<PAGE>
Dear Shareholder:
The U.S. economy continues to deliver steady growth with few signs of rising
inflation. Asian currency devaluations and market drops have added to the
jitteriness of domestic equity markets, but should help keep a lid on U.S.
inflation while continuing to keep the interest rates of high-quality,
dollar-denominated obligations on their downward glide. As a consequence, we
believe that fixed-income securities should continue to perform well. Corporate
profit growth however, will become increasingly more difficult to achieve. We
believe those companies reaching their growth targets will be rewarded in the
market and we continue to find the best prospects for good growth at reasonable
prices in mid-sized and smaller companies, although recent turbulence in the
equity markets has given us an opportunity to pick up some larger companies at
what we believe to be attractive prices.
WINTHROP SMALL COMPANY VALUE FUND
The Class A shares of the Winthrop Small Company Value Fund returned 32.48% for
the fiscal year ended October 31, 1997, versus 29.33% for the Russell 2000
Index. For the third consecutive year, small company shares, as measured by the
Russell 2000, under-performed large company shares, as measured by the S&P 500.
Recent turmoil in Asian and Japanese economies may help the relative performance
of smaller company shares, as they tend to be less exposed to global economies.
Additionally, amid signs that worldwide economic growth may be slowing, larger
companies may find acquiring their smaller competitors an attractive way to
bolster growth. The Fund has already benefited from several of its holdings
being acquisition targets in 1997.
Our relative performance in 1997 was hampered by our underweighted position in
the energy sector. The financial services sector, which represents approximately
14% of the Fund's portfolio, has benefited from the rash of takeovers in the
banking industry. While we expect these trends to continue, many of the stocks
are already reflecting some amount of acquisition premium, making it difficult
for us to effectively deploy capital there.
Aside from benefiting from takeovers, the portfolio has enjoyed strong
performance from Applied Power, Dallas Semiconductor, First American of Tenn.,
Herman Miller and Poe & Brown. We continue to believe that our strategy of
investing in a diversified group of niche-oriented, conservatively financed,
well managed smaller companies--that are available at reasonable prices--will be
rewarding.
WINTHROP GROWTH AND INCOME FUND
For the year ended October 31, 1997, Winthrop Growth and Income Fund Class A
shares returned 30.53%, versus a 32.12% return for the S&P 500. During the
turbulent quarter ended October 31, 1997, the Fund held its ground better than
the S&P 500, declining only 1.59% versus a 3.75% drop for the S&P 500. This is
consistent with what the Fund hopes to achieve--to participate in rising markets
and outperform in market declines.
During the course of the year, many financial services stocks and consumer
holdings performed well. Long time positions in Freddie Mac (+50%), AIG (+41%),
Pfizer (+72%) and Schering Plough (+75%) provided powerful performance, as
holdings in RJR Nabisco (+9%), United Technologies (+9%) and Bemis (+9%) turned
in single-digit returns.
Going forward, the Fund has added new positions, such as Sysco Corp. and First
Data, and added to an existing position in Automatic Data. Each of these
companies has achieved consistent earnings growth that has been overlooked in
the market and has traditionally traded at a significant premium to the S&P
500's price/earnings ratio. They are trading at a near-market multiple today,
and we believe each will grow earnings by at least fifteen percent a year for
the next three years. We believe that identifying companies able to grow
earnings in an environment that is likely to be less hospitable to profitability
will be key in delivering performance over the next two years.
WINTHROP GROWTH FUND
For the twelve months ended October 31, 1997, Winthrop Growth Fund Class A
shares returned 26.48%, versus a 32.12% return for the S&P 500. Financial and
technology stocks were again among the Fund's most successfull holdings. In the
finance group, AIG, US Bancorp and Bank of America performed particularly well.
Among the Fund's technology holdings, PeopleSoft, Microsoft and Molex were
strong performers.
WINTHROP FIXED INCOME FUND
The Winthrop Fixed Income Fund Class A shares returned 6.84% for the fiscal year
ended October 31, 1997, slightly trailing the 7.49% return of the Lehman
Government/Corporate Intermediate Index. On a calendar-year basis through
October 31, 1997, the Fund gained ground vs. the Lehman Index, returning 6.34%
vs 6.77%, respectively. The Fund's duration, which is more than 20% longer than
its benchmark Lehman Index, benefited shareholders of the Fund in the second
half of the year, as interest rates declined 100 basis points from April levels.
The Fund has been and continues to be positioned to take advantage of interest
rate declines in the months to come.
The longer duration and higher quality orientation of the Fund is supported by
our view that domestic growth will decelerate as we move into 1998. As concerns
regarding the Asian markets have mounted, sending the U.S. dollar to ever higher
levels, the outlook for U.S. corporate profits has deteriorated. Historically,
slower growth expectations have led investors to demand a higher risk premium or
spread for corporate debt/higher credit risk ownership. We are monitoring
current market developments for opportunities as risk premiums rise.
WINTHROP MUNICIPAL TRUST FUND
The Winthrop Municipal Trust Fund Class A shares returned 7.37% for the fiscal
year ended October 31, 1997. It was a good year for the Fund's performance, as
this return exceeded that of the Lipper Intermediate Municipal Index of 6.57% by
80 basis points. The Fund's longer duration relative to the index clearly
benefited performance.
We have focused on upgrading the credit quality of the Fund as we moved through
the year. The Fund has continually sold "BBB" rated securities in favor of solid
"AA" rated revenue bonds. We believe that these securities will outperform the
plethora of "AAA" insured securities. While we remain positive on the direction
of interest rates, further gains to municipal prices could be tempered by
increased supply with refunding issues. We remain long our benchmark duration
and look for opportunities in the coming year as increased supply may result in
credit spread widening.
Thank you for your investment in the Winthrop Focus Funds. The Officers and
Trustees would like to wish you a happy and prosperous New Year.
Sincerely,
G. Moffett Cochran December, 1997
President
1
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Growth Fund
Portfolio Changes for the Six Months Ended October 31, 1997
<TABLE>
<S> <C>
Major Purchases Major Sales
Federal-Mogul Corp.(1) Archer-Daniels-Midland Co.(2)
Firstar Corp.(1) Barnett Banks, Inc.(2)
Franklin Resources, Inc.(1) Capital One Financial Corp.(2)
Steel Dynamics, Inc.(1) Delta Air Lines, Inc.(2)
Sysco Corp.(1) Eastman Kodak Co.(2)
WorldCom, Inc.(1) General Motors Corp.(2)
Glenayre Technologies, Inc.(2)
Health Management Associates, Inc. Cl. A(2)
MCI Communications Corp.(2)
Nucor Corp.(2)
(1) New Holdings (2) Deletions
</TABLE>
Ten Largest Holdings October 31, 1997
Percent
Value of Fund
------------- ---------
BankAmerica Corp..................... $ 3,374,800 3.6%
Procter & Gamble Co.................. 3,168,800 3.4
Exxon Corp........................... 3,071,875 3.3
Federal Home Loan Mortgage Corp...... 3,060,300 3.3
American International Group, Inc.... 2,908,781 3.1
Merck & Co., Inc..................... 2,766,750 3.0
Worldcom, Inc........................ 2,690,000 2.9
Firstar Corp......................... 2,687,700 2.9
Microsoft Corp....................... 2,600,000 2.8
Schering-Plough Corp................. 2,522,813 2.7
----------- ----
$28,851,819 31.0%
=========== ====
Investment Results For the Periods Ended October 31, 1997
Average Annual Total Return
----------------------------
Winthrop
Growth Fund
----------------
Without With
Load Load S&P 500
-------- ----- --------
Class A:
1 year ..................... 26.48% 20.47% 32.12%
5 years .................... 15.26 14.14 19.87
10 years ................... 12.82 12.27 17.17
Class B:
1 year ..................... 25.66 21.66 32.12
From inception 2/96 ........ 18.91 17.32 25.71
[Performance Graph]
WINTHROP GROWTH FUND-CL. A
"Without Load" "With Load" "S&P"
"10/87" 10,000 9,525 10,000
"10/88" 11,172 10,642 11,480
"10/98" 13,599 12,953 14,510
"10/90" 12,096 11,522 13,424
"10/91" 15,690 14,944 17,923
"10/92" 16,421 15,641 19,706
"10/93" 18,778 17,887 22,650
"10/94" 19,558 18,629 23,524
"10/95" 21,946 20,903 29,742
"10/96" 26,405 25,151 36,913
"10/97" 33,397 31,811 48,769
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT
The performance data quoted represents past performance, which is no indication
of future performance. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. No adjustment has been made for any income taxes payable by
shareholders on dividends or capital gains, but the returns calculated above
have been computed after deduction of all fund expenses including advisory fees.
Class A returns shown above are computed with and without the imposition of the
maximum 4.75% front-end sales load. Effective February 28, 1996, the Fund began
offering Class B shares which, instead of a front-end sales load, are subject to
a contingent deferred sales charge (CDSC) ranging from 4% during the first year
to 0% after 4 years. Accordingly, returns on Class B shares will differ from
those of Class A shares and are referenced in the table above with and without
the imposition of the maximum 4% CDSC.
The S&P 500 Composite Stock Price Index is a widely accepted, unmanaged index of
overall stock market performance, which does not take into account charges, fees
and other expenses.
2
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Growth and Income Fund
Portfolio Changes for the Six Months Ended October 31, 1997
<TABLE>
<S> <C>
Major Purchases Major Sales
Comcast Corp. - Special Cl. A(1) Allmerica Property & Casualty Cos., Inc.(2)
Edison International(1) Columbia/HCA Healthcare Corp.(2)
First Data Corp.(1) Electronic Data Systems Corp.(2)
IBP, Inc.(1) First Bank Systems, Inc(2)
Martin Marietta Materials, Inc.(1) General Instruments Corp.(2)
Sysco Corp.(1) Hasbro, Inc.(2)
U.S. Bancorp(1) Heinz (H.J.) Co.(2)
Union Texas Petroleum Holdings, Inc.(1) RJR Nabisco Holdings Corp. Cv. Pfd.(2)
(1) New Holdings (2) Deletions
</TABLE>
Ten Largest Holdings October 31, 1997
Percent
Value of Fund
------------- -------
U.S. Bancorp.......................... $ 5,646,910 3.4%
Federal Home Loan Mortgage Corp....... 5,302,500 3.2
American International Group, Inc..... 4,500,956 2.7
Raytheon Co........................... 4,388,825 2.7
Loews Corp............................ 3,909,062 2.4
Amoco Corp............................ 3,667,500 2.2
Sysco Corp............................ 3,640,000 2.2
Burlington Northern Santa Fe.......... 3,562,500 2.2
United Technologies Corp.............. 3,430,000 2.1
Tyco International Ltd................ 3,367,300 2.0
------------- -----
$41,415,553 25.1%
============= =====
Investment Results For the Periods Ended October 31, 1997
Average Annual Total Return
----------------------------
Winthrop
Growth and
Income Fund
-----------------
Without With
Load Load S&P 500
-------- ----- --------
Class A:
1 year ................... 30.53% 24.33% 32.12%
5 years .................. 17.84 16.70 19.87
10 years ................. 14.71 14.15 17.17
Class B:
1 year ................... 29.59 25.59 32.12
From inception 2/96 ...... 21.98 20.41 25.71
[Performance Graph]
WINTHROP GROWTH AND INCOME FUND-CL. A
"Without Load" "With Load" "S&P"
"10/87" 10,000 9,525 10,000
"10/88" 11,393 10,852 11,480
"10/98" 13,843 13,191 14,510
"10/90" 12,770 12,164 13,424
"10/91" 16,199 15,429 17,923
"10/92" 17,356 16,532 19,706
"10/93" 20,295 19,331 22,650
"10/94" 21,225 20,217 23,524
"10/95" 24,643 23,473 29,742
"10/96" 30,211 28,776 36,913
"10/97" 39,434 37,561 48,769
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT
The performance data quoted represents past performance, which is no indication
of future performance. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. No adjustment has been made for any income taxes payable by
shareholders on dividends or capital gains, but the returns calculated above
have been computed after deduction of all fund expenses including advisory fees.
Class A returns shown above are computed with and without the imposition of the
maximum 4.75% front-end sales load. Effective February 28, 1996, the Fund began
offering Class B shares which, instead of a front-end sales load, are subject to
a contingent deferred sales charge (CDSC) ranging from 4% during the first year
to 0% after 4 years. Accordingly, returns on Class B shares will differ from
those of Class A shares and are referenced in the table above with and without
the imposition of the maximum 4% CDSC.
The S&P 500 Composite Stock Price Index is a widely accepted, unmanaged index of
overall stock market performance, which does not take into account charges, fees
and other expenses.
3
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Small Company Value Fund
Portfolio Changes for the Six Months Ended October 31, 1997
Major Purchases Major Sales
ATL Ultrasound, Inc.(1) Core Industries, Inc.(2)
Bard (C.R.), Inc.(1) DH Technology, Inc.(2)
Cambrex Corp.(1) Fort Howard Corp.(2)
Dallas Semiconductor Corp.(1) Furon Co.(2)
Hadco Corp.(1) Glenayre Technologies, Inc.(2)
HSB Group, Inc.(1) Helig-Meyers Co.(2)
National Fuel Gas Co.(1) Nellcor Puritan Bennett(2)
Wausau Paper Mills Co.(1) Stanhome, Inc.(2)
VeriFone, Inc.(2)
Wyle Electronics(2)
(1) New Holdings (2) Deletions
Ten Largest Holdings October 31, 1997
Percent
Value of Fund
------------- -------
Carlisle Companies, Inc. .................. $ 6,578,325 2.2%
First American Corp. of Tennessee ......... 6,422,000 2.1
Teleflex, Inc. ............................ 6,369,750 2.1
Applied Power, Inc. Cl. A ................. 5,673,937 1.9
FirstMerit Corp. .......................... 5,610,000 1.9
Hanna (M.A.) Co. .......................... 5,497,625 1.8
First Commerce Corp. ...................... 5,146,425 1.7
Werner Enterprises, Inc. .................. 4,777,250 1.6
Methode Electronics, Inc. Cl. A ........... 4,772,588 1.6
AptarGroup, Inc. .......................... 4,631,231 1.5
----------- ----
$55,479,131 18.4%
=========== ====
Investment Results For the Periods Ended October 31, 1997
Average Annual Total Return
----------------------------
Winthrop
Small Company
Value Fund
-----------------
Without With Russell
Load Load 2000
-------- ----- --------
Class A:
1 year .............. 32.48% 26.19% 29.33%
5 years ............. 17.06 15.92 18.69
10 years ............ 17.30 16.73 15.89
Class B:
1 year .............. 31.55 27.55 29.33
From inception 2/96 . 21.44 19.86 20.56
[Performance Graph]
WINTHROP SMALL COMPANY VALUE FUND-CL. A
"Without Load" "With Load" "Russell"
"10/87" 10,000 9,525 10,000
"10/88" 13,065 12,444 12,713
"10/98" 15,169 14,449 14,691
"10/90" 12,272 11,690 10,681
"10/91" 18,600 17,717 16,938
"10/92" 22,442 21,376 18,546
"10/93" 28,129 26,792 24,554
"10/94" 29,443 28,045 24,478
"10/95" 32,712 31,158 28,965
"10/96" 37,227 35,459 33,776
"10/97" 49,319 46,977 43,683
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT
The performance data quoted represents past performance, which is no indication
of future performance. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. No adjustment has been made for any income taxes payable by
shareholders on dividends or capital gains, but the returns calculated above
have been computed after deduction of all fund expenses including advisory fees.
Class A returns shown above are computed with and without the imposition of the
maximum 4.75% front-end sales load. Effective February 28, 1996, the Fund began
offering Class B shares which, instead of a front-end sales load, are subject to
a contingent deferred sales charge (CDSC) ranging from 4% during the first year
to 0% after 4 years. Accordingly, returns on Class B shares will differ from
those of Class A shares and are referenced in the table above with and without
the imposition of the maximum 4% CDSC.
The Russell 2000 Index is an unmanaged index and is composed of the 2,000
smallest companies in the Russell 3000 Index. The Russell 3000 Index is composed
of 3,000 of the largest U.S. companies by market capitalization. The Index does
not take into account charges, fees and other expenses.
4
<PAGE>
FOCUS FUND HIGHLIGHTS
Winthrop Fixed Income Fund
Portfolio Changes for the Six Months Ended October 31, 1997
Major Purchases Major Sales
Ford Capital BV(1) Duke Power Co.(2)
9.375%, 01/01/98 6.375%, 03/01/08
Oklahoma Gas & Electric(1) Student Loan Marketing Assn.(2)
6.500%, 07/15/17 Ser. 1997-1, 5.730%, 10/25/05
United States Treasury Bonds(1) United States Treasury Notes(2)
9.375%, 02/15/06 6.125%, 05/15/98
United States Treasury Notes(1) United States Treasury Notes(2)
8.000%, 05/15/01 8.250%, 07/15/98
United States Treasury Notes(1) United States Treasury Notes(2)
6.250%, 02/28/02 6.500%, 05/31/01
(1) New Holdings (2) Deletions
Portfolio Characteristics October 31, 1997*
30 Day Yield, Class A: 5.21% Average Years to Maturity: 7.1 years
30 Day Yield, Class B: 4.79% Average Coupon: 7.55%+
Average Rating: AA Average Duration: 4.4 years
* Weighted Averages
+ Exclusive of U.S. Treasury Bills and Commercial Paper
Investment Results For the Periods Ended October 31, 1997
Average Annual Total Return
------------------------------
Winthrop Fixed Lehman Bros.
Income Fund Gov't Corp.
---------------
Without With Intermediate
Load Load Bond Index
-------- ----- -------------
Class A:
1 year .............. 6.84% 1.77% 7.49%
5 years ............. 5.98 4.96 6.65
10 years ............ 8.37 7.84 8.41
Class B:
1 year .............. 6.10 2.10 7.49
From inception 2/96 . 4.97 3.23 6.71
[Performance Graph]
WINTHROP FIXED INCOME FUND-CL. A
"Lehman Bros. Gov't/Corp
"Without Load" "With Load" Intermediate Index"
"10/87" 10,000 9,525 10,000
"10/88" 11,127 10,598 10,932
"10/98" 12,397 11,808 12,084
"10/90" 13,282 12,651 12,977
"10/91" 15,130 14,412 14,767
"10/92" 16,700 15,907 16,244
"10/93" 18,668 17,782 17,857
"10/94" 17,851 17,003 17,513
"10/95" 20,034 19,084 19,706
"10/96" 20,903 19,912 20,853
"10/97" 22,333 21,275 22,414
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT
The performance data quoted represents past performance, which is no indication
of future performance. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. No adjustment has been made for any income taxes payable by
shareholders on dividends or capital gains. Class A returns shown above are
computed with and without the imposition of the maximum 4.75% front-end sales
load. Effective February 28, 1996, the Fund began offering Class B shares which,
instead of a front-end sales load, are subject to a contingent deferred sales
charge (CDSC) ranging from 4% during the first year to 0% after 4 years.
Accordingly, returns on Class B shares will differ from those of Class A shares
and are referenced in the table above with and without the imposition of the
maximum 4% CDSC.
The Lehman Brothers Government/Corporate Intermediate Bond Index is comprised of
securities in the Lehman Brothers Government/Corporate Bond Index that have
maturities of 5 - 10 years. The Lehman Brothers Government/Corporate Bond Index
includes the Lehman Brothers Government Bond Index and the Lehman Brothers
Corporate Bond Index. The Government Bond Index is made up of the Treasury Bond
Index (all public obligations of the U.S. Treasury, excluding flower bonds and
foreign-targeted issues) and the Agency Bond Index (all publicly issued debt of
U.S. Government agencies and quasi-federal corporations, and corporate debt
guaranteed by the U.S. Government). The Corporate Bond Index includes all
publicly issued, fixed rate, nonconvertible investment grade,
dollar-denominated, SEC-registered corporate debt. The Corporate Index sectors
are industrial, finance, utility, and Yankee.
5
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Municipal Trust Fund
Portfolio Changes for the Six Months Ended October 31, 1997
<TABLE>
<S> <C>
Major Purchases Major Sales
Chandler, Arizona Street & Highway(1) California Department of Water Systems (2)
Revenue 6.900%, 07/01/14 6.000%, 12/01/07
Maryland State & Local Facilities(1) Louisiana Public Facility Auth. Revenue(2)
5.000%, 08/01/08 Student Loan Ser. A 6.750%, 09/01/06
Phoenix, Arizona Civic Improvement(1) Missouri State Environment Improvement
Corp. 6.125%, 07/01/14 & Energy Resource Authority Pollution(2)
Port Authority of Houston, Texas(1) Control Revenue 5.800%, 09/01/09
5.375%, 10/01/05 Philadelphia, Pennsylvania Authority for(2)
Puerto Rico Electric Power Authority(1) Industrial Dev. 6.000%, 02/15/07
Revenue 6.000%, 07/01/11 University of Medicine &
Dentistry New Jersey(2)
Ser. E. 6.400%, 12/01/07
(1) New Holdings (2) Deletions
Portfolio Characteristics October 31, 1997*
30 Day Yield, Class A: 3.56% Average Years to Maturity: 8.1 years
30 Day Yield, Class B: 3.04% Average Coupon: 5.92%
Average Rating: AA Average Duration: 6.3 years
</TABLE>
* Weighted Averages
Investment Results For the Periods Ended October 31, 1997
Average Annual Total Return
------------------------------
Winthrop
Municipal Lipper
Trust Fund Intermediate
---------------
Without With Municipal
Load Load Fund Index
-------- ----- -------------
Class A:
1 year .............. 7.37% 2.27% 6.56%
From inception 7/93 . 4.80 3.61 5.18
Class B:
1 year .............. 6.62 2.62 6.56
From inception 2/96 . 4.77 3.03 5.00
[Performance Graph]
WINTHROP MUNICIPAL TRUST FUND-CL.A
"Lehman Bros. Intermediate
"Without Load" "With Load" Municipal Fund Index"
"7/93" 10,000 9,525 10,000
"10/93" 10,183 9,699 10,309
"10/94" 9,952 9,479 10,060
"10/95" 10,953 10,433 11,160
"10/96" 11,373 10,832 11,639
"10/97" 12,211 11,631 12,403
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT
The performance data quoted represents past performance, which is no indication
of future performance. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. No adjustment has been made for any income taxes payable by
shareholders on dividends or capital gains. Class A returns shown above are
computed with and without the imposition of the maximum 4.75% front-end sales
load. Effective February 28, 1996, the Fund began offering Class B shares which,
instead of a front-end sales load, are subject to a contingent deferred sales
charge (CDSC) ranging from 4% during the first year to 0% after 4 years.
Accordingly, returns on Class B shares will differ from those of Class A shares
and are referenced in the table above with and without the imposition of the
maximum 4% CDSC.
The Lipper Intermediate Municipal Fund Index is an equally weighted performance
index of the 29 largest funds in the Lipper Analytical grouping of intermediate
municipal debt funds, adjusted for capital gains and income dividends.
6
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997
- --------------------------------------------------------------------------------
Winthrop Growth Fund
COMMON STOCKS--96.7%
BASIC MATERIALS--4.8%
Shares Value
---------- ----------
Chemicals-3.1%
Morton International, Inc. ............... 32,000 $1,056,000
Specialty chemicals, salt, airbags
Praxair, Inc. ............................ 41,400 1,803,487
----------
Industrial gases/special coatings
2,859,487
---------
Metals & Mining-0.7%
Steel Dynamics, Inc.* .................... 29,000 616,250
---------
Manufacturer of steel
Paper-1.0%
Mead Corp. ............................... 16,000 968,000
---------
Manufacturer of paper, lumber &
wood products
4,443,737
---------
CAPITAL GOODS--9.3%
Aerospace & Defense-3.1%
General Dynamics Corp. ................... 18,500 1,501,969
Builds & designs nuclear submarines
Raytheon Co. ............................. 26,000 1,410,500
---------
Defense & commercial electronics:
construction
2,912,469
---------
Building & Construction-2.2%
Tyco International Ltd. .................. 54,000 2,038,500
---------
Fire protection systems: cable: solar
Electrical Equipment-1.2%
Emerson Electric Co. ..................... 20,400 1,069,725
---------
Manufacturer of electric/electronic
products
Environmental Control-0.4%
United Waste Systems, Inc.* .............. 10,105 373,885
---------
Nonhazardous solid waste management
Machinery-2.4%
Deere & Co. .............................. 42,900 2,257,613
---------
Largest manufacturer of farm
equipment: construction machinery
8,652,192
---------
CONSUMER CYCLICAL--9.0%
Auto Related-1.8%
Federal-Mogul Corp.* ..................... 20,000 846,250
Manufacturer of bearings: transmission
products
Lear Seating Corp.* ...................... 17,000 817,063
-----------
Automobile and light truck seating
systems
1,663,313
-----------
Leisure Related-2.8%
Disney (Walt) Co. ........................ 25,300 2,080,925
Diversified international entertainment
company
Hasbro, Inc. ............................. 18,500 536,500
-----------
Manufacturer of toys & games
2,617,425
-----------
Printing & Publishing-1.0%
Hollinger International, Inc. ............ 70,000 $ 914,375
---------
Newspaper publishing
Retail-General-3.4%
CVS Corp. ................................ 24,600 1,508,287
Retail: health stores, drugs
Sears Roebuck & Co. ...................... 41,000 1,716,875
---------
Large retailer of general merchandise
3,225,162
---------
8,420,275
---------
CONSUMER STAPLES--25.6%
Beverage & Tobacco-4.2%
Anheuser-Busch Cos., Inc. ................ 11,000 439,312
Largest U.S. brewer: baking
PepsiCo, Inc. ............................ 55,000 2,024,688
Provides soft drinks/food services
Philip Morris Cos., Inc. ................. 37,500 1,485,938
---------
Tobacco, brewing, soft drinks
3,949,938
---------
Drugs-7.3%
American Home Products Corp. ............. 20,000 1,482,500
Drugs, food, household/ware
Merck & Co., Inc. ........................ 31,000 2,766,750
Human & animal pharmaceuticals
Schering-Plough Corp. .................... 45,000 2,522,813
----------
Pharmaceutical/consumer products
6,772,063
----------
Hospital Supplies & Services-3.2%
Baxter International, Inc.* .............. 26,000 1,202,500
Manufacturer & distributor hospital/lab
products
Becton Dickinson & Co.* .................. 24,000 1,105,500
Healthcare products
Columbia/HCA Healthcare Corp. ............ 25,000 706,250
----------
Healthcare facilities/services
3,014,250
----------
Retail-Food-6.8%
CPC International, Inc.* ................. 17,000 1,683,000
International food processor
Safeway, Inc.* ........................... 12,000 697,500
Food supermarket chain
Sara Lee Corp ............................ 47,000 2,402,875
Processed foods: consumer products
Sysco Corp.* ............................. 40,000 1,600,000
-----------
Food distributor & service systems
6,383,375
-----------
Soaps & Toiletries-4.1%
Colgate-Palmolive Co. .................... 10,200 660,450
Household and personal care
Procter & Gamble Co. ..................... 46,600 3,168,800
-----------
Household, personal care, food
products
3,829,250
-----------
23,948,876
-----------
See notes to financial statements.
7
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997 (continued)
- ---------------------------------------------------------------------------
Winthrop Growth Fund
ENERGY--8.9%
Shares Value
------------- ---------
Oil-Domestic-4.2%
Burlington Resources, Inc. ............... 25,000 $ 1,223,437
Oil & gas exploration, development
Texaco, Inc. ............................. 30,000 1,708,125
Explore, produce, transport, refine
and market crude oil, natural gas,
etc
Western Atlas, Inc.* ..................... 11,000 948,062
----------
Oilfield information service/automation
systems
3,879,624
----------
Oil-International-4.7%
Exxon Corp. .............................. 50,000 3,071,875
World's leading oil company
Unocal Corp. ............................. 32,000 1,320,000
----------
Oil & gas exploration, development
4,391,875
----------
8,271,499
FINANCIAL--19.3%
Banking-10.3%
BankAmerica Corp. ........................ 47,200 3,374,800
Diverse financial products & services
Firstar Corp.* ........................... 74,400 2,687,700
Commercial banking: WI, IL, MN, AZ
U.S. Bancorp.* ........................... 18,000 1,830,375
Commercial banking: midwest
& northwest U.S. .......................
Wells Fargo & Co. ........................ 5,900 1,719,113
----------
Commercial banking: CA
9,611,988
----------
Financial Services-4.9%
Federal Home Loan Mortgage Corp. ......... 80,800 3,060,300
Provides residential mortgage funds
Franklin Resources, Inc.* ................ 16,500 1,482,938
----------
Mutual fund investment advisor
& servicing
4,543,238
----------
Insurance-4.1%
American International Group, Inc. ....... 28,500 2,908,781
International insurance holding
company
PennCorp Financial Group ................. 30,000 976,875
----------
Accident, health, life insurance
3,885,656
----------
18,040,882
----------
TECHNOLOGY--18.4%
Electronics-3.0%
First Data Corp. ......................... 25,000 726,562
Information processing & related
services
Intel Corp. .............................. 18,000 1,386,000
Semiconductor memory circuits
Molex, Inc. .............................. 17,500 656,250
----------
Terminals, connectors, switches
2,768,812
----------
Office Equipment/Service-9.8%
Cisco Systems, Inc.* ..................... 18,000 $ 1,476,561
Manufacturer of computer network
products
Hewlett-Packard Co. ...................... 31,000 1,912,313
Electronic measurement, analysis &
computation instruments
Microsoft Corp. .......................... 20,000 2,600,000
Software for microcomputers
Peoplesoft, Inc.* ........................ 15,000 943,125
Manufacturer human resource
management software
Pitney Bowes, Inc. ....................... 28,000 2,220,750
-----------
Postage and related mailing equipment
9,152,749
-----------
Telecommunications-5.6%
Bellsouth Corp. .......................... 31,400 1,485,612
Telephone service: south/south central
U.S
Northern Telecom Ltd. .................... 11,500 1,031,406
Telecommunications equipment
WorldCom, Inc.* .......................... 80,000 2,690,000
-----------
Long distance telephone services
5,207,018
-----------
17,128,579
TRANSPORT & SERVICE--1.4%
Airlines-0.5%
AMR Corp.* ............................... 4,000 465,750
-----------
Holding co.: American Airlines
Railroads-0.9%
Burlington Northern Santa Fe ............. 9,000 855,000
-----------
Railroad systems operations in U.S. ....
1,320,750
-----------
Total Common Stocks
(cost $62,379,392) ..................... 90,226,790
-----------
Principal
Amount
------------
COMMERCIAL PAPER--4.0%
Ford Motor Credit Corp.
5.56%, 11/04/97 ........................ $ 260,000 259,880
5.58%, 11/07/97 ........................ 680,000 679,368
General Electric Capital Corp.
5.49%, 11/03/97 ........................ 2,120,000 2,119,353
5.56%, 11/05/97 ........................ 670,000 669,586
------------
Total Commercial Paper
(amortized cost $3,728,187)............. 3,728,187
------------
TOTAL INVESTMENTS--100.7%
(cost $66,107,579) ..................... 93,954,977
------------
Cash and Other Assets
Net of Liabilities--(0.7)% ............. (650,606)
------------
NET ASSETS--100.0% ....................... $ 93,304,371
============
* Non-income producing
See notes to financial statements.
8
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997
- --------------------------------------------------------------------------------
Winthrop Growth and Income Fund
COMMON STOCKS--92.1%
BASIC MATERIALS--7.4%
Shares Value
------------ -----------
Chemicals-2.4%
DuPont (E.I.) de Nemours & Co. ........... 39,600 $ 2,252,250
Large chemical co.: oil & gas
Hercules, Inc. ........................... 38,600 1,770,775
-----------
Special chemicals/food products
4,023,025
-----------
Oil & Gas-5.0%
Amoco Corp. .............................. 40,000 3,667,500
Integrated domestic oil
Enron Corp. .............................. 64,100 2,435,800
Major natural gas pipeline system
San Juan Basin Royalty Trust ............. 185,000 1,838,437
Royalty gas interest in New Mexico
Union Texas Petroleum Holdings, Inc. * ... 15,000 341,250
-----------
Oil & gas exploration & production
8,282,987
-----------
12,306,012
CAPITAL GOODS/
CONSTRUCTION--6.6%
Aerospace & Defense-6.2%
General Dynamics Corp. ................... 30,600 2,484,338
Builds & designs nuclear submarines
Raytheon Co. ............................. 80,900 4,388,825
Defense & commercial electronics:
construction
United Technologies Corp. ................ 49,000 3,430,000
-----------
Aerospace, climate control systems
10,303,163
-----------
Building & Construction-0.4%
Martin Marietta Materials, Inc. * ........ 10,000 348,750
Aggregates/building materials
RPM, Inc. Ohio ........................... 15,000 281,250
-----------
Protective coatings
630,000
-----------
10,933,163
CONSUMER PRODUCTS
& SERVICES--27.8%
Beverages & Tobacco-5.2%
Guinness PLC ADRs ........................ 24,100 1,079,034
Distiller, brewer and distributor of
distilled spirits and malt beverages
Philip Morris Cos., Inc. ................. 80,000 3,170,000
Tobacco, brewing, soft drinks
RJR Nabisco Holdings Corp. ............... 90,000 2,851,875
Manufactures tobacco and food
products
UST, Inc. ................................ 50,000 1,496,875
-----------
Snuff, tobacco, wine, spirits
8,597,784
-----------
Containers-1.0%
Bemis Co. ................................ 44,000 1,677,500
-----------
Packaging/adhesive products
Drugs-3.7%
Pfizer, Inc. ............................. 26,900 $ 1,903,175
Healthcare consumer products,
specialty chemicals
Pharmacia & Upjohn, Inc. ................. 48,900 1,552,575
International pharmaceutical &
biotechnological group of companies
Schering-Plough Corp. .................... 48,200 2,702,213
-----------
Pharmaceutical/consumer products
6,157,963
-----------
Foods-2.6%
IBP, Inc. * .............................. 30,000 695,625
Produces beef/pork products
Sysco Corp. * ............................ 91,000 3,640,000
-----------
Food distributor & service systems
4,335,625
-----------
Hospital Supplies & Services-2.0%
Abbott Laboratories ...................... 44,500 2,728,406
Diversified line of human healthcare
products & services
Sun Healthcare Group, Inc. ............... 25,000 496,875
-----------
Operates long-term care facilities
3,225,281
-----------
Household Furniture-1.1%
Leggett & Platt, Inc. .................... 44,000 1,837,000
-----------
Manufacture springs, etc. for furniture,
bedding
Leisure-2.7%
Cedar Fair L.P. .......................... 55,700 2,725,819
Owns and operates amusement parks
Disney (Walt) Co. ........................ 20,739 1,705,783
-----------
Diversified international
entertainment company
4,431,602
-----------
Printing & Publishing-1.3%
New York Times Co. Cl. A ................. 40,000 2,190,000
-----------
Publishes newspapers & magazines
Retail-Food & Drugs-1.9%
Walgreen Co. ............................. 109,600 3,082,500
-----------
Major retail drug chain
Retail-General-3.2%
Federated Department Stores, Inc. ........ 54,000 2,376,000
Operates department stores in U.S
Newell Co. ............................... 77,500 2,974,062
-----------
Manufacturer of high volume staple
consumer products
5,350,062
-----------
Soaps & Toiletries-3.1%
Gillette Co. ............................. 26,800 2,386,875
Shaving, personal care products
Procter & Gamble Co. ..................... 40,400 2,747,200
-----------
Household, personal care, food
products
5,134,075
-----------
46,019,392
-----------
See notes to financial statements.
9
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997 (continued)
- --------------------------------------------------------------------------------
Winthrop Growth and Income Fund
ENERGY--4.6%
Shares Value
--------------- ----------
Oil-Supplies & Construction-4.6%
Halliburton Co. .......................... 36,000 $2,146,500
Oil well services: engineering &
construction
Union Pacific Resources Group ............ 101,500 2,499,438
Oil & gas exploration, development,
production
Western Atlas, Inc. * .................... 34,000 2,930,375
----------
Oilfield information service/
automation systems
7,576,313
----------
FINANCIAL SERVICES--22.6%
Banking-10.0%
BankAmerica Corp. ........................ 43,600 3,117,400
Diverse financial products & services
Household International, Inc. ............ 5,000 566,250
Finance & banking services
Mellon Bank Corp. ........................ 30,000 1,546,875
Commercial banking: PA
Republic New York Corp. .................. 26,100 2,761,706
Commercial banking: NY &
worldwide
U.S. Bancorp * ........................... 55,532 5,646,910
Commercial banking: OR & WA
Wells Fargo & Co. ........................ 10,000 2,913,750
----------
Commercial banking: CA
16,552,891
----------
Insurance-8.1%
Allmerica Financial Corp. ................ 38,136 1,787,625
Insurance and financial services &
products
American International Group, Inc. ....... 44,100 4,500,956
International insurance holding
company
Amerin Corp.* ............................ 40,000 915,000
Mortgage insurance
Financial Security Assurance Holding ..... 30,000 1,305,000
Insure asset-backed securities
HSB Group, Inc. .......................... 20,000 1,043,750
Insurance/engineering services
Hartford Financial Services Group ........ 26,900 2,178,900
Insurance provider
Progressive Corp. ........................ 16,100 1,678,425
----------
Insurance holding company
13,409,656
----------
Other-4.5%
Block (H&R), Inc. ........................ 55,000 2,035,000
Tax, computer & personal services
Federal Home Loan Mortgage Corp. ......... 140,000 5,302,500
----------
Provides residential mortgage funds
7,337,500
----------
37,300,047
----------
PUBLIC UTILITIES--3.4%
Electric-1.2%
Edison International * ................... 20,000 $ 512,500
Holding co.: Southern CA Edison
CIPSCO, Inc. ............................. 37,000 1,419,875
-----------
Holding co.: Central IL Public Service
1,932,375
-----------
Gas-1.0%
Consolidated Natural Gas Co. ............. 15,000 810,938
Integrated natural gas systems
New Jersey Resources Corp. ............... 28,000 906,500
-----------
Supplies gas in New Jersey
1,717,438
-----------
Telephone-1.2%
GTE Corp. ................................ 45,000 1,909,687
-----------
Telephone holding company;
manufacturing
5,559,500
-----------
SCIENCE & TECHNOLOGY--10.2%
Computers-5.9%
Automatic Data Processing ................ 64,600 3,302,675
Computer services
Cisco Systems, Inc. * .................... 20,000 1,640,624
Manufacture computer network
products
Cognizant Corp. .......................... 77,400 3,033,112
Medical/technical industrial
informational systems
First Data Corp.* ........................ 60,000 1,743,750
-----------
Information processing & related
services
9,720,161
-----------
Electronics-1.6%
Arrow Electronics, Inc.* ................. 47,000 1,333,625
Distributes electronic components
Motorola, Inc. ........................... 22,300 1,377,025
-----------
Semiconductors: communications
equipment
2,710,650
-----------
Telecommunications-2.7%
Comcast Corp. - Special Cl. A* ........... 62,450 1,717,375
Cable TV/sound communications
systems
Cox Communications, Inc. Cl. A* .......... 20,000 615,000
Cable TV/communications services
NTL, Inc.* ............................... 37,333 1,012,658
Telecommunications services
Vodafone Group ADRs ...................... 20,326 1,115,389
-----------
British cellular operator
4,460,422
-----------
16,891,233
----------
See notes to financial statements.
10
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997 (continued)
- ---------------------------------------------------------------------------
Winthrop Growth and Income Fund
TRANSPORT &
SERVICE--3.5%
Shares Value
-------------- -----------
Professional Service-1.3%
United Healthcare Corp. .................. 46,000 $ 2,130,375
-----------
Manages health maintenance
services
Railroads-2.2%
Burlington Northern Santa Fe ............. 37,500 3,562,500
-----------
Railroad systems operations in U.S. ....
5,692,875
-----------
MISCELLANEOUS--6.0%
Diversified-4.4%
Loews Corp. .............................. 35,000 $ 3,909,062
Tobacco; hotel; insurance subsidiary
Tyco International Ltd. .................. 89,200 3,367,300
-----------
Fire protection systems: cable, solar
7,276,362
-----------
Limited Partnership-Timber-1.0%
Plum Creek Timber Co. L.P. ............... 55,000 1,691,250
-----------
Lumber and wood products
Real Estate Investment Trust-0.6%
General Growth Properties, Inc. .......... 30,000 1,035,000
-----------
Real estate investment trust
10,002,612
-----------
Total Common Stocks
(cost $98,957,910) ..................... 152,281,147
-----------
CONVERTIBLE
PREFERRED STOCK--0.9%
(cost $1,108,393)
Airtouch Communications, Inc. Cl. B
Cv. Pfd. 6.000% ........................ 40,728 1,422,935
-----------
Wireless communications services
U.S. GOVERNMENT Principal
AGENCIES--0.6% Amount Value
(cost $977,396) ------------- -----------
Federal National Mortgage Assn ..
7.400%, 07/01/04 ....................... $ 1,000,000 $ 1,074,130
------------
U.S. GOVERNMENT
OBLIGATIONS--4.5%
United States Treasury Strips
0.000%, 05/15/11 ....................... 1,425,000 624,478
0.000%, 11/15/11 ....................... 3,000,000 1,271,730
0.000%, 02/15/12 ....................... 3,100,000 1,292,389
0.000%, 11/15/14 ....................... 4,000,000 1,392,880
0.000%, 11/15/18 ....................... 10,294,000 2,775,365
-----------
Total U.S. Government Obligations
(cost $6,593,140) ...................... 7,356,842
-----------
COMMERCIAL PAPER--1.6%
Ford Motor Credit Corp.
5.550%, 11/06/97 ....................... 2,550,000 2,548,034
5.580%, 11/07/97 ....................... 120,000 119,889
-----------
Total Commercial Paper
(amortized cost $2,667,923) ............ 2,667,923
-----------
TOTAL INVESTMENTS--99.7%
(cost $110,304,761) .................... 164,802,977
-----------
Cash and Other Assets
Net of Liabilities-0.3% ................ 447,484
-----------
NET ASSETS--100.0% ....................... $165,250,461
============
* Non-income producing
See notes to financial statements.
11
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997
- --------------------------------------------------------------------------------
Winthrop Small Company Value Fund
COMMON STOCKS--92.2%
BASIC MATERIALS--4.5%
Shares Value
-------------- -----------
Chemicals-3.3%
Cambrex Corp.* ........................... 11,100 $ 532,106
Producer of specialty chemicals
Hanna (M.A.) Co. ......................... 213,500 5,497,625
Specialty chemicals, polymers
LeaRonal, Inc. ........................... 158,400 3,880,800
-----------
Electroplating process
9,910,531
-----------
Paper-1.2%
Caraustar Industries, Inc. ............... 59,400 2,041,875
Manufactures low-cost recycled
paperboard
Wausau Paper Mills Co.* .................. 85,000 1,715,938
-----------
Printing & writing specialty paper
3,757,813
-----------
13,668,344
----------
CAPITAL GOODS/
CONSTRUCTION--19.5%
Aerospace-2.1%
Teleflex, Inc. ........................... 171,000 6,369,750
-----------
Aerospace controls; medical products
Building & Construction-10.2%
Applied Industrial Technology, Inc. ...... 116,475 3,385,055
Independent distributor of industrial
parts & products
Applied Power, Inc. Cl. A ................ 91,700 5,673,937
Manufactures hydraulic
industrial/construction equipment
materials
Carlisle Companies, Inc. ................. 152,100 6,578,325
Manufactures rubber, plastic, metal
products
CLARCOR, Inc. ............................ 73,050 2,095,622
Manufactures filtration/consumer
products
Lydall, Inc. ............................. 212,100 4,348,050
Engineered fiber materials
Osmonics, Inc.* .......................... 174,900 2,765,606
Reverse osmosis/ultrafiltration
RPM, Inc., Ohio .......................... 164,750 3,089,063
Protective coatings
Regal Beloit Corp. ....................... 100,000 2,687,500
-----------
Manufactures tools and power
transmissions
30,623,158
-----------
Electrical Equipment-5.8%
AptarGroup, Inc. ......................... 84,300 4,631,231
Manufacturer of packaging
components: pumps, valves
Belden, Inc. ............................. 122,700 4,202,475
Manufacturer of electrical wire,
cable
Dallas Semiconductor Corp.* .............. 57,000 2,785,875
Manufactures high-performance
circuits
Hadco Corp.* ............................. 35,000 1,938,125
Manufactures printed circuits
Woodhead Industries, Inc. ................ 197,800 3,857,100
-----------
Electrical specialty products
17,414,806
-----------
Environmental Control-1.4%
Donaldson, Inc. .......................... 85,900 $ 4,348,687
-----------
Engine air cleaners, mufflers
58,756,401
-----------
CONSUMER CYCLICAL--24.2%
Apparel/Textile-3.2%
Interface, Inc. Cl. A .................... 75,300 2,174,287
Manufacturer of carpet/tile
Unifi, Inc. .............................. 100,500 3,862,969
Texturizing polyester yarns
Unitog Co. ............................... 152,500 3,774,375
-----------
Rent/sell industrial uniforms
9,811,631
-----------
Auto Related-4.9%
Amcast Industrial Corp. .................. 134,700 3,418,012
Technology-intensive metal products
Donnelly Corp. Cl. A ..................... 113,250 2,038,500
Manufactures auto glass products
Modine Manufacturing Co. ................. 106,000 3,610,625
Auto parts: heating, air-conditioning
Myers Industries, Inc. ................... 166,024 2,915,796
Tire service/plastic products
Smith (A.O.) Corp. ....................... 70,000 2,900,625
-----------
Automotive products, electric
motors, piping systems
14,883,558
-----------
Food Service/Lodging-3.6%
Marcus Corp. ............................. 120,650 3,378,200
Hotels, restaurants, theaters
Rare Hospitality International, Inc.* .... 62,300 584,063
Operates franchise restaurants
Sbarro, Inc. ............................. 106,800 2,823,525
Italian fast food restaurant
Universal Foods Corp. .................... 103,400 4,077,837
-----------
Specialty products: yeast, cheese
10,863,625
-----------
Household Furniture/Appliances-3.8%
Chromcraft Revington, Inc.* .............. 110,800 3,490,200
Designs/manufactures furniture
HON Industries, Inc. ..................... 73,500 3,794,438
Manufacturer of office furniture/
home building products
La-Z-Boy, Inc. ........................... 74,900 2,799,388
Manufacturer of reclining chairs
Rival Co. ................................ 82,000 1,271,000
-----------
Small household appliances and
personal care products
11,355,026
-----------
Leisure Related-1.8%
K2, Inc. ................................. 163,200 4,131,000
Snow skis, fish tackle, industrial
products
The Sports Authority, Inc.* .............. 66,000 1,249,875
-----------
Sporting goods superstores
5,380,875
-----------
See notes to financial statements.
12
<PAGE>
Winthrop Focus Funds---Statement of Investments October 31, 1997 (continued)
- ----------------------------------------------------------------------------
Winthrop Small Company Value Fund
Shares Value
-------------- -----------
Printing & Publishing-4.4%
American Business Products, Inc. ......... 111,600 $ 2,238,975
Business forms and supplies
Banta Corp. .............................. 169,250 4,421,656
Printing/graphic/video services
Lee Enterprises, Inc. .................... 131,200 3,485,000
Newspaper publishing: radio, TV
Meredith Corp. ........................... 88,000 2,997,500
-----------
Publishing, broadcasting, real estate
& cable TV
13,143,131
-----------
Retail-General-2.5%
Arbor Drugs, Inc. ........................ 150,225 4,018,519
Operates drugstores in Michigan
Department 56, Inc. ...................... 112,800 3,405,150
-----------
Distributor of collectibles & gifts
7,423,669
-----------
72,861,515
-----------
CONSUMER STAPLES--10.5%
Drugs-2.6%
Bergen Brunswig Corp. Cl. A .............. 81,280 3,256,280
Pharmaceutical suppliers
Scherer (R.P.) Corp.* .................... 42,600 2,508,075
Manufacturer of drug delivery
systems
West Co., Inc. ........................... 64,100 2,155,363
-----------
Pharmaceutical packaging
7,919,718
-----------
Foods-1.2%
Flowers Industries, Inc. ................. 194,325 3,692,175
-----------
Baked, convenience, snack food
Hospital Supplies & Services-5.1%
ATL Ultrasound, Inc. * ................... 30,000 1,290,000
Medical ultrasound systems
Bard (C.R.), Inc.* ....................... 87,000 2,414,250
Hospital, surgical specialties
Beckman Instruments, Inc. ................ 87,600 3,449,250
Manufactures laboratory instruments
Morrison Health Care, Inc. ............... 10,100 167,281
Health care, food/nutrition services
Quorum Health Group, Inc. ................ 142,500 3,455,625
Owns, operates acute care hospitals
Sierra Health Services* .................. 90,600 3,346,537
Healthcare provider
SpaceLabs Medical, Inc.* ................. 59,400 1,314,225
-----------
Manufactures patient monitoring
products
15,437,168
-----------
Retail-Food & Drugs-1.6%
Hannaford Brothers Co. ................... 74,600 2,820,813
Distributor: food/supermarkets
Luby's Cafeterias, Inc. .................. 95,300 1,900,044
-----------
Cafeteria style restaurants
4,720,857
-----------
31,769,918
-----------
ENERGY--4.1%
Oil-Domestic-3.0%
Helmerich & Payne ........................ 48,000 $ 3,873,000
Contract driller: oil & gas production
KN Energy, Inc. .......................... 67,600 2,940,600
Natural gas, mineral resources
MAPCO, Inc. .............................. 62,900 2,075,700
Coal, gas pipeline: crude oil
Wiser Oil Co. ............................ 15,000 255,937
-----------
Exploration and production of oil
and gas in fifteen states
9,145,237
-----------
Oil-Supplies & Construction-1.1%
Tidewater, Inc. .......................... 49,100 3,225,256
-----------
Offshore service vessels
12,370,493
-----------
FINANCIAL--13.6%
Banks-6.8%
First American Corp. of Tennessee ........ 135,200 6,422,000
Commercial banking: TN
First Commerce Corp. ..................... 80,100 5,146,425
Commercial banking: LA, MS
FirstMerit Corp. ......................... 220,000 5,610,000
Commercial banking: OH
First Virginia Banks, Inc. ............... 72,300 3,357,431
-----------
Commercial banking: VA
20,535,856
-----------
Insurance-6.8%
HSB Group, Inc.* ......................... 65,700 3,428,719
Insurance/engineering
NAC Re Corp. ............................. 70,300 3,128,350
Holding co.: reinsurance
Old Republic International Corp. ......... 90,200 3,224,650
Insurance: life, disability, property,
casualty
Poe & Brown, Inc. ........................ 87,700 3,617,625
General insurance agency
Protective Life Corp. .................... 71,100 3,759,413
Financial service provider
ReliaStar Financial Corp. ................ 90,000 3,363,750
-----------
Insurance/financial services
20,522,507
-----------
41,058,363
-----------
PUBLIC UTILITIES--1.9%
Gas-1.9%
National Fuel Gas Co.* ................... 55,000 2,426,875
Natural gas utility holding company
WICOR, Inc. .............................. 77,450 3,340,031
-----------
Utility holding: Wisconsin gas
5,766,906
-----------
See notes to financial statements.
13
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997 (continued)
- --------------------------------------------------------------------------------
Winthrop Small Company Value Fund
TECHNOLOGY--6.1%
Shares Value
-------------- -----------
Electronics-4.2%
Black Box Corp.* ......................... 35,000 $ 1,435,000
Market/provide technical service for
communications/networking
equipment & systems
Input/Output, Inc.* ...................... 23,000 616,688
Manufacturer seismic data acquisition
systems
Mark IV Industries, Inc. ................. 78,250 1,897,563
Power transfer equipment/audio
transfer equipment
Methode Electronics, Inc. Cl. A .......... 241,650 4,772,588
Electronic component devices
MICROS Systems, Inc.* .................... 7,900 355,500
Manufactures point-of-sales computer
systems
Pioneer Standard Electronics, Inc. ....... 219,450 3,593,494
-----------
Distributor: electronic components
12,670,833
-----------
Office Equipment-1.9%
Hunt Manufacturing Corp. ................. 158,500 3,368,125
Manufactures & distributes office
and art products
Miller (Herman), Inc. .................... 46,500 2,272,687
-----------
Manufacturer of office furniture
5,640,812
-----------
18,311,645
-----------
TRANSPORT & SERVICE--4.0%
Professional Services-2.4%
CDI Corp.* ............................... 59,000 2,315,750
Engineering & technical services
Interim Services, Inc.* .................. 80,000 2,095,000
Temporary help services
Jacobs Engineering Group, Inc.* .......... 101,650 2,744,550
-----------
Full service engineering organization
7,155,300
-----------
Trucking & Shipping-1.6%
Werner Enterprises, Inc. ................. 197,000 4,777,250
-----------
Motor carrier: general freight
11,932,550
-----------
MISCELLANEOUS--3.8%
Diversified-2.8%
Brady (W.H.) Cl. A ....................... 107,700 $ 3,446,400
Manufactures adhesives & coatings
Precision Castparts Corp. ................ 30,000 1,764,375
Castings for aircraft engines
Ruddick Corp. ............................ 201,500 3,148,437
-----------
Food supermarkets; thread/yarn
8,359,212
-----------
Real Estate Investment Trust-1.0%
Merry Land & Investment Co., Inc. ........ 142,000 3,097,375
-----------
Acquisition, development &
operation of income producing
properties
11,456,587
-----------
Total Common Stocks
(cost $182,094,621) .................... 277,952,722
-----------
COMMERCIAL PAPER--8.5%
Principal
Amount
-----------
Ford Motor Credit Corp. ..................
5.560%, 11/04/97 ....................... $ 1,300,000 1,299,398
5.550%, 11/06/97 ....................... 5,700,000 5,695,606
5.580%, 11/07/97 ....................... 7,660,000 7,652,876
General Electric Corp. ...................
5.490%, 11/03/97 ....................... 3,100,000 3,099,055
5.560%, 11/05/97 ....................... 3,360,000 3,357,924
5.600%, 11/10/97 ....................... 4,370,000 4,363,882
-----------
Total Commercial Paper
(amortized cost $25,468,741) ........... 25,468,741
-----------
TOTAL INVESTMENTS--100.7%
(cost $207,563,362) .................... 303,421,463
-----------
Cash and Other Assets
Net of Liabilities--(0.7)% ............. (2,025,705)
-----------
NET ASSETS--100.0% ....................... $301,395,758
===========
* Non-income producing
See notes to financial statements.
14
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997
- --------------------------------------------------------------------------------
Winthrop Fixed Income Fund
U.S. GOVERNMENT
OBLIGATIONS--52.1%
Principal
Amount Value
-------------- -----------
United States Treasury Bonds
9.375%, 02/15/06 ....................... $ 2,500,000 $ 3,066,075
7.250%, 05/15/16 ....................... 1,000,000 1,115,880
United States Treasury Notes
7.500%, 10/31/99 ....................... 1,600,000 1,654,784
7.750%, 01/31/00 ....................... 2,000,000 2,085,400
7.750%, 02/15/01 ....................... 2,000,000 2,118,480
8.000%, 05/15/01 ....................... 3,400,000 3,641,366
7.500%, 11/15/01 ....................... 2,500,000 2,653,575
6.250%, 02/28/02 ....................... 2,000,000 2,035,260
7.250%, 08/15/04 ....................... 2,400,000 2,587,008
6.500%, 08/15/05 ....................... 1,000,000 1,036,900
7.000%, 07/15/06 ....................... 7,750,000 8,306,372
-----------
Total U.S. Government Obligations
(cost $29,617,061) 30,301,100
-----------
U.S. GOVERNMENT
AGENCIES--22.8%
Federal Home Loan Mortgage Corp. .........
Pool #90350 7.000%, 07/01/99 .......... 919,525 933,318
Pool #220016 8.750%, 10/01/01 ......... 10,786 11,095
7.360%, 07/01/04 ....................... 1,000,000 1,071,960
6.875%, 11/22/06 ....................... 500,000 510,595
Pool #1650 5.000%, 12/15/12 ........... 312,849 311,790
Pool #260499 10.000%, 04/01/16 ........ 70,110 75,893
Pool #292065 8.500%, 04/01/17 ......... 1,795,342 1,878,377
Pool #606523 7.721%, 10/01/19 ......... 865,646 898,649
Federal National Mortgage Assn. ..........
8.550%, 08/30/99 ....................... 400,000 419,088
Pool #312088 7.000%, 06/01/02 ......... 2,230,533 2,259,809
Pool #76368 9.250%, 09/01/03 .......... 86,722 91,194
Pool #76378 9.250%, 09/01/03 .......... 196,391 206,517
8.250%, 10/12/04 ....................... 600,000 623,022
8.400%, 10/25/04 ....................... 650,000 679,035
6.950%, 11/13/06 ....................... 1,000,000 1,024,170
Pool #270674 9.000%, 09/01/17 ......... 617,251 656,794
Pool #224635 9.000%, 09/01/20 ......... 192,593 204,931
Pool #124211 7.408%, 12/01/21 ......... 1,011,737 1,040,192
Government National Mortgage Assn. .......
Pool #93401 9.500%, 01/15/10 .......... 305,196 328,753
Pool #296254 9.500%, 09/15/20 ......... 12,543 13,581
-----------
Total U.S. Government Agencies
(cost $12,996,046) ..................... 13,238,763
-----------
CORPORATE
BONDS--24.6%
Foreign-2.3%
Santander Financial Issuances
7.250%, 05/30/06 ....................... $ 1,250,000 $ 1,306,250
-----------
Consumer Products & Services-2.7%
Anheuser Busch Cos.
7.000%, 09/01/05 ....................... 1,000,000 1,035,000
Coca-Cola Enterprises
7.000%, 10/01/26 ....................... 500,000 530,625
-----------
1,565,625
-----------
Financial-8.6%
Associates Corp. N.A.
6.875%, 11/15/08 ....................... 1,000,000 1,033,750
Ford Capital BV
9.375%, 01/01/98 ....................... 2,400,000 2,414,640
Sears Credit Account Master Trust
8.100%, 06/15/04 ....................... 1,500,000 1,569,223
-----------
5,017,613
-----------
Industrial-2.8%
DuPont (E.I.) de Nemours & Co. ...........
8.500%, 02/15/03 ....................... 1,500,000 1,601,250
-----------
Public Utilities-6.5%
Oklahoma Gas & Electric
6.500%, 07/15/17 ....................... 3,000,000 3,071,250
Union Oil of California
8.900%, 06/12/98 ....................... 700,000 711,970
-----------
3,783,220
-----------
Technology-1.7%
Xerox Corp. ..............................
6.250%, 11/15/26 ....................... 1,000,000 1,006,250
-----------
Total Corporate Bonds
(cost $13,912,338) ..................... 14,280,208
-----------
COMMERCIAL PAPER--0.3%
(amortized cost $174,890)
Xerox Corp. ..............................
5.650%, 11/05/97 ....................... 175,000 174,890
-----------
TOTAL INVESTMENTS--99.8%
(cost $56,700,335) ..................... 57,994,961
-----------
Cash and Other Assets
Net of Liabilities--0.2% ............... 134,971
-----------
NET ASSETS--100.0% ....................... $58,129,932
===========
See notes to financial statements.
15
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1997
- --------------------------------------------------------------------------------
Winthrop Municipal Trust Fund
MUNICIPAL Principal
BONDS--98.2% Amount Value
------------ -----------
Arizona-6.2%
Chandler, Arizona Street & Highway
Revenue
6.900%, 07/01/14 ....................... $1,000,000 $ 1,152,500
Phoenix, Arizona Civic Improvement Corp.
6.125%, 07/01/14 ....................... 1,000,000 1,102,500
-----------
2,255,000
-----------
California-3.2%
California State
6.500%, 09/01/10 ....................... 1,000,000 1,163,750
-----------
Colorado-6.0%
Denver, Colorado City &
County Airport
6.750%, 11/15/22 (prerefunded*) ........ 420,000 468,825
6.750%, 11/15/22 ....................... 1,580,000 1,706,400
-----------
2,175,225
-----------
Florida-3.0%
Lakeland, Florida Electric & Water Revenue
5.900%, 10/01/08 ....................... 1,000,000 1,101,250
-----------
Illinois-12.7%
Chicago, Illinois O'Hare International
Airport
5.500%, 01/01/08 ....................... 1,000,000 1,053,750
Chicago, Illinois Metropolitan Water
Reclamation District
5.750%, 12/01/01 ........................ 1,000,000 1,058,750
7.000%, 01/01/11 ........................ 1,000,000 1,207,500
Cook County, Illinois Ser. B
5.750%, 11/15/04 ....................... 1,215,000 1,313,719
-----------
4,633,719
-----------
Indiana-3.1%
Indiana University Revenue
Student Fee Ser. K
6.500%, 08/01/05 ....................... 1,000,000 1,125,000
-----------
Iowa-3.0%
Iowa Student Loan Liquidation Corp. ......
6.800%, 03/01/05 ....................... 1,000,000 1,083,750
-----------
Maryland-2.8%
Maryland State & Local Facilities
5.000%, 08/01/08 ....................... 1,000,000 1,030,000
-----------
Massachusetts-5.8%
Massachusetts State
Refunding Ser. B
5.500%, 11/01/07 ....................... 1,000,000 1,066,250
Massachusetts State Water Resources
Ser. B 5.700%, 11/01/02 ............... 1,000,000 1,065,000
-----------
2,131,250
-----------
Mississippi-2.9%
Mississippi State Ser. E
5.300%, 09/01/08 ....................... 1,000,000 1,045,000
-----------
Missouri-2.8%
Missouri State Health & Education
Facility
5.100%, 05/15/09 ....................... 1,000,000 1,016,250
-----------
New York-6.0%
New York City, New York Ser. G
5.750%, 02/01/08 ....................... $1,000,000 $1,050,000
New York State Dormitory Authority
Revenue
6.500%, 05/15/06 ....................... 1,000,000 1,125,000
-----------
2,175,000
-----------
Ohio-2.9%
Ohio State Water Development
Authority Revenue
5.750%, 06/01/04 ....................... 1,000,000 1,077,500
-----------
Oklahoma-4.7%
Grand River Dam Authority, Oklahoma
6.250%, 06/01/11 ....................... 1,500,000 1,706,250
-----------
Puerto Rico-5.9%
Puerto Rico Commonwealth Refunding
5.100%, 07/01/02 ....................... 1,000,000 1,033,750
Puerto Rico Electric Power Authority Revenue
6.000%, 07/01/11 ....................... 1,000,000 1,117,500
-----------
2,151,250
-----------
Tennessee-3.0%
Memphis, Tennessee Electric System
6.000%, 01/01/05 ....................... 1,000,000 1,087,500
-----------
Texas-15.6%
Lewisville, Texas Independent School
District
6.000%, 08/15/01 ....................... 1,000,000 1,062,500
Port Authority of Houston, Texas
5.375%, 10/01/05 ....................... 1,275,000 1,351,500
San Antonio, Texas Electric & Gas
5.000%, 02/01/12 ....................... 1,000,000 1,005,000
Texas State Refunding Ser. A
6.000%, 10/01/08 ....................... 1,000,000 1,105,000
University of Texas, Permanent
University Funding
4.600%, 07/01/08 ....................... 1,200,000 1,180,500
-----------
5,704,500
-----------
Virginia-2.8%
Arlington County, Virginia
5.250%, 08/01/98 ....................... 1,000,000 1,010,910
-----------
Washington-5.8%
Washington Public Power Supply
Ser. 1B
7.100%, 07/01/00 ....................... 1,000,000 1,070,000
Washington State Public Power Supply
5.500%, 07/01/10 ....................... 1,000,000 1,035,000
-----------
2,105,000
-----------
TOTAL INVESTMENTS--98.2%
(cost $34,479,151) ..................... 35,778,104
-----------
Cash and Other Assets
Net of Liabilities--1.8% ............... 645,830
-----------
NET ASSETS--100.0% ....................... $36,423,934
===========
* Securities which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and interest
on the municipal issue and to retire the securities in full at the earliest
refunding date.
See notes to financial statements.
16
<PAGE>
Winthrop Focus Funds--Statement of Assets and Liabilities October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small Fixed
Growth Growth and Company Income Municipal
Fund Income Fund Value Fund Fund Trust Fund
----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in securities, at value
(cost $66,107,579, $110,304,761,
$207,563,362, $56,700,335, and
$34,479,151, respectively) ............. $93,954,977 $164,802,977 $303,421,463 $57,994,961 $35,778,104
Cash .................................... 5,103 6,022 16,044 564 18,919
Receivable for investment securities sold 369,678 771,748 -- 1,778,060 --
Receivable for capital stock sold ....... 152,231 113,288 601,708 52,237 9,805
Dividends and interest receivable ....... 79,549 201,218 164,120 1,046,287 633,418
Reimbursement due from advisor .......... -- -- -- 49,628 27,808
Deferred organization costs (Note A) .... -- -- -- -- 15,665
------------ ------------ ------------ ------------ ------------
Total assets ......................... 94,561,538 165,895,253 304,203,335 60,921,737 36,483,719
------------ ------------ ------------ ------------ ------------
Liabilities:
Payable to investment advisor ........... 61,710 87,946 197,229 -- --
Payable to distributor .................. 30,977 54,855 90,270 16,441 9,580
Payable for investment securities
purchased .............................. 1,005,574 143,475 2,148,186 2,660,221 --
Payable for capital stock redeemed ...... 14,262 132,306 72,140 53,257 5,000
Dividend payable ........................ -- -- -- 61,358 28,133
Accrued expenses and other liabilities .. 144,644 226,210 299,752 528 17,072
------------ ------------ ------------ ------------ ------------
Total liabilities .................... 1,257,167 644,792 2,807,577 2,791,805 59,785
------------ ------------ ------------ ------------ ------------
Net Assets ................................... $93,304,371 $165,250,461 $301,395,758 $58,129,932 $36,423,934
============ ============ ============ ============ ============
Net Assets Consist of:
Capital paid-in ......................... $60,155,719 $104,040,048 $203,774,867 $57,498,773 $35,572,037
Undistributed net investment income ..... 92,880 282,424 832,780 -- --
Accumulated net realized gain
(loss) on investments .................. 5,208,374 6,429,773 930,010 (663,467) (447,056)
Net unrealized appreciation
on investments ......................... 27,847,398 54,498,216 95,858,101 1,294,626 1,298,953
------------ ------------ ------------ ------------ ------------
$93,304,371 $165,250,461 $301,395,758 $58,129,932 $36,423,934
============ ============ ============ ============ ============
Class A Shares:
Net assets .............................. $82,925,955 $145,586,140 $283,000,661 $54,755,147 $35,878,146
============ ============ ============ ============ ============
Shares outstanding ...................... 5,695,053 7,247,442 12,126,531 5,387,619 3,486,110
============ ============ ============ ============ ============
Net asset value and redemption
value per share ........................ $14.56 $20.09 $23.34 $10.16 $10.29
============ ============ ============ ============ ============
Maximum offering price per share
(net asset value plus sales charge of
4.75% of offering price) ............... $15.29 $21.09 $24.50 $10.67 $10.80
============ ============ ============ ============ ============
Class B Shares:
Net assets .............................. $10,378,416 $19,664,321 $18,395,097 $3,374,785 $545,788
============ ============ ============ ============ ============
Shares outstanding ...................... 720,005 980,348 795,758 332,030 53,034
============ ============ ============ ============ ============
Net asset value and offering price
per share .............................. $14.41 $20.06 $23.12 $10.16 $10.29
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
17
<PAGE>
Winthrop Focus Funds--Statement of Operations for the year ended October 31,
1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Small Fixed
Growth Growth and Company Income Municipal
Fund Income Fund Value Fund Fund Trust Fund
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends ....................................... $1,205,638 $2,793,376 $3,978,643 $ -- $ --
Interest ........................................ 130,152 649,270 484,803 3,830,250 1,909,481
---------- ---------- ---------- ---------- ----------
Total investment income ..................... 1,335,790 3,442,646 4,463,446 3,830,250 1,909,481
---------- ---------- ---------- ---------- ----------
Expenses:
Investment advisory fees (Note B) ............... 636,464 915,897 1,993,178 354,902 234,803
Distribution fees--Class A (Note B) ............. 234,630 397,878 743,608 162,999 111,128
Distribution fees--Class B (Note B) ............. 66,519 130,709 110,675 24,511 5,259
Transfer agent fees ............................. 106,900 157,900 306,000 60,000 38,700
Custodian fees .................................. 71,900 105,400 145,000 67,000 53,000
Legal fees ...................................... 10,000 22,000 37,000 8,000 5,000
Auditing fees ................................... 10,000 21,000 34,000 9,000 8,500
Printing fees ................................... 24,000 39,000 79,000 14,000 12,000
Trustees' fees .................................. 7,000 10,000 23,000 7,000 5,000
Registration fees ............................... 22,800 43,991 56,991 31,992 32,993
Miscellaneous ................................... 12,050 23,089 44,621 10,314 8,441
Amortization of organization costs (Note A) ..... -- -- -- -- 21,184
---------- ---------- ---------- ---------- ----------
Total expenses ............................... 1,202,263 1,866,864 3,573,073 749,718 536,008
Less expenses reimbursed by
investment advisor (Note B) ................. -- -- -- (164,718) (269,050)
---------- ---------- ---------- ---------- ----------
Net expenses ................................. 1,202,263 1,866,864 3,573,073 585,000 266,958
---------- ---------- ---------- ---------- ----------
Net Investment Income ................................ 133,527 1,575,782 890,373 3,245,250 1,642,523
---------- ---------- ---------- ---------- ----------
Realized and Unrealized Gain on Investments--(Note C):
Net realized gain on investments ............... 5,220,436 6,767,295 16,196,036 314,714 279,215
Net change in unrealized appreciation
on investments ............................... 13,577,222 28,947,100 55,151,733 168,816 746,848
----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain
on investments ............................... 18,797,658 35,714,395 71,347,769 483,530 1,026,063
----------- ----------- ----------- ----------- -----------
Increase in Net Assets from Operations ............... $18,931,185 $37,290,177 $72,238,142 $3,728,780 $2,668,586
=========== =========== =========== ========== ==========
</TABLE>
See notes to financial statements.
18
<PAGE>
Winthrop Focus Funds--Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth Fund Growth and Income Fund
--------------------------- ---------------------------
Year Ended Year Ended
10/31/97 10/31/96 10/31/97 10/31/96
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income .......................... $ 133,527 $ 290,019 $ 1,575,782 $ 1,759,734
Net realized gain on investments ............... 5,220,436 6,591,571 6,767,295 11,355,940
Net change in unrealized
appreciation on investments .................... 13,577,222 4,528,416 28,947,100 7,715,321
------------ ---------- ------------- -------------
Increase in net assets from operations ......... 18,931,185 11,410,006 37,290,177 20,830,995
------------ ---------- ------------- -------------
Dividends and Distributions to Shareholders from:
Investment income:
Class A ....................................... (280,254) (199,179) (1,549,544) (1,560,079)
Class B ....................................... (10,276) -- (43,477) (26,691)
Realized gains on investments:
Class A ....................................... (6,295,539) (3,854,607) (11,011,422) (2,114,222)
Class B ....................................... (298,769) -- (683,252) --
---------- ------------- ------------- ------------
Total Dividends and Distributions to
Shareholders .................................. (6,884,838) (4,053,786) (13,287,695) (3,700,992)
----------- ------------- ------------- ------------
Capital Stock Transactions--(Net) Note D ............ 9,985,223 7,970,431 20,899,863 15,243,210
---------- ------------- ------------- ------------
Total increase in net assets ................... 22,031,570 15,326,651 44,902,345 32,373,213
Net Assets:
Beginning of year .............................. 71,272,801 55,946,150 120,348,116 87,974,903
---------- ------------- ------------- ------------
End of year (including undistributed
net investment income of $92,880 and
$249,883 for the Growth Fund at
10/31/97 and 10/31/96, respectively,
and $282,424 and $299,663 for the
Growth and Income Fund at 10/31/97
and 10/31/96, respectively) ................... $ 93,304,371 $71,272,801 $165,250,461 $120,348,116
============= =========== ============= =============
</TABLE>
<TABLE>
<CAPTION>
Small Company Value Fund Fixed Income Fund
--------------------------- ---------------------------
Year Ended Year Ended
10/31/97 10/31/96 10/31/97 10/31/96
------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ...................... $ 890,373 $ 1,046,264 $ 3,245,250 $ 3,296,699
Net realized gain (loss) on investments .... 16,196,036 9,125,357 314,714 (765,991)
Net change in unrealized appreciation
on investments ............................ 55,151,733 18,057,004 168,816 (148,726)
------------- ------------- ------------- -------------
Increase in net assets from operations ..... 72,238,142 28,228,625 3,728,780 2,381,982
------------- ------------- ------------- -------------
Dividends and Distributions to Shareholders from:
Investment income:
Class A ................................... (1,023,009) (463,915) (3,122,839) (3,263,578)
Class B ................................... (22,095) -- (122,411) (33,121)
Realized gains on investments:
Class A ................................... (8,883,595) (4,882,667) -- --
Class B ................................... (251,999) -- -- --
------------- ------------- ------------- -------------
Total Dividends and Distributions
to Shareholders ............................ (10,180,698) (5,346,582) (3,245,250) (3,296,699)
------------- ------------- ------------- -------------
Capital Stock Transactions--(Net) Note D ........ 5,317,133 8,409,509 (370,950) 5,047,283
------------- ------------- ------------- -------------
Total increase in net assets ............... 67,374,577 31,291,552 112,580 4,132,566
Net Assets:
Beginning of year .......................... 234,021,181 202,729,629 58,017,352 53,884,786
------------- ------------- ------------- -------------
End of year (including undistributed net
investment income of $832,780 and
$987,511 for the Small Company Value
Fund at 10/31/97 and 10/31/96,
respectively) .............................. $ 301,395,758 $ 234,021,181 $ 58,129,932 $ 58,017,352
============= ============= ============= =============
</TABLE>
See notes to financial statements.
19
<PAGE>
Winthrop Focus Funds--Statement of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Trust Fund
---------------------------
Year Ended
10/31/97 10/31/96
------------ ------------
<S> <C> <C>
Operations:
Net investment income .............................. $1,642,523 $1,649,320
Net realized gain on investments ................... 279,215 172,684
Net change in unrealized appreciation
on investments ..................................... 746,848 (352,918)
------------ ------------
Increase in net assets from operations ............. 2,668,586 1,469,086
------------ ------------
Dividends and Distributions to Shareholders from:
Investment income:
Class A ........................................... (1,623,296) (1,642,490)
Class B ........................................... (19,227) (6,830)
------------ ------------
Total Dividends and Distributions to Shareholders .. (1,642,523) (1,649,320)
------------ ------------
Capital Stock Transactions--(Net) Note D ................ (3,884,712) 404,039
------------ ------------
Total increase in net assets ....................... (2,858,649) 223,805
Net Assets:
Beginning of year .................................. 39,282,583 39,058,778
------------ ------------
End of year ........................................ $36,423,934 $39,282,583
============ ============
</TABLE>
See notes to financial statements.
20
<PAGE>
Winthrop Focus Funds--Notes to Financial Statements October 31, 1997
- --------------------------------------------------------------------------------
Note (A) Significant Accounting Policies. Winthrop Focus Funds ("Winthrop" or
"Funds") operates as a series company currently consisting of five portfolios
(the "Portfolios"): Winthrop Growth Fund, Winthrop Growth and Income Fund,
Winthrop Small Company Value Fund, Winthrop Fixed Income Fund, and Winthrop
Municipal Trust Fund. Winthrop, organized as a Massachusetts business trust on
November 26, 1985, constitutes a diversified, open-end investment company which
is registered under the Investment Company Act of 1940, as amended ("Act").
Effective February 20, 1997, the Winthrop Small Company Value Fund's name was
changed from the Winthrop Aggressive Growth Fund.
The investment objective of the Winthrop Growth Fund and the Winthrop Growth and
Income Fund is long-term capital appreciation. The Winthrop Growth and Income
Fund also seeks continuity of income. The investment objective of the Winthrop
Small Company Value Fund is a high level of growth of capital. The Winthrop
Fixed Income Fund aims to provide as high a level of total return as is
consistent with capital preservation by investing principally in debt
securities, including, without limitation, convertible and nonconvertible debt
securities of foreign and domestic companies, including both well-known and
established and new and lesser-known companies. The Winthrop Municipal Trust
Fund's investment objective is to provide as high a level of total return as is
consistent with capital preservation by investing principally in high grade
tax-exempt municipal securities.
Effective February 28, 1996, each Fund commenced offering two classes of shares.
Class A shares are sold with a front-end sales charge of up to 4.75%. Class B
shares are sold with a contingent deferred sales charge which declines from 4%
to zero depending on the period of time the shares are held. Both classes have
identical voting, dividend, liquidation and other rights, except that each class
bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. Wood, Struthers & Winthrop Management Corp.
(the "Advisor") is a wholly-owned subsidiary of Donaldson, Lufkin & Jenrette
Securities Corporation, which is a wholly-owned subsidiary of Donaldson, Lufkin
and Jenrette, Inc. ("DLJ"). DLJ is an independently operated, indirect
subsidiary of The Equitable Companies Incorporated, a holding company controlled
by AXA-UAP ("AXA"), a member of a large French insurance group. AXA is
indirectly controlled by a group of four French mutual insurance companies.
The Funds account separately for the assets, liabilities and operations of each
Portfolio. Expenses directly attributable to each Portfolio are charged to that
Portfolio's operations; expenses which are applicable to all Portfolios are
allocated among them on a pro rata basis. The Funds' financial statements are
prepared in accordance with generally accepted accounting principles which may
require the use of management estimates and assumptions. Actual results could
differ from those estimates. The following is a summary of significant
accounting policies consistently followed by Winthrop.
(1) Security Valuation: Securities and options traded on national exchanges
and over-the-counter securities listed in the NASDAQ National Market System
are valued at the last reported sales price at the close of the New York
Stock Exchange. Securities for which there have been no sales on such day
are valued at the mean of the current bid and asked prices.
Over-the-counter securities not listed on the NASDAQ National Market System
are valued at the mean of the current bid and asked prices. Fixed-income
securities, except short-term securities, may be valued on the basis of
prices provided by a pricing service when such prices are believed by the
Advisor to reflect the fair market value of such securities. The prices
provided by a pricing service are determined without regard to bid or last
sale prices but take into account institutional size, trading in similar
groups of securities and any developments related to the specific
securities. Short-term investments, those with a remaining maturity of 60
days or less, are valued at amortized cost, which approximates market
value.
(2) Repurchase Agreements: The Funds may enter into repurchase agreements
with financial institutions, deemed to be credit worthy by the Funds'
Advisor, subject to the seller's agreement to repurchase and the Funds'
agreement to resell such securities at a mutually agreed-upon price.
Securities purchased subject to repurchase agreements are deposited with
the Funds' custodian and, pursuant to the terms of the repurchase
agreement, must have an aggregate market value greater than or equal to the
repurchase price plus accrued interest at all times. If the value of the
underlying securities falls below the value of the repurchase price plus
accrued interest, the Funds 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 Funds maintain the right to sell the underlying securities at market
value and may claim any resulting loss against the seller.
21
<PAGE>
Winthrop Focus Funds--Notes to Financial Statements October 31, 1997 (continued)
- --------------------------------------------------------------------------------
(3) Federal Income Taxes: The Funds intend to be treated as "regulated
investment companies" under Sub-chapter M of the Internal Revenue Code and
to distribute substantially all of their net taxable income. Accordingly,
no provisions for federal income taxes have been made in the accompanying
financial statements. The Fixed Income Fund has an unused capital loss
carryover of approximately $556,000 available for federal income tax
purposes to be applied against future net securities profits, if any,
realized subsequent to October 31, 1997. If not applied, the carryover
expires in fiscal 2004. The Municipal Trust Fund has an unused capital loss
carryover of approximately $447,000 available for federal income tax
purposes to be applied against future net securities profits, if any,
realized subsequent to October 31, 1997. If not applied, the carryover
expires in fiscal 2003.
(4) Investment Income and Securities Transactions: Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily.
Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the
identified cost basis. Discounts and premiums on securities purchased are
amortized in accordance with income tax regulations which approximate
generally accepted accounting principles.
(5) Dividends and Distributions: Dividends and distributions to
shareholders are recorded on the ex-dividend date.
(6) Deferred Organization Costs: The Municipal Trust Fund will reimburse
the Advisor for costs incurred in connection with the Municipal Trust
Fund's organization. The costs are being amortized on a straight-line basis
over sixty months commencing July 28, 1993.
Note (B) Advisory and Distribution Services Agreement: Under its Advisory
Agreement with Winthrop, the Advisor will provide investment advisory services
and order placement facilities for Winthrop and pay all compensation of Trustees
of Winthrop who are affiliated persons of the Advisor. The Advisor or its
affiliates will also furnish Winthrop, without charge, management supervision
and assistance and office facilities. Winthrop will pay the Advisor at the
following annual percentage rates of the average daily net assets of each Fund:
Growth Fund, .750 of 1% of the first $100,000,000, .500 of 1% of the balance;
Growth and Income Fund, .750 of 1% of the first $75,000,000, .500 of 1% of the
balance; Small Company Value Fund, .875 of 1% of the first $100,000,000, .750 of
1% of the next $100,000,000 and .625 of 1% of net assets in excess of
$200,000,000; Fixed Income Fund, .625 of 1% of the first $100,000,000, .500 of
1% of the balance; and Municipal Trust Fund, .625 of 1% of the first
$100,000,000, .500 of 1% of the balance. Such fees will be accrued daily and
paid monthly.
For the year ended October 31, 1997, the Advisor reduced its management fees and
reimbursed operating expenses by the amount that total fund operating expenses
exceeded 1.00% of the average daily net assets of the Class A shares and 1.70%
of the average daily net assets of the Class B shares of the Fixed Income Fund.
For the Municipal Trust Fund, during the period November 1, 1996 through June 2,
1997, the Advisor reduced its management fees and reimbursed operating expenses
by the amount that total fund operating expenses exceeded .50% of the average
daily net assets of the Class A shares and 1.20% of the average daily net assets
of the Class B shares. For the period November 1, 1997 through April 30, 1998
for the Fixed Income Fund and for the period June 3, 1997 through April 30, 1998
for the Municipal Trust Fund, the Advisor has agreed, with respect to both
Funds, to reduce its management fees and reimburse operating expenses by the
amount that total fund operating expenses exceed 1.00% of the average daily net
assets of each Fund's Class A shares and 1.70% of the average daily net assets
of each Fund's Class B shares. After April 30, 1998, the Advisor may, in its
sole discretion, determine to discontinue this practice with respect to both or
either of such Funds. As a result of the voluntary assumption of expenses, the
Advisor reimbursed the Fixed Income Fund and Municipal Trust Fund $164,718 and
$269,050, respectively, during the year ended October 31, 1997.
Pursuant to Rule 12b-1 under the Act, Winthrop has entered into a Distribution
Services Agreement (the "Agreement") with Donaldson, Lufkin & Jenrette
Securities Corporation, Winthrop's Distributor, under which Winthrop pays a
distribution services fee to the Distributor at an annual rate of .30 of 1% of
the average daily net assets attributable to Class A shares and 1% of the
average daily net assets attributable to Class B shares. Under the Agreement,
each Fund is obligated to pay distribution and/or service fees to the
Distributor as compensation for its distribution and service activities, not as
reimbursement for specific expenses incurred. If the Distributor's expenses
exceed its distribution and service fees, the Fund will not be obligated to pay
additional expenses. If the Distributor's expenses are less than such
distribution and service fees, it will retain its full fees and realize a
profit. In addition, the Agreement provides that the Advisor may use its own
resources including fees from investment companies (including Winthrop) to
finance the distribution of Winthrop's shares.
22
<PAGE>
Winthrop Focus Funds--Notes to Financial Statements October 31, 1997 (continued)
- --------------------------------------------------------------------------------
Note (C) Investment Transactions: For federal income tax purposes, the cost of
securities owned at October 31, 1997, was substantially the same as the cost of
securities for financial statement purposes. At October 31, 1997, the components
of the net unrealized appreciation (depreciation) on investments were as
follows:
<TABLE>
<CAPTION>
Growth Growth and Income Small Company Fixed Income Municipal Trust
Fund Fund Value Fund Fund Fund
---------- --------------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C>
Gross appreciation (investments having an
excess of value over cost) ............ $28,766,865 $56,316,198 $97,191,750 $1,294,626 $1,305,734
Gross depreciation (investments having an
excess of cost over value) ............ (919,467) (1,817,982) (1,333,649) -- (6,781)
---------- ------------ ------------ ------------ ------------
Net unrealized appreciation of
investments ........................... $27,847,398 $54,498,216 $95,858,101 $1,294,626 $1,298,953
============ ============ =========== =========== ===========
</TABLE>
For the period ended October 31, 1997, total aggregate purchases and sales
of portfolio securities, excluding short-term securities, were as follows:
<TABLE>
<CAPTION>
Growth Growth and Income Small Company Fixed Income Municipal Trust
Fund Fund Value Fund Fund Fund
---------- --------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Purchases .............................. $36,049,694 $38,124,476 $52,799,553 $65,641,563 $31,352,560
Sales .................................. 33,728,015 28,255,112 78,741,393 67,226,472 34,963,586
</TABLE>
Note (D) Shares of Beneficial Interest: There is an unlimited number of shares
($0.01 par value authorized). Transactions in shares of beneficial interest were
as follows:
<TABLE>
<CAPTION>
GROWTH FUND GROWTH AND INCOME FUND
------------------------------------------------ -----------------------------------------------
Year Ended October 31, Year Ended October 31,
1997 1996 1997 1996
-------------------------- -------------------- ----------------------- -----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
--------- ----------- --------- ---------- ---------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
Shares sold ................ 437,629 $ 5,865,281 659,662 $ 7,791,827 893,473 $16,234,868 1,164,764 $18,470,066
Shares issued through
reinvestment of dividends
and distributions .......... 473,727 5,681,333 323,919 3,499,542 645,324 10,634,266 197,158 2,969,907
------- ----------- -------- ----------- --------- ---------- ---------- ------------
911,356 11,546,614 983,581 11,291,369 1,538,797 26,869,134 1,361,922 21,439,973
------- ----------- -------- ----------- --------- ---------- ---------- ------------
Shares redeemed ............ (582,439) (7,873,990) (544,548) (6,369,265) (915,088) (16,802,597) (775,120) (12,425,324)
------- ----------- -------- ----------- --------- ---------- ---------- ------------
Net increase................ 328,917 $ 3,672,624 439,033 $ 4,922,104 623,709 $10,066,537 586,802 $ 9,014,649
======= =========== ======== =========== ========= ========== ========== ===========
Class B*
Shares sold ................ 474,191 $ 6,445,214 257,899 $ 3,126,900 614,345 $11,255,686 397,069 $ 6,478,685
Shares issued through
reinvestment of
dividends and
distributions .............. 25,191 300,539 -- -- 42,360 694,854 1,551 25,566
------- ----------- ---------- ------------ --------- ---------- ---------- -----------
499,382 6,745,753 257,899 3,126,900 656,705 11,950,540 398,620 6,504,251
------- ----------- ---------- ------------ --------- ---------- ---------- -----------
Shares redeemed ............ (30,834) (433,154) (6,442) (78,573) (58,047) (1,117,214) (16,930) (275,690)
------- ----------- ---------- ------------ --------- ---------- ---------- -----------
Net increase ............... 468,548 $ 6,312,599 251,457 $ 3,048,327 598,658 $10,833,326 381,690 $ 6,228,561
======= =========== ========== =========== ========= ========== ========== ===========
</TABLE>
* Winthrop commenced offering Class B shares on February 28, 1996.
23
<PAGE>
Winthrop Focus Funds--Notes to Financial Statements October 31, 1997 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY VALUE FUND FIXED INCOME FUND
--------------------------------------------------- -------------------------------------------------
Year Ended October 31, Year Ended October 31,
1997 1996 1997 1996
-------------------------- ------------------------ ----------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ----------- ---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
Shares sold ............... 1,563,609 $ 32,372,641 2,166,779 $37,617,929 1,007,188 $10,106,275 1,462,054 $14,868,063
Shares issued through
reinvestment of dividends
and distributions ........ 520,341 9,336,451 299,334 4,999,339 227,876 2,280,614 228,562 2,298,998
--------- ------------ ----------- ----------- ---------- ----------- --------- -----------
2,083,950 41,709,092 2,466,113 42,617,268 1,235,064 12,386,889 1,690,616 17,167,061
--------- ------------ ----------- ----------- ---------- ----------- --------- -----------
Shares redeemed ............ 2,325,116) (45,822,643) (2,302,746) (40,353,318) (1,447,949) (14,465,843) (1,365,005) (13,732,889)
--------- ------------ ----------- ----------- ---------- ----------- --------- -----------
Net increase (decrease)..... (241,166) $ (4,113,551) 163,367 $ 2,263,950 (212,885) $(2,078,954) 325,611 $ 3,434,172
========= ============ =========== =========== ========== =========== ========= ===========
Class B*
Shares sold ................ 488,038 $ 10,257,289 349,790 $ 6,251,446 234,034 $ 2,345,418 167,890 $ 1,673,750
Shares issued through
reinvestment of dividends
and distributions ........ 14,941 266,712 -- -- 9,475 94,809 3,016 29,872
--------- ------------ ----------- ----------- ---------- ----------- --------- -----------
502,979 10,524,001 349,790 6,251,446 243,509 2,440,227 170,906 1,703,622
--------- ------------ ----------- ----------- ---------- ----------- --------- -----------
Shares redeemed ............ (50,994) (1,093,317) (6,017) (105,887) (73,268) (732,223) (9,117) (90,511)
--------- ------------ ----------- ----------- ---------- ----------- --------- -----------
Net increase ............... 451,985 $ 9,430,684 343,773 $ 6,145,559 170,241 $ 1,708,004 161,789 $ 1,613,111
========= ============ =========== =========== ========== =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL TRUST FUND
---------------------------------------------------
Year Ended October 31,
1997 1996
------------------------ --------------------------
Shares Amount Shares Amount
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Class A
Shares sold ............... 620,191 $6,261,100 778,590 $7,762,187
Shares issued through
reinvestment of dividends
and distributions ....... 124,371 1,258,384 130,153 1,298,598
---------- ---------- ---------- ----------
744,562 7,519,484 908,743 9,060,785
---------- ---------- ---------- ----------
Shares redeemed ........... (1,134,519) (11,447,099) (916,513) (9,136,736)
---------- ---------- ---------- ----------
Net decrease .............. (389,957) $(3,927,615) (7,770) $ (75,951)
========== ========== ========== ==========
Class B*
Shares sold ................ 36,704 $ 373,121 48,213 $ 473,753
Shares issued through
reinvestment of dividends 1,332 13,451 629 6,237
--------- ---------- --------- ----------
38,036 386,572 48,842 479,990
--------- ---------- --------- ----------
Shares redeemed ............ (33,844) (343,669) -- --
--------- ---------- --------- ----------
Net increase ............... 4,192 $ 42,903 48,842 $ 479,990
========= ========== ========= ==========
</TABLE>
*Winthrop commenced offering Class B shares on February 28, 1996.
25
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for a share of capital stock
outstanding throughout each period presented. This information has been derived
from information provided in the financial statements.
<TABLE>
<CAPTION>
Net
Realized Ratio of
and Dividends Net Net Ratio of Net
Net Unrealized from Distri- Asset Assets Expenses Investment
Asset Net Gains or Net butions Value, End of to Income Average
Value, Investment (Losses) Investment from End Period Average (Loss)to Portfolio Commission
Beginning Income on Income Capital of Total (000 Net Average Net Turnover Rate
of Period (Loss) Securities (Loss) Gains Period Return++ omitted) Assets(2) Assets(2) Rate Paid(4)
-------- -------- -------- -------- -------- -------- -------- -------- ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Fund--Years Ended October 31,
Class A
1997 $12.69 $0.028 $3.065 ($0.048) ($1.175) $14.56 26.48% $ 82,926 1.36% 0.21% 41.1% $0.07
1996 11.35 0.053 2.107 (0.038) (0.782) 12.69 20.32 68,096 1.48 0.47 60.6 0.06
1995 10.82 0.037 1.190 (0.012) (0.685) 11.35 12.21 55,946 1.63 0.35 101.7 N/A
1994 10.97 0.014 0.435 -- (0.599) 10.82 4.15 52,455 1.65 0.06 28.2 N/A
1993 11.10 0.061 1.386 (0.077) (1.500) 10.97 14.36 49,446 1.36 0.56 61.7 N/A
Class B (3)
1997 12.63 (0.030) 3.016 (0.031) (1.175) 14.41 25.66 10,378 2.06 (0.51) 41.1 0.07
1996 11.88 (0.013) 0.763 -- -- 12.63 6.40 3,177 2.17 (1) (0.34)(1) 60.6 0.06
Growth and Income Fund--Years Ended October 31,
Class A
1997 $17.18 $0.211 $4.588 ($0.214) ($1.675) $20.09 30.53% $145,586 1.22% 1.15% 19.8% $0.06
1996 14.57 0.266 2.935 (0.241) (0.350) 17.18 22.60 113,803 1.36 1.68 44.0 0.06
1995 13.38 0.254 1.769 (0.266) (0.567) 14.57 16.10 87,975 1.58 1.94 31.8 N/A
1994 13.42 0.244 0.358 (0.223) (0.419) 13.38 4.58 67,020 1.64 1.88 25.9 N/A
1993 12.35 0.270 1.720 (0.271) (0.649) 13.42 16.93 52,166 1.33 2.12 36.4 N/A
Class B (3)
1997 17.15 0.079 4.577 (0.071) (1.675) 20.06 29.59 19,664 1.92 0.39 19.8 0.06
1996 16.05 0.136 1.109 (0.145) -- 17.15 7.67 6,545 1.99 (1) 1.06 (1) 44.0 0.06
Small Company Value Fund--Years Ended October 31,
Class A
1997 $18.41 $0.073 $5.661 ($0.081) ($0.723) $23.34 32.48% $283,001 1.35% 0.37% 21.1% $0.06
1996 16.61 0.084 2.162 (0.037) (0.409) 18.41 13.80 227,716 1.47 0.48 35.1 0.06
1995 15.65 0.035 1.621 -- (0.696) 16.61 11.10 202,730 1.64 0.23 25.1 N/A
1994 16.11 0.105 0.603 (0.026) (1.142) 15.65 4.67 144,624 1.70 (0.04) 31.6 N/A
1993 14.00 0.123 3.195 (0.011) (1.197) 16.11 25.34 77,903 1.44 0.32 134.3 N/A
Class B (3)
1997 18.34 (0.021) 5.576 (0.052) (0.723) 23.12 31.55 18,395 2.05 (0.32) 21.1 0.06
1996 17.41 (0.023) 0.953 -- -- 18.34 5.28 6,305 2.15 (1) (0.34) (1) 35.1 0.06
Fixed Income Fund--Years Ended October 31,
Class A
1997 $10.07 $0.575 $0.090 ($0.575) $ -- $10.16 6.84% $54,755 1.00% 5.74% 119.3% N/A
1996 10.22 0.577 (0.150) (0.577) -- 10.07 4.34 56,388 1.00 5.72 90.2 N/A
1995 9.66 0.588 0.560 (0.588) -- 10.22 12.23 53,885 1.00 5.90 66.1 N/A
1994 10.93 0.567 (1.027) (0.567) (0.243) 9.66 (4.37) 39,150 0.93 5.58 55.9 N/A
1993 10.40 0.622 0.567 (0.622) (0.037) 10.93 11.79 40,881 0.83 5.79 95.6 N/A
Class B (3)
1997 10.07 0.504 0.090 (0.504) -- 10.16 6.10 3,375 1.70 4.99 119.3 N/A
1996 10.22 0.339 (0.150) (0.339) -- 10.07 2.23 1,629 1.70 (1) 5.03 (1) 90.2 N/A
Municipal Trust Fund--Years Ended October 31,
Class A
1997 $10.01 $0.445 $0.280 ($0.445) $ -- $10.29 7.37% $35,878 0.70% 4.38% 84.3% N/A
1996 10.06 0.425 (0.050) (0.425) -- 10.01 3.83 38,794 0.80 4.26 79.3 N/A
1995 9.51 0.389 0.550 (0.389) -- 10.06 10.06 39,059 1.00 3.97 49.3 N/A
1994 10.10 0.365 (0.590) (0.365) -- 9.51 (2.27) 34,470 0.83 3.71 42.5 N/A
1993+ 10.00 0.085 0.100 (0.085) -- 10.10 7.15 (1) 33,794 0.75 (1) 3.28 (1) -- N/A
Class B (3)
1997 10.01 0.370 0.280 (0.370) -- 10.29 6.62 546 1.40 3.66 84.3 N/A
1996 10.12 0.248 (0.110) (0.248) -- 10.01 1.42 489 1.23 (1) 3.81 (1) 79.3 N/A
- ------------------------------
</TABLE>
+ Commencement of operations for the Municipal Trust Fund was July 28, 1993.
++ Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period, and redemption on
the last day of the period. Initial sales charge or contingent deferred
sales charge is not reflected in the calculation of total return. Total
return calculated for a period of less than one year is not annualized.
(1) Annualized
(2) Net of voluntary assumption by Advisor of expenses, expressed as a
percentage of average net assets, as follows: Fixed Income Fund Class A
shares, .30%, and .34%, .51%, .67%, and .58% for the years ended 10/31/97,
96, 95, 94, and 93, respectively; Fixed Income Fund Class B shares, .30% for
the year ended 10/31/97, and .34% (annualized) for the period 2/28/96
through 10/31/96; Municipal Trust Fund Class A shares, .74%, .64%, .58%,
.77% and 1.15% (annualized) for the years ended 10/31/97, 96, 95, 94 and 93,
respectively, and Municipal Trust Fund Class B shares,.74% for the year
ended 10/31/97, and .64% (annualized ) for the period 2/28/96 through
10/31/96.
(3) Winthrop commenced offering Class B shares on February 28, 1996.
(4) For fiscal years beginning after November 1, 1995, the Funds are required to
disclose the average commission rate paid for purchases and sales of equity
securities.
25
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
Shareholders and Board of Trustees
Winthrop Focus Funds
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Winthrop Focus Funds (comprising, respectively,
Winthrop Fixed Income Fund, Winthrop Growth Fund, Winthrop Growth and Income
Fund, Winthrop Municipal Trust Fund and Winthrop Small Company Value Fund) as of
October 31, 1997, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended and financial highlights for each of the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 October 31, 1997 by correspondence with the 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 constituting Winthrop Focus Funds at October 31, 1997,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended and the financial
highlights for each of the indicated periods, in conformity with generally
accepted accounting principles.
/s/ Ernst + Young LLP
New York, New York
December 10, 1997
26
<PAGE>
Winthrop Focus Funds -- Tax Information (unaudited)
- --------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986 to advise
you as to the federal tax status of distributions received by shareholders
during the Funds' fiscal year ended October 31, 1997. Accordingly, we are
advising you that the following distributions paid during the fiscal year by the
Funds were derived from the following sources:
<TABLE>
<CAPTION>
Ordinary Income
Distributions per Share
--------------------
Tax Alternative From From From
Exempt Minimum Tax Investment Short-Term Long-Term
Fund Income* Income Income Capital Gains Capital Gains
- ---- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Winthrop Growth Fund-Class A $ - $ - $ 0.048 $ 0.147 $ 1.028
Winthrop Growth Fund-Class B - - 0.031 0.147 1.028
Winthrop Growth and Income Fund-Class A - - 0.214 0.256 1.419
Winthrop Growth and Income Fund-Class B - - 0.071 0.256 1.419
Winthrop Small Company Value Fund-Class A - - 0.081 0.286 0.437
Winthrop Small Company Value Fund-Class B - - 0.052 0.286 0.437
Winthrop Fixed Income Fund-Class A - - 0.575 - -
Winthrop Fixed Income Fund-Class B - - 0.504 - -
Winthrop Municipal Trust Fund-Class A 0.387 0.056 0.002 - -
Winthrop Municipal Trust Fund-Class B 0.322 0.047 0.001 - -
</TABLE>
- --------------------------
*Federally exempt interest dividends
Because each Fund's fiscal year is not the calender year, calender year
taxpayers should use dollar amounts and the nature of those amounts referenced
on Form 1099-DIV which will be mailed to you in late January, 1998. Included
with your 1099-DIV will be a notice identifying the percentage of ordinary
income dividends paid in 1997 which were derived from Federal obligations and a
breakout of long-term capital gains enabling shareholders to identify the
appropriate tax rates to be applied. In addition, for use by our Winthrop
Municipal Trust shareholders, a schedule referencing the source of federal tax
exempt income identified by state will be provided. Shareholders are advised to
consult their own tax advisors with respect to the tax consequenses of their
investments in each Fund.
27
<PAGE>
WINTHROP FOCUS FUNDS
(800) 225-8011
TRUSTEES
G. Moffett Cochran Stig Host William H. Mathers
Robert L. Bast James L. McCabe William C. Simpson
James A. Engle Carl B. Menges Peter F. Krogh
John J. Halsey John J. Sheehan Stephen K. West
Dennis G. Little
OFFICERS
G. Moffett Cochran, Chairman and President
Sam M. D'Agostino, Vice President
James A. Engle, Vice President
Martin Jaffe, Vice President, Treasurer and Secretary
Richard J. Hanlon, Vice President
Cathy A. Jameson, Vice President
Brian A. Kammerer, Vice President
Marybeth B. Leithead, Vice President
Hugh M. Neuburger, Vice President
Roger W. Vogel, Vice President
INVESTMENT ADVISOR
Wood Struthers & Winthrop Management Corp.
An Investment Management Subsidiary of Donaldson, Lufkin & Jenrette
277 Park Avenue, New York, NY 10172
CUSTODIAN
Citibank, N.A.
111 Wall Street, New York, NY 10043
TRANSFER AGENT
FPS Services, Inc.
P.O. Box 61503 (3200 Horizon Drive)
King of Prussia, PA 19406-0903
DISTRIBUTOR
Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue, New York, NY 10172
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue, New York, NY 10019
LEGAL COUNSEL
Sullivan & Cromwell
125 Broad Street, New York, NY 10004
This report is submitted for the general information of the stockholders of
the Fund. It is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus,
which should be read carefully before investing.
Wood, Struthers & Winthrop
Established 1871
S
W W
[LOGO]
Investment Management Subsidiary of
Donaldson, Lufkin & Jenrette
Securities Corporation
(The Fund Distributor)
WFF-2 12/97
[LOGO] WINTHROP [LOGO]
MUTUAL FUNDS
WINTHROP FIXED INCOME FUND
WINTHROP GROWTH FUND
WINTHROP MUNICIPAL TRUST FUND
WINTHROP SMALL COMPANY VALUE FUND
OCTOBER 31, 1997
ANNUAL
REPORT
[GRAPHIC]
28
