CornerCap Small Cap Value Fund

$  9.86

11.2%          

CornerCap Balanced Fund

$11.07

3.4%          

CornerCap Emerging Growth Fund

$13.29

N/A*          

    (* Mutual fund created on July 31, 2000)

The Peachtree, Suite 1700

Advisor:

(800) 728-0670

1355 Peachtree Street, NE

Administrator:

(888) 81-FUNDS

Atlanta, Georgia 30309

Telecopier:

(404) 870-0770

Shares

Value
(Note 1-A)

COMMON STOCKS - 50.3%

Automotive -- 3.9%

1,800

Ford Motor Co. Del

79,608

234

Visteon

3,539

2,200

TRW Inc.

          89,375

       172,522

Aerospace -- 3.2%

2,300

Goodrich BF Co.

90,131

1,800

Rockwell International Corp.

       54,450

     144,581

Bank -- 1.6%

2,200

First Union Corp.

       70,813

Beverages -- 2.5%

1,300

Anheuser-Busch Companies, Inc.

     110,013

Building Materials -- 1.4%

1,600

PPG Industries, Inc.

       63,500

Communications --1.9%

1,500

Telefonos de Mexico

       85,100

Diversified -3.9%

2,700

ITT Industries, Inc.

87,581

4,300

National Service Industries, Inc.

       84,119

     171,700

Electric Lighting and Wiring Equipment -- 2.1%

1,750

Johnson Ctls., Inc.

       93,078

Electrical Utilities -- 6.9%

3,400

First Energy Corp.

91,588

4,600

Reliant Energy, Inc.

     213,900

     305,488

Financial Services -- 2.9%

800

JP Morgan & Co., Inc.

     130,700

Food Processing -- 1.8%

4,000

Sara Lee

       81,250

Machinery -3.5%

1,600

Briggs & Stratton

60,500

5,700

Flowserve Corporation

       93,694

     154,194

Shares

Value
(Note 1-A)

COMMON STOCKS - 58.78%

Medical Supplies - 3.1%

3,000

Mallinckrodt, Inc

     136,875

Metals - 1.5%

4,800

Timken Co.

       65,700

Mining -3.7%

1,908

Alcoa

96,593

1,600

Phelps Dodge Corp.

       66,800

     163,393

Oil Industry - 1.8%

2,400

Ashland, Inc.

       80,850

Paper & Forest Products - 1.1%

4,200

Glatfelter P.H. Co.

       50,925

Textile - 1.6%

2,500

Spring Ind.

       70,469

Thrift - 1.9%

3,645

Washington Federal

       86,450

Total Common Stocks (Cost $2,164,678)

 2,237,599

Principal

Value

Amount

(Note 1-A)

CORPORATE BONDS - 33.2%

Electronic Components - 3.3%

$150,000

Sony, 6.125%, Due 03/04/03

$

       147,824

Electrical Utilities - 3.3%

National Rural Utilities

150,000

     6.375%, Due 10/15/04

       146,604

Financial Service - 17.6%

GMAC

150,000

     6.700%, Due 04/03/01

149,951

Merrill Lynch

150,000

     6.375%, Due 10/15/08

141,119

Nations Bank

200,000

     6.375%, Due 05/15/05

193,924

Norwest Financial

150,000

     6.250%, Due 12/15/07

141,107

Walmart

150,000

     6.750%, Due 05/15/02

       150,170

       776,271

Multimedia- 4.5%

200,000

Disney Corp. 6.75%, Due 03/30/06

       199,818

Telecommunications - 4.0%

200,000

AT&T 6.00%, Due 03/15/09

       180,104

     Total Corporate Bonds (Cost $1,531,319)

   1,450,620

U.S. GOVERNMENT BONDS - 5.6%

U.S. Treasury

$140,000

6.50%, Due 08/15/05

143,544

100,000

6.50%, Due 10/15/06

       102,750

Total Government Bonds (Cost $258,766)

       246,294

SHORT-TERM INVESTMENTS - 10.5%

UMB Bank Short-Term Authorized Demand Notes

$469,653

(Cost $469,653)

        469,653 

Total Investments (Cost $4,424,416) (a)

98.8%

4,404,166 

Other Assets in excess of Liabilities

       1.2%

          53,545 

Net Assets

100.00%

$

4,457,712 

======  

========= 

(a)

Aggregate cost for federal income tax purpose is $4,424,416

At September 30, 2000, unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows

Gross unrealized appreciation

$

374,532 

Gross unrealized depreciation

     (394,782)

Net unrealized depreciation

(20,250)

=========

ASSETS

     Investments at market value,

            (Identified cost $3,107,854) (Note 1-A)

$

3,934,513 

     Cash

468,139 

     Interest receivable

53,473 

     Dividends receivable

5,049 

     Insurance Reserve

            1,515 

               Total assets

     4,462,689 

LIABILITIES

     Payable for investment securities purchased

$

0 

     Payable for fund shares redeemed

0 

     Management fee payable

3,828 

     Administration fees payable

            1,149 

               Total liabilities

            4,977 

NET ASSETS

     (Applicable to 402,841 shares outstanding,

          unlimited number of shares authorized)

$

4,457,712 

==========

NET ASSET VALUE offering and repurchase

     PRICE PER SHARE

     ($4,457,712 -- 402,841 shares)

$

11.07 

======

NET ASSETS

     At September 30, 2000, net assets consisted of:

          Paid-in capital

$

5,339,671 

          Undistributed net investment income

(574,649)

          Accumulated net realized gains on investments

(287,060)

          Net unrealized depreciation

        (20,250)

$

4,457,712 

==========

INVESTMENT INCOME

Dividends

$

40,967

Interest

63,049

Extraordinary Income

          (253)

Total income

      103,763

Expenses

Management fee (Note 2)

19,511

Service costs (Note 2)

       10,035

Total expenses

       29,546

     Net investment income

        74,217

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS

Net realized loss from security transactions

(178,492)

Change in unrealized depreciation of investments

      250,810

Net gain on investments

        72,318

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

$

146,535

=========

Period Ended        

Year Ended

September 30,        

March 31,

         2000                 

         2000         

INCREASE (DECREASE) IN NET ASSETS FROM

Operations

$

74,217 

$

158,753 

Net investment income

(178,492)

(93,481)

Net realized gain on investments

Increase (decrease) in unrealized appreciation

     of investments

     250,810 

   (261,379)

Net increase (decrease) in net assets

     resulting from operations

     146,535 

   (196,107)

Distributions to shareholders from

Net investment income

     ($0.00 and $0.37 per share, respectively)

-  

(158,480)

Capital gains

     ($0.00 and $.24 per share, respectively)

               -  

   (102,470)

Total distributions

               -  

   (260,950)

Capital share transactions (a)

Increase in net assets resulting from capital

     share transactions

   (119,397)

    389,089 

Total increase in net assets

27,671 

(67,968)

NET ASSETS

Beginning of period

  4,430,041 

 4,498,009 

End of period

(Including undistributed net investment income of

     $(84,262) and $73,927, respectively)

$

4,457,712 

$

4,430,041 

========

========

(a)

Summary of capital share activity follows:

Six-Month Period Ended

Year Ended

       September 30, 2000       

          March 31, 2000            

Shares

Value    

Shares

Value     

Shares sold

18,752 

$

201,964 

107,546

$

1,317,619 

Shares issued on

reinvestment of distributions

              0 

              0 

      23,199

      260,063 

18,752 

201,964 

130,745

1,577,682 

Shares redeemed

   (29,723)

 (321,361)

 (104,080)

 (1,188,593)

Net increase

(10,971)

$

(119,397)

26,665

$

389,089 

=======

=======

=======

=========

For Period

For Period

For Period

For Period

4/1/2000 To

Year Ended

Year Ended

6/1/1997 To

9/30/2000

3/31/2000

3/31/1999

7/70/1998(a)

Per Share Operating Performance

     Net asset value, beginning of period

$

   10.71

$

   11.62 

$

   12.21 

$

    32.99 

     Income from investment operations -

Net investment income

.18

.36 

.21 

024 

Net realized and unrealized gain

       (loss) on investments

      1.16

     (.66)

     (.26)

     2.20 

       Total from investment operations 

      1.35

     (.30)

     (.05)

     2.44 

     Less distributions from -

Net investment income

    -

(.37)

(.07)

(.19)

Realized gains

            -

     (.24)

     (.47)

  (23.03)

       Total distributions

     (.61)

     (.54)

  (23.22)

Net asset value, end of period

$

11.07

$

10.71 

$

11.62 

$

12.21 

======

======

======

======

Total Return

3.36%

(2.89)%

(.46)%

19.13%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period ($000)

$

4,458 

$

4,430 

$

4,498 

$

2,294 

Ratios to average net assets (b)

       Expenses

0.67%

1.32%

1.30%

1.53%**

       Net investment income

1.69%

3.16%

2.91%

2.80%**

Portfolio turnover rate

16.6%

16.38%

38.47%

13.38%

(a)

The Fund has changed its year-end from May 31^st to March 31^st.

(b)

Fee waivers reduced the expense ratio and increased the net investment income ratio by 1.25% in 1998.

(1)

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CornerCap Balanced Fund (the "Fund") is a series of shares of the CornerCap Group of Funds and is registered under the Investment Company Act of 1940 as a diversified open-end management investment company. Investment operations commenced on May 24, 1997 as a result of the reorganization of the Atlanta Growth Fund (Note 4). The investment objective of the Fund is to obtain capital appreciation and current income. The following is a summary of significant accounting policies followed by the Fund in the preparation of the financial statements. The policies are in conformity with generally accepted accounting principles.

A.

Security Valuation - Portfolio securities that are listed on national securities exchanges or the NASDAQ National Market System are valued at the last sale price as of 4:15 p.m. Eastern time, or in the absence of recorded sales, at the average of readily available closing bid and asked prices on such exchanges or such System. Unlisted securities that are not included in such System are valued at the mean of the quoted bid and asked prices in the over-the-counter-market. Securities and other assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Advisor under procedures established by and under the general supervision and responsibility of the Fund's Board of Trustees. Short-term investments are valued at amortized cost, if their original maturity was 60 days or less, or by amortizing the values as of the 61st day prior to maturity, if their original term to maturity exceeded 60 days.

B.

Security Transactions, Investment Income and Other - Security transactions are recorded on the trade date. Realized gains and losses on sales of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis.

C.

Federal Income Taxes - It is the Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income to its shareholders. In addition, the Fund intends to pay distributions as required to avoid imposition of excise tax. Therefore, no federal income tax provision is required.

D.

Distributions to Shareholders - Distributions from net investment income and realized gains, if any, are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles.

E.

Accounting Estimates - In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(2)

TRANSACTIONS WITH AFFILIATES

INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS

The Fund has an investment advisory agreement with CornerCap Investment Counsel, Inc. (the "Advisor"), pursuant to which the Advisor receives a fee, computed daily and payable monthly, at an annual rate of 1.0% of the average daily net assets.

In addition, the Fund has a service agreement with the Advisor, pursuant to which the Advisor receives a fee, computed daily and payable monthly at an annual rate of .30% of average net assets.

The Advisor will provide day-to-day operational services to the Fund including, but not limited to, providing or arranging to provide accounting, administrative, legal (except litigation), dividend disbursing, transfer agent, registrar, custodial, shareholder reporting, sub accounting and recordkeeping services. All fees and expenses associated with these and other functions including, but not limited to, expenses of legal compliance, shareholder communication and meetings of the Shareholders and the Board of Trustees will be paid by the Advisor.

(3)

PURCHASES AND SALES OF SECURITIES

For the six-month period ended September 30, 2000, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $972,590 and $137,414, respectively.

(4)

STOCK SPLIT

Effective June 30, 1997, the Fund had a reverse stock split of 1 share for every 4 shares owned. The financial highlights for the period ended May 31, 1997 have been adjusted retroactively to reflect this split.