Dear Shareholders,
Enclosed you will find the Annual Report for your Blanchard American Equity
Fund for the fiscal year ending April 30, 1995.
As you know, the investment objective of the Fund is to seek long-term price
appreciation through a portfolio of high-quality securities of well-established
"growth" companies. These companies have a history of consistent and sustainable
revenue and earnings growth, regardless of the economic environment. Other
superior financial characteristics of the stocks in the Fund's portfolio include
excellent pre-tax margins, high returns on equity, and high-dividend growth
rates.
The Year In Review
The equity markets have advanced during the first quarter of calendar 1995,
pushing both the Dow Jones and the S&P 500 indices to record levels. As the
quarter progressed, investors gained confidence that the economy was beginning
to slow in reaction to the Federal Reserve's seven interest rate increases over
the last year. Evidence of slowing economic growth convinced investors that
long-term rates had probably peaked during this cycle. As a result, the market
shrugged off weakness in the dollar and the economic crisis in Mexico and
concentrated on the favorable implications of a domestic "soft landing".
The Fund has advanced in a similar fashion, although it has trailed the S&P
500 index. The technology sector showed continued strength, as did
telecommunications, financial and gaming-related issues. This was partially
offset by the underperformance of issues in the retail and HMO industries.
The dramatic move that the market made during the first quarter of 1995
stands in stark contrast to the preceding nine months, during which the market
was constantly
The following information was reprint as a line graph.
The Value of a $10,000 Investment in the
Blanchard American Equity Fund
inception 11/2/92 through 4/30/95 as compared to
the Standard & Poor's 500 for the same period
-----------------------------------------
Avg. Annual Returns through 4/30/95
Blanchard American Equity Fund*
-----------------------------------------
1 year 4.83%
since inception -0.51%
-----------------------------------------
FYE 4/30/93 FYE 4/30/94 FYE 4/30/95
AEF -9.00% 3.52% 4.83%
S&P 500 6.60% 5.33% 17.40%
$9,925 $ 9,032 9,350 $ 9,801
$10,000 $10,660 $11,228 $13,182
Reflects deduction of $75 acct opening fee
Blanchard Standard
American Equity & Poor's
Fund^ 500(D)
*The average annual returns quoted above reflect reinvestment of distributions
but do not reflect the deduction of the account opening fee. If fee was
reflected, the returns would be lower. The total return includes changes in
principal value. The average annual return is total return annualized and
compounded. Past performance is no guarantee of future results.
(D)Source: S&P 500 is an unmanaged composite index of U.S. stock market
performance.
^Reflects deduction of the one-time account opening fee of $75.
This chart is for comparative purposes only and is not intended to reflect on
future performance of the index or the BAEF.
(over, please)
<PAGE>
battling to overcome the interest rate increases by the Federal Reserve. These
nine months were characterized by extreme volatility in the prices of individual
stocks and overall returns which were disappointing for both the Fund and the
market.
Investment Outlook
At Provident we continue to focus on company fundamentals. Relative to the
market, the companies in your portfolio _ such as Microsoft and Motorola, two of
the Fund's top ten holdings as of this writing, 5/22/95 _ generate superior
revenue growth, earnings growth and returns on equity.
Naturally, past performance of these companies or of the Fund itself is no
guarantee of future results. As with any stock mutual fund, principal value and
investment return will vary with market conditions so that shares, when
redeemed, may be worth more or less than their original purchase price.
However, with a relative valuation in the lower part of its historical
range, we believe your portfolio is well positioned for future performance. In
addition, initial signs that the economy is beginning to slow should make
earnings gains by cyclical companies more difficult. Evidence of a peak in
cyclical earnings is supported by the fact that the ratio of earnings estimate
increases versus decreases for economically sensitive stocks appears to have
peaked last quarter. This scenario favors the growth stocks in which your
portfolio invests _ companies whose earnings potential has traditionally been
unaffected by cyclical changes in the economy.
While there can be no assurances of success, we enter the current year with
a great deal of optimism about the prospects for your Blanchard American Equity
Fund, and we look forward to reporting strong results to you at this time next
year.
Sincerely,
JM:ml Jeffrey Miller
Managing Director
Provident Investment Counsel
Portfolio Managers of the Blanchard American Equity Fund
Distributed by Sheffield Investments, Inc. (1551) 04ARSL0695
<PAGE>
BLANCHARD AMERICAN EQUITY FUND-PORTFOLIO OF INVESTMENTS
April 30, 1995
(Left Column)
Shares Value
------ -----
EQUITY SECURITIES (97.15%)
Auto Parts (1.73%)
*Autozone, Inc. ..................... 7,200 $ 166,500
---------
Building Products (3.80%)
Home Depot, Inc. ................... 8,767 366,022
---------
Broadcast, Radio & TV (3.16%)
Capital Cities/ABC, Inc. ........... 3,600 304,200
---------
Computer Software & Service (16.65%)
*Analog Devices, Inc. ............... 4,800 129,000
Automatic Data Processing, Inc. .... 2,800 179,900
*Cabletron Systems, Inc. ............ 2,350 111,625
Computer Associates
International, Inc. .............. 2,200 141,625
*Computer Sciences Corp. ............ 2,200 108,625
*Microsoft, Inc. 6,000 490,500
*Oracle System Corp. ................ 12,600 384,300
Paychex, Inc. ...................... 1,200 57,150
---------
1,602,725
---------
Electronics & Electrical (15.70%)
*Applied Material, Inc. ............. 3,000 184,875
Hewlett Packard .................... 2,800 185,150
Intel Corp. ........................ 3,500 358,312
Molex Inc.-Cl. A ................... 750 27,000
Motorola, Inc. ..................... 6,300 358,313
Nokia Corp. (ADR) .................. 6,800 278,800
Sensormatics Electronics Corp. ..... 4,000 119,000
---------
1,511,450
---------
Employment Services (.94%)
Manpower Inc. ...................... 2,700 90,112
---------
Entertainment & Leisure (1.32%)
*British Sky Broadcasting (ADR) ..... 2,400 57,600
*Hospitality Franchise System, Inc. . 2,300 69,863
---------
127,463
---------
Environmental Control (.82%)
Browning-Ferris Industries, Inc. ... 2,400 79,200
---------
Financial Services (13.51%)
Federal Home Loan Mortgage
Corp. ............................ 1,300 84,825
Federal National Mortgage
Association ...................... 2,500 220,625
First Financial Management Corp. ... 1,700 124,312
First USA, Inc. .................... 3,400 144,500
First Data Corporation ............. 5,130 288,563
Finova Group Corp. ................. 3,400 114,750
MBNA Corp. ......................... 10,700 323,675
---------
1,301,250
---------
Funeral Services (1.32%)
Loewen Group, Inc. ................. 4,500 126,914
---------
Gaming (1.14%)
*Circus Circus Enterprises, Inc. .... 3,300 109,312
---------
(Right Column)
Shares Value
------ -----
Health Maintenance (6.92%)
*Humana, Inc. ....................... 7,300 $ 142,350
U.S. Healthcare, Inc. .............. 6,975 186,581
United Healthcare Corp. ............ 9,300 337,125
---------
666,056
---------
Insurance (3.15%)
American International Group Inc. .. 800 85,400
MGIC Investment Corp. .............. 4,000 169,500
PMI Group .......................... 1,300 48,425
---------
303,325
---------
Medical Services (3.32%)
Cardinal Health, Inc. .............. 1,600 73,800
Medtronic, Inc. .................... 2,500 185,937
Sun Healthcare Group, Inc. ......... 2,500 60,313
---------
320,050
---------
Natural Gas Products & Pipe (3.64%)
Enron Corp. ........................ 10,300 350,200
---------
Office & Business Equipment (3.38%)
Alco Standard Corporaion ........... 1,200 85,050
*Office Depot, Inc. ................. 7,550 171,763
Pittson Services Group ............. 2,900 68,875
---------
325,688
---------
Pharmaceuticals (.79%)
*Scherer R P Corp. .................. 1,600 76,400
---------
Real Estate (1.53%)
Equity Residential Prop. Trust ..... 5,500 147,125
---------
Restaurants (1.27%)
McDonalds Corp. .................... 3,500 122,500
---------
Retail (5.77%)
Lowe's Cos. ........................ 3,100 89,513
Talbots Inc. ....................... 1,600 48,600
Tyco International ................. 2,300 120,750
Wal-Mart Stores, Inc. .............. 12,500 296,875
---------
555,738
---------
Telecommunications (7.29%)
*ALC Communications Corp. ........... 2,600 99,125
*Andrew Corp. ....................... 1,900 94,050
Ericsson L M Tel Co. Cl. B (ADR) ... 5,500 368,844
*General Instrument Corp. ........... 4,100 139,912
---------
701,931
---------
TOTAL EQUITY SECURITIES
(IDENTIFIED COST $7,973,450) ........ 9,354,161
---------
TOTAL INVESTMENTS
(IDENTIFIED COST
$7,973,450)(a)(97.15%) ............ 9,354,161
---------
CASH AND OTHER ASSETS
IN EXCESS OF LIABILITIES
(2.85%) ........................... 274,182
---------
NET ASSETS (100%) ................... $9,628,343
==========
(a)The aggregate cost for federal income tax purposes is $8,041,793; the
aggregate gross unrealized appreciation is $1,627,094; and the gross
depreciation is $314,726; resulting in net unrealized appreciation of
$1,312,368.
*Non-income producing.
See notes to financial statements.
3
<PAGE>
BLANCHARD AMERICAN EQUITY FUND
Statement of Assets and Liabilities
April 30, 1995
Assets:
Investments in securities, at value
(Identified Cost $7,973,450) (note 1) ......................... $9,354,161
Cash ............................................................ 28,264
Receivables for:
Investments sold .............................................. 296,726
Shares of beneficial interest sold ............................ 30,345
Dividends ..................................................... 3,074
Reimbursement from Manager .................................... 6,000
Deferred organizational costs (note 1) .......................... 66,484
----------
Total assets ............................................. 9,785,054
----------
Liabilities:
Payables for:
Investments purchased ......................................... 47,767
Shares of beneficial interest repurchased ..................... 74,217
Accrued expenses and other liabilities .......................... 34,727
----------
Total liabilities ........................................ 156,711
----------
Net assets ............................................... $9,628,343
==========
Net assets are comprised of:
Paid in capital (unlimited authorized shares of beneficial interest,
$.01 par value, 1,000,269 shares outstanding) ................. $9,219,364
Accumulated realized loss ....................................... (959,867)
Accumulated net investment loss ................................. (11,865)
Unrealized net appreciation on investments ...................... 1,380,711
----------
Net assets ............................................... $9,628,343
==========
Net asset value per share ................................ $9.63
=====
See notes to financial statements.
4
<PAGE>
BLANCHARD AMERICAN EQUITY FUND
Statement of Operations
For the Year Ended April 30, 1995
Investment income:
Dividends $107,980
Interest 30,332
--------
Total income 138,312
--------
Expenses:
Investment management fee (note 2) ................. $ 128,735
Transfer agent fees (note 5) ....................... 60,949
Plan of distribution fee (note 3) .................. 58,516
Accounting fees (note 5) ........................... 53,300
Professional fees .................................. 40,465
Organizational expenses ............................ 26,588
Custodian fees ..................................... 24,508
Shareholder reports and notices .................... 19,700
Registration fees .................................. 19,400
Trustees' fees, retirement plan curtailment and
other expenses (note 5) .......................... 16,782
Other .............................................. 747
---------
Total expenses ........................... 449,690
Less: Expenses waived by Manager (note 2) .......... (92,524)
---------
Net expenses ....................................... 357,166
--------
Investment loss-net ................................ (218,854)
--------
Realized and unrealized gain (loss)-net (note 1):
Realized loss on investments in securities-net ....... (304,036)
Change in unrealized appreciation on investments ..... 1,056,341
----------
Net realized and unrealized gain .............................. 752,305
--------
Net increase in net assets resulting from operations ........... $533,451
========
See notes to financial statements.
5
<PAGE>
BLANCHARD AMERICAN EQUITY FUND
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Year For the Year
Ended Ended
April 30, 1995 April 30, 1994
-------------- --------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment loss-net .............................................. $ (218,854) $ (467,930)
Realized gain (loss)-net ......................................... (304,036) 601,197
Change in unrealized appreciation or depreciation-net ............ 1,056,341 1,663,800
----------- -----------
Net increase in net assets resulting from operations ............. 533,451 1,797,067
----------- -----------
Dividends and distributions to shareholders from:
Tax return of capital ............................................ (259,191) -
Transactions in shares of beneficial interest-
net decrease (note 6) ............................................ (4,616,259) (18,975,186)
----------- -----------
Net decrease in net assets ..................................... (4,341,999) (17,178,119)
Net assets:
Beginning of year .................................................. 13,970,342 31,148,461
----------- -----------
End of year (including accumulated net investment loss of
$11,865 and $0, respectively) .................................... $ 9,628,343 $13,970,342
=========== ===========
</TABLE>
See notes to financial statements.
6
<PAGE>
BLANCHARD AMERICAN EQUITY FUND
Notes To Financial Statements
April 30, 1995
NOTE 1 - Organization and Accounting Policies:
Blanchard American Equity Fund (the "Fund") is a series of Blanchard Funds
which was organized as a Massachusetts business trust on January 24, 1986. The
Fund is a registered, open-end non-diversified management investment company
under the Investment Company Act of 1940 ("the Act"). The Fund had no operations
before November 9, 1992 other than the sale of 10,000 shares of beneficial
interest for $100,000 to Sheffield Management Company (the "Manager").
The following is a summary of the significant accounting policies followed
by the Fund:
A. Valuation of Investments-Portfolio securities traded on a domestic
exchange are valued at the 4 PM EST price on that exchange, and if no sale is
made on that day, at the closing bid price (or the mean price in cases where a
mean is reported instead of the closing bid). In cases where a security is
traded on more than one exchange it is valued at the quotation on the exchange
determined to be the primary market for such security by the Trustees or the
Manager. All other portfolio securities for which over-the-counter market
quotations are readily available are valued at the latest available bid prices.
Short-term debt securities which mature in 60 days or less are valued at
amortized cost if their original maturity was 60 days or less, or by amortizing
their value on the 61st day prior to maturity if their term to maturity at the
date of purchase exceeded 60 days. All other securities and other assets of the
Fund are valued at fair value as determined in good faith by the Trustees.
B. Accounting for Investments-Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined on the identified cost method.
Interest income is accrued daily. Dividend income and other distributions are
recorded on the ex-dividend date.
C. Federal Income Tax Status-It is Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
D. Dividends and Distribution to Shareholders-The Fund records dividends and
distributions to its shareholders on the record date. The amount of dividends
and distributions from net investment income and net realized capital gains is
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income or net realized gains for financial reporting
purposes but not for tax purposes are reported as dividends or distributions in
excess of net investment income or net realized gains for tax purposes. To the
extent they exceed net investment income or net realized gains for tax purposes
they are reported as distributions of paid-in capital.
E. Organizational Expenses-The Manager paid the organizational expenses of
the Fund incurred prior to the public offering of its shares amounting to
approximately $132,941. The Fund has reimbursed the Manager for such expenses
and has deferred and is amortizing such expenses over five years from the date
of commencement of the Fund's operations.
7
<PAGE>
BLANCHARD AMERICAN EQUITY FUND
Notes To Financial Statements (continued)
April 30, 1995
F. Other-Certain expenses for the Blanchard Group of Funds are allocated
among the funds based upon their relative average net assets.
NOTE 2 - Investment Management Agreement:
Pursuant to a management agreement (the "Agreement"), the Manager manages
the Fund and the investment of the Fund's assets, subject at all times to the
supervision of the Fund's Trustees. In addition to providing overall business
management and administrative services, the Manager selects, monitors and
evaluates the Portfolio Adviser as noted below. The Manager receives from the
Fund an advisory fee payable monthly at an annual rate of 1.1% of the Fund's
average daily net assets.
Expenses of the Fund, exclusive of taxes, interest, brokerage commissions,
distribution fees, extraordinary expenses and certain other excludable expenses,
are subject to the expense limitation imposed by one of the states in which
shares of the Fund are offered for sale. For the year ended April 30, 1995, the
Fund's expenses exceeded the above limitation by $92,524 which was borne by the
Manager through a fee waiver.
Certain officers and/or Trustees of the Fund are officers/directors of the
Manager.
The Manager has a sub-advisory agreement with Provident Investment Counsel,
Inc. (the "Portfolio Adviser"). All fees for such services are paid by the
Manager. The Manager has advised the Fund that the fees paid to the Portfolio
Adviser were $45,521 for the year ended April 30, 1995.
NOTE 3 - Distribution Agreement and Plan:
Pursuant to a Distribution Agreement, Sheffield Investments, Inc. (the
"Distributor") an affiliated company of the Manager, acts as principal
distributor of the Fund's shares. The Distributor has the exclusive right to
distribute Fund shares directly or through other broker-dealers.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act which provides that the Fund may finance activities which are
primarily intended to result in the sale of the Fund's shares, including but not
limited to advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising material and
sales literature, and payments to dealers and shareholder servicing agents who
enter into agreements with the Manager or Distributor.
Pursuant to the Plan, the Fund may pay distribution fees not to exceed .50%
per annum of the Fund's average daily net assets. Provided that the Plan
continues in effect, any cumulative expenses incurred by the Distributor on or
after November 9, 1992, but not yet reimbursed by the Fund, may be reimbursed
through future distribution fees from the Fund. The Distributor has advised the
Fund that at April 30, 1995, the unreimbursed distribution expenses amounted to
$419,809. If the Plan is terminated or discontinued in accordance with its
terms, the obligation of the Fund to make payments to the Distributor pursuant
to the Plan will cease and the Fund will not be required to make any payments
past the date the Plan is terminated.
NOTE 4 - Acquisition Agreement:
Sheffield Management Company (the "Manager") and Sheffield Investments, Inc.
(the "Distributor"), have entered into an acquisition agreement (the
"Acquisition Agreement") with Signet Banking Corporation
8
<PAGE>
BLANCHARD AMERICAN EQUITY FUND
Notes To Financial Statements (continued)
April 30, 1995
and two of its subsidiaries ("Signet"), dated February 15, 1995, pursuant to
which Sheffield will sell to Signet the assets relating to, and the ability to
succeed to contracts with, the Blanchard Funds, including Blanchard American
Equity Fund (collectively, the "Funds"). The transactions contemplated by the
Acquisition Agreement which have been approved by the Board of Trustees of the
Funds are conditioned upon the approval of the shareholders of each Fund, of (1)
a new investment management agreement with Signet, (2)a new distribution
agreement with Federated Securities Corp., and (3)certain other conditions.
No material changes are contemplated in the operation of the Funds and no
management or distribution and administration fee increases are being proposed.
NOTE 5 - Security Transactions and Transactions with Affiliates:
Purchases and sales portfolio securities for the year ended April 30, 1995,
excluding short-term investments, aggregated $4,819,865 and $8,716,371,
respectively. The Distributor has advised the Fund that it received $188 from
shareholders as account opening fees for the year ended April 30, 1995. The
Manager has advised the Fund that, for the same period, it incurred costs, which
were reimbursed by the Fund, amounting to $13,143 for performing internal
accounting and transfer agency functions for the Fund.
The Funds have adopted an unfunded noncontributory pension plan (the "Plan")
covering all independent directors/trustees of the Funds who will have served as
an independent director/trustee for at least five years at the time of
retirement. Benefits under this plan are based on an annual amount equal to 75%
of the director/trustee fee at the time of retirement, plus 5% for each year of
service in excess of five years of service but not in excess of ten years of
service. Net periodic pension expense included in Trustees' fees, retirement
plan curtailment and other expenses in the Statement of Operations for the year
ended April 30, 1995 was $2,615. As indicated in Note4, the Manager has entered
into an agreement which provides for the acquistion of the Manager by Signet.
Following the acquisition, the independent directors/trustees of the Funds will
not stand for re-election. As a result, the Plan was curtailed and additional
pension expense of $9,250 was recorded to reflect the previously unrecognized
prior service costs of the independent directors/trustees. Included in accrued
expenses and other liabilities at April 30, 1995 is $11,865 of accrued pension
expense.
NOTE 6 - Shares of Beneficial Interest:
For the Year Ended For the Year Ended
April 30, 1995 April 30, 1994
------------------------ ---------------------------
Shares Amount Shares Amount
------ ------ ------ ------
Sold ................. 417,825 $3,983,359 487,125 $ 4,708,461
Reinvestment of
dividends and
distributions ...... 27,994 253,349 - -
-------- ----------- ---------- ------------
445,819 4,236,708 487,125 4,708,461
Repurchased .......... (928,616) (8,852,967) (2,428,717) (23,683,647)
-------- ----------- ---------- ------------
Net decrease ......... (482,797) $(4,616,259) (1,941,592) $(18,975,186)
======== =========== ========== ============
9
<PAGE>
BLANCHARD AMERICAN EQUITY FUND
Notes To Financial Statements (continued)
April 30, 1995
NOTE 7 - Federal Income Taxes:
As of April 30, 1995, the Fund had temporary book/tax differences primarily
attributable to wash sale loss deferrals. The Fund had permanent book/tax
differences primarily attributable to net operating losses. To reflect
reclassifications arising from permanent book/tax differences for the year ended
April 30, 1995, paid-in-capital was charged $466,180, accumulated realized
loss-net was credited $33,889 and accumulated distributions in excess of
investment income-net was credited $432,291.
At April 30, 1995 the Fund had a net capital loss carryover of $891,524 of
which $584,268 and $307,256 are available through April 30, 2002 and April 30,
2003, respectively, to offset future capital gains. To the extent that these
carryover losses are used to offset future capital gains, it is probable that
the gains so offset will not be distributed to shareholders.
NOTE 8 - Financial Highlights:
Selected ratios and per share data for a share of beneficial interest
outstanding:
<TABLE>
<CAPTION>
For the Period
November 9, 1992
For the Year Ended (commencement
April 30, of operations) to
---------------------- April 30,
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period ................... $9.42 $9.10 $10.00
Income from investment operations:
Net investment loss .................................. (.01)(DD) (.20)(DD) (.03)(DD)
Net gains or losses on securities (both realized and
unrealized) ........................................ .45 .52 (.87)
Net income (loss) from investment operations ....... .44 .32 (.90)
Less dividends and distributions from:
Tax return of capital ................................ (.23) .00 .00
Change in net asset value ............................ .21 .32 (.90)
Net asset value, end of period ......................... $9.63 $9.42 $ 9.10
Total return .......................................... 4.83% 3.52% (9.00%)(3)
Ratios/Supplemental Data:
Net assets end of period ($ Million) ................. $10 $14 $31
Ratio of expenses to average net assets .............. 3.05%(1) 3.00%(1) 3.13%(1)(2)
Ratio of net investment loss to average net assets ... (1.87%)(1) (2.04%)(1) (1.66%)(1)(2)
Portfolio turnover ..................................... 45% 97% 49%
</TABLE>
(1) The ratios of expenses to average net assets and net investment loss to
average net assets would have been 3.79% and (2.61%), respectively, for the
year ended April 30, 1995, and 3.01% and (2.05%), respectively, for the year
ended April 30, 1994, and 3.73% and (2.26%), respectively, for the period
ended April 30, 1993, if a portion of the Fund's expenses had not been
voluntarily reimbursed by the Manager.
(2) Annualized.
(3) Not annualized.
10
<PAGE>
BLANCHARD AMERICAN EQUITY FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
Blanchard American Equity Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Blanchard American Equity Fund (the
"Fund") at April30, 1995, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the two years in the period then ended
and for the period November 9, 1992 (commencement of operations) through April
30, 1993, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at April
30, 1995 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations were not received, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
June 20, 1995
11
<PAGE>
(Left Column)
Portfolio Adviser
Provident Investment
Counsel, Inc.
Custodian and Transfer Agent
United States Trust Company
of New York
Independent Accountants
Price Waterhouse LLP
Legal Counsel
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
Blanchard American
Equity Fund
41 Madison Ave., 24th Floor
New York, NY 10010-2267
(Right Column)
Blanchard
American
Equity Fund
Annual Report
April 30, 1995
Managed by: Sheffield Management Company
41 Madison Ave., 24th Floor
New York, NY 10010-2267
1-800-922-7771
