPT TREASURY
MONEY MARKET FUND MONEY MARKET FUND
----------------- -----------------
<S> <C> <C>
INVESTMENT INCOME:
Interest ............................................... $21,253 $21,687
------- -------
EXPENSES:
Investment Advisory fees ............................... 2,081 1,287
Less: Fees waived by Investment Adviser ................ (1,190) (215)
Administration fees .................................... 417 300
12b-1 fees ............................................. 595 429
Less: 12b-1 fees waiver ................................ (357) (257)
Transfer Agent fees .................................... 39 46
Custodian fees ......................................... 69 52
Professional fees ...................................... 50 32
Printing and shareholder reports ....................... 51 37
Registration and filing fees ........................... 48 16
Trustees' fees ......................................... 12 8
Miscellaneous .......................................... 111 84
Shareholder servicing fees -- Class A and B Shares ..... 310 110
------- -------
Total expenses ......................................... 2,236 1,929
------- -------
NET INVESTMENT INCOME ..................................... 19,017 19,758
------- -------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on investments sold ........... -- 37
Net change in unrealized appreciation/depreciation
on investments ...................................... -- --
------- -------
Net gain/(loss) on investments ......................... -- 37
------- -------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............................. $19,017 $19,795
======= =======
</TABLE>
See Accompanying Notes
134 & 135
<PAGE>
FINANCIAL STATEMENTS
ARMADA FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
CORE EQUITY FUND EQUITY GROWTH FUND
----------------------------- ---------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income/(loss) .................................. $ 30 $ (167) $ (239) $ (1,632)
Net realized gain/(loss) on investments sold, futures and
foreign currency transactions .............................. 11,743 4,677 101,144 (1,100)
Net unrealized appreciation/depreciation on investments,
futures and foreign currency transactions .................. 5,063 25,111 146,758 287,003
-------- -------- ---------- ----------
Net increase/(decrease) in net assets resulting
from operations ............................................ 16,836 29,621 247,663 284,271
-------- -------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I .................................................... (84) (47) (271) --
Class A .................................................... -- -- -- --
Class B .................................................... -- -- -- --
Class C .................................................... -- -- -- --
Dividends from realized capital gains:
Class I .................................................... (5,717) (5,032) (11,958) (51,288)
Class A .................................................... (112) (25) (1,601) (4,297)
Class B .................................................... (50) (15) (22) (16)
Class C .................................................... -- -- -- --
-------- -------- ---------- ----------
Total distributions ........................................... (5,963) (5,119) (13,852) (55,601)
-------- -------- ---------- ----------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued ................................ 6,527 6,590 126,832 654,266
Proceeds from Common Fund Conversion (note 6) .............. -- -- -- 257,675
Reinvestment of cash distributions ......................... 5,574 4,989 10,439 44,257
Cost of shares redeemed .................................... (27,094) (794) (355,351)* (256,697)
-------- -------- ---------- ----------
Net Class I share transactions ........................... (14,993) 10,785 (218,080) 699,501
-------- -------- ---------- ----------
Class A
Proceeds from shares issued ................................ 2,607 2,524 25,559 148,499
Reinvestment of cash distributions ......................... 110 25 1,526 4,243
Cost of shares redeemed .................................... (497) (1,360) (30,083) (27,176)
-------- -------- ---------- ----------
Net Class A share transactions ........................... 2,220 1,189 (2,998) 125,566
-------- -------- ---------- ----------
Class B
Proceeds from shares issued ................................ 1,081 1,071 2,327 1,448
Reinvestment of cash distributions ......................... 49 15 23 16
Cost of shares redeemed .................................... (477) (36) (266) (108)
-------- -------- ---------- ----------
Net Class B share transactions ........................... 653 1,050 2,084 1,356
-------- -------- ---------- ----------
Class C
Proceeds from shares issued ................................ 4 -- 264 --
Reinvestment of cash distributions ......................... -- -- -- --
Cost of shares redeemed .................................... (2) -- -- --
-------- -------- ---------- ----------
Net Class C share transactions ........................... 2 -- 264 --
-------- -------- ---------- ----------
Increase/(decrease) in net assets from share transactions ..... (12,118) 13,024 (218,730) 826,423
-------- -------- ---------- ----------
Total increase/(decrease) in net assets ....................... (1,245) 37,526 15,081 1,055,093
-------- -------- ---------- ----------
NET ASSETS:
Beginning of period ........................................... 148,440 110,914 1,419,910 364,817
-------- -------- ---------- ----------
End of period ................................................. $147,195 $148,440 $1,434,991 $1,419,910
======== ======== ========== ==========
EQUITY INCOME FUND EQUITY INDEX FUND
---------------------------- -----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 19991
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income/(loss) .................................. $ 10,759 $ 8,703 $ 3,887 $ 1,995
Net realized gain/(loss) on investments sold, futures and
foreign currency transactions .............................. 21,488 19,671 (9,998) 1,051
Net unrealized appreciation/depreciation on investments,
futures and foreign currency transactions .................. (78,388) 91,321 46,478 18,732
-------- -------- --------- --------
Net increase/(decrease) in net assets resulting
from operations ............................................ (46,141) 119,695 40,367 21,778
-------- -------- --------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I .................................................... (10,606) (6,836) (3,813) (1,309)
Class A .................................................... (202) (73) (53) (9)
Class B .................................................... (14) (5) (1) --
Class C .................................................... -- -- -- --
Dividends from realized capital gains:
Class I .................................................... (26,347) (6,668) (2,207) --
Class A .................................................... (623) (70) (28) --
Class B .................................................... (71) (8) -- --
Class C .................................................... -- -- -- --
-------- -------- --------- --------
Total distributions ........................................... (37,863) (13,660) (6,102) (1,318)
-------- -------- --------- --------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued ................................ 105,671 98,187 357,574 269,038
Proceeds from Common Fund Conversion (note 6) .............. -- 212,347 -- --
Reinvestment of cash distributions ......................... 25,812 7,529 5,462 1,150
Cost of shares redeemed .................................... (97,848) (68,381) (296,136) (36,603)
-------- -------- --------- --------
Net Class I share transactions ........................... 33,635 249,682 66,900 233,585
-------- -------- --------- --------
Class A
Proceeds from shares issued ................................ 6,456 11,058 5,801 4,339
Reinvestment of cash distributions ......................... 624 114 76 9
Cost of shares redeemed .................................... (7,121) (3,429) (1,905) (647)
-------- -------- --------- --------
Net Class A share transactions ........................... (41) 7,743 3,972 3,701
-------- -------- --------- --------
Class B
Proceeds from shares issued ................................ 814 1,036 526 --
Reinvestment of cash distributions ......................... 85 12 1 --
Cost of shares redeemed .................................... (358) (152) -- --
-------- -------- --------- --------
Net Class B share transactions ........................... 541 896 527 --
-------- -------- --------- --------
Class C
Proceeds from shares issued ................................ 103 -- 283 --
Reinvestment of cash distributions ......................... -- -- -- --
Cost of shares redeemed .................................... -- -- (2) --
-------- -------- --------- --------
Net Class C share transactions ........................... 103 -- 281 --
-------- -------- --------- --------
Increase/(decrease) in net assets from share transactions ..... 34,238 258,321 71,680 237,286
-------- -------- --------- --------
Total increase/(decrease) in net assets ....................... (49,766) 364,356 105,945 257,746
-------- -------- --------- --------
NET ASSETS:
Beginning of period ........................................... 560,433 196,077 257,746 --
-------- -------- --------- --------
End of period ................................................. $510,667 $560,433 $ 363,691 $257,746
======== ======== ========= ========
INTERNATIONAL EQUITY FUND SMALL CAP GROWTH FUND
---------------------------- ---------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income/(loss) .................................. $ 194 $ 191 $ (368) $ (180)
Net realized gain/(loss) on investments sold, futures and
foreign currency transactions .............................. 36,732 (2,911) 19,734 (10,439)
Net unrealized appreciation/depreciation on investments,
futures and foreign currency transactions .................. 42,605 5,406 18,810 3,126
-------- -------- -------- -------
Net increase/(decrease) in net assets resulting
from operations ............................................ 79,531 2,686 38,176 (7,493)
-------- -------- -------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I .................................................... (650) (830) -- (2)
Class A .................................................... (2) (2) -- --
Class B .................................................... -- -- -- --
Class C .................................................... -- -- -- --
Dividends from realized capital gains:
Class I .................................................... (1,587) -- -- (733)
Class A .................................................... (11) -- -- (5)
Class B .................................................... (1) -- -- --
Class C .................................................... -- -- -- --
-------- -------- -------- -------
Total distributions ........................................... (2,251) (832) -- (740)
-------- -------- -------- -------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued ................................ 172,183 71,205 80,084 48,064
Proceeds from Common Fund Conversion (note 6) .............. -- -- -- --
Reinvestment of cash distributions ......................... 1,021 42 -- 382
Cost of shares redeemed .................................... (23,920) (9,818) (40,435) (14,596)
-------- -------- -------- -------
Net Class I share transactions ........................... 149,284 61,429 39,649 33,850
-------- -------- -------- -------
Class A
Proceeds from shares issued ................................ 3,139 2,079 3,021 956
Reinvestment of cash distributions ......................... 10 2 -- 5
Cost of shares redeemed .................................... (1,113) (1,249) (2,027) (147)
-------- -------- -------- -------
Net Class A share transactions ........................... 2,036 832 994 814
-------- -------- -------- -------
Class B
Proceeds from shares issued ................................ 607 44 268 807
Reinvestment of cash distributions ......................... 1 -- -- --
Cost of shares redeemed .................................... (22) (4) (76) (673)
-------- -------- -------- -------
Net Class B share transactions ........................... 586 40 192 134
-------- -------- -------- -------
Class C
Proceeds from shares issued ................................ 174 -- 84 --
Reinvestment of cash distributions ......................... -- -- -- --
Cost of shares redeemed .................................... -- -- (3) --
-------- -------- -------- -------
Net Class C share transactions ........................... 174 -- 81 --
-------- -------- -------- -------
Increase/(decrease) in net assets from share transactions ..... 152,080 62,301 40,916 34,798
-------- -------- -------- -------
Total increase/(decrease) in net assets ....................... 229,360 64,155 79,092 26,565
-------- -------- -------- -------
NET ASSETS:
Beginning of period ........................................... 200,374 136,219 81,373 54,808
-------- -------- -------- -------
End of period ................................................. $429,734 $200,374 $160,465 $81,373
======== ======== ======== =======
<FN>
1 FUND COMMENCED OPERATIONS ON JULY 10, 1998.
* INCLUDES REDEMPTIONS AS A RESULT OF A REDEMPTION IN KIND ON MARCH 20, 2000. (SEE NOTE 9)
</FN>
</TABLE>
See Accompanying Notes
136 & 137
<PAGE>
FINANCIAL STATEMENTS
ARMADA FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND TAX MANAGED EQUITY FUND
------------------------------ ----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ..................................... $ 5,872 $ 1,768 $ 410 $ 773
Net realized gain/(loss) on investments sold, futures
and foreign currency transactions ...................... 9,330 (8,366) 377 312
Net unrealized appreciation/depreciation on
investments, futures and foreign currency
transactions ........................................... 25,470 (5,622) 43,939 58,031
-------- -------- -------- --------
Net increase/(decrease) in net assets resulting
from operations ........................................ 40,672 (12,220) 44,726 59,116
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I ................................................ (4,422) (867) (463) (776)
Class A ................................................ (146) (28) (3) (3)
Class B ................................................ (6) -- -- --
Class C ................................................ -- -- -- --
Dividends from realized capital gains:
Class I ................................................ -- (23,595) (248) (221)
Class A ................................................ -- (1,101) (15) (2)
Class B ................................................ -- (31) (9) (1)
Class C ................................................ -- -- -- --
-------- -------- -------- --------
Total distributions ....................................... (4,574) (25,622) (738) (1,003)
-------- -------- -------- --------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued ............................ 121,599 73,379 17,987 4,526
Proceeds from Common Fund Conversion (note 6) ........ -- -- -- 46,522
Reinvestment of cash distributions ..................... 2,240 13,812 124 111
Cost of shares redeemed ................................ (74,901) (64,606) (42,688) (26,256)
-------- -------- -------- --------
Net Class I share transactions ....................... 48,938 22,585 (24,577) 24,903
-------- -------- -------- --------
Class A
Proceeds from shares issued ............................ 2,482 11,093 12,777 7,809
Reinvestment of cash distributions ..................... 132 1,030 14 3
Cost of shares redeemed ................................ (5,429) (9,865) (4,847) (776)
-------- -------- -------- --------
Net Class A share transactions ....................... (2,815) 2,258 7,944 7,036
-------- -------- -------- --------
Class B
Proceeds from shares issued ............................ 200 463 5,658 5,341
Reinvestment of cash distributions ..................... 5 30 8 1
Cost of shares redeemed ................................ (48) (45) (1,188) (125)
-------- -------- -------- --------
Net Class B share transactions ....................... 157 448 4,478 5,217
-------- -------- -------- --------
Class C
Proceeds from shares issued ............................ 67 -- 449 --
Reinvestment of cash distributions ..................... -- -- -- --
Cost of shares redeemed ................................ -- -- (5) --
-------- -------- -------- --------
Net Class C share transactions ....................... 67 -- 444 --
-------- -------- -------- --------
Increase/(decrease) in net assets from share
transactions ........................................... 46,347 25,291 (11,711) 37,156
-------- -------- -------- --------
Total increase/(decrease) in net assets ................... 82,445 (12,551) 32,277 95,269
-------- -------- -------- --------
NET ASSETS:
Beginning of period ....................................... 282,439 294,990 254,231 158,962
-------- -------- -------- --------
End of period ............................................. $364,884 $282,439 $286,508 $254,231
======== ======== ======== ========
BALANCED ALLOCATION FUND BOND FUND
------------------------------ ----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 19991 MAY 31, 2000 MAY 31, 1999
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ..................................... $ 1,724 $ 1,267 $ 44,070 $ 35,495
Net realized gain/(loss) on investments sold, futures
and foreign currency transactions ...................... 8,689 (1,688) (35,415) 6,607
Net unrealized appreciation/depreciation on
investments, futures and foreign currency
transactions ........................................... 1,218 2,268 (7,103) (15,918)
--------- -------- --------- --------
Net increase/(decrease) in net assets resulting
from operations ........................................ 11,631 1,847 1,552 26,184
--------- -------- --------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I ................................................ (1,599) (948) (43,769) (35,439)
Class A ................................................ (58) (7) (214) (67)
Class B ................................................ (6) (2) (35) (18)
Class C ................................................ -- -- (1) --
Dividends from realized capital gains:
Class I ................................................ -- -- -- (10,610)
Class A ................................................ -- -- -- (25)
Class B ................................................ -- -- -- (7)
Class C ................................................ -- -- -- --
--------- -------- --------- --------
Total distributions ....................................... (1,663) (957) (44,019) (46,166)
--------- -------- --------- --------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued ............................ 20,521 109,461 55,018 334,224
Proceeds from Common Fund Conversion (note 6) ........ -- -- -- 444,085
Reinvestment of cash distributions ..................... 1,594 929 5,607 11,803
Cost of shares redeemed ................................ (47,094) (26,260) (158,946) (144,163)
--------- -------- --------- --------
Net Class I share transactions ....................... (24,979) 84,130 (98,321) 645,949
--------- -------- --------- --------
Class A
Proceeds from shares issued ............................ 3,518 1,810 4,737 4,207
Reinvestment of cash distributions ..................... 57 6 119 56
Cost of shares redeemed ................................ (1,523) (343) (3,668) (1,526)
--------- -------- --------- --------
Net Class A share transactions ....................... 2,052 1,473 1,188 2,737
--------- -------- --------- --------
Class B
Proceeds from shares issued ............................ 321 390 243 845
Reinvestment of cash distributions ..................... 6 2 32 24
Cost of shares redeemed ................................ (73) (7) (401) (113)
--------- -------- --------- --------
Net Class B share transactions ....................... 254 385 (126) 756
--------- -------- --------- --------
Class C
Proceeds from shares issued ............................ 3 -- 40 --
Reinvestment of cash distributions ..................... -- -- 1 --
Cost of shares redeemed ................................ -- -- -- --
--------- -------- --------- --------
Net Class C share transactions ....................... 3 -- 41 --
--------- -------- --------- --------
Increase/(decrease) in net assets from share
transactions ........................................... (22,670) 85,988 (97,218) 649,442
--------- -------- --------- --------
Total increase/(decrease) in net assets ................... 12,702 86,878 (139,685) 629,460
--------- -------- --------- --------
NET ASSETS:
Beginning of period ....................................... 86,878 -- 762,242 132,782
--------- -------- --------- --------
End of period ............................................. $ 74,176 $ 86,878 $ 622,557 $762,242
========= ======== ========= ========
ENHANCED INCOME FUND GNMA FUND
---------------------------- ----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ..................................... $ 5,071 $ 4,264 $ 6,438 $ 5,291
Net realized gain/(loss) on investments sold, futures
and foreign currency transactions ...................... (754) 236 (1,412) 234
Net unrealized appreciation/depreciation on
investments, futures and foreign currency
transactions ........................................... (1,496) (746) (2,148) (2,090)
-------- ------- -------- -------
Net increase/(decrease) in net assets resulting
from operations ........................................ 2,821 3,754 2,878 3,435
-------- ------- -------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I ................................................ (5,027) (4,259) (6,440) (5,162)
Class A ................................................ (42) (23) (76) (61)
Class B ................................................ (5) -- (4) --
Class C ................................................ -- -- (1) --
Dividends from realized capital gains:
Class I ................................................ -- (405) -- (581)
Class A ................................................ -- (2) -- (8)
Class B ................................................ -- -- -- --
Class C ................................................ -- -- -- --
-------- ------- -------- -------
Total distributions ....................................... (5,074) (4,689) (6,521) (5,812)
-------- ------- -------- -------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued ............................ 98,933 58,938 39,450 28,666
Proceeds from Common Fund Conversion (note 6) ........ -- -- -- --
Reinvestment of cash distributions ..................... 2,659 2,437 634 470
Cost of shares redeemed ................................ (78,000) (60,044) (13,646) (13,612)
-------- ------- -------- -------
Net Class I share transactions ....................... 23,592 1,331 26,438 15,524
-------- ------- -------- -------
Class A
Proceeds from shares issued ............................ 1,216 351 685 1,510
Reinvestment of cash distributions ..................... 35 23 56 60
Cost of shares redeemed ................................ (909) (376) (958) (585)
-------- ------- -------- -------
Net Class A share transactions ....................... 342 (2) (217) 985
-------- ------- -------- -------
Class B
Proceeds from shares issued ............................ 179 -- 160 --
Reinvestment of cash distributions ..................... 5 -- 4 --
Cost of shares redeemed ................................ (1) -- (2) --
-------- ------- -------- -------
Net Class B share transactions ....................... 183 -- 162 --
-------- ------- -------- -------
Class C
Proceeds from shares issued ............................ 18 -- 83 --
Reinvestment of cash distributions ..................... -- -- 1 --
Cost of shares redeemed ................................ -- -- -- --
-------- ------- -------- -------
Net Class C share transactions ....................... 18 -- 84 --
-------- ------- -------- -------
Increase/(decrease) in net assets from share
transactions ........................................... 24,135 1,329 26,467 16,509
-------- ------- -------- -------
Total increase/(decrease) in net assets ................... 21,882 394 22,824 14,132
-------- ------- -------- -------
NET ASSETS:
Beginning of period ....................................... 72,841 72,447 98,305 84,173
-------- ------- -------- -------
End of period ............................................. $ 94,723 $72,841 $121,129 $98,305
======== ======= ======== =======
<FN>
1 FUND COMMENCED OPERATIONS ON JULY 10, 1998.
</FN>
</TABLE>
See Accompanying Notes
138 & 139
<PAGE>
FINANCIAL STATEMENTS
ARMADA FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND TOTAL RETURN ADVANTAGE FUND
------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ............................. $ 19,151 $ 13,769 $ 20,368 $ 18,106
Net realized gain/(loss) on investments sold ...... (11,400) 2,105 (8,097) 3,724
Net unrealized appreciation/depreciation
on investments .................................. (3,177) (7,084) (6,392) (11,244)
-------- -------- -------- --------
Net increase/(decrease) in net assets
resulting from operations ....................... 4,574 8,790 5,879 10,586
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I ...................................... (18,864) (13,608) (20,158) (17,916)
Class A ...................................... (294) (205) (361) (197)
Class B ...................................... (34) (13) -- --
Class C ...................................... -- -- -- --
Dividends from realized capital gains:
Class I ...................................... (195) (1,679) (2,082) (1,326)
Class A ...................................... (3) (20) (42) (17)
Class B ...................................... -- (2) -- --
Class C ...................................... -- -- -- --
-------- -------- -------- --------
Total distributions ............................... (19,390) (15,527) (22,643) (19,456)
-------- -------- -------- --------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued .................. 84,807 168,983 72,288 74,950
Proceeds from Common Fund Conversion
(note 6) ................................... -- 71,602 -- --
Reinvestment of cash distributions ........... 5,677 5,353 13,768 12,191
Cost of shares redeemed ...................... (94,301) (92,671) (66,995) (46,083)
-------- -------- -------- --------
Net Class I share transactions ............. (3,817) 153,267 19,061 41,058
-------- -------- -------- --------
Class A
Proceeds from shares issued .................. 2,407 3,889 2,437 4,953
Reinvestment of cash distributions ........... 218 190 379 197
Cost of shares redeemed ...................... (3,649) (2,127) (2,155) (950)
-------- -------- -------- --------
Net Class A share transactions ............. (1,024) 1,952 661 4,200
-------- -------- -------- --------
Class B
Proceeds from shares issued .................. 319 742 1 --
Reinvestment of cash distributions ........... 31 12 -- --
Cost of shares redeemed ...................... (294) (30) -- --
-------- -------- -------- --------
Net Class B share transactions ............. 56 724 1 --
-------- -------- -------- --------
Class C
Proceeds from shares issued .................. 191 -- -- --
Reinvestment of cash distributions ........... -- -- -- --
Cost of shares redeemed ...................... -- -- -- --
-------- -------- -------- --------
Net Class C share transactions ............. 191 -- -- --
-------- -------- -------- --------
Increase/(decrease) in net assets from share
transactions .................................... (4,594) 155,943 19,723 45,258
-------- -------- -------- --------
Total increase/(decrease) in net assets ........... (19,410) 149,206 2,959 36,388
-------- -------- -------- --------
NETASSETS:
Beginning of period ............................... 319,206 170,000 333,103 296,715
-------- -------- -------- --------
End of period ..................................... $299,796 $319,206 $336,062 $333,103
======== ======== ======== ========
NATIONAL TAX EXEMPT BOND FUND OHIO TAX EXEMPT BOND FUND
------------------------------ -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ............................. $ 4,466 $ 4,217 $ 8,738 $ 9,813
Net realized gain/(loss) on investments sold ...... (1,960) 412 (3,099) 180
Net unrealized appreciation/depreciation
on investments .................................. (2,845) (581) (6,636) (2,191)
-------- -------- -------- --------
Net increase/(decrease) in net assets
resulting from operations ....................... (339) 4,048 (997) 7,802
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I ...................................... (4,239) (4,193) (8,551) (9,541)
Class A ...................................... (185) (67) (245) (212)
Class B ...................................... (9) (2) -- --
Class C ...................................... (1) -- -- --
Dividends from realized capital gains:
Class I ...................................... (146) (257) (139) (136)
Class A ...................................... (8) (1) (5) (3)
Class B ...................................... -- -- -- --
Class C ...................................... -- -- -- --
-------- -------- -------- --------
Total distributions ............................... (4,588) (4,520) (8,940) (9,892)
-------- -------- -------- --------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued .................. 30,472 20,912 24,425 81,139
Proceeds from Common Fund Conversion
(note 6) ................................... -- 22,085 -- --
Reinvestment of cash distributions ........... 128 67 257 278
Cost of shares redeemed ...................... (30,899) (22,312) (54,218) (39,407)
-------- -------- -------- --------
Net Class I share transactions ............. (299) 20,752 (29,536) 42,010
-------- -------- -------- --------
Class A
Proceeds from shares issued .................. 2,886 8,788 2,770 1,246
Reinvestment of cash distributions ........... 168 63 154 120
Cost of shares redeemed ...................... (3,040) (4,551) (2,287) (545)
-------- -------- -------- --------
Net Class A share transactions ............. 14 4,300 637 821
-------- -------- -------- --------
Class B
Proceeds from shares issued .................. 38 277 -- --
Reinvestment of cash distributions ........... 10 2 -- --
Cost of shares redeemed ...................... (86) -- -- --
-------- -------- -------- --------
Net Class B share transactions ............. (38) 279 -- --
-------- -------- -------- --------
Class C
Proceeds from shares issued .................. 100 -- -- --
Reinvestment of cash distributions ........... -- -- -- --
Cost of shares redeemed ...................... (101) -- -- --
-------- -------- -------- --------
Net Class C share transactions ............. (1) -- -- --
-------- -------- -------- --------
Increase/(decrease) in net assets from share
transactions .................................... (324) 25,331 (28,899) 42,831
-------- -------- -------- --------
Total increase/(decrease) in net assets ........... (5,251) 24,859 (38,836) 40,741
-------- -------- -------- --------
NETASSETS:
Beginning of period ............................... 105,118 80,259 210,173 169,432
-------- -------- -------- --------
End of period ..................................... $ 99,867 $105,118 $171,337 $210,173
======== ======== ======== ========
PENNSYLVANIA MUNICIPAL BOND FUND
--------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999
------------ ------------
<S> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ............................. $ 1,975 $ 1,891
Net realized gain/(loss) on investments sold ...... (226) 116
Net unrealized appreciation/depreciation
on investments .................................. (1,589) (433)
------- -------
Net increase/(decrease) in net assets
resulting from operations ....................... 160 1,574
------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I ...................................... (2,041) (1,807)
Class A ...................................... (10) (8)
Class B ...................................... -- --
Class C ...................................... -- --
Dividends from realized capital gains:
Class I ...................................... (73) (41)
Class A ...................................... -- --
Class B ...................................... -- --
Class C ...................................... -- --
------- -------
Total distributions ............................... (2,124) (1,856)
------- -------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued .................. 12,840 6,378
Proceeds from Common Fund Conversion
(note 6) ................................... -- --
Reinvestment of cash distributions ........... 33 38
Cost of shares redeemed ...................... (6,068) (4,718)
------- -------
Net Class I share transactions ............. 6,805 1,698
------- -------
Class A
Proceeds from shares issued .................. 106 114
Reinvestment of cash distributions ........... 3 1
Cost of shares redeemed ...................... (101) (20)
------- -------
Net Class A share transactions ............. 8 95
------- -------
Class B
Proceeds from shares issued .................. -- --
Reinvestment of cash distributions ........... -- --
Cost of shares redeemed ...................... -- --
------- -------
Net Class B share transactions ............. -- --
------- -------
Class C
Proceeds from shares issued .................. 100 --
Reinvestment of cash distributions ........... -- --
Cost of shares redeemed ...................... (101) --
------- -------
Net Class C share transactions ............. (1) --
------- -------
Increase/(decrease) in net assets from share
transactions .................................... 6,812 1,793
------- -------
Total increase/(decrease) in net assets ........... 4,848 1,511
------- -------
NETASSETS:
Beginning of period ............................... 40,389 38,878
------- -------
End of period ..................................... $45,237 $40,389
======= =======
</TABLE>
See Accompanying Notes
140 & 141
<PAGE>
FINANCIAL STATEMENTS
ARMADA FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND MONEY MARKET FUND
----------------------------- ----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ....................................... $ 80,385 $ 69,425 $ 200,281 $ 152,635
Net realized gain/(loss) on investments sold ................ -- -- 2 (1)
Net unrealized appreciation/depreciation on investments ..... -- -- -- --
---------- ---------- ---------- ----------
Net increase in net assets resulting from operations ........ 80,385 69,425 200,283 152,634
---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I .................................................. (51,826) (48,773) (120,489) (101,961)
Class A .................................................. (28,620) (20,599) (79,661) (51,163)
Class B .................................................. -- -- (19) (3)
---------- ---------- ---------- ----------
Total distributions ......................................... (80,446) (69,372) (200,169) (153,127)
---------- ---------- ---------- ----------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued .............................. 4,363,306 3,760,181 7,545,167 6,186,234
Reinvestment of cash distributions ....................... 2,087 873 6,344 405
Cost of shares redeemed .................................. (4,512,497) (3,802,485) (7,343,190) (5,964,073)
---------- ---------- ---------- ----------
Net Class I share transactions ......................... (147,104) (41,431) 208,321 222,566
---------- ---------- ---------- ----------
Class A
Proceeds from shares issued .............................. 1,208,638 1,375,632 5,325,371 3,828,467
Reinvestment of cash distributions ....................... 4,994 3,639 46,786 32,692
Cost of shares redeemed .................................. (1,257,022) (1,062,178) (5,015,185) (3,197,331)
---------- ---------- ---------- ----------
Net Class A share transactions ......................... (43,390) 317,093 356,972 663,828
---------- ---------- ---------- ----------
Class B
Proceeds from shares issued .............................. -- -- 2,987 162
Reinvestment of cash distributions ....................... -- -- 17 2
Cost of shares redeemed .................................. -- -- (2,781) (142)
---------- ---------- ---------- ----------
Net Class B share transactions ......................... -- -- 223 22
---------- ---------- ---------- ----------
Increase/(decrease) in net assets from share transactions ... (190,494) 275,662 565,516 886,416
---------- ---------- ---------- ----------
Total increase/(decrease) in net assets ..................... (190,555) 275,715 565,630 885,923
---------- ---------- ---------- ----------
NET ASSETS:
Beginning of period ......................................... 1,660,074 1,384,359 3,494,510 2,608,587
---------- ---------- ---------- ----------
End of period ............................................... $1,469,519 $1,660,074 $4,060,140 $3,494,510
========== ========== ========== ==========
OHIO MUNICIPAL PENNSYLVANIA TAX EXEMPT
MONEY MARKET FUND MONEY MARKET FUND
------------------------------ ----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 1 MAY 31, 2000 MAY 31, 1999
------------ -------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ....................................... $ 5,126 $ 2,062 $ 4,252 $ 3,760
Net realized gain/(loss) on investments sold ................ -- -- -- --
Net unrealized appreciation/depreciation on investments ..... -- -- -- --
-------- -------- -------- --------
Net increase in net assets resulting from operations ........ 5,126 2,062 4,252 3,760
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I .................................................. (4,220) (1,958) (2,656) (2,667)
Class A .................................................. (887) (124) (1,612) (1,112)
Class B .................................................. -- -- -- --
-------- -------- -------- --------
Total distributions ......................................... (5,107) (2,082) (4,268) (3,779)
-------- -------- -------- --------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued .............................. 328,514 273,577 150,196 176,111
Reinvestment of cash distributions ....................... 272 27 -- --
Cost of shares redeemed .................................. (298,669) (174,242) (133,109) (172,152)
-------- -------- -------- --------
Net Class I share transactions ......................... 30,117 99,362 17,087 3,959
-------- -------- -------- --------
Class A
Proceeds from shares issued .............................. 103,902 30,799 190,270 161,332
Reinvestment of cash distributions ....................... 904 98 969 490
Cost of shares redeemed .................................. (86,370) (19,878) (187,106) (141,365)
-------- -------- -------- --------
Net Class A share transactions ......................... 18,436 11,019 4,133 20,457
-------- -------- -------- --------
Class B
Proceeds from shares issued .............................. -- -- -- --
Reinvestment of cash distributions ....................... -- -- -- --
Cost of shares redeemed .................................. -- -- -- --
-------- -------- -------- --------
Net Class B share transactions ......................... -- -- -- --
-------- -------- -------- --------
Increase/(decrease) in net assets from share transactions ... 48,553 110,381 21,220 24,416
-------- -------- -------- --------
Total increase/(decrease) in net assets ..................... 48,572 110,361 21,204 24,397
-------- -------- -------- --------
NET ASSETS:
Beginning of period ......................................... 110,361 -- 131,036 106,639
-------- -------- -------- --------
End of period ............................................... $158,933 $110,361 $152,240 $131,036
======== ======== ======== ========
TAX EXEMPT
MONEY MARKET FUND TREASURY MONEY MARKET FUND
---------------------------- ---------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income ....................................... $ 19,017 $ 17,732 $ 19,758 $ 16,787
Net realized gain/(loss) on investments sold ................ -- (36) 37 85
Net unrealized appreciation/depreciation on investments ..... -- -- -- --
--------- -------- --------- ----------
Net increase in net assets resulting from operations ........ 19,017 17,696 19,795 16,872
--------- -------- --------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class I .................................................. (12,465) (12,418) (16,557) (14,683)
Class A .................................................. (6,486) (5,503) (3,281) (2,138)
Class B .................................................. -- -- -- --
--------- -------- --------- ----------
Total distributions ......................................... (18,951) (17,921) (19,838) (16,821)
--------- -------- --------- ----------
SHARE TRANSACTIONS:
Class I
Proceeds from shares issued .............................. 902,935 760,407 1,509,998 1,602,785
Reinvestment of cash distributions ....................... 290 98 79 26
Cost of shares redeemed .................................. (1,010,338) (745,079) (1,446,965) (1,616,371)
--------- -------- --------- ----------
Net Class I share transactions ......................... (107,113) 15,426 63,112 (13,560)
--------- -------- --------- ----------
Class A
Proceeds from shares issued .............................. 708,282 654,175 834,520 647,257
Reinvestment of cash distributions ....................... 5,987 5,196 477 447
Cost of shares redeemed .................................. (685,116) (601,426) (838,296) (571,910)
--------- -------- --------- ----------
Net Class A share transactions ......................... 29,153 57,945 (3,299) 75,794
--------- -------- --------- ----------
Class B
Proceeds from shares issued .............................. -- -- -- --
Reinvestment of cash distributions ....................... -- -- -- --
Cost of shares redeemed .................................. -- -- -- --
--------- -------- --------- ----------
Net Class B share transactions ......................... -- -- -- --
--------- -------- --------- ----------
Increase/(decrease) in net assets from share transactions ... (77,960) 73,371 59,813 62,234
--------- -------- --------- ----------
Total increase/(decrease) in net assets ..................... (77,894) 73,146 59,770 62,285
--------- -------- --------- ----------
NET ASSETS:
Beginning of period ......................................... 624,647 551,501 429,112 366,827
--------- -------- --------- ----------
End of period ............................................... $ 546,753 $624,647 $ 488,882 $ 429,112
========= ======== ========= ==========
<FN>
1 FUND COMMENCED OPERATIONS ON SEPTEMBER 15, 1998.
</FN>
</TABLE>
See Accompanying Notes
142 & 143
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
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 investment management company.
The Trust was organized as a Massachusetts business trust on January 28, 1986.
The Trust is comprised of 29 funds each of which is authorized to issue two
classes of shares designated as Class I and Class A shares. Effective January 1,
1998, all funds except Government Money Market, Ohio Municipal Money Market,
Pennsylvania Tax Exempt Money Market, Tax Exempt MoneyMarket, and Treasury Money
Market were authorized to offer a third class of shares designated as Class B
shares. Effective January 1, 2000, all funds except Government Money Market,
Ohio Municipal Money Market, Pennsylvania Tax Exempt Money Market, Tax Exempt
Money Market and Treasury MoneyMarket were authorized to offer a fourth class of
shares designated as Class C 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
distribution and/or shareholder service fees and investment minimums. Class A
shares are sold subject to a front-end sales charge and Class B and Class C
shares are sold with a contingent deferred sales charge, both of which may be
reduced or waived under certain circumstances.
The Trust currently has five Series that consist of the following Funds (each
referred to as a "Fund" or collectively as the "Funds"):
EQUITY SERIES
Core Equity Fund, Equity Growth Fund, Equity Income Fund, Equity Index Fund,
International Equity Fund, Large Cap Ultra Fund, Mid Cap Growth Fund, Small Cap
Growth Fund, Small Cap Value Fund, and Tax Managed Equity Fund;
ALLOCATION SERIES
Balanced Allocation Fund;
INCOME SERIES
Bond Fund, Enhanced Income Fund, GNMA Fund, Intermediate Bond Fund, Real Return
Advantage Fund, Total Return Advantage Fund, and U.S. Government Income Fund;
TAX EXEMPT SERIES
Michigan Municipal Bond Fund, National Tax Exempt Bond Fund, Ohio Tax Exempt
Bond Fund, and Pennsylvania Municipal Bond Fund;
MONEY MARKET SERIES
Government Money Market Fund, Money Market Fund, Ohio Municipal Money Market
Fund, Pennsylvania Tax Exempt Money Market Fund, Tax Exempt Money Market Fund,
Treasury Money Market Fund, and Treasury Plus Money Market Fund.
As of the date of this report, the Real Return Advantage Fund had not
commenced operations. See Footnote 11 regarding the Large Cap Ultra Fund, Mid
Cap Growth Fund, U.S. Government Income Fund, Michigan Municipal Bond Fund and
the Treasury Plus Money Market Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States 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.
The following is a summary of significant accounting policies followed by the
Funds.
SECURITY VALUATION:
EQUITY AND BOND FUNDS
An equity or bond fund generally values its investment portfolio at market
price. In the event that a sale of a particular fixed income security is not
reported for that day, fixed income securities are priced 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.
In the event that a sale of a particular equity security is not reported for
that day, shares are priced at the last bid quotation. If market prices are
unavailable or a Fund thinks that they are unreliable, fair value prices may be
determined in good faith using methods approved by the Board of Trustees.
Some Funds hold securities that are listed on foreign exchanges. These
securities may trade on weekends or other days when the Funds do not calculate
NAV. As a result, the market value of these Fund's investments may change on
days when you cannot buy and hold shares of the Fund.
MONEY MARKET FUNDS
For the money market funds, we generally value a Fund's investment portfolio
using the amortized cost valuation method, which is described in detail in our
144
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
Statement of Additional Information. If this method is determined to be
unreliable during certain market conditions or for other reasons, a Fund may
value its portfolio at market price or fair value prices may be determined in
good faith using methods approved by the Board of Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on 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 the Funds on the basis of average net
assets. Original issue discounts and market premiums are amortized to interest
income over the lives of the respective securities.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from the net
investment income of the Core Equity, Equity Growth, Equity Income, Equity
Index, Tax Managed Equity and Balanced Allocation Funds are declared and paid
quarterly; dividends from net investment income of the International Equity,
Small Cap Growth and Small Cap Value Funds are declared and paid annually. With
respect to the Core Equity, Equity Growth, Equity Income, Equity Index,
International Equity, Small Cap Growth, Small Cap Value, Tax Managed Equity, and
Balanced Allocation Funds, net investment income for dividend purposes consists
of dividends, interest income, and discounts earned (including both original
issue and market discount), less amortization of any market premiums and accrued
expenses. Dividends from the net investment income of the Bond, Enhanced Income,
GNMA, Intermediate Bond, Total Return Advantage, National Tax Exempt Bond, Ohio
Tax Exempt Bond, Pennsylvania Municipal Bond, Government Money Market, Money
Market, Ohio Municipal Money Market, Pennsylvania Tax Exempt Money Market, Tax
Exempt Money Market, and Treasury Money Market Funds are declared daily and paid
no later than five business days after the end of the month. Net investment
income of the Bond, Enhanced Income, GNMA, Intermediate Bond, Total Return
Advantage, Government Money Market, Money Market, and Treasury Money Market
Funds consists of interest income, discount earned (including both original
issue and market discount), less amortization of any market premiums and accrued
expenses. Net investment income of the National Tax Exempt Bond, Ohio Tax Exempt
Bond, Pennsylvania Municipal Bond, Ohio Municipal Money Market, Pennsylvania Tax
Exempt Money Market, and Tax Exempt Money Market Funds consists of interest
accrued, original issue discount earned, less amortization of any market premium
and accrued expenses. Any net realized capital gains will be distributed at
least annually for all the Funds.
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 or
continue to qualify as a separate "regulated investment company" under the
Internal Revenue Code and make the requisite distributions to 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 net realized capital gains exceed
amounts reported in the financial statements, such amounts are reported
separately.
The amounts of distributions from net investment income and net realized
capital gains are determined in accordance with Federal income tax regulations,
which may differ from those amounts determined under accounting principles
generally accepted in the United States. These book/tax differences are either
temporary or permanent in nature. These differences are primarily due to wash
sales, foreign currency gains and losses and the "mark to market" of certain
Passive Foreign Investment Companies (PFICs) for tax purposes. The character of
distributions made during the year from net investment income or net realized
gains, and the timing of distributions where the fiscal year in which the
amounts are distributed may differ from the year that the income or realized
gains (losses) were recorded by the Fund. To the extent these differences are
permanent, adjustments are made to the appropriate equity accounts in the period
that the differences arise. On the Statement of Net Assets the following
adjustments were made:
ACCUMULATED UNDISTRIBUTED
NET REALIZED NET INVESTMENT PAID-IN-
GAIN (LOSS) INCOME CAPITAL
FUND (000) (000) (000)
---- ------------ -------------- ---------
Core Equity $ (54) $ 54 $ --
Equity Growth (33,967) 510 33,457
Equity Income 1 (1) --
Equity Index 2 (2) --
International Equity (484) 484 --
Small Cap Growth -- 368 (368)
Intermediate Bond 2 (2) --
Total Return
Advantage 3 (3) --
145
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
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 isolate the portion of gains and losses on investments which
is due to fluctuations in foreign exchange rates from that which is due to
fluctuations in the market prices of investments.
FORWARD FOREIGN CURRENCY CONTRACTS: Certain of the Funds enter into forward
foreign 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 Fund realizes gains or losses at the time the
forward contracts are extinguished. At May 31, 2000, forward foreign currency
contracts outstanding were as follows:
CONTRACTS TO UNREALIZED
(DELIVER)/ IN EXCHANGE APPRECIATION
RECEIVE FOR SETTLEMENT (DEPRECIATION)
(000) (000) DATE (000)
------------ ----------- ---------- --------------
INTERNATIONAL EQUITY FUND:
FOREIGN CURRENCY SALES:
CH (2,074) $(1,228) 06/02/00 $ (6)
EU (188) (176) 06/05/00 (1)
GB (309) (454) 06/02/00 (10)
GB (151) (224) 06/05/00 (2)
GB (170) (254) 06/06/00 (1)
GB (367) (549) 06/07/00 (2)
JP (143,569) (1,349) 06/02/00 17
FOREIGN CURRENCY PURCHASES:
EU 4,257 3,976 06/30/00 20
EU 3,320 3,099 06/30/00 17
BALANCED ALLOCATION FUND:
FOREIGN CURRENCY SALES:
JP (2,624) (25) 06/02/00 --
EU (5) (5) 06/05/00 --
CH (47) (28) 06/02/00 --
GB (6) (9) 06/05/00 --
GB (7) (10) 06/06/00 --
GB (15) (22) 06/07/00 --
FOREIGN CURRENCY PURCHASES:
EU 190 177 06/30/00 1
EU 154 144 06/30/00 1
CH--Swiss Francs EU--Euro GB--British Pounds
JP--Japanese Yen
FUTURES CONTRACTS: Certain of the Funds may engage in futures contracts for
the purpose of hedging against the value of the portfolio securities held and in
the value of the securities a Fund intends to purchase, in order to maintain
liquidity. Upon entering into a futures contract, a Fund is required to deposit
with the broker an amount of cash or cash equivalents equal to a certain
percentage of the contract amount. This is known as the "initial margin".
Subsequent payments ("variation margin") are made or received by a Fund each
day, depending on the daily fluctuation of the value of the contract. The daily
changes in the contract are recorded as unrealized gain or loss. The Fund
recognizes a realized gain or loss when the contract is closed. The net
unrealized appreciation/(depreciation), if any, is shown in the financial
statements.
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, there is the risk that
the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
Financial futures contracts open at May 31, 2000 were as follows:
NUMBER NOTIONAL UNREALIZED
OF COST AMOUNT EXPIRATION GAIN/(LOSS)
FUND CONTRACTS (000) DATE (000)
---- --------- ----------- ---------- ----------
Equity Index-
S&P 500
Futures 14 $4,788 Jun-00 $ 190
International Equity-
CAC 40 Index 100 5,836 Jun-00 103
DAX Index 40 6,703 Jun-00 (91)
Topix Index 20 2,989 Jun-00 (159)
Small Cap Growth-
Russell 2000
Futures 72 17,559 Jun-00 (440)
Small Cap Value-
Russell 2000
Futures 40 12,062 Jun-00 (2,551)
MORTGAGE DOLLAR ROLLS: For the purpose of enhancing the Fund's yield, the
GNMA Fund may enter into mortgage dollar rolls (principally in securities
referred to as TBA's or To Be Announced) in which the Fund sells mortgage
securities for delivery in the current month and simultaneously contracts to
repurchase similar, but not identical, securities at an agreed-upon price on a
fixed date. The Fund accounts for such dollar rolls as purchases and sales and
maintains liquid high-grade securities in an amount at least equal to its
commitment to repurchase.
146
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
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 any remaining loss may be subject to legal
proceedings.
3. INVESTMENT ADVISER, DISTRIBUTION FEES AND OTHER RELATED PARTY
TRANSACTIONS
Fees paid by the Trust pursuant to the Advisory Agreements with National City
Investment Management Company (the "Adviser"), an indirect wholly owned
subsidiary of National City Corporation, are payable monthly based on an annual
rate, listed in the table below, based on each Fund's average daily net assets.
The Adviser may from time to time waive its fees payable by the Funds. At May
31, 2000, advisory fees accrued and unpaid amounted to:
ANNUAL
RATE (000)
------ ----
Core Equity Fund........................ 0.75% $321
Equity Growth Fund...................... 0.75% 891
Equity Income Fund...................... 0.75% 303
Equity Index Fund....................... 0.35% 60
International Equity Fund............... 1.15% 419
Small Cap Growth Fund................... 1.00% 139
Small Cap Value Fund.................... 1.00% 306
Tax Managed Equity Fund................. 0.75% 184
Balanced Allocation Fund................ 0.75% 48
Bond Fund............................... 0.55% 289
Enhanced Income Fund.................... 0.45% 38
GNMA Fund............................... 0.55% 52
Intermediate Bond Fund.................. 0.55% 102
Total Return Advantage Fund............. 0.55% 65
National Tax Exempt Bond Fund........... 0.55% 36
Ohio Tax Exempt Bond Fund............... 0.55% 84
Pennsylvania Municipal Bond Fund........ 0.55% 15
Government Money Market Fund............ 0.35% 313
Money Market Fund....................... 0.35% 841
Ohio Municipal Money Market Fund........ 0.35% 20
Pennsylvania Tax Exempt Money
Market Fund.......................... 0.40% 19
Tax Exempt Money Market Fund............ 0.35% 66
Treasury Money Market Fund.............. 0.30% 100
National Asset Management Corporation serves as investment sub-adviser (the
"Sub Adviser") to the Core Equity and Total Return Advantage Funds. No fees are
paid to the Sub-Adviser directly from the Trust.
The Trust maintains Shareholder Services Plans (the "Services Plan") with
respect to the Class A, Class B and Class C shares in the Funds. Pursuant to
such 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 Class A, B, or C
shares in consideration for payment, listed in the table below, on an annual
basis of the net asset value of the Class A, B, or C shares.
ANNUAL ANNUAL ANNUAL
RATE RATE RATE
CLASS A CLASS B CLASS C
------- ------- -------
Core Equity Fund.............. 0.25% 0.25% 0.25%
Equity Growth Fund............ 0.25% 0.25% 0.25%
Equity Income Fund............ 0.25% 0.25% 0.25%
Equity Index Fund............. 0.25% 0.25% 0.25%
International Equity Fund..... 0.25% 0.25% 0.25%
Small Cap Growth Fund......... 0.25% 0.25% 0.25%
Small Cap Value Fund.......... 0.25% 0.25% 0.25%
Tax Managed Equity Fund....... 0.25% 0.25% 0.25%
Balanced Allocation Fund...... 0.25% 0.25% 0.25%
Bond Fund..................... 0.25% 0.25% 0.25%
Enhanced Income Fund.......... 0.10% 0.25% 0.25%
GNMA Fund..................... 0.25% 0.25% 0.25%
Intermediate Bond Fund........ 0.25% 0.25% 0.25%
Total Return Advantage Fund... 0.25% 0.25% 0.25%
National Tax Exempt
Bond Fund.................. 0.10% 0.10% 0.25%
Ohio Tax Exempt Bond Fund..... 0.10% 0.10% 0.25%
Pennsylvania Municipal
Bond Fund.................. 0.10% 0.10% 0.25%
Government Money
Market Fund................ 0.15% N/A N/A
Money Market Fund............. 0.15% 0.15% 0.25%
Ohio Municipal Money
Market Fund................ 0.15% N/A N/A
Pennsylvania Tax Exempt
Money Market Fund.......... 0.15% N/A N/A
Tax Exempt
Money Market Fund.......... 0.15% N/A N/A
Treasury Money
Market Fund................ 0.15% N/A N/A
147
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
National City Bank serves as the Fund's Custodian.
The Trust and SEI Investments Distribution Co. ("SEI" or the "Distributor")
are parties to a distribution agreement dated May 1, 1998. The Distributor
receives no fees for its distribution services under this agreement. The Trust
reimburses the Distributor for direct and indirect costs and expenses incurred
in connection with advertising, marketing and other distribution services. The
Class I and Class A share plans are reimbursement plans and are subject to a fee
not to exceed .10% per annum of the average net assets of its Class I and Class
A shares. The Class B and Class C shares of the Trust are a compensation plan
and they pay the Distributor up to .75% per annum of the average net assets for
the same services provided to the Class I and Class A shares.
Each Trustee receives an annual fee of $15,000 plus $3,000 for each Board
meeting attended and reimbursement of out-of-pocket expenses. The Chairman of
the Board receives an additional $5,000 per annum for services in such capacity.
The Trustees and Chairman fees are paid for services rendered to all of the
Funds and are allocated on a prorata basis across the portfolios of Armada
Funds, Parkstone Group of Funds and The Armada Advantage Fund. No person who is
an officer, director, trustee, or employee of the Investment Adviser,
Distributor, or any parent or subsidiary thereof, who serves as an officer,
trustee, or employee of the Trust receives any compensation from the Trust.
Trustees who receive fees are eligible for participation in the Company's
Deferred Compensation Plan (the "Plan"), an unfunded, nonqualified deferred
compensation plan. The Plan allows each eligible Trustee to defer receipt of all
or a percentage of fees that would otherwise be payable for services performed.
Expenses paid for the year ended May 31, 2000, include legal fees of $606,822
paid to Drinker, Biddle & Reath LLP. A partner of that firm is Secretary of the
Trust.
The Trust and SEI Investments Mutual Funds Services (the "Administrator") are
parties to an Administration Agreement dated May 1, 1998, under which the
Administrator provides administrative services for an annual fee of 0.07% of the
aggregate average daily net assets of the Funds up to the first $18 billion and
0.06% of the aggregate average daily net assets of the Funds over $18 billion.
4. INVESTMENTS
During the period ended May 31, 2000, purchases and sales of securities,
other than short-term investments or U.S. government obligations, aggregated:
PURCHASES (000) SALES (000)
-------------- ------------
Core Equity Fund.............. $ 57,073 $ 75,137
Equity Growth Fund ........... 363,075 608,905
Equity Income Fund ........... 218,593 205,015
Equity Index Fund ............ 249,954 171,886
International Equity Fund .... 519,770 381,397
Small Cap Growth Fund ........ 207,840 173,510
Small Cap Value Fund ......... 361,558 333,082
Tax Managed Equity Fund ...... 8,123 16,654
Balanced Allocation Fund ..... 102,461 122,601
Bond Fund .................... 556,956 611,814
Enhanced Income Fund ......... 49,419 34,662
GNMA Fund .................... 25,230 28,902
Intermediate Bond Fund ....... 326,518 37,738
Total Return Advantage Fund .. 117,840 107,445
National Tax Exempt
Bond Fund .................. 65,531 64,522
Ohio Tax Exempt Bond Fund .... 59,087 81,991
Pennsylvania Municipal
Bond Fund .................. 23,426 16,003
Purchases and sales of long-term U.S. government obligations were:
PURCHASES (000) SALES (000)
-------------- -----------
Balanced Allocation Fund...... $ 36,453 $ 37,730
Bond Fund..................... 533,991 594,016
Enhanced Income Fund.......... 58,263 55,420
GNMA Fund..................... 86,842 53,003
Intermediate Bond Fund........ 278,715 229,781
Total Return Advantage Fund... 291,926 281,299
As of May 31, 2000, the following funds have capital loss carryforwards:
AMOUNT EXPIRATION
(000) DATE
---------- -------------
Bond Fund..................... 11,261 2008
Enhanced Income Fund.......... 373 2008
GNMA Fund..................... 617 2008
Intermediate Bond Fund........ 4,204 2008
Total Return Advantage Fund... 2,354 2008
National Tax Exempt
Bond Fund................... 327 2008
Ohio Tax Exempt Bond Fund..... 1,198 2008
Pennsylvania Municipal
Bond Fund................... 102 2008
Government Money
Market Fund................. 2 2002-06
Money Market Fund............. 9 2003-07
Pennsylvania Tax Exempt
Money Market Fund........... 13 2004-07
Tax Exempt Money
Market Fund................. 26 2006-07
148
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
Certain funds incurred losses from November 1, 1999 to May 31, 2000. As
permitted by tax regulations, the funds intend to elect to defer and treat these
losses as arising in the fiscal year ending May 31, 2001. The funds that elected
to defer losses and the amounts deferred are as follows:
(000)
-------
Equity Index Fund ............................. $ 9,588
International Equity Fund ..................... 243
Small Cap Value Fund .......................... 2,029
Bond Fund ..................................... 23,233
Enhanced Income Fund .......................... 485
GNMA Fund ..................................... 766
Intermediate Bond Fund ........................ 6,784
Total Return Advantage Fund ................... 4,478
National Tax Exempt
Bond Fund ................................... 1,633
Ohio Tax Exempt Bond Fund ..................... 1,901
Pennsylvania Municipal
Bond Fund ................................... 124
At May 31, 2000, the total cost of securities for Federal income tax purposes
was not materially different from amounts reported for financial reporting
purposes. The aggregate gross unrealized appreciation and depreciation for
securities held by the Funds at May 31, 2000 is as follows:
AGGREGATE AGGREGATE
GROSS GROSS
APPRECIATION DEPRECIATION NET
(000) (000) (000)
------------ ------------ ----------
Core Equity Fund .............. $ 43,745 $ (5,014) $ 38,731
Equity Growth Fund ............ 511,440 (22,396) 489,044
Equity Income Fund ............ 91,940 (32,198) 59,742
Equity Index Fund ............. 81,442 (16,422) 65,020
International Equity Fund ..... 69,638 (8,138) 61,500
Small Cap Growth Fund ......... 35,746 (9,205) 26,541
Small Cap Value Fund .......... 51,232 (9,232) 42,000
Tax Managed Equity Fund ....... 230,272 -- 230,272
Balanced Allocation Fund ...... 5,877 (2,388) 3,489
Bond Fund ..................... 1,359 (22,798) (21,439)
Enhanced Income Fund .......... 213 (2,175) (1,962)
GNMA Fund ..................... 158 (3,072) (2,914)
Intermediate Bond Fund ........ 419 (9,323) (8,904)
Total Return Advantage Fund ... 735 (12,658) (11,923)
National Tax Exempt
Bond Fund .................. 300 (1,416) (1,116)
Ohio Tax Exempt Bond Fund ..... 715 (3,293) (2,578)
Pennsylvania Municipal ........
Bond Fund .................. 285 (621) (336)
5. 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 on the following pages for
the Funds.
149
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
(000)
--------------------------------------------------------------------------------
CLASS I CLASS A CLASS B CLASS C
--------------------- ------------------- ------------------ -------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
5/31/00 5/31/99 5/31/00 5/31/99 5/31/00 5/31/99 5/31/00
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
CORE EQUITY FUND
Shares sold ................................... 441 521 180 190 74 83 --
Shares reinvested ............................. 388 396 8 2 3 1 --
Shares repurchased ............................ (1,930) (64) (34) (102) (33) (3) --
------- ------- ------- ------ ----- ----- ---
Net increase/(decrease) ....................... (1,101) 853 154 90 44 81 --
======= ======= ======= ====== ===== ===== ===
EQUITY GROWTH FUND
Shares sold ................................... 4,605 55,653 937 6,417 82 59 9
Shares sold from common fund .................. -- 11,713 -- -- -- -- --
Shares reinvested ............................. 373 1,893 55 182 1 -- --
Shares repurchased ............................ (12,962)** (34,479) (1,102) (809) (10) (3) --
------- ------- ------- ------ ----- ----- ---
Net increase/(decrease) ....................... (7,984) 34,780 (110) 5,790 73 56 9
======= ======= ======= ====== ===== ===== ===
EQUITY INCOME FUND
Shares sold ................................... 6,385 8,741 376 634 47 60 6
Shares sold from common fund .................. -- 12,893 -- -- -- -- --
Shares reinvested ............................. 1,617 443 39 7 5 1 --
Shares repurchased ............................ (5,956) (3,977) (438) (174) (20) (8) --
------- ------- ------- ------ ----- ----- ---
Net increase/(decrease) ....................... 2,046 18,100 (23) 467 32 53 6
======= ======= ======= ====== ===== ===== ===
EQUITY INDEX FUND*
Shares sold ................................... 30,978 25,795 484 400 43 -- 23
Shares reinvested ............................. 453 113 6 1 -- -- --
Shares repurchased ............................ (24,918) (3,478) (160) (56) -- -- --
------- ------- ------- ------ ----- ----- ---
Net increase .................................. 6,513 22,430 330 345 43 -- 23
======= ======= ======= ====== ===== ===== ===
INTERNATIONAL EQUITY FUND
Shares sold ................................... 11,564 6,630 214 189 40 4 11
Shares reinvested ............................. 68 4 1 -- -- -- --
Shares repurchased ............................ (1,625) (901) (77) (110) (2) -- --
------- ------- ------- ------ ----- ----- ---
Net increase .................................. 10,007 5,733 138 79 38 4 11
======= ======= ======= ====== ===== ===== ===
SMALL CAP GROWTH FUND
Shares sold ................................... 5,239 4,616 235 93 17 75 5
Shares reinvested ............................. -- 36 -- 1 -- -- --
Shares repurchased ............................ (2,589) (1,409) (160) (14) (5) (61) --
------- ------- ------- ------ ----- ----- ---
Net increase .................................. 2,650 3,243 75 80 12 14 5
======= ======= ======= ====== ===== ===== ===
SMALL CAP VALUE FUND
Shares sold ................................... 8,845 5,565 186 853 15 36 5
Shares reinvested ............................. 171 1,099 10 84 -- 3 --
Shares repurchased ............................ (5,441) (4,939) (404) (757) (3) (4) --
------- ------- ------- ------ ----- ----- ---
Net increase/(decrease) ....................... 3,575 1,725 (208) 180 12 35 5
======= ======= ======= ====== ===== ===== ===
<FN>
* FUND COMMENCED OPERATIONS ON JULY 10, 1998.
** INCLUDES REDEMPTION AS A RESULT OF A REDEMPTION IN KIND ON MARCH 20, 2000. (SEE NOTE 9).
</FN>
</TABLE>
150
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
(000)
--------------------------------------------------------------------------------
CLASS I CLASS A CLASS B CLASS C
--------------------- ------------------- ------------------ -------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
5/31/00 5/31/99 5/31/00 5/31/99 5/31/00 5/31/99 5/31/00
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
TAX MANAGED EQUITY FUND
Shares sold ................................... 1,320 1,245 960 663 429 444 32
Shares sold from common fund .................. -- 4,949 -- -- -- -- --
Shares reinvested ............................. 9 10 1 -- 1 -- --
Shares repurchased ............................ (3,203) (2,301) (353) (60) (87) (9) --
------- ------- ----- ----- ---- ---- ---
Net increase/(decrease) ....................... (1,874) 3,903 608 603 343 435 32
======= ======= ===== ===== ==== ==== ===
BALANCED ALLOCATION FUND*
Shares sold ................................... 1,831 10,709 329 173 27 38 --
Shares reinvested ............................. 145 90 5 1 1 -- --
Shares repurchased ............................ (4,269) (2,552) (136) (32) (6) (1) --
------- ------- ----- ----- ---- ---- ---
Net increase/(decrease) ....................... (2,293) 8,247 198 142 22 37 --
======= ======= ===== ===== ==== ==== ===
BOND FUND
Shares sold ................................... 5,697 54,213 490 407 25 81 4
Shares sold from common fund .................. -- 42,948 -- -- -- -- --
Shares reinvested ............................. 582 1,144 12 5 4 3 --
Shares repurchased ............................ (16,499) (35,024) (380) (147) (42) (11) --
------- ------- ----- ----- ---- ---- ---
Net increase/(decrease) ....................... (10,220) 63,281 122 265 (13) 73 4
======= ======= ===== ===== ==== ==== ===
ENHANCED INCOME FUND
Shares sold ................................... 10,040 5,834 123 35 18 -- 2
Shares reinvested ............................. 270 241 3 2 -- -- --
Shares repurchased ............................ (7,920) (5,959) (92) (37) -- -- --
------- ------- ----- ----- ---- ---- ---
Net increase .................................. 2,390 116 34 -- 18 -- 2
======= ======= ===== ===== ==== ==== ===
GNMA FUND
Shares sold ................................... 4,015 2,788 69 146 16 -- 9
Shares reinvested ............................. 65 46 6 6 -- -- --
Shares repurchased ............................ (1,379) (1,323) (97) (57) -- -- --
------- ------- ----- ----- ---- ---- ---
Net increase/(decrease) ....................... 2,701 1,511 (22) 95 16 -- 9
======= ======= ===== ===== ==== ==== ===
INTERMEDIATE BOND FUND
Shares sold ................................... 8,335 15,932 236 363 32 69 19
Shares sold from common fund .................. -- 6,642 -- -- -- -- --
Shares reinvested ............................. 560 503 21 18 3 1 --
Shares repurchased ............................ (9,261) (8,677) (359) (197) (29) (2) --
------- ------- ----- ----- ---- ---- ---
Net increase/(decrease) ....................... (366) 14,400 (102) 184 6 68 19
======= ======= ===== ===== ==== ==== ===
TOTAL RETURN ADVANTAGE FUND
Shares sold ................................... 7,510 7,279 250 478 -- -- --
Shares reinvested ............................. 1,427 1,179 39 19 -- -- --
Shares repurchased ............................ (6,902) (4,461) (227) (90) -- -- --
------- ------- ----- ----- ---- ---- ---
Net increase .................................. 2,035 3,997 62 407 -- -- --
======= ======= ===== ===== ==== ==== ===
<FN>
*FUND COMMENCED OPERATIONS ON JULY 10, 1998.
</FN>
</TABLE>
151
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
(000)
------------------------------------------------------------------------------
CLASS I CLASS A CLASS B CLASS C
-------------------- ------------------- ------------------ -------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
5/31/00 5/31/99 5/31/00 5/31/99 5/31/00 5/31/99 5/31/00
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONAL TAX EXEMPT BOND FUND
Shares sold ................................... 3,170 2,135 298 863 4 28 11
Shares sold from common fund .................. -- 2,165 -- -- -- -- --
Shares reinvested ............................. 13 6 17 6 1 -- --
Shares repurchased ............................ (3,220) (2,210) (316) (447) (9) -- (11)
------- -------- ----- ----- ----- ----- -----
Net increase/(decrease) ....................... (37) 2,096 (1) 422 (4) 28 --
======= ======== ===== ===== ===== ===== =====
OHIO TAX EXEMPT BOND FUND
Shares sold ................................... 2,288 7,248 260 111 -- -- --
Shares reinvested ............................. 24 24 15 11 -- -- --
Shares repurchased ............................ (5,088) (3,518) (217) (49) -- -- --
------- -------- ----- ----- ----- ----- -----
Net increase/(decrease) ....................... (2,776) 3,754 58 73 -- -- --
======= ======== ===== ===== ===== ===== =====
PENNSYLVANIA MUNICIPAL BOND FUND
Shares sold ................................... 1,283 605 11 11 -- -- 10
Shares reinvested ............................. 3 4 -- -- -- -- --
Shares repurchased ............................ (604) (449) (10) (2) -- -- (10)
------- -------- ----- ----- ----- ----- -----
Net increase .................................. 682 160 1 9 -- -- --
======= ======== ===== ===== ===== ===== =====
</TABLE>
Since Government Money Market, Money Market, Ohio Municipal Money Market,
Pennsylvania Tax Exempt Money Market, Tax Exempt Money Market, and Treasury
Money Market Funds have each sold and redeemed shares only at a constant net
asset value of $1.00 per share, the number of shares represented by such sales,
reinvestments, and redemptions is the same as the amounts shown in the Statement
of Changes in Net Assets.
6. COMMON TRUST FUND CONVERSIONS
On October 9, 1998, the Fort Wayne Large Cap Equity Fund, Fort Wayne Equity
Fund, Fort Wayne Income Fund, and Fort Wayne Tax Free Fund of National City Bank
of Indiana (formerly, Fort Wayne National Bank) were converted into the Armada
Tax Managed Equity Fund, Armada Tax Managed Equity Fund, Armada Intermediate
Bond Fund and Armada National Tax Exempt Bond Fund, respectively. The assets,
which consisted of securities and related receivables, were converted on a
tax-free basis at the respective Armada Fund's current day net asset value. At
the time of the conversion, 3,582,852 of Class I shares of the Armada Tax
Managed Equity Fund, 1,366,366 of Class I shares of the Armada Tax Managed
Equity Fund, 6,642,146 of Class I shares of the Armada Intermediate Bond Fund
and 2,165,202 of Class I shares of the Armada National Tax Exempt Bond Fund were
issued. The net assets of the Fort Wayne Large Cap Equity Fund, Fort Wayne
Equity Fund, Fort Wayne Income Fund, and Fort Wayne Tax Free Fund immediately
before the conversion were $33,678,806, $12,843,563, $71,602,332 and
$22,085,062, respectively, which included unrealized appreciation of $3,966,820,
$5,917,249, $1,094,445 and $588,915, respectively.
On August 14, 1998, the National City Fixed Income Fund for Personal Trusts
of National City Bank was converted into the Armada Bond Fund. The assets which
consisted of securities and related receivables, were converted on a tax-free
basis at the respective Armada Fund's current day net asset value. At the time
of this conversion, 42,948,272 of Class I shares of the Armada Bond Fund were
issued. The net assets of the National City Fixed Income Fund for Personal
Trusts immediately before the conversion were $444,085,137 which included
unrealized appreciation of $7,241,615.
On August 7, 1998, the National City Equity Fund for Personal Trusts #1 and
the National City Income Equity Fund for Personal Trusts #1 of National City
Bank were converted into the Armada Equity Growth and Armada Equity Income
Funds, respectively. The assets, which consisted of securities and related
receivables, were converted
152
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
on a tax-free basis at the respective Armada Fund's current day net asset value.
At the time of the conversion, 11,712,500 of Class I shares of the Armada Equity
Growth Fund and 12,892,934 of Class I shares of the Armada Equity Income Fund
were issued. The net assets of the National City Equity Fund for Personal Trusts
#1 and National City Income Equity Fund for Personal Trusts #1 immediately
before the conversion were $257,675,010 and $212,346,617, respectively, which
included unrealized appreciation of $102,201,766 and $51,916,108, respectively.
7. MARKET AND CREDIT RISK
Some countries in which certain of the Funds may invest require government
approval for the repatriation of investment income, capital or the proceeds of
sales of securities by foreign investors. In addition, if there is a
deterioration in a country's balance of payments or for other reasons, a country
may impose temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially
smaller, less liquid and more volatile than the major securities exchanges in
the United States. Consequently, acquisition and disposition of securities by
the Fund may be inhibited. In addition, a significant proportion of the
aggregate market value of equity securities listed on the major securities
exchanges in emerging markets are held by a smaller number of investors. This
may limit the number of shares available for acquisition or disposition of the
Fund.
The Balanced Allocation, Bond, Enhanced Income, GNMA, Intermediate Bond, and
Total Return Advantage Funds may invest in securities whose value is derived
from an underlying pool of mortgages or consumer loans. Prepayment of these
loans may shorten the stated maturity of these respective obligations and may
result in a loss of premium, if any has been paid.
Each Fund, other than Government Money Market, Money Market, Ohio Municipal
Money Market, Pennsylvania Tax Exempt Money Market, Tax Exempt Money Market, and
Treasury Money Market Funds, may invest up to 15% of its total assets in
illiquid securities which may include securities with contractual restrictions
on resale, securities exempt from registration under Rule 144A of the Securities
Act of 1933, as amended, and other securities which may not be readily
marketable. The Government Money Market, Money Market, Ohio Municipal Money
Market, Pennsylvania Tax Exempt Money Market, Tax Exempt Money Market, and
Treasury Money Market Funds may each invest up to 10% of total assets in
illiquid securities. The relative illiquidity of some of these securities may
adversely affect the Fund's ability to dispose of such securities in a timely
manner and at a fair price when it is necessary to liquidate such securities.
The Ohio Tax Exempt Bond, Pennsylvania Municipal Bond, Ohio Municipal Money
Market and the Pennsylvania Tax Exempt Money Market Funds follow an investment
policy of investing primarily in municipal obligations of one state. The
National Tax Exempt Bond and the Tax Exempt Money Market Funds follow an
investment policy of investing in municipal obligations of various states which
may, at times, comprise concentrations in one or several states. Economic
changes affecting each state and related public bodies and municipalities may
affect the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the National Tax Exempt Bond, Ohio
Tax Exempt Bond, Pennsylvania Municipal Bond, Ohio Municipal Money Market,
Pennsylvania Tax Exempt Money Market, and the Tax Exempt Money Market Funds.
Many municipalities insure repayment for their obligations. Although bond
insurance reduces the risk of loss due to default by an issuer, such bonds
remain subject to the risk that the market may fluctuate for other reasons and
there is no assurance that the insurance company will meet its obligations.
Insured securities have been identified in the Statement of Net Assets.
The Funds invest in securities that include revenue bonds, tax and revenue
anticipation notes, and general obligation bonds. At May 31, 2000, the
percentage of portfolio investments by each revenue source were as follows:
NATIONAL OHIO
TAX TAX PENNSYLVANIA
EXEMPT EXEMPT MUNICIPAL
BOND BOND BOND
Revenue Bonds: ---------- -------- --------------
Education ............ 5% 10% 20%
Hospital/Nursing
Homes .............. 1 8 5
Housing .............. 1 3 --
Industrial
Development ........ 1 2 10
Pollution Control .... 6 1 2
Public Facilities .... 3 5 2
Transportation ....... 13 3 6
Utilities ............ 12 18 11
Other ................ 15 1 17
General Obligations ..... 43 49 27
Anticipation Notes ...... -- -- --
---- ---- ----
100% 100% 100%
153
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
The rating of long-term debt as a percentage of total value of investments at
May 31, 2000, is as follows:
NATIONAL OHIO
TAX TAX PENNSYLVANIA
STANDARD & POOR'S/ EXEMPT EXEMPT MUNICIPAL
MOODY'S RATINGS BOND BOND BOND
------------------ -------- -------- -------------
AAA/Aaa 70.0% 60.6% 81.8%
AA/Aa 25.4 26.5 11.0
A/A 2.9 5.1 5.3
BBB/Baa -- 0.3 0.6
NR 1.7 7.5 1.3
----- ----- -----
100% 100% 100%
Securities rated by only one agency are shown in that category. Securities
rated by both agencies are shown with their lowest rating.
8. SECURITIES LENDING
The Funds may participate in a Securities Lending Agreement ("Lending
Agreement"). Security loans made pursuant to the Lending Agreement are required
at all times to be secured by U.S. Treasury Obligations and/or cash collateral
at least equal to 100% of the market value of securities issued in the U.S. and
105% of the market value of securities issued outside of the U.S. Cash
collateral received is invested in fixed-income securities, with a weighted
average maturity not to exceed 90 days, rated in one of the top two tiers by
Standard & Poor's ratings group or Moody's Investors Service, Inc. or repurchase
agreements collateralized by such securities. However, in the event of default
or bankruptcy by the lending agent, realization and/or retention of the
collateral may be subject to legal proceedings. In the event that the borrower
fails to return loaned securities and the collateral received is insufficient to
cover the value of the loaned securities and provided such collateral is not the
result of investment losses, the lending agent has agreed to pay the amount of
the shortfall to the funds, or at the discretion of the lending agent, replace
the loaned securities. The market value of the securities on loan, and related
collateral received at May 31, 2000, and income generated for the period ended
May 31, 2000 were as follows:
MARKET VALUE MARKET
OF SECURITIES VALUE OF
ON LOAN COLLATERAL INCOME
(000) (000) (000)
------------- ---------- ------
Core Equity Fund ......... $ 22,413 $ 22,413 $ 19
Equity Growth Fund ....... 168,810 168,810 328
Equity Income Fund ....... 45,432 45,432 156
MARKET VALUE MARKET
OF SECURITIES VALUE OF
ON LOAN COLLATERAL INCOME
(000) (000) (000)
------------- ---------- ------
Equity Index Fund .......... 36,168 36,168 84
International Equity Fund .. 94,670 94,670 45
Small Cap Growth Fund ...... 40,281 40,281 116
Small Cap Value Fund ....... 51,128 51,128 75
Tax Managed Equity Fund .... 9,421 9,421 51
Balanced Allocation Fund ... 10,544 10,544 17
Bond Fund .................. 127,343 127,343 217
Enhanced Income Fund ....... 7,578 7,578 15
Intermediate Bond Fund ..... 63,909 63,909 127
Total Return Advantage
Fund .................... 105,853 105,853 180
9. IN KIND TRANSFERS OF SECURITIES
During the year ended May 31, 2000, the Equity Growth Fund distributed
securities in lieu of cash for a Class I shareholder redemption. The shareholder
received a pro-rata portion of the Equity Growth Fund's holdings. The value of
the redemption was $65,043,736 (of which $33,458,166 was realized gain). Class I
shares of 2,338,164 were redeemed as part of this transaction. This transaction
was completed following guidelines approved by the Board of Trustees.
10. LINE OF CREDIT
Certain funds may borrow, if permitted by prospectus, an amount up to its
prospectus defined limitations, from a $350 million joint line of credit. In
aggregate the Armada Funds can borrow up to $85.5 million of the total line of
credit. Borrowings from the line of credit will bear interest at the Federal
Funds Rate plus 2.000%. No fund had any borrowings during the year ended May 31,
2000.
11. SUBSEQUENT EVENTS -- PARKSTONE MERGER (UNAUDITED)
The Board of Trustees and shareholders of the Parkstone Group of Funds
approved a reorganization of certain Parkstone Group of Funds ("Reorganizing
Funds") into similarly managed Armada Funds. The reorganization also provided
for five Parkstone Funds ("Continuing Funds") to be merged into
newly-established Armada investment portfolios. The tax-free reorganization of
the Reorganizing Funds took place at the close of business on June 9, 2000.
Similarly, the reorganization of the Continuing Funds took place on June 10,
2000, except the reorganization of the Parkstone Treasury Fund and the Armada
Treasury Plus Money Market Fund occurred on June 19, 2000.
154
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
PARKSTONE REORGANIZING FUNDS EXISTING ARMADA FUNDS
================================================================================
Prime Obligations Money Market 1
U.S. Government Obligations Government Money Market 1
Tax-Free Tax Exempt Money Market 1
Bond1 Bond
Limited Maturity Bond Limited Maturity Bond
(formerly Enhanced Income)1
Intermediate Government Obligations Intermediate Bond 1
Equity Income Equity Income 1
Small Capitalization Small Cap Growth 1
International Discovery International Equity 1
Balanced Allocation Balanced Allocation 1
National Tax Exempt Bond National Tax Exempt Bond 1
PARKSTONE CONTINUING FUNDS NEW ARMADA FUNDS
================================================================================
Large Capitalization1 Large Cap Ultra
Mid Capitalization1 Mid Cap Growth
U.S. Government Income1 U.S. Government Income
Michigan Municipal Bond1 Michigan Municipal Bond
Treasury 1 Treasury Plus Money Market
--------------------------------------------------------------------------------
1 Denotes the surviving or continuing portfolio for purposes of maintaining the
financial statements and performance history in the post-reorganization funds.
Under the Agreement and Plan of Reorganization the Parkstone I shares were
exchanged for Armada I shares, Parkstone A shares were exchanged for Armada A
shares and Parkstone B shares were exchanged for Armada B shares.
In subsequent financial reporting, the financial information for the Armada
Bond Fund prior to June 9, 2000 will be that of the Parkstone Bond Fund. The
Armada Bond Fund was the surviving net asset value. This means conversion
factors were applied to the Parkstone Bond Fund's financial performance history
for the respective share classes.
The net assets before and after the reorganization and shares issued and
redeemed by the corresponding Armada Funds were as follows:
<TABLE>
<CAPTION>
EXISTING PARKSTONE
EXISTING COMBINED NET ASSETS PRIOR NET ASSETS ARMADA FUND'S REORGANIZING FUND'S
ARMADA FUNDS AS OF JUNE 9, 2000 AS OF JUNE 9, 2000 SHARES ISSUED SHARES REDEEMED
=================================================================================================================================
<S> <C> <C> <C> <C>
Money Market $5,008,943,683 $4,394,894,078 614,038,196 614,038,196
Government Money Market 1,602,629,626 1,498,506,371 104,089,889 104,089,889
Tax Exempt Money Market 628,784,360 535,418,763 93,358,177 93,358,177
Limited Maturity Bond 202,393,175 92,554,395 11,273,126 11,937,935
Intermediate Bond 382,256,189 301,710,283 8,086,393 8,470,934
Bond 934,865,789 626,266,871 32,620,288 33,298,251
Equity Income 734,773,889 501,897,326 15,013,663 24,002,514
Small Cap Growth 452,639,251 184,684,416 17,041,876 11,204,423
International Equity 754,601,736 445,440,153 20,943,493 19,911,559
Balanced Allocation 224,665,290 76,237,123 13,933,236 11,739,478
National Tax Exempt Bond 166,379,126 101,292,106 6,782,394 6,518,841
PARKSTONE
NEW COMBINED NET ASSETS PRIOR NET ASSETS NEW ARMADA FUND'S CONTINUING FUND'S
ARMADA FUNDS AS OF JUNE 10, 2000 AS OF JUNE 10, 2000 SHARES ISSUED SHARES REDEEMED
=================================================================================================================================
Large Cap Ultra $ 324,621,718 N/A 15,601,834 15,601,834
Mid Cap Growth 368,457,916 N/A 21,700,476 21,700,476
U.S. Government Income 163,774,447 N/A 18,554,018 18,554,018
Michigan Municipal Bond 174,186,214 N/A 16,624,617 16,624,617
Treasury Plus Money Market* 233,032,281 N/A 233,026,341 233,026,341
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Assets moved into the Treasury Plus Money Market Fund on June 16, 2000.
155
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
Included in the net assets from the Parkstone Funds were the following
components:
<TABLE>
<CAPTION>
UNDISTRIBUTED ACCUMULATED NET UNREALIZED
PAID IN NET INVESTMENT REALIZED APPRECIATION/
PARKSTONE FUND CAPITAL INCOME (LOSS) GAIN (LOSS) (DEPRECIATION) NET ASSETS
=================================================================================================================================
REORGANIZING FUNDS
<S> <C> <C> <C> <C> <C>
Prime Obligations $614,043,384 $ -- $ 6,221 $ -- $614,049,605
U.S. Government
Obligations 104,125,202 -- (1,947) -- 104,123,255
Tax-Free 93,362,642 -- 2,955 -- 93,365,597
Limited Maturity Bond 123,442,582 1,305 (10,400,608) (3,204,499) 109,838,780
Intermediate Government
Obligations 96,419,523 -- (13,925,554) (1,948,063) 80,545,906
Bond 336,598,871 56,588 (20,684,216) (7,372,325) 308,598,918
Equity Income 198,245,704 45,148 11,715,646 22,870,065 232,876,563
Small Capitalization 152,247,648 (2,448,519) 27,779,138 90,376,568 267,954,835
International Discovery 200,905,437 (4,121,937) 32,761,819 79,616,264 309,161,583
Balanced Allocation 118,022,915 (151) 6,708,109 23,697,294 148,428,167
National Tax Exempt Bond 66,180,190 -- (1,307,610) 214,440 65,087,020
CONTINUING FUNDS
Large Capitalization 68,963,390 (1,784,939) 127,491,685 129,951,582 324,621,718
Mid Capitalization 114,098,702 (3,200,309) 138,423,500 119,136,023 368,457,916
U.S. Government Income 178,091,984 33,878 (9,826,242) (4,525,173) 163,774,447
Michigan Municipal Bond 172,259,138 2,703 (762,940) 2,687,313 174,186,214
Treasury 233,025,351 1,003 5,927 -- 233,032,281
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
156
<PAGE>
THE PARKSTONE GROUP OF FUNDS
ANNUAL REPORT
MAY 31, 2000
<PAGE>
PARKSTONE FUNDS
PARKSTONE LARGE CAPITALIZATION FUND OVERVIEW
================================================================================
COMMENTS FROM
THE EQUITY GROWTH TEAM
Considerable gains in the technology sector -- despite a correction from
March through May -- led to another year of strong returns for large cap growth
investors. Effective stock selection throughout the portfolio played a
significant role in the Parkstone Large Capitalization Fund's results. The
portfolio also benefited from a focus on semiconductor and communications
equipment stocks and an underweight in software and consumer noncyclicals.
For the fiscal year ended May 31, 2000, the Parkstone Large Capitalization
Fund produced a total return of 25.81% (before sales charges) for Investor B
shareholders and 27.25% for Institutional investors. Over the same period, the
Fund's benchmark, the S&P 500 BARRA Growth Index, had a return of 17.56%. As of
June 10, 2000, the Fund was renamed the Armada Large Cap Ultra Fund due to the
reorganization of the Parkstone Funds. The new name reflects its standing as the
Armada family's most aggressive domestic large cap fund.
We began adding to the Fund's semiconductor holdings last summer as the
industry's cycle of overcapacity appeared to be nearing an end. The explosive
growth of the Internet and wireless industries has driven sales of
microprocessors, contributing to fourfold gains for holdings Analog Devices and
Applied Materials and a three-fold increase for Texas Instruments. Among the
Fund's holdings, Nortel Networks climbed 190%, with Cisco Systems up 109% and
ADC Telecommunications up 100%.
Outside the technology arena, drug maker Warner Lambert, ad agency Omnicom
Group, and retailer Kohl's were among the portfolio's strongest performers.
Warner Lambert doubled in value due to strong fundamentals and a bidding war to
acquire the company. A strong advertising cycle contributed to the 32% return at
Omnicom Group before the Fund's position was sold. Kohl's has prospered from the
purchase of several former Caldor locations in the dense Northeast corridor,
contributing to a 41% return since we added it to the portfolio in November.
A modest holding in Microsoft paid off over the last five months of the
reporting period as the stock dropped 46%. This single stock accounted for as
much as 9.25% of the benchmark's value in December and finished the reporting
period at only 5%. The Fund benefited from a modest exposure to consumer
noncyclical stocks as well. Poor earnings results at bellwether companies like
Procter & Gamble and Gillette and uncertainty about future revenue growth cast a
cloud over the entire sector.
After being as much as 5% overweight in technology stocks during the fall,
the Fund has entered the new fiscal year with a slight underweight to the
sector. Valuation concerns led the management team to take some profits in many
of the Fund's top performers while the benchmark's annual re-balancing in
January only increased its technology weighting. During that time, we added to
our stake in Schlumberger and took a position in TransOcean. These oil field
services stocks offered welcome diversification and their earnings are climbing
as rising energy prices spur new exploration.
GROWTH OF A $10,000 INVESTMENT (4)
[line graph omitted--plot points as follows]
Parkstone Large Parkstone Large
Capitalization Fund Capitalization Fund S&P 500/BARRA
(Institutional Shares) (Investor B Shares) 2,3 Growth Index
12/28/95 $10,000 $10,000 $10,000
5/31/96 $11,221 $11,176 $11,151
5/31/97 $13,861 $13,688 $14,864
5/31/98 $18,485 $18,086 $19,664
5/31/99 $22,860 $22,133 $25,199
5/31/00 $29,089 $27,646 $29,624
PARKSTONE LARGE CAPITALIZATION FUND
-----------------------------------
Average Annual Total Returns, as of 5/31/00
----------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS INCEPTION 1 INCEPTION 1
----------------------------------------------------------------------------
Institutional Shares 27.25% 28.03% 27.36% 190.88%
----------------------------------------------------------------------------
Investor A Shares 26.66% 27.65% 26.70% 177.92%
----------------------------------------------------------------------------
Investor A Shares
with Sales Charge 19.72% 25.25% 25.05% 162.66%
----------------------------------------------------------------------------
Investor B Shares 25.81% 26.71% 25.80% 169.55%
----------------------------------------------------------------------------
Investor B Shares
with Sales Charge 20.84% 25.87% 25.59% 167.55%
----------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: DECEMBER 28, 1995
(INSTITUTIONAL SHARES); FEBRUARY 1, 1996 (INVESTOR A SHARES) AND FEBRUARY 1,
1996 (INVESTOR B SHARES).
2 INVESTOR B SHARES RETURNS FOR THE PERIOD PRIOR TO FEBRUARY 1, 1996 REFLECT THE
PERFORMANCE OF THE FUND'S INSTITUTIONAL SHARES.
3 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
4 THE LINE GRAPH SHOWS PERFORMANCE OF INSTITUTIONAL SHARES AND INVESTOR B SHARES
ONLY. INVESTOR A PERFORMANCE WOULD BE GREATER THAN OR LESS THAN THAT SHOWN IN
THE GRAPH BASED ON THE DIFFERENCES IN SALES LOADS AND FEES PAID BY INVESTOR A
SHAREHOLDERS.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 162.
158
<PAGE>
PARKSTONE FUNDS
PARKSTONE MID CAPITALIZATION FUND OVERVIEW
================================================================================
COMMENTS FROM THE SMALL AND
MID CAP GROWTH TEAM
Technology and Internet stocks drove the outstanding performance of the
mid-cap market over the past 12 months, as strong earnings growth and attractive
valuations relative to large caps beckoned investors. At the same time,
volatility held sway. After climbing 42% from December through February - the
best three-month performance in its history - the Russell Midcap Growth Index
dropped in value by 23% over the next three months.
An emphasis on semiconductor and software stocks helped the Parkstone Mid
Capitalization Fund record its best one-year returns to date. For the fiscal
year ended May 31, 2000, the Fund produced a total return of 50.40% (before
sales charges) for Investor B shareholders and 51.90% for Institutional
investors. Over the same period, the Fund's benchmark, the Russell Midcap Growth
Index had a return of 43.72%. As of June 10, 2000, the Fund was renamed the
Armada Mid Cap Growth Fund as part of the reorganization of the Parkstone Funds.
Although technology stocks accounted for a significant portion of the
portfolio's assets, the management team largely steered clear of pure-play
Internet companies. While this strategy had a negative impact on results in
fiscal 1999, it proved beneficial in fiscal 2000. The Fund's emphasis on
semiconductor stocks was the single-largest reason for the Fund's outperformance
versus its benchmark, as this sector benefited from the recovery in emerging
markets and the growing infrastructure needs of the Internet and wireless
industries. JDS Uniphase and PMC-Sierra led the way, up 425% and 414%,
respectively. In addition, Analog Devices, RF Micro Devices, and Xilinx all
increased in value by more than 200%. Our holdings in software companies also
benefited from the growth of the Internet, with Veritas Software up 494%,
Mercury Interactive up 255%, and Seibel Systems up 209%.
Lofty valuations led the management team to trim many of the Fund's
semiconductor and software holdings in early 2000 and look for opportunities in
other sectors. For example, the Fund added holdings in several oil field
services companies-Global Marine, BJ Services, and Ensco among them-that are
benefiting from the stepped-up exploration and production of oil and gas. These
companies appear to offer accelerating earnings and have provided some welcome
diversification.
While the outlook for the mid-cap sector continues to look bright, the
Manager believes many tech companies may find it difficult to sustain their
torrid pace of earnings growth. Staying true to the Fund's investing discipline
of growth at a reasonable price, the management team continues to seek
opportunities elsewhere. For example, we like the prospects for Capital One,
which is showing good growth in the credit card arena, and Concord EFS, a
payment processor benefiting from the growing use of debit and credit cards. We
believe Southwest Airlines, another holding, is one of the best-managed airlines
in the world and still offers strong growth potential.
GROWTH OF A $10,000 INVESTMENT (4)
[line graph omitted--plot points as follows]
Parkstone Mid Parkstone Mid
Capitalization Fund Capitalization Fund Russell Midcap
(Institutional Shares) (Investor B Shares) 2,3 Growth Index
5/31/90 $10,000 $10,000 $10,000
5/31/91 $10,567 $10,567 $11,751
5/31/92 $12,153 $12,153 $12,846
5/31/93 $13,931 $13,951 $14,850
5/31/94 $14,796 $14,005 $15,775
5/31/95 $16,063 $15,060 $18,255
5/31/96 $23,130 $21,479 $24,323
5/31/97 $22,788 $21,035 $26,992
5/31/98 $27,692 $25,381 $33,451
5/31/99 $29,963 $27,205 $38,682
5/31/00 $45,514 $40,917 $55,594
PARKSTONE MID CAPITALIZATION FUND
---------------------------------
Average Annual Total Returns, as of 5/31/00
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION 1 INCEPTION 1
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Institutional Shares 51.90% 25.93% 23.16% 16.36% 17.11% 523.59%
------------------------------------------------------------------------------------------
Investor A Shares 51.48% 25.73% 23.02% 16.26% 17.02% 518.10%
------------------------------------------------------------------------------------------
Investor A Shares
with Sales Charge 43.15% 23.38% 21.63% 15.60% 16.45% 484.21%
------------------------------------------------------------------------------------------
Investor B Shares 2, 3 50.40% 24.83% 22.13% 15.13% 17.36% 175.17%
------------------------------------------------------------------------------------------
Investor B Shares
with Sales Charge 2, 3 45.40% 24.01% 21.97% N/A N/A N/A
------------------------------------------------------------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: OCTOBER 31, 1988
(INSTITUTIONAL SHARES); OCTOBER 31, 1988 (INVESTOR A SHARES) AND FEBRUARY 4,
1994 (INVESTOR B SHARES).
2 INVESTOR B SHARES RETURNS FOR THE PERIOD PRIOR TO FEBRUARY 4, 1994 REFLECT THE
PERFORMANCE OF THE FUND'S INVESTOR A SHARES.
3 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
4 THE LINE GRAPH SHOWS PERFORMANCE OF INSTITUTIONAL SHARES AND INVESTOR B SHARES
ONLY. INVESTOR A PERFORMANCE WOULD BE GREATER THAN OR LESS THAN THAT SHOWN IN
THE GRAPH BASED ON THE DIFFERENCE IN SALES LOADS AND FEES PAID BY INVESTOR A
SHAREHOLDERS.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 162.
159
<PAGE>
PARKSTONE FUNDS
PARKSTONE U.S. GOVERNMENT INCOME FUND OVERVIEW
================================================================================
COMMENTS FROM THE
TAXABLE FIXED INCOME TEAM
In a difficult year for the bond market, the Parkstone U.S. Government Income
Fund benefited from its emphasis on Ginnie Maes, premium mortgage-backed
securities, and Treasuries. For the year ended May 31, 2000, the Fund produced a
total return (before sales charges) of 1.10% for Investor B shareholders and
2.26% for Institutional investors. By comparison, the Fund's benchmark, Lehman
Brothers Mortgage Backed Securities Index, had a return of 2.48%. On June 10,
2000, the Fund was renamed the Armada U.S. Government Income Fund due to the
reorganization of the Parkstone Funds.
As inflationary pressures, six attendant rate hikes, and an oversupply of new
corporate issues took their toll on the non-Treasury (or spread-sectors), the
portfolio's high credit quality insulated the Fund somewhat from the extremes of
market volatility. No less than 80% of the Fund was invested in agency or
government-backed securities throughout the reporting period.
An overweight to Ginnie Maes, which are backed by the full faith and credit
of the U.S. Treasury, proved particularly beneficial. Fannie Maes and Freddie
Macs have come under some pressure as a bill proposing to modify or remove their
implied government guarantee works it way through Congress. Exposure to
Treasuries also helped performance from January forward as the Federal
government's announced debt buyback spurred a rally in the Treasury market.
Looking ahead, mortgage-backed securities should continue to offer superior
credit quality and liquidity. Management is likely to maintain the Fund's
overweight to Ginnie Maes in light of the uncertainty surrounding the Fannie Mae
and Freddie Mac guarantee. At current interest rate levels, prepayments are not
a concern since much of the mortgage market is trading at a discount.
Meanwhile, we've made the portfolio roughly 5% less sensitive to interest
rate movements than the benchmark. Even after rate increases in February, March,
and May, the latter a 50-basis-point hike, more may be in the offing as the Fed
attempts to stem the wealth effect caused by the stock market's precipitous
rise. Although some of its speculative excess has been removed, rising energy
prices and virtually full employment continue to make inflation a concern.
As of May 31, 94% of the Fund's net assets were invested in mortgage-backed
securities, 4% in asset-backed securities, and 2% in U.S. Treasuries. As of the
same date, the average maturity of the Fund was 7.1 years. The Fund carries an
Agency average credit quality.
GROWTH OF A $10,000 INVESTMENT (4)
[line graph omitted--plot points as follows]
<TABLE>
<CAPTION>
Parkstone U.S. Government Parkstone U.S. Government
Income Fund Income Fund Lehman Mortgage-Backed
(Institutional Shares) (Investor B Shares) 2,3 Securities Index
<S> <C> <C> <C>
11/12/92 $10,000 $10,000 $10,000
5/31/93 $10,436 $10,436 $10,575
5/31/94 $10,641 $10,591 $10,567
5/31/95 $11,513 $11,351 $11,759
5/31/96 $12,190 $11,908 $12,348
5/31/97 $13,040 $12,624 $13,499
5/31/98 $14,194 $13,600 $14,804
5/31/99 $14,866 $14,113 $15,526
5/31/00 $15,202 $14,268 $15,911
</TABLE>
PARKSTONE U.S. GOVERNMENT INCOME FUND
-------------------------------------
Average Annual Total Returns, as of 5/31/00
--------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION 1 INCEPTION 1
--------------------------------------------------------------------------------
Institutional Shares 2.26% 5.24% 5.72% 5.70% 52.01%
--------------------------------------------------------------------------------
Investor A Shares 1.96% 4.97% 5.47% 5.49% 49.73%
--------------------------------------------------------------------------------
Investor A Shares
with Sales Charge (2.93)% 3.26% 4.45% 4.81% 42.60%
--------------------------------------------------------------------------------
Investor B Shares 2,3 1.10% 4.16% 4.68% 4.46% 31.79%
--------------------------------------------------------------------------------
Investor B Shares
with Sales Charge 2,3 (3.70)% 2.97% 4.37% N/A N/A
--------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: NOVEMBER 12, 1992
(INSTITUTIONAL SHARES); NOVEMBER 12, 1992 (INVESTOR A SHARES) AND FEBRUARY 4,
1994 (INVESTOR B SHARES).
2 INVESTOR B SHARES RETURNS FOR THE PERIOD PRIOR TO FEBRUARY 4, 1994 REFLECT THE
PERFORMANCE OF THE FUND'S INVESTOR A SHARES.
3 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
4 THE LINE GRAPH SHOWS PERFORMANCE OF INSTITUTIONAL SHARES AND INVESTOR B SHARES
ONLY. INVESTOR A PERFORMANCE WOULD BE GREATER THAN OR LESS THAN THAT SHOWN IN
THE GRAPH BASED ON THE DIFFERENCE IN SALES LOADS AND FEES PAID BY INVESTOR A
SHAREHOLDERS.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 162.
160
<PAGE>
PARKSTONE FUNDS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND OVERVIEW
================================================================================
COMMENTS FROM THE TAX EXEMPT FIXED INCOME TEAM
Robust economic growth and a string of Fed-driven interest rate hikes took
their toll on fixed income securities during the past 12 months. Although the
municipal market suffered along with taxable bonds, the management team's
strategy of focusing on income and stability served the Fund well under
difficult conditions.
For the fiscal year ended May 31, 2000, the Parkstone Michigan Municipal Bond
Fund produced a total return of (1.41)% (before sales charges) for Investor B
investors and (0.42)% for Institutional shareholders. The Fund was renamed the
Armada Michigan Municipal Bond Fund on June 10, 2000 as part of the
reorganization of the Parkstone Funds.
Over the same period, the Fund's benchmark, the Lehman 7-Year Municipal Bond
Index had a return of 0.24% while the Lehman Intermediate Mutual Fund Index
returned 0.18%. For internal purposes, the management team prefers to use the
Intermediate Mutual Fund Index, because we feel it better reflects the range of
maturities within the portfolio. Previously, the Fund used the Lehman 3-15 Year
Municipal Bond Index as its benchmark; however this index is no longer widely
tracked. Therefore, we've begun using the Lehman 7-Year Municipal Bond Index.
More than 85% of the Fund was invested in issues rated double-A or higher
with nearly 63% of assets in highest- quality, triple-A rated issues at
year-end. During the fiscal year, the Fund held very few A rated and triple-B
rated securities because the small spread between credit grades that
characterized the past 12 months did not warrant adding any extra risk to the
portfolio.
The management team continued to keep a significant portion of assets--20.6%
as of May 31--in school districts that participate in the state's School Bond
Loan Fund program. Since the State of Michigan has agreed to honor their
obligations in the unlikely event that these school districts cannot, we are
reaping the benefit of bonds that pay a slightly higher coupon for the same low
risk as the state's double-A-1 general obligations. Conversely, the Fund's
exposure to hospitals, particularly those in the eastern half of the state,
which are grappling with consolidation due to overcapacity has been reduced.
At year-end, 44% of the Fund's assets were invested in general obligation
securities, and 19% in pre-refunded and escrowed-to-maturity securities. Of the
Fund's revenue bonds, agencies accounted for 24.6%, utilities for 13%, and
hospitals for 18% of the total portfolio. As of May 31, 2000, the average
maturity of the Fund was 7.07 years.
Looking ahead, we remain optimistic on the credit quality of Michigan's
state-issued debt. The recent opening of three casinos in the Detroit area will
help diversify the state's tax base, which has long been reliant on the fortunes
of the automotive industry. Once we see clear signs that the Fed is unlikely to
hike rates further, we anticipate that the Fund's portfolio may be restructured
to lengthen the Fund's average maturity and duration.
GROWTH OF A $10,000 INVESTMENT 4
[line graph omitted--plot points as follows]
Parkstone Michigan Parkstone Michigan
Municipal Bond Fund Municipal Bond Fund Lehman 7-Year
(Institutional Shares) (Investor B Shares) 2,3 Municipal Bond Index
7/2/90 $10,000 $10,000 $10,000
5/31/91 $10,713 $10,713 $10,909
5/31/92 $11,530 $11,530 $11,890
5/31/93 $12,622 $12,621 $13,136
5/31/94 $12,991 $12,942 $13,568
5/31/95 $13,973 $13,798 $14,675
5/31/96 $14,470 $14,154 $15,356
5/31/97 $15,365 $14,880 $16,408
5/31/98 $16,455 $15,781 $17,732
5/31/99 $17,038 $16,178 $18,571
5/31/00 $16,966 $15,950 $18,617
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
--------------------------------------
Average Annual Total Returns, as of 5/31/00
--------------------------------------------------------------------------------
CUMULATIVE
SINCE SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION 1 INCEPTION 1
--------------------------------------------------------------------------------
Institutional Shares (0.42)% 3.36% 3.96% 5.48% 69.69%
--------------------------------------------------------------------------------
Investor A Shares (0.68)% 3.10% 3.71% 5.30% 66.99%
--------------------------------------------------------------------------------
Investor A Shares
with Sales Charge (5.37)% 1.44% 2.71% 4.79% 59.04%
--------------------------------------------------------------------------------
Investor B Shares (1.41)% 2.34% 2.94% 2.81% 19.17%
--------------------------------------------------------------------------------
Investor B Shares
with Sales Charge (6.17)% 1.11% 2.60% N/A N/A
--------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1 THE INCEPTION DATE FOR EACH CLASS IS AS FOLLOWS: JULY 2, 1990 (INSTITUTIONAL
SHARES); JULY 2, 1990 (INVESTOR A SHARES) AND FEBRUARY 4, 1994 (INVESTOR B
SHARES).
2 INVESTOR B SHARES RETURNS FOR THE PERIOD PRIOR TO FEBRUARY 4, 1994 REFLECT THE
PERFORMANCE OF THE FUND'S INVESTOR A SHARES.
3 IN INSTANCES WHERE PERFORMANCE OF AN OLDER SHARE CLASS IS USED TO CALCULATE
HISTORICAL PERFORMANCE OF A NEWER SHARE CLASS, THE PERFORMANCE OF THE OLDER
CLASS HAS NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE
NEWER CLASS. IF IT HAD, PERFORMANCE WOULD HAVE BEEN LOWER.
4 THE LINE GRAPH SHOWS PERFORMANCE OF INSTITUTIONAL SHARES AND INVESTOR B SHARES
ONLY. INVESTOR A PERFORMANCE WOULD BE GREATER THAN OR LESS THAN THAT SHOWN IN
THE GRAPH BASED ON THE DIFFERENCE IN SALES LOADS AND FEES PAID BY INVESTOR A
SHAREHOLDERS.
FOR MORE INFORMATION REGARDING PERFORMANCE AND THE APPLICABLE SALES CHARGES,
PLEASE REFER TO PAGE 162.
161
<PAGE>
ADDITIONAL PARKSTONE PERFORMANCE INFORMATION
================================================================================
The following information is helpful for a complete understanding of the
Parkstone performance figures presented within this report.
The return and principal value of an investment will fluctuate. When
redeemed, shares may be worth more or less than their original cost.
Certain sales charges are associated with each share class based on a $10,000
purchase. The following summarizes the sales charges in effect as of May 31,
2000 which were used to calculate performance for the respective share classes.
o The Parkstone Large Capitalization Fund and the Parkstone Mid Capitalization
Fund have a front-end sales charge of 5.50% for Investor A Shares.
o The Parkstone U.S. Government Income Fund and the Parkstone Michigan Municipal
Bond Fund have a front-end sales charge of 4.75% for Investor A Shares.
o All Investor B Shares have a maximum deferred sales charge of 5.00%. This
charge declines from 5.00% in the first year to 0.00% after five years, as
outlined in the prospectus.
Institutional Shares are for financial institutions investing for their own
or their customers' accounts.
162
<PAGE>
THE PARKSTONE GROUP OF FUNDS
FINANCIAL STATEMENTS
FOR THE YEAR ENDED MAY 31, 2000
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE LARGE CAPITALIZATION FUND
================================================================================
<TABLE>
<CAPTION>
LARGE CAPITALIZATION FUND
--------------------------------------------------------------------------------------
YEAR ENDED MAY 31, 2000 YEAR ENDED MAY 31, 1999
---------------------------------------- -----------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INSTITUTIONAL INVESTOR A INVESTOR B
------------ ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ....... $ 19.81 $ 19.67 $ 19.21 $ 16.27 $16.19 $15.95
-------- ------- ------- -------- ------ ------
INVESTMENT ACTIVITIES
Net investment loss ..................... (0.02) (0.06) (0.13) (0.06) (0.11) (0.23)
Net realized and unrealized
gain from investments ................. 5.08 4.98 4.78 3.90 3.89 3.79
-------- ------- ------- -------- ------ ------
Total from Investment Activities .... 5.06 4.92 4.65 3.84 3.78 3.56
-------- ------- ------- -------- ------ ------
DISTRIBUTIONS
Net realized gains ...................... (4.78) (4.78) (4.78) (0.30) (0.30) (0.30)
-------- ------- ------- -------- ------ ------
Total Distributions ................. (4.78) (4.78) (4.78) (0.30) (0.30) (0.30)
-------- ------- ------- -------- ------ ------
NET ASSET VALUE, END OF PERIOD .......... $ 20.09 $ 19.81 $ 19.08 $ 19.81 $19.67 $19.21
======== ======= ======= ======== ====== ======
Total Return (excludes sales and
redemption charges) .................... 27.25% 26.66% 25.81% 23.67% 23.42% 22.38%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .......... $278,697 $21,550 $15,770 $409,107 $24,513 $14,128
Ratio of expenses to average net assets .... 1.05% 1.30% 2.05% 1.10% 1.35% 2.11%
Ratio of net investment loss to
average net assets ..................... (0.36)% (0.61)% (1.36)% (0.33)% (0.59)% (1.34)%
Portfolio turnover ......................... 82.30% 82.30% 82.30% 50.51% 50.51% 50.51%
</TABLE>
See Accompanying Notes
164
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE LARGE CAPITALIZATION FUND
================================================================================
<TABLE>
<CAPTION>
LARGE CAPITALIZATION FUND
---------------------------------------------------
ELEVEN MONTHS ENDED MAY 31, 1998
---------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............ $ 14.48 $ 14.44 $ 14.34 $ 14.28
-------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income/(loss) .... (0.03) (0.06) (0.12) (0.06)
Net realized and unrealized
gain from investments ......... 3.52 3.51 3.43 3.32
-------- ------- ------- -------
Total from Investment
Activities .................... 3.49 3.45 3.31 3.26
-------- ------- ------- -------
DISTRIBUTIONS
Net investment
income ........................ (0.03) (0.03) (0.03) (0.03)
Net realized gains .............. (1.67) (1.67) (1.67) (1.67)
-------- ------- ------- -------
Total Distributions ............ (1.70) (1.70) (1.70) (1.70)
-------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD .................. $ 16.27 $ 16.19 $ 15.95 $ 15.84
======== ======= ======= =======
Total Return (excludes sales
and redemption charges) ......... 26.18%(a) 25.95%(a) 25.12%(a) 24.87%(a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) .................... $358,221 $21,628 $10,169 $ 268
Ratio of expenses to average
net assets ...................... 1.10%(b) 1.35%(b) 2.09%(b) 2.09%(b)
Ratio of net investment income/
(loss) to average net assets .... (0.19)%(b) (0.45)%(b) (1.21)%(b) (1.24)%(b)
Portfolio turnover ................. 24.74% 24.74% 24.74% 24.74%
LARGE CAPITALIZATION FUND
-------------------------------------------------
YEAR ENDED JUNE 30, 1997
-------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........... $ 11.25 $ 11.23 $11.22 $11.16
-------- ------- ------ ------
INVESTMENT ACTIVITIES
Net investment income/(loss) ... 0.03 (0.00) (0.05) (0.06)
Net realized and unrealized
gain from investments ........ 3.31 3.30 3.25 3.27
-------- ------- ------ ------
Total from Investment
Activities ................... 3.34 3.30 3.20 3.21
-------- ------- ------ ------
DISTRIBUTIONS
Net investment
income ....................... (0.03) (0.01) (0.00) (0.01)
Net realized gains ............. (0.08) (0.08) (0.08) (0.08)
-------- ------- ------ ------
Total Distributions ........... (0.11) (0.09) (0.08) (0.09)
-------- ------- ------ ------
NET ASSET VALUE,
END OF PERIOD ................. $ 14.48 $ 14.44 $14.34 $14.28
======== ======= ====== ======
Total Return (excludes sales
and redemption charges) ........ 29.81% 29.52% 28.62% 28.82%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) ................... $338,388 $12,260 $4,130 $ 42
Ratio of expenses to average
net assets ..................... 1.12% 1.37% 2.12% 2.12%
Ratio of net investment income/
(loss) to average net assets ... 0.19% (0.14)% (0.88)% (0.91)%
Portfolio turnover ................ 48.44% 48.44% 48.44% 48.44%
</TABLE>
(A) NOT ANNUALIZED
(B) ANNUALIZED
See Accompanying Notes
165
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE LARGE CAPITALIZATION FUND
================================================================================
<TABLE>
<CAPTION>
LARGE CAPITALIZATION FUND
------------------------------------------------------
DECEMBER 28, 1995 TO JUNE 30, 1996 (A)
------------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............................... $ 10.00 $10.00 $10.00 $10.00
-------- ------ ------ ------
INVESTMENT ACTIVITIES
Net investment income/(loss) .................................... 0.03 0.03 0.01 (0.00)
Net realized and unrealized gain on investments ................. 1.25 1.23 1.23 1.17
-------- ------ ------ ------
Total from Investment Activities ............................. 1.28 1.26 1.24 1.17
-------- ------ ------ ------
DISTRIBUTIONS
Net investment income ........................................... (0.03) (0.03) (0.00) (0.00)
Tax return of capital ........................................... (0.00) (0.00) (0.02) (0.01)
-------- ------ ------ ------
Total Distributions .......................................... (0.03) (0.03) (0.02) (0.01)
-------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD ................................. $ 11.25 $11.23 $11.22 $11.16
======== ====== ====== ======
Total Return (excludes sales and redemption charges) ............... 12.86%(b) 8.99%(b) 8.77%(b) 8.14%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .................................. $274,150 $1,657 $ 832 $ 2
Ratio of expenses to average net assets ............................ 2.19%(c) 1.40%(c) 1.78%(c) 2.24%(c)
Ratio of net investment income (loss) to average net assets ........ 1.26%(c) 0.31%(c) (0.32)%(c) (0.45)%(c)
Ratio of expenses to average net assets* ........................... 2.26%(c) 2.62%(c) 4.07%(c) 4.25%(c)
Portfolio turnover ................................................. 0.86% 0.86% 0.86% 0.86%
<FN>
* DURING THE PERIOD CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY FEE REDUCTIONS HAD NOT OCCURRED, THE RATIOS
WOULD HAVE BEEN AS INDICATED.
(A) PERIOD FROM COMMENCEMENT OF OPERATIONS
(B) NOT ANNUALIZED
(C) ANNUALIZED
</FN>
</TABLE>
See Accompanying Notes
166
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE MID CAPITALIZATION FUND
================================================================================
<TABLE>
<CAPTION>
MID CAPITALIZATION FUND
-------------------------------------------------------------------------------------
YEAR ENDED MAY 31, 2000 YEAR ENDED MAY 31, 1999
-------------------------------------------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INSTITUTIONAL INVESTOR A INVESTOR B
------------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ...... $ 14.27 $ 14.10 $13.14 $ 15.12 $ 14.98 $ 14.20
-------- ------- ------- -------- ------- -------
INVESTMENT ACTIVITIES
Net investment loss .................... (0.12)(a) (0.15)(a) (0.24)(a) (0.14) (0.19) (0.28)
Net realized and unrealized
gain on investments .................. 6.34 6.23 5.70 1.13 1.15 1.06
-------- ------- ------- -------- ------- -------
Total from Investment Activities ... 6.22 6.08 5.46 0.99 0.96 0.78
-------- ------- ------- -------- ------- -------
DISTRIBUTIONS
Net realized gains ..................... (4.65) (4.65) (4.65) (1.84) (1.84) (1.84)
-------- ------- ------- -------- ------- -------
Total Distributions ................ (4.65) (4.65) (4.65) (1.84) (1.84) (1.84)
-------- ------- ------- -------- ------- -------
NET ASSET VALUE, END OF PERIOD ......... $ 15.84 $ 15.53 $ 13.95 $ 14.27 $ 14.10 $ 13.14
======== ======= ======= ======== ======= =======
Total Return (excludes sales and
redemption charges) ................... 51.90% 51.48% 50.40% 8.20% 8.08% 7.19%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......... $281,161 $46,183 $18,584 $319,733 $50,605 $16,629
Ratio of expenses to average net assets ... 1.29% 1.54% 2.29% 1.32% 1.57% 2.32%
Ratio of net investment loss to
average net assets .................... (0.75)% (1.00)% (1.75)% (0.75)% (1.00)% (1.75)%
Portfolio turnover ........................ 110.26% 110.26% 110.26% 100.19% 100.19% 100.19%
</TABLE>
(A) CALCULATED BASED UPON AVERAGE SHARES OUTSTANDING.
See Accompanying Notes
167
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE MID CAPITALIZATION FUND
================================================================================
<TABLE>
<CAPTION>
MID CAPITALIZATION FUND
------------------------------------------------------
ELEVEN MONTHS ENDED MAY 31, 1998
------------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........... $ 15.82 $ 15.72 $ 15.12 $15.24
-------- ------- ------- ------
INVESTMENT ACTIVITIES
Net investment (loss) .......... (0.11) (0.14) (0.23) (0.23)
Net realized and unrealized
gain on investments .......... 2.52 2.51 2.42 2.46
-------- ------- ------- ------
Total from Investment
Activities ................... 2.41 2.37 2.19 2.23
-------- ------- ------- ------
DISTRIBUTIONS
Net realized gains ............. (3.11) (3.11) (3.11) (3.11)
-------- ------- ------- ------
Total Distributions ........... (3.11) (3.11) (3.11) (3.11)
-------- ------- ------- ------
NET ASSET VALUE,
END OF PERIOD ................. $ 15.12 $ 14.98 $ 14.20 $14.36
======== ======= ======= ======
Total Return (excludes sales
and redemption charges) ........ 16.98%(a) 16.84%(a) 16.27%(a) 16.44%(a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) ................... $518,080 $90,183 $23,780 $2,228
Ratio of expenses to average
net assets ..................... 1.30%(b) 1.55%(b) 2.30%(b) 2.30%(b)
Ratio of net investment loss to
average net assets ............. (0.77)%(b) (1.02)%(b) (1.77)%(b) (1.77)%(b)
Portfolio turnover ................ 38.41% 38.41% 38.41% 38.41%
MID CAPITALIZATION FUND
-----------------------------------------------------
YEAR ENDED JUNE 30, 1997
-----------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........... $ 20.83 $ 20.71 $ 20.28 $20.36
-------- ------- ------- ------
INVESTMENT ACTIVITIES
Net investment (loss) .......... (0.13) (0.16) (0.24) (0.21)
Net realized and unrealized
gain on investments .......... 1.25 1.30 1.21 1.22
-------- ------- ------- ------
Total from Investment
Activities ................... 1.12 1.14 0.97 1.01
-------- ------- ------- ------
DISTRIBUTIONS
Net realized gains ............. (6.13) (6.13) (6.13) (6.13)
-------- ------- ------- ------
Total Distributions ........... (6.13) (6.13) (6.13) (6.13)
-------- ------- ------- ------
NET ASSET VALUE,
END OF PERIOD ................. $ 15.82 $ 15.72 $ 15.12 $15.24
======== ======= ======= ======
Total Return (excludes sales
and redemption charges) ........ 5.58% 5.78% 4.94% 5.17%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) ................... $544,082 $80,634 $21,994 $2,018
Ratio of expenses to average
net assets ..................... 1.31% 1.56% 2.31% 2.31%
Ratio of net investment loss to
average net assets ............. (0.80)% (1.05)% (1.80)% (1.80)%
Portfolio turnover ................ 38.47% 38.47% 38.47% 38.47%
</TABLE>
(A) NOT ANNUALIZED
(B) ANNUALIZED
See Accompanying Notes
168
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE MID CAPITALIZATION FUND
================================================================================
<TABLE>
<CAPTION>
MID CAPITALIZATION FUND
------------------------------------------------------
YEAR ENDED JUNE 30, 1996
------------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .............. $ 16.62 $ 16.56 $ 16.35 $16.40
-------- ------- ------- ------
INVESTMENT ACTIVITIES
Net investment loss ............... (0.16) (0.16) (0.23) (0.17)
Net realized and unrealized
gain on investments ............. 5.03 4.97 4.82 4.79
-------- ------- ------- ------
Total from Investment
Activities ...................... 4.87 4.81 4.59 4.62
-------- ------- ------- ------
DISTRIBUTIONS
Net realized gains ................ (0.66) (0.66) (0.66) (0.66)
In excess of net realized
gains ............................. (0.00) (0.00) (0.00) (0.00)
-------- ------- ------- ------
Total Distributions .............. (0.66) (0.66) (0.66) (0.66)
-------- ------- ------- ------
NET ASSET VALUE,
END OF PERIOD .................... $ 20.83 $ 20.71 $ 20.28 $20.36
======== ======= ======= ======
Total Return (excludes sales
and redemption charges) ........... 29.83% 29.57% 28.59% 28.69%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) ...................... $650,495 $66,260 $15,840 $1,088
Ratio of expenses to average
net assets ........................ 1.29% 1.54% 2.29% 2.29%
Ratio of net investment loss
to average net assets ............. (0.68)% (0.94)% (1.70)% (1.73)%
Ratio of expenses to average
net assets* ....................... 1.29% 1.54% 2.29% 2.29%
Ratio of net investment loss
to average net assets* ........... (0.68)% (0.94)% (1.70)% (1.73)%
Portfolio turnover ................... 49.27% 49.27% 49.27% 49.27%
MID CAPITALIZATION FUND
------------------------------------------------------
YEAR ENDED JUNE 30, 1995
------------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............. $ 14.70 $ 14.69 $14.63 $16.29
-------- ------- ------ ------
INVESTMENT ACTIVITIES
Net investment loss .............. (0.08) (0.12) (0.11) (0.02)
Net realized and unrealized
gain on investments ............ 3.47 3.46 3.30 1.60
-------- ------- ------ ------
Total from Investment
Activities ..................... 3.39 3.34 3.19 1.58
-------- ------- ------ ------
DISTRIBUTIONS
Net realized gains ............... (0.49) (0.48) (0.48) (0.00)
In excess of net realized
gains ............................ (0.98) (0.99) (0.99) (1.47)
-------- ------- ------ ------
Total Distributions ............. (1.47) (1.47) (1.47) (1.47)
-------- ------- ------ ------
NET ASSET VALUE,
END OF PERIOD ................... $ 16.62 $ 16.56 $16.35 $16.40
======== ======= ====== ======
Total Return (excludes sales
and redemption charges) .......... 25.20% 24.85% 23.88% 23.56%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) ..................... $683,320 $43,803 $6,073 $ 153
Ratio of expenses to average
net assets ....................... 1.29% 1.51% 2.29% 2.27%(b)
Ratio of net investment loss
to average net assets ............ (0.64)% (0.87)% (1.61)% (1.43)%(b)
Ratio of expenses to average
net assets* ...................... 1.29% 1.54% 2.54% 2.53%(b)
Ratio of net investment loss
to average net assets* .......... (0.65)% (0.90)% (1.87)% (1.70)%(b)
Portfolio turnover .................. 46.39% 46.39% 46.39% 46.39%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIOS WOULD HAVE BEEN AS INDICATED.
(A) PERIOD FROM NOVEMBER 16, 1994 (COMMENCEMENT OF OFFERING OF INVESTOR C SHARES) TO JUNE 30, 1995.
(B) ANNUALIZED.
(C) REPRESENTS TOTAL RETURN FOR THE INSTITUTIONAL SHARES FOR THE PERIOD FROM
JULY 1, 1994 TO NOVEMBER 15, 1994 PLUS THE TOTAL RETURN FOR THE INVESTOR C
SHARES FOR THE PERIOD FROM NOVEMBER 16, 1994 TO JUNE 30, 1995.
</FN>
</TABLE>
See Accompanying Notes
169
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE U.S. GOVERNMENT INCOME FUND
================================================================================
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND
-------------------------------------------------------------------------------------
YEAR ENDED MAY 31, 2000 YEAR ENDED MAY 31, 1999
------------------------------------------ ----------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INSTITUTIONAL INVESTOR A INVESTOR B
------------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ....... $ 9.13 $ 9.13 $9.11 $ 9.27 $ 9.27 $ 9.24
-------- ------- ----- -------- ------- -------
INVESTMENT ACTIVITIES
Net investment income ................... 0.56 0.54 0.48 0.57 0.55 0.47
Net realized and unrealized
loss on investments ................... (0.36) (0.37) (0.38) (0.14) (0.14) (0.13)
-------- ------- ----- -------- ------- -------
Total from Investment Activities .... 0.20 0.17 0.10 0.43 0.41 0.34
-------- ------- ----- -------- ------- -------
DISTRIBUTIONS
Net investment income ................... (0.56) (0.53) (0.47) (0.57) (0.55) (0.47)
-------- ------- ----- -------- ------- -------
Total Distributions ................. (0.56) (0.53) (0.47) (0.57) (0.55) (0.47)
-------- ------- ----- -------- ------- -------
NET ASSET VALUE, END OF PERIOD .......... $ 8.77 $ 8.77 $8.74 $ 9.13 $ 9.13 $ 9.11
======== ======= ===== ======== ======= =======
Total Return (excludes sales and
redemption charges) .................... 2.26% 1.96% 1.10% 4.73% 4.46% 3.76%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .......... $134,250 $20,790 $9,192 $150,113 $38,190 $16,373
Ratio of expenses to average net assets .... 0.83% 1.08% 1.83% 0.75% 1.00% 1.75%
Ratio of net investment income to
average net assets ..................... 6.28% 6.03% 5.28% 6.15% 5.92% 5.15%
Ratio of expenses to average net assets* ... 0.94% 1.19% 1.94% 1.09% 1.34% 2.09%
Portfolio turnover ......................... 73.52% 73.52% 73.52% 52.60% 52.60% 52.60%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIOS WOULD HAVE BEEN AS INDICATED.
</FN>
</TABLE>
See Accompanying Notes
170
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE U.S. GOVERNMENT INCOME FUND
================================================================================
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND
-----------------------------------------------------
ELEVEN MONTHS ENDED MAY 31, 1998
-----------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........... $ 9.15 $ 9.15 $ 9.13 $ 9.10
-------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income .......... 0.63 0.61 0.55 0.54
Net realized and unrealized
gain/(loss) on investments ... 0.08 0.08 0.07 0.08
-------- ------- ------- -------
Total from Investment
Activities ................... 0.71 0.69 0.62 0.62
-------- ------- ------- -------
DISTRIBUTIONS
Net investment
income ....................... (0.55) (0.53) (0.47) (0.47)
Tax return of capital ......... (0.04) (0.04) (0.04) (0.04)
-------- ------- ------- -------
Total Distributions ........... (0.59) (0.57) (0.51) (0.51)
-------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD ................. $ 9.27 $ 9.27 $ 9.24 $ 9.21
======== ======= ======= =======
Total Return (excludes sales
and redemption charges) ........ 8.04%(a) 7.80%(a) 6.98%(a) 7.03%(a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) ................... $161,567 $54,710 $23,739 $ 363
Ratio of expenses to average
net assets ..................... 0.75%(b) 1.00%(b) 1.75%(b) 1.74%(b)
Ratio of net investment income
to average net assets .......... 7.44%(b) 7.20%(b) 6.45%(b) 6.34%(b)
Ratio of expenses to average
net assets* .................... 1.09%(b) 1.34%(b) 2.09%(b) 2.08%(b)
Portfolio turnover ................ 278.94% 278.94% 278.94% 278.94%
U.S. GOVERNMENT INCOME FUND
----------------------------------------------------
YEAR ENDED JUNE 30, 1997
----------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......... $ 9.25 $ 9.25 $ 9.21 $ 9.19
-------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income ......... 0.72 0.70 0.63 0.64
Net realized and unrealized
gain/(loss) on investments .. (0.10) (0.10) (0.09) (0.11)
-------- ------- ------- -------
Total from Investment
Activities .................. 0.62 0.60 0.54 0.53
-------- ------- ------- -------
DISTRIBUTIONS
Net investment
income ...................... (0.61) (0.59) (0.52) (0.50)
Tax return of capital ........ (0.11) (0.11) (0.10) (0.12)
-------- ------- ------- -------
Total Distributions .......... (0.72) (0.70) (0.62) (0.62)
-------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD ................ $ 9.15 $ 9.15 $ 9.13 $ 9.10
======== ======= ======= =======
Total Return (excludes sales
and redemption charges) ....... 6.91% 6.86% 6.06% 6.07%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) .................. $148,854 $58,589 $23,448 $ 69
Ratio of expenses to average
net assets .................... 0.77% 1.02% 1.77% 1.77%
Ratio of net investment income
to average net assets ......... 7.90% 7.64% 6.89% 6.89%
Ratio of expenses to average
net assets* ................... 1.11% 1.36% 2.11% 2.11%
Portfolio turnover ............... 499.53% 499.53% 499.53% 499.53%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY FEE
REDUCTIONS HAD NOT OCCURRED, THE RATIOS WOULD HAVE BEEN AS INDICATED.
(A) NOT ANNUALIZED.
(B) ANNUALIZED.
</FN>
</TABLE>
See Accompanying Notes
171
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE U.S. GOVERNMENT INCOME FUND
================================================================================
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND
----------------------------------------------------
YEAR ENDED JUNE 30, 1996
----------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............ $ 9.42 $ 9.42 $ 9.39 $ 9.36
-------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income ........... 0.75 0.73 0.66 0.66
Net realized and unrealized
gain/(loss) on investments .... (0.17) (0.17) (0.18) (0.17)
-------- ------- ------- -------
Total from Investment
Activities .................... 0.58 0.56 0.48 0.49
-------- ------- ------- -------
DISTRIBUTIONS
Net investment
income ........................ (0.67) (0.65) (0.59) (0.66)
Tax return of capital .......... (0.08) (0.08) (0.07) (0.00)
-------- ------- ------- -------
Total Distributions ............ (0.75) (0.73) (0.66) (0.66)
-------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD .................. $ 9.25 $ 9.25 $ 9.21 $ 9.19
======== ======= ======= =======
Total Return (excludes sales
and redemption charges) ......... 6.34% 5.97% 5.22% 5.25%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) .................... $130,615 $52,250 $19,556 $ 70
Ratio of expenses to average
net assets ...................... 0.76% 1.01% 1.76% 1.76%
Ratio of net investment income
to average net assets ........... 7.94% 7.70% 6.92% 6.92%
Ratio of expenses to average
net assets* ..................... 1.10% 1.35% 2.10% 2.10%
Portfolio turnover ................. 348.01% 348.01% 348.01% 348.01%
U.S. GOVERNMENT INCOME FUND
--------------------------------------------------------
YEAR ENDED JUNE 30, 1995
-------------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C(A)
------------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........... $ 9.41 $ 9.41 $ 9.38 $ 9.12
-------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income .......... 0.76 0.75 0.68 0.28
Net realized and unrealized
gain/(loss) on investments ... 0.01 (0.00) 0.01 0.24
-------- ------- ------- -------
Total from Investment
Activities ................... 0.77 0.75 0.69 0.52
-------- ------- ------- -------
DISTRIBUTIONS
Net investment
income ....................... (0.68) (0.66) (0.61) (0.25)
Tax return of capital ......... (0.08) (0.08) (0.07) (0.03)
-------- ------- ------- -------
Total Distributions ........... (0.76) (0.74) (0.68) (0.28)
-------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD ................. $ 9.42 $ 9.42 $ 9.39 $ 9.36
======== ======= ======= =======
Total Return (excludes sales
and redemption charges) ........ 8.70% 8.46% 7.71% 5.26%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000) ................... $110,190 $50,931 $ 8,478 $ 29
Ratio of expenses to average
net assets ..................... 0.83% 1.04% 1.83% 2.88%(b)
Ratio of net investment income
to average net assets .......... 8.25% 8.03% 7.28% 11.54%(b)
Ratio of expenses to average
net assets* .................... 1.19% 1.44% 2.44% 2.88%(b)
Portfolio turnover ................ 114.71% 114.71% 114.71% 114.71%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIOS WOULD HAVE BEEN AS INDICATED.
(A) PERIOD FROM NOVEMBER 16, 1994 (COMMENCEMENT OF OFFERING OF INVESTOR C SHARES) TO
JUNE 30, 1995.
(B) ANNUALIZED.
(C) REPRESENTS TOTAL RETURN FOR THE INSTITUTIONAL SHARES FOR THE PERIOD FROM JULY 1, 1994
TO NOVEMBER 15, 1994 PLUS THE TOTAL RETURN FOR THE INVESTOR C SHARES FOR THE PERIOD
FROM NOVEMBER 16, 1994 TO JUNE 30, 1995.
</FN>
</TABLE>
See Accompanying Notes
172
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
================================================================================
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL BOND FUND
--------------------------------------------------------------------------------------
YEAR ENDED MAY 31, 2000 YEAR ENDED MAY 31, 1999
------------------------------------------- ---------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INSTITUTIONAL INVESTOR A INVESTOR B
-------------- ------------ ------------ -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ....... $ 10.91 $ 10.91 $10.92 $ 11.06 $ 11.06 $11.07
-------- ------- ------ -------- ------- ------
INVESTMENT ACTIVITIES
Net investment income ................... 0.47 0.45 0.37 0.47 0.44 0.36
Net realized and unrealized loss
on investments ........................ (0.52) (0.53) (0.53) (0.08) (0.08) (0.08)
-------- ------- ------ -------- ------- ------
Total from Investment Activities .... (0.05) (0.08) (0.16) 0.39 0.36 0.28
-------- ------- ------ -------- ------- ------
DISTRIBUTIONS
Net investment income ................... (0.47) (0.44) (0.36) (0.47) (0.44) (0.36)
Net realized gains ...................... (0.01) (0.01) (0.01) (0.07) (0.07) (0.07)
-------- ------- ------ -------- ------- ------
Total Distributions ................. (0.48) (0.45) (0.37) (0.54) (0.51) (0.43)
-------- ------- ------ -------- ------- ------
NET ASSET VALUE, END OF PERIOD .......... $ 10.38 $ 10.38 $10.39 $ 10.91 $ 10.91 $10.92
======== ======= ====== ======== ======= ======
Total Return (excludes sales and
redemption charges) .................... (0.42)% (0.68)% (1.41)% 3.54% 3.38% 2.52%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .......... $156,734 $14,799 $1,881 $192,536 $28,305 $3,217
Ratio of expenses to average net assets .... 0.81% 1.06% 1.81% 0.76% 1.01% 1.76%
Ratio of net investment income to
average net assets ..................... 4.46% 4.21% 3.46% 4.21% 3.96% 3.21%
Ratio of expenses to average net assets* ... 0.91% 1.16% 1.91% 1.05% 1.29% 2.05%
Portfolio turnover ......................... 9.60% 9.60% 9.60% 6.52% 6.52% 6.52%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
</FN>
</TABLE>
See Accompanying Notes
173
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
================================================================================
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL BOND FUND
-------------------------------------------------------------------------------------
YEAR ENDED MAY 31, 1998 YEAR ENDED JUNE 30, 1997
------------------------------------------ --------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INSTITUTIONAL INVESTOR A INVESTOR B
------------- ------------ ------------ ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ...... $ 10.89 $ 10.89 $10.90 $ 10.77 $ 10.76 $10.76
-------- -------- ------ -------- ------- ------
INVESTMENT ACTIVITIES
Net investment income .................. 0.44 0.42 0.34 0.51 0.49 0.41
Net realized and unrealized
gain on investments .................. 0.23 0.23 0.23 0.14 0.14 0.13
-------- -------- ------ -------- ------- ------
Total from Investment Activities ... 0.67 0.65 0.57 0.65 0.63 0.54
-------- -------- ------ -------- ------- ------
DISTRIBUTIONS
Net investment income .................. (0.47) (0.45) (0.37) (0.49) (0.46) (0.36)
Net realized gains ..................... (0.03) (0.03) (0.03) (0.04) (0.04) (0.04)
-------- -------- ------ -------- ------- ------
Total Distributions ................ (0.50) (0.48) (0.40) (0.53) (0.50) (0.40)
-------- -------- ------ -------- ------- ------
NET ASSET VALUE, END OF PERIOD ......... $ 11.06 $ 11.06 $11.07 $ 10.89 $ 10.89 $10.90
======== ======== ====== ======== ======= ======
Total Return (excludes sales and
redemption charges) ................... 6.30%(a) 5.96%(a) 5.32%(a) 6.11% 5.89% 5.05%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......... $206,246 $38,536 $3,983 $194,950 $38,302 $3,503
Ratio of expenses to average net assets ... 0.74%(b) 0.99%(b) 1.74%(b) 0.76% 1.01% 1.76%
Ratio of net investment income to
average net assets .................... 4.34%(b) 4.09%(b) 3.34%(b) 4.73% 4.48% 3.73%
Ratio of expenses to average net assets* .. 1.03%(b) 1.28%(b) 2.03%(b) 1.05% 1.30% 2.05%
Portfolio turnover ........................ 26.24% 26.24% 26.24% 28.48% 28.48% 28.48%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
(A) NOT ANNUALIZED.
(B) ANNUALIZED.
</FN>
</TABLE>
See Accompanying Notes
174
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
================================================================================
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL BOND FUND
---------------------------------------
YEAR ENDED JUNE 30, 1996
---------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B
------------- ---------- ----------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................... $ 10.76 $ 10.75 $10.75
-------- ------- ------
INVESTMENT ACTIVITIES
Net investment income/(loss) ........... 0.50 0.47 0.40
Net realized and unrealized gain
on investments ....................... 0.04 0.04 0.04
-------- ------- ------
Total from Investment
Activities ........................... 0.54 0.51 0.44
-------- ------- ------
DISTRIBUTIONS
Net investment income .................. (0.50) (0.47) (0.40)
Net realized gains ..................... (0.03) (0.03) (0.03)
-------- ------- ------
Total Distributions ................... (0.53) (0.50) (0.43)
-------- ------- ------
NET ASSET VALUE, END OF PERIOD ............ $ 10.77 $ 10.76 $10.76
======== ======= ======
Total Return (excludes sales
and redemption charges) ................ 5.12% 4.87% 4.13%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......... $185,191 $36,681 $3,565
Ratio of expenses to average net assets ... 0.77% 1.02% 1.77%
Ratio of net investment income/(loss)
to average net assets .................. 4.57% 4.32% 3.57%
Ratio of expenses to average net assets* .. 1.06% 1.31% 2.06%
Portfolio turnover ........................ 27.66% 27.66% 27.66%
MICHIGAN MUNICIPAL BOND FUND
--------------------------------------------------------------
YEAR ENDED JUNE 30, 1995
-------------------------------------------------------------
INSTITUTIONAL INVESTOR A INVESTOR B INVESTOR C (A)(B)
------------- ---------- ---------- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................... $ 10.53 $ 10.53 $10.52 $10.11
-------- ------- ------ ------
INVESTMENT ACTIVITIES
Net investment income/(loss) ........... 0.50 0.48 0.40 (0.02)
Net realized and unrealized gain
on investments ....................... 0.25 0.23 0.24 0.62
-------- ------- ------ ------
Total from Investment
Activities ........................... 0.75 0.71 0.64 0.60
-------- ------- ------ ------
DISTRIBUTIONS
Net investment income .................. (0.50) (0.48) (0.40) (0.00)
Net realized gains ..................... (0.02) (0.01) (0.01) (0.17)
-------- ------- ------ ------
Total Distributions ................... (0.52) (0.49) (0.41) (0.17)
-------- ------- ------ ------
NET ASSET VALUE, END OF PERIOD ............ $ 10.76 $ 10.75 $10.75 $10.54
======== ======= ====== ======
Total Return (excludes sales
and redemption charges) ................ 7.33% 6.99% 6.28% 3.39%(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......... $176,068 $37,874 $2,270 --
Ratio of expenses to average net assets ... 0.78% 1.00% 1.78% 0.48%(c)
Ratio of net investment income/(loss)
to average net assets .................. 4.79% 4.57% 3.80% (0.32)%(c)
Ratio of expenses to average net assets* .. 1.07% 1.32% 2.32% 0.48%(c)
Portfolio turnover ........................ 26.06% 26.06% 26.06% 26.06%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIOS WOULD HAVE BEEN AS INDICATED.
(A) THERE WAS ONLY ONE SHARE OUTSTANDING FOR THE INVESTOR C SHARES AT JUNE 30, 1995.
(B) PERIOD FROM NOVEMBER 16, 1994 (COMMENCEMENT OF OFFERING OF INVESTOR C SHARES) TO JUNE 30, 1995.
(C) ANNUALIZED.
(D) REPRESENTS TOTAL RETURN FOR THE INSTITUTIONAL SHARES FOR THE PERIOD FROM
JULY 1, 1994 TO NOVEMBER 15, 1994 PLUS THE TOTAL RETURN FOR THE INVESTOR C
SHARES FOR THE PERIOD FROM NOVEMBER 16, 1994 TO JUNE 30, 1995, NOT ANNUALIZED.
</FN>
</TABLE>
See Accompanying Notes
175
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE TREASURY FUND
================================================================================
<TABLE>
<CAPTION>
TREASURY FUND
--------------------------------------------------------
YEAR ENDED MAY 31, 2000 YEAR ENDED MAY 31, 1999
--------------------------- --------------------------
INSTITUTIONAL INVESTOR A INSTITUTIONAL INVESTOR A
------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ....... $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- ------- -------- -------
Investment Activities ................... 0.048 0.047 0.045 0.044
Distributions ........................... (0.048) (0.047) (0.045) (0.044)
-------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD .......... $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======= ======== =======
Total Return ............................... 4.90% 4.80% 4.61% 4.51%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .......... $227,447 $ 1,835 $269,534 $ 9,161
Ratio of expenses to average net assets .... 0.56% 0.66% 0.58% 0.67%
Ratio of net investment income to
average net assets ..................... 4.77% 4.67% 4.52% 4.77%
Ratio of expenses to average net assets* ... 0.60% 0.85% 0.68% 0.91%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
</FN>
</TABLE>
See Accompanying Notes
176
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE TREASURY FUND
================================================================================
<TABLE>
<CAPTION>
TREASURY FUND
----------------------------------------------------------
ELEVEN MONTHS
ENDED MAY 31, 1998 YEAR ENDED JUNE 30, 1997
-------------------------- --------------------------
INSTITUTIONAL INVESTOR A INSTITUTIONAL INVESTOR A
------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........... $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- --------
Investment Activities .......................... 0.046 0.045 0.048 0.047
Distributions .................................. (0.046) (0.045) (0.048) (0.047)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ................. $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ========
Total Return ............................... 4.70%(a) 4.61%(a) 4.93% 4.82%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .............. $321,584 $240,208 $324,377 $176,006
Ratio of expenses to average net assets ........ 0.57%(b) 0.67%(b) 0.57% 0.67%
Ratio of net investment income to
average net assets ......................... 5.00%(b) 4.90%(b) 4.83% 4.72%
Ratio of expenses to average net assets* ....... 0.67%(b) 0.92%(b) 0.67% 0.92%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY FEE
REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
(A) NOT ANNUALIZED.
(B) ANNUALIZED.
</FN>
</TABLE>
See Accompanying Notes
177
<PAGE>
FINANCIAL HIGHLIGHTS
PARKSTONE TREASURY FUND
================================================================================
<TABLE>
<CAPTION>
TREASURY FUND
--------------------------------------------------------
YEAR ENDED JUNE 30, 1996 YEAR ENDED JUNE 30, 1995
--------------------------- --------------------------
INSTITUTIONAL INVESTOR A INSTITUTIONAL INVESTOR A
------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............. $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- --------
Investment Activities ............................ 0.050 0.049 0.048 0.047
Distributions .................................... (0.050) (0.049) (0.048) (0.047)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ========
Total Return ................................. 5.14% 5.04% 4.91% 4.81%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................ $223,416 $158,723 $192,232 $105,391
Ratio of expenses to average net assets .......... 0.60% 0.70% 0.64% 1.75%
Ratio of net investment income to
average net assets ........................... 4.98% 4.87% 4.95% 4.82%
Ratio of expenses to average net assets* ......... 0.70% 0.95% 0.78% 1.04%
<FN>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
</FN>
</TABLE>
See Accompanying Notes
78
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE LARGE CAPITALIZATION FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 96.6%
BIOLOGICAL TECHNOLOGY -- 1.1%
Amgen* ..................................... 56,600 $ 3,601
-------
BUSINESS SERVICES -- 4.3%
Automatic Data Processing .................. 63,800 3,505
Ceridian* .................................. 40,000 965
Computer Sciences* ......................... 61,200 5,871
Concord EFS* ............................... 98,640 2,392
Marchfirst* ................................ 40,000 755
-------
13,488
-------
CABLE TELEVISION -- 0.2%
Comcast, Cl A Special ...................... 20,000 757
-------
COMMUNICATIONS EQUIPMENT -- 7.6%
ADC Telecommunications* .................... 64,800 4,354
Lucent Technologies ........................ 148,384 8,514
Motorola ................................... 16,200 1,519
Nortel Networks ............................ 126,800 6,887
Qualcomm* .................................. 39,904 2,649
-------
23,923
-------
COMPUTER HARDWARE -- 13.6%
Cisco Systems* ............................. 320,776 18,264
Dell Computer* ............................. 124,000 5,347
EMC* ....................................... 56,632 6,587
International Business Machines ............ 71,320 7,654
Sun Microsystems* .......................... 65,776 5,040
-------
42,892
-------
COMPUTER SOFTWARE -- 8.3%
Amdocs Ltd.* ............................... 15,000 929
BMC Software* .............................. 55,000 2,420
Microsoft* ................................. 201,544 12,609
Oracle* .................................... 118,400 8,510
Siebel Systems* ............................ 5,000 585
Veritas Software* .......................... 10,000 1,165
-------
26,218
-------
DIVERSIFIED MANUFACTURING -- 9.1%
General Electric ........................... 300,024 15,789
Honeywell International .................... 60,538 3,311
Tyco International ......................... 153,072 7,204
United Technologies ........................ 38,840 2,347
-------
28,651
-------
ENTERTAINMENT -- 2.0%
Time Warner# ............................... 79,200 6,252
-------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
FOOD & BEVERAGE -- 1.0%
Anheuser Busch ............................. 10,000 $ 775
Coca Cola .................................. 20,000 1,067
PepsiCo .................................... 35,000 1,424
-------
3,266
-------
HEALTH CARE DIVERSIFIED -- 1.5%
Johnson & Johnson .......................... 51,760 4,633
-------
HEALTH CARE MAJOR DRUGS -- 13.1%
Bristol-Myers Squibb ....................... 94,600 5,209
Lilly (Eli) ................................ 46,200 3,517
Merck ...................................... 99,280 7,409
Pfizer ..................................... 180,000 8,021
Schering-Plough ............................ 136,000 6,579
Warner-Lambert ............................. 87,800 10,723
-------
41,458
-------
HEALTH CARE MEDICAL PRODUCTS & SUPPLIES-- 2.7%
Baxter International ....................... 55,000 3,657
Guidant* ................................... 21,960 1,112
Medtronic .................................. 71,360 3,684
-------
8,453
-------
HOUSEHOLD PRODUCTS -- 2.2%
Colgate Palmolive .......................... 56,304 2,963
Procter & Gamble ........................... 57,824 3,845
-------
6,808
-------
INFORMATION RETRIEVAL SERVICES -- 0.4%
America Online* ............................ 25,000 1,325
-------
INSURANCE -- 1.5%
American International Group ............... 42,986 4,839
-------
MISCELLANEOUS BUSINESS SERVICES -- 0.2%
Sapient* ................................... 5,000 500
-------
OFFICE & BUSINESS EQUIPMENT -- 0.7%
Lexmark International, Cl A* ............... 31,000 2,162
-------
PETROLEUM & FUEL PRODUCTS -- 2.7%
Schlumberger ............................... 75,600 5,561
Transocean Sedco Forex ..................... 61,000 3,000
-------
8,561
-------
PETROLEUM REFINING -- 0.2%
Coastal .................................... 10,000 614
-------
RETAIL DRUG STORES -- 1.1%
Walgreen ................................... 125,640 3,565
-------
RETAIL FOOD CHAINS -- 1.2%
Safeway* ................................... 84,960 3,919
-------
See Accompanying Notes
179
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE LARGE CAPITALIZATION FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
RETAIL STORES -- 5.6%
Circuit City ...................... 20,000 $ 996
Home Depot ........................ 94,900 4,632
Kohls* ............................ 32,960 1,706
Target ............................ 43,560 2,731
Wal-Mart .......................... 131,472 7,576
-----------
17,641
-----------
SEMI-CONDUCTOR EQUIPMENT -- 2.2%
Applied Materials* ................ 54,800 4,576
KLA-Tencor* ....................... 47,840 2,371
-----------
6,947
-----------
SEMI-CONDUCTORS/INSTRUMENTS -- 10.9%
Altera* ........................... 30,400 2,611
Analog Devices* ................... 51,400 3,958
Intel ............................. 142,000 17,706
Micron Technology*# ............... 60,000 4,196
Texas Instruments ................. 83,808 6,055
-----------
34,526
-----------
TELEPHONE & TELECOMMUNICATION -- 3.2%
Alltel ............................ 47,304 3,095
Nextel, Cl A* ..................... 20,000 1,852
SBC Communications ................ 54,000 2,359
Sprint ............................ 15,000 907
Worldcom* ......................... 52,320 1,969
-----------
10,182
-----------
TOTAL COMMON STOCK
(Cost $186,759) .................. 305,181
-----------
CASH EQUIVALENT -- 3.7%
Goldman Sachs Financial Square
Prime Obligation
Money Market Fund ............... 11,702,704 11,703
-----------
TOTAL CASH EQUIVALENT
(Cost $11,703) ................... ............. 11,703
-----------
TOTAL INVESTMENTS -- 100.3%
(Cost $198,462) ................................ 316,884
===========
OTHER ASSETS AND LIABILITIES,
NET -- (0.3%) .................................. (867)
-----------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Institutional Class
(unlimited authorization -- no par
value) based on 13,875,178 outstanding
shares of beneficial interest .................. $ 106,959
Portfolio Shares of Investor A Class
(unlimited authorization-- no par
value) based on 1,087,565 outstanding
shares of beneficial interest .................. 27,126
Portfolio Shares of Investor B Class
(unlimited authorization -- no par value)
based on 826,698 outstanding
shares of beneficial interest .................. 26,678
Accumulated net realized gain on
investments .................................... 36,832
Net unrealized appreciation
on investments ................................. 118,422
-----------
TOTAL NET ASSETS -- 100.0% ........................ $ 316,017
===========
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SHARE -- INSTITUTIONAL CLASS ................... $20.09
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- INVESTOR A
CLASS .......................................... $19.81
===========
MAXIMUM OFFERING PRICE PER
SHARE -- INVESTOR A CLASS
($19.81 / 94.5%) ............................... $20.96
===========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- INVESTOR B
CLASS .......................................... $19.08
===========
------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
CL--CLASS
See Accompanying Notes
180
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE MID CAPITALIZATION FUND
================================================================================
MAY 31, 2000
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- 87.5%
AIR TRANSPORTATION -- 1.0%
Southwest Airlines ......................... 185,300 $ 3,555
-------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 2.9%
GM, Hughes Electronics*# ................... 28,500 2,805
Univision Communications* .................. 18,700 1,926
Westwood One* .............................. 164,800 5,469
-------
10,200
-------
BUSINESS SERVICES -- 7.7%
American Management Systems*# .............. 114,700 4,294
Appnet* .................................... 39,200 853
Computer Sciences* ......................... 33,500 3,214
Concord EFS* ............................... 241,200 5,849
Exodus Communications*# .................... 36,800 2,597
Fiserv* .................................... 40,800 1,907
Jack Henry & Associates .................... 85,500 3,718
Verisign* .................................. 20,800 2,816
Viant*# .................................... 49,300 1,233
-------
26,481
-------
COMMUNICATIONS EQUIPMENT -- 3.4%
Commscope* ................................. 92,700 3,581
Comverse Technology*# ...................... 89,800 8,205
-------
11,786
-------
COMPUTER HARDWARE -- 2.1%
American Power Conversion* ................. 47,700 1,690
Gateway*# .................................. 66,200 3,277
Network Appliance* ......................... 33,800 2,182
-------
7,149
-------
COMPUTER SOFTWARE -- 10.7%
Adobe Systems .............................. 31,000 3,489
Bea Systems* ............................... 72,400 2,615
Citrix Systems*# ........................... 42,200 2,221
i2 Technologies* ........................... 16,000 1,702
Iona Technologies PLC* ..................... 45,800 2,001
Mercury Interactive* ....................... 25,600 2,170
Rational Software* ......................... 63,600 4,663
Remedy* .................................... 98,000 4,067
Siebel Systems* ............................ 37,300 4,364
Symantec* .................................. 68,800 4,524
Veritas Software*# ......................... 44,400 5,173
-------
36,989
-------
DRUGS & HEALTH CARE -- 3.4%
Forest Laboratories* ....................... 84,800 7,505
Immunex* ................................... 69,100 1,788
Medimmune* ................................. 16,100 2,502
-------
11,795
-------
NUMBER VALUE
OF SHARES (000)
--------- -----
COMMON STOCK -- CONTINUED
ELECTRONICS -- 1.1%
Gentex* .................................... 124,000 $ 3,844
-------
ENERGY SERVICES -- 6.8%
BJ Services Companies* ..................... 75,900 5,436
Ensco International ........................ 145,900 5,097
Global Marine*# ............................ 137,900 3,904
Nabors Industries* ......................... 102,800 4,420
Noble Drilling* ............................ 103,700 4,498
-------
23,355
-------
ENTERTAINMENT -- 0.7%
Macrovision* ............................... 33,900 2,369
-------
FINANCIAL SERVICES -- 1.0%
Capital One ................................ 71,400 3,374
-------
INSURANCE -- 1.6%
Aflac ...................................... 105,200 5,438
-------
MEASURING DEVICES -- 0.5%
PE Biosystems .............................. 31,300 1,737
-------
MISCELLANEOUS BUSINESS SERVICES -- 0.3%
Inktomi*# .................................. 10,600 1,183
-------
OFFICE & BUSINESS EQUIPMENT -- 2.3%
Electronics for Imaging*# .................. 100,600 3,703
Lexmark International, Cl A* ............... 59,700 4,164
-------
7,867
-------
PETROLEUM & FUEL PRODUCTS -- 1.4%
Apache ..................................... 80,400 4,894
-------
PROFESSIONAL SERVICES -- 0.8%
Paychex .................................... 80,400 2,814
-------
RESTAURANTS -- 0.9%
Jack in the Box* ........................... 122,900 3,049
-------
RETAIL -- 5.9%
Best Buy* .................................. 45,000 2,880
BJ's Wholesale Club* ....................... 166,300 5,155
Circuit City ............................... 40,600 2,022
Family Dollar Stores# ...................... 194,000 3,832
Linens 'N Things* .......................... 90,500 2,404
Men's Wearhouse* ........................... 201,800 4,023
-------
20,316
-------
SEMI-CONDUCTORS/INSTRUMENTS -- 22.3%
Advanced Micro Devices* .................... 82,500 6,719
Altera*# ................................... 96,800 8,313
Analog Devices* ............................ 85,800 6,607
Broadcom, Cl A*# ........................... 16,200 2,107
JDS Uniphase* .............................. 66,300 5,834
KLA-Tencor* ................................ 77,600 3,846
See Accompanying Notes
181
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE MID CAPITALIZATION FUND
================================================================================
MAY 31, 2000
NUMBER OF SHARES/ VALUE
PAR (000) (000)
---------------- -----
COMMON STOCK -- CONTINUED
SEMI-CONDUCTORS/INSTRUMENTS -- CONTINUED
LSI Logic* .......................... 68,400 $ 3,604
Maxim Integrated Products*# ......... 72,700 4,612
Novellus Systems* ................... 92,800 4,472
PMC-Sierra* ......................... 24,800 3,801
RF Micro Devices* ................... 53,600 5,628
SDL*# ............................... 12,700 2,877
Teradyne* ........................... 72,400 6,226
Vitesse Semiconductor* .............. 43,200 2,187
Xilinx* ............................. 135,200 10,292
--------
77,125
--------
TECHNOLOGY -- 2.9%
Jabil Circuit* ...................... 107,700 3,931
Sanmina*# ........................... 69,300 4,409
Symbol Technologies ................. 42,000 1,851
--------
10,191
--------
TELEPHONE & TELECOMMUNICATION -- 5.1%
Broadwing ........................... 93,600 2,229
McLeodUSA, CL A*# ................... 175,500 3,510
Nextel, Cl A* ....................... 41,400 3,835
NTL*# ............................... 28,000 1,654
Voicestream Wireless*# .............. 37,400 4,282
Winstar Communications*# ............ 78,299 2,222
--------
17,732
--------
UTILITY SERVICES -- 2.7%
AES*# ............................... 106,500 9,292
--------
TOTAL COMMON STOCK
(Cost $208,066) .................... 302,535
--------
CASH EQUIVALENT -- 3.9%
Goldman Sachs Financial Square
Prime Obligation
Money Market Fund .............. 13,628,009 13,628
--------
TOTAL CASH EQUIVALENT
(Cost $13,628) 13,628
--------
REPURCHASE AGREEMENT -- 8.2%
Prudential
(dated 05/31/00, matures 06/01/00,
repurchase price $28,505,067;
collateralized by FHLMC and
FNMA obligations: total
value $29,161,518) ................ 28,500 28,500
--------
TOTAL REPURCHASE AGREEMENT
(Cost $28,500) .............................. 28,500
--------
TOTAL INVESTMENTS -- 99.6%
(Cost $250,194) ............................. $344,663
========
OTHER ASSETS AND LIABILITIES,
NET -- 0.4% ................................. 1,265
--------
NET ASSETS:
Portfolio Shares of Institutional Class
(unlimited authorization-- no par
value) based on 17,749,955 outstanding
shares of beneficial interest ............... 86,264
Portfolio Shares of Investor A Class
(unlimited authorization -- no par value)
based on 2,973,929 outstanding
shares of beneficial interest ............... 71,839
Portfolio Shares of Investor B Class
(unlimited authorization -- no par value)
based on 1,332,568 outstanding
shares of beneficial interest ............... 35,958
Accumulated net realized gain on
investments and futures ..................... 55,908
Net unrealized appreciation on
investments and futures ..................... 95,959
--------
TOTAL NET ASSETS -- 100.0% ..................... $345,928
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- INSTITUTIONAL CLASS ................ $15.84
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- INVESTOR A
CLASS ....................................... $15.53
========
MAXIMUM OFFERING PRICE PER
SHARE -- INVESTOR A CLASS
($15.53 / 94.5%) ............................ $16.43
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- INVESTOR B
CLASS ....................................... $13.95
========
------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
# SECURITY FULLY OR PARTIALLY ON LOAN.
CL--CLASS
FHLMC--FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
See Accompanying Notes
182
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE U.S. GOVERNMENT INCOME FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- --------- -----
ASSET BACKED SECURITIES -- 5.6%
Amresco Residential Mortgage,
Series 1997-1, Cl B1A (A)
7.410% ............. 03/25/27 $ 2,027 $ 1,984
Cityfed Mortgage Trust,
Series 1, Cl D
10.000% ............. 01/01/18 87 88
Option One Mortgage Loan Trust,
Series 2000-1, Cl M2 (A)
6.940% ............. 04/25/30 4,000 3,993
Security Mortgage Acceptance
Corporation, Series B, Cl 4
9.000% ............. 12/01/16 2,545 2,615
Structured Mortgage Asset
Residential Trust,
Series 1992-2, Cl I
8.250% ............. 06/25/19 546 557
-------
TOTAL ASSET BACKED SECURITIES
(Cost $9,394) .............................. 9,237
-------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 3.2%
Credit Suisse First Boston Mortgage
Securities, Series 1997-C1, Cl A1C
7.240% ............. 04/20/07 2,200 2,131
Drexel Burnham Lambert Trust,
Series H, Cl 4
8.500% ............. 04/01/17 1,394 1,384
Mdc Asset Investors Trust,
Series XI, Cl 8
7.000% ............. 02/20/19 416 414
Merrill Lynch Mortgage Investors,
Series 1996-C1, Cl A1
7.150% ............. 04/25/28 1,325 1,305
-------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $5,470) .............................. 5,234
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 88.5%
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 7.1%
7.500% ................ 05/15/22 1,454 1,429
8.000% ..... 09/01/03 - 03/01/22 1,822 1,845
8.500% ..... 03/01/06 - 01/01/22 1,957 2,014
8.750% ..... 06/01/16 - 07/01/17 646 669
9.000% ..... 09/01/01 - 09/01/20 2,092 2,175
9.250% ..... 08/01/13 - 11/01/19 178 187
9.750% ..... 11/01/08 - 04/01/09 409 436
10.000% ..... 06/01/05 - 09/01/16 1,969 2,080
10.500% ..... 07/01/00 - 11/01/02 96 98
11.500% ..... 10/01/00 - 01/01/01 9 9
PAR VALUE
MATURITY (000) (000)
-------- --------- -----
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- CONTINUED
FEDERAL HOME LOAN MORTGAGE CORPORATION -- CONTINUED
12.000% ..... 10/01/00 - 11/01/00 $ 2 $ 2
12.250% ................ 08/01/15 687 785
-------
11,729
-------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 27.1%
6.000% ..... 05/25/14 - 02/01/29 26,035 23,102
6.500% ..... 02/01/28 - 07/01/29 9,204 8,531
7.500% ..... 05/25/21 - 11/01/22 3,602 3,506
8.000% ..... 12/01/17 - 03/01/23 6,656 6,624
8.500% ..... 11/01/21 - 09/01/23 519 530
9.000% ..... 06/01/09 - 10/01/19 408 422
9.500% ............... 09/01/11 514 538
10.000% ............... 06/01/21 93 100
10.500% ..... 09/01/00 - 05/01/04 100 106
11.000% ..... 08/01/00 - 09/01/06 43 45
11.250% ..... 06/01/13 - 12/01/15 63 69
11.500% ..... 08/01/00 - 11/01/00 3 3
12.000% ............... 08/01/00 3 3
12.500% ............... 05/01/15 645 738
14.000% ............... 11/01/12 182 201
-------
44,518
-------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 44.2%
6.000% ..... 11/15/28 - 07/20/29 29,342 26,608
6.500% ..... 11/15/23 - 12/15/23 337 318
7.000% ..... 10/15/22 - 03/15/29 6,407 6,174
7.500% ..... 05/15/22 - 12/15/29 2,503 2,466
8.000% ..... 04/15/17 - 05/20/24 1,785 1,799
8.250% ..... 01/15/05 - 06/15/16 921 940
8.500% ..... 03/20/17 - 09/15/24 512 521
8.750% ..... 08/15/08 - 06/15/17 455 468
9.000% ..... 10/15/04 - 12/15/22 3,808 3,928
9.250% ..... 05/15/16 - 05/15/21 1,138 1,184
9.500% ..... 06/15/09 - 05/15/22 10,645 11,154
10.500% ..... 09/15/00 - 09/15/04 160 167
11.000% ..... 08/15/00 - 02/15/01 57 57
11.500% ..... 06/20/04 - 12/15/15 453 500
12.000% ..... 08/15/12 - 05/15/18 1,930 2,186
12.500% ..... 04/15/10 - 01/20/16 3,571 4,043
12.750% ..... 09/20/13 - 12/20/14 183 207
13.000% ..... 11/15/10 - 06/20/15 1,675 1,927
13.500% ..... 05/15/10 - 06/20/15 1,688 1,981
14.000% ..... 05/15/11 - 02/15/15 1,509 1,774
14.500% ..... 09/15/12 - 08/15/14 28 32
15.000% ..... 06/15/11 - 01/15/13 3,404 3,994
16.000% ..... 11/15/11 - 12/15/11 10 12
17.000% ............... 11/15/11 89 105
-------
72,545
-------
See Accompanying Notes
183
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE U.S. GOVERNMENT INCOME FUND
================================================================================
MAY 31, 2000
NUMBER OF VALUE
MATURITY SHARES/PAR (000) (000)
--------- ---------------- -----
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- CONTINUED
UNITED STATES DEPARTMENT OF VETERAN AFFAIRS -- 10.1%
6.836% ............ 01/15/30 $17,773 $ 16,570
--------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost $150,656) ............................ $145,362
--------
CASH EQUIVALENT -- 2.6%
Goldman Sachs
Financial Square Government
Money Market Fund .............. 4,205,000 4,205
--------
TOTAL CASH EQUIVALENT
(COST $4,205) .............................. 4,205
--------
TOTAL INVESTMENTS -- 99.9%
(COST $169,725) ............................ 164,038
========
OTHER ASSETS AND LIABILITIES,
NET -- 0.1% ................................ 194
--------
VALUE
(000)
-----
NET ASSETS:
Portfolio Shares of Institutional Class
(unlimited authorization -- no par
value) based on 15,312,265 outstanding
shares of beneficial interest .............. $145,253
Portfolio Shares of Investor A Class
(unlimited authorization -- no par value)
based on 2,371,319 outstanding
shares of beneficial interest .............. 24,920
Portfolio Shares of Investor B Class
(unlimited authorization -- no par value)
based on 1,051,152 outstanding
shares of beneficial interest .............. 9,517
Undistributed net investment income ......... 35
Accumulated net realized loss on
investments ................................ (9,806)
Net unrealized depreciation
on investments ............................. (5,687)
--------
TOTAL NET ASSETS -- 100.0% .................... $164,232
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- INSTITUTIONAL CLASS ............... $8.77
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- INVESTOR A
CLASS ...................................... $8.77
========
MAXIMUM OFFERING PRICE PER
SHARE -- INVESTOR A CLASS
($8.77 / 95.25%) ........................... $9.21
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- INVESTOR B
CLASS ...................................... $8.74
========
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MAY 31, 2000.
CL--CLASS
See Accompanying Notes
184
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- 98.6%
MICHIGAN -- 88.7%
Brighton Area School District (GO)
(AMBAC) (A) Series II
0.000% ............. 05/01/11 $ 2,000 $ 1,080
Byron Center Public School (GO)
8.250% ............. 05/01/08 1,380 1,639
8.250% ............. 05/01/09 1,380 1,658
Chippewa Valley Schools,
Prerefunded
05/01/01 @ 102 (GO)
7.000% ............. 05/01/01 1,000 1,039
Chippewa Valley Schools (GO)
7.800% ............. 05/01/01 2,375 2,439
Clarkeston State Community
Schools (GO) (FGIC)
6.250% ............. 05/01/05 1,000 1,047
Clinton Township Building
Authority (RB) (AMBAC)
4.800% ............. 11/01/13 1,150 1,057
Detroit Downtown Development
(GO) (AMBAC)
6.250% ............. 07/15/11 1,600 1,702
Detroit Sewer Disposal System
(RB) (MBIA) Series A
6.000% ............. 07/01/07 2,500 2,600
Detroit Sewer Disposal System
(RB) (MBIA) Series B
6.000% ............. 07/01/09 1,000 1,042
6.000% ............. 07/01/10 1,380 1,433
Detroit State Aid
(GO) (AMBAC)
5.250% ............. 05/01/08 2,000 1,990
Detroit Water Supply System
(RB) (FGIC)
6.500% ............. 07/01/15 1,000 1,084
Detroit Water Supply System
(RB) (MBIA) Series A
6.000% ............. 07/01/13 1,000 1,040
Detroit Water Supply System
(RB) (MBIA) Series B
5.400% ............. 07/01/10 2,000 1,992
5.550% ............. 07/01/12 2,000 2,005
Ecorse Public School District
(GO) (FGIC)
6.500% ............. 05/01/07 1,350 1,448
Flint (GO) (MBIA)
6.000% ............. 11/01/04 1,110 1,149
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
MICHIGAN -- CONTINUED
Forest Hills Public Schools
Unlimited Tax (GO)
5.000% ............. 05/01/12 $ 1,000 $ 939
Goodrich Area School
District, Prerefunded
05/01/05 @ 102 (GO) (AMBAC)
7.650% ............. 05/01/05 1,125 1,264
Grand Haven
Area Public Schools
(GO) (MBIA)
7.000% ............. 05/01/07 1,235 1,357
Grand Ledge
Public School District
(GO) (MBIA)
5.250% ............. 05/01/09 1,500 1,492
5.450% ............. 05/01/11 1,250 1,253
Grand Rapids Building
Authority (RB)
5.000% ............. 04/01/15 1,570 1,435
Grand Rapids Sewer Systems
(RB) (FGIC) Series A
5.375% ............. 01/01/16 1,535 1,477
Greater Detroit Resource
Recovery Authority
(RB) (AMBAC) Series B
6.250% ............. 12/13/08 1,500 1,577
Holt Public Schools (GO)
8.750% ............. 05/01/01 600 621
Huron Valley School District
(GO) (FGIC)
5.750% ............. 05/01/06 1,000 1,029
Jenison Public Schools
(GO) (FGIC)
5.250% ............. 05/01/12 1,000 981
Kalamazoo (GO)
6.200% ............. 10/01/06 1,650 1,710
Kalamazoo Hospital
Finance Authority,
Borgess Medical Center
(RB) (ETM) (FGIC) Series A
6.000% ............... 06/01/03 2,000 2,052
6.125% ............... 07/01/07 2,000 2,080
Kalamazoo Hospital Finance
Authority, Bronson Methodist
(RB) (ETM) Series A
5.875% ............. 05/15/03 1,440 1,471
See Accompanying Notes
185
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
MICHIGAN -- CONTINUED
Kalamazoo Public Library
(GO) (MBIA)
5.200% ............. 05/01/11 $ 1,000 $ 979
Kent Hospital Finance
Authority, Butterworth
Hospital (RB) Series A
7.250% ............. 01/15/13 5,000 5,562
Kentwood Public School System,
Prerefunded
05/01/02 @ 102 (GO) (A)
5.900% ............. 05/01/04 500 517
Kentwood Public School
System (GO)
5.900% ............. 05/01/04 500 514
Lake Orion Community
School District, Prerefunded
05/01/05 @ 101 (GO) (AMBAC)
7.000% ............. 05/01/05 2,000 2,177
Lansing (GO)
6.000% ............. 01/01/07 1,335 1,387
Lansing Building Authority
(GO) (ETM) (AMBAC)
6.000% ............. 06/01/04 1,000 1,021
Lansing School District,
Prerefunded 05/01/05 @ 100
(GO) Series III
6.875% ............. 05/01/09 2,000 2,150
Lansing Tax Increment
Finance Authority
(GO) (ETM)
6.000% ............. 10/01/02 1,000 1,022
Livonia Public School
District (GO)
6.350% ............. 05/01/04 1,000 1,040
Michigan State Building
Authority (RB)
6.400% ............. 10/01/04 1,000 1,036
Michigan State Building Authority,
Adult General Hospital Facility,
Prerefunded 12/01/02 @ 100 (RB)
7.000% ............. 12/01/02 1,020 1,068
Michigan State Building Authority
(RB) (ETM) (AMBAC) Series II
6.250% ............. 10/01/00 1,000 1,005
Michigan State Building Authority
Equipment Program (RB) Series B
4.100% ............. 10/01/00 300 299
Michigan State Building Authority
(RB) Series II
5.000% ............. 10/15/14 1,000 919
5.375% ............. 10/15/10 1,000 995
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
MICHIGAN -- CONTINUED
Michigan State, Environmental
Protection Program,
Prerefunded 11/01/02 @ 102 (GO)
6.250% ............. 11/01/02 $ 1,000 $ 1,047
Michigan State, Environmental
Protection Program (GO)
6.250% ............. 11/01/12 3,250 3,473
Michigan State
Hospital Finance Authority,
Harper-Grace Hospitals
(RB) (ETM)
7.125% ............. 05/01/09 1,060 1,137
Michigan State Hospital
Finance Authority,
Sisters of Mercy (RB) (MBIA)
5.375% ............. 08/15/14 5,000 4,869
Michigan State Hospital
Finance Authority,
Henry Ford Heath System
(RB) (AMBAC)
6.000% ............. 09/01/11 500 516
6.000% ............. 09/01/12 2,000 2,057
Michigan State Hospital
Finance Authority,
Genesys Health System,
Prerefunded 10/01/05 @ 102
(RB) Series A
8.100% ............. 10/01/05 3,500 4,007
Michigan State Hospital
Finance Authority,
Mercy Health Services
(RB) Series T
6.000% ............. 08/15/02 1,000 1,014
Michigan State
Housing Development
Authority (RB) Series A
6.450% ............. 06/01/04 1,000 1,029
Michigan State
Housing Development
Authority, Parkway
Meadows Project (RB) (FSA)
6.625% ............. 10/15/06 1,000 1,045
Michigan State Housing
Development Authority
(RB) (AMT) (AMBAC) Series A
5.750% ............. 10/01/04 1,525 1,548
Michigan State Municipal
Bond Authority (RB)
5.150% ............. 10/01/08 1,000 989
See Accompanying Notes
186
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
MICHIGAN -- CONTINUED
Michigan State Municipal Bond
Authority (RB) (AMBAC)
6.200% ............. 05/01/04 $ 1,000 $ 1,037
Michigan State,
Recreation Program (GO)
5.750% ............. 11/01/01 1,000 1,013
Michigan State South
Central Power Agency
(RB) (MBIA)
5.700% ............. 11/01/04 1,055 1,079
5.800% ............. 11/01/05 2,000 2,050
Michigan State Strategic
Fund Limited Obligation,
Consumers Power
Company (RB)
5.800% ............. 06/15/10 1,000 1,015
Michigan State Strategic
Fund Limited Obligation,
Ford Motor Project (RB)
Series A
7.100% ............. 02/01/06 5,950 6,433
Michigan State Strategic
Fund Limited Obligation,
Detroit Edison Company
(RB) (MBIA)
7.000% ............. 07/15/08 3,000 3,311
Michigan State Strategic
Fund Limited Obligation,
Detroit Edison Company
(RB) (FGIC)
6.950% ............. 05/01/11 2,000 2,245
Michigan State Strategic
Fund Pollution Control
Revenue, General
Motors Corporation (RB)
6.200% ............. 09/01/20 1,000 1,009
Michigan State Trunk
Line (RB) (FGIC)
Series A
6.250% ............. 11/01/03 1,005 1,041
Michigan State
Underground Storage
Tank (RB) (AMBAC)
Series I
6.000% ............. 05/01/05 1,000 1,032
Michigan State University,
Prerefunded 08/15/02 @ 101
(RB) Series A
5.700% ............. 08/15/02 1,000 1,024
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
MICHIGAN -- CONTINUED
Mona Shores School District
(GO) (FGIC)
6.750% ............. 05/01/09 $ 2,075 $ 2,283
Oakland County Economic
Development Authority,
Cranbrook Elderly Community
Project, Prerefunded
11/01/04 @ 100 (RB) Series B
6.375% ............. 11/01/14 1,000 1,049
Oakland County Community
College Improvements
Project (RB)
6.650% ............. 05/01/11 1,000 1,049
Paw Paw Public School District
(GO) (FGIC)
6.500% ............. 05/01/09 1,000 1,083
Plymouth-Canton Community
School District, Prerefunded
05/01/01 @ 101 (GO) Series B
6.500% ............. 05/01/01 1,000 1,025
Rochester Community School
District Authority, Prerefunded
05/01/02 @ 100 (GO) (FGIC)
6.300% ............. 05/01/02 2,000 2,048
Rochester Community School
District Authority, Prerefunded
05/01/02 @ 100 (GO)
6.500% ............. 05/01/02 1,000 1,028
Rochester Community School
District (GO) (FGIC)
5.250% ............. 05/01/04 1,000 1,005
Rockford Public School District
(GO)
5.750% ............. 05/01/07 1,135 1,156
Rockford Public School District
(GO) (FGIC)
6.000% ............. 05/01/07 400 418
Royal Oak Hospital Finance
Authority, William Beaumont
Hospital (RB)
6.000% ............. 11/15/02 2,120 2,152
St. Johns Public Schools
(GO) (FGIC)
5.000% ............. 05/01/21 955 840
Southgate Community School
District (GO) (FGIC)
5.750% ............. 05/01/11 1,665 1,702
See Accompanying Notes
187
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
================================================================================
MAY 31, 2000
PAR VALUE
MATURITY (000) (000)
-------- ---- -----
MUNICIPAL BONDS -- CONTINUED
MICHIGAN -- CONTINUED
Traverse City Area Public Schools,
Prerefunded 05/01/01 @ 101.50
(GO) Series II
7.000% ............. 05/01/01 $ 1,000 $ 1,034
University of Michigan, Major
Capital Project (RB) Series B
5.600% ............. 04/01/08 2,000 2,033
University of Michigan,
Prerefunded 12/01/00 @ 102 (RB)
7.000% ............. 12/01/00 2,000 2,062
University of Michigan,
Student Fee (RB) Series A
6.000% ............. 04/01/05 500 519
6.000% ............. 04/01/06 1,315 1,373
Utica Community Schools (GO)
5.600% ............. 05/01/05 1,975 2,012
Wayne Charter County,
Wayne County Airport Project
(RB) (AMBAC) Series A
7.250% ............. 12/01/10 285 293
Wayne County Building
Authority, Capital Improvements
(RB) (MBIA) Series A
6.000% ............. 06/01/07 2,000 2,090
West Ottawa Public School
District (GO) (FGIC)
6.000% ............. 05/01/06 1,985 2,067
Western Michigan University
(GO) (FGIC) Series A
5.400% ............. 07/15/08 1,500 1,500
Western School District
(GO) (MBIA)
5.900% ............. 05/01/10 1,680 1,749
Wyandotte City School
District, Prerefunded
05/01/01 @ 102 (GO)
6.900% ............. 05/01/01 1,000 1,038
Wyandotte Electric Authority
(RB) (MBIA) (A)
6.250% ............. 10/01/08 3,000 3,154
Ypsilanti School District
(GO) (FGIC)
6.500% ............. 05/01/06 1,175 1,253
--------
153,908
--------
NUMBER OF VALUE
MATURITY SHARES/PAR (000) (000)
--------- ---------------- -----
MUNICIPAL BONDS -- CONTINUED
OHIO -- 0.8%
Hartland School District
(GO) (FGIC)
6.000% .......... 05/01/12 $1,325 $ 1,378
--------
PUERTO RICO -- 8.3%
Commonwealth of
Puerto Rico (GO) (MBIA)
6.250% ............. 07/01/09 3,500 3,789
6.250% ............. 07/01/10 2,000 2,168
6.250% ............. 07/01/12 500 541
Commonwealth of
Puerto Rico, Aqueduct & Sewer
Authority (RB) (MBIA)
6.000% ............. 07/01/07 1,000 1,060
Commonwealth of
Puerto Rico, Electric Power Authority
(RB) (MBIA) Series W
6.500% ............. 07/01/05 1,250 1,338
Commonwealth of Puerto Rico,
Public Buildings Authority
(RB) (FSA) Series L
5.500% ............. 07/01/07 4,000 4,110
Commonwealth of Puerto Rico,
Public Finance Corporation,
Commonwealth Appropriation
(RB) (AMBAC) Series A
5.375% ............. 06/01/10 250 254
University of Puerto Rico
(RB) (MBIA) Series N
6.250% ............. 06/01/07 1,000 1,071
--------
14,331
--------
VIRGIN ISLANDS -- 0.8%
Virgin Islands Public Finance
Authority (RB) (ETM)
7.000% ............. 10/01/04 1,340 1,397
--------
TOTAL MUNICIPAL BONDS
(Cost $169,995) .............................. 171,014
--------
CASH EQUIVALENT -- 0.6%
Federated Michigan
Tax Free Money Market Fund ...... 1,025,000 1,025
--------
TOTAL CASH EQUIVALENT
(Cost $1,025) ................................ 1,025
--------
See Accompanying Notes
188
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE MICHIGAN MUNICIPAL BOND FUND
================================================================================
MAY 31, 2000
VALUE
(000)
-----
TOTAL INVESTMENTS -- 99.2%
(Cost $171,019) .................................. $172,039
========
OTHER ASSETS AND LIABILITIES,
NET -- 0.8% ................................... 1,375
--------
NET ASSETS:
Portfolio Shares of Institutional Class
(unlimited authorization-- no par
value) based on 15,095,240 outstanding
shares of beneficial interest ................. 156,513
Portfolio Shares of Investor A Class
(unlimited authorization -- no par value)
based on 1,425,893 outstanding
shares of beneficial interest ................. 14,599
Portfolio Shares of Investor B Class
(unlimited authorization -- no par value)
based on 181,080 outstanding
shares of beneficial interest ................. 1,957
Undistributed net investment income ............ 2
Accumulated net realized loss on
investments ................................... (677)
Net unrealized appreciation
on investments ................................ 1,020
--------
TOTAL NET ASSETS -- 100.0% ....................... $173,414
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- INSTITUTIONAL CLASS .................. $10.38
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- INVESTOR A
CLASS ......................................... $10.38
========
MAXIMUM OFFERING PRICE PER
SHARE -- INVESTOR A CLASS
($10.38 / 95.25%) ............................. $10.90
========
NET ASSET VALUE ANDOFFERING
PRICE PER SHARE -- INVESTOR
B CLASS ....................................... $10.39
========
------------------------------------------------
(A) ZERO COUPON BOND
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
ETM--ESCROWED TO MATURITY
FGIC--FEDERAL GUARANTY INSURANCE COMPANY
FSA--FEDERAL SECURITY ASSURANCE
GO--GENERAL OBLIGATION
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
RB--REVENUE BOND
See Accompanying Notes
189
<PAGE>
STATEMENT OF NET ASSETS
PARKSTONE TREASURY FUND
================================================================================
MAY 31, 2000
NUMBER OF VALUE
MATURITY SHARES/PAR (000) (000)
--------- ---------------- -----
U.S. TREASURY OBLIGATIONS -- 16.9%
U.S. Treasury Notes+
4.000% ............. 10/31/00 $ 5,500 $ 5,448
4.500% ............. 01/31/01 3,000 2,965
4.625% ............. 11/30/00 5,000 4,957
5.000% ............. 04/30/01 500 492
5.125% ............. 08/31/00 10,500 10,480
5.375% ............. 06/30/00 5,500 5,500
5.375% ............. 07/31/00 6,500 6,497
5.375% ............. 02/15/01 2,500 2,477
--------
Total U.S. Treasury Obligations
(Cost $38,816) 38,816
--------
REPURCHASE AGREEMENTS -- 83.4%
BA Securities
(dated 05/31/00, matures 06/01/00,
repurchase price $11,402,005;
collateralized by U.S. Treasury Note:
value $11,802,958) ............... 11,400 11,400
Chase Manhattan
(dated 05/31/00, matures 06/01/00,
repurchase price $11,402,005;
collateralized by U.S. Treasury Note:
value $11,687,642) ............... 11,400 11,400
Dresdner
(dated 5/31/00, matures 06/01/00,
repurchase price $58,510,286;
collateralized by U.S. Treasury Notes:
value $59,670,000) ............... 58,500 58,500
Goldman Sachs
(dated 05/31/00, matures 06/01/00,
repurchase price $11,402,014;
collateralized by U.S. Treasury Bond:
value $11,628,986) ............... 11,400 11,400
Greenwich
(dated 05/31/00, matures 06/01/00,
repurchase price $58,510,368;
collateralized by various U.S. Treasury
Obligations: total value
$59,671,520) ..................... 58,500 58,500
J.P. Morgan
(dated 05/31/00, matures 06/01/00,
repurchase price $11,401,995;
collateralized by U.S. Treasury Bond:
value $11,868,507) ............... 11,400 11,400
PAR VALUE
(000) (000)
---- -----
REPURCHASE AGREEMENTS -- CONTINUED
Merrill Lynch
(dated 05/31/00, matures 06/01/00,
repurchase price $5,693,988;
collateralized by U.S. Treasury Bill:
value $5,811,192) ................ $ 5,693 $ 5,693
Morgan Stanley
(dated 05/31/00, matures 06/01/00,
repurchase price $11,402,005;
collateralized by U.S. Treasury Note:
value $11,674,440) ............... 11,400 11,400
Prudential
(dated 05/31/00, matures 06/01/00,
repurchase price $11,401,995;
collateralized by U.S. Treasury Note:
value $11,730,155) ............... 11,400 11,400
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $191,093) ............................. 191,093
--------
TOTAL INVESTMENTS -- 100.3%
(Cost $229,909)* ............................ 229,909
========
OTHER ASSETS AND LIABILITIES,
NET -- (0.3%) ............................... (627)
--------
NET ASSETS:
Portfolio Shares of Institutional Class
(unlimited authorization-- no par
value) based on 227,440,152
outstanding shares of beneficial interest ... 227,440
Portfolio Shares of Investor A Class
(unlimited authorization -- no par value)
based on 1,835,264 outstanding
shares of beneficial interest ............... 1,837
Undistributed net investment income .......... 3
Accumulated net realized gain on
investments ................................. 2
--------
TOTAL NET ASSETS -- 100.0% ..................... $229,282
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- INSTITUTIONAL CLASS ................ $1.00
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE --
INVESTOR A CLASS ............................ $1.00
========
* ALSO COST FOR FEDERAL INCOME TAX PURPOSES
+ EFFECTIVE YIELD
See Accompanying Notes
190
<PAGE>
FINANCIAL STATEMENTS
THE PARKSTONE GROUP OF FUNDS
================================================================================
STATEMENTS OF OPERATIONS (000)
FOR THE YEAR ENDED MAY 31, 2000
<TABLE>
<CAPTION>
YEAR ENDED MAY 31, 2000
-------------------------------------------------------------------------
LARGE MID U.S. MICHIGAN
CAPITALIZATION CAPITALIZATION GOVERNMENT MUNICIPAL TREASURY
FUND FUND INCOME FUND BOND FUND FUND
-------------- -------------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ........................................ $ 710 $ 1,637 $ 13,105 $10,282 $13,665
Dividends ....................................... 2,285 476 -- -- --
Less: foreign taxes withheld .................... (3) -- -- -- --
-------- -------- -------- ------- -------
Total investment income .................... 2,992 2,113 13,105 10,282 13,665
-------- -------- -------- ------- -------
EXPENSES:
Investment Advisory fees ........................ 3,313 3,835 1,141 1,209 864
Fees waived by Investment Adviser ............... -- -- (191) (135) --
Administration and accounting fees .............. 812 706 369 389 462
Administration fee waiver ....................... -- -- (16) (62) (109)
12 B-1 fees ..................................... 181 252 161 72 17
12 B-1 fees waived .............................. -- -- -- -- (11)
Shareholder servicing fees ...................... 40 44 31 6 --
Registration and filing fees .................... 28 21 27 4 13
Custodian fees .................................. 55 56 33 33 39
Professional fees ............................... 67 41 31 32 26
Trustees' fees .................................. 8 7 3 4 4
Transfer Agent fees ............................. 191 230 113 84 58
Printing and shareholder reports ................ 48 40 21 22 19
Miscellaneous ................................... 9 14 8 9 53
-------- -------- -------- ------- -------
Total expenses ............................. 4,752 5,246 1,731 1,667 1,435
-------- -------- -------- ------- -------
NET INVESTMENT INCOME/(LOSS) .................... (1,760) (3,133) 11,374 8,615 12,230
-------- -------- -------- ------- -------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain on futures .................... -- 1,195 -- -- --
Net realized gain/(loss) on investments ......... 168,385 164,254 (3,758) (658) 2
Net change in unrealized appreciation/
depreciation on investments .................. (53,389) 4,060 (3,785) (9,314) --
Net change in unrealized appreciation
on futures ................................... -- 1,490 -- -- --
-------- -------- -------- ------- -------
Net gain/(loss) on investments .................. 114,996 170,999 (7,543) (9,972) 2
-------- -------- -------- ------- -------
NET INCREASE / (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .................... $113,236 $167,866 $ 3,831 $(1,357) $12,232
======== ======== ======== ======= =======
</TABLE>
See Accompanying Notes
191
<PAGE>
FINANCIAL STATEMENTS
THE PARKSTONE GROUP OF FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
LARGE CAPITALIZATION FUND MID CAPITALIZATION FUND
------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss .............................. $ (1,760) $ (1,629) $ (3,133) $ (4,129)
Net realized gain on investments sold and
futures ....................................... 168,385 70,480 165,449 134,749
Net change in unrealized appreciation/
depreciation on investments and futures ....... (53,389) 22,143 5,550 (104,609)
-------- -------- -------- --------
Net increase in net assets
resulting from operations ..................... 113,236 90,994 167,866 26,011
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Institutional shares ........................ -- -- -- --
Investor A shares ........................... -- -- -- --
Investor B shares ........................... -- -- -- --
Dividends from realized capital gains:
Institutional shares ........................ (89,263) (6,438) (84,921) (52,517)
Investor A shares ........................... (4,853) (375) (11,635) (8,203)
Investor B shares ........................... (3,384) (211) (4,859) (2,657)
-------- -------- -------- --------
Total Distributions .............................. (97,500) (7,024) (101,415) (63,377)
-------- -------- -------- --------
SHARE TRANSACTIONS:
Institutional shares
Proceeds from shares issued ................. 33,621 65,788 66,336 34,083
Reinvestment of cash distributions .......... 56,281 4,089 64,513 38,894
Cost of shares redeemed ..................... (234,745)* (96,262) (226,049)* (240,008)
-------- -------- -------- --------
Net Institutional shares transactions ..... (144,843) (26,385) (95,200) (167,031)
-------- -------- -------- --------
Investor A shares
Proceeds from shares issued ................. 7,860 11,843 7,802 112,759
Reinvestment of cash distributions .......... 4,600 357 11,260 7,986
Cost of shares redeemed ..................... (16,533) (13,766) (31,116) (156,097)
-------- -------- -------- --------
Net Investor A shares transactions ........ (4,073) (1,566) (12,054) (35,352)
-------- -------- -------- --------
Investor B shares
Proceeds from shares issued ................. 1,710 4,942 685 916
Reinvestment of cash distributions .......... 3,267 206 4,743 2,600
Cost of shares redeemed ..................... (3,528) (3,437) (5,664) (9,069)
-------- -------- -------- --------
Net Investor B shares transactions ........ 1,449 1,711 (236) (5,553)
-------- -------- -------- --------
Investor C shares (a)
Proceeds from shares issued ................. -- 100 -- 181
Reinvestment of cash distributions .......... -- -- -- --
Cost of shares issued ....................... -- (368) -- (2,183)
-------- -------- -------- --------
Net Investor C shares transactions ........ -- (268) -- (2,002)
-------- -------- -------- --------
Decrease in net assets from
share transactions ......................... (147,467) (26,508) (107,490) (209,938)
-------- -------- -------- --------
Total increase/(decrease) in net assets ....... (131,731) 57,462 (41,039) (247,304)
-------- -------- -------- --------
NET ASSETS:
Beginning of period ........................... 447,748 390,286 386,967 634,271
-------- -------- -------- --------
End of period ................................. $316,017 $447,748 $345,928 $386,967
======== ======== ======== ========
<FN>
* INCLUDES REDEMPTIONS AS A RESULT OF THE REDEMPTION IN KIND ON MARCH 1, 2000.
(A) INVESTOR C CLASS OF SHARES CLOSED ON AUGUST 28, 1998.
</FN>
</TABLE>
See Accompanying Notes
192
<PAGE>
FINANCIAL STATEMENTS
THE PARKSTONE GROUP OF FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND MICHIGAN MUNICIPAL BOND FUND
------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ............................ $ 11,374 $ 13,241 $ 8,615 $ 9,903
Net realized gain/(loss) on investments sold ..... (3,758) 1,493 (658) 981
Net change in unrealized appreciation/
depreciation on investments ................... (3,785) (4,469) (9,314) (2,440)
-------- -------- -------- --------
Net increase/(decrease) in net assets
resulting from operations ..................... 3,831 10,265 (1,357) 8,444
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Institutional shares ........................ (9,044) (9,491) (7,621) (8,489)
Investor A shares ........................... (1,661) (2,684) (890) (1,303)
Investor B shares ........................... (634) (1,063) (83) (112)
Investor C shares ........................... -- (3) -- --
Dividends from realized capital gains:
Institutional shares ........................ -- -- (186) (1,265)
Investor A shares ........................... -- -- (23) (212)
Investor B shares ........................... -- -- (3) (22)
Return of capital:
Institutional shares ........................ -- -- -- (17)
Investor A shares ........................... -- -- -- (2)
-------- -------- -------- --------
Total Distributions .............................. (11,339) (13,241) (8,806) (11,422)
-------- -------- -------- --------
SHARE TRANSACTIONS:
Institutional shares
Proceeds from shares issued ................. 32,327 34,064 18,911 30,857
Reinvestment of cash distributions .......... 1,298 818 878 1,118
Cost of shares redeemed ..................... (43,620) (44,141) (46,756) (43,116)
-------- -------- -------- --------
Net Institutional shares transactions ..... (9,995) (9,259) (26,967) (11,141)
-------- -------- -------- --------
Investor A shares
Proceeds from shares issued ................. 23,020 12,842 977 3,633
Reinvestment of cash distributions .......... 1,149 1,787 777 1,127
Cost of shares redeemed ..................... (40,449) (30,609) (14,069) (14,623)
-------- -------- -------- --------
Net Investor A shares transactions ........ (16,280) (15,980) (12,315) (9,863)
-------- -------- -------- --------
Investor B shares
Proceeds from shares issued ................. 290 979 122 93
Reinvestment of cash distributions .......... 407 567 69 96
Cost of shares redeemed ..................... (7,358) (8,668) (1,390) (914)
-------- -------- -------- --------
Net Investor B shares transactions ........ (6,661) (7,122) (1,199) (725)
-------- -------- -------- --------
Investor C shares (a)
Proceeds from shares issued ................. -- 7 -- --
Reinvestment of cash distributions .......... -- 3 -- --
Cost of shares redeemed ..................... -- (376) -- --
-------- -------- -------- --------
Net Investor C shares transactions ........ -- (366) -- --
-------- -------- -------- --------
Decrease in net assets from
share transactions ........................ (32,936) (32,727) (40,481) (21,729)
-------- -------- -------- --------
Total decrease in net assets .................. (40,444) (35,703) (50,644) (24,707)
-------- -------- -------- --------
NET ASSETS:
Beginning of period ........................... 204,676 240,379 224,058 248,765
-------- -------- -------- --------
End of period ................................. $164,232 $204,676 $173,414 $224,058
======== ======== ======== ========
<FN>
(A) INVESTOR C CLASS OF SHARES CLOSED ON AUGUST 28, 1998.
</FN>
</TABLE>
See Accompanying Notes
193
<PAGE>
FINANCIAL STATEMENTS
THE PARKSTONE GROUP OF FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
TREASURY FUND
-----------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income .................................. $ 12,230 $ 18,999
Net realized gain on investments sold .................. 2 24
-------- ----------
Net increase in net assets
resulting from operations ........................... 12,232 19,023
-------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Institutional shares .............................. (11,930) (13,765)
Investor A shares ................................. (298) (5,234)
Dividends in excess of net investment income:
Institutional shares .............................. -- (24)
Investor A shares ................................. -- (9)
-------- ----------
Total Distributions .................................... (12,228) (19,032)
-------- ----------
SHARE TRANSACTIONS:
Institutional shares
Proceeds from shares issued ....................... 875,864 992,405
Reinvestment of cash distributions ................ 30 --
Cost of shares redeemed ........................... (917,995) (1,044,439)
-------- ----------
Net Institutional share transactions ............ (42,101) (52,034)
-------- ----------
Investor A shares
Proceeds from shares issued ....................... 65,615 835,457
Reinvestment of cash distributions ................ 154 318
Cost of shares redeemed ........................... (73,085) (1,066,829)
-------- ----------
Net Investor A share transactions ............... (7,316) (231,054)
-------- ----------
Decrease in net assets from share transactions ...... (49,417) (283,088)
-------- ----------
Total decrease in net assets ........................ (49,413) (283,097)
-------- ----------
NET ASSETS:
Beginning of period ................................. 278,695 561,792
-------- ----------
End of period ....................................... $229,282 $ 278,695
======== ==========
</TABLE>
See Accompanying Notes
194
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. ORGANIZATION:
The Parkstone Group of Funds (the "Group") was organized on March 27, 1987,
and is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end investment company established as a Massachusetts
business trust.
The Group is authorized to issue an unlimited number of shares without par
value. The Group presently offers shares of the Prime Obligations Fund, the U.S.
Government Obligations Fund, the Tax-Free Fund, the Treasury Fund (collectively,
"the money market funds"), the Small Capitalization Fund, the Mid Capitalization
Fund, the Large Capitalization Fund, the International Discovery Fund, the
Limited Maturity Bond Fund, the Intermediate Government Obligations Fund, the
U.S. Government Income Fund, the Bond Fund, the National Tax Exempt Bond Fund
(formerly the Municipal Bond Fund), the Michigan Municipal Bond Fund, the
Balanced Allocation Fund and the Equity Income Fund (collectively, "the variable
net asset value funds").
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 distribution and/or shareholders
service fees and investment minimums. Investor A shares are sold subject to a
front-end sales charge and Investor B shares are sold with a contingent deferred
sales charge, both of which may be reduced or waived under certain
circumstances.
These financial statements and related notes pertain to the Large
Capitalization Fund, the Mid Capitalization Fund, the U.S. Government Income
Fund, the Michigan Municipal Bond Fund, and the Treasury Fund (collectively,
"the Funds" and individually, a "Fund").
LARGE CAPITALIZATION FUND
To provide capital appreciation with a diversified portfolio of publicly traded
large cap equity securities.
MID CAPITALIZATION FUND
To provide capital appreciation with a diversified portfolio of publicly traded
mid cap equity securities.
U.S. GOVERNMENT INCOME FUND
To provide current income as well as preservation of capital by investing
primarily in U.S. government securities.
MICHIGAN MUNICIPAL BOND FUND
To provide current income exempt from federal income taxes and, to the extent
possible, from Michigan personal income taxes, as is consistent with
conservation of capital.
TREASURY FUND
To provide current income with liquidity and stability of principal.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies are in
conformity with accounting principles generally accepted in the United States
(GAAP). The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts. Actual results could
differ from those estimates.
The following is a summary of significant accounting policies followed by
the Funds.
SECURITIES VALUATION:
EQUITY AND BOND FUNDS
An equity or bond fund generally values its investment portfolio at market
price. In the event that a sale of a particular fixed income security is not
reported for that day, fixed income securities are priced 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.
In the event that a sale of a particular equity security is not reported for
that day, shares are priced at the last bid quotation. If market prices are
unavailable or a Fund thinks that they are unreliable, fair value prices may be
determined in good faith using methods approved by the Board of Trustees.
TREASURY FUND
For the Treasury Fund, we generally value the Fund's investment portfolio
using the amortized cost valuation method, which is described in detail in our
Statement of Additional Information. If this method is determined to be
unreliable during certain market conditions or for other reasons, the Fund may
value its portfolio at market price or fair value prices may be determined in
good faith using methods approved by the Board of Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on 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
195
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
in the Group are allocated among the Funds on the basis of average net
assets. Original issue discounts and market premiums are amortized to interest
income over the lives of the respective securities.
REPURCHASE AGREEMENTS: Repurchase Agreements are considered loans under the
1940 Act. In connection therewith, the Group'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 Group 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 Group maintains the right to sell the underlying
securities at market value and any remaining loss may be subject to legal
proceedings.
SECURITIES LENDING: The Funds may participate in a Securities Lending
Agreement ("Lending Agreement"). Security loans made pursuant to the Lending
Agreement are required at all times to be secured by U.S. Treasury Obligations
and/or cash collateral at least equal to 100% of the market value of securities
issued in the U.S. Cash collateral received is invested in fixed-income
securities, with a weighted average maturity not to exceed 90 days, rated in one
of the top two tiers by Standard & Poor's ratings group or Moody's Investors
Service, Inc. or repurchase agreements collateralized by such securities.
However, in the event of default or bankruptcy by the lending agent, realization
and/or retention of the collateral may be subject to legal proceedings. In the
event that the borrower fails to return loaned securities and the collateral
received is insufficient to cover the value of the loaned securities and
provided such collateral is not the result of investment losses, the lending
agent has agreed to pay the amount of the shortfall to the funds, or at the
discretion of the lending agent, replace the loaned securities. The market value
of the securities on loan, and related collateral received at May 31, 2000, and
income generated for the period ended May 31, 2000 were as follows:
INCOME
MARKET MARKET VALUE EARNED FROM
VALUE OF OF LOANED SECURITIES
COLLATERAL SECURITIES LENDING
(000) (000) (000)
---------- --------- -----------
Large Capitalization
Fund $ 9,046 $ 9,046 $ 58
Mid Capitalization
Fund 64,598 64,598 245
U.S. Government Income -- -- 3
Fund
FUTURES CONTRACTS: Certain of the Funds may engage in futures contracts for
the purpose of hedging against the value of the portfolio securities held and in
the value of the securities a Fund intends to purchase, in order to maintain
liquidity. Upon entering into a futures contract, a Fund is required to deposit
with the broker an amount of cash or cash equivalents equal to a certain
percentage of the contract amount. This is known as the "initial margin".
Subsequent payments ("variation margin") are made or received by a Fund each
day, depending on the daily fluctuation of the value of the contract. The daily
changes in the contract are recorded as unrealized gain or loss. The Fund
recognizes a realized gain or loss when the contract is closed. The net
unrealized appreciation/(depreciation), if any, is shown in the financial
statements.
Financial futures contracts open at May 31, 2000 were as follows:
NATIONAL
NUMBER COST UNREALIZED
OF AMOUNT EXPIRATION GAINS
FUND CONTRACTS (000) DATE (000)
----- --------- -------- ---------- ----------
Mid Capitalization
Fund ............. 150 $34,345 Jun-00 $1,490
S&P 400
Mid Cap Futures
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, there is the risk that
the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
MORTGAGE DOLLAR ROLLS: For the purpose of enhancing the Fund's yield, the
U.S. Government Income Fund may enter into mortgage dollar rolls (principally in
securities referred to as TBA's or To Be Announced) in which the Fund sells
mortgage securities for delivery in the current month and simultaneously
contracts to repurchase similar, but not identical, securities at an agreed-upon
price on a fixed date. The Fund accounts for such dollar rolls as purchases and
sales and maintains liquid high-grade securities in an amount at least equal to
its commitment to repurchase.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income are declared daily and paid monthly for the U.S. Government Income Fund,
the Michigan Municipal Bond Fund and the Treasury Fund. Dividends from net
investment income are declared and paid monthly for the Large Capitalization
Fund and the Mid Capitalization Fund. Distributable net realized capital gains,
if any, are declared and distributed at least annually. Effective
196
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
December 1, 1998, the U.S. Government Income Fund changed from declaring and
paying dividends from net investment income monthly to declaring dividends from
net investment income daily and paying monthly.
FEDERAL INCOME TAXES: It is the policy of each of the Funds to continue to
qualify as a regulated investment company by complying with the provisions
available to certain investment companies, as defined in applicable sections of
the Internal Revenue Code, and to make distributions of net investment income
and net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
Dividends from net investment income and from net realized capital gains are
determined in accordance with income tax regulations which may differ from GAAP.
These "book/tax" differences are primarily due to differing treatments for
mortgage-backed securities and deferrals of certain losses.
These "book/tax" differences are either considered temporary or permanent in
nature. Dividends and distributions to shareholders which exceed net investment
income and net realized gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported as
distributions of capital. To the extent these differences are permanent in
nature, such amounts are reclassified within the composition of net assets based
on their federal tax-basis treatment; temporary differences do not require
reclassifications.
On the Statement of Net Assets the following adjustments were made:
ACCUMULATED UNDISTRIBUTED
NET REALIZED NET INVESTMENT PAID IN
LOSS INCOME CAPITAL
FUND (000) (000) (000)
----- --------- --------- ---------
Large Capitalization
Fund ............ $(89,669) $1,760 $87,909
Mid Capitalization
Fund ............ (77,145) 3,133 74,012
Treasury Fund ...... (2) 2 --
EXPENSES: Expenses directly attributable to a Fund are charged to the Fund,
while expenses which are attributable to more than one Fund of the Group are
allocated among the respective Funds based upon relative net assets or another
appropriate basis. In addition, expenses that are directly attributable to a
specific class are charged only to that class.
The investment income and expenses of a Fund (other than class specific
expenses) and realized and unrealized gains and losses on investments of a Fund
are allocated to each class of shares based upon their relative net asset value
on the date income is earned or expenses are recognized and realized and
unrealized gains and losses are incurred.
3. INVESTMENTS:
During the year ended May 31, 2000, purchases and sales of securities, other
than short-term investments or U.S. Government obligations, aggregated:
PURCHASES (000) SALES (000)
-------------- ----------
Large Capitalization Fund ..... $344,810 $591,727
Mid Capitalization Fund ....... 395,907 631,965
U.S. Government Income Fund ... 37,671 28,202
Michigan Municipal Bond Fund .. 18,379 56,600
Purchases and sales of long-term U.S. Government obligations were:
PURCHASES (000) SALES (000)
--------------- ----------
U.S. Government Income Fund ..... $96,403 $139,464
As of May 31, 2000 the following funds have capital loss carry forwards:
AMOUNT (000) EXPIRATION DATE
------------ ---------------
U.S. Government Income Fund ..... $7,198 2002-2008
Michigan Municipal Bond Fund .... 172 2008
Certain funds incurred losses from November 1, 1999 to May 31, 2000. As
permitted by tax regulations, the Funds intend to elect to defer and treat these
losses as arising in the fiscal year ending May 31, 2001. The funds that elected
to defer losses and the amounts deferred are as follows:
(000)
-------
U.S. Government Income Fund ....... $2,607
Michigan Municipal Bond Fund ...... 486
At May 31, 2000 the total cost of securities for Federal income tax
purposes was not materially different from amounts reported for financial
reporting purposes. The aggregate gross unrealized appreciation and depreciation
for securities held by the Funds at May 31, 2000, is as follows:
AGGREGATE AGGREGATE
GROSS GROSS
APPRECIATION DEPRECIATION NET
(000) (000) (000)
------------ ------------ --------
Large Capitalization Fund .... $123,017 $ (4,595) $118,422
Mid Capitalization Fund ....... 112,227 (16,268) 95,959
U.S. Government Income
Fund ........................ 150 (5,837) (5,687)
Michigan Municipal Bond
Fund ........................ 2,593 (1,573) 1,020
197
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
4. SHARES OF BENEFICIAL INTEREST:
The Group'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 Group 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>
LARGE MID U.S. GOVERNMENT
CAPITALIZATION CAPITALIZATION INCOME
FUND FUND FUND
--------------------------- --------------------------- ---------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
SHARE TRANSACTIONS (000):
Institutional Shares:
Issued ................. 1,625 3,587 4,026 2,425 3,624 3,676
Reinvested ............. 2,997 214 5,112 3,097 145 88
Redeemed ............... (11,400)1 (5,165) (13,789)1 (17,388) (4,898) (4,755)
------- ------ ------- ------- ------ ------
Change in Institutional
Shares ............. (6,778) (1,364) (4,651) (11,866) (1,129) (991)
======= ====== ======= ======= ====== ======
Investor A shares
Issued ................. 383 636 498 7,624 2,557 1,387
Reinvested ............. 248 19 909 644 128 193
Redeemed ............... (789) (745) (2,022) (10,699) (4,497) (3,300)
------- ------ ------- ------- ------ ------
Change in Investor A
shares ............. (158) (90) (615) (2,431) (1,812) (1,720)
======= ====== ======= ======= ====== ======
Investor B shares
Issued ................. 86 273 48 66 32 105
Reinvested ............. 182 11 425 224 45 62
Redeemed ............... (176) (186) (406) (699) (824) (937)
------- ------ ------- ------- ------ ------
Change in Investor B
shares ............. 92 98 67 (409) (747) (770)
======= ====== ======= ======= ====== ======
Investor C shares*
Issued ................. -- 6 -- 13 -- 1
Reinvested ............. -- -- -- -- -- --
Redeemed ............... -- (23) -- (168) -- (40)
------- ------ ------- ------- ------ ------
Change in Investor C
shares ............. -- (17) -- (155) -- (39)
======= ====== ======= ======= ====== ======
MICHIGAN
MUNICIPAL TREASURY
BOND FUND FUND
--------------------------- ---------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
SHARE TRANSACTIONS (000):
Institutional Shares:
Issued ................. 1,800 2,782 875,864 992,405
Reinvested ............. 83 101 30 --
Redeemed ............... (4,433) (3,888) (917,995) (1,044,439)
------ ------ -------- ----------
Change in Institutional
Shares ............. (2,550) (1,005) (42,101) (52,034)
====== ====== ======== ==========
Investor A shares
Issued ................. 92 328 65,615 835,456
Reinvested ............. 73 102 154 318
Redeemed ............... (1,334) (1,320) (73,085) (1,066,829)
------ ------ -------- ----------
Change in Investor A
shares ............. (1,169) (890) (7,316) (231,055)
====== ====== ======== ==========
Investor B shares
Issued ................. 12 8 -- --
Reinvested ............. 6 9 -- --
Redeemed ............... (132) (82) -- --
------ ------ -------- ----------
Change in Investor B
shares ............. (114) (65) -- --
====== ====== ======== ==========
Investor C shares*
Issued ................. -- -- -- --
Reinvested ............. -- -- -- --
Redeemed ............... -- -- -- --
------ ------ -------- ----------
Change in Investor C
shares ............. -- -- -- --
====== ====== ======== ==========
<FN>
* INVESTOR C CLASS OF SHARES CLOSED ON AUGUST 28, 1998.
1 INCLUDES REDEMPTIONS AS A RESULT OF THE REDEMPTION IN KIND ON MARCH 1, 2000.
</FN>
</TABLE>
5. RELATED PARTY TRANSACTIONS:
Fees paid by the Group pursuant to the Advisory Agreements with National City
Investment Management Company (the "Adviser"), an indirect wholly owned
subsidiary of National City Corporation, are payable monthly based on an annual
rate, listed in the table on the next page, based on each Fund's average daily
net assets. The advisor from time to time may waive its fees payable by the
Funds. The Group and SEI Investments Mutual Funds Services (the "Administrator")
are parties to an Administration Agreement dated January 1, 2000, under which
the Administrator provides administrative services for an annual fee of 0.10% of
the aggregate average daily net assets of the Funds. Prior to January 1, 2000,
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"), and
BISYS Fund Services Ohio, Inc., which are wholly-owned subsidiaries of the
BISYS Group, Inc. served as the Administrator to the Group. As compensation for
services performed, each Fund paid BISYS an annual fee of 0.20% of the aggregate
average daily net assets of the Funds.
The Group and SEI Investments Mutual Funds Services are parties to a Fund
Accounting Agreement dated April 1, 2000, under which SEI provides fund
accounting services for an annual fee of 0.015% of the aggregate average daily
net assets of the Funds. Prior to April 1, 2000, BISYS Fund Services Limited
Partnership d/b/a BISYS Fund Services ("BISYS"), and BISYS Fund Services Ohio,
Inc. are wholly-owned subsidiaries of the BISYS Group, Inc. served as Fund
Accountant to the
198
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
Group. As compensation for services performed, each fund paid BISYS an annual
fee of 0.035% of the aggregate average daily net assets of the Funds plus
reimbursement of reasonable out-of-pocket expenses.
Each Trustee receives an annual fee of $15,000 plus $3,000 for each Board
meeting attended and reimbursement of out-of-pocket expenses. The Chairman of
the Board receives an additional $5,000 per annum for services in such capacity.
The Trustees and Chairman fees are paid for services rendered to all of the
Funds and are allocated on a prorata basis across the portfolios of Armada
Funds, Parkstone Group of Funds and The Armada Advantage Fund. No person who is
an officer, director, trustee, or employee of the Investment Adviser,
Distributor, or any parent or subsidiary thereof, who serves as an officer,
trustee, or employee of the Trust receives any compensation from the Trust.
Trustees who receive fees are eligible for participa- tion in the Company's
Deferred Compensation Plan (the "Plan"), an unfunded, nonqualified deferred
compensation plan. The Plan allows each eligible Trustee to defer receipt of all
or a percentage of fees that would otherwise be payable for services performed.
The Group and SEI Investments Distribution Company are parties to a
distribution agreement dated September 19, 1998. The distributor receives no
fees for its distribution services under this agreement.
The Group has adopted an Investor A Distribution and Shareholder Service Plan
(the "Investor A Plan"), and an Investor B Distribution and Shareholder Service
Plan (the "Investor B Plan"), each in accordance with Rule 12b-1 under the 1940
Act. Pursuant to the Investor A Plan, each Fund is authorized to pay or
reimburse the distributor of Investor A shares, a periodic distribution and/or
service fee, calculated at an annual rate not to exceed 0.25% of the average
daily net asset value of Investor A shares of that Fund. Pursuant to the
Investor B Plan, each Fund is authorized to pay or reimburse the distributor of
Investor B shares, (a) a distribution fee in an amount not to exceed on an
annual basis 0.75% of the average daily net assets of Investor B shares of that
Fund and (b) a service fee in an amount not to exceed on an annual basis 0.25%
of the average daily net assets of the Investor B shares of that Fund. These
fees may be used by the distributor to pay banks, including the IMC, broker
dealers and other institutions, or to reimburse the distributor or its
affiliates for administration, distribution, and shareholder service assistance
in connection with the distribution of Fund shares.
Fees may be voluntarily reduced to assist the Funds in maintaining
competitive expense ratios. Information regarding these transactions is as
follows for the period ended May 31, 2000 (amounts in thousands):
<TABLE>
<CAPTION>
LARGE MID U.S. GOVERNMENT MICHIGAN MUNICIPAL TREASURY
CAPITALIZATION CAPITALIZATION INCOME FUND BOND FUND FUND
-------------- -------------- --------------- ------------------ --------
<S> <C> <C> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual Fee
(Percentage of average net assets) ....... 0.75% 1.00% 0.55% 0.55% 0.30%
INVESTMENT ADVISORY FEES
ACCRUED AND UNPAID: ...................... $204 $297 $76 $81 $57
ADMINISTRATION FEES:
Annual Fee
(Percentage of average net assets) ....... 0.115% 0.115% 0.115% 0.115% 0.115%
12B-1 FEES INVESTOR A:
Annual Fee
(Percentage of average net assets) ....... 0.25% 0.25% 0.25% 0.25% 0.10%
12B-1 FEES INVESTOR B:
Annual Fee
(Percentage of average net assets) ....... 0.75% 0.75% 0.75% 0.75% --
SHAREHOLDER SERVICE FEES INVESTOR B:
Annual Fee
(Percentage of average net assets) ....... 0.25% 0.25% 0.25% 0.25% --
</TABLE>
See Accompanying Notes
199
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
6. CONCENTRATION OF CREDIT RISK
The Michigan Municipal Bond Fund invests a substantial proportion of its
assets in debt obligations issued by the State of Michigan and its political
subdivisions, agencies and public authorities. This Fund is more susceptible to
factors adversely affecting issuers of Michigan municipal securities than a fund
that is not concentrated in these issuers to the same extent.
At May 31, 2000, the percentage of portfolio investments by each revenue
source were as follows:
REVENUE BONDS:
Education ............................. 5%
Hospital/Nursing Home ................. 18
Housing ............................... 2
Industrial Development ................ 6
PollutionControl ...................... 2
Public Facilities ..................... 6
Transportation ........................ 1
Utilities ............................. 13
Other ................................. 2
General Obligations ................... 45
---
100%
The rating of long-term debt as a percentage of total value of investments at
May 31, 2000, is as follows:
STANDARD & POOR'S/
MOODY'S RATINGS
------------------
AAA/Aaa ............................... 63%
AA/Aa ................................. 23
A/A ................................... 7
NR .................................... 7
---
100%
Securities rated by only one agency are shown in that category. Securities rated
by both agencies are shown with their lowest rating.
7. COMMON TRUST CONVERSION:
On October 10, 1998, the Mid Capitalization Fund issued shares to acquire all
the assets and liabilities of a certain common trust fund of National City Bank.
The following is a summary of shares issued, net assets converted, net asset
value per share and unrealized appreciation as of the conversion date.
NET ASSET
NET VALUE PER UNREALIZED
SHARES ASSETS SHARE APPRECIATION
(000) (000) (000) (000)
------- ------- ---------- ------------
Mid Capitalization
Fund ............... 323 $3,548 $10.99 $641
8. LINE OF CREDIT
Certain funds may borrow an amount up to its prospectus defined limitations
from a $350 million joint line of credit. In aggregate the Parkstone Group of
Funds can borrow up to $58.0 million of the total line of credit. Borrowings
from the line of credit will bear interest at the Federal Funds Rate plus
2.000%. No fund had any borrowings as of May 31, 2000.
9. IN KIND TRANSFERS OF SECURITIES
During the year ended May 31, 2000, the Large Capitalization and Mid
Capitalization Funds distributed securities in lieu of cash for an Institutional
shareholder redemption. The shareholder received a pro-rata portion of the Large
Capitalization and Mid Capitalization Fund's holdings. The value of the
redemption was $130,393,186 and $68,697,399 for the Large Capitalization Fund
and the Mid Capitalization Fund, respectively, (of which $67,290,904 and
$32,770,364, respectively, was realized gain). Institutional shares of 6,385,562
and 3,890,000 were redeemed from the Large Capitalization and the Mid
Capitalization Fund, respectively, as part of this transaction. This transaction
was completed following guidelines approved by the Board of Trustees.
See Accompanying Notes
200
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
10. SUBSEQUENT EVENT -- PARKSTONE MERGER (UNAUDITED)
The Board of Trustees and shareholders of the Parkstone Group of Funds
approved a reorganization of certain Parkstone Funds ("Reorganizing Funds") into
similarly-managed Armada Funds. The Reorganization also provided for five
Parkstone Funds ("Continuing Funds") to be merged into newly-established Armada
investment portfolios. The tax-free reorganization of the reorganizing funds
took place at the close of business on June 9, 2000. Similarly, the
reorganization of the Continuing Funds took place on June 10, 2000, except the
reorganization of the Parkstone Treasury Fund and the Armada Treasury Plus Money
Market Fund occurred on June 16, 2000.
<TABLE>
<CAPTION>
PARKSTONE REORGANIZING FUNDS EXISTING ARMADA FUNDS
==================================================================================================================
<S> <C>
Prime Obligations Money Market 1
U.S. Government Obligations Government Money Market 1
Tax-Free Tax Exempt Money Market 1
Bond1 Bond
Limited Maturity Bond Limited Maturity Bond 1 (formerly Enhanced Income)
Intermediate Government Obligations Intermediate Bond 1
Equity Income Equity Income 1
Small Capitalization Small Cap Growth 1
International Discovery International Equity 1
Balanced Allocation Balanced Allocation 1
National Tax Exempt Bond National Tax Exempt Bond 1
PARKSTONE CONTINUING FUND NEW ARMADA FUNDS
==================================================================================================================
Large Capitalization 1 Large Cap Ultra
Mid Capitalization1 Mid Cap Growth
U.S. Government Income 1 U.S. Government Income
Michigan Municipal Bond 1 Michigan Municipal Bond
Treasury 1 Treasury Plus Money Market
------------------------------------------------------------------------------------------------------------------
<FN>
1 DENOTES THE SURVIVING OR CONTINUING PORTFOLIO FOR PURPOSES OF MAINTAINING THE
FINANCIAL STATEMENTS AND PERFORMANCE HISTORY IN THE POST-REORGANIZATION FUNDS.
</FN>
</TABLE>
Under the Agreement and Plan of Reorganization the Parkstone I shares were
exchanged for Armada I shares, Parkstone A shares were exchanged for Armada A
shares and Parkstone B shares were exchanged for Armada B shares.
In subsequent financial reporting, the financial information for the Armada
Bond Fund prior to June 9, 2000 will be that of the Parkstone Bond Fund. The
Armada Bond Fund was the surviving net asset value. This means conversion
factors were applied to the Parkstone Bond Fund's financial performance history
for the respective share classes.
See Accompanying Notes
201
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
The net assets before and after the reorganization and shares issued and
redeemed by the corresponding Armada Funds were as follows:
<TABLE>
<CAPTION>
EXISTING PARKSTONE
EXISTING COMBINED NET ASSETS PRIOR NET ASSETS ARMADA FUND'S REORGANIZING FUND'S
ARMADA FUNDS AS OF JUNE 9, 2000 AS OF JUNE 9, 2000 SHARES ISSUED SHARES REDEEMED
================================================================================================================================
<S> <C> <C> <C> <C>
Money Market $5,008,943,683 $4,394,894,078 614,038,196 614,038,196
Government Money Market 1,602,629,626 1,498,506,371 104,089,889 104,089,889
Tax Exempt Money Market 628,784,360 535,418,763 93,358,177 93,358,177
Limited Maturity Bond 202,393,175 92,554,395 11,273,126 11,937,935
Intermediate Bond 382,256,189 301,710,283 8,086,393 8,470,934
Bond 934,865,789 626,266,871 32,620,288 33,298,251
Equity Income 734,773,889 501,897,326 15,013,663 24,002,514
Small Cap Growth 452,639,251 184,684,416 17,041,876 11,204,423
International Equity 754,601,736 445,440,153 20,943,493 19,911,559
Balanced Allocation 224,665,290 76,237,123 13,933,236 11,739,478
National Tax Exempt Bond 166,379,126 101,292,106 6,782,394 6,518,841
</TABLE>
<TABLE>
<CAPTION>
NEW PARKSTONE
NEW COMBINED NET ASSETS PRIOR NET ASSETS ARMADA FUND'S CONTINUING FUND'S
ARMADA FUNDS AS OF JUNE 10, 2000 AS OF JUNE 10, 2000 SHARES ISSUED SHARES REDEEMED
================================================================================================================================
<S> <C> <C> <C>
Large Cap Ultra $324,621,718 N/A 15,601,834 15,601,834
Mid Cap Growth 368,457,916 N/A 21,700,476 21,700,476
U.S. Government Income 163,774,447 N/A 18,554,018 18,554,018
Michigan Municipal Bond 174,186,214 N/A 16,624,617 16,624,617
Treasury Plus Money Market* 233,032,281 N/A 233,026,341 233,026,341
--------------------------------------------------------------------------------------------------------------------------------
<FN>
*Assets moved into the Treasury Plus Money Market Fund on June 16, 2000.
</FN>
</TABLE>
Included in the net assets from the Parkstone Funds were the following
components:
<TABLE>
<CAPTION>
UNDISTRIBUTED ACCUMULATED NET UNREALIZED
PAID IN NET INVESTMENT REALIZED APPRECIATION/
PARKSTONE FUNDS CAPITAL INCOME (LOSS) GAIN (LOSS) DEPRECIATION NET ASSETS
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
REORGANIZING FUNDS
Prime Obligations $614,043,384 $ -- $ 6,221 $ -- $614,049,605
U.S. Government
Obligations 104,125,202 -- (1,947) -- 104,123,255
Tax-Free 93,362,642 -- 2,955 -- 93,365,597
Limited Maturity Bond 123,442,582 1,305 (10,400,608) (3,204,499) 109,838,780
Intermediate Government
Obligations 96,419,523 -- (13,925,554) (1,948,063) 80,545,906
Bond 336,598,871 56,588 (20,684,216) (7,372,325) 308,598,918
Equity Income 198,245,704 45,148 11,715,646 22,870,065 232,876,563
Small Capitalization 152,247,648 (2,448,519) 27,779,138 90,376,568 267,954,835
International Discovery 200,905,437 (4,121,937) 32,761,819 79,616,264 309,161,583
Balanced Allocation 118,022,915 (151) 6,708,109 23,697,294 148,428,167
National Tax Exempt Bond 66,180,190 -- (1,307,610) 214,440 65,087,020
CONTINUING FUNDS
Large Capitalization 68,963,390 (1,784,939) 127,491,685 129,951,582 324,621,718
Mid Capitalization 114,098,702 (3,200,309) 138,423,500 119,136,023 368,457,916
U.S. Government Income 178,091,984 33,878 (9,826,242) (4,525,173) 163,774,447
Michigan Municipal Bond 172,259,138 2,703 (762,940) 2,687,313 174,186,214
Treasury 233,025,351 1,003 5,927 -- 233,032,281
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Accompanying Notes
202
<PAGE>
REPORT OF INDEPENDENT AUDITORS
================================================================================
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
THE PARKSTONE GROUP OF FUNDS
We have audited the accompanying statements of net assets of Large
Capitalization Fund, Mid Capitalization Fund, U.S. Government Obligations Fund,
MichiganMunicipal Bond Fund and Treasury Fund (the "Funds") as of May 31, 2000,
and the related statements of operations, statements of changes in net assets,
and financial highlights for the year then ended. These financial statements and
financial highlights are the responsibility of the Funds' managements. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.The statements of changes in net assets
for the year ended May 31, 1999 and the financial highlights for the periods
presented through May 31, 1999 were audited by other auditors whose report dated
July 22, 1999 expressed an unqualified opinion on those financial statements and
financial highlights.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of May 31, 2000, by correspondence with the
Funds' custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds at May 31, 2000, and the results of their operations,
changes in their net assets, and their financial highlights for the year then
ended, in conformity with accounting principles generally accepted in the United
States.
/s/signature omitted
Philadelphia, Pennsylvania
July 7, 2000
203
<PAGE>
NOTICE TO SHAREHOLDERS (UNAUDITED)
================================================================================
The information set forth below is for each fund's fiscal year as required by
federal laws. Shareholders, however, must report distributions on a calendar
year basis for income tax purposes, which may include distributions for portions
of two fiscal years of a Fund. Accordingly, the information needed by
shareholders for income tax purposes will be sent to them in early 2001. Please
consult your tax advisor for proper treatment of this information.
For the fiscal year ended May 31, 2000, each Fund designated long term
capital gains and exempt income with regards to distributions paid during the
year as follows:
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
LONG TERM ORDINARY
CAPITAL GAINS INCOME TAX EXEMPT TOTAL QUALIFYING
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTION DIVIDENDS
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS) (TAX BASIS) (1)
---- ------------- ------------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Large Capitalization 92.84% 7.16% 0.00% 100.00% 9.79%
Mid Capitalization 74.56% 25.44% 0.00% 100.00% 0.66%
U.S. Government Income 0.00% 100.00% 0.00% 100.00% 0.00%
Michigan Municipal Bond 2.36% 0.01% 97.63% 100.00% 0.00%
Treasury 0.00% 100.00% 0.00% 100.00% 0.00%
International Discovery 83.75% 16.25% 0.00% 100.00% 0.00%
Small Capitalization 37.91% 62.09% 0.00% 100.00% 0.77%
Equity Income 92.26% 7.74% 0.00% 100.00% 92.73%
Balanced Allocation 69.23% 30.77% 0.00% 100.00% 0.00%
Bond 0.00% 100.00% 0.00% 100.00% 0.00%
Intermediate Government Obligations 0.00% 100.00% 0.00% 100.00% 0.00%
Limited Maturity Bond 0.00% 100.00% 0.00% 100.00% 0.00%
National Tax Exempt 5.55% 1.58% 92.87% 100.00% 0.00%
Prime Obligations 0.00% 100.00% 0.00% 100.00% 0.00%
Tax-Free 0.00% 0.11% 99.89% 100.00% 0.00%
U.S. Government Obligations 0.00% 100.00% 0.00% 100.00% 0.00%
</TABLE>
For the period ended June 9, 2000, each fund designated long term capital
gains and exempt income with regards to distributions paid during the period of
June 1, 2000 through June 9, 2000 as follows:
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
LONG TERM ORDINARY
CAPITAL GAINS INCOME TAX EXEMPT TOTAL QUALIFYING
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTION DIVIDENDS
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS) (TAX BASIS) (1)
---- ------------- ------------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
International Discovery 27.86% 72.14% 0.00% 100.00% 0.00%
Small Capitalization 42.93% 57.07% 0.00% 100.00% 0.00%
Equity Income 0.00% 100.00% 0.00% 100.00% 0.00%
Balanced Allocation 56.96% 43.04% 0.00% 100.00% 0.00%
Bond 0.00% 100.00% 0.00% 100.00% 0.00%
Intermediate Government Obligations 0.00% 100.00% 0.00% 100.00% 0.00%
Limited Maturity Bond 0.00% 100.00% 0.00% 100.00% 0.00%
National Tax Exempt 0.00% 0.00% 100.00% 100.00% 0.00%
Prime Obligations 0.00% 100.00% 0.00% 100.00% 0.00%
Tax-Free 0.00% 0.00% 100.00% 100.00% 0.00%
U.S. Government Obligations 0.00% 100.00% 0.00% 100.00% 0.00%
<FN>
Items (A), (B), (C) and (D) are based on a percentage of the Fund's total distribution.
Item (E) is based on a percentage of ordinary income distributions of the Fund.
(1) Qualifying Dividends represent dividends which qualify for the corporate dividends received deduction.
</FN>
</TABLE>
204
<PAGE>
RESULTS OF PROXY VOTING (UNAUDITED)
================================================================================
May 10, 2000 Shareholder Meeting:
A special meeting of the shareholders of the Large Capitalization, Mid
Capitalization, U.S. Government Income, Michigan Municipal Bond and Treasury
Funds was held on May 10, 2000. Shareholders approved the following proposal.
PROPOSAL:
To approve an Agreement and Plan of Reorganization, attached to the Combined
Prospectus/Proxy Statement for the meeting, which provides for: (a) transfer of
substantially all of the assets and liabilities of each of the Parkstone Group
of Funds into the corresponding fund of the Armada Funds in exchange for A
shares, B shares or I shares, as applicable of such Armada Fund of equal value;
(b) the distribution of the shares of designated classes of the corresponding
Armada Funds to the shareholders of the Parkstone Group of Funds; and (c) the
dissolution under state law and the deregistration under the Investment Company
Act of 1940, as amended, of the Parkstone Group of Funds.
% OF OUTSTANDING % OF DOLLARS
FUND DOLLARS VOTED VOTED
---- ---------------- -------------
LARGE CAPITALIZATION
Affirmative ................. 92.022% 99.717%
Against ..................... 0.115% 0.124%
Abstain ..................... 0.146% 0.159%
---------- ----------
Total .................... 92.283% 100.000%
========== ==========
MID CAPITALIZATION
Affirmative ................. 86.621% 99.154%
Against ..................... 0.306% 0.350%
Abstain ..................... 0.434% 0.496%
---------- ----------
Total ................. 87.361% 100.000%
========== ==========
U.S. GOVERNMENT INCOME
Affirmative ................. 89.464% 98.999%
Against ..................... 0.215% 0.239%
Abstain ..................... 0.689% 0.762%
---------- ----------
Total ................. 90.368% 100.000%
========== ==========
MICHIGAN MUNICIPAL BOND
Affirmative ................. 85.569% 99.325%
Against ..................... 0.255% 0.295%
Abstain ..................... 0.327% 0.380%
---------- ----------
Total ................. 86.151% 100.000%
========== ==========
TREASURY
Affirmative ................. 60.383% 99.996%
Against ..................... 0.000% 0.000%
Abstain ..................... 0.002% 0.004%
---------- ----------
Total ................. 60.385% 100.000%
========== ==========
205
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
================================================================================
BOARD OF TRUSTEES
ROBERT D. NEARY
CHAIRMAN
Retired Co-Chairman, Ernst & Young
Director:
Cold Metal Products, Inc.
Strategic Distribution, 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:
Kirtland Capital Corporation
Morrison Products
TruSeal Technologies
JOHN F. DURKOTT
President and Chief Operating Officer,
Kittle's Home Furnishings Center, Inc.
ROBERT J. FARLING
Retired Chairman, President and Chief
Executive Officer, Centerior Energy
RICHARD W. FURST
Garvice D. Kincaid Professor of Finance
and Dean, Gatton College of Business
and Economics, University of Kentucky
Director:
Foam Design, Inc.
The Seed Corporation
Office Suites Plus, Inc.
ihigh.com, Inc.
GERALD L. GHERLEIN
Retired Executive Vice President and
General Counsel, Eaton Corporation
J. WILLIAM PULLEN
President and Chief Executive Officer,
Whayne Supply Company
The Armada Trustees also serve as the Trustees of The Armada Advantage Fund.
They served as Trustees of The Parkstone Group of Funds until the completion of
its reorganization into Armada Funds on June 16, 2000.
[Logo omitted]
Armada [Register Mark] Funds
<PAGE>
[Logo omitted]
DESIGN YOUR OWN DESTINY
WWW.armadafunds.com
One Freedom valley Drive
Oaks, PA 19456
INVESTMENT ADVISOR:
National City[Registered mark]
Investment Management Company
1900 East Ninth Street, 22nd Floor
Cleveland, OH 44114
ARM-F-012-02
BULK RATE
U.S. POSTAGE
PAID
CINCINNATI CORPORATE MAIL
PERMIT #9463
CINCINNATI, OH
