<PAGE>
Dear Shareholder:
The current expansion continues, but at a slowing pace. Inflation remains
subdued and although we believe that the problems of Asia and Latin America may
spill onto our shores, we believe the damage will be manageable. The Federal
Reserve already cut interest rates three times, and while it may be some time
before the next interest rate cut, monetary policy will likely continue to be
relatively easy. Within the equity portfolios, we continue to focus on the
durability of earnings, and expect that companies that deliver on earnings
expectations will be very good investments. Within the fixed-income portfolios,
we are moving toward adding some credit risk exposure and reducing our average
maturities.
WINTHROP SMALL COMPANY VALUE FUND
The Class A shares of the Winthrop Small Company Value Fund returned -11.20% for
the fiscal year ended October 31, 1998, versus -11.84% for the Russell 2000
Index. In this difficult investing environment, we made a concerted effort to
limit the amount of capital gains the Fund distributed for 1998. By the end of
August, gains realized earlier in the year had left the Fund with approximately
$2.00 per share of realized gains. However, by the end of the fiscal year, we
had reduced the gain to less than $0.02 per share.
The small-cap market suffered through an abysmal period in early October, with
the Russell 2000 down almost 30% during the period before a spectacular rally
that has left the benchmark down less than 8% for the calendar year. The rally
was fueled mostly by a dramatic rebound in technology shares--in many cases, the
same issues that were decimated by global economic concerns. The Fund made
opportunistic investments in selected technology issues, including Artesyn
Technologies, Technitrol, Electro Scientific, Jabil Circuit and Teradyne. The
latter three have each more than doubled in just a few months.
Of late, the Fund has been increasing exposure to the "beaten up" energy area.
Warm weather and reduced economic demand have driven oil and gas prices to low
levels which we believe will lead to increased merger and acquisition activity
in the sector. Many of the energy-related stocks are selling at depressed
valuations and look attractive to us on a long-term basis. Generally, we believe
small-cap stocks, which are trading at their lowest relative valuation to larger
companies in 20 years, represent a compelling investment opportunity.
WINTHROP GROWTH AND INCOME FUND
For the quarter and year ended October 31, 1998, the Winthrop Growth and Income
Fund Class A shares returned -0.13% and +19.14%, respectively, versus a return
of -1.57% and +22.00% for the S&P 500. This performance is in line with our goal
of outperforming in periods of market weakness and participating--but usually
not leading--during market advances.
During the year, performance benefited from large holdings in Federal Home Loan
Mortgage Corporation and Merck, but was hurt by exposure to the energy sector,
which was affected by collapsing oil prices.
Although the stock market currently appears fully priced, we believe that good
buying opportunities can be found in some stocks. One such stock is CalEnergy,
which trades at 13 times next year's projected earnings and should be able to
grow earnings at 12% annually. This leading independent power producer is
positioned to benefit from electric utility deregulation and represents an
opportunity to buy into a good management team with solid business prospects at
a very reasonable price. This is the type of investment opportunity we seek.
WINTHROP GROWTH FUND
For the fiscal year ended October 31, 1998, the Winthrop Growth Fund's Class A
shares returned +21.00% versus a +22.0% return for the S&P 500. Investments in
the telecommunications, food and drug retailing, pharmaceutical, hospital
supply, and technology sectors were among the Fund's best performers. Among the
Fund's more successful pharmaceutical holdings were Schering-Plough, Amgen, and
Merck. In the technology group, IBM, Microsoft, and Cisco Systems performed
especially well.
WINTHROP FIXED INCOME FUND
Returns for the Winthrop Fixed Income Fund's Class A shares tracked those of the
Lehman Government Corporate Intermediate Index for the fiscal year ended October
31, 1998: +8.46% vs. +9.10%, respectively. More than 40% of the Fund's
fiscal-year return was realized in the fourth quarter of 1997 when U.S.
government securities, a heavily weighted sector within the Fund, rallied
strongly.
During the fiscal year, the Fund has maintained a longer-than-average duration
vs. the benchmark Lehman Index. That strategy worked to the Fund's advantage as
interest rates fell 100-150 basis points across the government yield curve. The
Fund also pursued a strategy of underweighting the non-government sectors of the
market through most of the year, since, in our view, risk premiums afforded
non-government securities did not adequately reflect our concerns about a
potentially less robust economic environment. While this underweighting dragged
down performance in the early part of the year, it paid off handsomely during
the year's final fiscal quarter, as interest rates fell dramatically and
investors sought the safety and liquidity of government securities.
WINTHROP MUNICIPAL TRUST FUND
The Winthrop Municipal Trust Fund's Class A shares concluded fiscal 1998 by
returning +6.28% vs. +6.81% for the Lipper Intermediate Municipal Index. The
longer average maturity of the Fund during the fixed-income market crisis of the
early fall contributed to our relative underperformance, but should stand us in
good stead going forward with a more accommodating Federal Reserve monetary
policy.
The municipal market had a difficult market environment during the final fiscal
quarter of 1998. Due to the global liquidity crisis, U.S. Treasuries became the
investment vehicle of choice, and other fixed-income investments dramatically
underperformed this asset class. Municipals traded at their widest levels to
U.S. Treasuries by any historical measurement. Additionally, supply continued to
hit the marketplace in an unabated manner, low interest rates and continued
voter-approved bond projects kept the public finance underwriters busy and the
market flooded with product.
Thank you for your investment in the Winthrop Mutual Funds. The Officers and
Trustees would like to wish you a happy and prosperous New Year.
Sincerely,
/s/ G. Moffett Cochran
G. Moffett Cochran
President December, 1998
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Growth Fund
Portfolio Changes for the Six Months Ended October 31, 1998
Major Purchases Major Sales
Associates First Capital Corp. Baxter International, Inc.(2)
Bank One Corp.(1) Firstar Corp.(2)
Bard (C.R.), Inc.(1) First Data Corp.(2)
Dayton Hudson Corp. PepsiCo, Inc.(2)
Omnicom Group, Inc.(1) Steel Dynamics, Inc.(2)
Schlumberger, Ltd.(1) Weatherford International, Inc.(2)
Sprint Corp.(1)
Texaco, Inc.
Whitman Corp.(1)
(1) New Holdings (2) Deletions
Ten Largest Holdings October 31, 1998
Percent
Value of Fund
------------ --------
Freddie Mac .................................. $ 4,646,000 4.0%
MCI Worldcom, Inc. ........................... 4,420,000 3.9
Microsoft Corp. .............................. 4,235,000 3.7
Procter & Gamble Co. ......................... 4,141,575 3.6
Schering-Plough Corp. ........................ 3,909,250 3.4
American International Group, Inc. ........... 3,644,437 3.2
Exxon Corp. .................................. 3,562,500 3.1
Dayton Hudson Corp. .......................... 3,517,125 3.1
Tyco International, Ltd. ..................... 3,344,625 2.9
Pitney Bowes, Inc. ........................... 3,083,500 2.7
------------- ----
$38,504,012 33.6%
============= ====
Investment Results For the Periods Ended October 31, 1998
[THE FOLLOWING TABLE REPRESENTS A LINE GRAPH IN THE PRINTED MATERIALS.]
Winthrop Growth Fund - Cl. A.
Without Load With Load S&P 500
------------ --------- -------
10/88 10000 9525 10000
10/89 12172 11594 12693
10/90 10827 10313 11693
10/91 14043 13376 15612
10/92 14968 14000 17165
10/93 16808 16010 19729
10/94 17505 16674 20490
10/95 19643 18710 25906
10/96 23634 22512 32152
10/97 29893 28473 42479
10/98 36170 34452 51824
Comparison of Change in Value
of $10,000 Investment
Average Annual Total Return
----------------------------
Winthrop
Growth Fund
-----------------
Without With
Load Load S&P 500
-------- ----- --------
Class A:
1 year .................. 21.00% 15.25% 22.00%
5 years ................. 16.56 15.44 21.31
10 years ................ 13.72 13.17 17.88
Class B:
1 year .................. 20.20 16.20 22.00
From inception 2/96 ..... 19.41 18.86 24.30
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 applicable 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.
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Growth and Income Fund
Portfolio Changes for the Six Months Ended October 31, 1998
Major Purchases Major Sales
Bank One Corp.(1) Dupont (E.I.) de Nemours & Co.(2)
CalEnergy Co., Inc.(1) First Data Corp.(2)
First Chicago (1) Gillette Co.(2)
Gateway 2000, Inc.(1) RJR Nabisco Holdings Corp.
Helmerich & Payne, Inc. Schering-Plough Corp.(2)
Merck & Co., Inc. Union Pacific Resources Group (2)
Monsanto Co.(1) Vodafone Group ADRs (2)
Newell Co.(1) Walgreen Co.
Schlumberger, Ltd.(1) Western Atlas, Inc.(2)
Washington Mutual, Inc.(1) Wells Fargo & Co.(2)
(1) New Holdings (2) Deletions
Ten Largest Holdings October 31, 1998
Percent
Value of Fund
------------ --------
Freddie Mac .................................. $ 8,050,000 4.1%
Merck & Co., Inc. ............................ 5,910,425 3.0
Philip Morris Cos., Inc. ..................... 5,879,375 3.0
American International Group, Inc. ........... 5,639,288 2.8
Tyco International, Ltd. ..................... 5,524,825 2.8
Burlington Northern Santa Fe ................. 5,511,188 2.8
U.S. Bancorp ................................. 5,336,154 2.7
IMS Health, Inc. ............................. 5,147,100 2.6
Sysco Corp. .................................. 4,902,625 2.5
Newell Co. ................................... 4,809,200 2.4
------------- ----
$56,710,180 28.7%
============= ====
Investment Results For the Periods Ended October 31, 1998
[THE FOLLOWING TABLE REPRESENTS A LINE GRAPH IN THE PRINTED MATERIALS.]
Winthrop Growth and Income Fund - Cl. A.
Without Load With Load S&P 500
------------ --------- -------
10/88 10000 9525 10000
10/89 12156 11579 12693
10/90 11209 10677 11693
10/91 14218 13543 15612
10/92 15234 14511 17165
10/93 17814 16968 19729
10/94 18630 17745 20490
10/95 21630 20603 25906
10/96 26517 25258 32152
10/97 34612 32969 42479
10/98 41238 39279 51824
Comparison of Change in Value
of $10,000 Investment
Average Annual Total Return
----------------------------
Winthrop
Growth and
Income Fund
-----------------
Without With
Load Load S&P 500
-------- ----- --------
Class A:
1 year .................. 19.14% 13.48% 22.00%
5 years ................. 18.28 17.13 21.31
10 years ................ 15.22 14.66 17.88
Class B:
1 year .................. 18.29 14.29 22.00
From inception 2/96 ..... 20.61 20.06 24.30
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 applicable 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.
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Small Company Value Fund
Portfolio Changes for the Six Months Ended October 31, 1998
Major Purchases Major Sales
AMETEK, Inc. Amcast Industrial Corp.(2)
Arrow International, Inc.(1) Cardinal Health, Inc.(2)
CalEnergy Co., Inc.(1) The Colonial BancGroup, Inc.(2)
CCB Financial Corp.(1) Department 56, Inc.(2)
Cullen/Frost Bankers, Inc.(1) Donaldson, Inc.(2)
Electro Scientific Industries, Inc.(1) Flowers Industries, Inc.(2)
Invacare Corp.(1) Mark IV Industries, Inc.(2)
People's Bank(1) Merry Land & Investment Co., Inc.(2)
Teradyne, Inc.(1) Sundstrand Corp.(2)
Varco International, Inc.(1) Unifi, Inc.(2)
(1) New Holdings (2) Deletions
Ten Largest Holdings October 31, 1998
Percent
Value of Fund
------------ --------
Teleflex, Inc. ............................. $ 6,615,563 2.6%
FirstMerit Corp. ........................... 5,830,000 2.3
Carlisle Companies, Inc. ................... 5,283,900 2.0
Protective Life Corp. ...................... 5,270,287 2.0
Ruddick Corp. .............................. 5,106,231 2.0
HSB Group, Inc. ............................ 5,044,856 1.9
Myers Industries, Inc. ..................... 4,776,576 1.8
National Fuel Gas Co. ...................... 4,706,100 1.8
Universal Foods Corp. ...................... 4,701,850 1.8
Applied Power, Inc. Cl. A .................. 4,641,525 1.8
------------- ----
$51,976,888 20.0%
============= ====
Investment Results For the Periods Ended October 31, 1998
[THE FOLLOWING TABLE REPRESENTS A LINE GRAPH IN THE PRINTED MATERIALS.]
Winthrop Small Company Value Fund - Cl. A.
Without Load With Load Russell 2000
------------ --------- ------------
10/88 10000 9525 10000
10/89 11611 11060 11556
10/90 9394 8947 8402
10/91 14237 13561 13324
10/92 17178 16362 14589
10/93 21530 20508 19315
10/94 22537 21466 19255
10/95 25039 23849 22785
10/96 28495 27141 26570
10/97 37750 35957 34363
10/98 33522 31929 30294
Comparison of Change in Value
of $10,000 Investment
Average Annual Total Return
----------------------------
Winthrop
Small Company
Value Fund
-----------------
Without With Russell
Load Load 2000
-------- ----- -----
Class A:
1 year .................. -11.20% -15.42% -11.84%
5 years ................. 9.26 8.20 9.42
10 years ................ 12.86 12.31 11.72
Class B:
1 year .................. -11.98 -15.50 -11.84
From inception 2/96 ..... 7.69 7.03 7.25
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 applicable 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.
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Fixed Income Fund
Portfolio Changes for the Six Months Ended October 31, 1998
Major Purchases Major Sales
Federal Home Loan Bank(1) Commercial Credit Co.(2)
5.470%, 08/17/00 8.250%, 11/01/01
Federal Home Loan Bank(1) Federal Home Loan Bank(2)
5.125%, 09/15/03 7.440%, 08/10/01
Federal Home Loan Mortgage Corp.(1) United States Treasury Bonds(2)
5.605%, 03/12/99 7.250%, 05/15/16
United States Treasury Notes(1) United States Treasury Notes(2)
6.125%, 12/31/01 6.250%, 08/31/02
United States Treasury Notes(1) United States Treasury Notes(2)
6.250%, 02/28/02 5.750%, 04/30/03
(1) New Holdings (2) Deletions
Portfolio Characteristics October 31, 1998*
30 Day Yield, Class A: 4.13% Average Years to Maturity: 5.1 years
30 Day Yield, Class B: 3.65% Average Coupon: 6.85%+
Average Rating: AA Average Duration: 3.6 years
* Weighted Averages
+ Exclusive of Commercial Paper
Investment Results For the Periods Ended October 31, 1998
[THE FOLLOWING TABLE REPRESENTS A LINE GRAPH IN THE PRINTED MATERIALS.]
Winthrop Fixed Income Fund - Cl. A.
Lehman Bros.
Gov't/Corp
Without Load With Load Intermediate Index
------------ --------- ------------------
10/88 10000 9525 10000
10/89 11142 10612 11054
10/90 11937 11370 11871
10/91 13599 12953 13508
10/92 15009 14296 14859
10/93 16778 15981 16335
10/94 16044 15282 16020
10/95 18006 17191 18026
10/96 18787 17937 19075
10/97 20073 19164 20503
10/98 21771 20737 22369
Comparison of Change in Value
of $10,000 Investment
Average Annual Total Return
------------------------------
Winthrop Fixed
Income Fund Lehman Bros.
--------------- Gov't. Corp.
Without With Intermediate
Load Load Bond Index
-------- ----- -------------
Class A:
1 year ................. 8.46% 3.31% 9.10%
5 years ................ 5.35 4.33 6.49
10 years ............... 8.09 7.57 8.39
Class B:
1 year ................. 7.71 3.71 9.10
From inception 2/96 .... 5.99 5.31 7.60
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
applicable 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.
<PAGE>
FOCUS FUND HIGHLIGHTS (unaudited)
Winthrop Municipal Trust Fund
Portfolio Changes for the Six Months Ended October 31, 1998
<TABLE>
<S> <C>
Major Purchases Major Sales
Houston, Texas Public Improvement California State(2)
Refunding Ser. A (1) 6.500%, 09/01/10
5.000%, 03/01/05 Chattanooga-Hamilton County Hospital
Plano, Texas Independent School District(1) Authority(2)
6.000%, 02/15/05 3.650%, 10/01/17
Port Authority NY & NJ Consolidated --113th(1) Frederick County, Maryland(2)
3.900%, 12/01/00 5.200%, 07/01/03
Texas State Refunding Ser. B(1) Massachusetts State Refunding Ser. B(2)
5.000%, 10/01/01 5.500%, 11/01/07
Wisconsin State Clean Water Refunding Ser. 2(1) Metropolitan Water District South(2)
5.000%, 06/01/03 5.500%, 07/01/10
(1) New Holdings (2) Deletions
</TABLE>
Portfolio Characteristics October 31, 1998*
30 Day Yield, Class A: 2.92% Average Years to Maturity: 6.8 years
30 Day Yield, Class B: 2.37% Average Coupon: 5.65%
Average Rating: AA Average Duration: 5.0 years
* Weighted Averages
Investment Results For the Periods Ended October 31, 1998
[THE FOLLOWING TABLE REPRESENTS A LINE GRAPH IN THE PRINTED MATERIALS.]
Winthrop Municipal Trust Fund - Cl. A.
Lipper Intermediate
Without Load With Load Municipal Fund Index
------------ --------- --------------------
7/93 10000 9525 10000
10/93 10183 9699 10309
10/94 9952 9479 10060
10/95 10953 10433 11160
10/96 11373 10832 11639
10/97 12211 11631 12403
10/98 12982 12365 13248
Comparison of Change in Value
of $10,000 Investment
Average Annual Total Return
----------------------------
Winthrop Municipal
Trust Fund Lipper
----------------- Intermediate
Without With Municipal
Load Load Fund Index
-------- ----- ------------
Class A:
1 year ................... 6.28% 1.23% 6.81%
5 years .................. 4.97 3.95 5.23
From Inception ........... 5.08 4.12 5.48
Class B:
1 year ................... 5.54 1.54 6.81
From inception 2/96 ...... 5.06 4.37 5.67
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
applicable CDSC.
The Lipper Intermediate Municipal Fund Index is an equally weighted performance
index of the 30 largest funds in the Lipper Analytical grouping of intermediate
municipal debt funds, adjusted for capital gains and income dividends.
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998
- -------------------------------------------------------------------------------
Winthrop Growth Fund
COMMON STOCKS--97.2%
BASIC MATERIALS--3.0% Shares Value
------ ----------
Chemicals-1.5%
Praxair, Inc. ............................. 41,400 $1,666,350
Industrial gases/special coatings ----------
Paper Products-1.5%
Avery Dennison Corp. ...................... 43,000 1,781,813
Adhesives, labels, office products ----------
3,448,163
----------
CAPITAL GOODS--8.7%
Aerospace & Defense-3.3%
General Dynamics Corp. .................... 37,000 2,189,938
Builds & designs nuclear submarines
Raytheon Co. Cl. B ........................ 26,000 1,509,625
Defense & commercial electronics: ----------
construction
3,699,563
----------
Building & Construction-2.9%
Tyco International, Ltd. .................. 54,000 3,344,625
Fire protection systems: cable: solar ----------
Electrical Equipment-1.2%
Emerson Electric Co. ...................... 20,400 1,346,400
Manufacturer of electric/electronic ----------
products
Machinery-1.3%
Deere & Co. ............................... 42,900 1,517,588
Largest manufacturer of farm equipment: ----------
construction machinery
9,908,176
----------
CONSUMER CYCLICAL--10.0%
Auto Related-1.4%
Federal-Mogul Corp.* ...................... 20,000 1,083,750
Manufacturer of bearings:
transmission products
Lear Seating Corp.* ....................... 17,000 546,125
Automobile and light truck seating systems ----------
1,629,875
----------
Leisure Related-2.4%
Disney (Walt) Co. ......................... 75,900 2,044,556
Diversified international entertainment
company
Hasbro, Inc. .............................. 18,500 648,656
Manufacturer of toys & games ----------
2,693,212
----------
Printing & Publishing-0.8%
Hollinger International, Inc. ............. 70,000 910,000
Newspaper publishing ----------
Retail-General-5.0%
CVS Corp. ................................. 49,200 2,247,825
Retail: health stores, drugs
Dayton Hudson Corp. ....................... 83,000 3,517,125
Department stores ----------
5,764,950
----------
Waste Disposal-0.4%
Waste Management, Inc. .................... 10,105 455,988
Municipal, commercial, industrial and ----------
residential waste management services
11,454,025
----------
CONSUMER STAPLES--26.1%
Beverage & Tobacco-4.2%
Nabisco Holdings Corp. .................... 35,000 1,321,250
Manufactures food products
Philip Morris Cos., Inc. .................. 37,500 1,917,188
Tobacco, brewing, soft drinks
Whitman Corp. ............................. 72,000 1,543,500
Produces/distributes Pepsi-Cola & other ----------
non-alcoholic beverages
4,781,938
----------
Drugs-9.7%
American Home Products Corp. .............. 40,000 1,950,000
Drugs, food, household/ware
Amgen, Inc. ............................... 39,000 3,063,937
Research/development of biotech products
& pharmaceuticals
Merck & Co., Inc. ......................... 16,500 2,231,625
Human & animal pharmaceuticals
Schering-Plough Corp. ..................... 38,000 3,909,250
Pharmaceutical/consumer products ----------
11,154,812
----------
Hospital Supplies & Services-3.5%
Bard (C.R.), Inc. ......................... 33,000 1,408,688
Hospital, surgical specialties
Becton Dickinson & Co.* ................... 48,000 2,022,000
Healthcare products
Columbia HCA Healthcare Corp. ............. 25,000 525,000
Healthcare facilities/services ----------
3,955,688
----------
Retail-Food-4.3%
Safeway, Inc.* ............................ 24,000 1,147,500
Food supermarket chain
Sara Lee Corp. ............................ 28,000 1,671,250
Processed foods: consumer products
Sysco Corp.* .............................. 80,000 2,155,000
Food distributor & service systems ----------
4,973,750
----------
Soaps & Toiletries-4.4%
Colgate-Palmolive Co. ..................... 10,200 901,425
Household and personal care
Procter & Gamble Co. ...................... 46,600 4,141,575
Household, personal care, food products ----------
5,043,000
----------
29,909,188
----------
ENERGY--7.2%
Oil-Domestic-3.1%
Schlumberger, Ltd. ........................ 15,000 787,500
Oilfield services
Texaco, Inc. .............................. 36,000 2,135,250
Explore, produce, transport, refine
and market crude oil, natural gas, etc.
Tosco Corp. ............................... 24,000 673,500
Refining & distribution of petroleum ----------
products
3,596,250
----------
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998 (continued)
- -------------------------------------------------------------------------------
Winthrop Growth Fund
Shares Value
------ ----------
Oil-International-4.1%
Exxon Corp. ............................... 50,000 $3,562,500
World's leading oil company
Unocal Corp. .............................. 32,000 1,086,000
Oil & gas exploration, development ----------
4,648,500
----------
8,244,750
----------
FINANCIAL--18.7%
Banking-7.4%
BankAmerica Corp. ......................... 53,411 3,067,794
Diverse financial products & services
Bank One Corp. ............................ 26,700 1,304,963
Commercial banking: AZ, CO, IL, IN,
LA, OH, OK, TX, UT, WI & WV
U.S. Bancorp.* ............................ 54,000 1,971,000
Commercial banking: midwest &
northwest U.S.
Wells Fargo & Co. ......................... 5,900 2,183,000
Commercial banking: CA ----------
8,526,757
----------
Financial Services-6.3%
Associates First Capital Corp. ............ 18,000 1,269,000
Consumer/commercial finance
Franklin Resources, Inc.* ................. 33,000 1,247,813
Mutual fund investment advisor
& servicing
Freddie Mac ............................... 80,800 4,646,000
Provides residential mortgage funds ----------
7,162,813
----------
Insurance-5.0%
American International Group, Inc. ........ 42,750 3,644,437
International processing & related
services
Hartford Financial Services Group ......... 39,000 2,071,875
Insurance provider ----------
5,716,312
----------
21,405,882
----------
TECHNOLOGY--21.2%
Computers-1.9%
International Business Machines Corp. ..... 15,000 2,226,562
Largest manufacturer of business ----------
machines
Electronics-2.1%
Intel Corp. ............................... 18,000 1,605,375
Semiconductor processing chips
Molex, Inc. ............................... 21,875 780,664
Terminals, connectors, switches ----------
2,386,039
----------
Office Equipment/Service-9.2%
Cisco Systems, Inc.* ...................... 40,500 2,551,500
Manufacturer of computer network
products
Microsoft Corp. ........................... 40,000 4,235,000
Computer software
Peoplesoft, Inc.* ......................... 30,000 635,625
Manufacturer human resource
management software
Pitney Bowes, Inc. ........................ 56,000 3,083,500
Postage and related mailing equipment ----------
10,505,625
----------
Telecommunications-8.0%
BellSouth Corp. ........................... 31,400 2,506,113
Telephone service: south/south
central U.S.
MCI Worldcom, Inc.* ....................... 80,000 4,420,000
Telephone service: international
Northern Telecom, Ltd. .................... 23,000 984,687
Telecommunications equipment
Sprint Corp. .............................. 16,400 1,258,700
Global communications company ----------
9,169,500
----------
24,287,726
----------
TRANSPORT & SERVICE--1.2%
Airlines-0.5%
AMR Corp.* ................................ 8,000 536,000
Holding co.: American Airlines ----------
Railroads-0.7%
Burlington Northern Santa Fe .............. 27,000 833,625
Railroad systems operations in U.S. ----------
1,369,625
----------
MISCELLANEOUS--1.1%
Commercial Services-1.1%
Omnicom Group, Inc. ....................... 25,000 1,235,937
Operates advertising agencies ----------
Total Common Stocks
(cost $66,245,763) ...................... 111,263,472
-----------
COMMERCIAL PAPER--2.9%
Principal
Amount
----------
Ford Motor Credit Corp.
5.40%, 11/06/98 .................... $ 2,880,000 2,877,840
General Electric Capital Corp.
5.13%, 11/03/98 .................... 450,000 449,872
----------
Total Commercial Paper
(amortized cost $3,327,712) ........ 3,327,712
----------
TOTAL INVESTMENTS--100.1%
(cost $69,573,475) ................. 114,591,184
-----------
Cash and Other Assets
Net of Liabilities-(0.1)% .......... (74,419)
-----------
NET ASSETS--100% $114,516,765
===========
*Non-income producing
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998
- -------------------------------------------------------------------------------
Winthrop Growth and Income Fund
Shares Value
------ ----------
COMMON STOCKS--95.9%
BASIC MATERIALS--6.3%
Chemicals-1.4%
Hanna (M.A.) Co. ......................... 182,700 $2,683,406
Specialty chemicals, polymers ----------
Oil & Gas-4.7%
Amoco Corp. .............................. 80,000 4,490,000
Integrated domestic oil
Cabot Corp. .............................. 10,000 280,625
Oil & gas drilling supplies
Enron Corp. .............................. 64,100 3,381,275
Major natural gas pipeline system
San Juan Basin Royalty Trust ............. 185,000 1,110,000
Royalty gas interest in New Mexico ----------
9,261,900
----------
Steel-0.2%
Nucor Corp. .............................. 10,000 453,125
Steel joists, angles, rounds ----------
12,398,431
----------
CAPITAL GOODS/
CONSTRUCTION--7.7%
Aerospace & Defense-6.5%
General Dynamics Corp. ................... 61,200 3,622,275
Builds & designs nuclear submarines
Raytheon Co. ............................. 80,900 4,530,400
Defense & commercial electronics:
construction
United Technologies Corp. ................ 49,000 4,667,250
Aerospace, climate control systems ----------
12,819,925
----------
Building & Construction-0.4%
Martin Marietta Materials, Inc.* ......... 10,000 490,625
Aggregates/building materials
RPM, Inc. Ohio ........................... 18,750 315,233
Protective coatings ----------
805,858
----------
Industrial Equipment-0.8%
Unova, Inc.* ............................. 104,000 1,501,500
Design & integration of manufacturing ----------
systems and industrial machinery
15,127,283
----------
CONSUMER PRODUCTS &
SERVICES--31.8%
Beverages & Tobacco-4.9%
Diageo PLC Sponsored ADR's ............... 26,028 1,143,604
Manufactures food and beverage
products
Philip Morris Cos., Inc. ................. 115,000 5,879,375
Tobacco, brewing, soft drinks
RJR Nabisco Holdings Corp. ............... 15,000 428,437
Manufactures tobacco and food
products
Seagram Co., Ltd. ........................ 15,000 493,125
Beverages, film & music
entertainment
UST, Inc. ................................ 50,000 1,700,000
Snuff, tobacco, wine, spirits ----------
9,644,541
----------
Containers-0.8%
Bemis, Co. ............................... 44,000 1,633,500
Packaging/adhesive products ----------
Drugs-5.2%
Amgen, Inc.* ............................. 22,000 1,728,375
Research/development of biological
products
Merck & Co., Inc. ........................ 43,700 5,910,425
Human & animal pharmaceuticals
Pharmacia & Upjohn, Inc. ................. 48,900 2,588,644
International pharmaceutical & ----------
biotechnological group of companies
10,227,444
----------
Foods-2.9%
IBP, Inc.* ............................... 30,000 811,875
Produces beef/pork products
Sysco Corp.* ............................. 182,000 4,902,625
Food distributor & service systems ----------
5,714,500
----------
Hospital Supplies & Services-4.9%
Abbott Laboratories ...................... 89,000 4,177,438
Diversified line of human healthcare
products & services
IMS Health, Inc. ......................... 77,400 5,147,100
Supplies technical support services
Sun Healthcare Group, Inc. ............... 50,000 293,750
Operates long-term care facilities ----------
9,618,288
----------
Household Furniture-1.0%
Leggett & Platt, Inc. .................... 88,000 2,057,000
Manufactures springs, etc. for ----------
furniture, bedding
Leisure-2.3%
Cedar Fair L.P. .......................... 111,400 2,764,113
Owns and operates amusement parks
Disney (Walt) Co. ........................ 62,217 1,675,970
Diversified international ----------
entertainment company
4,440,083
----------
Printing & Publishing-1.1%
New York Times Co. Cl. A ................. 80,000 2,260,000
Publishes newspapers & magazines ----------
Retail-Food & Drugs-2.0%
General Nutrition Companies, Inc.* ....... 30,000 436,875
Vitamin & health related products
Walgreen Co. ............................. 72,800 3,544,450
Major retail drug chain ----------
3,981,325
----------
Retail-General-3.5%
Federated Department Stores, Inc. ........ 54,000 2,075,625
Operates department stores in U.S
Newell Co. ............................... 109,300 4,809,200
Manufacturer of high volume staple ----------
consumer products
6,884,825
----------
Soaps & Toiletries-3.2%
International Flavors & Fragrances, Inc. . 71,500 2,676,781
Develops & manufactures flavor &
fragrance products
Procter & Gamble Co. ..................... 40,400 3,590,550
Household, personal care, food products ----------
6,267,331
----------
62,728,837
----------
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998 (continued)
- --------------------------------------------------------------------------------
Winthrop Growth and Income Fund
Shares Value
------- ----------
ENERGY--4.3%
Oil-Domestic-3.2%
Helmerich & Payne, Inc. ...................... 144,000 $ 3,429,000
Contract driller: oil & gas production
Schlumberger, Ltd. ........................... 53,000 2,782,500
Oilfield services ----------
6,211,500
----------
Oil-Supplies & Construction-1.1%
Halliburton Co. .............................. 61,000 2,192,188
Oil well services: engineering & ----------
construction
8,403,688
----------
FINANCIAL SERVICES--22.2%
Banking-7.6%
BankAmerica Corp. ............................ 49,337 2,833,794
Diverse financial products & services
Bank One Corp. ............................... 54,500 2,663,688
Commercial banking: AZ, CO, IL, IN,
LA, OH, OK, TX, UT, WI & WV
Household International, Inc. ................ 55,000 2,010,938
Finance & banking service
Republic New York Corp. ...................... 52,200 2,182,612
Commercial banking: NY & worldwide
U.S. Bancorp* ................................ 146,196 5,336,154
Commercial banking: midwest & ----------
northwest U.S.
15,027,186
----------
Insurance-8.1%
Allmerica Financial Corp. .................... 38,136 1,906,800
Insurance & financial services & products
American International Group, Inc. ........... 66,150 5,639,288
International insurance holding company
Amerin Corp.* ................................ 40,000 855,000
Mortgage insurance
Berkley (W.R.) Corp. ......................... 10,000 301,562
Provides property & casualty insurance
Financial Security Assurance Holding ......... 30,000 1,494,375
Insures asset-backed securities
Hartford Financial Services Group ............ 53,800 2,858,125
Insurance provider
HSB Group, Inc. .............................. 30,000 1,211,250
Insurance/engineering services
Progressive Corp. ............................ 10,100 1,487,225
Insurance holding company
Travelers Property Casualty Corp. ............ 10,000 306,875
Provides broad range of insurance ----------
products
16,060,500
----------
Other-6.5%
Block (H&R), Inc. ............................ 55,000 2,464,688
Tax, computer & personal services
Freddie Mac .................................. 140,000 8,050,000
Provides residential mortgage funds
Washington Mutual, Inc. ...................... 61,600 2,306,150
Banking, mortgage lending, insurance, ----------
mutual fund management
12,820,838
----------
43,908,524
----------
PUBLIC UTILITIES--4.7%
Electric-2.8%
Ameren Corp. ................................. 38,110 1,522,018
Holding co: Central IL Public Service
CalEnergy Co., Inc.* ......................... 134,800 3,690,150
Power generation facilities
Northeast Utilities* ......................... 20,000 312,500
Retail electric service: CT, MA & ----------
western NH 5,524,668
----------
Gas-1.0%
Consolidated Natural Gas Co. ................. 15,000 792,187
Integrated natural gas systems
New Jersey Resources Corp. ................... 28,000 1,076,250
Supplies gas in New Jersey ----------
1,868,437
----------
Telephone-0.9%
GTE Corp. .................................... 30,000 1,760,625
Telephone holding company; ----------
manufacturing
9,153,730
----------
SCIENCE &
TECHNOLOGY--8.8%
Computers-5.2%
3Com Corp.* .................................. 55,000 1,983,438
Provides networking solutions
Automatic Data Processing .................... 47,600 3,703,875
Computer services
Cisco Systems, Inc.* ......................... 41,100 2,589,300
Manufacturer of computer network
products
Gateway 2000, Inc.* .......................... 33,800 1,886,462
Markets personal computers ----------
10,163,075
----------
Electronics-0.5%
Arrow Electronics, Inc.* ..................... 47,000 1,025,187
Distributes electronic components ----------
Telecommunications-3.1%
Comcast Corp.-Special Cl. A* ................. 67,450 3,330,344
Cable TV/sound communications systems
Cox Communications, Inc. Cl. A* .............. 20,000 1,097,500
Cable TV/communications systems
NTL, Inc.* ................................... 37,333 1,789,651
Telecommunications services ----------
6,217,495
----------
17,405,757
----------
TRANSPORT & SERVICE--2.8%
Railroads-2.8%
Burlington Northern Santa Fe ................. 178,500 5,511,188
Railroad systems operations in U.S. ----------
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998 (continued)
- --------------------------------------------------------------------------------
Winthrop Growth and Income Fund
Shares Value
------- -------------
MISCELLANEOUS--7.3%
Commercial Services-0.3%
Nielsen Media Research ....................... 42,766 $ 606,743
Provides measurement service of -------------
television audiences
Diversified-5.8%
Loews Corp. .................................. 37,000 3,475,687
Tobacco; hotel; insurance subsidiary
Monsanto Co. ................................. 61,900 2,514,688
Agricultural products, nutrition &
consumer products, pharmaceuticals
Tyco International, Ltd. ..................... 89,200 5,524,825
Fire protection systems: cable: solar -------------
11,515,200
-------------
Limited Partnership-Timber-0.7%
Plum Creek Timber Co. L.P. ................... 50,000 1,400,000
Lumber and wood products -------------
Real Estate Investment Trust-0.5%
General Growth Properties, Inc. .............. 30,000 1,066,875
Real estate investment trust -------------
14,588,818
-------------
Total Common Stocks
(cost $125,468,850) ........................ 189,226,256
-------------
CONVERTIBLE PREFERRED
STOCK--1.0%
(cost $1,108,393)
Airtouch Communications, Inc. Cl. B .......... 40,728 1,873,488
Cv. Pfd. 6.000% -------------
Wireless communications services
Principal
Amount Value
------- -------------
U.S GOVERNMENT
AGENCIES--0.6%
(cost $980,785)
Federal National Mortgage Association .... $ 1,000,000 $ 1,134,936
7.400%, 07/01/04 -------------
CORPORATE BONDS--2.3%
Consumer Staples-0.5%
Procter & Gamble Co. ..................... 1,000,000 1,016,250
5.250%, 09/15/03 -------------
Financial-1.0%
Merrill Lynch & Co. ...................... 2,000,000 2,027,500
6.000%, 02/12/03 -------------
Public Utilities-0.8%
National Rural Utilities ................. 1,500,000 1,492,500
5.000%, 10/01/02 -------------
Total Corporate Bonds
(cost $4,552,824) ...................... 4,536,250
-------------
TOTAL INVESTMENTS--99.8%
(cost $132,110,852) .................... 196,770,930
-------------
Cash and Other Assets
Net of Liabilities-0.2% ................ 489,650
-------------
NET ASSETS--100% $ 197,260,580
=============
*Non-income producing
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998
- -------------------------------------------------------------------------------
Winthrop Small Company Value Fund
Shares Value
------- ----------
COMMON STOCKS--92.7%
Basic Materials--4.8%
Chemicals-4.4%
Cambrex Corp.* .............................. 160,800 $4,110,450
Producer of specialty chemicals
Hanna (M.A.) Co. ............................ 218,500 3,209,219
Special chemicals, polymers
LeaRonal, Inc. .............................. 183,400 4,046,263
Electroplating process ----------
11,365,932
----------
Paper-0.4%
Wausau-Mosinee Paper Corp. .................. 70,000 1,220,625
Printing, writing, specialty paper ----------
12,586,557
----------
CAPITAL GOODS/
CONSTRUCTION--17.8%
Aerospace-3.0%
AAR Corp. ................................... 50,000 1,156,250
New and used aviation equipment
Teleflex, Inc. .............................. 171,000 6,615,563
Aerospace controls; medical products ----------
7,771,813
----------
Building & Construction-8.9%
Applied Industrial Technology, Inc. ......... 41,475 549,544
Independent distributor of industrial
parts & products
Applied Power, Inc. Cl. A ................... 168,400 4,641,525
Manufactures hydraulic industrial/
construction equipment materials
Carlisle Companies, Inc. .................... 136,800 5,283,900
Manufactures rubber, plastic,
metal products
CLARCOR, Inc. ............................... 89,575 1,511,578
Manufactures filtration/
consumer products
Lydall, Inc. ................................ 195,400 1,978,425
Engineered fiber materials
Osmonics, Inc.* ............................. 118,500 1,059,094
Reverse osmosis/ultrafiltration
Regal Beloit Corp. .......................... 93,000 1,958,813
Manufactures tools and power
transmissions
RPM, Inc., Ohio ............................. 230,937 3,882,628
Protective coatings
Unova, Inc.* ................................ 153,600 2,217,600
Design & integration of manufacturing ----------
systems and industrial machinery
23,083,107
----------
Electrical Equipment-5.9%
AMETEK, Inc. ................................ 70,000 1,483,125
Manufactures instruments/
electric motors
AptarGroup, Inc. ............................ 151,600 4,055,300
Manufacturer of packaging
components: pumps, valves
Dallas Semiconductor Corp.* ................. 52,000 1,924,000
Manufactures high-performance
circuits
Technitrol, Inc. ............................ 65,000 1,771,250
Electronic/mechanical product
Teradyne, Inc ............................... 121,000 3,932,500
Manufacurer of electronic test system
Woodhead Industies, Inc. .................... 197,800 2,348,875
Electrical specialty products ----------
15,515,050
----------
46,369,970
----------
CONSUMER CYCLICAL--18.4%
Apparel/Textile-1.3%
Interface, Inc. Cl. A ....................... 97,850 1,204,778
Manufacturer of carpet/tile
Unitog Co. .................................. 120,300 2,165,400
Rent/sell industrial uniforms ----------
3,370,178
----------
Auto Related-4.6%
Donnelly Corp. Cl. A ........................ 73,250 1,016,344
Manufactures auto glass products
Modine Manufacturing Co. .................... 132,300 4,332,825
Auto parts: heating, air-conditioning
Myers Industries, Inc. ...................... 199,024 4,776,576
Tire service/plastic products
Smith (A.O.) Corp. .......................... 90,450 1,848,572
Automotive products, electric motors, ----------
piping systems
11,974,317
----------
Food Service/Lodging-4.2%
Marcus Corp. ................................ 229,975 3,535,866
Hotels, restaurants, theaters
Sbarro, Inc. ................................ 111,800 2,627,300
Italian fast food restaurant
Universal Foods Corp. ....................... 216,800 4,701,850
Specialty products: yeast, cheese ----------
10,865,016
----------
Household Furniture/Appliances-3.2%
Chromcraft Revington, Inc.* ................. 221,600 3,587,150
Designs/manufactures furniture
HON Industries, Inc. ........................ 107,000 2,267,063
Manufacturer of office furniture/
home building products
La-Z-Boy, Inc. .............................. 130,200 2,392,425
Manufacturer of reclining chairs ----------
8,246,638
----------
Printing & Publishing-5.1%
American Business Products, Inc. ............ 121,600 2,257,200
Business forms and supplies
Banta Corp. ................................. 152,250 3,787,219
Printing/graphic/video services
Lee Enterprises, Inc. ....................... 136,200 3,702,938
Newspaper publishing: radio, TV
Meredith Corp. .............................. 97,000 3,589,000
Publishing, broadcasting, real estate ----------
& cable TV
13,336,357
----------
47,792,506
----------
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998 (continued)
- --------------------------------------------------------------------------------
Winthrop Small Company Value Fund
Shares Value
------- ----------
CONSUMER STAPLES--8.7%
Drugs-0.7%
West Co., Inc. .............................. 64,100 $1,902,969
Pharmaceutical packaging ----------
Hospital Supplies & Services-6.8%
Arrow International, Inc. ................... 106,000 2,941,500
Critical & cardiac care equipment
Bard (C.R.), Inc.* .......................... 93,000 3,969,937
Hospital, surgical specialties
Beckman Coulter, Inc. ....................... 67,600 3,177,200
Manufactures laboratory instruments
Invacare Corp. .............................. 137,000 3,082,500
Manufacturer/distributor of home
medical equipment
Morrison Health Care, Inc. .................. 10,100 174,856
Health care, food/nutrition services
Quorum Health Group, Inc. ................... 37,500 543,750
Owns, operates acute care hospitals
Sierra Health Services* ..................... 160,900 3,750,981
Healthcare provider ----------
17,640,724
----------
Retail-Food & Drug-1.1%
Hannaford Brothers Co. ...................... 62,600 2,742,663
Distributor: food/supermarkets ----------
Retail-General-0.1%
Lands' End, Inc.* ........................... 14,000 238,875
Clothing, accessories, household items ----------
22,525,231
----------
ENERGY--5.2%
Oil-Domestic-3.5%
Helmerich & Payne, Inc. ..................... 136,000 3,238,500
Contract driller: oil & gas production
KN Energy, Inc. ............................. 77,600 3,855,750
Natural gas, mineral resources
Newpark Resources, Inc.* .................... 225,000 2,123,437
Oil & gas environmental services ----------
9,217,687
----------
Oil-Supplies & Construction-1.7%
BJ Services Co. ............................. 30,000 613,125
Oil & gas well pressure pumping service
Tidewater, Inc. ............................. 49,100 1,390,144
Offshore service vessels
Varco International, Inc.* .................. 220,000 2,378,750
Oil & gas drilling products ----------
4,382,019
----------
13,599,706
----------
FINANCIAL--18.9%
Banks-8.0%
CCB Financial Corp. ......................... 64,000 3,368,000
Commercial banking: southern U.S.
Cullen/Frost Bankers, Inc. .................. 55,000 2,928,750
Commercial banking: central U.S.
First American Corp. of Tennessee ........... 84,700 3,493,875
Commercial banking: TN
FirstMerit Corp. ............................ 220,000 5,830,000
Commercial banking: OH
First Virginia Banks, Inc. .................. 42,300 1,929,937
Commercial banking: VA
People's Bank ............................... 122,000 3,118,625
Consumer/commercial insurance and ----------
investment services
20,669,187
----------
Insurance-10.9%
Executive Risk, Inc. ........................ 20,000 950,000
Underwrites liability insurance
Horace Mann Educators Corp. ................. 63,000 1,803,375
Insurance holding: property, casualty, life
HSB Group, Inc.* ............................ 124,950 5,044,856
Insurance/engineering
NAC Re Corp. ................................ 90,300 4,373,906
Holding co.: reinsurance
Old Republic International Corp. ............ 142,800 2,713,200
Insurance: life, disability, property, casual
Poe & Brown, Inc. ........................... 96,900 3,748,819
General insurance agency
Protective Life Corp. ....................... 142,200 5,270,287
Financial service provider
ReliaStar Financial Corp. ................... 100,000 4,381,250
Insurance/financial services ----------
28,285,693
----------
48,954,880
----------
PUBLIC UTILITIES--4.7%
Electric-1.2%
CalEnergy Co., Inc.* ........................ 115,000 3,148,125
Power generation facilities ----------
Gas-3.5%
National Fuel Gas Co.* ...................... 99,600 4,706,100
Natural gas utility holding company
WICOR, Inc. ................................. 180,900 4,409,437
Utility holding: Wisconsin gas ----------
9,115,537
----------
12,263,662
----------
TECHNOLOGY--6.2%
Electronics-5.6%
Artesyn Technologies, Inc.* ................. 75,000 1,082,812
Power conversion products
Black Box Corp.* ............................ 5,000 166,875
Market/provide technical service for
communications/networking equipment
& systems
Electronic Scientific Industries, Inc. ...... 140,000 3,517,500
Laser systems & components
Input/Output, Inc.* ......................... 175,000 1,553,125
Manufacturer seismic data acquisition systems
See notes to financial statements.
Page 13
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998 (continued)
- -------------------------------------------------------------------------------
Winthrop Small Company Value Fund
Shares Value
------- ------------
Jabil Circuit, Inc. ......................... 50,000 $2,315,625
Designs/manufactures circuit boards &
systems
Methode Electronics, Inc. Cl. A ............. 251,650 3,869,119
Electronic component devices
Pioneer Standard Electronics, Inc. .......... 219,450 1,961,334
Distributor: electronic components ------------
14,466,390
------------
Office Equipment-0.6%
Hunt Manufacturing Corp. .................... 116,600 1,617,825
Manufactures & distributes office ------------
and art products
16,084,215
------------
TRANSPORT & SERVICE--3.5%
Professional Services-1.8%
CDI Corp.* .................................. 48,000 1,047,000
Engineering & technical services
Jacobs Engineering Group, Inc.* ............. 111,650 3,642,581
Temporary help services ------------
4,689,581
------------
Trucking & Shipping-1.7%
Werner Enterprises, Inc ..................... 248,750 4,477,500
Motor carrier: general freight ------------
9,167,081
------------
MISCELLANEOUS--4.5%
Diversified-4.5%
Brady (W.H.) Cl. A .......................... 112,700 2,592,100
Manufactures adhesives & coatings
Federal Signal Corp. ........................ 120,000 2,887,500
Special trucks, tools, signals
Millipore Corp. ............................. 50,000 1,231,250
Develops, manufactures and sells
purification products
Ruddick Corp. ............................... 262,700 5,106,231
Food supermarkets; thread/yarn ------------
11,817,081
------------
Total Common Stocks
(cost $179,918,848) 241,160,889
------------
COMMERCIAL PAPER--7.6%
Principal
Amount Value
------- ------------
Ford Motor Credit Corp
5.010%, 11/02/98 ....................... $ 1,500,000 $ 1,499,791
5.130%, 11/04/98 ....................... 8,100,000 8,096,537
5.400%, 11/06/98 ....................... 2,230,000 2,228,328
General Electric Capital Corp.
4.950%, 11/03/98 ....................... 6,475,000 6,473,219
5.130%, 11/03/98 ....................... 1,400,000 1,399,601
------------
Total Commercial Paper
(amortized cost $19,697,476) ........... 19,697,476
------------
TOTAL INVESTMENTS--100.3%
(cost $199,616,324) .................... 260,858,365
------------
Cash and Other Assets
Net of Liabilities-(0.3)% .............. (701,673)
------------
NET ASSETS--100% $260,156,692
============
*Non-income producing
See notes to financial statements.
Page 14
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998
- --------------------------------------------------------------------------------
Winthrop Fixed Income Fund
Principal
Amount Value
--------- ----------
U.S. GOVERNMENT
OBLIGATIONS-29.8%
United States Treasury Bonds
9.375%, 02/15/06 .......................... $ 1,500,000 $ 1,935,713
United States Treasury Notes
7.750%, 01/31/00 .......................... 1,000,000 1,042,017
8.000%, 05/15/01 .......................... 1,150,000 1,250,859
7.500%, 11/15/01 .......................... 3,700,000 4,025,789
6.125%, 12/31/01 .......................... 1,200,000 1,262,181
6.250%, 02/28/02 .......................... 3,700,000 3,911,714
6.250%, 08/31/02 .......................... 2,400,000 2,554,601
-----------
Total U.S. Government Obligations
(cost $15,261,282) 15,982,874
-----------
U.S. GOVERNMENT
AGENCIES--42.7%
Federal Home Loan Bank
5.125%, 09/15/03 .......................... 4,100,000 4,146,369
5.470%, 08/17/00 .......................... 2,000,000 2,027,387
7.360%, 07/01/04 .......................... 5,000,000 5,580,552
Federal Home Loan Mortgage Corp.
5.605%, 03/12/99 .......................... 2,500,000 2,506,365
Pool #90350 7.000%, 07/01/99 .............. 515,088 524,424
Pool #220016 8.750%, 10/01/01 ............. 3,655 3,761
6.875%, 11/22/06 .......................... 500,000 528,125
Pool #292065 8.500%, 04/01/17 ............. 1,375,047 1,445,948
Pool #260499 10.000%, 04/01/16 ............ 14,702 16,002
Pool #606523 7.721%, 10/01/19 ............. 629,994 645,744
Federal National Mortgage Assn.
Pool #312088 7.000%, 06/01/02 ............. 1,180,207 1,205,655
Pool #76368 9.250%, 09/01/03 .............. 56,821 59,911
Pool #76378 9.250%, 09/01/03 .............. 141,094 148,766
8.250%, 10/12/04 .......................... 600,000 620,214
8.400%, 10/25/04 .......................... 650,000 673,725
6.950%, 11/13/06 .......................... 1,000,000 1,058,217
Pool #270674 9.000%, 09/01/17 ............. 536,493 565,330
Pool #224635 9.000%, 09/01/20 ............. 108,414 114,241
Pool #124211 7.339%, 12/01/21 ............. 787,288 800,081
Government National Mortgage Assn.
Pool #93401 9.500%, 01/15/10 .............. 204,054 219,103
Pool #296254 9.500%, 09/15/20 ............. 4,817 5,199
-----------
Total U.S. Government Agencies
(cost $22,453,605) ........................ 22,895,119
-----------
CORPORATE BONDS--25.8%
Consumer Products & Services-4.9%
Anheuser Busch Cos.
7.000%, 09/01/05 .......................... 1,000,000 1,060,000
Coca-Cola Enterprises
7.000%, 10/01/26 .......................... 500,000 530,625
Procter & Gamble Co.
5.250%, 09/15/03 .......................... 1,000,000 1,016,250
-----------
2,606,875
-----------
Financial-6.7%
Associates Corp. of North America
6.450%, 10/15/01 .......................... 1,000,000 1,025,000
Salomon Smith Barney Holdings
6.250%, 05/15/03 .......................... 1,000,000 1,022,500
Sears Credit Account Master Trust Series
1995-2, 8.100%, 06/15/04 .................. 1,500,000 1,554,899
-----------
3,602,399
-----------
Foreign-2.4%
Santander Financial Issuances
7.250%, 05/30/06 .......................... 1,250,000 1,296,875
-----------
Public Utilities-9.8%
MCI Communications Corp.
6.125%, 04/15/02 .......................... 1,000,000 1,017,500
National Rural Utilities
5.000%, 10/01/02 .......................... 1,000,000 995,000
Oklahoma Gas & Electric
6.500%, 07/15/17 .......................... 3,000,000 3,270,000
-----------
5,282,500
-----------
Technology-2.0%
Xerox Corp.
6.250%, 11/15/26 .......................... 1,000,000 1,070,000
-----------
Total Corporate Bonds
(cost $13,242,896) ........................ 13,858,649
-----------
COMMERCIAL PAPER--2.1%
(amortized cost $1,139,842)
General Electric Capital Corp.
4.950%, 11/02/98 .......................... 980,000 979,865
5.250%, 11/02/98 .......................... 160,000 159,977
-----------
1,139,842
-----------
TOTAL INVESTMENTS--100.4%
(cost $52,097,625) ........................ 53,876,484
-----------
Cash and Other Assets
Net of Liabilities--(0.4)% ................ (193,092)
-----------
NET ASSETS--100% ............................ $53,683,392
===========
See notes to financial statements.
Page 15
<PAGE>
Winthrop Focus Funds--Statement of Investments October 31, 1998
- --------------------------------------------------------------------------------
Winthrop Municipal Trust Fund
Principal
MUNICIPAL Amount Value
--------- ----------
BONDS-102.4%
Arizona-7.3%
Chandler, Arizona Street & Highway
Revenue
6.900%, 07/01/14 ......................... $ 1,000,000 $ 1,158,750
Maricopa County, Arizona School District
Ser. A
5.200%, 07/01/13 ......................... 1,000,000 1,058,750
Phoenix, Arizona Civic Improvement Corp.
6.125%, 07/01/14 ........................ 1,000,000 1,112,500
------------
3,330,000
------------
Colorado-3.7%
Denver, Colorado City & County Airport
6.750%, 11/15/22 ........................ 1,580,000 1,708,375
------------
Florida-3.0%
Lakeland, Florida Electric & Water Revenue
5.900%, 10/01/08 ......................... 1,200,000 1,360,500
------------
Georgia-2.4%
Georgia State Ser. B
5.500%, 07/01/10 ......................... 1,000,000 1,112,500
------------
Illinois-10.3%
Chicago Illinois Metropolitan
Water Reclamation District
5.750%, 12/01/01 ......................... 1,000,000 1,063,750
7.000%, 01/01/11 ......................... 1,000,000 1,238,750
Chicago, Illinois O'Hare International
Airport
5.500%, 01/01/08 ......................... 1,000,000 1,088,750
Cook County, Illinois Ser. B
5.750%, 11/15/04 ......................... 1,215,000 1,325,869
------------
4,717,119
------------
Indiana-2.5%
Indiana University Revenue
Student Fee Ser. K
6.500%, 08/01/05 ......................... 1,000,000 1,136,250
------------
Iowa-2.3%
Iowa Student Loan Liquidation Corp.
6.800%, 03/01/05 ......................... 1,000,000 1,075,000
------------
Louisiana-1.1%
St. Charles Parish, Louisiana
Pollution Control Revenue
3.800%, 09/01/23* ....................... 500,000 500,000
------------
Maryland-2.3%
Maryland State & Local Facilities
5.000%, 08/01/08 ......................... 1,000,000 1,072,500
------------
Massachusetts-2.3%
Massachusetts State Water Resources Ser. B
5.700%, 11/01/02 ......................... 1,000,000 1,070,000
------------
New York-10.8%
New York City, New York Ser. G
5.750%, 02/01/08 ......................... 1,000,000 1,096,250
New York State Dormitory Authority Revenue
5.000%, 07/01/06 ......................... 1,000,000 1,066,250
6.500%, 05/15/06 ......................... 1,000,000 1,152,500
Port Authority NY & NJ Consolidated -
One Hundred Thirteenth
3.900%, 12/01/00 ......................... 1,600,000 1,612,000
------------
4,927,000
------------
Ohio-2.4%
Ohio State Water Development
Authority Revenue
5.750%, 06/01/04 ......................... 1,000,000 1,085,000
------------
Oklahoma-3.9%
Grand River Dam Authority, Oklahoma
6.250%, 06/01/11 ......................... 1,500,000 1,768,125
------------
Puerto Rico-4.8%
Puerto Rico Commonwealth Refunding
5.100%, 07/01/02 .......................... 1,000,000 1,043,750
Puerto Rico Electric Power Authority
Revenue
6.000%, 07/01/11 .......................... 1,000,000 1,153,750
------------
2,197,500
------------
Tennessee-2.4%
Memphis, Tennessee Electric System
6.000%, 01/01/05 ......................... 1,000,000 1,103,750
------------
Texas-29.3%
Fort Worth, Texas Higher Education
5.000%, 03/15/11 ......................... 1,000,000 1,033,750
Gulf Coast Waste Disposal Authority, Texas
3.800%, 05/01/23* ........................ 500,000 500,000
Houston, Texas Public Improvement
Refunding Ser. A
5.000%, 03/01/05 ......................... 2,000,000 2,110,000
Lewisville, Texas Independent
School District
6.000%, 08/15/01 .......................... 1,000,000 1,063,750
Plano, Texas Independent School District
6.000%, 02/15/05 ......................... 2,000,000 2,220,000
Port Authority of Houston, Texas
5.375%, 10/01/05 ......................... 1,275,000 1,389,750
San Antonio, Texas Electric & Gas
5.000%, 02/01/12 .......................... 1,000,000 1,032,500
Texas A & M University
5.250%, 05/15/01 ......................... 1,300,000 1,350,375
Texas State Refunding Ser. A
6.000%, 10/01/08 ......................... 1,000,000 1,145,000
Texas State Refunding Ser. B
5.000%, 10/01/01 .......................... 1,500,000 1,557,238
------------
13,402,363
------------
Utah-2.3%
Utah State Ser. A
5.000%, 07/01/05 .......................... 1,000,000 1,063,750
------------
Washington-4.7%
Washington State Public Power Supply
7.100%, 07/01/00 .......................... 1,000,000 1,053,750
Washington State Public Power Supply
5.500%, 07/01/10 .......................... 1,000,000 1,073,750
------------
2,127,500
------------
Wisconsin-4.6%
Wisconsin State Clean Water
Refunding Ser. 2
5.000%, 06/01/03 .......................... 2,000,000 2,095,000
------------
TOTAL INVESTMENTS--102.4%
(cost $45,003,445) ..................... 46,852,232
------------
Cash and Other Assets
Net of Liabilities-(2.4)% ................. (1,116,258)
------------
NET ASSETS--100.00% ......................... $ 45,735,974
============
See notes to financial statements.
*Variable Rate Demand Note
<PAGE>
Winthrop Focus Funds--Statement of Assets and Liabilities October 31, 1998
- -------------------------------------------------------------------------------
<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 $69,573,475, $132,110,852,
$199,616,324, $52,097,625 and
$45,003,445, respectively) .......... $114,591,184 $196,770,930 $260,858,365 $ 53,876,484 $ 46,852,232
Cash ................................. 7,800 -- 10,886 1,720 --
Receivable for investment
securities sold ..................... -- 684,477 2,069,982 1,059,796 --
Receivable for capital stock sold .... 92,339 64,275 699,460 33,677 2,000
Dividends and interest receivable .... 77,463 233,676 220,510 794,016 725,202
Reimbursement due from advisor ....... -- -- -- 102,830 60,970
------------ ------------ ------------ ------------ ------------
Total assets ...................... 114,768,786 197,753,358 263,859,203 55,868,523 47,640,404
------------ ------------ ------------ ------------ ------------
Liabilities:
Payable to investment advisor ........ 67,028 94,699 159,198 -- --
Payable to distributor ............... 37,231 65,823 74,541 16,737 12,680
Payable for investment
securities purchased ................ -- -- 2,978,836 2,059,184 1,565,002
Payable for capital stock redeemed ... 26,686 35,128 222,110 64,004 279,069
Cash overdraft due to custodian ...... -- 89,604 -- -- 11,706
Dividend payable ..................... -- -- -- 44,679 20,593
Accrued expenses and other liabilities 121,076 207,524 267,826 527 15,380
------------ ------------ ------------ ------------ ------------
Total liabilities ................. 252,021 492,778 3,702,511 2,185,131 1,904,430
------------ ------------ ------------ ------------ ------------
Net Assets ................................ $114,516,765 $197,260,580 $260,156,692 $ 53,683,392 $ 45,735,974
============ ============ ============ ============ ============
Net Assets Consist of:
Capital paid-in ...................... $ 67,750,369 $114,657,830 $198,083,360 $ 51,510,862 $ 43,879,767
Undistributed net investment income .. -- 544,417 657,647 218 --
Accumulated net realized gain
on investments ...................... 1,748,687 17,398,255 173,644 393,453 7,420
Net unrealized appreciation
of investments ..................... 45,017,709 64,660,078 61,242,041 1,778,859 1,848,787
------------ ------------ ------------ ------------ ------------
$114,516,765 $197,260,580 $260,156,692 $ 53,683,392 $ 45,735,974
============ ============ ============ ============ ============
Class A Shares:
Net assets ........................... $ 97,078,323 $163,935,967 $237,872,671 $ 47,834,341 $ 44,305,883
============ ============ ============ ============ ============
Shares outstanding ................... 5,875,166 7,255,301 12,175,007 4,572,333 4,205,769
============ ============ ============ ============ ============
Net asset value and redemption
value per share ..................... $ 16.52 $ 22.60 $ 19.54 $ 10.46 $ 10.53
============ ============ ============ ============ ============
Maximum offering price per share
(net asset value plus sales charge of
4.75% of offering price) ............ $ 17.34 $ 23.73 $ 20.51 $ 10.98 $ 11.06
============ ============ ============ ============ ============
Class B Shares:
Net assets ........................... $ 17,438,442 $ 33,324,613 $ 22,284,021 $ 5,849,051 $ 1,430,091
============ ============ ============ ============ ============
Shares outstanding ................... 1,072,912 1,477,905 1,158,641 559,055 135,768
============ ============ ============ ============ ============
Net asset value and offering price
per share ........................... $ 16.25 $ 22.55 $ 19.23 $ 10.46 $ 10.53
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Operations for the year ended
October 31, 1998
- --------------------------------------------------------------------------------
<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 ................................. $ 1,215,076 $ 3,202,695 $ 4,134,760 $ -- $ --
Interest .................................. 169,443 700,404 642,589 3,462,440 1,929,621
------------ ------------ ------------ ------------ ------------
Total investment income ................ 1,384,519 3,903,099 4,777,349 3,462,440 1,929,621
------------ ------------ ------------ ------------ ------------
Expenses:
Investment advisory fees (Note B) ......... 791,152 1,138,550 2,257,326 347,059 252,180
Distribution fees--Class A (Note B) ....... 281,391 486,265 833,911 154,153 118,085
Distribution fees--Class B (Note B) ....... 147,898 281,218 232,018 41,451 9,871
Transfer agent fees ....................... 105,900 152,500 251,700 57,100 52,630
Custodian fees ............................ 72,400 98,700 154,700 65,300 58,900
Registration fees ......................... 41,500 56,200 78,000 45,500 34,000
Printing fees ............................. 22,000 41,000 64,000 9,000 8,500
Legal fees ................................ 12,000 26,000 40,000 7,500 6,500
Auditing fees ............................. 14,000 24,500 39,500 7,000 7,000
Trustees' fees ............................ 10,500 19,000 31,000 7,500 6,500
Miscellaneous ............................. 10,371 27,171 56,633 6,954 6,309
Amortization of organization costs (Note A) -- -- -- -- 15,665
------------ ------------ ------------ ------------ ------------
Total expenses ......................... 1,509,112 2,351,104 4,038,788 748,517 576,140
Less expenses reimbursed by
investment advisor (Note B) ........... -- -- -- (164,206) (165,742)
------------ ------------ ------------ ------------ ------------
Net expenses ........................... 1,509,112 2,351,104 4,038,788 584,311 410,398
------------ ------------ ------------ ------------ ------------
Net Investment Income (Loss) ................... (124,593) 1,551,995 738,561 2,878,129 1,519,223
------------ ------------ ------------ ------------ ------------
Realized and Unrealized Gain (Loss)on
Investments--(Note C):
Net realized gain on investments ......... 2,384,117 19,617,176 112,417 1,056,920 454,476
Net change in unrealized appreciation
on investments ......................... 17,170,311 10,161,862 (34,616,060) 484,233 549,834
------------ ------------ ------------ ------------ ------------
Net realized and unrealized gain (loss)
on investments ......................... 19,554,428 29,779,038 (34,503,643) 1,541,153 1,004,310
------------ ------------ ------------ ------------ ------------
Net Increase (Decrease) in
Net Assets from Operations ................ $ 19,429,835 $ 31,331,033 $(33,765,082) $ 4,419,282 $ 2,523,533
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth Fund Growth and Income Fund
-------------------------------- --------------------------------
Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) ...................... $ (124,593) $ 133,527 $ 1,551,995 $ 1,575,782
Net realized gain on investments .................. 2,384,117 5,220,436 19,617,176 6,767,295
Net change in unrealized appreciation
on investments ................................... 17,170,311 13,577,222 10,161,862 28,947,100
------------- ------------- ------------- -------------
Net increase in net assets from operations ........ 19,429,835 18,931,185 31,331,033 37,290,177
------------- ------------- ------------- -------------
Dividends and Distributions to Shareholders from:
Investment income:
Class A .......................................... (101,689) (280,254) (1,262,477) (1,549,544)
Class B .......................................... -- (10,276) (27,525) (43,477)
Realized gains on investments:
Class A .......................................... (5,154,757) (6,295,539) (7,513,780) (11,011,422)
Class B .......................................... (680,240) (298,769) (1,134,914) (683,252)
------------- ------------- ------------- -------------
Total Dividends and Distributions to Shareholders . (5,936,686) (6,884,838) (9,938,696) (13,287,695)
------------- ------------- ------------- -------------
Capital Stock Transactions--(Net) Note D ............... 7,719,245 9,985,223 10,617,782 20,899,863
------------- ------------- ------------- -------------
Total increase in net assets ...................... 21,212,394 22,031,570 32,010,119 44,902,345
Net Assets:
Beginning of year ................................. 93,304,371 71,272,801 165,250,461 120,348,116
------------- ------------- ------------- -------------
End of year (including undistributed net
investment income of $92,880 for the Growth
Fund at 10/31/97, and $544,417 and $282,424
for the Growth and Income Fund at 10/31/98
and 10/31/97, respectively) ...................... $ 114,516,765 $ 93,304,371 $ 197,260,580 $ 165,250,461
============= ============= ============= =============
<CAPTION>
Small Company Value Fund Fixed Income Fund
-------------------------------- --------------------------------
Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ............................. $ 738,561 $ 890,373 $ 2,878,129 $ 3,245,250
Net realized gain on investments .................. 112,417 16,196,036 1,056,920 314,714
Net change in unrealized appreciation
on investments ................................... (34,616,060) 55,151,733 484,233 168,816
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from operations .................................. (33,765,082) 72,238,142 4,419,282 3,728,780
------------- ------------- ------------- -------------
Dividends and Distributions to Shareholders from:
Investment income:
Class A .......................................... (808,971) (1,023,009) (2,691,416) (3,122,839)
Class B .......................................... -- (22,095) (186,495) (122,411)
Realized gains on investments:
Class A .......................................... (15,177,402) (8,883,595) -- --
Class B .......................................... (1,010,450) (251,999) -- --
------------- ------------- ------------- -------------
Total Dividends and Distributions to Shareholders . (16,996,823) (10,180,698) (2,877,911) (3,245,250)
------------- ------------- ------------- -------------
Capital Stock Transactions--(Net) Note D ............... 9,522,839 5,317,133 (5,987,911) (370,950)
------------- ------------- ------------- -------------
Total increase (decrease) in net assets ........... (41,239,066) 67,374,577 (4,446,540) 112,580
Net Assets:
Beginning of year ................................. 301,395,758 234,021,181 58,129,932 58,017,352
------------- ------------- ------------- -------------
End of year (including undistributed net
investment income of $657,647 and $832,780
for the Small Company Value Fund at 10/31/98
and 10/31/97, respectively, and $218 for
the Fixed Income Fund at 10/31/98) ............... $ 260,156,692 $ 301,395,758 $ 53,683,392 $ 58,129,932
============= ============= ============= =============
</TABLE>
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Statement of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Trust Fund
--------------------------------
Year Ended
10/31/98 10/31/97
------------ ------------
<S> <C> <C>
Operations:
Net investment income .............................. $ 1,519,223 $ 1,642,523
Net realized gain on investments ................... 454,476 279,215
Net change in unrealized appreciation on investments 549,834 746,848
------------ ------------
Net increase in net assets from operations ......... 2,523,533 2,668,586
------------ ------------
Dividends and Distributions to Shareholders from:
Investment income:
Class A ........................................... (1,489,223) (1,623,296)
Class B ........................................... (30,000) (19,227)
------------ ------------
Total Dividends and Distributions to Shareholders .. (1,519,223) (1,642,523)
------------ ------------
Capital Stock Transactions--(Net) Note D ................ 8,307,730 (3,884,712)
------------ ------------
Total increase (decrease) in net assets ............ 9,312,040 (2,858,649)
Net Assets:
Beginning of year .................................. 36,423,934 39,282,583
------------ ------------
End of year ........................................ $ 45,735,974 $ 36,423,934
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
Winthrop Focus Funds--Notes to Financial Statements October 31, 1998
- -------------------------------------------------------------------------------
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").
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.
Each Fund offers 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 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.
<PAGE>
Winthrop Focus Funds--Notes to Financial Statements October 31, 1998 (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.
(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.
(7) Reclassification of Components of Net Assets: At October 31, 1998, the
following reclassifications were recorded to reflect permanent book/tax
differences: Growth Fund reduced capital paid-in $124,595; reduced accumulated
net realized gain on investments $8,807; and reduced accumulated net investment
loss $133,402. Small Company Value Fund reduced capital paid-in $15,214,346;
reduced undistributed net investment income $104,723; and increased accumulated
net realized gain on investments $15,319,069. These reclassifications had no
effect on net assets or net asset value per share.
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, 1998, 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
and the Municipal Trust Fund. For the period November 1, 1998 through October
31, 1999, the Advisor has agreed, with respect to both Funds, to continue 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 October 31, 1999, 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 $164,206 and
$165,742, respectively, during the year ended October 31, 1998.
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.
<PAGE>
Winthrop Focus Funds--Notes to Financial Statements October 31, 1998 (continued)
- --------------------------------------------------------------------------------
Note (C) Investment Transactions: For federal income tax purposes, the cost of
securities owned at October 31, 1998, was substantially the same as the cost of
securities for financial statement purposes. At October 31, 1998, 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) ............. $ 46,237,316 $ 69,293,051 $ 63,618,790 $ 1,792,185 $ 1,849,884
Gross depreciation (investments having an
excess of cost over value) ............. (1,219,607) (4,632,973) (2,376,749) (13,326) (1,097)
------------- ------------- ------------- ------------- -------------
Net unrealized appreciation
of investments.......................... $ 45,017,709 $ 64,660,078 $ 61,242,041 $ 1,778,859 $ 1,848,787
============= ============= ============= ============= =============
</TABLE>
For the year ended October 31, 1998, 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 ................................ $ 24,043,129 $ 65,018,296 $ 119,467,403 $ 61,178,579 $ 30,725,576
Sales .................................... 21,937,361 59,459,227 121,755,586 65,224,813 20,474,808
</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
---------------------------------------------------------------
Year Ended October 31,
1998 1997
----------------------------- -----------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A
Shares sold ............... 422,109 $ 6,775,100 437,629 $ 5,865,281
Shares issued through
reinvestment of dividends
and distributions ....... 328,321 4,571,899 473,727 5,681,333
------------ ------------ ------------ ------------
750,430 11,346,999 911,356 11,546,614
------------ ------------ ------------ ------------
Shares redeemed ........... (570,317) (9,018,140) (582,439) (7,873,990)
------------ ------------ ------------ ------------
Net increase (decrease) ... 180,113 $ 2,328,859 328,917 $ 3,672,624
============ ============ ============ ============
Class B
Shares sold ............... 405,245 $ 6,311,194 474,191 $ 6,445,214
Shares issued through
reinvestment of dividends
and distributions ....... 48,496 672,194 25,191 300,539
------------ ------------ ------------ ------------
453,741 6,983,388 499,382 6,745,753
------------ ------------ ------------ ------------
Shares redeemed ........... (100,834) (1,593,002) (30,834) (433,154)
------------ ------------ ------------ ------------
Net increase .............. 352,907 $ 5,390,386 468,548 $ 6,312,599
============ ============ ============ ============
<CAPTION>
GROWTH AND INCOME FUND
---------------------------------------------------------------
Year Ended October 31,
1998 1997
----------------------------- -----------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A
Shares sold ............... 644,179 $ 14,182,363 893,473 $ 16,234,868
Shares issued through
reinvestment of dividends
and distributions ....... 360,571 7,446,447 645,324 10,634,266
------------ ------------ ------------ ------------
1,004,750 21,628,810 1,538,797 26,869,134
------------ ------------ ------------ ------------
Shares redeemed ........... (996,891) (21,924,317) (915,088) (16,802,597)
------------ ------------ ------------ ------------
Net increase (decrease) ... 7,859 $ (295,507) 623,709 $ 10,066,537
============ ============ ============ ============
Class B
Shares sold ............... 597,420 $ 13,125,998 614,345 $ 11,255,686
Shares issued through
reinvestment of dividends
and distributions ....... 54,492 1,126,775 42,360 694,854
------------ ------------ ------------ ------------
651,912 14,252,773 656,705 11,950,540
------------ ------------ ------------ ------------
Shares redeemed ........... (154,355) (3,339,484) (58,047) (1,117,214)
------------ ------------ ------------ ------------
Net increase .............. 497,557 $ 10,913,289 598,658 $ 10,833,326
============ ============ ============ ============
</TABLE>
<PAGE>
Winthrop Focus Funds--Notes to Financial Statements October 31, 1998 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY VALUE FUND
---------------------------------------------------------------
Year Ended October 31,
1998 1997
----------------------------- -----------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A
Shares sold ................ 1,284,225 $ 27,801,004 1,563,609 $ 32,372,641
Shares issued through
reinvestment of dividends
and distributions ....... 687,065 14,965,287 520,341 9,336,451
------------ ------------ ------------ ------------
1,971,290 42,766,291 2,083,950 41,709,092
------------ ------------ ------------ ------------
Shares redeemed ............ (1,922,814) (41,663,984) (2,325,116) (45,822,643)
------------ ------------ ------------ ------------
Net increase (decrease) .... 48,476 $ 1,102,307 (241,166) $ (4,113,551)
============ ============ ============ ============
Class B
Shares sold ................ 518,740 $ 11,401,502 488,038 $ 10,257,289
Shares issued through
reinvestment of dividends
and distributions ....... 45,728 985,428 14,941 266,712
------------ ------------ ------------ ------------
564,468 12,386,930 502,979 10,524,001
------------ ------------ ------------ ------------
Shares redeemed ............ (201,585) (3,966,398) (50,994) (1,093,317)
------------ ------------ ------------ ------------
Net increase ............... 362,883 $ 8,420,532 451,985 $ 9,430,684
============ ============ ============ ============
<CAPTION>
FIXED INCOME FUND
---------------------------------------------------------------
Year Ended October 31,
1998 1997
----------------------------- -----------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A
Shares sold ................ 864,157 $ 8,849,660 1,007,188 $ 10,106,275
Shares issued through
reinvestment of dividends
and distributions ....... 203,755 2,089,567 227,876 2,280,614
------------ ------------ ------------ ------------
1,067,912 10,939,227 1,235,064 12,386,889
------------ ------------ ------------ ------------
Shares redeemed ............ (1,883,198) (19,273,927) (1,447,949) (14,465,843)
------------ ------------ ------------ ------------
Net increase (decrease) .... (815,286) $ (8,334,700) (212,885) $ (2,078,954)
============ ============ ============ ============
Class B
Shares sold ................ 343,505 $ 3,539,007 234,034 $ 2,345,418
Shares issued through
reinvestment of dividends
and distributions ....... 14,055 144,410 9,475 94,809
------------ ------------ ------------ ------------
357,560 3,683,417 243,509 2,440,227
------------ ------------ ------------ ------------
Shares redeemed ............ (130,535) (1,336,628) (73,268) (732,223)
------------ ------------ ------------ ------------
Net increase ............... 227,025 $ 2,346,789 170,241 $ 1,708,004
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL TRUST FUND
---------------------------------------------------------------
Year Ended October 31,
1998 1997
----------------------------- -----------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A
Shares sold ................ 1,397,039 $ 14,495,430 620,191 $ 6,261,100
Shares issued through
reinvestment of dividends
and distributions ....... 118,197 1,231,297 124,371 1,258,384
------------ ------------ ------------ ------------
1,515,236 15,726,727 744,562 7,519,484
------------ ------------ ------------ ------------
Shares redeemed ............ (795,577) (8,279,965) (1,134,519) (11,447,099)
------------ ------------ ------------ ------------
Net increase (decrease) .... 719,659 $ 7,446,762 (389,957) $ (3,927,615)
============ ============ ============ ============
Class B
Shares sold ................ 82,622 $ 859,779 36,704 $ 373,121
Shares issued through
reinvestment of dividends
and distributions ....... 1,368 14,267 1,332 13,451
------------ ------------ ------------ ------------
83,990 874,046 38,036 386,572
------------ ------------ ------------ ------------
Shares redeemed ............ (1,256) (13,078) (33,844) (343,669)
------------ ------------ ------------ ------------
Net increase ............... 82,734 $ 860,968 4,192 $ 42,903
============ ============ ============ ============
</TABLE>
<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 and Distribu- Net Ratio of Ratio of
Net Asset Unrealized Dividends tions Asset Net Assets Expenses Net Investment
Value, Net Gains or from Net from Value, End of to Average Income(Loss) Portfolio
Beginning Investment (Losses) on Investment Capital End Total Period Net to Average Turnover
of Period Income(Loss) Securities Income(Loss) Gains of Period Return+ (000 omitted) Assets(2) Net Assets(2) Rate
--------- ------------ ---------- ------------ ----- --------- ------- ------------- --------- ------------- ----
Growth Fund--Years Ended October 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
1998 $14.56 ($ 0.003)* $ 2.882 ($ 0.017) ($ 0.902) $ 16.52 21.00% $ 97,078 1.29% (0.02%) 21.0%
1997 12.69 0.028 3.065 (0.048) (1.175) 14.56 26.48 82,926 1.36 0.21 41.1
1996 11.35 0.053 2.107 (0.038) (0.782) 12.69 20.32 68,096 1.48 0.47 60.6
1995 10.82 0.037 1.190 (0.012) (0.685) 11.35 12.21 55,946 1.63 0.35 101.7
1994 10.97 0.014 0.435 -- (0.599) 10.82 4.15 52,455 1.65 0.06 28.2
Class B (3)
1998 14.41 (0.115)* 2.857 -- (0.902) 16.25 20.20 17,438 1.99 (0.72) 21.0
1997 12.63 (0.030) 3.016 (0.031) (1.175) 14.41 25.66 10,378 2.06 (0.51) 41.1
1996 11.88 (0.013) 0.763 -- -- 12.63 6.40 3,177 2.17 (1) (0.34) (1) 60.6
<CAPTION>
Growth and Income Fund--Years Ended October 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
1998 $20.09 $ 0.202* $ 3.509 ($ 0.170) ($ 1.031) $ 22.60 19.14% $163,936 1.13% 0.92% 32.7%
1997 17.18 0.211 4.588 (0.214) (1.675) 20.09 30.53 145,586 1.22 1.15 19.8
1996 14.57 0.266 2.935 (0.241) (0.350) 17.18 22.60 113,803 1.36 1.68 44.0
1995 13.38 0.254 1.769 (0.266) (0.567) 14.57 16.10 87,975 1.58 1.94 31.8
1994 13.42 0.244 0.358 (0.223) (0.419) 13.38 4.58 67,020 1.64 1.88 25.9
Class B (3)
1998 20.06 0.045* 3.500 (0.024) (1.031) 22.55 18.29 33,325 1.83 0.22 32.7
1997 17.15 0.079 4.577 (0.071) (1.675) 20.06 29.59 19,664 1.92 0.39 19.8
1996 16.05 0.136 1.109 (0.145) -- 17.15 7.67 6,545 1.99 (1) 1.06 (1) 44.0
<CAPTION>
Small Company Value Fund--Years Ended October 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
1998 $23.34 $ 0.066* ($ 2.548) ($ 0.063) ($ 1.255) $ 19.54 (11.20)% $237,873 1.29% 0.30% 41.5%
1997 18.41 0.073 5.661 (0.081) (0.723) 23.34 32.48 283,001 1.35 0.37 21.1
1996 16.61 0.084 2.162 (0.037) (0.409) 18.41 13.80 227,716 1.47 0.48 35.1
1995 15.65 0.035 1.621 -- (0.696) 16.61 11.10 202,730 1.64 0.23 25.1
1994 16.11 0.105 0.603 (0.026) (1.142) 15.65 4.67 144,624 1.70 (0.04) 31.6
Class B (3)
1998 23.12 (0.089)* (2.546) -- (1.255) 19.23 (11.98) 22,284 1.99 (0.40) 41.5
1997 18.34 (0.021) 5.576 (0.052) (0.723) 23.12 31.55 18,395 2.05 (0.32) 21.1
1996 17.41 (0.023) 0.953 -- -- 18.34 5.28 6,305 2.15 (1) (0.34) (1) 35.1
<CAPTION>
Fixed Income Fund--Years Ended October 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
1998 $10.16 $ 0.531 $ 0.300 ($ 0.531) -- $ 10.46 8.46% $ 47,834 1.00% 5.24% 114.0%
1997 10.07 0.575 0.090 (0.575) -- 10.16 6.84 54,755 1.00 5.74 119.3
1996 10.22 0.577 (0.150) (0.577) -- 10.07 4.34 56,388 1.00 5.72 90.2
1995 9.66 0.588 0.560 (0.588) -- 10.22 12.23 53,885 1.00 5.90 66.1
1994 10.93 0.567 (1.027) (0.567) (0.243) 9.66 (4.37) 39,150 0.93 5.58 55.9
Class B (3)
1998 10.16 0.456 0.300 (0.456) -- 10.46 7.71 5,849 1.70 4.50 114.0
1997 10.07 0.504 0.090 (0.504) -- 10.16 6.10 3,375 1.70 4.99 119.3
1996 10.22 0.339 (0.150) (0.339) -- 10.07 2.23 1,629 1.70 (1) 5.03 (1) 90.2
<CAPTION>
Municipal Trust Fund--Years Ended October 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
1998 $10.29 $ 0.383 $ 0.240 ($ 0.383) -- $ 10.53 6.28% $ 44,306 1.00% 3.78% 51.5%
1997 10.01 0.445 0.280 (0.445) -- 10.29 7.37 35,878 0.70 4.38 84.3
1996 10.06 0.425 (0.050) (0.425) -- 10.01 3.83 38,794 0.80 4.26 79.3
1995 9.51 0.389 0.550 (0.389) -- 10.06 10.06 39,059 1.00 3.97 49.3
1994 10.10 0.365 (0.590) (0.365) -- 9.51 (2.27) 34,470 0.83 3.71 42.5
Class B (3)
1998 10.29 0.318 0.240 (0.318) -- 10.53 5.54 1,430 1.70 3.04 51.5
1997 10.01 0.370 0.280 (0.370) -- 10.29 6.62 546 1.40 3.66 84.3
1996 10.12 0.248 (0.110) (0.248) -- 10.01 1.42 489 1.23 (1) 3.81 (1) 79.3
</TABLE>
- ----------
+ 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.
* Based on average shares outstanding.
(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%, .30%, .34%, .51%, and .67% for the years ended 10/31/98, 97,
96, 95, and 94, respectively; Fixed Income Fund Class B shares, .30% and
.30% for the years ended 10/31/98 and 97, respectively, and .34%
(annualized) for the period 2/28/96 through 10/31/96; Municipal Trust Fund
Class A shares, .41%, .74%, .64%, .58%, and .77% for the years ended
10/31/98, 97, 96, 95, and 94, respectively, and Municipal Trust Fund Class
B shares, .41% and .74% for the years ended 10/31/98 and 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.
<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, 1998, 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, 1998 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, 1998,
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, 1998
<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, 1998. 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 $ -- $ -- $ 0.017 $ 0.367 $ 0.535
Winthrop Growth Fund-Class B -- -- -- 0.367 0.535
Winthrop Growth and Income Fund-Class A -- -- 0.170 0.058 0.973
Winthrop Growth and Income Fund-Class B -- -- 0.024 0.058 0.973
Winthrop Small Company Value Fund-Class A -- -- 0.063 0.567 0.688
Winthrop Small Company Value Fund-Class B -- -- -- 0.567 0.688
Winthrop Fixed Income Fund-Class A -- -- 0.528 -- --
Winthrop Fixed Income Fund-Class B -- -- 0.454 -- --
Winthrop Municipal Trust Fund-Class A 0.340 0.041 0.002 -- --
Winthrop Municipal Trust Fund-Class B 0.282 0.034 0.002 -- --
</TABLE>
- ------------------
* Federally exempt interest dividends
Because each Fund's fiscal year is not the calendar year, calendar 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, 1999. Included
with your 1099-DIV will be a notice identifying the percentage of ordinary
income dividends paid in 1998 which were derived from Federal obligations. 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 consequenes of their investments in each Fund.
<PAGE>
WINTHROP FOCUS FUNDS
(800) 225-8011
TRUSTEES
G. Moffett Cochran Carl B. Menges William C. Simpson
Robert L. Bast John J. Sheehan Peter F. Krogh
James A. Engle Dennis G. Little Stephen K. West
Stig Host William H. Mathers
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
First Data Investor Services Group, 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
[LOGO]
INVESTMENT MANAGEMENT SUBSIDIARY OF
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
(THE FUND DISTRIBUTOR)
WFF-2 12/98
[LOGO] WINTHROP [LOGO]
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MUTUAL FUNDS
WINTHROP FIXED INCOME FUND
WINTHROP GROWTH FUND
WINTHROP GROWTH AND INCOME FUND
WINTHROP MUNICIPAL TRUST FUND
WINTRHOP SMALL COMPANY VALUE FUND
OCTOBER 31, 1998
ANNUAL
REPORT
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