<PAGE> 1
CrestFunds(R), Inc.
Annual Report
November 30, 1995
Cash Reserve Fund
U.S. Treasury Money Fund
Tax Free Money Fund
Limited Term Bond Fund
Intermediate Bond Fund
Government Bond Fund
Virginia Intermediate Municipal
Bond Fund
Virginia Municipal Bond Fund
Value Fund
Capital Appreciation Fund
Special Equity Fund
<PAGE> 2
CRESTFUNDS, INC.(R)
DEAR CRESTFUNDS SHAREHOLDER:
We are pleased to report on an exceptional year for stocks and bonds. This was a
period when everything fell into place for long-term investors, as a combination
of moderate economic growth, low inflation and strong corporate profits led to
one of the best years in the history of the financial markets. By our
calculation, this was the ninth best year for stocks and third best for bonds
since 1926.
At this time last year, we encouraged shareholders to take heart after what had
been a disappointing 1994. As we've said before, one year does not determine
investment success or failure. So now, after such a great year we may need to
temper our enthusiasm relative to the long-term realities of the financial
markets.
A REVIEW OF 1995: THE ECONOMY AND FINANCIAL MARKETS
We began the fiscal year with a booming economy and with interest rates at
relatively high levels. The economy had been in a strong uptrend for over a year
and interest rates had risen dramatically in anticipation of higher inflation.
As it turned out, the inflationary pressures never developed, but the rise in
interest rates did contribute to a cooling down in the economy.
Signs of slower economic growth and modest inflation spurred a major reversal in
the level of interest rates, a trend that was reinforced by actions of the
Federal Reserve. Over the course of the fiscal year, the yield on 90-day
Treasury bills declined from 5.70% to 5.46%, while the yield on 30-year Treasury
bonds fell from 7.99% to 6.13%. For the fiscal year, the total return from
Treasury bills was 5.48%, while the Lehman Government/Corporate Intermediate
Index recorded a 14.51% return.
Lower interest rates also helped stocks as investors saw declining returns from
money market securities and bonds. Additionally, corporate profit growth
remained strong in the aggregate. The combination of these factors attracted
record cash flows into the stock market, propelling all indices to record
levels. For example, the Standard & Poor's 500(R) had a total return of 36.98%
for the fiscal year, while the NASDAQ composite produced 41.17%.
THE ECONOMIC OUTLOOK FOR 1996
We anticipate that the slower economic conditions of 1995 will continue into
1996 for several reasons. First, this expansion is now over five years old
suggesting that there is little if any pent-up demand left from the previous
downturn. Consumer purchases that were delayed have now been made. Secondly,
employment conditions have weakened over the past year, both from slower
economic growth and the continuation of corporate consolidations and downsizing.
Consumer confidence has declined, while debt burdens have risen. Finally,
government spending is being reined in from pressure to balance the budget.
There is unlikely to be any real fiscal stimulus to the economy for many years.
The good news is that interest rates have declined substantially, lowering the
cost of borrowing for the government, corporations and consumers. This will
contribute to a lower budget deficit and additional purchasing power for
corporations and consumers.
All said, it is a mixed picture for the economy, with little to suggest a boom
or a bust. We look for real Gross Domestic Product to grow about 2% in 1996 and
for inflation to remain below 3%.
THE OUTLOOK FOR THE FINANCIAL MARKETS
We remain generally optimistic on the outlook for stocks and bonds, mainly
because we believe that inflation will remain subdued. While we have had
inflationary bursts in certain commodity prices in recent years, the overall
disinflationary trend has persisted for over a decade. The forces that underlie
this trend, such as greater global competition and floating exchange rates, have
compelled governments and corporations to strengthen their cost management
disciplines in order to succeed. We do not see these pressures receding in the
near future.
<PAGE> 3
While investors have gradually recognized that inflation is less of a threat,
there is still room for further declines in interest rates. Returns from money
market securities are expected to drift lower in 1996 as the Federal Reserve
eases monetary policy further. This should also lead to lower bond yields and
some further price appreciation for bond investors. The stock market would be
helped by lower interest rates, but unlike 1995, profit growth is expected to be
less robust, suggesting a more selective, more volatile environment for 1996.
On behalf of all of us who manage CrestFunds, let me thank you for the
opportunity to serve you. Please let us know if there is more we can do to help
you fulfill your investment objectives.
Sincerely,
THOMAS D. HOGAN
Chairman
Capitoline Investment Services Incorporated
A wholly-owned subsidiary of Crestar Bank
<PAGE> 4
CRESTFUNDS, INC.: LIMITED TERM BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Limited Term Bond Fund seeks to provide a high level of current income by
investing in investment-grade fixed income debt obligations. The Fund is managed
to maintain a dollar-weighted average portfolio maturity of between 1 and 5
years.
YEAR IN REVIEW
FOR BOND INVESTORS, THE FISCAL YEAR ENDING NOVEMBER 30, 1995 WAS THE EXACT
OPPOSITE OF 1994. Bond prices generally rose throughout the year, affording bond
market participants double digit returns most frequently achieved in the equity
markets. The driving force behind this market move was the Federal Reserve
action taken in 1994 when the Fed raised interest rates 6 times in an attempt to
slow the torrid pace of growth experienced in 1993 and early 1994. This
objective was achieved in 1995 as consumers found it more expensive to finance
major purchases ranging from home mortgages to items charged via credit cards
and manufacturers found it more expensive to pursue expansion plans. As the
consumer and the manufacturing sectors began to feel the pinch caused by the
higher cost of money, the economy slowed to a more moderate, non-inflationary
level during 1995. Additionally, the inflation outlook continued to improve
throughout 1995 as producers found it difficult to pass along price increases.
The consumer price index has only increased at a 2.6% rate since November 1994.
The combination of moderate economic growth and a low inflation rate resulted in
one of the best bond markets in history.
THE CRESTFUNDS LIMITED TERM BOND FUND RESPONDED TO THESE MARKET CONDITIONS by
extending maturities and repositioning the portfolio along different points on
the yield curve. The majority of this extension occurred during the first
quarter of 1995 when the fund's average maturity was increased from 3.0 years to
3.9 years. Purchases were made in four and five year notes as one year
maturities were reduced. As the bond market continued to go higher throughout
the summer, the average maturity was slightly reduced in an attempt to capture
some of the gains achieved earlier in the year and to reduce the Fund's exposure
to interest rate risk. Other strategies that worked in the Fund's favor included
reducing federal agency notes in favor of short asset-backed securities
purchased to improve the Fund's overall yield. Asset backed securities were also
favored over short-term corporate bonds for new purchases as the yields offered
superior returns over similar maturity treasuries. Cash positions were kept
minimal throughout the year. At fiscal year end the Fund's average maturity was
3.4 years, slightly over the mid point of the Fund's allowable maturity range of
1 to 5 years.
LOOKING AHEAD TO 1996, THE BOND MARKET SHOULD CONTINUE TO BE AN ATTRACTIVE
INVESTMENT ALTERNATIVE although, given the dramatic decline in interest rates
during the past 12 months, the potential for risk is growing. On the positive
side, the ever vigilant Federal Reserve reversed its tightening mode in July of
1995 by lowering short-term interest rates by .25% to 5.75%. This was followed
by another cut of .25% in December, lowering the rate to 5.5%. Given our outlook
for moderate economic growth and controlled inflation in 1996, it is likely that
the Fed will move short-term rates even lower in early 1996. Congressional and
White House agreement on a balanced budget will aid this development, but a
failure to reach an agreement could prove to be disappointing near term.
Therefore, we continue to feel cautiously optimistic toward the bond market.
However, as bond prices continue to move higher, we are looking for
opportunities to lock in profits and move to a slightly more defensive position.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1995
Corporates 40%
Treasures & Agencies 32%
Mortgage/Asset Backed 22%
Cash Equivalents 6%
<PAGE> 5
CRESTFUNDS, INC.: LIMITED TERM BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Ltd Trust
9/30/92 1,000,000 1,000,000 1,000,000
Nov-92 988,630 983,249 955,134
Nov-93 1,076,020 1,078,920 1,030,210
Nov-94 1,059,130 1,059,280 1,026,190
Nov-95 1,180,932 1,212,985 1,151,795
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank's Trust &
Investment Management Group.
A hypothetical $1 million investment in Trust Class shares of the Limited Term
Bond Fund, at the Fund's commencement of operations (9/28/92), including the
effect of Fund expenses but excluding account level fees, would have grown to
$1,180,932 by November 30, 1995. Over the same period, a $1 million investment
in Lehman Brothers Government/Corporate Intermediate Bond Index and the Merrill
Lynch 1-5 Year Government/Corporate Bond Index would have grown to $1,212,985
and 1,151,795, respectively.
INVESTORS CLASS A
Ltd Inv A
5/31/92 9,800 10,000 10,000
Nov-93 10,104 10,355 10,288
Nov-94 9,933 10,167 10,248
Nov-95 11,096 11,642 11,502
Investors Class A shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class A shares of the Limited
Term Bond Fund on the day that class commenced operations (5/19/93), including
the effect of the maximum 2.00% sales charge and the Investors Class A higher
transfer agency fee, would be valued at $11,096 by November 30, 1995. Over the
same period, a $10,000 investment in Lehman Brothers Government/Corporate
Intermediate Bond Index and the Merrill Lynch 1-5 Year Government/Corporate Bond
Index would have grown to $11,642 and 11,502, respectively.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A
----------- ------------------------------
with load without load
<S> <C> <C> <C>
1 YEAR 11.50% 9.51% 11.70%
3 YEAR 6.10% -- --
LIFE OF FUND 5.38% 4.67% 5.32%
</TABLE>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A
----------- ------------------------------
with load without load
<S> <C> <C> <C>
1 YEAR 11.50% 9.51% 11.70%
3 YEAR 19.44% --
LIFE OF FUND 18.10% 15.58% 17.89%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. On May 19, 1993, the Fund
commenced sales of Investors Class A shares. Performance information prior to
May 19, 1993 for the Investors Class A does not reflect the effects of the
higher transfer agent fee rate, which, if included, would lower Investors Class
A performance. Life of Fund figures are from commencement of operations
(9/28/92) to the period ended listed above. The Lehman Brothers
Government/Corporate Intermediate Bond Index, an unmanaged index, is a broad
measure of the performance of intermediate (one-to ten-year) bonds. Merrill
Lynch 1-5 year Government/Corporate Bond Index, an unmanaged index, is a broad
measure of the performance of one to five year Bonds. They both include
reinvestment of dividends and capital gains. Share price, yield and return will
vary, and you may have a gain or loss when you sell your shares. Past
performance is no guarantee of future results.
<PAGE> 6
CRESTFUNDS, INC.: INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Intermediate Bond Fund seeks to provide a high level of current income by
investing in investment-grade fixed-income debt obligations. The Fund is managed
to maintain a dollar-weighted average portfolio maturity of between 5 and 10
years.
YEAR IN REVIEW
THE FISCAL YEAR ENDED NOVEMBER 30, 1995 PROVED TO BE OUTSTANDING FOR BOND MARKET
PARTICIPANTS. The economy, as measured by the Real Gross Domestic Product (GDP),
slowed down in 1995 following an extended period of robust growth. The driving
force behind this slowdown was a direct result of Federal Reserve action taken
in 1994 when the Fed raised interest rates 6 times in an attempt to slow the
torrid pace of growth which began during the fourth quarter of 1993 and
continued throughout 1994. The success of this activity was apparent when GDP
for the first and second quarters of 1995 came in at 4.7% and 3.0%,
respectively. While these growth rates were still above the Federal Reserve's
non-inflationary growth target of 2.5%, this slowing was enough to allow
interest rates to fall as both the consumer and manufacturing sectors began to
show signs of stress caused by the higher cost of short term borrowing.
Additionally, as the economy slowed, inflationary expectations began to fall and
investors became more confident that the value of their fixed-income investments
would not erode due to inflation. The combination of moderate economic growth
and a low inflation rate resulted in one of the best bond markets in history.
THE CRESTFUNDS INTERMEDIATE BOND FUND RESPONDED TO THESE MARKET CONDITIONS BY
EXTENDING MATURITIES AND REPOSITIONING AMONG VARIOUS SECTORS. At the end of the
last fiscal year, the Fund's average maturity was slightly under 6 years. During
the first 6 months of 1995, the average maturity was extended to just over 7
years with emphasis in the 10 to 12 year sector. We correctly anticipated that
yields in all maturities would decline and that the shape of the yield curve
would "flatten". This happens when inflationary pressures are declining and
economic growth begins to slow. Some longer dated issues were also added to take
advantage of this "flattening" of the yield curve. Additionally, we reversed our
previous year's strategy of reducing our corporate bond exposure. As interest
rates began to fall this year, we increased our exposure to corporates from 28%
to 39% as the outlook for corporate bonds showed signs of improvement. Most of
the purchases were directed to the industrial sector and emphasis was placed on
higher quality credits. To fund these purchases, we reduced our treasury
holdings commensurately. Both strategy moves -- extending maturities and
increasing corporate holdings -- improved the Fund's relative performance for
the year.
LOOKING AHEAD TO 1996, THE BOND MARKET SHOULD CONTINUE TO BE AN ATTRACTIVE
INVESTMENT ALTERNATIVE although, given the dramatic decline in interest rates
during the past 12 months, the potential for risk is growing. On the positive
side, the ever vigilant Federal Reserve reversed its tightening mode in July of
1995 by lowering short-term interest rates by .25% to 5.75%. This was followed
by another cut of .25% in December, lowering the rate to 5.5%. Given our outlook
for moderate economic growth and controlled inflation in 1996, it is likely that
the Fed will move short-term rates even lower in early 1996. Congressional and
White House agreement on a balanced budget will aid this development but a
failure to reach an agreement could prove to be disappointing near term. We
continue to feel cautiously optimistic toward the bond market, although if bond
prices continue to move higher, we will look for opportunities to lock in
profits and move to a slightly more defensive position.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1995
Treasuries & Agencies 43%
Corporates 39%
Mortgage/Asset Backed 14%
Cash Equivalents 4%
<PAGE> 7
CRESTFUNDS, INC.: INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Intermediate Trust
9/30/92 1,000,000 1,000,000
Nov-92 976,020 986,897
Nov-93 1,079,280 1,094,470
Nov-94 1,028,230 1,060,980
Nov-95 1,203,752 1,248,241
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/ or administered by Crestar Bank's Trust
& Investment Management Group.
A hypothetical $1 million investment in Trust Class shares of the Intermediate
Bond Fund, at the Fund's commencement of operations (9/28/92), including the
effect of Fund expenses but excluding account level fees, would have grown to
$1,203,752 by November 30, 1995. Over the same period, a $1 million investment
in Lehman Brothers Aggregate Bond Index would have grown to $1,248,241.
INVESTORS CLASS A
Intermed Inv A
5/30/93 9,700 10,000
Nov-93 10,032 10,396
Nov-94 9,559 10,078
Nov-95 11,191 11,856
Investors Class A shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class A shares of the
Intermediate Bond Fund on the day that class commenced operations (5/11/93),
including the effect of the maximum 3.00% sales charge and the Investors Class A
higher transfer agency fee, would be valued at $11,191 by November 30, 1995.
Over the same period, a $10,000 investment in Lehman Brothers Aggregate Bond
Index would have grown to $11,856.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A
----------- ------------------------------
with load without load
<S> <C> <C> <C>
1 YEAR 17.07% 13.61% 17.08%
3 YEAR 7.24% -- --
LIFE OF FUND 6.12% 5.00% 6.01%
</TABLE>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A
----------- ------------------------------
with load without load
<S> <C> <C> <C>
1 YEAR 17.07% 13.61% 17.08%
3 YEAR 23.33% -- --
LIFE OF FUND 20.79% 16.74% 20.41%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. On May 11, 1993, the Fund
commenced sales of Investors Class A shares. Performance information prior to
May 11, 1993 for the Investors Class A does not reflect the effects of the
higher transfer agent fee rate, which, if included, would lower Investors Class
A performance. Life of Fund figures are from commencement of operations
(9/28/92) to the period ended listed above. The Lehman Brothers Aggregate Bond
Index, an unmanaged index, is a broad measure of bond performance. It includes
reinvestment of dividends and capital gains. Share price, yield and return will
vary, and you may have a gain or loss when you sell your shares. Past
performance is no guarantee of future results.
<PAGE> 8
CRESTFUNDS, INC.: GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Government Bond Fund seeks to provide a high level of current income in a
manner consistent with preserving principal by investing primarily in
obligations issued or guaranteed by U.S. Government or its agencies or
instrumentalities.
YEAR IN REVIEW
THE FISCAL YEAR ENDED NOVEMBER 30, 1995 PROVED TO BE OUTSTANDING FOR BOND MARKET
PARTICIPANTS. The economy as measured by the Real Gross Domestic Product (GDP),
slowed down in 1995 following an extended period of robust growth. The driving
force behind this slowdown was a direct result of Federal Reserve action taken
in 1994 when the Fed raised interest rates 6 times in an attempt to slow the
torrid pace of growth which began during the fourth quarter of 1993 and
continued throughout 1994. The success of this activity was apparent when GDP
for the first and second quarters of 1995 came in at 4.7% and 3.0%,
respectively. While these growth rates were still above the Federal Reserve's
non-inflationary growth target of 2.5%, this slowing of growth was enough to
allow interest rates to fall as both the consumer and manufacturing sectors
began to show signs of stress caused by the higher cost of short-term borrowing.
Additionally, as the economy slowed, inflationary expectations began to fall and
investors became more confident that the value of their fixed-income investments
would not erode due to inflation. The combination of moderate economic growth
and a low inflation rate resulted in one of the best bond markets in history.
CRESTFUNDS GOVERNMENT BOND FUND WAS WELL POSITIONED TO BENEFIT FROM THE
SUBSTANTIAL DECLINE IN INTEREST RATES. The Fund was introduced in April of 1995
as an option for the investor looking for a high quality, longer term fixed
income mutual fund. Upon inception, the Fund was invested predominately in
Treasury securities with an average maturity of 11.3 years. During the next few
months the focus was on adding corporate bonds to the portfolio for
diversification purposes and to enhance yield. Industrial and finance corporate
bonds in 7 and 10 year maturities were added as treasuries with similar
maturities were reduced. By July, the Fund had reached an average maturity of
11.8 years and corporates comprised 21% of the portfolio. From that point on,
the maturity of the Fund was gradually reduced to the current average maturity
of 9.8 years in an attempt to capture some of the gains achieved since the
Fund's inception and to reduce the Fund's exposure to interest rate risk. As
five year corporate bonds were added to achieve this goal, the Fund's corporate
allocation reached 25%. The balance of the portfolio is in federal agency notes
and shorter term asset backed securities, and longer term treasury bonds.
LOOKING AHEAD TO 1996, THE BOND MARKET SHOULD CONTINUE TO BE AN ATTRACTIVE
INVESTMENT ALTERNATIVE although, given the dramatic decline in interest rates
during the past 12 months, the potential for risk is growing. On the positive
side, the ever vigilant Federal Reserve reversed its tightening mode in July of
1995 by lowering short-term interest rates by .25% to 5.75%. This was followed
by another cut of .25% in December, lowering the rate to 5.5%. Given our outlook
for moderate economic growth and controlled inflation in 1996, it is likely that
the Fed will move short-term rates even lower in early 1996. Congressional and
White House agreement on a balanced budget will aid this development but a
failure to reach an agreement could prove to be disappointing near term. We
continue to feel cautiously optimistic toward the bond market, although if bond
prices continue to move higher, we will look for opportunities to lock in
profits and move to a slightly more defensive position.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1995
Treasuries & Agencies 67%
Corporates 25%
Cash Equivalents 4%
Mortgage/Asset Backed 4%
<PAGE> 9
CRESTFUNDS, INC.: GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Gov Bond Trust
4/30/95 1,000,000 1,000,000
Nov-95 1,110,100 1,099,900
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank's Trust &
Investment Management Group.
A hypothetical $1 million investment in Trust Class shares of the Government
Bond Fund, at the Fund's commencement of operations (4/5/95), including the
effect of Fund expenses but excluding account level fees, would have grown to
$1,110,100 by November 30, 1995. Over the same period, a $1 million investment
in Lehman Brothers Government Bond Index would have grown to $1,099,900.
INVESTORS CLASS B
Gov BF
4/30/95 10,000 10,000
Nov-95 10,566 10,999
Investors Class B shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class B shares of the
Government Bond Fund on the day that class commenced operations (4/19/95),
including the effect of a Contingent Deferred Sales Charge and the Investors
Class B higher transfer agency fee and 12B-1 fee, would be valued at $10,566 by
November 30, 1995. Over the same period, a $10,000 investment in Lehman Brothers
Government Bond Index would have grown to $10,999.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS B
----------- --------------------------------------------
with back-end load without back-end load
<S> <C> <C> <C>
LIFE OF FUND 18.56% 9.64% 18.12%
</TABLE>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS B
----------- --------------------------------------------
with back-end load without back-end load
<S> <C> <C> <C>
LIFE OF FUND 11.85% 5.86% 10.86%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. On April 19, 1995, the Fund
commenced sales of Investors Class B shares. Performance information prior to
April 19, 1995 for the Investors Class B does not reflect the effects of the
higher transfer agent fee and 12b-1 fee rate, which, if included, would lower
Investors Class B performance. Life of Fund figures are from commencement of
operations (4/5/95) to the period ended listed above. The Lehman Brothers
Government Bond Index, an unmanaged index, is a broad measure of the performance
of government bonds. It includes reinvestment of dividends and capital gains.
Share price, yield and return will vary, and you may have a gain or loss when
you sell your shares.
<PAGE> 10
CRESTFUNDS, INC.: VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Virginia Intermediate Municipal Bond Fund seeks to provide high current
income exempt from federal and Virginia income tax in a manner consistent with
the preservation of capital by investing in municipal bonds of investment-grade
quality. The Fund is managed to maintain a dollar-weighted average portfolio
maturity of between 5 and 10 years.
YEAR IN REVIEW
DURING 1995, INTEREST RATES DROPPED SUBSTANTIALLY. The dominating factor for
this reversal from 1994 was the realization that inflation was contained for
nearly four years and that the moderating growth of the economy reduced the risk
of future inflation. Also, the Federal Reserve has given the market a sign that
it is willing to reduce short-term interest rates by cutting the Fed Funds rate
by .25% in July. Interest rates on municipals also dropped but not in tandem
with taxable interest rates. The biggest factor for the divergence was "flat tax
fears." As we are approaching a Presidential re-election year, heated debates
have arisen about Tax Reform. Several proposals were made during the year, some
to the extreme of eliminating income tax and only having a consumption tax. As
we see it, it would likely be 1997 before any of these reforms will seriously be
debated and even then the likelihood of radical reform is small. Also, as the
federal government has granted greater fiscal discretion to state and local
authorities, it seems illogical to limit these authorities' ability to raise
funds by reducing the tax benefits to municipal bond investors, especially
without some grandfathering clause. Therefore, we see some potential additional
benefits of holding municipal bonds presently.
OUR APPROACH OVER THE LAST TWELVE MONTHS HAS BEEN TO TAKE ADVANTAGE OF THE
"FLAT TAX FEARS" BY PURCHASING MUNICIPAL BONDS AT EXTREMELY HIGH PERCENTAGES OF
TREASURY YIELDS. This in effect gives the municipal shareholders higher yields
both before and after taxes and makes municipal investments advantageous for
taxpayers in some of the lower tax brackets. Although we are obtaining higher
yields, we are still focusing on high quality securities. Presently, almost half
of the portfolio is invested in general obligation bonds, which are backed by
the full taxing power of the municipality. The average quality of the portfolio
is rated AA by Moody's Investor Services, one of the two largest national
ratings agencies.
We have also been able to take advantage of opportunities created in the
marketplace to replace some of the low coupon bonds that were purchased in 1993
and which increased in value significantly this year with higher coupon bonds.
The higher coupons increased the current yield on the portfolio and also add a
cushion if interest rates stop falling.
Another strategy employed this year has been to capture some of the gains
created during the year and shorten the average maturity of the portfolio from
9.7 years to approximately 7 years. The latter is more in line with the
intermediate nature of this Fund and positions us well for the upcoming year
when interest rates are likely to be more stable.
LOOKING AHEAD TO 1996, WE SEE A REASONABLE ENVIRONMENT FOR FIXED-INCOME
INVESTMENTS. With inflation low and the economy subdued, the backdrop is in
place for another good year. However, with the absolute level of interests rates
lower, we anticipate that we will have a year that is more similar to the
historical norm with returns similar to the coupon yield of the portfolio. We
expect to see some ups and downs as the political situation intrudes upon
reality and have positioned the portfolio with a more moderate maturity
structure to soften the impact of any political negatives.
The CrestFunds Virginia Intermediate Municipal Bond Fund is attractive to
investors because it generates current income that is predominately exempt from
federal and Virginia state income taxes. Current tax-exempt yields are very
compelling; for example, a Virginia resident in the highest effective combined
federal and state tax bracket receiving a 3.95% tax-exempt yield would have to
earn 7.02% or more in a taxable investment to achieve the same after tax benefit
(known as the "taxable equivalent yield).
MATURITY DISTRIBUTION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1995
0 - 3 Years 13%
3 - 5 Years 17%
5 - 7 Years 14%
7 - 10 Years 13%
10 - 15 Years 34%
15 - 20 Years 9%
<PAGE> 11
CRESTFUNDS, INC.: VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Va M Trust
1/31/93 1,000,000 1,000,000 1,000,000
Nov-93 1,066,040 1,080,940 1,059,360
Nov-94 996,324 1,033,490 1,049,820
Nov-95 1,156,632 1,212,281 1,175,695
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank's Trust &
Investment Management Group.
A hypothetical $1 million investment in Trust Class shares of the Virginia
Intermediate Municipal Bond Fund, at the Fund's commencement of operations
(1/11/93), including the effect of Fund expenses but excluding account level
fees, would have grown to $1,156,632 by November 30, 1995. Over the same period,
a $1 million investment in Lehman Brothers General Obligation Bond Index and
Lehman Brothers 5 Year General Obligation Bond Index would have grown to
$1,212,281 and 1,1175,695, respectively.
INVESTORS CLASS A
Virg Inv A
5/31/93 9,650 10,000 10,000
Nov-93 9,996 10,428 10,340
Nov-94 9,340 9,970 10,246
Nov-95 10,844 11,695 11,475
Investors Class A shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class A shares of the Virginia
Intermediate Municipal Bond Fund on the day that class commenced operations
(5/5/93), including the effect of the maximum 3.50% sales charge and the
Investor Class A higher transfer agency fee, would be valued at $10,844 by
November 30, 1995. Over the same period, a $10,000 investment in Lehman Brothers
General Obligation Bond Index and Lehman Brothers 5 Year General Obligation Bond
Index would have grown to $11,695 and 11,475, respectively.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A
----------- ------------------------------
with load without load
<S> <C> <C> <C>
1 YEAR 16.09% 12.08% 16.10%
LIFE OF FUND 5.40% 4.06% 5.34%
</TABLE>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A
----------- ------------------------------
with load without load
<S> <C> <C> <C>
1 YEAR 16.09% 12.08% 16.10%
LIFE OF FUND 16.37% 12.17% 16.19%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. On May 5, 1993, the Fund
commenced sales of Investors Class A shares. Performance information prior to
May 5, 1993 for the Investors Class A does not reflect the effects of the higher
transfer agent fee rate, which, if included, would lower Investors Class A
performance. Life of Fund figures are from commencement of operations (1/11/93)
to the period ended listed above. The Lehman Brothers General Obligation Bond
Index, an unmanaged index, is a broad measure of the performance of tax-exempt
bonds. The Lehman Brothers 5 year General Obligation Bond Index, an unmanaged
index, is a broad measure of the performance of 1-5 year tax-exempt Bonds. They
both include reinvestment of dividends and capital gains. Share price, yield and
return will vary, and you may have a gain or loss when you sell your shares.
Past performance is no guarantee of future results.
<PAGE> 12
CRESTFUNDS, INC.: VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Virginia Municipal Bond Fund seeks to provide high current income exempt
from federal and Virginia income tax in a manner consistent with the
preservation of capital by investing in municipal bonds of investment-grade
quality.
YEAR IN REVIEW
SINCE ITS INCEPTION IN APRIL, THE FUND HAS DOUBLED IN SIZE AND HAS BENEFITED
FROM THE SIGNIFICANT DROP IN INTEREST RATES. Consistent with the objective of
providing tax-exempt income, the Fund invests in longer term, high quality,
Virginia municipal bonds.
OUR STRATEGY FOR THE LAST EIGHT MONTHS HAS BEEN TO TAKE ADVANTAGE OF THE "FLAT
TAX FEARS" AND INVEST PRIMARILY IN MUNICIPALS THAT WERE YIELDING OVER 90% OF
COMPARABLE MATURITY TREASURY SECURITIES. For example, with a 20 year Treasury
security at 6.0%, a 20 year municipal bond could be purchased at a yield of
5.4%. This strategy allowed us to purchase high quality 10 to 30 year municipals
with both high absolute and relative yields.
"Flat tax fears" arose in 1995 as a number of proposed changes to the current
tax code were floated in Congress. Several proposals were made during the year,
some to the extreme of eliminating income tax and only having a consumption tax.
As we see it, it would likely be 1997 before any of these reforms will seriously
be debated and even then the likelihood of radical reform is small. Also, as the
federal government has granted greater fiscal discretion to state and local
authorities, it seems illogical to limit these authorities' ability to raise
funds by reducing the tax benefits to municipal bond investors, especially
without some grandfathering clause. Therefore, we see some potential additional
benefits of holding municipal bonds presently.
We have been very selective in the quality of the securities purchased for
this Fund. Since this Fund is comprised primarily of longer term securities, we
have emphasized very high quality. Over half of the Fund is invested in general
obligation bonds which are backed by the full taxing authority of the issuing
municipality. The remaining half is diversified among eight different sectors to
include education, public buildings, housing, hospital, utility, and
transportation bonds. The overall quality rating of the Fund is AA by Moody's
Investor Services, one of the two largest national ratings agencies. One other
special feature of this Fund is that the assets are all Virginia securities.
Since Virginia is one of the few remaining AAA quality states, its bonds attract
national, high quality investors in the secondary market, helping to support
prices and keep quality spreads narrow.
AS WE POSITION THE PORTFOLIO FOR 1996, OUR STRATEGY FAVORS OWNING SECURITIES
WITH MAXIMUM CALL PROTECTION AND BUYING THEM AT FAVORABLE SPREADS TO TREASURY
SECURITIES. In general, we continue to see a reasonable environment for
municipal bonds. Economic growth should remain moderate and inflation should
remain controlled. Following the unusually large returns earned in 1995, returns
should be more similar to the historical norm where returns approximate the
coupon yield of the portfolio. The CrestFunds Virginia Municipal Bond Fund
should continue to be attractive to investors because it generates current
income that is predominately exempt from Federal and Virginia state income
taxes.
MATURITY DISTRIBUTION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1995
0 - 3 Years 2%
3 - 5 Years 6%
5 - 7 Years 6%
7 - 10 Years 4%
10 - 15 Years 23%
15 - 20 Years 34%
20 - 25 Years 9%
25+ Years 16%
<PAGE> 13
CRESTFUNDS, INC.: VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Virg Trust
4/30/95 1,000,000 1,000,000
Nov-95 1,082,900 1,081,600
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank's Trust &
Investment Management Group.
A hypothetical $1 million investment in Trust Class shares of the Virginia
Municipal Bond Fund, at the Fund's commencement of operations (4/5/95),
including the effect of Fund expenses but excluding account level fee, would
have grown to $1,082,900 by November 30, 1995. Over the same period, a $1
million investment in Lehman Brothers General Obligation Bond Index would have
grown to $1,081,600.
INVESTORS CLASS
Virg Muni B
4/30/95 10,000 10,000
Nov-95 10,293 10,816
Investors Class B shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class B shares of the
Government Bond Fund on the day that class commenced operations (4/17/95),
including the effect of a Contingent Deferred Sales Charge and the Investors
Class B higher transfer agency fee and 12B-1 fee, would be valued at $10,293 by
November 30, 1995. Over the same period, a $10,000 investment in Lehman Brothers
General Obligation Bond Index would have grown to $10,816.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS B
----------- --------------------------------------------
with back-end load without back-end load
<S> <C> <C> <C>
LIFE OF FUND 11.89% 2.41% 10.53%
</TABLE>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS B
----------- --------------------------------------------
with back-end load without back-end load
<S> <C> <C> <C>
LIFE OF FUND 7.67% 1.51% 6.51%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. On April 17, 1995, the Fund
commenced sales of Investors Class B shares. Performance information prior to
April 17, 1995 for the Investors Class B does not reflect the effects of the
higher transfer agent fee and 12b-1 fee rate, which, if included, would lower
Investors Class B performance. Life of Fund figures are from commencement of
operations (4/5/95) to the period ended listed above. The Lehman Brothers
General Obligation Bond Index, an unmanaged index, is a broad measure of the
performance of tax-exempt bonds. It includes reinvestment of dividends and
capital gains. Share price, yield and return will vary, and you may have a gain
or loss when you sell your shares. Past performance is no guarantee of future
results.
<PAGE> 14
CRESTFUNDS, INC.: VALUE FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Value Fund seeks to provide long-term capital appreciation and, as a
secondary objective, current income, by investing primarily in income producing
equity securities of companies with large market capitalizations. Investments
are broadly diversified among major economic sectors and among those securities
with above-average total return potential.
YEAR IN REVIEW
At the Fund's last year end, forecasts called for rising inflation and interest
rates, an inevitable squeeze on corporate profits, and a cautious outlook for
equities. The rest, as they say, is history. December began a fabulous run for
the markets, producing spectacular gains both for stocks and bonds, and
corporate profits surprised to the upside on the momentum established in late
1994.
The combined influence of low inflation, falling interest rates, strong
profits, and paltry investor expectations created a near-perfect backdrop for
domestic equities, propelling the S&P 500 to a gain of just under 37% for the
twelve months ending November 30, 1995. Although the Value Fund trailed the S&P
500, it generated strong absolute gains.
Fund performance was positively impacted by reducing our
economically-sensitive exposure for much of the year, and by increasing
positions in areas that benefited from the decline in interest rates. Financial
service stocks such as banks, insurance companies, and savings and loans
participated in this advance. In addition, our positions in technology,
transportation, health care, and consumer non-durables also were among the
market leaders. On the other hand, our decision to pare technology holdings
during the second quarter proved to be premature and carried a negative impact
during the late spring and early summer when technology shares rode a cresting
wave of enthusiasm and excitement. However, our concerns about technology were
validated by their poor relative performance since summer. Our holdings in the
consumer area lagged, as compelling valuations of the stocks were overcome by
disappointing earning results. We reduced cash levels during the summer and
remain at lower levels. As a result, the Fund's performance improved steadily
over the second half of the year.
OUTLOOK
The outstanding returns provided by equities in 1995 will be difficult to match
in 1996. We characterize the environment as cautiously optimistic, with
inflation likely to remain under control, with interest rates remaining stable
to slightly lower, and corporate profits remaining at a high level. The flow of
funds into equities also remains solid. We balance these positive factors
against a rising danger that profit growth will not meet or exceed some very
optimistic assumptions for 1996. Disappointments have been experienced in a
number of companies already, and we expect to see that number multiply in the
quarters ahead. Also, investor expectations for 1996 are far more upbeat than
they were heading into last year. Markets have tended to perform far better when
they climb a wall of investor worries. Nevertheless, if corporate profits erode
no further than we project, then we would expect equities to deliver returns
closer to their historical norms in the high single digits.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1995
Consumer Staples 16.9%
Consumer Cyclicals 15.9%
Finance 12.8%
Utilities 10.5%
Energy 10.3%
Capital Goods 9.8%
Technology 9.6%
Basic Materials 9.5%
Transportation 2.7%
Diversified 2.0%
<PAGE> 15
CRESTFUNDS, INC.: VALUE FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Va L Trust
9/30/92 1,000,000 1,000,000
Nov-92 1,042,600 1,037,620
Nov-93 1,147,380 1,142,420
Nov-94 1,141,760 1,154,180
Nov-95 1,470,130 1,580,880
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank's Trust &
Investment Management Group.
A hypothetical $1 million investment in Trust Class shares of the Value Fund,
at the Fund's commencement of operations (9/28/92), including the effect of Fund
expenses but excluding account level fees, would have grown to $1,470,129 by
November 30, 1995. Over the same period, a $1 million investment in Standard &
Poor's 500 Composite Index would have grown to $1,580,883.
INVESTORS CLASS A
Va Inv A
5/31/93 9,550 10,000
Nov-93 9,642 10,401
Nov-94 9,598 10,508
Nov-95 12,354 14,393
Investors Class A shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class A shares of the Value
Fund on the day that class commenced operations (5/7/93), including the effect
of the maximum 4.50% sales charge and the Investors Class A higher transfer
agency fee, would be valued at $12.354 by November 30, 1995. Over the same
period, a $10,000 investment in Standard & Poor's 500 Composite Index would have
grown to $14,393.
INVESTORS CLASS B
Value B
4/30/95 10,000 10,000
Nov-95 10,923 11,948
Investors Class B shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class B shares of the Value
Fund on the day that class commenced operations (4/5/95), including the effect
of a Contingent Deferred Sales Charge and the Investors Class B higher transfer
agency fee and 12B-1 fee, would be valued at $10,923 by November 30, 1995. Over
the same period, a $10,000 investment in Standard & Poor's 500 Composite Index
would have grown to $11,948.
<PAGE> 16
CRESTFUNDS, INC.: VALUE FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- -------------------------- ------------------------------------------
with load without load with back-end load without back-end load
<S> <C> <C> <C> <C> <C>
1 YEAR 28.76% 22.90% 28.71% -- --
3 YEAR 12.14% -- -- -- --
LIFE OF FUND 13.25% 11.59% 13.21% 12.04% 13.26%
</TABLE>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- -------------------------- ------------------------------------------
with load without load with back-end load without back-end load
<S> <C> <C> <C> <C> <C>
1 YEAR 28.76% 22.90% 28.71% -- --
3 YEAR 41.02% -- -- -- --
LIFE OF FUND 48.49% 41.61% 48.35% 43.43% 48.53%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. On May 7, 1993, the Fund
commenced sales of Investors Class A shares. Performance information prior to
May 7, 1993 for the Investors Class A does not reflect the effects of the higher
transfer agent fee rate, which, if included, would lower Investors Class A
performance. On April 5, 1995, the Fund commenced sales of Investors Class B
shares. Performance information prior to April 5, 1995, for the Investors Class
B does not reflect the effects of a higher transfer agent fee rate and a 12b-1
fee rate, which, if included, would lower Investors Class B performance. Life of
Fund figures are from commencement of operations (9/28/92) to the period ended
listed above. The S&P 500(R) Index is an unmanaged index of common stocks. It
includes reinvestment of dividends. Share price, yield and return will vary, and
you may have a gain or loss when you sell your shares. Past performance is no
guarantee of future results.
<PAGE> 17
CRESTFUNDS, INC.: CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Capital Appreciation Fund seeks to provide long-term capital appreciation by
investing primarily in the equity securities of companies with medium to large
market capitalizations.
YEAR IN REVIEW
THE CAPITAL APPRECIATION FUND PRODUCED SOLID RESULTS IN FISCAL YEAR 1995 IN A
MARKET WHERE INVESTORS FOCUSED MORE ON RETURNS THAN ON THE ASSOCIATED RISE. The
first nine months of the fiscal year produced strong performance, while the last
three months proved challenging. Market sentiment began to shift away from
earnings momentum towards more stable earnings growth as investors began to have
increasing concerns over the prospects for future economic growth. Those
concerns appear to be fading and we are encouraged about the market's prospects
going forward as recent Federal Reserve interest rate cuts should bode well for
future growth.
THE CAPITAL APPRECIATION FUND CONTINUES TO FOCUS ON COMPANIES WITH SOLID
GROWTH PROSPECTS SUCH AS THOSE IN HEALTH CARE AND TELECOMMUNICATIONS. Stocks in
these groups performed well as solid fundamentals combined with attractive
valuations. The strong performance of our health care stocks reflected the
improving fundamentals of the industry players that have learned to prosper in
today's difficult managed care environment. We continue to like biotechnology
(Amgen, Biogen), pharmaceutical (Rhone-Poulenc Rorer, Walson) and service (Sun
Healthcare, Tenet Healthcare) companies. In the telecommunication group, the
prospects for regulatory reform and new market opportunities are fueling solid
performance. We are focusing on the long distance industry leaders AT&T and MCI
Communications for our telecommunication exposure. In general, our preference
for companies that are experiencing unit growth as opposed to pricing growth
continues to be beneficial in this low inflation environment.
LOOKING FORWARD TO 1996, WE EXPECT TECHNOLOGY, EARLY CYCLE DURABLES, AND
FINANCE STOCKS TO DO WELL. Interest-sensitive areas like housing and
construction issues should perform well as the prospect of lower interest rates
will likely lead to increased activity in that sector. Selected insurance issues
should do well as reduced industry capacity appears to be helping to firm
pricing. Additionally, technology stocks that have a competitive advantage (via
new products, lower cost structure, etc.) should perform better in 1996
following a punishing second half of 1995.
OVERALL, WE ANTICIPATE REAL EQUITY RETURNS FOR 1996 WILL BE CLOSER TO
HISTORICAL AVERAGES AS OPPOSED TO A REPEAT OF 1995. Last year turned out to be
one of the strongest equity markets in recent history, exceeding most
expectations. We expect returns in 1996 to be closer to historical averages. We
look for the Capital Appreciation Fund to continue to do well, by focusing on
companies that have solid growth prospects that are trading at reasonable
valuations.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1995
Consumer Staples 23.7%
Consumer Cyclicals 15.3%
Technology 14.8%
Energy 12.5%
Finance 12.0%
Utilities 9.1%
Basic Materials 6.3%
Transportation 6.3%
<PAGE> 18
CRESTFUNDS, INC.: CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
CA Trust
1/31/93 1,000,000 1,000,000
Nov-93 963,643 1,000,000
Nov-94 1,003,340 1,023,180
Nov-95 1,211,439 1,457,754
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank's Trust &
Investment Management Group.
A hypothetical $1 million investment in Trust Class shares of the Capital
Appreciation Fund, at the Fund's commencement of operations (1/11/93), including
the effect of Fund expenses but excluding account level fees, would have grown
to $1,211,439 by November 30, 1995. Over the same period, a $1 million
investment in Frank Russell 1000 Growth Index would have grown to $1,457,754.
INVESTORS CLASS A
CA Inv A
5/31/93 9,550 10,000
Nov-93 9,512 10,265
Nov-94 9,863 10,544
Nov-95 11,906 14,625
Investors Class A shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class A shares of the Capital
Appreciation Fund on the day that class commenced operations (5/7/93), including
the effect of the maximum 4.50% sales charge and the Investors Class A higher
transfer agency fee, would be valued at $11,906 by November 30, 1995. Over the
same period, a $10,000 investment in Frank Russell Growth Index would have grown
to $14,625.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A
----------- ------------------------------
with load without load
<S> <C> <C> <C>
1 YEAR 20.74% 15.24% 20.72%
LIFE OF FUND 7.50% 5.24% 7.11%
</TABLE>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A
----------- ------------------------------
with load without load
<S> <C> <C> <C>
1 YEAR 20.74% 15.24% 20.72%
LIFE OF FUND 23.21% 15.88% 21.93%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. On May 7, 1993, the Fund
commenced sales of Investors Class A shares. Performance information prior to
May 7, 1993 for the Investors Class A does not reflect the effects of the higher
transfer agent fee rate, which, if included, would lower Investors Class A
performance. Life of Fund figures are from commencement of operations (1/11/93)
to the period ended listed above. The Russell 1000(R) Growth Index, an unmanaged
index, is a broad measure of the performance of growth companies. It includes
reinvestment of dividends and capital gains. Share price, yield and return will
vary, and you may have a gain or loss when you sell your shares. Past
performance is no guarantee of future results.
<PAGE> 19
CRESTFUNDS, INC.: SPECIAL EQUITY FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Special Equity Fund seeks to provide long-term capital appreciation by
investing primarily in the equity securities of companies with small to medium
market capitalization. These companies often pay no dividends, and current
income is not a goal of the Fund.
YEAR IN REVIEW
A constellation of factors, including depressed stock values at the beginning of
the year, healthy corporate profit growth, and a sharp decline in interest
rates, came into alignment in 1995, producing one of the best years in history
for equity investors. After mediocre returns in 1994, investors were rewarded
for their patience, and were reminded of the perils of trying to "time the
market." Most market averages finished the year near record highs, and 1995
offered relatively few opportunities for bearish investors to jump aboard during
a significant retreat in stock prices. Record cash flows into equity mutual
funds kept stocks on the run all year long. Although small capitalization stocks
produced strong absolute returns, the group failed to outperform large cap
stocks for the first time since 1990.
The Special Equity Fund benefited throughout 1995 from broad diversification
and our commitment to investing in quality growth companies at reasonable
prices. A handful of portfolio companies were acquired by larger companies
during the first half of the year, validating the Fund's blend of value and
growth investment styles. We believe that large companies will continue to
employ their strong cash flow, access to plentiful credit, and expensive stock
in order to purchase competing or complementary smaller companies.
Our modest commitment to the technology group proved to be a liability at
midyear, when stocks linked to the "digital revolution" embarked on an explosive
rally. We enjoyed good gains from our technology holdings during the year, but
in retrospect, a more aggressive embrace of this volatile group was the right
strategy in 1995. Technology is an important driver of innovation and growth,
and is therefore a key factor in selecting investments for a small company fund.
Nevertheless, we are reluctant to buy the hot technology of the moment if it
means abandoning reasonable valuation parameters. We added to our technology
holdings as these stocks retreated to more favorable valuations during the
latter part of the year.
1996 will of course provide numerous surprises for investors. We expect a
climate of modest economic growth, low inflation and stable or lower interest
rates that should be generally healthy for common stocks. After the strong
earnings gains of 1994 and 1995, corporations may struggle to keep growth in
line with investors' expectations. After a year in which growth considerations
were paramount, value may emerge as a more important investment attribute in
1996.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1995
Consumer Cyclicals 21.9%
Finance 14.6%
Technology 13.7%
Capital Goods 12.2%
Consumer Staples 11.5%
Basic Materials 9.6%
Energy 7.5%
Utilities 6.0%
Transportation 2.0%
Diversified 1.0%
<PAGE> 20
CRESTFUNDS, INC.: SPECIAL EQUITY FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
SEQ Trust
9/30/92 1,000,000 1,000,000 1,000,000
Nov-92 1,110,110 1,054,330 1,138,240
Nov-93 1,266,300 1,161,030 1,275,390
Nov-94 1,206,280 1,112,150 1,263,660
Nov-95 1,448,375 1,331,574 1,658,046
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank's Trust &
Investment Management Group.
A hypothetical $1 million investment in Trust Class shares of the Special
Equity Fund, at the Fund's commencement of operations (9/28/92), including the
effect of Fund expenses but excluding account level fees, would have grown to
$1,448,375 by November 30, 1995. Over the same period, a $1 million investment
in Value Line Index and Frank Russell 2000 Growth Index would have grown to
$1,331,574 and $1,658,046, respectively.
INVESTORS CLASS A
SEQ Inv A
5/31/93 9,550 10,000 10,000
Nov-93 10,175 10,225 10,819
Nov-94 9,691 9,794 10,720
Nov-95 11,635 11,726 14,065
Investors Class A shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class A shares of the Special
Equity Fund on the day that class commenced operations (5/5/93), including the
effect of the maximum 4.50% sales charge and the Investors Class A higher
transfer agency fee, would be valued at $11,635 by November 30, 1995. Over the
same period, a $10,000 investment in Value Line Index and Frank Russell 2000
Growth Index would have grown to $11,726 and $14,065, respectively.
INVESTORS CLASS B
Special Eq B
4/30/95 10,000 10,000 10,000
Nov-95 10,628 11,038 11,972
Investors Class B shares are available to individual and institutional customers
investing directly in the Funds.
A hypothetical $10,000 investment in Investors Class B shares of the Special
Equity Fund on the day that class commenced operations (4/5/95), including the
effect of a Contingent Deferred Sales Charge and the Investors Class B higher
transfer agency fee and 12B-1 fee, would be valued at $10,628 by November 30,
1995. Over the same period, a $10,000 investment in Value Line Index and Frank
Russell 2000 Growth Index would have grown to $11,038 and $11,972, respectively.
<PAGE> 21
CRESTFUNDS, INC.: SPECIAL EQUITY FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- -------------------------- ------------------------------------------
with load without load with back-end load without back-end load
<S> <C> <C> <C> <C> <C>
1 YEAR 20.07% 14.64% 20.06% -- --
3 YEAR 9.27% -- -- -- --
LIFE OF FUND 12.63% 11.01% 12.63% 11.20% 12.43%
</TABLE>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1995
------------------------------------------
<TABLE>
<CAPTION>
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- -------------------------- ------------------------------------------
with load without load with back-end load without back-end load
<S> <C> <C> <C> <C> <C>
1 YEAR 20.07% 14.64% 20.06% -- --
3 YEAR 30.47% -- -- -- --
LIFE OF FUND 45.99% 39.29% 45.96% 40.05% 45.15%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. On May 5, 1993, the Fund
commenced sales of Investors Class A shares. Performance information prior to
May 5, 1993 for the Investors Class A does not reflect the effects of the higher
transfer agent fee rate, which, if included, would lower Investors Class A
performance. On April 5, 1995, the Fund commenced sales of Investors Class B
shares. Performance information prior to April 5, 1995 for the Investors Class B
does not reflect the effects of the higher transfer agent fee rate and 12b-1 fee
rate, which, if included, would lower Investors Class B performance. Life of
Fund figures are from commencement of operations (9/28/92) to the period ended
listed above. The Value Line Index, an unmanaged index, is a broad measure of
the performance of both large and small capital companies. The Frank Russell
1000 Growth Index, an unmanaged index, is a broad measure of the performance of
both large and small capital companies. Both include reinvestment of dividends
and capital gains. Share price, yield and return will vary, and you may have a
gain or loss when you sell your shares. Past performance is no guarantee of
future results.
<PAGE> 22
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
CASH RESERVE FUND
<TABLE>
<CAPTION>
Face
Amount Value
(000) (000)
-------- --------
<S> <C> <C>
COMMERCIAL PAPER (29.1%)
AES Shady Point
5.900%, 01/23/96................. $ 12,000 $ 11,896
AT&T Capital
5.600%, 02/08/96................. 15,000 14,838
5.640%, 02/22/96................. 11,000 10,857
Bank of America
5.605%, 12/04/95................. 8,000 7,996
CS First Boston
5.650%, 01/18/96................. 12,000 11,910
5.700%, 01/16/96................. 14,000 13,898
Enterprise Funding
5.680%, 02/15/96................. 7,600 7,509
Guangdong Enterprises
5.720%, 01/19/96................. 19,000 18,852
International Nederlanden
5.600%, 03/15/96................. 13,000 12,788
McCormick
5.550%, 07/02/96................. 5,000 4,835
NationsBank
5.650%, 02/02/96................. 3,000 2,970
Sierra Funding
5.820%, 05/15/96................. 10,000 9,732
Stellar Capital
5.900%, 01/16/96................. 6,081 6,035
Strategic Asset Funding
5.800%, 12/13/95................. 5,000 4,990
Svenska Handelsbanken
5.740%, 01/25/96................. 20,000 19,825
Vehicle Services
5.700%, 02/15/96................. 4,000 3,952
- ------------------------------------------------------
Total Commercial Paper
(Cost $162,882,640).......... 162,883
- ------------------------------------------------------
CERTIFICATES OF DEPOSIT (14.6%)
Bank of New York
6.000%, 09/26/96................. 6,000 6,000
Bank of Tokyo
6.330%, 01/24/96................. 8,000 8,001
6.300%, 01/31/96................. 10,000 10,001
First Alabama
5.750%, 01/22/96................. 10,000 10,000
Mellon Bank Note
6.020%, 05/31/96................. 15,000 15,022
Nations Bank, Texas
7.000%, 02/06/96................. 10,000 9,999
Sanwa Bank
6.080%, 03/04/96................. 8,000 8,000
5.960%, 04/08/96................. 15,000 15,001
- ------------------------------------------------------
Total Certificates of Deposit
(Cost $82,024,489)........... 82,024
- ------------------------------------------------------
<CAPTION>
Face
Amount Value
(000) (000)
-------- --------
<S> <C> <C>
BANKERS ACCEPTANCES (5.3%)
Bank of Tokyo
5.650%, 04/30/96................. $ 5,000 $ 4,882
5.600%, 05/13/96................. 5,000 4,872
First Union Bank
5.800%, 02/02/96................. 20,000 20,000
- ------------------------------------------------------
Total Bankers Acceptances
(Cost $29,753,951)........... 29,754
- ------------------------------------------------------
CORPORATE OBLIGATIONS (3.2%)
Exxon Capital
7.750%, 02/14/96................. 7,675 7,706
JP Morgan MTN
6.500%, 05/06/96................. 10,000 10,035
- ------------------------------------------------------
Total Corporate Obligations
(Cost $17,741,261)........... 17,741
- ------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (4.5%)
FHLB
5.575%, 06/12/96................. 5,000 4,997
6.000%, 08/07/96................. 5,000 5,000
FHLMC
5.420%, 01/05/96................. 5,634 5,604
FNMA
5.500%, 03/13/96................. 10,000 9,843
- ------------------------------------------------------
Total U.S. Government Agency
Obligations
(Cost $25,443,545)........... 25,444
- ------------------------------------------------------
REPURCHASE AGREEMENTS (43.4%)
J.P. Morgan
5.870%, dated 11/30/95, matures
12/01/95, repurchase price
$25,629,596 (collateralized by
various FHLMC obligations total
par value $5,058,345,
7.000%--7.500%,
11/01/10--11/01/25; FHLB
obligation par value $1,000,000,
4.510%, 03/01/96; various FNMA
obligations total par value
$20,147,389, 7.000%--9.500%,
08/01/24--11/01/25; total market
value: $26,137,926)............. 25,625
Lehman
5.870%, dated 11/30/95, matures
12/01/95, repurchase price
$10,971,897 (collateralized by
various FNMA obligations par
value $23,805,340,
6.931%--8.000%,
11/01/21--10/01/30; total market
value: $11,190,167)............. 10,970
Merrill Lynch
5.870%, dated 11/30/95, matures
12/01/95, repurchase price
$68,817,921 (collateralized by
various FNMA obligations total
par value $119,088,736,
6.236%--7.719%,
11/01/23--03/01/33; total market
value: $70,865,193)............. 68,807
</TABLE>
<PAGE> 23
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
CASH RESERVE FUND (concluded)
<TABLE>
<CAPTION>
Value
(000)
--------
<S> <C>
REPURCHASE AGREEMENTS (continued)
Nomura
5.870%, dated 11/30/95, matures
12/01/95, repurchase price
$137,761,016 (collateralized by
various FHLMC obligations total
par value $255,078,315, 3.600%--
10.126%, 06/15/23--04/25/24;
various FNMA obligations total
par value $209,630,752, 2.326%--
8.000%, 03/25/22--09/25/23;
total market value:
$140,493,329)................... $137,739
- ------------------------------------------------------
Total Repurchase Agreements
(Cost $243,140,785).......... 243,141
- ------------------------------------------------------
Total Investments (100.1%)
(Cost $560,986,671).......... 560,987
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.1%)
Other Assets and Liabilities,
Net.............................. (541)
- ------------------------------------------------------
<CAPTION>
Value
(000)
--------
<S> <C>
NET ASSETS:
Fund shares of the Trust Class ($.001 par
value-- 4.5 Billion shares authorized)
based on 520,218,691 outstanding shares of
capital stock.............................. $520,220
Fund shares of the Investors Class A ($.001
par value--4.5 Billion shares authorized)
based on 40,241,114 outstanding shares of
capital stock.............................. 40,241
Fund shares of the Investors Class B ($.001
par value--4.5 Billion shares authorized)
based on 21,170 outstanding shares of
capital stock.............................. 21
Undistributed Net Investment Income......... 50
Accumulated Net Realized Loss on
Investments............................... (86)
- ------------------------------------------------------
Total Net Assets: (100.00%)............. $560,446
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($520,184,546 DIVIDED BY 520,218,691
SHARES OUTSTANDING)......................... $1.00
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--INVESTORS
CLASS A ($40,239,839 DIVIDED BY 40,241,114
SHARES OUTSTANDING)......................... $1.00
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--INVESTORS
CLASS B(1) ($21,152 DIVIDED BY 21,170
SHARES OUTSTANDING)......................... $1.00
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
(1) Investors Class B has a contingent deferred sales charge. For description of
a possible redemption charge, see the notes to the financial statements.
FHLB--Federal Home Loan Bank
FHLMC--Federal National Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
MTN--Medium Term Note
The accompanying notes are an integral part of the financial statements.
<PAGE> 24
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
U.S. TREASURY MONEY FUND
<TABLE>
<CAPTION>
Face
Amount Value
(000) (000)
------- --------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS (41.6%)
U.S. Treasury Bills
5.550%, 12/14/95................. $15,000 $ 14,970
5.620%, 12/21/95................. 25,000 24,923
U.S. Treasury Notes
9.250%, 01/15/96................. 10,000 10,042
4.000%, 01/31/96................. 10,000 9,973
4.625%, 02/15/96................. 10,000 9,980
8.875%, 02/15/96................. 10,000 10,058
4.625%, 02/29/96................. 10,000 9,975
5.125%, 03/31/96................. 10,000 9,981
4.250%, 05/15/96................. 10,000 9,939
5.875%, 05/31/96................. 15,000 15,018
U.S. Treasury STRIPS
5.750%, 02/15/96................. 15,000 14,827
5.504%, 05/15/96................. 10,000 9,746
5.660%, 11/15/96................. 5,000 4,741
- ------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $154,173,266).......... 154,173
- ------------------------------------------------------
REPURCHASE AGREEMENTS (58.6%)
Lehman Brothers
5.850%, dated 11/30/95 matures
12/01/95, repurchase price
$10,016,309 (collateralized by
U.S. Treasury Bond par value
$6,715,000, 11.75%, 11/15/14;
total market value:
$10,220,444).................... 10,015
Merrill Lynch
5.850%, dated 11/30/95 matures
12/01/95, repurchase price
$90,351,101 (collateralized by
various U.S. Treasury
obligations par value
$112,804,000, 6.250%--8.875%,
05/15/98--02/15/03; total market
value: $92,144,029)............. 90,336
Morgan Stanley
5.850%, dated 11/30/95, matures
12/01/95, repurchase price
$14,106,817 (collateralized by
various U.S. Treasury
obligations total par value
$10,427,000, 5.125%-- 10.750%,
03/31/98--08/15/05; total market
value: $14,403,337)............. 14,105
<CAPTION>
Value
(000)
--------
<S> <C>
Nomura
5.850%, dated 11/30/95, matures
12/01/95, repurchase price
$90,449,866 (collateralized by
various U.S. Treasury notes
total par value $85,781,000,
5.125%--8.750%,
07/31/96--02/15/25; total market
value: $92,244,395)............. $ 90,435
Prudential Securities
5.850%, dated 11/30/95, matures
12/01/95, repurchase price
$12,010,288 (collateralized by
U.S. Treasury obligation par
value $11,045,000, 7.750%,
12/31/99; total market value:
$12,249,445).................... 12,008
- ------------------------------------------------------
Total Repurchase Agreements
(Cost $216,899,135).......... 216,899
- ------------------------------------------------------
Total Investments (100.2%)
(Cost $371,072,401).......... 371,072
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.2%)
Other Assets and Liabilities,
Net.............................. (618)
- ------------------------------------------------------
NET ASSETS:
Fund shares of Trust Class ($.001 par
value--4 Billion shares authorized) based
on 370,453,843 outstanding shares of
capital stock............................. 370,454
- ------------------------------------------------------
Total Net Assets: (100.0%)............. $370,454
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($370,453,845 DIVIDED BY 370,453,843 SHARES
OUTSTANDING)............................... $1.00
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
STRIPS-- Separate Trading of Registered Interest and Principal of Security.
The accompanying notes are an integral part of the financial statements.
<PAGE> 25
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
TAX-FREE MONEY FUND
<TABLE>
<CAPTION>
Face
Amount Value
(000) (000)
-------- --------
<S> <C> <C>
MUNICIPAL BONDS (91.7%)
ARKANSAS (1.4%)
Arkansas State Development Finance
Authority Single Family Mortgage
Project, Ser D, RB, FGIC
3.800%, 03/01/96................. $ 2,775 $ 2,775
- ------------------------------------------------------
CALIFORNIA (3.0%)
Burbank, CA, Second Lien Tax
Allocation Golden State,
Prerefunded 12/01/95 @ 102
9.250%, 12/01/95................. 6,025 6,146
- ------------------------------------------------------
FLORIDA (2.2%)
Jacksonville, FL
3.750%, 01/10/96(B).............. 4,500 4,500
- ------------------------------------------------------
GEORGIA (4.4%)
Fulton County, GA, TAN
4.750%, 12/29/95................. 6,000 6,003
Gwinnett County, GA, Refunding
Bond, GO
4.125%, 01/01/96................. 3,000 3,001
- ------------------------------------------------------
9,004
- ------------------------------------------------------
LOUISIANA (3.5%)
Louisiana State Public Facilities
Hospital Authority Willis Knighton
Medical Project, RB, AMBAC
3.650%, 12/06/95(A).............. 7,100 7,100
- ------------------------------------------------------
MARYLAND (9.8%)
Baltimore County, MD
3.750%, 02/07/96................. 4,000 4,000
Baltimore County, MD Public
Improvements, RB
5.700%, 03/01/96................. 1,000 1,005
Howard County, MD, Multifamily
Housing Authority
4.250%, 06/01/96(A).............. 3,000 3,000
Maryland State Department of
Transportation
6.200%, 08/15/96................. 1,000 1,016
5.700%, 09/01/96................. 1,000 1,015
Maryland State Health & Higher
Education Authority Loyola College
Issue, RB
4.000%, 12/01/95(A)(B)........... 7,500 7,500
Montgomery County, MD,
Opportunities Commission Authority
Overlook II Project, Issue II, RB
3.750%, 12/06/95(A)(B)........... 414 414
3.750%, 12/06/95(A)(B)........... 2,000 2,000
- ------------------------------------------------------
19,950
- ------------------------------------------------------
NEBRASKA (4.9%)
City of Lincoln, NE, Electric
System, RB
3.750%, 12/14/95(B).............. 10,000 10,000
- ------------------------------------------------------
<CAPTION>
Face
Amount Value
(000) (000)
------ --------
<S> <C> <C>
NEW YORK (0.5%)
Tri-Borough, NY, Bridge & Tunnel
Authority, Ser 1, RB, Prerefunded
01/01/96 @ 102
7.625%, 01/01/14................. $ 1,000 $ 1,023
- ------------------------------------------------------
NORTH CAROLINA (1.0%)
City of Durham, NC, Ser A, CP
3.550%, 12/06/95(A)(B)........... 2,000 2,000
- ------------------------------------------------------
PENNSYLVANIA (3.3%)
Delaware County, PA, Industrial
Development Authority,
Philadelphia Electric Project, Ser
A, RB, FGIC
3.800%, 12/07/95................. 6,700 6,700
- ------------------------------------------------------
RHODE ISLAND (2.9%)
Rhode Island State, TAN, GO
4.500%, 06/28/96(B).............. 6,000 6,029
- ------------------------------------------------------
SOUTH CAROLINA (3.4%)
Florence County, SC, McLeod
Regional Medical Center Project,
FGIC
3.900%, 12/07/95(A).............. 7,000 7,000
- ------------------------------------------------------
TENNESSEE (6.9%)
Franklin County, TN, Health &
Education Facilities Authority
University of The South Project,
RB, FGIC
3.750%, 12/06/95(A)(B)........... 6,500 6,500
Metropolitan Government Nashville &
Davidson County, TN, Health &
Education Facility Board
Authority, RB
3.750%, 12/06/95(A)(B)........... 3,189 3,189
3.750%, 12/06/95(A)(B)........... 888 888
Nashville, TN, Metropolitan
Government Bellmont College
Project
3.800%, 12/06/95(A).............. 500 500
State of Tennessee Ser A, GO
5.000%, 03/01/96................. 3,000 3,005
- ------------------------------------------------------
14,082
- ------------------------------------------------------
VIRGINIA (40.6%)
Cheasapeake, VA, GO
7.250%, 08/01/96................. 1,000 1,023
Chesapeake, VA, Public Improvements
8.750%, 07/01/96................. 1,400 1,439
Chesterfield County, VA, Industrial
Development Authority Phillip
Morris Companies Project, RB
3.750%, 12/06/95(A).............. 2,500 2,500
Chesterfield County, VA, Industrial
Development Authority Virginia
Electric Power Project, Ser A, RB
3.550%, 12/06/95................. 4,000 4,000
Chesterfield, VA, Industrial
Development Authority
3.950%, 12/05/95................. 3,000 3,000
</TABLE>
<PAGE> 26
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
TAX-FREE MONEY FUND (continued)
<TABLE>
<CAPTION>
Face
Amount Value
(000) (000)
------ --------
<S> <C> <C>
MUNICIPAL BONDS (continued)
VIRGINIA (continued)
Fairfax County, VA, Industrial
Development Authority, RB,
Prerefunded 10/01/96 @ 103
7.875%, 10/01/17................. $ 2,165 $ 2,301
Fairfax County, VA, Public
Improvements, Ser A
5.000%, 06/01/96(B).............. 1,000 1,006
Fairfax County, VA, Ser A
Prerefunded 06/01/96 @ 100.25
6.800%, 06/01/97................. 1,000 1,018
Greensville County, VA, Industrial
Development Authority Georgia
Pacific Project, RB
3.750%, 12/06/95(A)(B)........... 3,850 3,850
Hampton, VA, GO
7.625%, 01/15/96................. 1,290 1,294
Hanover County, VA, Carter Project
3.750%, 12/06/95(A).............. 500 500
Louisa County, VA, Industrial
Development Authority, RB
3.750%, 12/06/95(A)(B)........... 5,000 5,000
Newport News, VA, Public Housing
Authority
3.750%, 12/06/95(A)(B)........... 1,051 1,051
Prince William County, VA,
Industrial Development Authority,
Electric And Power Project, RB
3.800%, 12/05/95(B).............. 1,200 1,200
3.550%, 12/06/95(B).............. 2,800 2,800
Pulaski County, VA, Pulaski
Furniture, RB, Ser A
3.750%, 12/06/95(A)(B)........... 3,687 3,687
3.900%, 12/06/95(A)(B)........... 532 532
Richmond, VA, Airport Commission
International Airport Project, Ser
B, RB, AMBAC
3.550%, 12/06/96(A).............. 2,000 2,000
Richmond, VA, Industrial
Development Authority Philip
Morris Companies
Project, RB
3.750%, 12/06/95(A).............. 1,700 1,700
Richmond, VA, Redevelopment Housing
Authority, Stony Point Project, RB
3.900%, 12/07/95(A)(B)........... 1,800 1,800
Roanoke, VA, Industrial Development
Authority Memorial Hospital
Project, Ser D, RB
3.850%, 12/07/95(A)(B)........... 6,570 6,570
Suffolk County, VA
4.000%, 05/30/96................. 6,000 6,000
Virginia Beach, VA, Public
Improvements
4.000%, 11/01/96(B).............. 1,000 1,001
Virginia State Higher Education,
Ser C, RB
5.000%, 06/01/96................. 430 433
<CAPTION>
Face
Amount Value
(000) (000)
-------- --------
<S> <C> <C>
Virginia State Housing Development
Authority Commonwealth Mortgage,
Subser D, RB
3.750%, 03/04/96................. $ 1,000 $ 1,000
Virginia State Housing Development
Authority, Ser D, Prerefunded
02/15/96 @100
3.600%, 02/15/96................. 9,000 9,000
Virginia State Public School
Authority
3.600%, 01/01/96(B).............. 2,000 2,000
Virginia State Public School
Authority, Ser A, RB
7.700%, 01/01/96................. 1,000 1,003
Virginia State, GO
5.000%, 06/01/96................. 3,185 3,203
York County, VA, Electric & Power
Project
3.850%, 01/11/96(B).............. 3,500 3,500
York County, VA, Industrial
Development Authority
3.950%, 12/05/95(B).............. 4,700 4,700
York County, VA, Industrial
Development Authority Philip
Morris Companies Project
3.750%, 12/06/95(A)(B)........... 2,700 2,700
- ------------------------------------------------------
82,811
- ------------------------------------------------------
WASHINGTON (2.0%)
Port Anacortes, WA, Texaco Project
3.800%, 12/06/95(B).............. 4,000 4,000
- ------------------------------------------------------
WYOMING (1.9%)
Sweetwater County, WY, Pacific
Project, RB
3.850%, 12/06/95(B).............. 3,800 3,800
- ------------------------------------------------------
Total Municipal Bonds
(Cost $186,920,225).......... 186,920
- ------------------------------------------------------
CASH EQUIVALENTS (7.7%)
Aim Tax Free Money Market Portfolio
3.600%,(A)....................... 4,500 4,500
SEI Institutional Tax Free
Portfolio
3.660%,(A)....................... 9,731 9,731
SEI Tax Free Portfolio
3.500%,(A)....................... 1,506 1,506
- ------------------------------------------------------
Total Cash Equivalents
(Cost $15,737,244)........... 15,737
- ------------------------------------------------------
Total Investments (99.4%)
(Cost $202,657,469).......... 202,657
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.6%)
Other Assets and Liabilities,
Net.............................. 1,303
- ------------------------------------------------------
</TABLE>
<PAGE> 27
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
TAX-FREE MONEY FUND (concluded)
<TABLE>
<CAPTION>
Value
(000)
--------
<S> <C>
NET ASSETS:
Fund shares of Trust Class ($.001 par
value--1 Billion shares authorized) based
on 202,343,506 outstanding shares of
capital stock.............................. $202,343
Fund shares of Investors Class A ($.001
par value--1 Billion shares authorized)
based on 1,626,989 outstanding shares of
capital stock.............................. 1,627
Accumulated Net Realized Loss on
Investments............................... (10)
- ------------------------------------------------------
Total Net Assets: (100.0%).............. $203,960
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($202,332,779 DIVIDED BY
202,343,506 SHARES OUTSTANDING)............. $1.00
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--INVESTORS
CLASS A ($1,627,644 DIVIDED BY
1,626,989 SHARES OUTSTANDING)............... $1.00
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
(A) Floating Rate Security--the rate reflected on the Statement of Net Assets is
the rate in effect on November 30, 1995. The date reported on the Statement
of Net Assets is the later of the date on which the security can be redeemed
at par or the next date on which the rate of interest is adjusted.
(B) Security backed by letter of credit or credit support.
AMBAC--American Municipal Bond Assurance Company
CP--Certificate of Participation
FGIC--Federal Guaranty Insurance Company
GO--General Obligation
RB--Revenue Bond
Ser--Series
TAN--Tax Anticipation Note
The accompanying notes are an integral part of the financial statements.
<PAGE> 28
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
LIMITED TERM BOND FUND
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ --------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS (22.1%)
U.S. Treasury Notes
5.875%, 05/31/96.................. $ 500 $ 501
6.000%, 06/30/96.................. 2,000 2,007
6.500%, 05/15/97.................. 2,000 2,030
6.125%, 05/31/97.................. 2,000 2,020
6.750%, 05/31/97.................. 1,000 1,019
5.500%, 09/30/97.................. 1,000 1,002
7.250%, 02/15/98.................. 1,000 1,037
5.125%, 11/30/98.................. 2,000 1,983
6.375%, 01/15/99.................. 1,000 1,026
5.875%, 03/31/99.................. 1,000 1,012
7.000%, 04/15/99.................. 1,000 1,046
6.000%, 10/15/99.................. 2,000 2,036
6.375%, 08/15/02.................. 2,000 2,081
7.875%, 11/15/04.................. 1,000 1,143
- ------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $19,600,365)............ 19,943
- ------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (9.4%)
FFCB MTN
7.125%, 06/01/01.................. 1,000 1,068
8.600%, 05/30/06, Callable
05/30/01 @100................... 1,000 1,115
FHLB
5.870%, 06/26/98.................. 2,000 2,015
7.600%, 03/15/99.................. 1,500 1,506
FNMA MTN
6.610%, 03/24/99.................. 1,750 1,774
6.250%, 01/14/04, Callable
01/14/97 @100................... 1,000 985
- ------------------------------------------------------
Total U.S. Government Agency
Obligations (Cost
$8,330,968)................... 8,463
- ------------------------------------------------------
MORTGAGE-BACKED SECURITIES (5.3%)
FHLMC, REMIC #1607-B
4.350%, 06/15/03.................. 1,618 1,605
FNMA ARM, Pool #305168
7.294%, 12/01/95(A)............... 1,248 1,288
FNMA, Pool #250227
8.500%, 03/01/25.................. 866 900
GNMA, Pool #207206
9.750%, 03/15/99.................. 87 93
Resolution Trust, Ser 1992-Mh2
7.000%, 02/15/04.................. 867 868
- ------------------------------------------------------
Total Mortgage-Backed Securities
(Cost $4,706,342)............. 4,754
- ------------------------------------------------------
CORPORATE OBLIGATIONS (39.5%)
Alcan Aluminum
5.875%, 04/01/00.................. 2,000 1,985
Allstate
5.875%, 06/15/98.................. 1,000 999
American Express Credit
7.875%, 12/01/96.................. 500 510
American Home Products
6.875%, 04/15/97.................. 1,000 1,012
Caterpillar Financial Services MTN
5.645%, 12/07/95(A)............... 2,000 1,974
<CAPTION>
Face Market
Amount Value
(000) (000)
------ --------
<S> <C> <C>
Central Fidelity MTN
5.000%, 06/17/96.................. $2,000 $ 1,997
Chase Manhattan
8.500%, 03/01/96.................. 600 604
Chrysler Financial
6.500%, 06/15/98.................. 3,000 3,034
Commercial Credit
7.375%, 03/15/02.................. 500 531
Connecticut Light & Power
5.500%, 02/01/99.................. 1,000 988
Detroit Edison
6.400%, 10/01/98.................. 975 977
First Union
8.125%, 06/24/02.................. 1,000 1,096
Ford Motor Credit MTN
6.750%, 05/15/05.................. 3,000 3,052
General Electric
6.835%, 04/03/97.................. 1,000 1,015
General Motors
7.000%, 06/15/03.................. 2,000 2,075
General Motors Acceptance
7.750%, 01/15/99.................. 1,500 1,575
Heller Financial MTN
9.220%, 04/01/96.................. 400 404
Houston Lighting & Power
5.250%, 01/01/97.................. 1,000 996
IBM MTN
6.375%, 06/15/00.................. 2,000 2,033
IBM Credit MTN
4.850%, 09/03/96.................. 1,000 993
International Lease Finance
7.410%, 09/01/99.................. 1,200 1,256
National City
8.375%, 03/15/96.................. 600 605
Philip Morris
9.250%, 12/01/97.................. 1,000 1,064
6.375%, 01/15/98.................. 2,000 2,018
Pitney Bowes Credit
6.250%, 06/01/98.................. 1,000 1,010
Salomon Brothers
7.125%, 08/01/99.................. 1,300 1,313
Virginia Electric Power MTN
8.550%, 12/08/95.................. 500 500
- ------------------------------------------------------
Total Corporate Obligations
(Cost $35,306,504)............ 35,616
- ------------------------------------------------------
ASSET BACKED SECURITIES (15.9%)
Advanta Credit Card Master Trust,
Ser 1995-F A1
6.050%, 08/01/03.................. 1,000 1,003
American Express Master Trust, Ser
1992
6.600%, 07/15/99.................. 2,000 2,049
Bridgestone/Firestone Master Trust,
Ser 1992-A
6.250%, 12/01/99.................. 500 500
Chase Manhattan Grantor Trust, Ser
1995-B
5.900%, 11/15/01.................. 2,000 2,007
</TABLE>
<PAGE> 29
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
LIMITED TERM BOND FUND (concluded)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ --------
<S> <C> <C>
ASSET BACKED SECURITIES (continued)
CIT RV Grantor Trust, Ser 1994-A, Cl
A
4.900%, 07/15/09.................. $1,268 $ 1,236
Corestates Home Equity Trust, Ser
1994-1a
6.650%, 05/15/09.................. 848 857
Greentree Manufacturing Housing, Ser
1995-7 A2
6.150%, 11/15/26.................. 1,000 1,004
Premier Auto Trust, Ser 1993-5 A2
4.220%, 03/02/99.................. 915 900
Sears Credit Account Master Trust,
Ser 1992-1, Cl A
5.900%, 11/15/98.................. 500 501
Signet Credit Card Master Trust, Ser
1994-1A
5.938%, 12/15/95(A)............... 1,000 1,001
Spiegel Master Trust, Ser 1995-A
7.500%, 09/15/04.................. 1,000 1,060
The Money Store, Ser 1995-A1
7.925%, 02/15/14.................. 2,000 2,073
Volvo Auto Receivables Grantor
Trust, Ser 1992-B, Cl A
5.450%, 12/15/98.................. 188 188
- ------------------------------------------------------
Total Asset Backed Securities
(Cost $14,240,109)............ 14,379
- ------------------------------------------------------
CASH EQUIVALENTS (4.8%)
Aim Liquid Assets Portfolio
5.710%,(A)........................ 4,387 4,387
- ------------------------------------------------------
Total Cash Equivalents
(Cost $4,387,352)............. 4,387
- ------------------------------------------------------
REPURCHASE AGREEMENT (1.3%)
J.P. Morgan
5.880%, dated 11/30/95,
matures 12/01/95, repurchase
price $1,183,283 (collateralized
by FHLMC Gold, par value $43,521,
7.500%, matures 11/01/25: FNMA
obligation, par value $1,160,854,
7.000%, matures 11/01/25: total
market value $1,206,751)......... 1,183
- ------------------------------------------------------
Total Repurchase Agreement
(Cost $1,183,090)............. 1,183
- ------------------------------------------------------
Total Investments (98.3%)
(Cost $87,754,730)............ 88,725
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.7%)
Other Assets and Liabilities, Net... 1,522
- ------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value
(000)
-------
<S> <C>
NET ASSETS:
Fund shares of the Trust Class ($.001
par value--1.5 Billion shares authorized)
based on 8,848,883 outstanding shares of
capital stock............................. $88,834
Fund shares of the Investors Class A ($.001
par value--1.5 Billion shares authorized)
based on 144,980 outstanding shares of
capital stock............................. 1,460
Net Unrealized Appreciation of
Investments............................... 970
Accumulated Net Realized Loss on
Investments............................... (1,040)
Undistributed Net Investment Income......... 23
- ------------------------------------------------------
Total Net Assets: (100.00%)............. $90,247
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($88,788,644 DIVIDED BY 8,848,883 SHARES
OUTSTANDING)................................ $10.03
- ------------------------------------------------------
NET ASSET VALUE, AND REDEMPTION PRICE PER
SHARE--INVESTORS CLASS A ($1,458,372
DIVIDED BY 144,980 SHARES OUTSTANDING)...... $10.06
- ------------------------------------------------------
OFFERING PRICE PER SHARE--INVESTORS CLASS A
($10.06 DIVIDED BY 98.0%)................... $10.27
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
(A) Floating Rate Security--the rate reflected on the Statement of Net Assets is
the rate in effect on November 30, 1995. The date reported on the Statement
of Net Assets is the later of the date on which the security can be redeemed
at par or the next date on which the rate of interest is adjusted.
ARM--Adjustable Rate Mortgage
Cl--Class
FFCB--Federal Farm Credit Bank
FHLB--Federal Home Loan Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
MTN--Medium Term Note
REMIC--Real Estate Mortgage Investment Conduit
Ser--Series
The accompanying notes are an integral part of the financial statements.
<PAGE> 30
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS (36.5%)
U.S. Treasury Bonds
10.000%, 05/15/10.................. $2,000 $ 2,583
6.250%, 08/15/23................... 2,000 2,001
U.S. Treasury Notes
6.875%, 07/31/99................... 2,000 2,089
8.000%, 08/15/99................... 1,500 1,623
7.875%, 11/15/99................... 1,000 1,082
5.500%, 04/15/00................... 2,000 2,002
6.250%, 08/31/00................... 1,000 1,028
7.875%, 08/15/01................... 1,000 1,110
6.375%, 08/15/02................... 1,000 1,040
6.250%, 02/15/03................... 2,500 2,583
5.750%, 08/15/03................... 3,000 3,003
7.250%, 08/15/04................... 4,000 4,395
7.875%, 11/15/04................... 2,000 2,287
U.S. Treasury STRIPS
0.000%, 11/15/02................... 2,000 1,356
0.000%, 08/15/10................... 3,000 1,217
0.000%, 05/15/11................... 3,000 1,152
- ------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $28,207,814)............. 30,551
- ------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (6.4%)
FFCB MTN
7.125%, 06/01/01................... 2,000 2,136
8.600%, 05/30/06 Callable
05/30/01 @ 100................... 1,000 1,115
FNMA
8.350%, 11/10/99................... 1,000 1,090
FNMA MTN
6.250%, 01/14/04 Callable
01/14/97 @ 100................... 1,000 985
- ------------------------------------------------------
Total U.S. Government Agency
Obligations (Cost
$5,186,378).................... 5,326
- ------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS (6.2%)
FHLMC REMIC 1726 Cl B
6.750%, 11/15/04................... 2,000 2,053
FNMA
8.500%, 03/01/25................... 866 900
FNMA REMIC 1991-1 G
7.000%, 01/25/21................... 1,500 1,520
Resolution Trust Corporation CMO Ser
1992-MH2, Cl A1
7.000%, 02/15/04................... 694 695
- ------------------------------------------------------
Total Mortgage-Backed Obligations
(Cost $4,984,684).............. 5,168
- ------------------------------------------------------
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
CORPORATE OBLIGATIONS (38.7%)
Allstate
5.875%, 06/15/98................... $1,000 $ 999
AT&T
7.000%, 05/15/05................... 1,000 1,055
AT&T MTN
5.190%, 02/26/96(A)................ 1,000 985
BankAmerica
7.500%, 10/15/02................... 1,000 1,066
Bank of New York
7.625%, 07/15/02................... 1,000 1,077
Caterpillar Financial Services, MTN
5.654%, 12/07/95(A)................ 2,000 1,974
First Chicago
7.625%, 01/15/03................... 1,000 1,071
First Union
8.125%, 06/24/02................... 2,000 2,192
Ford Motor Credit MTN
7.500%, 11/15/99................... 1,000 1,052
6.750%, 05/15/05................... 1,000 1,017
General Motors Acceptance Corporation
7.000%, 03/01/00................... 1,000 1,034
General Motors Acceptance Corporation
MTN
8.500%, 03/15/96................... 1,000 1,008
8.500%, 01/01/03................... 1,000 1,116
IBM
6.375%, 06/15/00................... 2,000 2,032
Illinois Bell Telephone
5.800%, 02/01/04................... 1,000 976
KeyCorp
8.000%, 07/01/04................... 1,000 1,097
Loews
8.250%, 01/15/07................... 1,000 1,105
Marriott International
7.125%, 06/01/07................... 1,750 1,798
Mellon Bank
6.500%, 08/01/05................... 2,000 1,995
Morgan Stanley
6.375%, 12/15/03................... 1,000 994
Occidental Petroleum
8.500%, 11/09/01................... 1,000 1,108
Philip Morris
7.125%, 08/15/02................... 1,000 1,039
Pitney Bowes Credit
6.625%, 06/01/02................... 2,000 2,050
RJR Nabisco
8.750%, 04/15/04................... 1,000 1,033
8.750%, 08/15/05................... 1,000 1,014
WMX Technologies
6.250%, 10/15/00................... 500 505
- ------------------------------------------------------
Total Corporate Obligations
(Cost $31,409,538)............. 32,392
- ------------------------------------------------------
</TABLE>
<PAGE> 31
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND (concluded)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
ASSET BACKED SECURITIES (8.4%)
American Express Master Trust Ser
1992
6.600%, 07/15/99................... $1,000 $ 1,025
Bridgestone/Firestone Master Trust
Ser 1992-A
6.250%, 12/01/99................... 250 250
CIT RV Grantor Trust Ser 1994-A, Cl A
4.900%, 07/15/09................... 634 618
EQCC Home Equity Loan Trust
5.800%, 03/15/09................... 1,490 1,469
Greentree Manufacturing Housing Ser
1995-7 A2
6.150%, 11/15/26................... 1,000 1,004
Sears Credit Account Master Trust Ser
1992-1a
5.900%, 11/15/98................... 250 251
Signet Credit Card Master Trust Ser
1994-1A
5.938%, 12/15/95(A)................ 1,000 1,001
The Money Store 1995-A1
7.925%, 02/15/14................... 1,250 1,295
Volvo Auto Receivables Grantor Trust
Ser 1992-B, Cl A
5.450%, 12/15/98................... 94 94
- ------------------------------------------------------
Total Asset Backed Securities
(Cost $6,963,673).............. 7,007
- ------------------------------------------------------
CASH EQUIVALENTS (4.0%)
Aim Liquid Assets Portfolio
5.710%,(A)......................... 3,313 3,313
- ------------------------------------------------------
Total Cash Equivalents
(Cost $3,313,406).............. 3,313
- ------------------------------------------------------
Total Investments (100.2%)
(Cost $80,065,493)............. 83,757
- ------------------------------------------------------
<CAPTION>
Market
Value
(000)
-------
<S> <C>
OTHER ASSETS AND LIABILITIES (-0.2%)
Other Assets and Liabilities, Net.... $ (158)
- ------------------------------------------------------
NET ASSETS:
Fund shares of Trust Class ($.001 par
value--1.5 Billion shares authorized)
based on 8,090,978 outstanding shares of
capital stock.............................. 80,631
Fund shares of Investors Class A ($.001 par
value--1.5 Billion shares authorized) based
on 170,828 outstanding shares of capital
stock...................................... 1,705
Net Unrealized Appreciation of
Investments............................... 3,692
Accumulated Net Realized Loss On
Investments............................... (2,475)
Undistributed Net Investment Income......... 46
- ------------------------------------------------------
Total Net Assets: (100.00%)............. $83,599
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($81,869,755 DIVIDED BY 8,090,978 SHARES
OUTSTANDING)................................ $10.12
- ------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE--INVESTORS CLASS A ($1,729,142
DIVIDED BY 170,828 SHARES OUTSTANDING)...... $10.12
- ------------------------------------------------------
OFFERING PRICE PER SHARE--INVESTORS CLASS A
($10.12 DIVIDED BY 97.0%)................... $10.43
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
(A) Floating Rate Security--the rate reflected on the Statement of Net Assets is
the rate in effect on November 30, 1995. The date reported on the Statement
of Net Assets is the later of the date on which the security can be redeemed
at par or the next date on which the rate of interest is adjusted.
Cl--Class
CMO--Collateralized Mortgage Obligation
FFCB--Federal Farm Credit Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
MTN--Medium Term Note
REMIC--Real Estate Mortgage Investment Conduit
Ser--Series
STRIPS-- Separate Trading of Registered Interest and Principal of Security
The accompanying notes are an integral part of the financial statements.
<PAGE> 32
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS (61.8%)
U.S. Treasury Bonds
8.750%, 11/15/08................... $500 $ 589
8.125%, 05/15/21................... 500 617
8.000%, 11/15/21................... 500 610
6.250%, 08/15/23................... 750 750
U.S. Treasury Notes
6.500%, 11/30/96................... 250 253
6.000%, 11/30/97................... 250 253
6.000%, 12/31/97................... 250 253
5.375%, 05/31/98................... 250 250
5.875%, 03/31/99................... 250 253
6.750%, 05/31/99................... 500 520
8.750%, 08/15/00................... 500 565
6.375%, 08/15/02................... 250 260
6.250%, 02/15/03................... 500 517
5.875%, 02/15/04................... 250 252
7.875%, 11/15/04................... 500 572
- ------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $6,062,485).............. 6,514
- ------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (4.9%)
FHLMC
6.395%, 05/16/00................... 500 512
- ------------------------------------------------------
Total U.S. Government Agency
Obligations
(Cost $497,079)................ 512
- ------------------------------------------------------
CORPORATE OBLIGATIONS (24.3%)
Associates of North America
6.000%, 03/15/00................... 250 249
AT&T
7.000%, 05/15/05................... 250 264
Ford Motor Credit MTN
6.750%, 05/15/05................... 250 254
General Motors Acceptance
7.750%, 01/15/99................... 250 263
IBM
6.375%, 06/15/00................... 250 254
Marriott International
7.125%, 06/01/07................... 250 257
Philip Morris
7.625%, 05/15/02................... 250 266
Pitney Bowes Credit
6.250%, 06/01/98................... 250 252
RJR Nabisco
8.750%, 08/15/05................... 250 253
Wal-Mart Stores
5.875%, 10/15/05................... 250 243
- ------------------------------------------------------
Total Corporate Obligations
(Cost $2,476,247).............. 2,555
- ------------------------------------------------------
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
ASSET BACKED SECURITIES (4.2%)
EQCC Home Equity Loan Trust, Ser
1994-1 A
5.800%, 03/15/09................... $186 $ 184
The Money Store, Ser 1995-A1
7.925%, 02/15/14................... 250 259
- ------------------------------------------------------
Total Asset Backed Securities
(Cost $438,504)................ 443
- ------------------------------------------------------
REPURCHASE AGREEMENT (4.3%)
Lehman
5.870%, dated 11/30/95, matures
12/01/95, repurchase price
$454,838 (collateralized by FNMA
ARM par value $490,000, 7.802%,
matures 09/01/20: market value
$464,274)......................... 455
- ------------------------------------------------------
Total Repurchase Agreement
(Cost $454,764)................ 455
- ------------------------------------------------------
Total Investments (99.5%)
(Cost $9,929,079).............. 10,479
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.5%)
Other Assets and Liabilities, Net.... 57
- ------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class ($.001 par
value--.5 Billion shares authorized) based
on 957,790 outstanding shares of capital
stock...................................... 9,667
Fund shares of the Investors Class B ($.001
par value--.5 Billion shares authorized)
based on 30,428 outstanding shares of
capital stock.............................. 318
Net Unrealized Appreciation of
Investments............................... 550
Accumulated Net Realized Gain on
Investments............................... 1
- ------------------------------------------------------
Total Net Assets: (100.0%).............. $10,536
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($10,211,299 DIVIDED BY 957,790 SHARES
OUTSTANDING)................................ $10.66
- ------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER
SHARE--INVESTORS CLASS B(1) ($324,862
DIVIDED BY 30,428 SHARES OUTSTANDING)....... $10.68
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
(1) Investors Class B has a contingent deferred sales charge. For description of
a possible redemption charge, see the notes to the financial statements.
ARM--Adjustable Rate Mortgage
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
MTN--Medium Term Note
Ser--Series
The accompanying notes are an integral part of the financial statements.
<PAGE> 33
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
MUNICIPAL BONDS (95.0%)
VIRGINIA (95.0%)
Arlington County, VA Industrial
Development Authority, Arlington
Hospital Facility Project, RB,
Callable 09/01/03 @ 102
5.125%, 09/01/08................... $1,000 $ 980
Arlington County, VA Refunding Bond,
GO
5.100%, 06/01/97................... 1,000 1,019
Arlington County, VA, GO
5.250%, 08/01/98................... 1,000 1,031
5.000%, 07/15/01................... 500 516
Chesapeake, VA Hospital Authority
First Mortgage Chesapeake General
Hospital Project, RB MBIA
5.000%, 07/01/03................... 300 304
Chesterfield County, VA Refunding &
Improvement Bond, GO, Callable
07/15/01 @ 102
5.900%, 07/15/02................... 250 273
Chesterfield County, VA, Ser A, GO,
Prerefunded 01/15/00 @ 102
6.750%, 01/15/10................... 1,300 1,441
Danville, VA School Improvements
Project, GO, Callable 08/01/03 @
102, MBIA
5.400%, 08/01/08................... 500 513
Danville, VA, GO, Callable 04/01/03 @
102
5.600%, 04/01/09 (B)............... 250 260
Fairfax County, VA Industrial
Development Authority Refunding
Bond, Innovation Health System
Project, RB
5.000%, 08/15/08................... 1,000 970
Fairfax County, VA Refunding Bond,
Ser A, GO
5.200%, 06/01/06................... 1,000 1,024
Fairfax County, VA Refunding Bond,
Ser A, GO, Callable 06/01/00 @
100.75
4.900%, 06/01/03 (B)............... 300 306
Fairfax County, VA Refunding Bond,
Ser C, GO
4.000%, 05/01/97 (B)............... 1,000 1,003
4.500%, 05/01/00 (B)............... 700 708
Fauquier County, VA, GO, Callable
07/15/03 @ 102
5.550%, 07/15/09................... 800 820
Frederick-Winchester, VA Service
Authority Regional Sewer System, RB,
AMBAC
4.900%, 10/01/99................... 200 203
Hampton, VA Public Improvements
Project, Ser C, GO, Callable
08/01/03 @ 102
4.800%, 08/01/06................... 1,000 987
Hampton, VA Sanitation District
Wastewater Authority Refunding Bond
Capital Improvements Project, RB,
Callable 10/01/03 @ 102
4.900%, 10/01/06................... 1,000 998
Harrisonburg, VA Refunding Bond, GO
6.000%, 08/01/99................... 1,000 1,056
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
Henrico County, VA Industrial
Development Authority Hospital
Facility Refunding Bond Bon Secours
Health System Project, RB, Callable
08/15/03 @ 102, FSA
5.000%, 08/15/04................... $ 400 $ 398
Henrico County, VA Refunding Bond
Public Improvements Project, GO
4.500%, 01/15/00................... 1,000 1,010
Henrico County, VA Refunding Bond
Public Improvements Project, GO,
Callable 01/15/03 @ 102
5.200%, 01/15/07................... 1,000 1,031
James City County, VA, GO, FGIC
4.800%, 12/15/05................... 1,000 1,006
James Madison University, VA, RB,
Callable 06/01/03 @ 102, AMBAC
5.375%, 06/01/09................... 500 501
Newport News, VA Public Housing
Authority Multi-Family Housing For
Newport-Oxford Project, RB
3.900%, 12/01/95 (A)(B)............ 1,300 1,300
Norfolk, VA Industrial Development
Authority Childrens Hospital
Project, RB, Callable 06/01/04 @
102, AMBAC
5.100%, 06/01/07................... 1,000 1,009
Norfolk, VA Industrial Development
Authority Sentara Hospital Project,
Ser A, RB, Callable 11/01/04 @ 102
4.800%, 11/01/06................... 1,000 964
Norfolk, VA Redevelopment & Housing
Authority Educational Facility, RB,
Callable 11/01/05 @ 102
5.800%, 11/01/08................... 700 743
Norfolk, VA Refunding Bond, GO
4.700%, 06/01/02 (B)............... 1,000 1,015
Norfolk, VA, GO, Prerefunded 10/01/98
@ 102
7.000%, 10/01/09................... 1,000 1,096
Norfolk, VA, Refunding & Improvement
Bond, GO
5.000%, 02/01/03................... 1,000 1,029
Peninsula Ports, VA Riverside Health
System Project, Ser A, RB
5.600%, 07/01/98................... 500 514
Portsmouth, VA, Refunding Bond, GO
5.000%, 08/01/02................... 1,000 1,030
Prince William County, VA Park
Authority, RB
5.500%, 10/15/99................... 500 524
5.800%, 10/15/01................... 500 536
Prince William County, VA Refunding
Bond, Ser C, GO, Callable 08/01/03 @
102
5.100%, 08/01/08 (B)............... 1,000 1,007
Richmond County, VA Metropolitan
Authority Highway Improvements
Project, Ser B, RB, Callable
07/15/02 @ 102, FGIC
6.050%, 07/15/05................... 500 540
</TABLE>
<PAGE> 34
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
MUNICIPAL BONDS (continued)
VIRGINIA (continued)
Roanoke, VA Industrial Development
Authority Roanoke Memorial Hospital
Project, Ser B, RB
5.800%, 07/01/05................... $ 500 $ 521
Roanoke, VA Water Utility
Improvements, Ser B, GO
5.800%, 08/01/00................... 500 531
Stafford County, VA Water Authority,
RB, FGIC
4.750%, 06/01/03................... 1,000 1,010
Suffolk, VA Redevelopment & Housing
Authority Oak Springs Association
Project, RB
6.250%, 02/01/05 (B)............... 500 506
Suffolk, VA Refunding & Improvement
Bond, GO
5.200%, 08/01/02................... 1,500 1,562
University of Virginia, Ser A, RB
5.200%, 06/01/12................... 1,500 1,485
University of Virginia, VA Hospital
Authority, Ser E, RB, Callable
06/01/99 @ 100
6.000%, 06/01/13................... 1,000 1,018
Upper Occoquan, VA Sewer Authority,
RB, Callable 01/01/04 @ 102, FGIC
5.200%, 07/01/09................... 1,000 1,000
Virginia Beach, VA Refunding Bond, GO
5.000%, 07/15/03................... 1,000 1,030
5.450%, 07/15/11................... 1,000 1,014
Virginia State College Building
Authority University of Richmond
Project, RB, Callable 11/01/02 @ 102
6.250%, 11/01/12................... 1,000 1,066
Virginia State Education Loan
Authority, Ser C, RB
5.100%, 03/01/00 (B)............... 400 401
Virginia State Education Loan
Authority, Ser F, RB
5.250%, 03/01/00 (B)............... 750 747
Virginia State Housing Development
Authority,
Ser C-4, RB, Callable 01/01/02 @ 102
4.900%, 01/01/04................... 1,000 990
Virginia State Housing Development
Authority, Ser D, RB
5.000%, 11/01/01 (B)............... 770 785
<CAPTION>
Face Market
Amount Value
(000) (000)
------ -------
<S> <C> <C>
Virginia State Public Building
Authority Correctional Facilities
Project, Ser A, RB
6.750%, 08/01/97................... $1,000 $ 1,046
Virginia State Public Building
Authority Refunding Bond, Ser B, RB
5.625%, 08/01/02................... 250 266
Virginia State Public School
Authority, Ser C, RB
4.500%, 01/01/00................... 1,000 1,009
4.875%, 01/01/09................... 1,000 967
Virginia State Solid Waste Disposal
Systems, Ser E, RB
4.600%, 05/01/00................... 500 500
Virginia State Transportation Board
Authority
Northern Virginia Transportation District
Project,
Ser C, RB, Callable 05/15/03 @ 102
5.500%, 05/15/15................... 1,000 1,001
Virginia State Transportation Board
Authority Route 28 Project, RB,
Escrowed To Maturity
6.700%, 03/01/96................... 1,000 1,007
Waynesboro, VA, GO, Callable 02/01/02
@ 102
5.400%, 02/01/08................... 300 306
- ------------------------------------------------------
49,433
- ------------------------------------------------------
Total Municipal Bonds
(Cost $48,867,613)............. 49,433
- ------------------------------------------------------
CASH EQUIVALENTS (5.8%)
Aim Tax Free Institutional Cash
Reserve
3.550%, (A)........................ 389 389
Federated Virginia Municipal Cash
Trust
3.410%, (A)........................ 2,628 2,628
- ------------------------------------------------------
Total Cash Equivalents
(Cost $3,017,000).............. 3,017
- ------------------------------------------------------
Total Investments (100.8%)
(Cost $51,884,613)............. 52,450
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.8%)
Other Assets and Liabilities, Net.... (428)
- ------------------------------------------------------
</TABLE>
<PAGE> 35
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (concluded)
<TABLE>
<CAPTION>
Market
Value
(000)
-------
<S> <C>
NET ASSETS:
Fund shares of the Trust Class ($.001 par
value-- 1 Billion shares authorized) based
on 4,236,628 outstanding shares of capital
stock...................................... $43,743
Fund shares of the Investors Class A ($.001
par value--1 Billion shares authorized)
based on 845,384 outstanding shares of
capital stock.............................. 8,663
Net Unrealized Appreciation of
Investments................................ 565
Accumulated Net Realized Loss on
Investments................................ (945)
Distribution in Excess of Net Investment
Income..................................... (4)
- ------------------------------------------------------
Total Net Assets: (100.0%).............. $52,022
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($43,373,050 DIVIDED BY 4,236,628 SHARES
OUTSTANDING)................................ $10.24
- ------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE--INVESTORS CLASS A ($8,648,638
DIVIDED BY 845,384 SHARES OUTSTANDING)...... $10.23
- ------------------------------------------------------
OFFERING PRICE PER SHARE--INVESTORS CLASS A
($10.23 DIVIDED BY 96.5%)................... $10.60
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
(A) Floating Rate Security--the rate reflected on the Statement of Net Assets is
the rate in effect on November 30, 1995. The date reported on the Statement
of Net Assets is the later of the date on which the security can be redeemed
at par or the next date on which the rate of interest is adjusted.
(B) Security backed by letter of credit or credit support.
AMBAC--American Municipal Bond Assurance Company
FGIC--Federal Guaranty Insurance Company
FSA--Financial Securities Assurance, Inc.
GO--General Obligation
MBIA--Municipal Bond Insurance Association
RB--Revenue Bond
Ser--Series
The accompanying notes are an integral part of the financial statements.
<PAGE> 36
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
VIRGINIA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ ------
<S> <C> <C>
MUNICIPAL BONDS (97.2%)
VIRGINIA (97.2%)
Arlington County, VA Industrial
Development Authority Arlington
Hospital Facility Project, RB AMBAC
5.000%, 09/01/21.................... $200 $ 183
Chesapeake Bay, VA Bridge & Tunnel
Improvements Project, RB Callable
07/01/05 @ 102 FGIC
5.500%, 07/01/06.................... 150 158
Chesapeake, VA Refunding Bond, GO
5.250%, 12/01/06.................... 250 259
Chesterfield County, VA, Ser A, GO
Prerefunded 01/15/00 @ 102
6.750%, 01/15/10.................... 200 222
Danville, VA, GO Callable 04/01/03 @
102
5.600%, 04/01/09(B)................. 150 156
Fairfax County, VA Industrial
Development Authority Inova Health
System Project, RB
5.000%, 08/15/23.................... 200 180
Fairfax County, VA Refunding Bond, Ser
C, GO Callable 10/01/99 @ 101.25
5.600%, 10/01/04(B)................. 150 157
Fairfax County, VA Water Authority, RB
Callable 04/01/07 @ 102
6.000%, 04/01/22.................... 150 155
Frederick-Winchester, VA Service
Authority Regional Sewer System
Project, RB Callable 10/01/03 @ 102
AMBAC
5.750%, 10/01/10.................... 150 155
Front Royal, VA MN
3.650%, 12/07/95(A)................. 145 145
Hampton Roads, VA Sanitation District
Waste Water Capital Improvements
Project, RB
4.700%, 10/01/04.................... 250 250
James City, VA, GO FGIC
5.200%, 12/15/10.................... 150 149
Loudoun County, VA Sanitation
Authority Water & Sewer, RB FGIC
6.250%, 01/01/16.................... 150 158
Lychburg, VA Public Improvement, GO
Callable 04/01/03 @ 102
5.000%, 04/01/12(B)................. 200 193
Newport News, VA, Ser A, GO MBIA
5.500%, 07/01/12.................... 250 256
Norfolk, VA MN
3.650%, 12/07/95(A)................. 105 105
Norfolk, VA Redevelopment & Housing
Authority, Tidewater Community
College Project, RB
5.875%, 11/01/15.................... 100 104
Norfolk, VA, GO
5.750%, 06/01/12.................... 150 156
Norfolk, VA, GO Prerefunded 10/01/98 @
102
7.000%, 10/01/09.................... 150 165
<CAPTION>
Face Market
Amount Value
(000) (000)
------ ------
<S> <C> <C>
Petersburg, VA, GO Callable 07/15/04 @
102 FGIC
5.750%, 07/15/14.................... $150 $ 153
Portsmouth, VA Water & Sewer
Improvements, GO Callable 08/01/01 @
102
5.700%, 08/01/02.................... 200 214
Richmond, VA Metropolitan Expressway
Authority, Ser A, RB Callable
07/15/02 @ 100 FGIC
5.750%, 07/15/22.................... 150 151
Richmond, VA Public Improvements
Project, Ser B, GO
6.250%, 01/15/18.................... 150 154
Riverside, VA Regional Jail Authority
Jail Facilities Project, RB Callable
07/01/05 @ 102 MBIA
6.000%, 07/01/25.................... 150 156
Roanoke, VA Public Improvements
Project, GO
5.150%, 08/01/12.................... 250 244
Spotsylvania County, VA Public
Improvements Project, GO Callable
07/15/02 @ 102
5.875%, 07/15/10.................... 150 156
University of Virginia, Ser A, RB
Callable 06/01/03 @ 102
5.200%, 06/01/15.................... 200 196
Virginia Beach, VA, GO
5.450%, 07/15/11.................... 200 203
Virginia College Building Authority,
Washington & Lee University Project,
RB Callable 01/01/04 @ 102
5.800%, 01/01/24.................... 150 155
Virginia State College Building
Authority University of Virginia
Project, RB Callable 11/01/99 @ 101
6.400%, 11/01/22.................... 150 160
Virginia State Housing Development
Authority Commonwealth Meeting, Ser
A-4, AMT RB MBIA
6.350%, 07/01/18(B)................. 150 154
Virginia State Peninsula Regional Jail
Authority Regional Jail Facility, RB
Callable 10/01/05 @ $101 MBIA
5.500%, 10/01/14.................... 200 201
Virginia State Public Building
Authority, Ser C, RB Callable
08/01/02 @ 101
5.750%, 08/01/12.................... 150 154
Virginia State Public School Authority
Special Obligation Bond for York
County, Callable 07/15/04 @ 102
5.900%, 07/15/13.................... 150 156
Virginia State Transportation Board
Contract U.S. Route 58 Corridor
Project, Ser A, RB Callable 05/15/03
@ 102
5.400%, 05/15/08.................... 150 154
Virginia State, Ser A, RB
5.000%, 06/01/06.................... 450 462
</TABLE>
<PAGE> 37
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
VIRGINIA MUNICIPAL BOND FUND (concluded)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------ ------
<S> <C> <C>
MUNICIPAL BONDS (continued)
VIRGINIA (continued)
West Point, VA Industrial Development
Authority Solid Waste Disposal
Chesapeake Corporation Project, Ser
B, RB
6.250%, 03/01/19.................... $150 $ 155
- ------------------------------------------------------
Total Municipal Bonds
(Cost $6,469,189)............... 6,684
- ------------------------------------------------------
CASH EQUIVALENTS (2.6%)
Federated Virginia Municipal Cash
Trust
3.410%, (A)......................... 178 178
- ------------------------------------------------------
Total Cash Equivalents
(Cost $178,000)................. 178
- ------------------------------------------------------
Total Investments (99.8%)
(Cost $6,647,189)............... 6,862
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.2%)
Other Assets and Liabilities, Net..... 13
- ------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value
(000)
------
<S> <C>
NET ASSETS:
Fund shares of Trust Class ($.001 par value--
.5 Billion shares authorized) based on
600,555 outstanding shares of capital
stock....................................... $6,047
Fund shares of Investors Class B ($.001 par
value--.5 Billion shares authorized) based
on 60,250 outstanding shares of capital
stock....................................... 612
Net Unrealized Appreciation on Investments... 215
Accumulated Net Realized Gain on
Investments................................. 1
- ------------------------------------------------------
Total Net Assets: (100.0%)............... $6,875
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($6,246,508 DIVIDED BY 600,555 SHARES
OUTSTANDING)................................. $10.40
- ------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER
SHARE--INVESTORS CLASS B(1) ($628,392
DIVIDED BY 60,250 SHARES OUTSTANDING)........ $10.43
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
(A) Floating Rate Security--the rate reflected on the Statement of Net Assets is
the rate in effect on November 30, 1995. The date reported on the Statement
of Net Assets is the later of the date on which the security can be redeemed
at par or the next date on which the rate of interest is adjusted.
(B) Security is backed by letter of credit or credit support.
(1) Investors Class B has a contingent deferred sales charge. For description of
a possible redemption charge, see the notes to the financial statements.
AMBAC--American Municipal Bond Assurance Company
AMT--Alternative Minimum Tax
FGIC--Financial Guaranty Insurance Company
GO--General Obligation
MBIA--Municipal Bond Insurance Association
MN--Master Note
RB--Revenue Bond
Ser--Series
The accompanying notes are an integral part of the financial statements.
<PAGE> 38
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
Market
Value
Shares (000)
-------- --------
<S> <C> <C>
COMMON STOCKS (99.0%)
AIR TRANSPORTATION (1.6%)
*AMR............................... 50,000 $ 3,831
- ------------------------------------------------------
AIRCRAFT (2.2%)
*Litton Industries................. 60,000 2,693
Rockwell International............. 50,000 2,450
- ------------------------------------------------------
5,143
- ------------------------------------------------------
APPAREL/TEXTILES (1.5%)
*Jones Apparel Group............... 100,000 3,612
- ------------------------------------------------------
AUTOMOTIVE (4.9%)
Federal Mogul...................... 225,000 4,303
General Motors..................... 90,000 4,365
Goodyear Tire & Rubber............. 70,000 2,966
- ------------------------------------------------------
11,634
- ------------------------------------------------------
BANKS (5.3%)
Banc One........................... 85,000 3,241
Bankers Trust New York............. 65,000 4,217
Fleet Financial Group.............. 75,000 3,131
PNC Bank........................... 65,000 1,901
- ------------------------------------------------------
12,490
- ------------------------------------------------------
CHEMICALS (3.2%)
Dow Chemical....................... 71,500 5,068
Georgia Gulf....................... 68,000 2,422
- ------------------------------------------------------
7,490
- ------------------------------------------------------
COMMUNICATIONS (2.1%)
Motorola........................... 80,000 4,900
- ------------------------------------------------------
COMPUTERS & SERVICES (6.1%)
*Cabletron Systems................. 25,000 2,075
Pitney Bowes....................... 45,000 2,014
*Storage Technology................ 75,000 1,856
*Sybase............................ 100,000 3,512
*Tandem Computers.................. 400,000 5,000
- ------------------------------------------------------
14,457
- ------------------------------------------------------
CONSTRUCTION (1.4%)
Foster Wheeler..................... 85,000 3,357
- ------------------------------------------------------
COSMETICS, SOAPS & TOILETRIES (0.5%)
Procter & Gamble................... 15,000 1,296
- ------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL
EQUIPMENT (2.2%)
AMP................................ 70,000 2,809
W.W. Grainger...................... 35,000 2,341
- ------------------------------------------------------
5,150
- ------------------------------------------------------
ENVIRONMENTAL SERVICES (2.2%)
WMX Technologies................... 175,000 5,163
- ------------------------------------------------------
<CAPTION>
Market
Value
Shares (000)
-------- --------
<S> <C> <C>
FOOD, BEVERAGE & TOBACCO (5.4%)
Campbell Soup...................... 60,000 $ 3,352
+McCormick......................... 100,000 2,363
RJR Nabisco........................ 125,000 3,641
U.S.T. ............................ 100,000 3,262
- ------------------------------------------------------
12,618
- ------------------------------------------------------
HOUSEHOLD FURNITURE & FIXTURES (1.3%)
Masco.............................. 100,000 2,950
- ------------------------------------------------------
HOUSEHOLD PRODUCTS (2.5%)
Premark International.............. 75,000 3,825
Singer N.V......................... 75,000 1,969
- ------------------------------------------------------
5,794
- ------------------------------------------------------
INSURANCE (5.3%)
Cigna.............................. 45,000 4,950
Torchmark.......................... 100,000 4,250
Unum............................... 60,000 3,248
- ------------------------------------------------------
12,448
- ------------------------------------------------------
MACHINERY (4.9%)
Deere.............................. 85,000 2,794
Giddings & Lewis................... 250,000 3,906
Tenneco............................ 100,000 4,800
- ------------------------------------------------------
11,500
- ------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (6.6%)
American Home Products............. 20,000 1,825
C.R. Bard.......................... 125,000 3,609
Columbia/HCA Healthcare............ 60,000 3,097
Rhone Poulenc Rorer................ 85,000 4,069
Schering Plough.................... 50,000 2,869
- ------------------------------------------------------
15,469
- ------------------------------------------------------
METALS & MINING (3.3%)
*Alumax............................ 150,000 4,987
*LTV............................... 195,000 2,828
- ------------------------------------------------------
7,815
- ------------------------------------------------------
OIL & GAS (1.2%)
Coastal............................ 85,000 2,826
- ------------------------------------------------------
PAPER & PAPER PRODUCTS (2.9%)
Potlatch........................... 40,000 1,615
Westvaco........................... 90,000 2,464
Weyerhaeuser....................... 60,000 2,715
- ------------------------------------------------------
6,794
- ------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (5.5%)
Apache............................. 85,000 2,263
Dresser Industries................. 120,000 2,835
Schlumberger....................... 70,000 4,445
Union Texas Petroleum.............. 175,000 3,369
- ------------------------------------------------------
12,912
- ------------------------------------------------------
</TABLE>
<PAGE> 39
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
VALUE FUND (concluded)
<TABLE>
<CAPTION>
Market
Value
Shares (000)
-------- --------
<S> <C> <C>
COMMON STOCKS (continued)
PETROLEUM REFINING (3.4%)
Amoco.............................. 60,000 $ 4,065
Exxon.............................. 25,000 1,934
Mobil.............................. 20,000 2,088
- ------------------------------------------------------
8,087
- ------------------------------------------------------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES
(1.9%)
Eastman Kodak...................... 65,000 4,420
- ------------------------------------------------------
PRINTING & PUBLISHING (1.5%)
Tribune............................ 55,000 3,548
- ------------------------------------------------------
RETAIL (6.7%)
Albertsons......................... 125,000 3,844
Circuit City....................... 90,000 2,610
Limited............................ 180,000 3,218
Melville........................... 100,000 3,113
*Toys R US......................... 125,000 2,906
- ------------------------------------------------------
15,691
- ------------------------------------------------------
SAVINGS & LOAN (2.0%)
H.F. Ahmanson...................... 175,000 4,681
- ------------------------------------------------------
TELEPHONES & TELECOMMUNICATION
(3.7%)
Ameritech.......................... 20,000 1,100
AT&T............................... 65,000 4,290
MCI Communications................. 125,000 3,328
- ------------------------------------------------------
8,718
- ------------------------------------------------------
TRUCKING (1.0%)
Ryder System....................... 100,000 2,387
- ------------------------------------------------------
UTILITIES, ELECTRIC, & GAS (6.7%)
Boston Edison...................... 125,000 3,484
Consolidated Natural Gas........... 120,000 5,325
Equitable Resources................ 65,000 1,999
Public Service Enterprise.......... 100,000 2,963
Unicom............................. 60,000 1,920
- ------------------------------------------------------
15,691
- ------------------------------------------------------
Total Common Stocks
(Cost $214,920,240).......... 232,872
- ------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
--------- --------
<S> <C> <C>
CASH EQUIVALENTS (1.4%)
Aim Liquid Assets Portfolio
5.710%, (A)..................... $ 3,284 $ 3,284
- ------------------------------------------------------
Total Cash Equivalents
(Cost $3,284,047)........... 3,284
- ------------------------------------------------------
Total Investments (100.4%)
(Cost $218,204,287)......... 236,156
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES
(-0.4%)
Other Assets and Liabilities,
Net............................. (1,051)
- ------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class ($.001 par
value--1.5 Billion shares authorized)
based on 19,005,585 outstanding shares
of capital stock........................... 201,449
Fund shares of the Investors Class A ($.001
par value--1.5 Billion shares authorized)
based on 1,083,612 outstanding shares of
capital stock.............................. 12,189
Fund shares of the Investors Class B ($.001
par value--1.5 Billion shares authorized)
based on 179,273 outstanding shares of
capital stock.............................. 2,143
Net Unrealized Appreciation of
Investments............................... 17,952
Accumulated Net Realized Gain on
Investments............................... 1,235
Undistributed Net Investment Income......... 137
- ------------------------------------------------------
Total Net Assets: (100.00%)............. $235,105
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($220,385,316 DIVIDED BY 19,005,585 SHARES
OUTSTANDING)................................ $11.60
- ------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE--INVESTORS CLASS A ($12,633,255
DIVIDED BY 1,083,612 SHARES OUTSTANDING).... $11.66
- ------------------------------------------------------
OFFERING PRICE PER SHARE--INVESTORS CLASS A
($11.66 / 95.5%)............................ $12.21
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--INVESTORS
CLASS B(1) ($2,085,930 DIVIDED BY 179,273
SHARES OUTSTANDING)......................... $11.64
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
* Non-income producing securities.
+ Non-voting shares.
(A) Floating Rate Security--the rate reflected on the Statement of Net Assets is
the rate in effect on November 30, 1995. The date reported on the Statement
of Net Assets is the later of the date on which the security can be redeemed
at par or the next date on which the rate of interest is adjusted.
(1) Investors Class B has a contingent deferred sales charge. For description of
a possible redemption charge, see the notes to the financial statements.
The accompanying notes are an integral part of the financial statements.
<PAGE> 40
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND
<TABLE>
<CAPTION>
Market
Value
Shares (000)
------- -------
<S> <C> <C>
COMMON STOCKS (96.3%)
AIR TRANSPORTATION (1.5%)
Skywest............................. 26,000 $ 354
- ------------------------------------------------------
BANKS (4.1%)
Chemical Banking.................... 3,700 222
H.F. Ahmanson....................... 26,700 714
- ------------------------------------------------------
936
- ------------------------------------------------------
BUILDING & CONSTRUCTION (6.5%)
Webb, Del E. ....................... 29,000 587
Medusa.............................. 9,500 236
*Schuler Homes...................... 22,000 195
*Toll Brothers...................... 26,000 471
- ------------------------------------------------------
1,489
- ------------------------------------------------------
COMMUNICATIONS (6.1%)
A.H. Belo, Ser A.................... 13,400 477
*Clear Channel Communications....... 3,600 284
*ECI Telecommunications............. 30,000 630
- ------------------------------------------------------
1,391
- ------------------------------------------------------
COMPUTERS & SERVICES (8.3%)
*Creative Technology................ 18,000 164
*Gateway 2000....................... 17,500 483
*Netmanage.......................... 11,250 255
*Netscape Communications............ 200 28
*Seagate Technology................. 7,100 375
*Sybase............................. 17,000 597
- ------------------------------------------------------
1,902
- ------------------------------------------------------
COSMETICS, SOAPS & TOILETRIES (2.6%)
Procter & Gamble.................... 7,000 605
- ------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL
EQUIPMENT (5.0%)
*Cypress Semiconductor.............. 20,000 312
Motorola............................ 9,600 588
*Solectron.......................... 5,600 238
- ------------------------------------------------------
1,138
- ------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (2.5%)
CPC International................... 8,200 564
- ------------------------------------------------------
INSURANCE (7.4%)
American Financial.................. 17,800 534
Life RE............................. 24,000 513
Mid Ocean........................... 17,500 648
- ------------------------------------------------------
1,695
- ------------------------------------------------------
MARINE TRANSPORTATION (3.0%)
Carnival Cruise Lines, Cl A......... 26,000 676
- ------------------------------------------------------
<CAPTION>
Market
Value
Shares (000)
------- -------
<S> <C> <C>
MEASURING DEVICES (1.3%)
*Elsag Bailey Process Automation
N.V............................... 10,000 $ 289
- ------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (16.5%)
*Amgen.............................. 3,000 149
Biogen.............................. 6,500 354
*Genzyme............................ 2,000 130
*Medisense.......................... 24,000 612
Rhone Poulenc Rorer................. 18,500 886
*Tenet Healthcare................... 28,000 500
United States Surgical.............. 30,500 766
*Watson Pharmaceuticals............. 8,000 374
- ------------------------------------------------------
3,771
- ------------------------------------------------------
METALS & MINING (6.0%)
AK Steel Holding.................... 15,500 537
*Alumax............................. 13,800 459
Cyprus Amax Minerals................ 13,700 377
- ------------------------------------------------------
1,373
- ------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (11.8%)
Burlington Resources................ 7,000 270
*Chesapeake Energy.................. 19,000 807
Dresser............................. 19,000 449
*Smith International................ 32,000 540
Tidewater........................... 22,000 630
- ------------------------------------------------------
2,696
- ------------------------------------------------------
PROFESSIONAL SERVICES (1.2%)
*Medaphis........................... 9,000 290
- ------------------------------------------------------
RECREATIONAL PRODUCTS & SERVICES (2.1%)
*Grand Casinos...................... 13,000 478
- ------------------------------------------------------
TELEPHONES & TELECOMMUNICATION (4.7%)
AT&T................................ 10,300 680
MCI Communications.................. 15,050 401
- ------------------------------------------------------
1,081
- ------------------------------------------------------
TRANSPORTATION (4.5%)
Burlington Northern Santa Fe........ 4,100 331
Norfolk Southern.................... 8,900 701
- ------------------------------------------------------
1,032
- ------------------------------------------------------
UTILITIES, ELECTRIC, & GAS (1.2%)
Consolidated Natural Gas............ 6,000 266
- ------------------------------------------------------
Total Common Stocks
(Cost $21,104,620)............ 22,026
- ------------------------------------------------------
</TABLE>
<PAGE> 41
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND (concluded)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
------- -------
<S> <C> <C>
CASH EQUIVALENTS (3.7%)
Aim Liquid Assets Portfolio
5.710%, (A)....................... $ 837 $ 837
- ------------------------------------------------------
Total Cash Equivalents
(Cost $837,399)............... 837
- ------------------------------------------------------
Total Investments (100.0%)
(Cost $21,942,019)............ 22,863
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.0%)
Other Assets and Liabilities, Net... (10)
- ------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class ($.001 par
value-- 1.5 Billion shares authorized)
based on 1,802,278 outstanding shares of
capital stock.............................. 18,901
Fund shares of the Investors Class A ($.001
par value--1.5 Billion shares authorized)
based on 302,978 outstanding shares of
capital stock.............................. 3,186
Net Unrealized Appreciation on
Investments................................ 921
Accumulated Net Realized Loss on
Investments................................ (158)
Undistributed Net Investment Income......... 3
- ------------------------------------------------------
Total Net Assets: (100.0%).............. $22,853
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($19,591,555 DIVIDED BY 1,802,278 SHARES
OUTSTANDING)................................ $10.87
- ------------------------------------------------------
NET ASSET VALUE, AND REDEMPTION PRICE PER
SHARE--INVESTORS CLASS A ($3,260,950
DIVIDED BY 302,978 SHARES OUTSTANDING)...... $10.76
- ------------------------------------------------------
OFFERING PRICE PER SHARE--INVESTORS CLASS A
($10.76 DIVIDED BY 95.5%)................... $11.27
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
* Non-income producing security.
(A) Floating Rate Security--the rate reflected on the Statement of Net Assets is
the rate in effect on November 30, 1995. The date reported on the Statement
of Net Assets is the later of the date on which the security can be redeemed
at par or the next date on which the rate of interest is adjusted.
Cl--Class
The accompanying notes are an integral part of the financial statements.
<PAGE> 42
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND
<TABLE>
<CAPTION>
Market
Value
Shares (000)
-------- -------
<S> <C> <C>
COMMON STOCKS (92.1%)
AEROSPACE (0.6%)
*Whittaker.......................... 20,000 $ 355
- ------------------------------------------------------
AEROSPACE & DEFENSE (1.7%)
*SCI Systems........................ 10,000 334
*Tracor............................. 45,000 669
- ------------------------------------------------------
1,003
- ------------------------------------------------------
APPAREL/TEXTILES (1.5%)
*Cone Mills......................... 25,000 281
*Marisa Christina................... 5,000 84
*Triarc, Cl A....................... 50,000 525
- ------------------------------------------------------
890
- ------------------------------------------------------
AUTOMOTIVE (3.4%)
Arvin Industries.................... 25,000 441
Breed Technologies.................. 30,000 607
Federal Mogul....................... 30,000 574
*Lear Seating....................... 15,000 420
- ------------------------------------------------------
2,042
- ------------------------------------------------------
BANKS (4.6%)
Central Fidelity Banks.............. 15,000 495
First Tennessee National............ 10,000 605
Southern National................... 20,000 525
SouthTrust.......................... 20,000 505
Union Planters...................... 10,000 315
Wilmington Trust.................... 10,000 318
- ------------------------------------------------------
2,763
- ------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING
(1.1%)
*Multimedia......................... 15,000 673
- ------------------------------------------------------
BUILDING & CONSTRUCTION (0.5%)
Pulte............................... 10,000 308
- ------------------------------------------------------
BUILDING MATERIALS (1.4%)
Centex Construction Products........ 20,000 280
Martin Marietta Materials........... 27,000 550
- ------------------------------------------------------
830
- ------------------------------------------------------
CAPITAL EQUIPMENT (0.5%)
Wabash National..................... 10,000 280
- ------------------------------------------------------
CHEMICALS (3.9%)
Aceto............................... 35,000 591
Calgon Carbon....................... 50,000 587
Crompton & Knowles.................. 25,000 325
Ethyl............................... 20,000 250
Lea Ronol........................... 20,000 563
- ------------------------------------------------------
2,316
- ------------------------------------------------------
COMMUNICATIONS EQUIPMENT (1.5%)
*B.I................................ 10,000 85
*CMC Industries..................... 50,000 219
*Ortel.............................. 50,000 562
- ------------------------------------------------------
866
- ------------------------------------------------------
COMPUTER SOFTWARE (1.0%)
*Structural Dynamics Research....... 30,000 611
- ------------------------------------------------------
<CAPTION>
Market
Value
Shares (000)
------- -------
<S> <C> <C>
COMPUTERS & SERVICES (3.7%)
*Conner Peripherils................. 25,000 $ 566
*Dialogic........................... 20,000 630
*Netmanage.......................... 20,000 453
*Verifone........................... 20,000 585
- ------------------------------------------------------
2,234
- ------------------------------------------------------
CONSUMER PRODUCTS (1.3%)
Cross A.T., Cl A.................... 20,000 317
Stride Rite......................... 50,000 437
- ------------------------------------------------------
754
- ------------------------------------------------------
ELECTRICAL SERVICES (1.9%)
Central Maine Power................. 50,000 675
Public Service of New Mexico........ 25,000 441
- ------------------------------------------------------
1,116
- ------------------------------------------------------
ENERGY (1.9%)
*AES................................ 40,000 810
*Destec Energy...................... 25,000 350
- ------------------------------------------------------
1,160
- ------------------------------------------------------
FINANCIAL SERVICES (1.6%)
A.G. Edwards........................ 15,000 405
*SPS Transaction Services........... 19,000 525
- ------------------------------------------------------
930
- ------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (2.5%)
Cott Quebec......................... 70,000 442
Dimon............................... 40,000 690
International Multifoods............ 16,400 383
- ------------------------------------------------------
1,515
- ------------------------------------------------------
GAS/NATURAL GAS (2.6%)
Public Service of North Carolina.... 30,000 491
UGI................................. 25,000 519
USX-Delhi Group..................... 50,000 513
- ------------------------------------------------------
1,523
- ------------------------------------------------------
INSURANCE (5.5%)
First Colony........................ 30,000 780
Home Beneficial, Cl B............... 20,000 485
Life Re............................. 35,000 748
*Life USA Holdings.................. 50,000 425
USF & G............................. 30,000 518
USLife.............................. 11,250 325
- ------------------------------------------------------
3,281
- ------------------------------------------------------
MACHINERY (5.3%)
BWIP Holding, Cl A.................. 35,000 538
Giddings & Lewis.................... 20,000 312
*Global Industries Technologies..... 25,000 444
Kennmetal........................... 15,000 461
Newcor.............................. 50,000 394
Regal Beloit........................ 25,000 550
Zero................................ 30,000 476
- ------------------------------------------------------
3,175
- ------------------------------------------------------
</TABLE>
<PAGE> 43
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)
------- -------
<S> <C> <C>
COMMON STOCKS (continued)
MEASURING DEVICES (1.8%)
Acme-Cleveland...................... 17,000 $ 387
*CEM................................ 30,000 382
Modern Controls..................... 30,000 304
- ------------------------------------------------------
1,073
- ------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (6.0%)
*Avecor Cardiovascular.............. 5,000 76
*Haemonetics........................ 24,000 426
*Integrated Health Services......... 20,000 442
*Medisense.......................... 25,000 638
*Mid Atlantic Medical Services...... 25,000 609
Sterile Concepts Holdings........... 40,000 560
Vital Signs......................... 40,000 800
- ------------------------------------------------------
3,551
- ------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (6.1%)
*Box Energy, Cl B................... 35,000 302
*Chieftan International............. 50,000 837
*Global Marine...................... 75,000 506
Horsham............................. 40,000 545
*Nabors Industries.................. 50,000 494
*Oceaneering International.......... 50,000 488
*Stolt Comex Seaway S.A............. 45,000 433
- ------------------------------------------------------
3,605
- ------------------------------------------------------
PRECIOUS METALS (1.6%)
Agnico Eagle Mines.................. 29,800 372
*AMAX Gold.......................... 50,000 319
*MK Gold............................ 100,000 288
- ------------------------------------------------------
979
- ------------------------------------------------------
PRINTING & PUBLISHING (4.9%)
Cadmus Communications............... 33,000 941
Jostens............................. 30,000 742
Meredith............................ 20,000 787
*Western Publishing Group........... 50,000 444
- ------------------------------------------------------
2,914
- ------------------------------------------------------
PROFESSIONAL SERVICES (1.3%)
E.G. & G............................ 40,000 770
- ------------------------------------------------------
RECREATION (1.7%)
Callaway Golf....................... 50,000 994
- ------------------------------------------------------
RESTAURANTS (1.1%)
Sbarro.............................. 30,000 671
- ------------------------------------------------------
RETAIL (2.2%)
*S & K Famous Brands................ 60,000 435
*Stein Mart......................... 35,000 440
*Urban Outfitters................... 20,000 445
- ------------------------------------------------------
1,320
- ------------------------------------------------------
<CAPTION>
Market
Value
Shares (000)
-------- -------
<S> <C> <C>
SAVINGS & LOAN (2.6%)
H.F. Ahmanson....................... 20,000 $ 535
JSB Financial....................... 15,000 480
Webster Financial................... 20,000 515
- ------------------------------------------------------
1,530
- ------------------------------------------------------
SEMI-CONDUCTORS/INSTRUMENTS (2.1%)
*Continental Circuits............... 25,000 412
Helix Technology.................... 25,000 831
- ------------------------------------------------------
1,243
- ------------------------------------------------------
SPECIALTY CONSTRUCTION (0.5%)
*Insituform Technologies, Cl A...... 25,000 287
- ------------------------------------------------------
SPECIALTY MACHINERY (0.8%)
Modine Manufacturing................ 15,000 458
- ------------------------------------------------------
STEEL & STEEL WORKS (2.8%)
Brush Wellman....................... 12,000 210
Lukens.............................. 20,000 612
Reliance Steel & Aluminum........... 30,000 563
Synalloy............................ 15,000 306
- ------------------------------------------------------
1,691
- ------------------------------------------------------
TELEPHONES & TELECOMMUNICATION
(0.6%)
*Mobile Telecommunication
Technologies...................... 15,000 341
- ------------------------------------------------------
TRUCKING (1.9%)
Rollins Truck Leasing............... 22,500 225
Werner Enterprises.................. 25,000 525
Yellow.............................. 30,000 356
- ------------------------------------------------------
1,106
- ------------------------------------------------------
WHOLESALE (6.1%)
*Arden Industrial Products.......... 80,000 400
Juno Lighting....................... 30,000 472
Lawson Products..................... 20,000 475
Marshall Industries................. 15,000 529
Owens & Minor Holding............... 42,600 554
Richfood Holdings, Cl A............. 25,000 687
*Sterling Electronics............... 30,000 503
- ------------------------------------------------------
3,620
- ------------------------------------------------------
Total Common Stocks
(Cost $49,705,983)............ 54,778
- ------------------------------------------------------
</TABLE>
<PAGE> 44
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1995
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND (concluded)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
-------- -------
<S> <C> <C>
CASH EQUIVALENTS (4.9%)
Aim Liquid Assets Portfolio
5.710%,(A)........................ $2,896 $ 2,896
- ------------------------------------------------------
Total Cash Equivalents
(Cost $2,896,237)............. 2,896
- ------------------------------------------------------
REPURCHASE AGREEMENT (2.4%)
J.P. Morgan
5.880%, dated 11/30/95,
matures 12/01/95, repurchase
price $1,438,938 (collateralized
by FHLMC obligation, par value
$1,437,236, 7.500%, matures
11/01/25: total market value
$1,467,478)...................... 1,439
- ------------------------------------------------------
Total Repurchase Agreement
(Cost $1,438,704)............. 1,439
- ------------------------------------------------------
Total Investments (99.4%)
(Cost $54,040,924)............ 59,113
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.6%)
Other Assets and Liabilities, Net... 355
- ------------------------------------------------------
NET ASSETS:
Fund shares of Trust Class ($.001 par value--
1.5 Billion shares authorized) based on
4,475,261 outstanding shares of capital
stock....................................... 49,426
Fund shares of Investors Class A ($.001 par
value--1.5 Billion shares authorized) based
on 387,330 outstanding shares of capital
stock....................................... 4,501
Fund shares of Investors Class B ($.001 par
value--1.5 Billion shares authorized) based
on 45,870 outstanding shares of capital
stock....................................... 533
Net Unrealized Appreciation of Investments... 5,072
Accumulated Net Realized Loss on
Investments................................ (89)
Undistributed Net Investment Income.......... 25
- ------------------------------------------------------
Total Net Assets: (100.0%)............... $59,468
- ------------------------------------------------------
<CAPTION>
Market
Value
(000)
-------
<S> <C>
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--TRUST CLASS
($54,221,507 DIVIDED BY 4,475,261 SHARES
OUTSTANDING)................................. $12.12
- ------------------------------------------------------
NET ASSET VALUE, AND REDEMPTION PRICE PER
SHARE--INVESTORS CLASS A ($4,692,550 DIVIDED
BY 387,330 SHARES OUTSTANDING)............... $12.12
- ------------------------------------------------------
OFFERING PRICE PER SHARE--INVESTORS CLASS A
($12.12 DIVIDED BY 95.5%).................... $12.69
- ------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE--INVESTORS CLASS
B(1) ($554,093 DIVIDED BY 45,870 SHARES
OUTSTANDING)................................. $12.08
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>
(A) Floating Rate Security--the rate reflected on the Statement of Net Assets is
the rate in effect on November 30, 1995. The date reported on the Statement
of Net Assets is the later of the date on which the security can be redeemed
at par or the next date on which the rate of interest is adjusted.
(1) Investors Class B has a contingent deferred sales charge. For description of
a possible redemption charge, see the notes to the financial statements.
* Non-income producing securities
Cl--Class
FHLMC--Federal Home Loan Mortgage Corporation
The accompanying notes are an integral part of the financial statements.
<PAGE> 45
STATEMENT OF OPERATIONS CRESTFUNDS, INC.
For the Period Ended November 30, 1995
<TABLE>
<CAPTION>
(IN THOUSANDS)
-----------------------------------------------------------------------
CASH RESERVE U.S. TREASURY TAX FREE LIMITED TERM INTERMEDIATE
FUND MONEY FUND MONEY FUND BOND FUND BOND FUND
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest Income:........................... $ 28,879 $18,883 $7,379 $5,200 $ 5,304
- --------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees................. 1,934 1,297 766 418 470
Waiver of Investment Advisory Fees....... -- -- -- -- --
Administrative Fees...................... 725 488 287 125 117
Waiver of Administrative Fees............ -- -- -- -- --
Custodian/Transfer Agent Fees............ 437 292 171 75 71
Professional Fees........................ 53 36 20 17 17
Trustee Fees............................. 9 7 4 2 2
Registration & Filing Fees............... 14 7 7 4 4
Insurance Expense........................ 11 6 4 2 2
Distribution Fees--Trust Class........... 682 486 285 124 115
Waiver of Distribution Fees--Trust
Class................................. (682) (486) (285) (124) (115)
Distribution Fees--Investors Class A..... 115 -- 6 1 2
Waiver of Distribution Fees--Investors
Class A............................... (115) -- (6) (1) (2)
Distribution Fees--Investors Class B..... -- -- -- -- --
Waiver of Distribution Fees--Investors
Class B............................... -- -- -- -- --
Printing Fees............................ 16 12 7 6 5
Miscellaneous Fees....................... -- -- -- 3 3
- --------------------------------------------------------------------------------------------------------------------
Total Expenses...................... 3,199 2,145 1,266 652 691
- --------------------------------------------------------------------------------------------------------------------
Net Investment Income...................... 25,680 16,738 6,113 4,548 4,613
- --------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments.... (14) -- -- (145) (668)
- --------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of
Investments.............................. -- -- -- 4,764 8,352
- --------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments.............................. (14) -- -- 4,619 7,684
- --------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting from
Operations............................... $ 25,666 $16,738 $6,113 $9,167 $ 12,297
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE> 46
STATEMENT OF OPERATIONS CRESTFUNDS, INC.
For the Period Ended November 30, 1995
<TABLE>
<CAPTION>
(IN THOUSANDS)
------------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE VIRGINIA CAPITAL SPECIAL
GOVERNMENT MUNICIPAL MUNICIPAL VALUE APPRECIATION EQUITY
BOND FUND (1) BOND FUND BOND FUND (1) FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest Income:................... $ 394 $ 2,521 $ 172 $ 951 $ 44 $ 287
Dividend Income:................... -- -- -- 5,504 241 710
- ------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees......... 35 249 19 1,522 142 386
Waiver of Investment Advisory
Fees.......................... (6) -- (3) -- -- --
Administrative Fees.............. 9 75 5 304 29 77
Waiver of Administrative Fees.... (9) (35) (5) -- -- --
Custodian/Transfer Agent Fees.... 4 46 3 184 18 47
Professional Fees................ 3 12 1 33 10 14
Trustee Fees..................... 1 1 -- 5 2 1
Registration & Filing Fees....... 3 4 3 6 4 4
Insurance Expense................ -- 1 -- 2 -- 1
Distribution Fees--Trust Class... 9 62 4 289 25 71
Waiver of Distribution Fees--
Trust Class................... (9) (62) (4) (289) (25) (71)
Distribution Fees--Investors
Class A....................... -- 13 -- 15 3 6
Waiver of Distribution Fees--
Investors Class A............. -- (13) -- (15) (3) (6)
Distribution Fees--Investors
Class B....................... 1 -- 2 5 -- 2
Waiver of Distribution Fees--
Investors Class B............. -- -- (1) (1) -- --
Printing Fees.................... 1 4 -- 10 2 3
Miscellaneous Fees............... -- 1 1 6 1 2
- ------------------------------------------------------------------------------------------------------------------------
Total Expenses.............. 42 358 25 2,076 208 537
- ------------------------------------------------------------------------------------------------------------------------
Net Investment Income.............. 352 2,163 147 4,379 77 460
- ------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on
Investments...................... 93 (398) 30 21,813 2,611 (83)
- ------------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized
Appreciation of Investments...... 550 5,690 215 24,731 516 8,522
- ------------------------------------------------------------------------------------------------------------------------
Change in Net Realized and
Unrealized Gain on Investments... 643 5,292 245 46,544 3,127 8,439
- ------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
from Operations.................. $ 995 $ 7,455 $ 392 $50,923 $3,204 $ 8,899
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced operations on April 5, 1995
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE> 47
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
<TABLE>
<CAPTION>
(IN THOUSANDS)
----------------------------------------------------------------------------------
CASH RESERVE CASH RESERVE U.S. TREASURY U.S. TREASURY TAX FREE TAX FREE
FUND FUND MONEY FUND MONEY FUND MONEY FUND MONEY FUND
----------- ----------- ----------- ----------- ---------- ----------
12/01/94 12/01/93 12/01/94 12/01/93 12/01/94 12/01/93
TO 11/30/95 TO 11/30/94 TO 11/30/95 TO 11/30/94 TO 11/30/95 TO 11/30/94
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Activities:
Net Investment Income....................... $ 25,680 $ 13,975 $ 16,738 $ 10,752 $ 6,113 $ 3,126
Net Realized Gain (Loss) on Investments..... (14) (72) -- -- -- 2
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From
Operations.................................. 25,666 13,903 16,738 10,752 6,113 3,128
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income:
Trust Class............................... (24,141) (13,854) (16,738) (10,752) (6,063) (3,119)
Investors Class A......................... (1,537) (120) -- -- (50) (7)
Investors Class B......................... (1) -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions..................... (25,679) (13,974) (16,738) (10,752) (6,113) (3,126)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets.......................... (13) (71) -- -- -- 2
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (All at a $1.00 Per
Share):
Trust Class:
Shares Issued............................. 922,366 1,011,728 899,896 1,040,914 420,904 389,092
Shares Issued In Lieu of Cash
Distributions........................... 815 402 217 63 -- --
Shares Redeemed........................... (780,499) (1,042,579) (849,136) (1,064,036) (376,174) (373,774)
------------ ------------ ------------- ------------- ----------- -----------
Total Trust Class Transactions.......... 142,682 (30,449) 50,977 (23,059) 44,730 15,318
------------ ------------ ------------- ------------- ----------- -----------
Investor Class A:
Shares Issued............................. 64,444 17,873 -- 3 4,744 2,165
Shares Issued In Lieu of Cash
Distributions........................... 1,534 139 -- -- 50 7
Shares Redeemed........................... (37,548) (6,275) -- (21) (3,923) (1,645)
------------ ------------ ------------- ------------- ----------- -----------
Total Investor Class A Transactions..... 28,430 11,737 -- (18) 871 527
------------ ------------ ------------- ------------- ----------- -----------
Investor Class B:
Shares Issued............................. 29 -- -- -- -- --
Shares Issued In Lieu of Cash
Distributions........................... 1 -- -- -- -- --
Shares Redeemed........................... (9) -- -- -- -- --
------------ ------------ ------------- ------------- ----------- -----------
Total Investor Class B Transactions..... 21 -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Transactions................................ 171,133 (18,712) 50,977 (23,077) 45,601 15,845
- ---------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net
Assets................................ 171,120 (18,783) 50,977 (23,077) 45,601 15,847
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period......................... 389,326 408,109 319,477 342,554 158,359 142,512
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period............................... $ 560,446 $ 389,326 $ 370,454 $ 319,477 $ 203,960 $ 158,359
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE> 48
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
<TABLE>
<CAPTION>
(IN THOUSANDS)
-------------------------------------------------------------------
GOVERNMENT
LIMITED TERM LIMITED TERM INTERMEDIATE INTERMEDIATE BOND
BOND FUND BOND FUND BOND FUND BOND FUND FUND(1)
---------- ---------- ---------- ---------- -----------
12/01/94 12/01/93 12/01/94 12/01/93 04/05/95
TO 11/30/95 TO 11/30/94 TO 11/30/95 TO 11/30/94 TO 11/30/95
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Activities:
Net Investment Income...................................... $ 4,548 $ 4,225 $ 4,613 $ 3,957 $ 352
Net Realized Gain (Loss) on Investments.................... (145) (895) (668) (1,804) 93
Change in Net Unrealized Appreciation (Depreciation) of
Investments.............................................. 4,764 (4,821) 8,352 (5,416) 550
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From Operations............. 9,167 (1,491) 12,297 (3,263) 995
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income:
Trust Class.............................................. (4,452) (4,197) (4,487) (3,900) (348)
Investor Class A......................................... (36) (28) (74) (50) --
Investor Class B......................................... -- -- -- -- (4)
In Excess of Net Investment Income:
Trust Class.............................................. -- (15) -- -- --
Investor Class A......................................... -- -- -- -- --
Investor Class B......................................... -- -- -- -- --
Capital Gains:
Trust Class.............................................. -- (254) -- (251) (89)
Investor Class A......................................... -- (1) -- (3) --
Investor Class B......................................... -- -- -- -- (3)
In Excess of Capital Gains:
Trust Class.............................................. -- (1) -- (2) --
Investor Class A......................................... -- -- -- -- --
Investor Class B......................................... -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions.................................... (4,488) (4,496) (4,561) (4,206) (444)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets......................................... 4,679 (5,987) 7,736 (7,469) 551
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Shares Issued............................................ 33,357 42,346 29,752 50,055 11,738
Shares Issued In Lieu of Cash Distributions.............. 3,171 3,429 2,474 2,399 1
Shares Redeemed.......................................... (35,747) (42,426) (35,110) (26,424) (2,072)
-------- -------- -------- -------- ------
Total Trust Class Transactions......................... 781 3,349 (2,884) 26,030 9,667
-------- -------- -------- -------- ------
Investor Class A:
Shares Issued............................................ 913 538 776 852 --
Shares Issued In Lieu of Cash Distributions.............. 29 24 67 42 --
Shares Redeemed.......................................... (117) (357) (269) (387) --
-------- -------- -------- -------- ------
Total Investor Class A Transactions.................... 825 205 574 507 --
-------- -------- -------- -------- ------
Investor Class B:
Shares Issued............................................ -- -- -- -- 327
Shares Issued In Lieu of Cash Distributions.............. -- -- -- -- 5
Shares Redeemed.......................................... -- -- -- -- (14)
-------- -------- -------- -------- ------
Total Investor Class B Transactions.................... -- -- -- -- 318
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Transactions...... 1,606 3,554 (2,310) 26,537 9,985
- ---------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets................ 6,285 (2,433) 5,426 19,068 10,536
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period........................................ 83,962 86,395 78,173 59,105 --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period.............................................. $ 90,247 $ 83,962 $ 83,599 $ 78,173 $10,536
- ---------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Trust Class
Shares Issued............................................ 3,410 4,314 3,084 5,210 1,155
Shares Issued in Lieu of Cash Distributions.............. 324 350 256 250 --
Shares Redeemed.......................................... (3,674) (4,333) (3,671) (2,771) (198)
-------- -------- -------- -------- ------
Total Trust Class Share Transactions:.................. 60 331 (331) 2,689 957
-------- -------- -------- -------- ------
Investor Class A
Shares Issued............................................ 91 54 79 89 --
Shares Issued in Lieu of Cash Distributions.............. 4 2 7 4 --
Shares Redeemed.......................................... (12) (37) (28) (41) --
-------- -------- -------- -------- ------
Total Investor Class A Share Transactions:............. 83 19 58 52 --
-------- -------- -------- -------- ------
Investor Class B
Shares Issued............................................ -- -- -- -- 31
Shares Issued in Lieu of Cash Distributions.............. -- -- -- -- 1
Shares Redeemed.......................................... -- -- -- -- (1)
-------- -------- -------- -------- ------
Total Investor Class B Share Transactions:............. -- -- -- -- 31
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase in Share Transactions........................... 143 350 (273) 2,741 988
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced operations on April 5, 1995.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE> 49
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
<TABLE>
<CAPTION>
(IN THOUSANDS)
------------------------------------------------------------------------------------
VIRGINIA VIRGINIA
INTERMEDIATE INTERMEDIATE VIRGINIA MUNICIPAL VALUE VALUE
MUNICIPAL BOND FUND MUNICIPAL BOND FUND BOND FUND (1) FUND FUND
----------------- ----------------- -------------- ---------- ----------
12/01/94 12/01/93 04/05/95 12/01/94 12/01/93
TO 11/30/95 TO 11/30/94 TO 11/30/95 TO 11/30/95 TO 11/30/94
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Activities:
Net Investment Income................... $ 2,163 $ 2,278 $ 147 $ 4,379 $ 3,308
Net Realized Gain (Loss) on
Investments........................... (398) (545) 30 21,813 10,730
Change in Net Unrealized Appreciation
(Depreciation) of Investments......... 5,690 (5,240) 215 24,731 (14,852)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From
Operations.............................. 7,455 (3,507) 392 50,923 (814)
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income:
Trust Class........................... (1,797) (1,966) (138) (4,388) (2,961)
Investor Class A...................... (364) (310) -- (228) (113)
Investor Class B...................... -- -- (9) (7) --
In Excess of Net Investment Income:
Trust Class........................... -- -- -- -- --
Investor Class A...................... -- -- -- -- --
Investor Class B...................... -- -- -- -- --
Capital Gains:
Trust Class........................... -- (95) (26) (29,441) (6,389)
Investor Class A...................... -- (12) -- (1,560) (172)
Investor Class B...................... -- -- (3) (167) --
In Excess of Capital Gains:
Trust Class........................... -- (2) -- -- --
Investor Class A...................... -- -- -- -- --
Investor Class B...................... -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions................. (2,161) (2,385) (176) (35,791) (9,635)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets...................... 5,294 (5,892) 216 15,132 (10,449)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Shares Issued......................... 14,161 24,364 6,938 63,581 61,132
Shares Issued In Lieu of Cash
Distributions....................... 29 133 -- 24,051 7,016
Shares Redeemed....................... (16,598) (17,519) (891) (48,378) (58,727)
-------- -------- ------- -------- --------
Total Trust Class Transactions...... (2,408) 6,978 6,047 39,254 9,421
-------- -------- ------- -------- --------
Investor Class A:
Shares Issued......................... 2,323 4,531 -- 3,958 5,051
Shares Issued In Lieu of Cash
Distributions....................... 272 244 -- 1,769 275
Shares Redeemed....................... (2,304) (1,213) -- (1,979) (865)
-------- -------- ------- -------- --------
Total Investor Class A
Transactions...................... 291 3,562 -- 3,748 4,461
-------- -------- ------- -------- --------
Investor Class B:
Shares Issued......................... -- -- 623 2,049 --
Shares Issued In Lieu of Cash
Distributions....................... -- -- 7 174 --
Shares Redeemed....................... -- -- (18) (80) --
-------- -------- ------- -------- --------
Total Investor Class B
Transactions...................... -- -- 612 2,143 --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Transactions............................ (2,117) 10,540 6,659 45,145 13,882
- ---------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net
Assets............................ 3,177 4,648 6,875 60,277 3,433
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period..................... 48,845 44,197 -- 174,828 171,395
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period........................... $ 52,022 $ 48,845 $6,875 $ 235,105 $ 174,828
- ---------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Trust Class
Shares Issued......................... 1,429 2,445 688 5,580 5,501
Shares Issued in Lieu of Cash
Distributions....................... 3 13 -- 2,175 628
Shares Redeemed....................... (1,688) (1,781) (87) (4,287) (5,297)
-------- -------- ------- -------- --------
Total Trust Class Share
Transactions:..................... (256) 677 601 3,468 832
-------- -------- ------- -------- --------
Investor Class A
Shares Issued......................... 237 448 -- 346 450
Shares Issued in Lieu of Cash
Distributions....................... 27 25 -- 158 25
Shares Redeemed....................... (232) (126) -- (173) (77)
-------- -------- ------- -------- --------
Total Investor Class A Share
Transactions:..................... 32 347 -- 331 398
-------- -------- ------- -------- --------
Investor Class B
Shares Issued......................... -- -- 61 170 --
Shares Issued in Lieu of Cash
Distributions....................... -- -- 1 15 --
Shares Redeemed....................... -- -- (2) (6) --
-------- -------- ------- -------- --------
Total Investor Class B Share
Transactions:..................... -- -- 60 179 --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase in Share Transactions........ (224) 1,024 661 3,978 1,230
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced operations on April 5, 1995.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE> 50
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------------------------------------------------------------
CAPITAL CAPITAL SPECIAL EQUITY SPECIAL EQUITY
APPRECIATION FUND APPRECIATION FUND FUND FUND
-------------- -------------- ----------- -----------
12/01/94 12/01/93 12/01/94 12/01/93
TO 11/30/95 TO 11/30/94 TO 11/30/95 TO 11/30/94
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income..................................... $ 77 $ 20 $ 460 $ 138
Net Realized Gain (Loss) on Investments................... 2,611 109 (83) 1,620
Change in Net Unrealized Appreciation (Depreciation) of
Investments............................................. 516 193 8,522 (4,470)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From Operations............ 3,204 322 8,899 (2,712)
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income:
Trust Class............................................. (71) (16) (455) (87)
Investor Class A........................................ (10) (1) (38) (6)
Investor Class B........................................ -- -- (1) --
In Excess of Net Investment Income:
Trust Class............................................. -- -- -- --
Investor Class A........................................ -- -- -- --
Investor Class B........................................ -- -- -- --
Capital Gains:
Trust Class............................................. (2,304) -- (1,501) (4,528)
Investor Class A........................................ (342) -- (115) (163)
Investor Class B........................................ -- -- -- --
In Excess of Capital Gains:
Trust Class............................................. -- -- -- --
Investor Class A........................................ -- -- -- --
Investor Class B........................................ -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions................................... (2,727) (17) (2,110) (4,784)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets........................................ 477 305 6,789 (7,496)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Shares Issued........................................... 10,294 6,916 19,004 23,025
Shares Issued In Lieu of Cash Distributions............. 59 -- 1,570 3,714
Shares Redeemed......................................... (4,065) (2,070) (16,202) (8,702)
------- ------- -------------- -------
Total Trust Class Transactions........................ 6,288 4,846 4,372 18,037
------- ------- -------------- -------
Investor Class A:
Shares Issued........................................... 1,637 1,002 1,418 2,905
Shares Issued In Lieu of Cash Distributions............. 349 1 152 169
Shares Redeemed......................................... (275) (167) (872) (183)
------- ------- -------------- -------
Total Investor Class A Transactions................... 1,711 836 698 2,891
------- ------- -------------- -------
Investor Class B:
Shares Issued........................................... -- -- 536 --
Shares Issued In Lieu of Cash Distributions............. -- -- 1 --
Shares Redeemed......................................... -- -- (4) --
------- ------- -------------- -------
Total Investor Class B Transactions................... -- -- 533 --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Transactions..... 7,999 5,682 5,603 20,928
- ---------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets............... 8,476 5,987 12,392 13,432
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period....................................... 14,377 8,390 47,076 33,644
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period............................................. $22,853 $14,377 $ 59,468 $ 47,076
- ---------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Trust Class
Shares Issued........................................... 896 678 1,681 2,027
Shares Issued in Lieu of Cash Distributions............. 5 -- 153 313
Shares Redeemed......................................... (364) (204) (1,493) (768)
------- ------- -------------- -------
Total Trust Class Share Transactions:................. 537 474 341 1,572
------- ------- -------------- -------
Investor Class A
Shares Issued........................................... 146 100 126 255
Shares Issued in Lieu of Cash Distributions............. 33 -- 15 14
Shares Redeemed......................................... (26) (17) (79) (17)
------- ------- -------------- -------
Total Investor Class A Share Transactions:............ 153 83 62 252
------- ------- -------------- -------
Investor Class B
Shares Issued........................................... -- -- 46 --
Shares Issued in Lieu of Cash Distributions............. -- -- -- --
Shares Redeemed......................................... -- -- -- --
------- ------- -------------- -------
Total Investor Class B Share Transactions:............ -- -- 46 --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase in Share Transactions.......................... 690 557 449 1,824
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE> 51
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES
NET --------------------------- DISTRIBUTIONS NET NET
ASSET NET REALIZED -------------------- ASSET ASSETS, RATIO
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------
CASH RESERVE FUND
- ------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 1.00 0.053 -- (0.053) -- 1.00 5.45% 520,185 0.66%
1994 1.00 0.034 -- (0.034) -- 1.00 3.46% 377,493 0.66%
1993 1.00 0.027 -- (0.027) -- 1.00 2.76% 408,036 0.66%
1992 1.00 0.036 -- (0.036) -- 1.00 3.66% 496,847 0.61%
1991 1.00 0.060 -- (0.060) -- 1.00 6.17% 396,534 0.51%
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1995 1.00 0.053 -- (0.053) -- 1.00 5.44% 40,240 0.67%
1994 1.00 0.033 -- (0.033) -- 1.00 3.36% 11,832 0.68%
1993 (1) 1.00 0.014 -- (0.014) -- 1.00 1.49% 73 1.16%*
INVESTORS CLASS B(**)
FOR THE PERIOD ENDED NOVEMBER 30,:
1995 (2) 1.00 0.028 -- (0.028) -- 1.00 2.82% 21 1.53%*
- ------------------------
U.S. TREASURY MONEY FUND
- ------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 1.00 0.052 -- (0.052) -- 1.00 5.29% 370,454 0.66%
1994 1.00 0.033 -- (0.033) -- 1.00 3.30% 319,477 0.66%
1993 1.00 0.025 -- (0.025) -- 1.00 2.51% 342,537 0.66%
1992 1.00 0.034 -- (0.034) -- 1.00 3.55% 482,881 0.64%
1991 1.00 0.058 -- (0.058) -- 1.00 6.00% 279,790 0.56%
INVESTORS CLASS A(+)
FOR THE YEARS ENDED NOVEMBER 30,:
1994 1.00 0.008 -- (0.008) -- 1.00 0.79% -- 0.92%*
1993 1.00 0.003 -- (0.003) -- 1.00 0.34% 17 1.16%*
- --------------------
TAX FREE MONEY FUND
- --------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 1.00 0.032 -- (0.032) -- 1.00 3.26% 202,333 0.66%
1994 1.00 0.021 -- (0.021) -- 1.00 2.07% 157,602 0.67%
1993 1.00 0.019 -- (0.019) -- 1.00 1.88% 142,284 0.66%
1992 1.00 0.031 -- (0.031) -- 1.00 3.03% 155,458 0.47%
1991 1.00 0.046 -- (0.046) -- 1.00 4.72% 166,670 0.27%
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1995 1.00 0.031 -- (0.031) -- 1.00 3.25% 1,627 0.67%
1994 1.00 0.020 -- (0.020) -- 1.00 1.98% 757 0.76%
1993 (3) 1.00 0.009 -- (0.009) -- 1.00 0.88% 228 1.16%*
<CAPTION>
RATIO OF RATIO OF
EXPENSES RATIO OF INCOME TO
TO AVERAGE NET INVESTMENT AVERAGE
NET ASSETS INCOME NET ASSETS PORTFOLIO
EXCLUDING TO AVERAGE EXCLUDING TURNOVER
FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------
CASH RESERVE FUND
- ------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 0.81% 5.31% 5.16% --
1994 0.66% 3.37% 3.37% --
1993 0.66% 2.75% 2.75% --
1992 0.61% 3.50% 3.50% --
1991 0.58% 6.00% 5.93% --
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1995 1.07% 5.31% 4.91% --
1994 0.97% 3.35% 3.06% --
1993 (1) 13.00%* 2.25%* (14.09)%* --
INVESTORS CLASS B(**)
FOR THE PERIOD ENDED NOVEMBER 30.:
1995 (2) 1.68%* 4.46%* 4.31%* --
- -------------------------
U.S. TREASURY MONEY FUND
- -------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 0.81% 5.16% 5.01% --
1994 0.66% 3.23% 3.23% --
1993 0.66% 2.52% 2.52% --
1992 0.65% 3.37% 3.36% --
1991 0.62% 5.61% 5.55% --
INVESTORS CLASS A(+)
FOR THE YEARS ENDED NOVEMBER 30,:
1994 29.16%* 2.31%* (25.93)%* --
1993 36.60%* 2.02%* (33.42)%* --
- --------------------
TAX FREE MONEY FUND
- --------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 0.81% 3.19% 3.04% --
1994 0.67% 2.06% 2.06% --
1993 0.66% 1.85% 1.85% --
1992 0.62% 3.00% 2.85% --
1991 0.70% 4.39% 3.96% --
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1995 1.07% 3.16% 2.76% --
1994 1.44% 1.97% 1.29% --
1993 (3) 3.00%* 1.35%* (0.49)%* --
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commencement of operations for this class May 4, 1993.
(2) Commencement of operations for this class April 19, 1995.
(3) Commencement of operations for this class May 5, 1993.
(+) Ceased operations March 31, 1994.
* Annualized.
** Total Return does not reflect the sales charge or redemption charge,
where applicable.
<PAGE> 52
FINANCIAL HIGHLIGHTS (continued) CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES
NET --------------------------- DISTRIBUTIONS NET NET
ASSET NET REALIZED -------------------- ASSET ASSETS, RATIO
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
- ----------------------
LIMITED TERM BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 9.49 0.532 0.534 (0.546) -- 10.03 11.50% 88,789 0.78%
1994 10.16 0.480 (0.640) (0.480) (0.030) 9.49 (1.56)% 83,369 0.76%
1993 9.81 0.500 0.350 (0.500) -- 10.16 8.84% 85,968 0.77%
1992 (4) 10.00 0.070 (0.190) (0.070) -- 9.81 (1.22)% 72,590 1.04%*
INVESTORS CLASS A(**)
FOR THE YEARS ENDED NOVEMBER 30,:
1995 9.50 0.530 0.556 (0.546) -- 10.06 11.70% 1,458 0.79%
1994 10.17 0.480 (0.650) (0.470) (0.030) 9.50 (1.72)% 593 0.77%
1993 (5) 10.11 0.260 0.060 (0.260) -- 10.17 3.16% 427 1.02%*
- ----------------------
INTERMEDIATE BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 9.16 0.569 0.954 (0.563) -- 10.12 17.07% 81,870 0.88%
1994 10.20 0.530 (1.000) (0.530) (0.040) 9.16 (4.72)% 77,143 0.88%
1993 9.70 0.520 0.500 (0.520) -- 10.20 10.69% 58,487 0.90%
1992 (4) 10.00 0.080 (0.300) (0.080) -- 9.70 (2.20)% 13,759 1.15%*
INVESTORS CLASS A(**)
FOR THE YEARS ENDED NOVEMBER 30,:
1995 9.16 0.572 0.951 (0.563) -- 10.12 17.08% 1,729 0.89%
1994 10.19 0.520 (0.990) (0.520) (0.040) 9.16 (4.72)% 1,030 0.89%
1993 (6) 10.20 0.290 (0.010) -- (0.290) 10.19 2.72% 618 1.15%*
- ---------------------
GOVERNMENT BOND FUND
- ---------------------
TRUST CLASS
FOR THE PERIOD ENDED NOVEMBER 30,:
1995 (7) 10.00 0.412 0.753 (0.412) (0.093) 10.66 11.85% 10,211 0.71%*
INVESTORS CLASS B(**)
FOR THE PERIOD ENDED NOVEMBER 30,:
1995 (8) 10.03 0.338 0.738 (0.333) (0.093) 10.68 10.86% 325 1.55%*
- ---------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- ---------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 9.21 0.428 1.030 (0.428) -- 10.24 16.09% 43,373 0.72%
1994 10.33 0.440 (1.100) (0.440) (0.020) 9.21 (6.53)% 41,365 0.65%
1993 (9) 10.00 0.390 0.330 (0.390) -- 10.33 7.25% 39,392 0.71%*
INVESTORS CLASS A(**)
FOR THE YEARS ENDED NOVEMBER 30,:
1995 9.20 0.428 1.029 (0.427) -- 10.23 16.10% 8,649 0.73%
1994 10.32 0.440 (1.100) (0.440) (0.020) 9.20 (6.56)% 7,481 0.66%
1993 (3) 10.22 0.260 0.100 (0.260) -- 10.32 (3.53)% 4,805 0.66%*
<CAPTION>
RATIO OF
OF EXPENSES RATIO OF INCOME TO
TO AVERAGE NET INVESTMENT AVERAGE
NET ASSETS INCOME NET ASSETS PORTFOLIO
EXCLUDING TO AVERAGE EXCLUDING TURNOVER
FEE WAIVERS NET ASSETS FEE WAIVERS RATE
<S> <<C> <C> <C> <C>
- -------------
- -------------
LIMITED TERM
- -------------
TRUST CLASS
FOR THE YEAR
1995 0.93% 5.44% 5.29% 36%
1994 0.76% 4.92% 4.92% 47%
1993 0.77% 4.95% 4.95% 61%
1992 (4) 1.04%* 4.46%* 4.46%* 2%
INVESTORS CL
FOR THE YEAR
1995 0.94% 5.46% 5.31% 36%
1994 1.03% 4.92% 4.66% 47%
1993 (5) 1.48%* 4.70%* 4.24%* 61%
- -------------
INTERMEDIATE
- -------------
TRUST CLASS
FOR THE YEAR
1995 1.03% 5.89% 5.74% 37%
1994 0.88% 5.53% 5.53% 39%
1993 0.90% 5.15% 5.15% 28%
1992 (4) 1.15%* 4.63%* 4.63%* 0%
INVESTORS CL
FOR THE YEAR
1995 1.04% 5.87% 5.72% 37%
1994 1.05% 5.51% 5.35% 39%
1993 (6) 1.58%* 4.90%* 4.47%* 28%
- -------------
GOVERNMENT BO
- -------------
TRUST CLASS
FOR THE PERI
1995 (7) 1.11%* 6.00%* 5.60%* 28%
INVESTORS CL
FOR THE PERI
1995 (8) 1.95%* 5.05%* 4.65%* 28%
- -------------
VIRGINIA INTE
- -------------
TRUST CLASS
FOR THE YEAR
1995 0.94% 4.34% 4.12% 28%
1994 0.77% 4.48% 4.36% 24%
1993 (9) 0.85%* 4.25%* 4.11%* 39%
INVESTORS CL
FOR THE YEAR
1995 0.95% 4.33% 4.11% 28%
1994 0.80% 4.47% 4.33% 24%
1993 (3) 0.90%* 4.27%* 4.03%* 39%
Amounts designated as "--" are either $0 or have been rounded to $0.
(3) Commencement of operations for this class May 5, 1993
(4) Commencement of operations for this class September 28, 1992
(5) Commencement of operations for this class May 19, 1993
(6) Commencement of operations for this class May 11, 1993
(7) Commencement of operations for this class April 5, 1995.
(8) Commencement of operations for this class April 19, 1995.
(9) Commencement of operations for this class January 11, 1993
* Annualized.
** Total Return does not reflect the sales charge or redemption charge, where applicable.
</TABLE>
<PAGE> 53
FINANCIAL HIGHLIGHTS (continued) CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES
NET --------------------------- DISTRIBUTIONS NET NET
ASSET NET REALIZED -------------------- ASSET ASSETS, RATIO
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
- ---------------------------
VIRGINIA MUNICIPAL BOND FUND
- ---------------------------
TRUST CLASS
FOR THE PERIOD ENDED NOVEMBER 30,:
1995 (7) 10.00 0.309 0.445 (0.310) (0.044) 10.40 7.67% 6,247 0.71%*
INVESTORS CLASS B(**)
FOR THE PERIOD ENDED NOVEMBER 30,:
1995 (10) 10.06 0.237 0.409 (0.232) (0.044) 10.43 6.51% 628 1.57%*
- ----------
VALUE FUND
- ----------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 10.73 0.245 2.619 (0.262) (1.732) 11.60 28.76% 220,386 1.02%
1994 11.38 0.200 (0.240) (0.190) (0.420) 10.73 (0.49)% 166,713 1.01%
1993 10.50 0.180 0.870 (0.170) -- 11.38 10.05% 167,337 1.03%
1992 (4) 10.00 0.030 0.500 (0.030) -- 10.50 5.30% 82,944 1.28%*
INVESTORS CLASS A(**)
FOR THE YEARS ENDED NOVEMBER 30,:
1995 10.78 0.250 2.623 (0.261) (1.732) 11.66 28.71% 12,633 1.03%
1994 11.42 0.180 (0.220) (0.180) (0.420) 10.78 (0.45)% 8,115 1.02%
1993 (11) 11.06 0.060 0.350 (0.050) -- 11.42 3.71% 4,058 1.16%*
INVESTORS CLASS B(**)
FOR THE PERIOD ENDED NOVEMBER 30,:
1995 (7) 11.11 0.120 1.618 (0.136) (1.072) 11.64 15.78% 2,086 1.68%*
- -----------------------
CAPITAL APPRECIATION FUND
- -----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 10.17 0.043 2.035 (0.046) (1.332) 10.87 20.74% 19,592 1.10%
1994 9.79 0.010 0.380 (0.010) -- 10.17 4.13% 12,869 1.05%
1993 (9) 10.00 0.010 (0.210) (0.010) -- 9.79 (2.00)% 7,741 1.11%*
INVESTORS CLASS A(**)
FOR THE YEARS ENDED NOVEMBER 30,:
1995 10.08 0.044 2.013 (0.045) (1.332) 10.76 20.72% 3,261 1.11%
1994 9.74 0.010 0.340 (0.010) -- 10.08 3.70% 1,509 1.06%
1993 (11) 9.42 -- 0.320 -- -- 9.74 3.40% 649 1.36%*
- ------------------
SPECIAL EQUITY FUND
- ------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1995 10.56 0.100 1.928 (0.108) (0.360) 12.12 20.07% 54,221 1.04%
1994 12.76 0.030 (0.460) (0.020) (1.750) 10.56 (4.74)% 43,640 1.03%
1993 11.19 0.010 1.560 -- -- 12.76 14.07% 32,706 1.03%
1992 (4) 10.00 0.010 1.180 -- -- 11.19 11.90% 21,925 1.28%*
INVESTORS CLASS A(**)
FOR THE YEARS ENDED NOVEMBER 30,:
1995 10.56 0.100 1.927 (0.107) (0.360) 12.12 20.06% 4,693 1.05%
1994 12.76 0.030 (0.460) (0.020) (1.750) 10.56 (4.76)% 3,436 1.04%
1993 (3) 11.69 -- 1.070 -- -- 12.76 9.19% 938 1.28%*
INVESTORS CLASS B(**)
FOR THE PERIOD ENDED NOVEMBER 30,:
1995 (7) 10.61 0.007 1.501 (0.038) -- 12.08 14.22% 554 1.90%*
<CAPTION>
RATIO OF
OF EXPENSES RATIO OF INCOME TO
TO AVERAGE NET INVESTMENT AVERAGE
NET ASSETS INCOME NET ASSETS PORTFOLIO
EXCLUDING TO AVERAGE EXCLUDING TURNOVER
FEE WAIVERS NET ASSETS FEE WAIVERS RATE
<S> <<C> <C> <C> <C>
- -------------
- -------------
VIRGINIA MUNI
- -------------
TRUST CLASS
FOR THE PERI
1995 (7) 1.11%* 4.61%* 4.21%* 35%
INVESTORS CL
FOR THE PERI
1995 (10) 1.97%* 3.76%* 3.36%* 35%
- ----------
VALUE FUND
- ----------
TRUST CLASS
FOR THE YEAR
1995 1.17% 2.16% 2.01% 175%
1994 1.01% 1.82% 1.82% 116%
1993 1.03% 1.64% 1.64% 77%
1992 (4) 1.28%* 1.74%* 1.74%* 5%
INVESTORS CL
FOR THE YEAR
1995 1.18% 2.14% 1.99% 175%
1994 1.04% 1.81% 1.79% 116%
1993 (11) 1.16%* 1.51%* 1.51%* 77%
INVESTORS CL
FOR THE PERI
1995 (7) 2.03%* 1.13%* 0.78%* 175%
- -------------
CAPITAL APPRE
- -------------
TRUST CLASS
FOR THE YEAR
1995 1.25% 0.40% 0.25% 470%
1994 1.05% 0.17% 0.17% 271%
1993 (9) 1.11%* 0.20%* 0.20%* 133%
INVESTORS CL
FOR THE YEAR
1995 1.26% 0.39% 0.24% 470%
1994 1.18% 0.16% 0.04% 271%
1993 (11) 1.80%* (0.05)%* (0.49)%* 133%
- -------------
SPECIAL EQUIT
- -------------
TRUST CLASS
FOR THE YEAR
1995 1.19% 0.90% 0.75% 81%
1994 1.03% 0.32% 0.32% 117%
1993 1.03% 0.06% 0.06% 95%
1992 (4) 1.28%* 0.23%* 0.23%* 3%
INVESTORS CL
FOR THE YEAR
1995 1.20% 0.89% 0.74% 81%
1994 1.10% 0.31% 0.25% 117%
1993 (3) 1.61%* (0.19)%* (0.52)%* 95%
INVESTORS CL
FOR THE PERI
1995 (7) 2.05%* (0.04)%* (0.19)%* 81%
Amounts designated as "--" are either $0 or have been rounded to $0.
(3) Commencement of operations for this class May 5, 1993.
(4) Commencement of operations for this class September 28, 1992.
(7) Commencement of operations for this class April 5, 1995.
(9) Commencement of operations for this class January 11, 1993.
(10) Commencement of operations for this class April 17, 1995.
(11) Commencement of operations for this class May 7, 1993.
* Annualized.
** Total Return does not reflect the sales charge or redemption charge, where applicable.
</TABLE>
<PAGE> 54
NOTES TO FINANCIAL STATEMENTS CRESTFUNDS, INC.
November 30, 1995
1. ORGANIZATION
CrestFunds, Inc. (the Company) is registered under the Investment Company Act of
1940 (the "1940 Act"), as amended, as an open-end, management investment company
organized as a Maryland corporation. The Company currently has twelve investment
portfolios (individually a Fund and collectively the "Funds"). The Funds offer
one or more of three classes of shares, the Trust Class Shares, the Investors
Class A Shares and the Investors Class B Shares. The Funds include:
EQUITY FUNDS
Value Fund
Special Equity Fund
Capital Appreciation Fund
BOND FUNDS
Limited Term Bond Fund
(previously known as Short/Intermediate Bond Fund)
Intermediate Bond Fund
(previously known as Bond Fund)
Virginia Intermediate Municipal Bond Fund
(previously known as Virginia Municipal Bond Fund)
Virginia Municipal Bond Fund
Government Bond Fund
Municipal Bond Fund
MONEY MARKET FUNDS
Cash Reserve Fund
U.S. Treasury Money Fund
Tax Free Money Fund
Each Fund, with the exception of the Municipal Bond Fund, has commenced
operations prior to November 30, 1995. This report pertains only to those Funds
in operation as of November 30, 1995.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds:
Security Valuation--Investment securities held by the Money Market Funds
are stated at amortized cost, which approximates market value. Under this
valuation method, purchase discount and premiums are accreted and amortized
ratably to maturity and are included in interest income.
Investments in equity securities held by the Non-Money Market Funds which
are traded on a national securities exchange (or reported on the NASDAQ
national market system) are stated at the last quoted sale price if readily
available for each equity securities on each business day; other equity
securities traded in the over-the-counter markets and listed equity
securities for which no sale was reported on that date are stated at the
last quoted bid price. Debt obligations exceeding sixty days to maturity
for which market quotations are readily available are valued at the most
recent quoted bid price. Debt obligations with sixty days or less remaining
until maturity may be valued at their amortized cost. Restricted securities
for which quotations are not readily available are valued at fair value
using methods determined in good faith under general Directors supervision.
Federal Income Taxes--It is each Fund's intention to continue to qualify as
a regulated investment company for Federal income tax purposes and
distribute all of its taxable income and net capital gains. Accordingly, no
provision for Federal income taxes is required.
Dividends and Distributions to Shareholders-- Distribution from net
investment income for the Money Market Funds and Bond Funds are declared
daily and paid monthly. Each of the Equity Funds declare and pay dividends
from net investment income monthly. Any net realized capital gains will be
distributed at least annually for all Funds. Dividends and distributions
are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are
primarily due to differing treatments for deferral of wash sales losses and
post October losses.
Classes--Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/unrealized gains and losses are allocated to
the respective classes on the basis of the relative daily net assets.
Security Transactions and Investment Income--Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Costs used in determining realized gains and losses on the sale of
investment securities are those of the specific securities sold adjusted
for the accretion and amortization of purchase discounts and premiums
during the respective holding periods. Interest income is recorded on the
accrual basis; dividend income is recorded on the ex-dividend date.
Repurchase Agreements--Each Fund, with the exception of Tax Free Money
Fund, Virginia Intermediate Municipal Bond Fund and Virginia Municipal Bond
Fund, may invest in repurchase
<PAGE> 55
NOTES TO FINANCIAL STATEMENTS (continued) CRESTFUNDS, INC.
November 30, 1995
agreements. The Funds, through their sub-custodian, receive delivery of the
underlying securities, whose market value including interest is required to
be at least 102% of the resale price. The Funds' investment advisor,
Capitoline Investment Services Incorporated, is responsible for determining
that the value of these underlying securities remains at least 102% to the
resale price. If the seller defaults, the Fund would suffer a loss to the
extent that the proceeds from the sale of the underlying securities were
less than the resale price.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES--The Company's investment advisor is Capitoline Investment
Services Incorporated (the Advisor), a wholly owned subsidiary of Crestar
Bank. Pursuant to an Investment Advisory Agreement, the Advisor is paid for
advisory services to each Fund at the annual rate based on the following
fee schedule: Cash Reserve Fund, U.S. Treasury Money Fund and Tax Free
Money Fund: .40% of each Fund's average daily net assets for the first $500
million of net assets; .35% of each Fund's average daily net assets on the
next $500 million of net assets; .30% of each Fund's average daily net
assets on all remaining net assets; Capital Appreciation Fund, Value Fund
and Special Equity Fund: .75% of each Fund's average daily net assets;
Limited Term Bond Fund and Virginia Intermediate Municipal Bond Fund: .50%
of each Fund's average daily net assets; Intermediate Bond Fund, Government
Bond Fund and Virginia Municipal Bond Fund: .60% of each Fund's average
daily net assets. The Advisor has voluntarily agreed to waive a portion of
its fee for Virginia Municipal Bond Fund and Government Bond Fund in order
to limit Advisory Fee to .50% for each Fund.
ADMINISTRATION AND DISTRIBUTION FEES--SEI Financial Management Corporation
(the Administrator), a wholly-owned subsidiary of SEI Corporation, serves
as administrator to the Company. The Administrator provides the Company
with administrative services, including fund accounting, and regulatory
reporting and is entitled to receive a fee at an annual rate of .15% of the
average daily net assets of the Funds. The Administrator has voluntarily
agreed to waive a portion of its fee for Virginia Municipal Bond Fund and
Government Bond Fund in order to limit operating expenses.
SEI Financial Services Company (the Distributor), a wholly-owned subsidiary
of SEI Corporation, serves as distributor of each Fund's shares pursuant to
a distribution agreement with the Company. The Trust Class and Investors
Class A shares of the Funds have a separate distribution plan (the 12b-1
Plan) pursuant to Rule 12b-1 under the 1940 Act. As provided in the 12b-1
Plan, the Trust Class and Investors Class A shares of the Funds pay the
Distributor as compensation for its services .15% of the aggregate average
daily net assets of such classes of the Funds. The Distributor has agreed
to waive any fees payable pursuant to the 12b-1 Plan.
In addition, the Investors Class A shares of the Money Market Funds have a
distribution plan (the Investors Class A Plan) pursuant to Rule 12b-1 under
the 1940 Act. As provided in the Investors Class A Plan, the Investors
Class A shares of the Money Market Funds pay the Distributor as
compensation for its services .25% of such Class' average daily net assets.
The Distributor has agreed to waive any fees payable pursuant to the
Investors Class A Plan.
The Investors Class B shares of the Funds have a distribution plan (the B
Shares Plan) pursuant to Rule 12b-1 under the 1940 Act. As provided in the
B Shares Plan, the Investors Class B shares of the Funds pay the
Distributor as compensation for its services .75% of the aggregate average
daily net assets of such class of the Funds. In addition, pursuant to the B
Share Plan, the Distributor is compensated at an annual rate of .25% of the
B shares' average net assets for providing ongoing Shareholder support
services to investors in B shares. The Distributor has agreed to waive a
portion of its fees pursuant to the B Shares Plan in order to limit
Distribution Fees to .85% for each Fund.
TRANSFER AGENT AND CUSTODIAN FEES--Crestar Bank serves as the Company's
transfer agent and dividend disbursing agent and is compensated for those
services monthly by each Fund at an annual rate of .05% of the Fund's
average daily net assets for the Trust Class and .06% of the Fund's average
daily net assets for the Investors Class A and Investors Class B. In
addition, Crestar Bank serves as the Company's custodian and is compensated
at an annual rate of up to .04% of each Fund's average daily net assets.
<PAGE> 56
NOTES TO FINANCIAL STATEMENTS (continued) CRESTFUNDS, INC.
November 30, 1995
CONTINGENT DEFERRED SALES CHARGE (CDSC)-- A CDSC is imposed on certain
redemptions of Investors Class B shares. The CDSC varies depending on the
number of years from the time of payment for the purchase of Investors
Class B shares until the redemption of such shares.
<TABLE>
<CAPTION>
CONTINGENT
FROM DATE OF DEFERRED SALES
PURCHASE CHARGE
--------- ----------------
<S> <C>
Year 1.................................. 5.00%
Year 2.................................. 4.00%
Year 3.................................. 3.00%
Year 4.................................. 3.00%
Year 5.................................. 2.00%
Year 6.................................. 1.00%
Year 7.................................. 0.00%
Year 8.................................. Conversion to A Shares
</TABLE>
4. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale of securities,
including U.S. Government securities, other than temporary cash investments,
during the period ended November 30, 1995.
<TABLE>
<CAPTION>
PURCHASE SALES
(000) (000)
------ ------
<S> <C> <C>
Limited Term Bond............................. $36,043 $ 25,219
Intermediate Bond............................. 32,566 25,742
Government Bond............................... 11,787 2,406
Virginia Intermediate Municipal Bond.......... 12,977 16,105
Virginia Municipal Bond....................... 7,838 1,647
Value......................................... 356,076 332,104
Capital Appreciation.......................... 90,529 85,423
Special Equity................................ 41,413 38,565
</TABLE>
At November 30, 1995, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation on securities at November 30,
1995, for each Fund is as follows:
<TABLE>
<CAPTION>
NET
APPRECIATION DEPRECIATION APPRECIATION/DEPRECIATION
(000) (000) (000)
-------- -------- ------------------
<S> <C> <C> <C>
Limited Term
Bond.............. $ 1,160 $ 190 $ 970
Intermediate
Bond.............. 3,913 221 3,692
Government Bond.... 550 -- 550
Virginia
Intermediate
Municipal Bond.... 703 137 566
Virginia Municipal
Bond.............. 215 -- 215
Value.............. 21,605 3,653 17,952
Capital
Appreciation...... 1,662 741 921
Special Equity..... 8,222 3,150 5,072
</TABLE>
Subsequent to 10/31/95, the Funds recognized net capital losses for tax purposes
that have been deferred to 1996 and can be used to offset future capital gains
at 11/30/96. The Funds also had capital losses carryforward at 11/30/95, to the
extent provided in the regulations for Federal income tax as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYOVER
FUND 11/30/95 EXPIRES 2000 EXPIRES 2001
-------- --------- ---------
<S> <C> <C> <C>
Cash Reserve.................. $ 86,053 $ -- $ --
Tax Free Money................ 10,083 8,372 1,711
Limited Term Bond............. 1,038,806 -- --
Intermediate Bond............. 2,471,343 -- --
Virginia Intermediate
Municipal Bond............... 942,826 -- --
Capital Appreciation.......... -- -- --
Special Equity................ 83,520 -- --
</TABLE>
<TABLE>
<CAPTION>
POST
10/31/95
FUND EXPIRES 2002 EXPIRES 2003 DEFERRED LOSSES
--------- --------- -----------
<S> <C> <C> <C>
Cash Reserve.............. $ 71,692 $ 14,361 $ --
Tax Free Money............ -- -- --
Limited Term Bond......... 784,783 254,023 --
Intermediate Bond......... 1,803,687 667,656 --
Virginia Intermediate
Municipal Bond........... 544,784 398,042 --
Capital Appreciation...... -- -- 43,163
Special Equity............ -- 83,520 --
</TABLE>
5. CONCENTRATION OF CREDIT RISK
The Virginia Intermediate Municipal Bond Fund and the Virginia Municipal Bond
Fund invest in debt securities in the state of Virginia. The ability of the
issuers of the securities held by the Funds to meet their obligations may be
affected by economic or political conditions in that state.
- --------------------------------------------------------------------------------
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Company. The report is not
authorized for distribution to prospective investors in the Company, unless
preceded or accompanied by an effective prospectus. Neither the Company nor SEI
Financial Services Company is a bank and Company shares are not obligations of
or guaranteed by any bank or insured by the FDIC, the Federal Reserve Board or
any other agency. Investing in mutual funds involves risks, including the
possible loss of principal amount invested. An investment in a money market fund
is neither insured nor guaranteed by the U.S. government, and there can be no
assurance that a money market fund will maintain a stable $1.00 share price. SEI
Financial Services Company and Crestar Bank are not affiliated.
- --------------------------------------------------------------------------------
<PAGE> 57
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of CrestFunds, Inc.:
We have audited the accompanying statements of net assets of CrestFunds, Inc.
(comprised of the Cash Reserve Fund, U.S. Treasury Money Fund, Tax Free Money
Fund, Limited Term Bond Fund, Intermediate Bond Fund, Government Bond Fund,
Virginia Intermediate Municipal Bond Fund, Virginia Municipal Bond Fund, Value
Fund, Capital Appreciation Fund and Special Equity Fund) as of November 30,
1995, the related statements of operations and of changes in net assets and the
financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Company'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. Our procedures included confirmation of securities owned as of
November 30, 1995 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
portfolios constituting the CrestFunds, Inc. as of November 30, 1995, the
results of their operations, the changes in their net assets and the financial
highlights for the periods presented, in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
January 19, 1996
<PAGE> 58
SHAREHOLDER VOTING RIGHTS CRESTFUNDS, INC.
(Unaudited)
MAY 4, 1995
The Annual Meeting of Shareholders of the Company was held on May 4, 1995.
At the meeting shareholders voted on two proposals. Each proposal and the
results of the voting are set forth below.
I. Proposal to elect the following individuals to the Company's Board of
Directors:
<TABLE>
<CAPTION>
JESSE F. WILLIAMS III JOHN BRUCE JAMES JR. GLEN DOUGLAS POND DAVID F. FOWLER JEAN OAKEY
---------------------- -------------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
For....... 586,787,835.483 586,802,155.651 586,796,937.937 586,802,042.623 586,802,042.623
Against... 196,801.810 182,481.642 187,699.356 182,594.670 182,594.670
Abstain... 0.00 0.00 0.00 0.00 0.00
</TABLE>
II. Proposal to approve the selection of Deloitte & Touche LLP as independent
public accountants of the Company:
<TABLE>
<S> <C>
For....... 586,751,894.060
Against... 211,619.447
Abstain... 21,123.786
</TABLE>
<PAGE> 59
NOTICE TO SHAREHOLDERS OF
THE CRESTFUNDS, INC.
(Unaudited)
For Shareholders that do not have a November 30, 1995 taxable year end, this
notice is for informational purposes only. For shareholders with a November 30,
1995 taxable year end, please consult your tax advisor as to the pertinence of
the notice.
For the fiscal year ended November 30, 1995, each fund has designated the
following items with regard to distributions paid during the year:
<TABLE>
<CAPTION>
(A) (B) C
LONG TERM ORDINARY (A+B)
CAPITAL GAINS INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS)
- ----------------------------------------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
Cash Reserve..................................................... 0% 100% 100%
U.S. Treasury.................................................... 0% 100% 100%
Tax Free Money Market............................................ 0% 100% 100%
Limited Term Bond................................................ 0% 100% 100%
Intermediate Bond................................................ 0% 100% 100%
Government Bond.................................................. 0% 100% 100%
Virginia Intermediate Municipal Bond............................. 0% 100% 100%
Virginia Municipal Bond.......................................... 0% 100% 100%
Value............................................................ 29% 71% 100%
Capital Appreciation............................................. 6% 94% 100%
Special Equity................................................... 37% 63% 100%
</TABLE>
<TABLE>
<CAPTION>
(D) (E) (F)
QUALIFYING TAX EXEMPT FOREIGN
FUND DIVIDENDS (1) INTEREST TAX CREDIT
- ----------------------------------------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
Cash Reserve..................................................... 0% 0% 0%
U.S. Treasury.................................................... 0% 0% 0%
Tax Free Money Market............................................ 0% 100% 0%
Limited Term Bond................................................ 0% 0% 0%
Intermediate Bond................................................ 0% 0% 0%
Government Bond.................................................. 0% 0% 0%
Virginia Intermediate Municipal Bond............................. 0% 98% 0%
Virginia Municipal Bond.......................................... 0% 83% 0%
Value............................................................ 18% 0% 0%
Capital Appreciation............................................. 5% 0% 0%
Special Equity................................................... 51% 0% 0%
</TABLE>
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
* Items (A) and (B) are based on a percentage of each fund's total
distributions.
** Items (D) and (E) are based on a percentage of ordinary income distributions
of each fund.
