[CRESTAR LOGO]
NOVEMBER 30, 1997
CREST
-----
FUNDS
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
Maryland Municipal Bond Fund
Value Fund
Capital Appreciation Fund
Special Equity Fund
Life Vision Maximum Growth Portfolio
Life Vision Growth and Income Portfolio
Life Vision Balanced Portfolio
Annual Report
<PAGE>
CRESTFUNDS, INC.
DEAR CRESTFUNDS SHAREHOLDER:
Investors in U.S. markets were well rewarded in 1997. For the third consecutive
year equities were the asset of choice in the fiscal year ended November 30,
1997, producing 20+% total returns. However, fixed-income assets also provided
strong returns--nearly twice the long-term average. Money fund returns were in
line with historical averages, but even this return was more than twice the rate
of inflation.
A year ago we stated in our annual report our belief that the current
expansion would continue into the new fiscal year and that the financial markets
would likely generate adequate returns. We also stated that the economy and the
financial markets could be more vulnerable to potential external shocks. The
current financial crisis in Asia is credited with substantial losses in Far East
markets as well as major shifts in U.S. markets. The challenge in the new fiscal
year will be the ability of the economy, financial markets and world leaders to
both contain the current crisis and steer a course for continued long-term
growth.
A REVIEW OF 1997
Economic growth was exceptional in the past year. Overall growth was above
average despite being in the seventh year of an economic expansion, and the rate
of inflation actually declined. Consumers benefited from strong job growth, a
drop in the unemployment rate to a 24-year low, and more favorable interest
rates. Consumer confidence closed the year at record high levels, and home sales
and housing starts remained firm.
The business sector recorded sharp improvement in productivity while keeping
inventories at historically low levels. Real output increased over 5% during the
fiscal year, and the nation began to restore its reputation as a world
competitor. A stable dollar allowed US firms to begin penetrating overseas
markets.
The strong growth in incomes and output drovethe Federal deficit down sharply
through increased revenues and reduced expenditures on entitlement programs.
This development reduced the amount of federal borrowing in the markets and
helped to lower overall interest rates. This, in turn, gave the Federal Reserve
increased flexibility in conducting monetary policy.
Early in the year, the continued strength in the economy raised concerns of a
rise in both future inflation and the overnight Federal Funds rate. While the
latter was true, the former was not. Interest rates did rise significantly as
the 30-year Treasury bond yield jumped from 6.36% at the beginning of the fiscal
year (November 30, 1996) to 7.17% by tax time in April. Also the Federal
Reserve, fearing a future rise in inflation, raised the Federal Funds rate in
late March to 5 1/2% from 5 1/4%. The upward bias to interest rates early in the
year hurt the bond markets, and also kept the equity markets in check.
Inflation, however, failed to accelerate. The growing perception that a surge
in inflation was unlikely allowed the bond markets to begin a rally that lasted
for the remainder of the year. Long-term interest rates reversed course, and
stocks moved sharply higher. A notable aspect of the stock market rally in the
second and third quarters was the reemergence of small cap and mid cap stocks.
By the end of the third quarter, the major small cap and mid cap indexes pulled
even with or surpassed the S&P 500.
Turbulence returned to the markets around Halloween, as a growing financial
crisis in Asia "spooked" global investors. Currencies and equity markets in the
Far East fell sharply amid concerns that speculative excesses in real estate and
unproductive government building projects might cause massive failures.
Investors became worried that the protectionist measures employed by many Asian
economies to promote their rapid growth could ultimately prove to be harmful.
Investors fled from the region making the crisis more severe. The
International Monetary Fund ("IMF") and world political and financial leaders
quickly stepped in to stem the growing panic. The IMF developed loan packages to
pump much needed liquidity into these financial systems, but only if the
countries agreed to some bitter fiscal and monetary policy medicine. Adoption of
these packages has been slow, and financial markets declined as the uncertainty
continued.
The impact of this crisis on world markets was substantial and at present
remains the most significant factor affecting daily swings in both stock and
bond markets. In general, bond markets benefited from the flight to quality out
of Asia into the perceived comfort of the U.S. Treasury market. This caused bond
markets to rally strongly toward the close of the year. Equity investors reacted
to the crisis by attempting to isolate portfolios from the effects of the
region. Companies with strong connections to the Far East through currency,
trade or competition were sold in favor of domestic oriented companies.
1
<PAGE>
THE OUTLOOK FOR 1998
There are two key elements affecting the outlook for the new year. The first is
the ongoing problem in Asia and its successful resolution on a
country-by-country basis. The second, and perhaps more important factor, is that
the U.S. economy is still strong with few imbalances. We look for growth to slow
to its long-term average of 2 - 2 1/2%, with little if any acceleration in
inflation.
In this climate the Federal Reserve may sit on the sidelines and keep a
steady domestic monetary policy while the Far East issues are resolved. This
would provide passive support to both the stock and bond markets. Bond markets
could produce returns near their historical average of 5 - 5 1/2%. The equity
markets are a more complicated scenario and will be dependent on how and how
quickly the "Asian Flu" is cured.
We believe that corporate earnings are likely to come under downward pressure
this year due to slowing economic growth, the rise in the dollar, and increased
foreign competition in terms of lower prices. However, the stock markets
historically perform well in an environment of steady economic growth and low
inflation. Our outlook for the economy calls for continued growth and low
inflation. We also anticipate a steady inflow of money into stocks as the year
progresses, further supporting the market. If the economy continues to expand
and investors do not reverse course on their investing patterns, the equity
markets could move higher yet again in 1998, but reaching the long-term average
return of 13.8% could prove challenging.
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,
/S/ SIGNATURE
Ben L. Jones, CFA
President
Crestar Asset Management Company
a wholly-owned subsidiary of Crestar Bank
and part of the Crestar Investment Group
November, 1997
2
<PAGE>
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
Disciplined sector selection and allocation as well as a firming bond market
helped the Limited Term Bond Fund achieve a healthy 5.84% return (Trust Class)
for its shareholders over the twelve months ended November, 1997. The annualized
return over the past three years was 7.25%. Interest rates remained in a narrow
trading range for much of the year, before closing the year with a strong rally
related to the Asian financial crisis.
The dominant concern in the fixed-income markets for much of the year was that
strong economic growth would inevitably push inflation higher and precipitate a
restrictive policy from the Federal Reserve. This restrictive policy move would
likely be a preemptive strike against inflation through several hikes in the
overnight Fed Funds rate. The yield on the 30-year Treasury bond rose from 6.36%
on November 30, 1996, up to a high of 7.17% by April, 1997, following the
quarter-percent tightening by the Fed.
However, by the second quarter, the inflation reports were still very low,
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for bonds. With the Federal Reserve
taking a "wait-and-see" attitude on the economy and inflation, long-term yields
began to fall, and the yield curve flattened significantly. In this environment,
corporate, mortgage-backed and asset-backed securities performed very well.
Average portfolio duration was neutral to slightly long to the benchmark, which
added additional return to the Fund.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and money pouring into the safety of U.S. Treasury
notes. The yield curve continued to flatten as Fed policy remained unchanged.
The 30-year Treasury bond ended with a 6.04% yield on November 30, 1997. The
sharp drop in Treasury yields related to the flight to quality caused corporate
bond spreads to widen and mortgage prepayments to accelerate. As a result,
mortgage-backed securities and corporate bonds did not keep pace with the
performance of the Treasury market.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
The long-term fundamentals for fixed income markets remain sound. There is a
near-term risk that investment flows into bonds could dry up if the Asian crisis
is resolved quickly. Should this happen, interest rates in the short-term could
rise.
We believe that this environment of slower growth and contained inflation will
give support to the fixed income markets in the year ahead, though some
turbulence could remain. We look for interest rates to stay within a broad
trading range and for corporate quality spreads to stabilize in the months
ahead. If these forces materialize, we will adjust selector allocation to
maximize returns in the Fund.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
TREASURIES & AGENCIES 20%
CASH EQUIVALENTS 3%
MORTGAGE/ASSET BACKED 34%
CORPORATES 43%
3
<PAGE>
CRESTFUNDS, INC.: LIMITED TERM BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds Limited Term Bond Fund,
Trust Class, versus the Merrill Lynch 1-5 Year Gov't./Corp. Bond Index,
and the Lehman Intermediate Gov't./Corp. Bond Index
[LINE GRAPH OMITTED]
CrestFunds Limited Merrill Lynch Lehman Intermediate
Term Bond Fund, 1-5 Year Gov't./ Gov't./Corp.
Trust Class Corp. Bond Index Bond Index
9/30/92 1,000,000 1,000,000 1,000,000
11/92 988,630 987,133 983,249
11/93 1,076,025 1,064,722 1,078,920
11/94 1,059,132 1,060,570 1,059,283
11/95 1,180,932 1,190,383 1,212,985
11/96 1,234,310 1,259,664 1,283,702
11/97 1,306,393 1,336,377 1,364,961
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
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 $1,306,393 by November 30, 1997. 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
$1,364,961 and $1,336,377, respectively.
INVESTORS CLASS A
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Limited Term Bond
Fund, Investor A, versus
the Merrill Lynch 1-5 Year Gov't./Corp. Bond Index,
and the Lehman Intermediate Gov't./Corp. Bond Index
[LINE GRAPH OMITTED]
CrestFunds Limited Merrill Lynch Lehman
Term Bond Fund, 1-5 Year Gov't./ Intermediate Gov't./
Investor A Class Corp. Bond Index Corp. Bond Index
5/31/93 9,800 10,000 10,000
11/93 10,104 10,288 10,355
11/94 9,933 10,248 10,167
11/95 11,096 11,502 11,642
11/96 11,584 12,171 12,321
11/97 12,245 12,913 13,101
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 $12,245 by November 30, 1997. 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 $13,108 and $12,913, respectively.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
1 YEAR 5.84% 3.63% 5.71%
3 YEAR 7.25% 6.52% 7.22%
LIFE OF FUND 5.31% 4.55% 5.03%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
1 YEAR 5.84% 3.63% 5.71%
3 YEAR 18.56% 11.29% 18.13%
LIFE OF FUND 30.71% 22.36% 24.90%
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Fund figures are
from commencement of operations per class 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.
4
<PAGE>
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
Disciplined sector selection and allocation as well as a firming bond market
helped the Intermediate Bond Fund achieve a healthy 6.46% return (Trust Class)
for its shareholders over the twelve months ended November, 1997. The annualized
return over the past three years was 9.01%. Interest rates remained in a narrow
trading range for much of the year, before closing the year with a strong rally
related to the Asian financial crisis.
The dominant concern in the fixed-income markets for much of the year was that
strong economic growth would inevitably push inflation higher and precipitate a
restrictive policy from the Federal Reserve. This restrictive policy move would
likely be a preemptive strike against inflation through several hikes in the
overnight Fed Funds rate. The yield on the 30-year Treasury bond rose from 6.36%
on November 30, 1996, up to a high of 7.17% by April, 1997, following the
quarter-percent tightening by the Fed.
However, by the second quarter, the inflation reports were still very low,
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for bonds. With the Federal Reserve
taking a "wait-and-see" attitude on the economy and inflation, long-term yields
began to fall, and the yield curve flattened significantly. In this environment,
corporate, mortgage-backed and asset-backed securities performed very well.
Average portfolio duration was neutral to slightly long to the benchmark, which
added additional return to the Fund.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and money pouring into the safety of U.S. Treasury
notes. The yield curve continued to flatten as Fed policy remained unchanged.
The 30-year Treasury bond ended with a 6.04% yield on November 30, 1997. The
sharp drop in Treasury yields related to the flight to quality caused corporate
bond spreads to widen and mortgage prepayments to accelerate. As a result,
mortgage-backed securities and corporate bonds did not keep pace with the
performance of the Treasury market.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
The long-term fundamentals for fixed income markets remain sound. There is a
near-term risk that investment flows into bonds could dry up if the Asian crisis
is resolved quickly. Should this happen, interest rates in the short-term could
rise.
We believe that this environment of slower growth and contained inflation will
give support to the fixed income markets in the year ahead, though some
turbulence could remain. We look for interest rates to stay within a broad
trading range and for corporate quality spreads to stabilize in the months
ahead. If these forces materialize, we will adjust selector allocation to
maximize returns in the Fund.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
TREASURIES & AGENCIES 32%
CASH EQUIVALENTS 1%
CORPORATES 35%
MORTGAGE/ASSET BACKED 32%
5
<PAGE>
CRESTFUNDS, INC.: INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds Intermediate Bond Fund,
Trust Class, versus the Lehman Brothers Aggregate Bond Index
[LINE GRAPH OMITTED]
CrestFunds Intermediate Bond Lehman Brothers
Fund, Trust Class Aggregate Bond Index
9/30/92 1,000,000 1,000,000
11/92 976,020 986,897
11/93 1,079,283 1,094,469
11/94 1,028,233 1,060,978
11/95 1,203,752 1,248,241
11/96 1,250,939 1,323,760
11/97 1,331,750 1,424,101
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
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 $1,331,750 by November 30, 1997. Over the same period, a $1
million investment in Lehman Brothers Aggregate Bond Index would have grown to
$1,424,101.
INVESTORS CLASS A
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Intermediate Bond Fund,
Investor A Class, versus the Lehman Brothers Aggregate Bond Index
[LINE GRAPH OMITTED]
CrestFunds Intermediate Bond Lehman Brothers
Fund, Investor A Aggregate Bond Index
5/31/93 9,700 10,000
11/93 10,032 10,396
11/94 9,559 10,078
11/95 11,191 11,856
11/96 11,629 12,574
11/97 12,379 13,527
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 $12,379 by November 30, 1997.
Over the same period, a $10,000 investment in Lehman Brothers Aggregate Bond
Index would have grown to $13,527.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
1 YEAR 6.46% 3.23% 6.45%
3 YEAR 9.01% 7.91% 9.00%
LIFE OF FUND 5.76% 4.61% 5.32%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
1 YEAR 6.46% 3.23% 6.45%
3 YEAR 20.66% 10.01% 20.62%
LIFE OF FUND 33.64% 22.77% 26.62%
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Fund figures are
from commencement of operations per class 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.
6
<PAGE>
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 US Government or its agencies or
instrumentalities. There are no limits on the dollar-weighted average portfolio
maturity of the Fund.
YEAR IN REVIEW
Disciplined sector selection and allocation as well as a firming bond market
helped the Government Bond Fund achieve a 6.04% return (Trust Class) for its
shareholders over the twelve months ended November, 1997. Interest rates
remained in a narrow trading range for much of the year, before closing the year
with a strong rally related to the Asian financial crisis.
The dominant concern in the fixed-income markets for much of the year was that
strong economic growth would inevitably push inflation higher and precipitate a
restrictive policy from the Federal Reserve. This restrictive policy move would
likely be a preemptive strike against inflation through several hikes in the
overnight Fed Funds rate. The yield on the 30-year Treasury bond rose from 6.36%
on November 30, 1996, up to a high of 7.17% by April, 1997, following the
quarter-percent tightening by the Fed.
However, by the second quarter, the inflation reports were still very low,
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for bonds. With the Federal Reserve
taking a "wait-and-see" attitude on the economy and inflation, long-term yields
began to fall, and the yield curve flattened significantly. In this environment,
corporate, mortgage-backed and asset-backed securities performed very well.
Average portfolio duration for the Fund was neutral to the benchmark.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and money pouring into the safety of U.S. Treasury
notes. The yield curve continued to flatten as Fed policy remained unchanged.
The 30-year Treasury bond ended with a 6.04% yield on November 30, 1997. The
sharp drop in Treasury yields related to the flight to quality caused corporate
bond spreads to widen and mortgage prepayments to accelerate. As a result,
mortgage-backed securities and corporate bonds did not keep pace with the
performance of the Treasury market.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
The long-term fundamentals for fixed income markets remain sound. There is a
near-term risk that investment flows into bonds could dry up if the Asian crisis
is resolved quickly. Should this happen, interest rates in the short-term could
rise.
We believe that in this environment of slower growth and contained inflation
will give support to the fixed income markets in the year ahead, though some
turbulence could remain. We look for interest rates to stay within a broad
trading range and for corporate quality spreads to stabilize in the months
ahead. If these forces materialize, we will adjust sector allocation to maximize
returns in the Fund.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
TREASURIES & AGENCIES 23%
CASH EQUIVALENTS 2%
CORPORATES 25%
MORTGAGE/ASSET BACKED 50%
7
<PAGE>
CRESTFUNDS, INC.: GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds Government Bond Fund,
Trust Class, versus the Lehman Brothers Government Bond Index
[LINE GRAPH OMITTED]
CrestFunds Government Bond Lehman Brothers
Fund, Trust Class Government Bond Index
4/30/95 1,000,000 1,000,000
11/95 1,110,104 1,099,906
11/96 1,143,629 1,158,311
11/97 1,212,704 1,243,215
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
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
$1,212,704 by November 30, 1997. Over the same period, a $1 million investment
in Lehman Brothers Government Bond Index would have grown to $1,243,215.
INVESTORS CLASS B
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Government Bond Fund,
Investor B Class, versus the Lehman Brothers Government Bond Index
[LINE GRAPH OMITTED]
CrestFunds Government Bond Lehman Brothers
Fund, Investor B Class Government Bond Index
4/30/95 10,000 10,000
11/95 11,066 10,999
11/96 11,301 11,583
11/97 11,585 12,432
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 $11,585 by
November 30, 1997. Over the same period, a $10,000 investment in Lehman Brothers
Government Bond Index would have grown to $12,432.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 6.04% 0.17% 5.17%
LIFE OF FUND 7.83% 5.86% 6.89%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 6.04% 0.17% 5.17%
LIFE OF FUND 22.17% 16.07% 19.07%
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Fund figures are
from commencement of operations per class 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.
8
<PAGE>
CRESTFUNDS, INC.: VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Virginia Intermediate Municipal Bond Fund seeks to provide a high level of
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
Disciplined analysis of security issuance and flows, duration weighting, as well
as a generally firming bond market helped the Virginia Intermediate Municipal
Bond Fund achieve a 5.55% return (Trust Class) for its shareholders over the
twelve months ended November 1997. The three year annualized return was 8.42%.
Interest rates remained in a narrow trading range for much of the year, before
closing the year with a strong rally related to the Asian financial crisis.
The dominant concern in the fixed-income markets for much of the year was that
strong economic growth would inevitably push inflation higher and precipitate a
restrictive policy from the Federal Reserve. This restrictive policy move would
likely be a preemptive strike against inflation through several hikes in the
overnight Fed Funds rate. The yield on the 10-year AAA general obligation bond
rose from 4.75% early in year up to a high of 5.20% by April, 1997, following
the quarter-percent tightening by the Fed.
However, by the second quarter, the inflation reports were still very low,
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for bonds. With the Federal Reserve
taking a "wait-and-see" attitude on the economy and inflation, long-term yields
began to fall, and the yield curve flattened significantly. In this environment,
longer-term duration bonds provided the greatest returns. Average portfolio
duration for the Fund was neutral to long to the benchmark.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and money pouring into the safety of U.S. Treasury
notes. The yield curve continued to flatten as Fed policy remained unchanged.
The 10-year AAA general obligation bond ended with a 4.66% yield on November 30,
1997. The sharp drop in Treasury yields may encourage municipalities to refund
existing debt and save interest expense, thus increasing the value of
non-callable bonds.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
The long-term fundamentals for the fixed income markets remain sound. There is a
near-term risk that investment flows into bonds could dry up if the Asian crisis
is resolved quickly. Should this happen, interest rates in the short-term could
rise.
We believe that this environment of slower growth and contained inflation will
give support to the fixed income markets in the year ahead, though some
turbulence could remain. We look for interest rates to stay within a broad
trading range.
MATURITY DISTRIBUTION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
0-3 YEARS 16%
3-5 YEARS 16%
5-7 YEARS 6%
7-10 YEARS 31%
10-15 YEARS 22%
15-20 YEARS 8%
20+ YEARS 1%
9
<PAGE>
CRESTFUNDS, INC.: VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds VA Intermediate Muni Bond Fund,
Trust Class, versus the Lehman Brothers 5 Year G.O. Bond Index,
and the Lehman Brothers G.O. Bond Index
[LINE GRAPH OMITTED]
CrestFunds VA Lehman Brothers Lehman Brothers
Intermediate Muni Bond 5 Year G.O. G.O. Bond
Fund, Trust Class Bond Index Index
1/31/93 1,000,000 1,000,000 1,000,000
11/93 1,066,043 1,059,356 1,080,941
11/94 996,324 1,049,822 1,033,488
11/95 1,156,632 1,175,695 1,212,281
11/96 1,203,013 1,238,713 1,285,139
11/97 1,269,780 1,305,355 1,373,043
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
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 $1,269,780 by November 30, 1997. 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
$1,373,043 and $1,305,355, respectively.
INVESTORS CLASS A
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds VA Intermediate Muni Bond Fund,
Investor A Class, versus the Lehman Brothers 5 Year G.O. Bond Index,
and the Lehman Brothers G.O. Bond Index
[LINE GRAPH OMITTED]
CrestFunds VA Intermediate Lehman Brothers Lehman Brothers
Muni Bond Fund, 5 Year G.O. G.O. Bond
Investor A Class Bond Index Index
5/31/93 9,650 10,000 10,000
11/93 9,996 10,340 10,428
11/94 9,340 10,246 9,970
11/95 10,844 11,475 11,695
11/96 11,279 12,090 12,398
11/97 11,916 12,741 13,246
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
Investors Class A higher transfer agency fee would be valued at $11,916 by
November 30, 1997. 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 $13,246 and $12,741, respectively.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
--------- ------------
1 YEAR 5.55% 1.95% 5.65%
3 YEAR 8.42% 7.19% 8.45%
LIFE OF FUND 5.14% 3.85% 4.66%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
--------- ------------
1 YEAR 5.55% 1.95% 5.65%
3 YEAR 17.59% 5.96% 17.93%
LIFE OF FUND 27.76% 18.87% 23.16%
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Fund figures are
from commencement of operations per class 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.
10
<PAGE>
CRESTFUNDS, INC.: VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Virginia Municipal Bond Fund seeks to provide a high level of 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. There are no limits on the dollar-weighted portfolio maturity of the
Fund.
YEAR IN REVIEW
Disciplined analysis of security issuance and flows, duration weighting, as well
as a generally firming bond market helped the Virginia Municipal Bond Fund
achieve a 6.46% return (Trust Class) for its shareholders over the twelve months
ended November, 1997. Interest rates remained in a narrow trading range for much
of the year, before closing the year with a strong rally related to the Asian
financial crisis.
The dominant concern in the fixed-income markets for much of the year was that
strong economic growth would inevitably push inflation higher and precipitate a
restrictive policy from the Federal Reserve. This restrictive policy move would
likely be a preemptive strike against inflation through several hikes in the
overnight Fed Funds rate. The yield on the 10-year AAA general obligation bond
rose from 4.75% early in year up to a high of 5.20% by April, 1997, following
the quarter-percent tightening by the Fed.
However, by the second quarter, the inflation reports were still very low,
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for bonds. With the Federal Reserve
taking a "wait-and-see" attitude on the economy and inflation, long-term yields
began to fall, and the yield curve flattened significantly. In this environment,
longer-term duration bonds provided the greatest returns. Average portfolio
duration for the Fund was neutral to long to the benchmark.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and money pouring into the safety of U.S. Treasury
notes. The yield curve continued to flatten as Fed policy remained unchanged.
The 10-year AAA general obligation bond ended with a 4.66% yield on November 30,
1997. The sharp drop in Treasury yields may encourage municipalities to refund
existing debt and save interest expense, thus increasing the value of
non-callable bonds.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
The long-term fundamentals for the fixed income markets remain sound. There is a
near-term risk that investment flows into bonds could dry up if the Asian crisis
is resolved quickly. Should this happen, interest rates in the short-term could
rise.
We believe that this environment of slower growth and contained inflation will
give support to the fixed income markets in the year ahead, though some
turbulence could remain. We look for interest rates to stay within a broad
trading range.
MATURITY DISTRIBUTION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
0-3 YEARS 6%
7-10 YEARS 13%
10-15 YEARS 31%
15-20 YEARS 21%
20-25 YEARS 20%
25+ YEARS 9%
11
<PAGE>
CRESTFUNDS, INC.: VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds Virginia Municipal Bond Fund,
Trust Class, versus the Lehman Brothers General Obligation Bond Index
[LINE GRAPH OMITTED]
CrestFunds Virginia Lehman Brothers
Municipal Bond General Obligation
Fund, Trust Class Bond Index
4/30/95 1,000,000 1,000,000
11/95 1,082,859 1,081,567
11/96 1,120,542 1,146,570
11/97 1,192,929 1,224,995
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
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 fees, would
have grown to $1,192,929 by November 30, 1997. Over the same period, a $1
million investment in Lehman Brothers General Obligation Bond Index would have
grown to $1,224,995.
INVESTORS CLASS B
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Virginia Municipal Bond Fund,
Investor B Class, versus the Lehman Brothers General Obligation Bond Index
[LINE GRAPH OMITTED]
CrestFunds Virginia Lehman Brothers
Municipal Bond Fund, General Obligation
Investor B Class Bond Index
4/30/95 10,000 10,000
11/95 10,793 10,816
11/96 11,072 11,466
11/97 11,389 12,250
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 Virginia
Municipal 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 $11,389 by
November 30, 1997. Over the same period, a $10,000 investment in Lehman Brothers
General Obligation Bond Index would have grown to $12,250.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 6.46% 0.58% 5.58%
LIFE OF FUND 6.63% 4.53% 5.58%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 6.46% 0.58% 5.58%
LIFE OF FUND 18.60% 12.36% 15.36%
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Fund figures are
from commencement of operations per class 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.
12
<PAGE>
CRESTFUNDS, INC.: MARYLAND MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Maryland Municipal Bond Fund seeks to provide a high level of current income
exempt from federal and Maryland income tax in a manner consistent with the
preservation of capital by investing in Municipal Bonds of investment grade
quality. There are no limits on the dollar-weighted average portfolio maturity
of the Fund.
YEAR IN REVIEW
Disciplined analysis of security issuance and flows, duration weighting, as well
as a generally firming bond market helped the Maryland Municipal Bond Fund
achieve a 6.50% return (Trust Class) for its shareholders over the twelve months
ended November, 1997. Interest rates remained in a narrow trading range for much
of the year, before closing the year with a strong rally related to the Asian
financial crisis.
The dominant concern in the fixed-income markets for much of the year was that
strong economic growth would inevitably push inflation higher and precipitate a
restrictive policy from the Federal Reserve. This restrictive policy move would
likely be a preemptive strike against inflation through several hikes in the
overnight Fed Funds rate. The yield on the 10-year AAA general obligation bond
rose from 4.75% early in year up to a high of 5.20% by April, 1997, following
the quarter-percent tightening by the Fed.
However, by the second quarter, the inflation reports were still very low,
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for bonds. With the Federal Reserve
taking a "wait-and-see" attitude on the economy and inflation, long-term yields
began to fall, and the yield curve flattened significantly. In this environment,
longer-term duration bonds provided the greatest returns. Average portfolio
duration for the Fund was neutral to long to the benchmark.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and money pouring into the safety of U.S. Treasury
notes. The yield curve continued to flatten as Fed policy remained unchanged.
The 10-year AAA general obligation bond ended with a 4.66% yield on November 30,
1997. The sharp drop in Treasury yields may encourage municipalities to refund
existing debt and save interest expense, increasing the value of non-callable
bonds.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
The long-term fundamentals for the fixed income markets remain sound. There is a
near-term risk that investment flows into bonds could dry up if the Asian crisis
is resolved quickly. Should this happen, interest rates in the short-term could
rise.
We believe that this environment of slower growth and contained inflation will
give support to the fixed income markets in the year ahead, though some
turbulence could remain. We look for interest rates to stay within a broad
trading range.
MATURITY DISTRIBUTION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
0-3 YEARS 18%
3-5 YEARS 3%
5-7 YEARS 4%
7-10 YEARS 16%
10-15 YEARS 10%
15-20 YEARS 31%
20-25 YEARS 11%
20+ YEARS 7%
13
<PAGE>
CRESTFUNDS, INC.: MARYLAND MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds Maryland Municipal Bond Fund,
Trust Class, versus the Lehman Brothers General Obligation Bond Index
[LINE GRAPH OMITTED]
CrestFunds Maryland Lehman Brothers
Municipal Bond General Obligation
Fund, Trust Class Bond Index
3/31/96 1,000,000 1,000,000
11/96 1,041,103 1,058,215
11/97 1,108,775 1,130,597
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
A hypothetical $1 million investment in Trust Class shares of the Maryland
Municipal Bond Fund, at the Fund's commencement of operations March 1, 1996,
including the effect of Fund expenses but excluding account level fees, would
have grown to $1,108,775 by November 30, 1997. Over the same period, a $1
million investment in Lehman Brothers General Obligation Bond Index would have
grown to $1,130,597.
INVESTORS CLASS B
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Maryland Municipal Bond Fund,
Investor B Class, versus the Lehman Brothers General Obligation Bond Index
[LINE GRAPH OMITTED]
CrestFunds Maryland Lehman Brothers
Municipal Bond General Obligation
Fund, Investor B Class Bond Index
4/30/96 10,000 10,000
11/96 10,459 10,619
11/97 10,749 11,346
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 Maryland
Municipal Bond Fund on the day that class commenced operations April 25, 1996,
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 $10,749 by
November 30, 1997. Over the same period, a $10,000 investment in Lehman Brothers
General Obligation Bond Index would have grown to $11,346.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 6.50% 0.64% 5.64%
LIFE OF FUND 4.14% 3.97% 6.39%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with load without load
1 YEAR 6.50% 0.64% 5.64%
LIFE OF FUND 7.35% 6.43% 10.43%
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distribution, if any. Life of Fund figures are
from commencement of operations per class 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.
14
<PAGE>
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
A disciplined equity selection process and an unprecedented third year of
healthy financial markets helped the Value Fund achieve a strong 25.1% return
(Trust Class) for its shareholders over the last twelve months. The annualized
return over the past three years was 25.6%. Large capitalization stocks led the
market for much of the year, but medium and small capitalization company stocks
also began to participate more fully in the broader market rally as the year
progressed.
The equity markets got off to a relatively slow, though positive start in 1997,
as the vibrant pace of economic growth led to first the fear, and then reality,
of an interest rate hike by the Federal Reserve. The move by Fed policy makers
was aimed at heading off a potential increase in inflation. While inflation
remained low, the increase in rates was felt in the utility, capital goods,
basic materials and communication services sectors, all of which moved lower
during the first quarter.
However, by the second quarter, the inflation reports were still very low
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for equities, technology stocks in
particular. Tandem was a strong performer in the technology sector due in large
part to its merger with Compaq. Another sector that eventually benefited from
low inflation and decline in interest rates was utilities. AT&T performed
particularly well for the Fund. In the basic materials sector, Fort Howard
showed impressive appreciation as it merged with James River to form Fort James.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and stocks with strong ties to the Far East lower.
Technology and other economically-sensitive growth related sectors were hit
hardest, though financial stocks continued to produce above-average returns.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
Financial margins could be squeezed by the rise in the dollar and the increased
competition overseas. We believe some of this risk has already been discounted
in stock prices, but will continue to impact the market in the quarter ahead.
We believe that in this environment of slower growth and increased competition,
individual equity selection is more important than ever. We believe that this
can benefit value-oriented investing. Companies that can demonstrate strategic
insight and creativity and can sustain earnings growth will prosper, while those
that falter will see their stock price punished. Our disciplined approach of
identifying companies that have solid growth prospects and are trading at
reasonable valuations should perform well.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
BASIC MATERIALS 6%
CAPITAL GOODS 6%
CONSUMER CYCLICALS 11%
CONSUMER NON-DURABLES 13%
DIVERSIFIED 4%
ENERGY 12%
FINANCE 15%
STAPLES 9%
TECHNOLOGY 14%
TRANSPORTATION 2%
UTILITIES 8%
15
<PAGE>
CRESTFUNDS, INC.: VALUE FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds Value Fund,
Trust Class, versus the Standard & Poor's 500 Composite Index
[LINE GRAPH OMITTED]
CrestFunds Value Fund, Standard & Poor's 500
Trust Class Composite Index
9/30/92 1,000,000 1,000,000
11/92 1,042,600 1,037,516
11/93 1,147,381 1,141,890
11/94 1,141,759 1,153,765
11/95 1,470,129 1,579,851
11/96 1,803,554 2,019,681
11/97 2,261,837 2,595,492
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
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 $2,261,837 by
November 30, 1997. Over the same period, a $1 million investment in Standard &
Poor's 500 Composite Index would have grown to $2,595,492.
INVESTORS CLASS A
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Value Fund,
Investor A Class, versus the Standard & Poor's 500 Composite Index
[LINE GRAPH OMITTED]
CrestFunds Value Fund, Standard & Poor's 500
Investor A Class Composite Index
5/31/93 9,550 10,000
11/93 9,642 10,401
11/94 9,599 10,508
11/95 12,355 14,389
11/96 15,151 18,394
11/97 19,002 23,639
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 $19,002 by November 30, 1997. Over the same
period, a $10,000 investment in Standard & Poor's 500 Composite Index would
have grown to $23,639.
INVESTORS CLASS B
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Value Fund,
Investor B Class, versus the Standard & Poor's 500 Composite Index
[LINE GRAPH OMITTED]
CrestFunds Value Fund, Standard & Poor's 500
Investor B Class Composite Index
4/30/95 10,000 10,000
11/95 11,423 11,946
11/96 13,914 15,272
11/97 17,042 19,626
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 $17,042 by November 30, 1997. Over
the same period, a $10,000 investment in Standard & Poor's 500 Composite Index
would have grown to $19,626.
16
<PAGE>
CRESTFUNDS, INC.: VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with back-end load without back-end load
<C> <C> <C> <C> <C> <C>
1 YEAR 25.41% 19.81% 25.42% 19.63% 24.63%
3 YEAR 25.59% 23.64% 25.56% -- --
LIFE OF FUND 17.30% 15.81% 16.99% 22.87% 23.67%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with back-end load without back-end load
1 YEAR 25.41% 19.18% 25.42% 19.63% 24.63%
3 YEAR 97.24% 69.28% 97.29% -- --
LIFE OF FUND 128.46% 95.53% 104.74% 72.77% 75.77%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Fund figures are
from commencement of operations per class 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.
17
<PAGE>
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
A disciplined equity selection process and an unprecedented third year of
healthy financial markets helped the Capital Appreciation Fund achieve a strong
23.7% return (Trust Class) for its shareholders over the last twelve months.
Large capitalization stocks led the market for much of the year, but medium and
small capitalization company stocks also began to participate more fully in the
broader market rally as the year progressed.
The equity markets got off to a relatively slow, though positive start in 1997,
as the vibrant pace of economic growth led to first the fear, and then reality,
of an interest rate hike by the Federal Reserve. The move by Fed policy makers
was aimed at heading off a potential increase in inflation. While inflation
remained low, the increase in rates was felt in the utility, capital goods,
basic materials and communication services sectors, all of which moved lower
during the first quarter.
However, by the second quarter, the inflation reports were still very low
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for equities, technology stocks in
particular. Compaq was a one of the Fund's technology holdings that performed
very well in this environment. Another sector that benefited from low inflation
and decline in interest rates was financials. Fannie Mae performed particularly
well for the Fund. In the non-durable sector, P&G showed impressive
appreciation.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and stocks with strong ties to the Far East lower.
Technology and other growth related sectors were hit hardest, though financial
stocks continued to produce above-average returns.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
Financial margins could be squeezed by the rise in the dollar and the increased
competition overseas. We believe much of this risk has already been discounted
in stock prices, and that some value has reemerged in the technology sector.
We believe that in this environment of slower growth and increased competition,
individual equity selection is more important than ever. Companies that can
demonstrate strategic insight and creativity along with steady earnings growth
will prosper, while those that falter will see their stock price punished. Our
disciplined approach of identifying companies that have solid growth prospects
and are trading at reasonable valuations should perform well in this
environment.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
BASIC MATERIALS 3%
CAPITAL GOODS 13%
CONSUMER CYCLICALS 19%
CONSUMER NON-DURABLES 22%
ENERGY 8%
FINANCE 14%
TECHNOLOGY 18%
UTILITIES 3%
18
<PAGE>
CRESTFUNDS, INC.: CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds Capital Appreciation Fund,
Trust Class, versus the Frank Russell 1000 Growth Index
[LINE GRAPH OMITTED]
CrestFunds Frank Russell
Capital Appreciation 1000
Fund, Trust Class Growth Index
1/31/93 1,000,000 1,000,000
11/93 963,643 1,023,182
11/94 1,003,345 1,051,012
11/95 1,211,439 1,457,754
11/96 1,518,902 1,841,143
11/97 1,879,033 2,329,230
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
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 $1,879,033 by November 30, 1997. Over the same period, a $1 million
investment in Frank Russell 1000 Growth Index would have grown to $2,329,230.
INVESTORS CLASS A
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Capital Appreciation Fund,
Investor A Class, versus the Frank Russell 1000 Growth Index
[LINE GRAPH OMITTED]
CrestFunds Capital Appreciation Frank Russell
Fund, Investor A Class 1000 Growth Index
5/31/93 9,550 10,000
11/93 9,512 10,265
11/94 9,863 10,544
11/95 11,906 14,625
11/96 14,923 18,471
11/97 18,475 23,368
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 $18,475 by November 30, 1997. Over the
same period, a $10,000 investment in Frank Russell Growth Index would have grown
to $23,368.
INVESTOR CLASS B
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Capital Appreciation Fund,
Investor B Class, versus the Frank Russell 1000 Growth Index
[LINE GRAPH OMITTED]
CrestFunds Capital Appreciation Frank Russell
Fund, Investor B Class 1000 Growth Index
8/31/97 10,000 10,000
11/97 10,331 10,533
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 (9/1/97),
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 $10,331 by
November 30, 1997. Over the same period, a $10,000 investment in Lehman Brothers
Government Bond Index would have grown to $10,533.
19
<PAGE>
CRESTFUNDS, INC.: CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with load without load
<C> <C> <C> <C> <C> <C>
1 YEAR 23.71% 18.26% 23.80% 1.30%* 6.30%*
3 YEAR 23.26% 21.38% 23.27% -- --
LIFE OF FUND 14.18% 15.31% 16.47% 5.18% 27.07%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with load without load
1 YEAR 23.71% 18.26% 23.80% 1.30%* 6.30%*
3 YEAR 89.33% 65.39% 89.74% -- --
LIFE OF FUND 91.10% 91.69% 100.63% 1.30% 6.30%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Fund figures are
from commencement of operations per class to the period ended listed above. The
Frank 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.
*These numbers represent a three month total return.
20
<PAGE>
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 disciplined equity selection process and an unprecedented third year of
healthy financial markets helped the Special Equity Fund achieve a strong 23.3%
return (Trust Class) for its shareholders over the last twelve months. The
annualized return over the past three years was 19.9%. Large capitalization
stocks generally led the broad market for much of the year, but medium and small
capitalization company stocks also began to participate more fully in the
broader market rally as the year progressed. This is reflected in the
performance of the Fund.
The equity markets got off to a relatively slow, though positive start in 1997,
as the vibrant pace of economic growth led to first the fear, and then reality,
of an interest rate hike by the Federal Reserve. The move by Fed policy makers
was aimed at heading off a potential increase in inflation. While inflation
remained low, the increase in rates was felt in the utility, capital goods,
basic materials and communication services sectors, all of which moved lower
during the first quarter.
However, by the second quarter, the inflation reports were still very low
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for equities, and technology stocks
in particular, though volatility was very high. Storage Technology and KLA
Tencor Corp. were strong performers for the Fund. Another sector that benefited
from low inflation and decline in interest rates was financials. Here, South
Trust performed very well. In the capital goods sector, Encore Wire Corp. was an
important contributor to overall Fund returns.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and stocks with strong ties to the Far East lower.
Technology and other growth related sectors were hit hardest, though financial
stocks continued to produce above-average returns.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
Financial margins could be squeezed by the rise in the dollar and the increased
competition overseas. We believe much of this risk has already been discounted
in stock prices, and that some value has reemerged in the technology sector.
We believe that in this environment of slower growth and increased competition,
individual equity selection is more important than ever. We believe that this
can benefit small and mid cap stocks. Companies that can demonstrate strategic
insight and creativity along with steady earnings growth will prosper, while
those that falter will see their stock price punished. Our disciplined approach
of identifying companies that have solid growth prospects and are trading at
reasonable valuations should perform well.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
BASIC MATERIALS 5%
CAPITAL GOODS 18%
CONSUMER CYCLICALS 18%
CONSUMER NON-DURABLES 11%
ENERGY 10%
FINANCE 15%
TECHNOLOGY 20%
UTILITIES 3%
21
<PAGE>
CRESTFUNDS, INC.: SPECIAL EQUITY FUND
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $1,000,000
Investment in the CrestFunds Special Equity Fund,
Trust Class, versus the Frank Russell 2000 Growth Index
and the Value Line Index (Price Return)
[LINE GRAPH OMITTED]
CrestFunds Frank Russell
Special Equity 2000 Growth Value Line
Fund, Trust Class Index Index
9/30/92 1,000,000 1,000,000 1,000,000
11/92 1,110,106 1,138,235 1,054,329
11/93 1,266,298 1,275,392 1,161,027
11/94 1,206,276 1,263,658 1,112,148
11/95 1,448,375 1,658,046 1,331,574
11/96 1,686,488 1,849,550 1,523,720
11/97 2,079,103 2,128,463 1,947,772
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
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
$2,079,103 by November 30, 1997. Over the same period, a $1 million investment
in Value Line Index and Frank Russell 2000 Growth Index would have grown to
$1,947,772 and $2,128,463, respectively.
INVESTORS CLASS A
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Special Equity Fund,
Investor A Class, versus the Frank Russell 2000 Growth Index,
and the Value Line Index (Price Return)
[LINE GRAPH OMITTED]
CrestFunds Special Frank Russell
Equity Fund, 2000 Value Line
Investor A Class Growth Index Index
5/31/93 9,550 10,000 10,000
11/93 10,175 10,819 10,225
11/94 9,691 10,720 9,794
11/95 11,635 14,065 11,726
11/96 13,536 15,690 13,419
11/97 16,701 18,056 17,153
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 $16,701 by November 30, 1997. Over the
same period, a $10,000 investment in Value Line Index and Frank Russell 2000
Growth Index would have grown to $17,153 and 18,056, respectively.
INVESTORS CLASS B
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Special Equity Fund,
Investor B Class, versus the Frank Russell 2000 Growth Index,
and the Value Line Index
[LINE GRAPH OMITTED]
CrestFunds Special Frank Russell Value
Equity Fund, 2000 Line Index
Investor B Class Growth Index (Price Return)
4/30/95 10,000 10,000 10,000
11/95 11,128 11,972 11,038
11/96 12,850 13,355 12,631
11/97 15,405 15,369 16,146
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 (5/5/93), 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 $15,404 by November 30,
1997. Over the same period, a $10,000 investment in Value Line Index and Frank
Russell 2000 Growth Index would have grown to $16,146 and $15,369, respectively.
22
<PAGE>
CRESTFUNDS, INC.: SPECIAL EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with back-end load without back-end load
<C> <C> <C> <C> <C> <C>
1 YEAR 23.28% 17.79% 23.38% 17.22% 22.22%
3 YEAR 19.90% 18.06% 19.89% -- --
LIFE OF FUND 15.35% 12.09% 13.23% 18.88% 19.72%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with back-end load without back-end load
1 YEAR 23.28% 17.79% 23.38% 17.22% 22.22%
3 YEAR 87.36% 63.43% 87.82% -- --
LIFE OF FUND 109.57% 68.55% 76.50% 58.19% 61.19%
</TABLE>
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Fund figures are
from commencement of operations per class 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 2000 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.
23
<PAGE>
CRESTFUNDS, INC.: LIFE VISION MAXIMUM GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Life Vision Maximum Growth Portfolio seeks to provide a high level of
capital appreciation, without regard to current income. Under normal market
conditions, at least 80% of the Portfolio's total assets will be invested in
shares of underlying CrestFunds that invest primarily in equity securities that
seek capital appreciation.
YEAR IN REVIEW
A disciplined equity selection process and an unprecedented third year of
healthy financial markets helped the Maximum Growth Portfolio achieve a strong
6.82% return for its shareholders since its inception in June 1997. The
synthetic performance annualized return over the past three years was 21.3%*.
Large capitalization stocks led the market for much of the year, but medium and
small capitalization company stocks also began to participate more fully in the
broader market rally as the year progressed.
The equity markets got off to a relatively slow, though positive start in 1997
as the vibrant pace of economic growth led to first the fear, and then reality,
of an interest rate hike by the Federal Reserve. The move by Fed policy makers
was aimed at heading off a potential increase in inflation. While inflation
remained low, the increase in rates was felt in the utility, capital goods,
basic materials and communication services sectors, all of which moved lower
during the first quarter.
However, by the second quarter, the inflation reports were still very low
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for equities, and technology stocks
in particular. Financial stocks were the high performance sector for the year.
Another sector that eventually benefited in the fourth quarter from low
inflation and decline in interest rates was utilities.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and stocks with strong ties to the Far East lower.
Technology and other economically-sensitive growth related sectors were hit
hardest, though financial stocks continued to produce above-average returns.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
Financial margins could be squeezed by the rise in the dollar and the increased
competition overseas. We believe much of this risk has already been discounted
in stock prices, and that some value has reemerged in the technology sector.
We believe that in this environment of slower growth and increased competition,
individual equity selection is more important than ever. Companies that can
demonstrate strategic insight and creativity along with steady earnings growth
will prosper, while those that falter will see their stock price punished. Our
disciplined approach of identifying companies that have solid growth prospects
and are trading at reasonable valuations should perform well.
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
CAPITAL APPRECIATION 30%
SPECIAL EQUITY 24%
VALUE FUND 41%
CASH RESERVE 5%
* Performance is inclusive of historic returns of Life Vision predecessor asset
allocation model. The performance quoted represents past performance of
Crestar Bank's asset allocation program, adjusted for fees and expenses for
periods prior to June 30, 1997, and past performance of the Trust Shares for
the period after the Portfolio's inception on June 30, 1997. The asset
allocation program was not registered under the 1940 Act, and therefore was
not subject to certain investment restrictions which may have adversely
affected performance.
24
<PAGE>
CRESTFUNDS, INC.: LIFE VISION MAXIMUM GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Maximum Growth Portfolio,
versus a 60/30/10 Blend of the Following Indices: the S&P 500 Index,
the Russell 2000 Index, and the Salomon 3-Month T-Bill
[LINE GRAPH OMITTED]
CrestFunds Maximum Growth Portfolio 60/30/10 Blend of the Above Indices
12/92 10,000 10,000
11/93 10,929 11,002
11/94 10,679 11,078
11/95 13,215 14,543
11/96 15,804 17,770
11/97 19,075 22,151
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
A hypothetical $10,000 investment in Trust Class shares of the Life Vision
Maximum Growth Portfolio, (which commenced June 30, 1997) and the corresponding
Crestar asset allocation model, adjusted for fees and expenses for periods prior
to June 30, 1997, including the effect of Portfolio expenses but excluding
account level fees, would have grown to $19,075 by November 30, 1997. Over the
same period, a $10,000 investment in the blend of indices would have grown to
$22,151. The asset allocation model referred to above was not registered under
the 1940 Act, and therefore was not subject to certain investment restrictions
which may have adversely affected performance.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS
-----------
1 YEAR 20.70%
3 YEAR 21.33%
LIFE OF PORTFOLIO 14.04%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS
-----------
1 YEAR 20.70%
3 YEAR 75.84%
LIFE OF PORTFOLIO 90.74%
The performance quoted represents past performance of Crestar Bank's asset
allocation program, adjusted for fees and expenses for periods prior to June 30,
1997, and past performance of the Trust Shares for the period after the
Portfolio's inception on June 30, 1997. The asset allocation program was not
registered under the 1940 Act, and therefore was not subject to certain
investment restrictions which may have adversely affected performance.
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Portfolio figures
are from commencement of operations per class to the period ended listed above.
The S&P 500 Index(R) is an unmanaged index of common stocks. The Russell 2000
Index(R) is an unmanaged index based on total market capitalization. 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.
25
<PAGE>
CRESTFUNDS, INC.: LIFE VISION GROWTH AND INCOME PORTFOLIO
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Life Vision Growth and Income Portfolio seeks to provide long-term capital
appreciation, with current income as a secondary objective. Under normal market
conditions, at least 80% of the Portfolio's total assets will be invested in
shares of underlying CrestFunds that invest primarily in either equity
securities that seek capital appreciation, or invest primarily in fixed-income
securities that seek income.
YEAR IN REVIEW
A disciplined asset selection process and an unprecedented third year of healthy
financial markets helped the Growth and Income Portfolio achieve a strong 5.97%
return for its shareholders since its inception in June 1997. The synthetic
performance annualized return over the past three years was 17.45%*. Large
capitalization stocks led the market for much of the year, but medium and small
capitalization company stocks also began to participate more fully in the
broader market rally as the year progressed. Interest rates remained in a broad
trading range for much of the year, before closing the year with a strong rally
related to the Asian financial crisis.
The equity markets got off to a relatively slow, though positive start in 1997
as the vibrant pace of economic growth led to first the fear, and then reality
of an interest rate hike by the Federal Reserve. The move by Fed policy makers
was aimed at heading off a potential increase in inflation. While inflation
remained low, the increase in rates was felt in the utility, capital goods,
basic materials and communication services sectors, all of which moved lower
during the first quarter.
However, by the second quarter, the inflation reports were still very low
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for equities, and technology stocks
in particular. Financial stocks were the high performance sector for the year.
Another sector that eventually benefited in the fourth quarter from low
inflation and decline in interest rates was utilities.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and stocks with strong ties to the Far East lower.
Technology and other economically-sensitive growth related sectors were hit
hardest, though financial stocks continued to produce above-average returns. The
fixed income markets benefited from a "flight to quality", and yields fell
sharply.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
Financial margins could be squeezed by the rise in the dollar and the increased
competition overseas. We believe much of this risk has already been discounted
in stock prices, and that some value has re-emerged in the technology sector.
We believe that in this environment of slower growth and contained inflation
will give support to the fixed income markets in the year ahead, though some
turbulence could remain. We look for interest rates to stay within a broad
trading range and for corporate quality spreads to stabilize in the months
ahead. If these forces materialize, we will adjust selector allocation to
maximize returns in the Portfolio. For stocks, individual equity selection is
more important than ever. Companies that can demonstrate strategic insight and
creativity along with steady earnings growth will prosper, while those that
falter will see their stock price punished. Our disciplined approach of
identifying companies that have solid growth prospects and are trading at
reasonable valuations should perform well.
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
CASH RESERVE 5%
CAPITAL APPRECIATION 20%
SPECIAL EQUITY 20%
VALUE FUND 30%
GOVERNMENT BOND 5%
INTERMEDIATE BOND 10%
LIMITED TERM BOND 10%
* Performance is inclusive of historic returns of Life Vision predecessor asset
allocation model. The performance quoted represents past performance of
Crestar Bank's asset allocation program, adjusted for fees and expenses for
periods prior to June 30, 1997, and past performance of the Trust Shares for
the period after the Portfolio's inception on June 30, 1997. The asset
allocation program was not registered under the 1940 Act, and therefore was
not subject to certain investment restrictions which may have adversely
affected performance.
26
<PAGE>
CRESTFUNDS, INC.: LIFE VISION GROWTH AND INCOME PORTFOLIO
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Growth & Income Portfolio,
versus a 50/25/20/5 Blend of the Following Indices: the S&P 500 Index,
Lehman Aggregate Bond Index, Russell 2000 Index,
and the Salomon 3-Month T-Bill
[LINE GRAPH OMITTED]
CrestFunds Growth & 50/25/20/5 Blend of
Income Portfolio the Above Indices
12/92 10,000 10,000
11/93 10,808 10,983
11/94 10,566 10,954
11/95 12,828 14,115
11/96 14,735 16,797
11/97 17,120 20,340
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
A hypothetical $10,000 investment in Trust Class shares of the Life Vision
Growth and Income Portfolio, (which commenced June 30, 1997) and the
corresponding Crestar asset allocation model, adjusted for fees and expenses for
periods prior to June 30, 1997, including the effect of Portfolio expenses but
excluding account level fees, would have grown to $17,120 by November 30, 1997.
Over the same period, a $10,000 investment in the blend of indices would have
grown to $20,340. The asset allocation model referred to above was not
registered under the 1940 Act, and therefore was not subject to certain
investment restrictions which may have adversely affected performance.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS
-----------
1 YEAR 16.19%
3 YEAR 17.45%
LIFE OF PORTFOLIO 11.56%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
--------------------------------------
TRUST CLASS
-----------
1 YEAR 16.19%
3 YEAR 56.86%
LIFE OF PORTFOLIO 71.19%
The performance quoted represents past performance of Crestar Bank's asset
allocation program, adjusted for fees and expenses for periods prior to June 30,
1997, and past performance of the Trust Shares for the period after the
Portfolio's inception on June 30, 1997. The asset allocation program was not
registered under the 1940 Act, and therefore was not subject to certain
investment restrictions which may have adversely affected performance.
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Portfolio figures
are from commencement of operations per class to the period ended listed above.
The S&P 500 Index(R) is an unmanaged index of common stocks. The Russell 2000
Index(R) is an unmanaged index based on total market capitalization. The Lehman
Aggregate Bond Index, an unmanaged index, measures performance of the Lehman
Government/Corporate Index and the Mortgage-Backed Securities Index and includes
treasury issues, agency issues, corporate bond issues and mortgage backed
securities. 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.
27
<PAGE>
CRESTFUNDS, INC.: LIFE VISION BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Life Vision Balanced Portfolio seeks both capital appreciation and current
income. Under normal market conditions, the Portfolio will invest primarily in
shares of underlying CrestFunds that invest primarily in equity securities, but
at least 25% of the Portfolio's total assets will be invested in shares of
underlying CrestFunds that invest primarily in fixed-income securities.
YEAR IN REVIEW
A disciplined asset selection process and an unprecedented third year of healthy
financial markets helped the Balanced Portfolio achieve a strong 5.70% return
for its shareholders since its inception in June 1997. The synthetic performance
annualized return over the past three years was 15.61%*. Large capitalization
stocks led the market for much of the year, but medium and small capitalization
company stocks also began to participate more fully in the broader market rally
as the year progressed. Interest rates remained in a broad trading range for
much of the year, before closing the year with a strong rally related to the
Asian financial crisis.
The equity markets got off to a relatively slow, though positive start in 1997
as the vibrant pace of economic growth led to first the fear, and then reality,
of an interest rate hike by the Federal Reserve. The move by Fed policy makers
was aimed at heading off a potential increase in inflation. While inflation
remained low, the increase in rates was felt in the utility, capital goods,
basic materials and communication services sectors, all of which moved lower
during the first quarter.
However, by the second quarter, the inflation reports were still very low
reducing the need and risk of additional tightening moves by the Fed. This
helped create a more favorable environment for equities, and technology stocks
in particular. Financial stocks were the high performance sector for the year.
Another sector that eventually benefited in the fourth quarter from low
inflation and decline in interest rates was utilities.
As the fourth quarter began, the Asian financial crisis intensified, sending the
value of the dollar higher and stocks with strong ties to the Far East lower.
Technology and other economically-sensitive growth related sectors were hit
hardest, though financial stocks continued to produce above-average returns. The
fixed income markets benefited from a "flight to quality", and yields fell
sharply.
While the outlook for the economy is somewhat cloudy given the turmoil in Asia,
the economic fundamentals in the U.S. are still positive. We look for growth in
the economy to be at or near its long-term average of 2 1/2% with low inflation.
Financial margins could be squeezed by the rise in the dollar and the increased
competition overseas. We believe much of this risk has already been discounted
in stock prices, and that some value has re-emerged in the technology sector.
We believe that in this environment of slower growth and contained inflation
will give support to the fixed income markets in the year ahead, though some
turbulence could remain. We look for interest rates to stay within a broad
trading range and for corporate quality spreads to stabilize in the months
ahead. If these forces materialize, we will adjust selector allocation to
maximize returns in the Portfolio. For stocks, individual equity selection is
more important than ever. Companies that can demonstrate strategic insight and
creativity along with steady earnings growth will prosper, while those that
falter will see their stock price punished. Our disciplined approach of
identifying companies that have solid growth prospects and are trading at
reasonable valuations should perform well.
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1997
[PIE CHART OMITTED]
CAPITAL APPRECIATION 20%
SPECIAL EQUITY 14%
VALUE FUND 25%
GOVERNMENT BOND 5%
INTERMEDIATE BOND 20%
LIMITED TERM BOND 10%
CASH RESERVE 6%
* Performance is inclusive of historic returns of Life Vision predecessor asset
allocation model. The performance quoted represents past performance of
Crestar Bank's asset allocation program, adjusted for fees and expenses for
periods prior to June 30, 1997, and past performance of the Trust Shares for
the period after the Portfolio's inception on June 30, 1997. The asset
allocation program was not registered under the 1940 Act, and therefore was
not subject to certain investment restrictions which may have adversely
affected performance.
28
<PAGE>
CRESTFUNDS, INC.: LIFE VISION BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
PERFORMANCE
TRUST CLASS
Comparison of Change in the Value of a $10,000
Investment in the CrestFunds Balanced Portfolio,
versus a 40/35/20/5 Blend of the Following Indices: the S&P 500 Index,
Lehman Aggregate Bond Index, Russell 2000 Index,
and the Salomon 3-Month T-Bill
[LINE GRAPH OMITTED]
CrestFunds 40/35/20/5 Blend of
Balanced Portfolio the Above Indices
12/92 10,000 10,000
11/93 10,770 10,988
11/94 10,554 10,913
11/95 12,591 13,853
11/96 14,226 16,183
11/97 16,309 19,258
Trust Class shares are available to qualified individual or institutional
customers whose assets are managed and/or administered by Crestar Bank.
A hypothetical $10,000 investment in Trust Class shares of the Life Vision
Balanced Portfolio, (which commenced June 30, 1997) and the corresponding
Crestar asset allocation model, adjusted for fees and expenses for periods prior
to June 30, 1997, including the effect of Portfolio expenses but excluding
account level fees, would have grown to $16,309 by November 30, 1997. Over the
same period, a $10,000 investment in the blend of indices would have grown to
$19,258. The asset allocation model referred to above was not registered under
the 1940 Act, and therefore was not subject to certain investment restrictions
which may have adversely affected performance.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS
-----------
1 YEAR 14.64%
3 YEAR 15.61%
LIFE OF PORTFOLIO 10.47%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1997
---------------------------------------
TRUST CLASS
-----------
1 YEAR 14.64%
3 YEAR 50.66%
LIFE OF PORTFOLIO 63.12%
The performance quoted represents past performance of Crestar Bank's asset
allocation program, adjusted for fees and expenses for periods prior to June 30,
1997, and past performance of the Trust Shares for the period after the
Portfolio's inception on June 30, 1997. The asset allocation program was not
registered under the 1940 Act, and therefore was not subject to certain
investment restrictions which may have adversely affected performance.
Total returns are historical and include changes in share price and reinvestment
of dividends and capital gain distributions, if any. Life of Portfolio figures
are from commencement of operations per class to the period ended listed above.
The S&P 500 Index(R) is an unmanaged index of common stocks. The Russell 2000
Index(R) is an unmanaged index based on total market capitalization. The Lehman
Aggregate Bond Index, an unmanaged index, measures performance of the Lehman
Government/Corporate Index and the Mortgage-Backed Securities Index and includes
treasury issues, agency issues, corporate bond issues and mortgage backed
securities. 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.
29
<PAGE>
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,
Maryland Municipal Bond Fund, Value Fund, Capital Appreciation Fund, Special
Equity Fund, Life Vision Maximum Growth Portfolio, Life Vision Growth and Income
Portfolio and Life Vision Balanced Portfolio) as of November 30, 1997 and 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, 1997 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, 1997, 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 21, 1998
30
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
CASH RESERVE FUND
Face
Amount Value
(000) (000)
------ -------
COMMERCIAL PAPER (13.0%)
FINANCIAL SERVICES (9.5%)
General Electric Capital
5.540%, 01/08/98 ................ $20,000 $ 19,883
5.680%, 02/13/98 ................ 25,000 24,708
Goldman Sachs
5.640%, 05/08/98 ................ 25,000 24,381
Merrill Lynch
5.750%, 02/06/98 ................ 25,000 24,732
- ---------------------------------------------------------
93,704
- ---------------------------------------------------------
UTILITIES, ELECTRIC, & GAS (3.5%)
AES Shady Point
5.620%, 02/10/98 ................ 35,000 34,612
- ---------------------------------------------------------
Total Commercial Paper
(Cost $128,316) .............. 128,316
- ---------------------------------------------------------
CERTIFICATES OF DEPOSIT (21.5%)
Bank of Tokyo
5.695%, 12/11/97 ................ 15,000 15,000
5.650%, 12/19/97 ................ 25,000 25,000
Bankers Trust
5.970%, 08/28/98 ................ 25,000 24,995
5.650%, 12/01/97 (A) ........... 20,000 19,993
Barclays Bank (A)
5.620%, 12/01/97 ................ 35,000 34,998
Norinchukin Bank
5.810%, 03/18/98 ................ 25,000 25,001
5.980%, 09/18/98 ................ 20,000 20,002
Societe Generale
5.780%, 01/13/98 ................ 10,000 9,999
5.870%, 03/03/98 ................ 15,000 14,999
5.970%, 09/15/98 ................ 10,000 9,997
Wachovia Bank
6.150%, 04/27/98 ................ 12,000 11,998
- ---------------------------------------------------------
Total Certificates of Deposit
(Cost $211,982) .............. 211,982
- ---------------------------------------------------------
BANK NOTES (7.4%)
FCC National Bank (A)
5.610%, 12/01/97 ................ 40,000 39,990
First of America Bank
5.940%, 08/31/98 ................ 20,000 19,992
PNC Bank N.A. (A)
5.650%, 12/01/97 ................ 13,000 12,998
- ---------------------------------------------------------
Total Bank Notes
(Cost $72,980) ............... 72,980
- ---------------------------------------------------------
CORPORATE OBLIGATIONS (25.4%)
BANKS - NATIONAL COMMERCIAL (2.0%)
Bank of New York
6.000%, 03/24/98 ................ 20,000 19,998
- ---------------------------------------------------------
Face
Amount Value
(000) (000)
------ -------
BUSINESS CREDIT INSTITUTIONS (2.5%)
Ford Motor Credit MTN
7.125%, 12/01/97 ................ $15,000 $ 15,000
General Motors Acceptance MTN
8.375%, 01/30/98 ................ 10,000 10,040
- ---------------------------------------------------------
25,040
- ---------------------------------------------------------
COMPUTERS & SERVICES (4.7%)
IBM
5.605%, 12/23/97 (A) ............ 45,000 44,975
- ---------------------------------------------------------
FINANCIAL SERVICES (6.1%)
Associates of North America
8.800%, 08/01/98 ................ 15,000 15,259
General Motors Acceptance MTN
7.250%, 04/15/98 ................ 5,000 5,021
6.150%, 05/22/98 ................ 10,000 10,001
PHH MTN
5.690%, 02/25/98 (A) ............ 30,000 29,997
- ---------------------------------------------------------
60,278
- ---------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (1.0%)
Philip Morris
9.250%, 12/01/97 ................ 10,000 10,000
- ---------------------------------------------------------
SECURITY BROKERAGE/DEALERS (9.1%)
Bear Stearns
5.720%, 01/06/98 (A) ............ 25,000 25,000
5.670%, 01/09/98 (A) ............ 15,000 15,000
CS First Boston
5.700%, 01/03/98 (A) ............ 5,000 5,000
5.700%, 01/07/98 ................ 30,000 30,000
Merrill Lynch
5.690%, 02/18/98 (A) ............ 15,000 14,999
- ---------------------------------------------------------
89,999
- ---------------------------------------------------------
Total Corporate Obligations
(Cost $250,290) .............. 250,290
- ---------------------------------------------------------
INSURANCE FUNDING AGREEMENTS (10.2%)
General American Life
5.850%, 12/01/97 (A) ............ 50,000 50,000
Integrity Life
5.850%, 12/01/97 (A) ............ 50,000 50,000
- ---------------------------------------------------------
Total Insurance Funding Agreements
(Cost $100,000) .............. 100,000
- ---------------------------------------------------------
31
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
CASH RESERVE FUND (concluded)
Face
Amount Value
(000) (000)
------ ------
REPURCHASE AGREEMENTS (22.0%)
Deutsche Bank
5.70%, dated 11/28/97, matures
12/01/97, repurchase price
$193,800,871 (collateralized by
various FHLMC obligations, total par
value $68,165,181, 6.00%-8.50%,
09/01/03-02/01/25; various FNMA
obligations, total par value:
$115,277,874, 0.00%-8.50%,
02/13/98-11/01/97; various GNMA
obligations, total par value
$52,747,504, 6.50%-9.50%,
11/15/04-11/15/27:
total market
value: $197,583,907) .............. $193,709 $ 193,709
Merrill Lynch
5.70%, dated 11/28/97, matures
12/01/97, repurchase price
$21,992,926 (collateralized by
various GNMA obligations, total par
value $22,401,000, 5.50%-7.00%,
02/20/27-09/15/27: total market
value: $22,425,232) ............... 21,982 21,982
- ---------------------------------------------------------
Total Repurchase Agreements
(Cost $215,691) .............. 215,691
- ---------------------------------------------------------
Total Investments (99.5%)
(Cost $979,259) .............. 979,259
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.5%) 4,426
- ---------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 4.0 billion
shares authorized) based on
848,183,131 outstanding shares .... 848,183
Portfolio Shares of Investors Class A
($.001 par value -- .25 billion shares
authorized) based on 135,510,107
outstanding shares ................ 135,510
Portfolio Shares of Investors Class B
($.001 par value -- .25 billion shares
authorized) based on 37,909
outstanding shares ................ 38
Undistributed net investment income . 1
Accumulated net realized loss
on investments (47)
- ---------------------------------------------------------
Total Net Assets: (100.0%) $983,685
- ---------------------------------------------------------
Value
------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($848,140,157 / 848,183,131
SHARES OUTSTANDING) ................. $1.00
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS A
($135,506,689 / 135,510,107
SHARES OUTSTANDING) ................. $1.00
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS B (1)
($37,902 / 37,909 SHARES OUTSTANDING) $1.00
=========================================================
(A) Floating Rate Security--The rate reflected on the
Statement of Net Assets is the rate in effect on
November 30, 1997. 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.
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
MTN--Medium Term Note
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
U.S. TREASURY MONEY FUND
Face
Amount Value
(000) (000)
------ -------
U.S. TREASURY OBLIGATIONS (20.6%)
U.S. Treasury Bill
5.430%, 12/11/97 (A) ........... $15,000 $ 14,978
U.S. Treasury Notes
5.000%, 01/31/98 ............... 20,000 19,980
6.125%, 03/31/98 ............... 10,000 10,003
5.875%, 04/30/98 ............... 15,000 14,991
6.000%, 05/31/98 ............... 10,000 10,009
5.250%, 07/31/98 ............... 10,000 9,970
6.125%, 08/31/98 ............... 10,000 10,028
6.000%, 09/30/98 ............... 20,000 20,072
5.875%, 10/31/98 ............... 10,000 10,020
5.500%, 11/15/98 ............... 10,000 9,986
- ---------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $130,037) ............. 130,037
- ---------------------------------------------------------
REPURCHASE AGREEMENTS (79.6%)
Deutsche Bank
5.66%, dated 11/28/97, matures
12/01/97, repurchase price $29,615,414
(collateralized by U.S. Treasury Note,
par value $28,640,000, 6.625%, 05/15/07;
market value: $30,193,839) ....... 29,601 29,601
J.P. Morgan
5.66%, dated 11/28/97, matures
12/01/97, repurchase price $29,647,997
(collateralized by various U.S. Treasury
obligations, total par value $30,066,000,
0.00%-6.625%, 02/26/98-05/15/07;
total market value: $30,237,069) 29,643 29,643
Merrill Lynch
5.66%, dated 11/28/97, matures
12/01/97, repurchase price $29,030,475
(collateralized by various U.S. Treasury
obligations, total par value $22,853,000,
6.125%-13.75%, 08/31/98-08/15/25;
total market value: $29,597,316) 29,017 29,017
Morgan Stanley
5.66%, dated 11/28/97, matures
12/01/97, repurchase price
$18,537,654 (collateralized by U.S.
Treasury Note, par value $18,460,000,
6.25%, 07/31/98;
market value: $18,909,841) ....... 18,529 18,529
Prudential Bache
5.66%, dated 11/28/97, matures
12/01/97, repurchase price
$28,867,840 (collateralized by U.S.
Treasury Notes, total par value
$29,203,000, 5.875%-6.375%,
10/31/98-05/15/99; total
market value: $29,431,521) ....... 28,854 28,854
Face
Amount Value
(000) (000)
------ ------
Swiss Bank
5.66%, dated 11/28/97, matures
12/01/97, repurchase price $154,369,639
(collateralized by U.S. Treasury Notes,
total par value $154,849,000,
5.25%-5.625%, 12/31/97-10/31/99;
total market value: $157,497,147) $154,297 $154,297
Dresdner Bank
5.62%, dated 11/28/97, matures 12/01/97,
repurchase price $30,428,754
(collateralized by U.S. Treasury
Note, par value $30,535,000,
5.875, 02/28/99; market
value: $31,023,685) .............. 30,415 30,415
Greenwich Bank
5.66%, dated 11/28/97, matures
12/01/97, repurchase price $153,906,342
(collateralized by various U.S. Treasury
obligations, total par value $144,693,000,
6.125%-7.75%, 01/31/00-02/15/25;
total market value: $156,913,513) 153,834 153,834
Union Bank of Switzerland
5.66%, dated 11/28/97, matures
12/01/97, repurchase price $29,387,305
(collateralized by various U.S. Treasury
obligations, total par value $29,736,000,
0.00%-6.625%, 12/04/97-02/15/27;
total market value: $29,961,388) 29,373 29,373
- ---------------------------------------------------------
Total Repurchase Agreements
(Cost $503,563) ............. 503,563
- ---------------------------------------------------------
Total Investments (100.2%)
(Cost $633,600) ............. 633,600
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-0.2%) (1,219)
- ---------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 3.75 billion
shares authorized) based on
632,386,069 outstanding shares ... 632,386
Overdistributed net investment income (5)
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $632,381
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($632,381,332 / 632,386,069
SHARES OUTSTANDING) ............... $1.00
=========================================================
(A) The rate reflected on the Statement of Net Assets
represents the security's discount rate at purchase.
The accompanying notes are an integral part of the
financial statements.
33
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
TAX-FREE MONEY FUND
Face
Amount Value
(000) (000)
------ ------
MUNICIPAL BONDS (95.6%)
CONNECTICUT (3.4%)
Connecticut Housing Finance
Authority, AMT
4.100%, 12/04/97 (A) (B) ....... $ 8,000 $ 8,000
- ---------------------------------------------------------
DISTRICT OF COLUMBIA (4.3%)
District of Columbia, Tax and Revenue
Anticipation Note, Ser B, GO
4.500%, 09/30/98 (B) ........... 10,000 10,050
- ---------------------------------------------------------
HAWAII (1.4%)
Hawaii Housing Finance and Development
Authority, RB, AMT
4.100%, 12/04/97 (A) (B) ....... 3,255 3,255
- ---------------------------------------------------------
ILLINOIS (2.1%)
Chicago O'Hare International Airport,
RB, AMT, AMBAC
4.100%, 01/01/98 (A) ........... 5,000 5,000
- ---------------------------------------------------------
LOUISIANA (4.7%)
Pooled Louisiana State, AMT
4.200%, 12/01/97 (A) (B) ....... 10,940 10,940
- ---------------------------------------------------------
MARYLAND (4.7%)
Maryland State Department of
Transportation, RB
3.625%, 06/15/98 ............... 2,000 1,994
Montgomery County, TECP
3.800%, 02/09/98 (B) ........... 9,000 9,000
- ---------------------------------------------------------
10,994
- ---------------------------------------------------------
NEW YORK (11.2%)
New York City Water and Sewer Finance
Authority, RB, FSA
4.000%, 12/04/97 (A) ........... 9,000 9,000
New York City, GO, AMBAC
3.900%, 12/04/97 (A) ........... 9,000 9,000
New York Medical Care Facility, RB
3.950%, 12/04/97 (A) (B) ....... 8,140 8,140
- ---------------------------------------------------------
26,140
- ---------------------------------------------------------
NORTH CAROLINA (1.7%)
North Carolina Community Health Care
Facilities, Givens Estate Project, RB
3.700%, 12/01/97 (A) (B) ....... 4,000 4,000
- ---------------------------------------------------------
OKLAHOMA (1.7%)
Oklahoma Water Reserve Board,
State Loan Program, RB
3.750%, 03/02/98 (A) (B) ....... 4,000 4,000
- ---------------------------------------------------------
PENNSYLVANIA (5.3%)
Emmaus, General Authority, RB, FSA
4.100%, 12/03/97 (A) ........... 3,500 3,500
Philadelphia Airport, AMT, RB, FGIC
4.050%, 12/04/97 (A) ........... 9,000 9,000
- ---------------------------------------------------------
12,500
- ---------------------------------------------------------
Face
Amount Value
(000) (000)
------ -------
SOUTH CAROLINA (4.8%)
Florence County, McLeod Regional Medical
Center Project, Ser A, RB, FGIC
4.000%, 12/04/97 (A) ........... $ 8,200 $ 8,200
South Carolina State Public Service
Authority, Ser A, RB MBIA
6.000%, 01/01/98 ............... 3,000 3,006
- ---------------------------------------------------------
11,206
- ---------------------------------------------------------
SOUTH DAKOTA (2.1%)
Heartland Consumers Power
District, RB, FSA
4.000%, 12/04/97 (A) ........... 5,035 5,035
- ---------------------------------------------------------
TEXAS (12.0%)
Plano, TECP, MBIA
3.650%, 12/08/97 (B) ........... 9,000 9,000
San Antonio Electric and Gas, RB
4.050%, 12/04/97 (A) (B) ....... 9,000 9,000
Texas Tax and Revenue Anticipation
Note, Ser A
4.750%, 08/31/98 ............... 10,000 10,067
- ---------------------------------------------------------
28,067
- ---------------------------------------------------------
VIRGINIA (34.7%)
Chesterfield County, Industrial
Development Authority, Philip Morris
Companies Project, RB
4.100%, 12/03/97 (A) (B) ....... 5,500 5,500
Colonial Heights, Industrial Development
Authority, Philip Morris Companies
Project, RB
4.100%, 12/03/97 (A) (B) ....... 2,600 2,600
Fairfax County, Public Improvements, GO
4.000%, 12/04/97 (A) (B) ....... 3,300 3,300
Fairfax County, Public Improvements,
Ser B, GO
6.000%, 06/01/98 (B) ........... 2,410 2,434
Fredericksburg Industrial Development
Authority, Hospital Facility, RB
4.000%, 12/04/97 (A) ........... 4,495 4,495
Louisa County, Industrial Development
Authority, RB
4.050%, 12/03/97 (A) (B) ....... 4,900 4,900
Pulaski County, Industrial Development
Authority, Pulaski Furniture, RB
4.050%, 12/03/97 (A) (B) ....... 4,219 4,219
Richmond, Industrial Development
Authority, Philip Morris Companies
Project, RB
4.100%, 12/03/97 (A) (B) ....... 1,700 1,700
Richmond, Public Housing Authority,
Old Manchester Project, Ser A, RB
4.050%, 12/03/97 (A) (B) ....... 8,550 8,550
34
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
TAX-FREE MONEY FUND (concluded)
Face
Amount Value
(000) (000)
------ -------
Virginia Housing Development Authority,
RB, Mandatory Put 06/10/98 @ 100
3.800%, 06/10/98 (A) ........... $10,000 $ 9,997
Virginia Port Authority Facility,
AMT, RB, MBIA
4.100%, 12/04/97 (A) ........... 8,000 8,000
Virginia State College Building Authority,
Equipment Leasing Program, RB
3.850%, 02/01/98 ............... 7,710 7,709
Virginia State Transportation Board,
US Route 58 Corridor Project, RB,
Prerefunded 5/15/98 @ 102
6.800%, 05/15/98 ............... 5,000 5,160
Waynesboro, Industrial Development
Authority, Residential Care Facility, RB
3.800%, 12/01/97 (A) (B) ....... 4,200 4,200
York County, Industrial Development
Authority, Philip Morris Companies
Project, RB
3.950%, 12/03/97 (A) (B) ....... 2,700 2,700
York County, TECP, VEPCO
3.900%, 03/09/98 (B) ........... 6,000 6,000
- ---------------------------------------------------------
81,464
- ---------------------------------------------------------
WASHINGTON (1.5%)
Seattle, Sewer Authority, RB,
Prerefunded 01/01/98 @ 102 AMBAC
7.375%, 01/01/98 ............... 2,000 2,046
Tacoma, Electric System, RB,
Prerefunded 01/01/98 @ 102 AMBAC
8.000%, 01/01/98 ............... 1,440 1,474
- ---------------------------------------------------------
3,520
- ---------------------------------------------------------
Total Municipal Bonds
(Cost $224,171) ............. 224,171
- ---------------------------------------------------------
CASH EQUIVALENTS (3.8%)
Financial Square Tax Free Portfolio 6,642 6,642
SEI Institutional Tax Free Portfolio 2,147 2,147
- ---------------------------------------------------------
Total Cash Equivalents
(Cost $8,789) ............... 8,789
- ---------------------------------------------------------
Total Investments (99.4%)
(Cost $232,960) ............. 232,960
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.6%) 1,511
- ---------------------------------------------------------
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .9 billion
shares authorized) based on
226,844,447 outstanding shares ... $226,844
Portfolio Shares of Investors Class A
($.001 par value -- .1 billion shares
authorized) based on 7,633,972
outstanding shares ............... 7,634
Overdistributed net investment income (8)
Accumulated net realized gain on investments 1
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $234,471
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($226,837,323 / 226,844,447
SHARES OUTSTANDING) ................ $1.00
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS A
($7,633,691 / 7,633,972
SHARES OUTSTANDING) ................ $1.00
=========================================================
(A) Floating Rate Security--The rate reflected on the
Statement of Net Assets is the rate in effect on
November 30, 1997. 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 Corporation
AMT--Alternative Minimum Tax
FGIC--Financial Guaranty Investors Assurance
FSA--Financial Securities Assurance, Inc.
GO--General Obligation
MBIA--Municipal Bond Insurance Association
RB--Revenue Bond
Ser--Series
TECP--Tax Exempt Commercial Paper
VEPCO--Virginia Electric & Power Company
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
LIMITED TERM BOND FUND
Face Market
Amount Value
(000) (000)
------ -------
U.S. TREASURY OBLIGATIONS (4.1%)
U.S. Treasury Note
8.000%, 05/15/01 ............... $3,000 $ 3,199
- ---------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $3,201) ............... 3,199
- ---------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (16.1%)
FFCB
6.470%, 03/20/02 ............... 2,500 2,485
FFCB MTN
7.125%, 06/01/01 ............... 1,000 1,034
8.600%, 05/30/06 ............... 1,000 1,074
FHLB
5.870%, 06/26/98 ............... 2,000 2,002
FHLMC
5.980%, 12/08/05 ............... 1,000 990
FNMA MTN
6.610%, 03/24/99 ............... 1,750 1,767
6.310%, 11/02/00 ............... 500 500
6.250%, 01/14/04 ............... 1,000 987
6.770%, 09/01/05 ............... 1,750 1,815
- ---------------------------------------------------------
Total U.S. Government Agency Obligations
(Cost $12,615) .............. 12,654
- ---------------------------------------------------------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (21.1%)
FHLMC Pool E00412
7.000%, 01/01/11 ............... 1,832 1,853
FHLMC Pool G10664
7.000%, 02/01/12 ............... 4,893 4,950
FHLMC REMIC 1933AE
7.000%, 03/15/25 ............... 2,800 2,817
FNMA ARM Pool 305168
7.802%, 12/01/97 (A) ........... 901 938
FNMA Pool 250820
7.000%, 01/01/27 ............... 2,601 2,606
FNMA Pool 356039
6.500%, 08/01/03 ............... 2,955 2,957
FNMA REMIC 92-199A
5.250%, 11/25/99 ............... 489 485
GNMA Pool 207206
9.750%, 03/15/99 ............... 10 12
- ---------------------------------------------------------
Total U.S. Agency Mortgage-Backed Obligations
(Cost $16,392) .............. 16,618
- ---------------------------------------------------------
CORPORATE OBLIGATIONS (42.1%)
AGRICULTURE (2.5%)
Alcan Aluminum
5.875%, 04/01/00 ............... 2,000 1,987
- ---------------------------------------------------------
BANKS (7.0%)
Capital One Bank MTN
6.830%, 05/17/99 ............... 2,000 2,007
Korea Development Bank
7.900%, 02/01/02 ............... 1,500 1,464
Face Market
Amount Value
(000) (000)
------ -------
Popular North America
6.625%, 10/27/02 ............... $2,000 $ 2,007
- ---------------------------------------------------------
5,478
- ---------------------------------------------------------
BUSINESS CREDIT INSTITUTIONS (4.5%)
General Motors Acceptance
7.750%, 01/15/99 ............... 1,500 1,526
USL Capital
6.500%, 12/01/03 ............... 2,000 2,015
- ---------------------------------------------------------
3,541
- ---------------------------------------------------------
COMMUNICATIONS EQUIPMENT (3.3%)
US Cellular, Callable 08/15/04 @ 100
7.250%, 08/15/07 ............... 2,525 2,569
- ---------------------------------------------------------
ELECTRICAL SERVICES (2.9%)
Detroit Edison
6.400%, 10/01/98 ............... 975 975
Ohio Edison
6.875%, 09/15/99 ............... 1,300 1,308
- ---------------------------------------------------------
2,283
- ---------------------------------------------------------
FINANCIAL SERVICES (6.5%)
Green Tree Financial
6.500%, 09/26/02 ............... 2,000 2,003
Macsaver Financial Services
7.875%, 08/01/03 ............... 3,000 3,083
- ---------------------------------------------------------
5,086
- ---------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (2.5%)
Philip Morris
6.375%, 01/15/98 ............... 2,000 2,000
- ---------------------------------------------------------
MISCELLANEOUS MANUFACTURING (2.7%)
Penn Central
9.750%, 08/01/99 ............... 2,000 2,090
- ---------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (2.6%)
United Dominion Realty
7.250%, 01/15/07 ............... 2,000 2,080
- ---------------------------------------------------------
SECURITY BROKERAGE/DEALERS (7.6%)
Jefferies Group
8.875%, 05/01/04 ............... 2,000 2,130
Salomon Brothers
7.125%, 08/01/99 ............... 1,300 1,318
Smith Barney MTN
6.625%, 07/01/02 ............... 2,500 2,519
- ---------------------------------------------------------
5,967
- ---------------------------------------------------------
Total Corporate Obligations
(Cost $32,809) .............. 33,081
- ---------------------------------------------------------
36
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
LIMITED TERM BOND FUND (concluded)
Face Market
Amount Value
(000) (000)
------ -------
ASSET BACKED SECURITIES (12.7%)
AUTOMOTIVE (1.6%)
Chase Manhattan Grantor Trust,
Ser 1995-B
5.900%, 11/15/01 ............... $ 637 $ 636
Ford Credit Auto Owner Trust,
Ser 1996-A A2
6.300%, 12/15/98 ............... 435 441
Premier Auto Trust, Ser 1993-5 A2
4.220%, 03/02/99 ............... 139 138
- ---------------------------------------------------------
1,215
- ---------------------------------------------------------
CREDIT CARDS (5.1%)
Advanta Credit Card Master Trust,
Ser 1995-F A1
6.050%, 08/01/03 ............... 1,000 996
American Express Master Trust,
Ser 1992-2 A
6.600%, 05/15/00 ............... 2,000 2,012
Spiegel Master Trust, Ser 1995-A
7.500%, 09/15/04 ............... 1,000 1,032
- ---------------------------------------------------------
4,040
- ---------------------------------------------------------
HOME EQUITY (5.1%)
CoreStates Home Equity Trust,
Ser 1994-1A
6.650%, 05/15/09 ............... 820 829
EQCC Home Equity Loan Trust,
Ser 1994-1 A
5.800%, 03/15/09 ............... 990 974
Equivantage, Ser 1996-1 A1
6.550%, 10/25/25 ............... 1,046 1,043
Green Tree Financial, Ser 1995-7 A2
6.150%, 11/15/26 ............... 590 591
The Money Store Home Equity Trust,
Ser 1995-A1
7.925%, 02/15/14 ............... 580 589
- ---------------------------------------------------------
4,026
- ---------------------------------------------------------
MOTOR HOMES (0.9%)
CIT RV Grantor Trust, Ser 1994-A A
4.900%, 07/15/09 ............... 712 698
- ---------------------------------------------------------
Total Asset Backed Securities
(Cost $9,913) ............... 9,979
- ---------------------------------------------------------
CASH EQUIVALENT (2.8%)
Aim Liquid Assets Portfolio ........ 2,235 2,235
- ---------------------------------------------------------
Total Cash Equivalent
(Cost $2,235) ............... 2,235
- ---------------------------------------------------------
Total Investments (98.9%)
(Cost $77,165) .............. 77,766
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (1.1%) 856
- ---------------------------------------------------------
Market
Value
(000)
-------
NET ASSETS:
Portfolio Shares of Trust Class ($.001 par
value -- 1.4 billion shares
authorized) based on
7,836,089 outstanding shares ..... $78,942
Portfolio Shares of Investors Class A
($.001 par value -- .1 billion shares
authorized) based on 93,269
outstanding shares ............... 960
Overdistributed net investment income (2)
Accumulated net realized loss
on investments ................... (1,879)
Net unrealized appreciation
on investments ................... 601
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $78,622
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($77,695,789 / 7,836,089
SHARES OUTSTANDING) ................ $9.92
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS A
($926,353 / 93,269
SHARES OUTSTANDING) ................ $9.93
- ---------------------------------------------------------
OFFERING PRICE PER SHARE -- INVESTORS CLASS A
($9.93 / 98.0%) .................... $10.13
=========================================================
(A) Floating Rate Security--The rate reflected on the
Statement of Net Assets is the rate in effect on
November 30, 1997. 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
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
Ser--Series
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
U.S. TREASURY OBLIGATIONS (23.3%)
U.S. Treasury Bonds
7.125%, 02/15/23 ............... $ 7,000 $ 7,883
6.500%, 11/15/26 ............... 5,500 5,794
U.S. Treasury Notes
8.000%, 08/15/99 ............... 3,700 3,830
8.000%, 05/15/01 ............... 2,000 2,133
7.875%, 08/15/01 ............... 1,000 1,066
7.500%, 11/15/01 ............... 2,000 2,113
6.375%, 08/15/02 ............... 2,000 2,042
7.250%, 05/15/04 ............... 5,000 5,366
7.875%, 11/15/04 ............... 10,200 11,347
7.500%, 02/15/05 ............... 26,500 28,955
- ---------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $67,747) .............. 70,529
- ---------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (8.8%)
FFCB
6.470%, 03/20/02 ............... 12,100 12,025
FFCB MTN
7.125%, 06/01/01 ............... 2,500 2,586
FHLMC
5.980%, 12/08/05 ............... 1,000 990
FNMA
8.350%, 11/10/99 ............... 1,000 1,043
6.380%, 06/25/03 ............... 5,000 4,968
FNMA MTN
6.250%, 01/14/04 ............... 3,300 3,258
International Bank Reconstruction &
Development MTN
9.100%, 06/01/99 ............... 1,500 1,569
- ---------------------------------------------------------
Total U.S. Government Agency Obligations
(Cost $26,396) .............. 26,439
- ---------------------------------------------------------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (26.3%)
FHLMC Pool E00412
7.000%, 01/01/11 ............... 1,710 1,729
FHLMC Pool G10664
7.000%, 02/01/12 ............... 12,327 12,469
FHLMC REMIC 1459 H
7.000%, 07/15/19 ............... 10,087 10,105
FHLMC REMIC 1726 B
6.750%, 11/15/04 ............... 7,000 7,115
FHLMC REMIC 1933 AE
7.000%, 03/15/25 ............... 12,000 12,075
FHLMC REMIC 1934 E
6.500%, 02/15/12 ............... 9,689 9,779
FNMA Pool 250820
7.000%, 01/01/27 ............... 10,211 10,231
FNMA Pool 356039
6.500%, 08/01/03 ............... 3,180 3,181
FNMA REMIC 1993-127 K
6.500%, 10/25/21 ............... 4,500 4,474
Face Market
Amount Value
(000) (000)
------ ------
FNMA REMIC 91-01 1G
7.000%, 01/25/21 ............... $ 1,186 $ 1,180
GNMA Pool 207206
9.750%, 03/15/99 ............... 18 19
GNMA Pool 376345
6.500%, 12/15/23 ............... 7,269 7,153
- ---------------------------------------------------------
Total U.S. Agency Mortgage-Backed Obligations
(Cost $78,046) .............. 79,510
- ---------------------------------------------------------
CORPORATE OBLIGATIONS (34.6%)
AUTOMOTIVE (2.4%)
Ford Motor
7.500%, 11/15/99 ............... 1,000 1,025
General Motors
7.000%, 06/15/03 ............... 6,000 6,157
- ---------------------------------------------------------
7,182
- ---------------------------------------------------------
BANKS - NATIONAL COMMERCIAL (3.5%)
Capital One Bank MTN
6.830%, 05/17/99 ............... 2,300 2,309
Central Fidelity
8.150%, 11/15/02 ............... 3,000 3,210
NationsBank
6.875%, 02/15/05 ............... 5,000 5,094
- ---------------------------------------------------------
10,613
- ---------------------------------------------------------
BUSINESS CREDIT INSTITUTIONS (3.4%)
Ford Motor Credit
6.750%, 05/15/05 ............... 6,000 6,082
General Motors Acceptance
8.500%, 01/01/03 ............... 1,000 1,088
General Motors Acceptance MTN
7.000%, 03/01/00 ............... 1,000 1,016
USL Capital
6.500%, 12/01/03 ............... 2,000 2,015
- ---------------------------------------------------------
10,201
- ---------------------------------------------------------
FINANCIAL SERVICES (6.2%)
Green Tree Financial
6.500%, 09/26/02 ............... 9,000 9,011
Macsaver Financial Services
7.875%, 08/01/03 ............... 9,550 9,813
- ---------------------------------------------------------
18,824
- ---------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (0.3%)
Philip Morris
7.125%, 08/15/02 ............... 1,000 1,019
- ---------------------------------------------------------
HOTELS & LODGING (0.6%)
Marriott International
7.125%, 06/01/07 ............... 1,750 1,783
- ---------------------------------------------------------
38
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND (concluded)
Face Market
Amount Value
(000) (000)
------ ------
INSURANCE (2.5%)
Hartford Life
7.100%, 06/15/07 ............... $ 7,500 $ 7,659
- ---------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (0.6%)
Occidental Petroleum
8.500%, 11/09/01 ............... 1,600 1,716
- ---------------------------------------------------------
RETAIL (1.7%)
KMart
8.125%, 12/01/06 ............... 5,000 5,063
- ---------------------------------------------------------
SECURITY BROKERAGE/DEALERS (11.8%)
Jefferies Group
8.875%, 05/01/04 ............... 7,000 7,455
Lehman Brothers
10.000%, 05/15/99 .............. 3,000 3,154
Paine Webber
7.625%, 10/15/08 ............... 7,000 7,368
Salomon Brothers
7.200%, 02/01/04 ............... 10,000 10,325
Smith Barney MTN
6.625%, 07/01/02 ............... 7,200 7,254
- ---------------------------------------------------------
35,556
- ---------------------------------------------------------
UTILITIES, ELECTRIC, & GAS (1.6%)
Gulf States Utilities
6.770%, 08/01/05 ............... 5,000 4,931
- ---------------------------------------------------------
Total Corporate Obligations
(Cost $102,314) ............. 104,547
- ---------------------------------------------------------
ASSET BACKED SECURITIES (5.0%)
American Express Master Trust,
Ser 1992-2 A
6.600%, 05/15/00 ............... 6,350 6,389
CIT RV Grantor Trust, Ser 1994-A A
4.900%, 07/15/09 ............... 481 471
EQCC Home Equity Loan Trust, Ser 1994-1 A
5.800%, 03/15/09 ............... 817 803
Ford Credit Auto Owner Trust, Ser 1996-A A2
6.300%, 12/15/98 ............... 879 890
Green Tree Financial, Ser 1995-9 A2
6.000%, 01/15/27 ............... 1,267 1,272
Green Tree Financial, Ser 1995-7 A2
6.150%, 11/15/26 ............... 1,179 1,182
Olympic Automobile Receivables Trust,
Ser 1995-D A4
6.050%, 11/15/00 ............... 3,700 3,698
The Money Store Home Equity Trust,
Ser 1995-A1
7.925%, 02/15/14 ............... 362 368
- ---------------------------------------------------------
Total Asset Backed Securities
(Cost $14,998) .............. 15,073
- ---------------------------------------------------------
Face Market
Amount Value
(000) (000)
------ ------
CASH EQUIVALENT (1.2%)
Aim Liquid Assets Portfolio ........ $ 3,491 $ 3,491
- ---------------------------------------------------------
Total Cash Equivalent
(Cost $3,491) ............... 3,491
- ---------------------------------------------------------
Total Investments (99.2%)
(Cost $292,992) ............. 299,589
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.8%) 2,488
- ---------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 1.4 billion
shares authorized) based on
30,115,872 outstanding shares .... 295,376
Portfolio Shares of Investors Class A
($.001 par value -- .1 billion shares
authorized) based on 226,592
outstanding shares ............... 2,247
Undistributed net investment income 2
Accumulated net realized loss
on investments ................... (2,145)
Net unrealized appreciation
on investments ................... 6,597
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $302,077
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($299,820,359 / 30,115,872
SHARES OUTSTANDING) ................ $9.96
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS A
($2,256,771 / 226,592 SHARES
OUTSTANDING) ....................... $9.96
- ---------------------------------------------------------
OFFERING PRICE PER SHARE -- INVESTORS CLASS A
($9.96 / 97.0%) .................... $10.27
=========================================================
FFCB--Federal Farm Credit 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.
39
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
U.S. TREASURY OBLIGATIONS (21.2%)
U.S. Treasury Bonds
8.750%, 11/15/08 ............... $ 500 $ 568
6.500%, 11/15/26 ............... 3,500 3,687
U.S. Treasury Note
8.000%, 05/15/01 ............... 3,000 3,199
- ---------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $7,141) ............... 7,454
- ---------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (1.7%)
FHLMC
5.980%, 12/08/05 ............... 350 346
FNMA MTN
6.770%, 09/01/05 ............... 250 259
- ---------------------------------------------------------
Total U.S. Government Agency Obligations
(Cost $611) ................. 605
- ---------------------------------------------------------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (42.2%)
FHLMC Pool E00412
7.000%, 01/01/11 ............... 450 455
FHLMC Pool E66605
6.500%, 03/01/12 ............... 3,320 3,310
FHLMC Pool G10664
7.000%, 02/01/12 ............... 1,505 1,523
FHLMC REMIC 1934-E
6.500%, 02/15/12 ............... 1,938 1,956
FNMA Pool 250820
7.000%, 01/01/27 ............... 1,301 1,303
FNMA Pool 356039
6.500%, 08/01/03 ............... 313 314
FNMA REMIC 1996-30 PC
7.000%, 11/25/20 ............... 4,600 4,666
GNMA Pool 352020
6.500%, 11/15/23 ............... 672 662
GNMA Pool 780429
7.500%, 09/15/26 ............... 662 678
- ---------------------------------------------------------
Total U.S. Agency Mortgage-Backed Obligations
(Cost $14,674) .............. 14,867
- ---------------------------------------------------------
CORPORATE OBLIGATIONS (25.4%)
BANKS (0.7%)
Capital One Bank MTN
6.830%, 05/17/99 ............... 250 251
- ---------------------------------------------------------
BUSINESS CREDIT INSTITUTIONS (0.7%)
General Motors Acceptance
7.750%, 01/15/99 ............... 250 254
- ---------------------------------------------------------
COMMUNICATIONS EQUIPMENT (2.9%)
US Cellular
7.250%, 08/15/07 ............... 1,000 1,017
- ---------------------------------------------------------
FINANCIAL SERVICES (5.7%)
Green Tree Financial
6.500%, 09/26/02 ............... 1,000 1,001
Face Market
Amount Value
(000) (000)
------ ------
Macsaver Financial Services
7.400%, 02/15/02 ............... $1,000 $1,008
- ---------------------------------------------------------
2,009
- ---------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (1.6%)
Philip Morris
7.625%, 05/15/02 ............... 550 572
- ---------------------------------------------------------
INSURANCE (3.2%)
Hartford Life
7.100%, 06/15/07 ............... 1,100 1,123
- ---------------------------------------------------------
SECURITY BROKERAGE/DEALERS (10.7%)
Jefferies Group
8.875%, 05/01/04 ............... 1,000 1,065
Salomon Brothers
7.200%, 02/01/04 ............... 1,375 1,420
Smith Barney MTN
6.625%, 07/01/02 ............... 1,250 1,259
- ---------------------------------------------------------
3,744
- ---------------------------------------------------------
Total Corporate Obligations
(Cost $8,782) ............... 8,970
- ---------------------------------------------------------
ASSET BACKED SECURITIES (7.3%)
AFG Receivables Trust, Ser 1997-A
6.350%, 10/31/02 ............... 844 846
EQCC Home Equity Loan Trust, Ser 1994-1 A
5.800%, 03/15/09 ............... 102 100
Green Tree Financial , Ser 1995-9 A2
6.000%, 01/15/27 ............... 380 382
Honda Auto Receivables Grantor Trust,
Ser 1995-A
6.200%, 12/15/00 ............... 218 218
Olympic Automobile Receivables Trust,
Ser 1995-D A4
6.050%, 11/15/00 ............... 825 825
The Money Store Home Equity Trust,
Ser 1995-A1
7.925%, 02/15/14 ............... 203 206
- ---------------------------------------------------------
Total Asset Backed Securities
(Cost $2,570) ............... 2,577
- ---------------------------------------------------------
REPURCHASE AGREEMENT (1.6%)
J.P. Morgan
5.70%, dated 11/28/97, matures 12/01/97,
repurchase price $551,402
(collateralized by GNMA obligation,
par value $548,118, 7.50%,
11/15/27; market value: $562,164) 551 551
- ---------------------------------------------------------
Total Repurchase Agreement
(Cost $551) ................. 551
- ---------------------------------------------------------
Total Investments (99.4%)
(Cost $34,329) .............. 35,024
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.6%) 202
- ---------------------------------------------------------
40
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND (concluded)
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .75 billion
shares authorized) based on
3,283,536 outstanding shares ..... $33,327
Portfolio Shares of Investors Class B
($.001 par value -- .125 billion shares
authorized) based on 116,784
outstanding shares ............... 1,207
Overdistributed net investment income (1)
Accumulated net realized loss
on investments ................... (2)
Net unrealized appreciation
on investments ................... 695
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $35,226
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($34,012,980 / 3,283,536
SHARES OUTSTANDING) ................ $10.36
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS B (1)
($1,213,115 / 116,784
SHARES OUTSTANDING) ................ $10.39
=========================================================
(1) Investors Class B has a contingent deferred sales
charge. For description of a possible redemption
charge, see the notes to the financial statements.
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
MTN--Medium Term Note
Ser--Series
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
MUNICIPAL BONDS (99.1%)
VIRGINIA (99.1%)
Alexandria, Industrial Development
Authority, RB
7.200%, 01/01/98 ............... $1,000 $1,002
Arlington County, Public Improvements,
GO, Callable 08/01/04 @ 102
5.750%, 08/01/08 ............... 2,500 2,700
Big Stone Gap, Redevelopment &
Housing Authority Wallens Ridge
Project, RB, Callable 09/01/05 @ 102
5.250%, 09/01/10 ............... 3,600 3,658
Chesapeake Bay, Bridge & Tunnel Authority,
RB, Prerefunded 07/01/01 @ 102 MBIA
6.375%, 07/01/22 ............... 7,000 7,621
Chesapeake, Hospital Authority,
General Hospital Project, RB,
Callable 07/01/00 @ 102
8.200%, 07/01/05 ............... 1,000 1,101
Chesapeake, Public Improvements, GO
5.800%, 08/01/02 ............... 2,000 2,130
Chesapeake, Refunding Bond, GO
5.400%, 12/01/08 ............... 2,500 2,650
Chesterfield County, Health Center
Community Project, RB,
Callable 12/01/06 @ 102
5.875%, 12/01/21 ............... 500 522
Chesterfield County, Refunding Bond, GO
5.650%, 07/15/00 ............... 3,000 3,127
Danville, School Improvements, GO,
Callable 08/01/03 @ 102 MBIA
5.400%, 08/01/08 ............... 500 522
Fairfax County, Industrial Development
Authority, Inova Health System Project,
RB, Callable 08/15/06 @ 102
5.300%, 08/15/07 ............... 1,500 1,569
Fairfax County, School Improvements,
GO, Callable 06/01/01 @ 102
5.200%, 06/01/13 ............... 5,000 5,112
Fairfax County, Sewer Authority, RB,
Callable 11/15/03 @ 102, AMBAC
5.400%, 11/15/07 ............... 2,000 2,105
5.500%, 11/15/09 ............... 3,000 3,142
Fauquier County, School Improvements,
GO, Callable 07/15/03 @ 102
5.550%, 07/15/09 ............... 800 835
Fredericksburg, Industrial Development
Authority, Hospital Facilities Project,
RB, Callable 06/15/07 @ 102 AMBAC
5.250%, 06/15/16 ............... 5,000 4,981
Hampton, Sanitation District Wastewater
Authority, RB, Callable 10/01/03 @ 102
4.900%, 10/01/06 ............... 2,000 2,042
Face Market
Amount Value
(000) (000)
------ ------
Harrisonburg, Industrial Development
Authority, Rockingham Memorial
Hospital Project, RB,
Callable 12/01/02 @ 102 MBIA
5.750%, 12/01/13 ............... $3,000 $3,082
Harrisonburg, Refunding Bond, GO
6.000%, 08/01/99 ............... 1,000 1,030
Henrico County, Industrial Development
Authority, Browning Ferris Project,
RB, Mandatory Put 12/01/05 @ 100 (A)
5.300%, 12/01/97 ............... 1,000 1,032
Henrico County, Industrial Development
Authority, Government Projects RB,
Callable 06/01/06 @ 102
5.150%, 06/01/07 ............... 2,500 2,581
Henrico County, Industrial Development
Authority, Residential and Health Care
Facility, RB, Callable 07/01/03 @ 102
6.150%, 07/01/26 ............... 2,000 2,002
Henrico County, Industrial Development
Authority, Westminister Project, RB
7.300%, 10/01/99 ............... 1,060 1,075
Henry County, Public Improvements, GO,
Callable 07/15/04 @ 102
6.000%, 07/15/14 ............... 1,000 1,056
James Madison University, RB,
Callable 06/01/03 @ 102
5.375%, 06/01/09 ............... 500 519
Loudoun County, Sanitation Authority,
RB, Callable 01/01/03 @ 102 FGIC
6.100%, 01/01/04 ............... 1,250 1,362
Loudoun County, Sanitation Authority,
RB, Callable 01/01/07 @ 102 FGIC
5.125%, 01/01/26 ............... 3,250 3,152
Loudoun County, Sanitation Authority,
RB, FGIC
5.900%, 01/01/02 ............... 1,000 1,062
Loudoun County, Ser A, GO,
Callable 08/01/07 @ 102
4.600%, 08/01/08 ............... 1,000 991
5.000%, 08/01/17 ............... 2,000 1,927
Lynchburg, Refunding Bond, GO,
Callable 04/01/03 @ 102
5.250%, 04/01/08 ............... 2,000 2,073
Newport News, Public Housing Authority,
Multi-Family Housing for
Newport-Oxford Project, RB (A)
4.000%, 12/01/97 ............... 1,300 1,300
Newport News, Public Improvements,
GO, Callable 01/15/07 @ 102
5.250%, 01/15/14 ............... 3,530 3,579
Newport News, Public Improvements,
Ser A, GO, Callable 01/15/06 @ 102
5.200%, 01/15/16 ............... 960 962
42
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
VIRGINIA (continued)
Newport News, Public Improvements,
Ser A, GO, Callable 07/01/05 @ 102 MBIA
5.500%, 07/01/12 ............... $2,500 $2,584
Newport News, Refunding Bond, GO,
Callable 07/01/99 @ 101.50
5.700%, 07/01/05 ............... 2,000 2,065
Newport News, School Improvements, Ser A,
GO, Prerefunded 11/01/00 @ 100.25
6.200%, 11/01/01 ............... 1,000 1,059
Norfolk, Industrial Development Authority,
Bon Secours Health Project, RB,
Callable 08/15/07 @ 102
5.250%, 08/15/26 ............... 4,200 4,121
Norfolk, Industrial Development Authority,
Children's Hospital Project, RB, AMBAC
6.900%, 06/01/06 ............... 1,000 1,156
Norfolk, Industrial Development Authority,
Children's Hospital Project, RB,
Callable 06/01/04 @ 102, AMBAC
5.100%, 06/01/07 ............... 1,000 1,028
Norfolk, Industrial Development Authority,
Public Health Center Project, RB,
Callable 09/15/06 @ 102
5.625%, 09/15/17 ............... 1,600 1,648
Norfolk, Industrial Development Authority,
Sentara Hospital Project, Ser A, RB,
Callable 11/01/04 @ 102
4.800%, 11/01/06 ............... 1,000 1,006
4.900%, 11/01/07 ............... 2,500 2,516
5.000%, 11/01/08 ............... 2,500 2,516
Norfolk, Redevelopment & Housing
Authority, Tidewater Community College
Project, RB, Callable 11/01/05 @ 102
5.800%, 11/01/08 ............... 700 760
Norfolk, Refunding Bond, Ser A, GO
5.100%, 02/01/00 ............... 4,000 4,080
Peninsula Ports, Hospital Authority,
Mary Immaculate Project, RB
8.000%, 08/01/99 ............... 515 536
Peninsula Ports, Industrial Development
Authority, Olde Hampton Hotel Project,
RB, Callable 01/05/98 @ 101 (A) (B)
4.875%, 07/01/99 ............... 490 491
Peumansend Creek, Regional Jail Authority,
GAN, RB, Callable 04/01/99 @ 100
4.550%, 04/01/00 ............... 5,000 5,019
Portsmouth, Public Improvements, GO,
Prerefunded 08/01/00 @ 102
6.750%, 08/01/04 ............... 1,500 1,622
Portsmouth, Refunding Bond, GO,
Callable 08/01/03 @ 102
5.450%, 08/01/07 ............... 2,000 2,103
Face Market
Amount Value
(000) (000)
------ ------
Prince William County, Park Authority, RB
5.500%, 10/15/99 ............... $ 500 $ 511
5.800%, 10/15/01 ............... 500 518
Prince William County, Park Authority, RB,
Callable 10/15/04 @ 102
6.200%, 10/15/05 ............... 500 525
Prince William County, Refunding Bond,
Ser C, GO, Callable 08/01/03 @ 102
5.000%, 08/01/07 ............... 5,000 5,144
Prince William County,
Water & Sewer Authority, RB,
Prerefunded 07/01/01 @ 102 FGIC
6.500%, 07/01/21 ............... 1,000 1,089
Richmond, Metropolitan Expressway
Authority, Ser A, RB,
Callable 07/15/02 @ 102 FGIC
5.900%, 07/15/03 ............... 1,500 1,618
Richmond, Public Improvements,
Ser A, GO
6.100%, 01/15/01 ............... 2,750 2,898
Richmond, Public Improvements,
Ser A, GO, Callable 01/15/05 @ 102
5.300%, 01/15/09 ............... 1,500 1,545
Richmond, Public Utility Authority,
Ser A, RB, Callable 01/15/98 @ 102
7.100%, 01/15/00 ............... 1,000 1,023
Richmond, Redevelopment & Housing
Authority, RB, AMT (A)
4.750%, 12/26/97 ............... 1,500 1,500
Roanoke, Industrial Development Authority,
Roanoke Memorial Hospital Project, RB
6.900%, 07/01/99 ............... 1,000 1,043
Roanoke, Industrial Development Authority,
Roanoke Memorial Hospital Project,
Ser B, RB, Callable 07/01/02 @ 102
5.900%, 07/01/06 ............... 2,500 2,659
Roanoke, Industrial Development Authority,
Roanoke Memorial Hospital Project,
Ser B, RB, Callable 07/01/02 @ 102
5.800%, 07/01/05 ............... 500 528
Roanoke, Public Improvements, GO
4.900%, 02/01/06 ............... 1,000 1,029
Roanoke, Public Improvements, GO,
Callable 02/01/06 @ 102
5.000%, 02/01/12 ............... 3,165 3,165
Roanoke, Public Improvements, GO,
Callable 01/20/98 @ 100.25
6.700%, 08/01/98 ............... 1,000 1,007
Roanoke, Public Improvements, Ser B, GO
5.800%, 08/01/00 ............... 1,000 1,044
Roanoke Valley, Waste Authority, RB
5.400%, 09/01/02 ............... 1,450 1,488
43
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
VIRGINIA (continued)
Southeastern Public Service Authority,
Ser A, RB, MBIA
5.150%, 07/01/09 ............... $3,000 $3,098
Spotsylvania County, School Improvements,
GO, Callable 07/15/02 @ 102
5.300%, 07/15/03 ............... 1,500 1,558
Suffolk, Refunding Bond, GO,
Callable 08/01/03 @ 102
5.600%, 08/01/06 ............... 2,000 2,115
5.700%, 08/01/07 ............... 2,000 2,120
Suffolk, Refunding & Improvement Bond, GO
5.200%, 08/01/02 ............... 1,500 1,554
Tazewell County, Industrial
Development Authority,
Courthouse Project, RB,
Callable 01/01/07 @ 102 MBIA
5.300%, 01/01/27 ............... 1,000 984
University of Virginia, Hospital Authority,
Ser E, RB, Callable 06/01/99 @ 100
6.000%, 06/01/13 ............... 1,000 1,024
University of Virginia, Hospital Authority,
Ser E, RB, Callable 06/01/99 @ 102
6.750%, 06/01/01 ............... 2,500 2,638
6.900%, 06/01/04 ............... 2,000 2,113
University of Virginia, Ser A, RB,
Callable 06/01/03 @ 102
5.200%, 06/01/12 ............... 1,500 1,517
Upper Occoquan, Sewer Authority, RB,
Series A, Callable 07/01/06 @ 102 MBIA
5.000%, 07/01/15 ............... 2,500 2,444
Virginia Beach, Development Authority,
Residential and Health Care Facility, RB,
Callable 07/01/07 @102
6.050%, 07/01/20 ............... 1,500 1,513
Virginia Beach, Development Authority,
Sentara Bayside Hospital Project, RB,
Callable 11/01/01 @ 102
6.300%, 11/01/21 ............... 1,750 1,851
Virginia Beach, Highway Improvements,
Ser A, GO, Callable 03/01/01 @ 102
6.400%, 03/01/03 ............... 1,000 1,079
Virginia Beach, Judicial Center Project,
Prerefunded 09/01/00 @ 102, COP, FGIC
7.000%, 09/01/01 ............... 1,500 1,637
Virginia Beach, Public Improvements,
GO, Callable 05/01/97 @ 102
6.900%, 05/01/98 ............... 1,000 1,013
Virginia Beach, Public Improvements,
Ser A, GO, Prerefunded 10/01/99 @ 102
6.900%, 10/01/03 ............... 1,000 1,069
Virginia Beach, Public Improvements,
Ser C, GO
6.100%, 08/01/00 ............... 1,000 1,050
Face Market
Amount Value
(000) (000)
------ ------
Virginia Beach, Refunding Bond, GO
5.000%, 07/15/03 ............... $1,000 $1,031
5.300%, 07/15/07 ............... 2,000 2,125
5.450%, 07/15/11 ............... 1,000 1,068
Virginia Beach, Refunding Bond, GO,
Callable 11/01/04 @ 102
5.750%, 11/01/10 ............... 3,500 3,732
Virginia Commonwealth Port Authority, RB,
Callable 07/01/98 @ 102
8.200%, 07/01/08 ............... 1,500 1,566
Virginia Commonwealth Transportation Board,
Northern Transit District, RB,
Callable 05/15/07 @ 101
5.125%, 05/15/19 ............... 2,250 2,219
Virginia Commonwealth Transportation
Board, Oak Grave Connector, Ser A, RB,
Callable 05/15/07 @ 101
5.250%, 05/15/22 ............... 2,250 2,250
Virginia Polytechnic Institute &
State University, Ser A, RB,
Callable 06/01/06 @ 102
5.350%, 06/01/09 ............... 2,000 2,080
Virginia State College Building Authority,
University of Richmond Project, RB,
Callable 11/01/02 @ 102
6.250%, 11/01/12 ............... 2,000 2,135
Virginia State College Building Authority,
University of Richmond Project, RB,
Callable 11/01/04 @ 100
5.550%, 11/01/19 ............... 6,500 6,914
Virginia State College Building Authority,
University of Richmond Project, RB,
Callable 11/01/99 @ 101
6.400%, 11/01/22 ............... 1,000 1,048
Virginia State Education Loan Authority,
RB, AMT
5.600%, 03/01/03 ............... 2,500 2,628
Virginia State Education Loan Authority,
RB, Callable 09/01/05 @ 100
5.550%, 09/01/10 ............... 1,800 1,883
Virginia State Education Loan Authority,
Ser B, RB, ETM
4.850%, 09/01/01 ............... 520 529
Virginia State Education Loan Authority,
Ser F, RB, ETM
5.250%, 03/01/00 ............... 560 573
Virginia State Housing Development Authority,
Ser B, RB, Callable 01/01/00 @ 102
7.375%, 05/01/05 ............... 1,000 1,048
Virginia State Housing Development Authority,
Ser B, RB, Callable 01/01/06 @ 102
6.350%, 01/01/15 ............... 3,000 3,210
Virginia State Housing Development Authority,
Ser C, RB, Callable 01/01/02 @ 102
5.550%, 01/01/11 ............... 3,000 3,064
44
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (concluded)
Face Market
Amount Value
(000) (000)
------ ------
VIRGINIA (continued)
Virginia State Housing Development Authority,
Ser C, RB, Callable 01/01/04 @ 102
5.700%, 05/01/05 ............... $1,000 $ 1,060
Virginia State Housing Development Authority,
Ser C, RB, Callable 07/01/02 @ 102
6.000%, 07/01/06 (C) ........... 2,000 2,085
Virginia State Housing Development Authority,
Ser I, RB, Callable 01/01/08 @ 102
5.450%, 05/01/18 ............... 2,000 2,005
Virginia State Public Building Authority,
Ser A, RB
6.000%, 08/01/06 ............... 6,000 6,585
Virginia State Public Building Authority,
Ser B, RB
5.600%, 08/01/01 ............... 4,000 4,190
Virginia State Public School Authority, RB
5.000%, 01/01/04 ............... 2,000 2,050
Virginia State Public School Authority, RB,
Callable 01/01/02 @ 102
6.250%, 01/01/08 ............... 2,000 2,143
Virginia State Public School Authority,
Ser B, RB, Callable 01/01/00 @ 102
5.850%, 01/01/02 ............... 1,500 1,571
Virginia State Public School Authority,
Ser B, RB, Callable 01/01/03 @ 102
5.600%, 01/01/05 ............... 1,880 1,990
Virginia State Public School Authority,
Ser C, RB, Callable 01/01/04 @ 102
4.875%, 01/01/09 ............... 1,000 999
Virginia State Refunding Bond, GO
5.600%, 06/01/02 ............... 4,750 5,023
Virginia State Transportation Bord Contract,
US Route 58 Corridor Development Program,
RB, Prerefunded 05/15/1998 @ 102
6.000%, 05/15/19 ............... 1,250 1,287
Virginia State University, Medical College
Project, Ser D, RB
3.900%, 07/01/99 ............... 2,000 1,995
Virginia State University, Ser A, RB,
Callable 05/01/06 @ 102
5.625%, 05/01/16 ............... 2,500 2,581
Winchester, Public Improvements, GO
6.050%, 03/01/00 ............... 500 521
Winchester, Refunding Bond, GO,
Callable 01/15/04 @ 102
5.400%, 01/15/08 (B) ........... 1,000 1,041
- ---------------------------------------------------------
242,854
- ---------------------------------------------------------
Total Municipal Bonds
(Cost $234,656) ............. 242,854
- ---------------------------------------------------------
Face Market
Amount Value
(000) (000)
------ ------
CASH EQUIVALENT (0.4%)
Federated Virginia Municipal Cash Trust $904 $ 904
- ---------------------------------------------------------
Total Cash Equivalent
(Cost $904) ................. 904
- ---------------------------------------------------------
Total Investments (99.5%)
(Cost $235,560) ............. 243,758
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.5%) 1,164
- ---------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .75 billion
shares authorized) based on
22,998,812 outstanding shares .... 228,035
Portfolio Shares of Investors Class A
($.001 par value -- .25 billion shares
authorized) based on 759,272
outstanding shares ............... 7,798
Undistributed net investment income 72
Accumulated net realized gain
on investments ................... 819
Net unrealized appreciation
on investments ................... 8,198
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $244,922
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($237,096,164 / 22,998,812
SHARES OUTSTANDING) ................ $10.31
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS A
($7,825,561 / 759,272
SHARES OUTSTANDING) ................ $10.31
- ---------------------------------------------------------
OFFERING PRICE PER SHARE -- INVESTORS CLASS A
($10.31 / 96.5%) ................... $10.68
=========================================================
(A) Floating Rate Security--The rate reflected on the
Statement of Net Assets is the rate in effect on
November 30, 1997. 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.
(C) Security is restricted as to resale until January 1,
1998. This security acts as collateral for unsettled
security purchases. At the end of the year, this
security amounted to .85% of net assets.
AMBAC--American Municipal Bond Assurance Corporation
AMT--Alternative Minimum Tax
COP--Certificate of Participation
ETM--Escrowed to Maturity
FGIC--Federal Guaranty Insurance Company
GO--General Obligation
MBIA--Municipal Bond Investors Assurance
RB--Revenue Bond
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VIRGINIA MUNICIPAL BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
MUNICIPAL BONDS (95.7%)
VIRGINIA (95.7%)
Albemarle County, Industrial Development
Authority, Martha Jefferson Hospital Project,
RB, Callable 10/01/03 @ 102
5.800%, 10/01/09 ............... $500 $517
Alexandria, Industrial Development Authority,
Episcopal High School Project, RB,
Callable 01/01/06 @ 102
5.300%, 01/01/11 ............... 500 511
Alexandria, Industrial Development Authority,
Potomac Electric Project, SER A, RB,
Callable 02/15/04 @ 102, MBIA
5.375%, 02/15/24 ............... 400 399
Alexandria, Redevelopment & Housing
Authority, Buckingham Village Apartments
Project, RB, Callable 01/01/06 @ 102
6.050%, 07/01/16 ............... 250 261
Arlington County, Public Improvements, GO,
Callable 06/01/05 @ 101.50
5.400%, 06/01/12 ............... 250 259
Arlington County, Virginia Industrial
Development Authority, Headquarters
Facility, Ser A, RB, Callable 07/01/07 @ 102
5.250%, 07/01/12 ............... 300 306
Capital Region Airport Community, Richmond
International Airport Project, Ser A, RB,
AMBAC, Callable 07/01/05 @ 102
5.625%, 07/01/15 ............... 500 513
Chesapeake, Refunding Bond, GO
5.250%, 12/01/06 ............... 500 524
Chesterfield County, Refunding Bond, GO,
Callable 03/01/03 @ 101.50
5.250%, 03/01/08 ............... 500 520
Fairfax County, Industrial Development
Authority, Inova Health System
Project, RB, FSA
5.250%, 08/15/19 ............... 500 502
Fairfax County, Redevelopment & Housing
Authority, Paul Spring Center Project,
Ser A, RB, Callable 12/01/06 @ 103
5.900%, 06/15/17 ............... 250 263
Fairfax County, Water Authority, RB,
Callable 04/01/07 @ 102
6.000%, 04/01/22 ............... 315 333
Fairfax County, Water Authority, RB,
Prerefunded 04/01/07 @ 102
6.000%, 04/01/22 ............... 185 205
Face Market
Amount Value
(000) (000)
------ ------
Fairfax, Redevelopment & Housing Authority,
RB, Callable 06/01/06 @ 102
5.500%, 06/01/12 ............... $ 425 $ 436
Fairfax, School & Public Improvements, GO,
Callable 06/01/03 @ 102
5.000%, 06/01/07 ............... 500 515
Frederick-Winchester, Service Authority,
Regional Sewer System Project, RB,
Callable 10/01/03 @ 102, AMBAC
5.750%, 10/01/10 ............... 150 159
Fredericksburg, Industrial Development
Authority, Hospital Facilities Project, RB,
Callable 06/15/07 @ 102, AMBAC
5.300%, 06/15/10 ............... 500 516
Hampton Roads, Sanitation District, RB,
Callable 10/01/03 @ 102
5.100%, 10/01/08 ............... 335 341
Henrico County, Industrial Development
Authority, Residential & Healthcare Facility,
RB, Callable 07/01/03 @ 102
6.100%, 07/01/20 ............... 1,000 1,001
Henrico County, Public Improvements, GO,
Callable 01/15/03 @ 102
5.200%, 01/15/07 ............... 250 260
Henry County, Industrial Development
Authority, Martinsville & Henry Hospital
Project, RB, Callable 01/01/07 @ 101
6.000%, 01/01/17 ............... 500 524
James City County, Public Improvements,
GO, Callable 12/15/05 @ 102, FGIC
5.250%, 12/15/14 ............... 250 252
Leesburg, Public Improvements, GO,
Callable 06/01/05 @ 102, AMBAC
5.400%, 06/01/10 ............... 250 260
Leesburg, Utility Systems, RB,
Callable 07/01/07 @ 102, MBIA
5.000%, 07/01/10 ............... 750 758
Loudoun County, Sanitation Authority
Water & Sewer RB, FGIC,
Callable 01/01/07 @ 102
5.125%, 01/01/26 ............... 750 728
Loudoun County, School Improvements,
GO, Callable 06/01/06 @ 102
5.600%, 06/01/10 ............... 250 265
Lynchburg, Public Improvements, GO,
Callable 05/01/06 @ 102
5.100%, 05/01/11 ............... 500 506
46
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VIRGINIA MUNICIPAL BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
VIRGINIA (continued)
Newport News, Redevelopment & Housing
Authority, RB, Callable 08/20/07 @ 102
5.850%, 12/20/30 ............... $ 500 $ 509
Norfolk, Industrial Development Authority,
Bon Secours Health Project, RB,
Callable 08/15/07 @ 102, MBIA
5.250%, 08/15/17 ............... 750 748
Norfolk, Public & Sewer Improvements,
GO, Callable 06/01/06 @ 101
5.250%, 06/01/09 ............... 500 515
Northern Virginia Transportation District,
Virginia Railway Express Project, RB,
Callable 07/01/00 @ 100, FSA
6.000%, 07/01/14 ............... 250 256
Portsmouth, Public Improvements, GO,
Callable 08/01/06 @ 101, FGIC
5.250%, 08/01/21 ............... 500 501
Richmond, Metropolitan Expressway
Authority, Ser A, RB,
Callable 07/15/02 @ 100, FGIC
5.750%, 07/15/22 ............... 250 254
Richmond, Redevelopment & Housing
Authority, Richmeade Project RB, AMT (A)
4.750%, 12/26/97 ............... 500 500
Roanoke, Public Improvements Project,
GO, Callable 08/01/04 @ 102
5.150%, 08/01/12 ............... 250 253
Spotsylvania County, Water & Sewer System,
RB, Callable 06/01/07 @ 102, MBIA
5.250%, 06/01/12 ............... 500 507
5.250%, 06/01/22 ............... 250 249
Stafford County, Water & Sewer System,
RB, Callable 06/01/03 @ 102, FGIC
5.250%, 06/01/12 ............... 250 253
Virginia Beach, Development Authority,
Residential & Healthcare Facility, RB,
Callable 07/01/07 @ 102
6.150%, 07/01/27 ............... 250 252
Virginia Beach, Refunding Bond, GO
5.450%, 07/15/11 ............... 200 214
Virginia Polytechnic Institute & State
University, RB, Callable 06/01/06 @ 102
5.500%, 06/01/16 ............... 200 204
Face Market
Amount Value
(000) (000)
------ ------
Virginia State Housing Development Authority,
Commonwealth Mortgage Project,
Ser A-4, AMT, RB,
Callable 01/01/06 @ 102, MBIA
6.350%, 07/01/18 ............... $ 150 $ 159
Virginia State Housing Development
Authority, Commonwealth Mortgage Project,
RB, Ser A, Callable 01/01/03 @ 102
6.400%, 07/01/17 ............... 1,000 1,060
Virginia State Park Authority,
Biotechnology Research Project,
RB, Callable 09/01/06 @ 101
5.250%, 09/01/18 ............... 500 503
Virginia State Public Building Authority,
RB, Callable 08/01/05 @ 101
5.200%, 08/01/16 ............... 300 299
Virginia State Public School Authority,
RB, Callable 08/01/07 @ 102
5.375%, 08/01/18 ............... 500 506
Virginia State University, Ser A, RB,
Callable 05/01/06 @ 102
5.625%, 05/01/16 ............... 1,000 1,033
West Point, Industrial Development
Authority, Chesapeake Corporation Project,
Ser B, RB, Callable 03/01/04 @ 102
6.250%, 03/01/19 ............... 165 176
- ---------------------------------------------------------
20,585
- ---------------------------------------------------------
Total Municipal Bonds
(Cost $20,010) .............. 20,585
- ---------------------------------------------------------
CASH EQUIVALENT (3.2%)
Federated Virginia Municipal Cash Trust 702 702
- ---------------------------------------------------------
Total Cash Equivalent
(Cost $702) ................. 702
- ---------------------------------------------------------
Total Investments (98.9%)
(Cost $20,712) .............. 21,287
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (1.1%) 233
- ---------------------------------------------------------
47
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VIRGINIA MUNICIPAL BOND FUND (concluded)
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .75 billion
shares authorized) based on
1,918,956 outstanding shares ..... $19,459
Portfolio Shares of Investors Class B
($.001 par value -- .125 billion
shares authorized) based on
140,814 outstanding shares ....... 1,431
Accumulated net realized gain
on investments ................... 55
Net unrealized appreciation
on investments ................... 575
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $21,520
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($20,043,983 / 1,918,956
SHARES OUTSTANDING) ................ $10.44
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS B (1)
($1,475,695 / 140,814
SHARES OUTSTANDING) ................ $10.48
=========================================================
(A) Floating Rate Security--The rate reflected on the
Statement of Net Assets is the rate in effect on
November 30, 1997. 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.
AMBAC--American Municipal Bond Assurance Corporation
AMT--Alternative Minimum Tax
FGIC--Financial Guaranty Insurance Company
FSA--Financial Securities Assurance, Inc.
GO--General Obligation
MBIA--Municipal Bond Investors Assurance
RB--Revenue Bond
Ser--Series
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
MARYLAND MUNICIPAL BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
MUNICIPAL BONDS (97.4%)
MARYLAND (94.9%)
Anne Arundel County, Public Improvements,
GO, Callable 02/01/04 @ 101.50
4.600%, 02/01/06 ............... $250 $250
Baltimore, Construction & Public
Improvements, GO,
Callable 06/01/06 @ 101
5.500%, 06/01/16 ............... 250 257
Baltimore County, Metropolitan
District Water Utility Improvements,
Ser 64, GO, Callable 08/01/03 @ 102
5.000%, 08/01/13 ............... 100 100
Baltimore County, Parking Authority, RB,
Prerefunded 07/01/99 @ 102
7.200%, 07/01/19 ............... 200 213
Baltimore County, Pension Funding, GO,
Callable 08/01/08 @ 101
5.125%, 08/01/15 ............... 500 492
Baltimore, Emergency Telecomm
Facilities, Ser A, COP,
Callable 10/01/07 @ 102 AMBAC
5.000%, 10/01/17 ............... 400 394
Baltimore, Parking Authority
Refunding Bond, RB, FGIC
4.350%, 07/01/02 ............... 200 200
Baltimore, Pollution Control General
Motors Corporate Project, RB
5.350%, 04/01/08 ............... 250 263
Calvert County, Pollution Control
Baltimore Gas & Electric Company
Project, RB, Callable 07/15/04 @ 102
5.550%, 07/15/14 ............... 250 257
Carroll County, Public Improvements,
GO, Callable 12/01/06 @ 101
5.125%, 12/01/14 ............... 500 508
Harford County, Refunding Bond, GO,
Callable 12/01/03 @ 102
4.900%, 12/01/12 ............... 100 99
Howard County, Public Improvements,
Ser A, GO, Callable 02/15/05 @ 101
5.650%, 02/15/16 ............... 100 104
Maryland State Community Development
Administration, Multi-Family Housing
Program, Ser B, RB,
Callable 05/15/05 @ 102
5.650%, 05/15/15 ............... 115 118
Maryland State Community Development
Administration, Single-Family Housing
Program, Callable 04/01/07 @ 101.50
5.600%, 04/01/18 (C) ........... 500 514
Maryland State Facilities Improvement,
GO, Callable 10/15/05 @ 100
5.000%, 10/15/06 ............... 250 258
Maryland State Health & Higher
Educational Facilities Authority,
Broadmead Project, RB
5.500%, 07/01/17 ............... 300 296
Face Market
Amount Value
(000) (000)
------ ------
Maryland State Health & Higher
Educational Facilities Authority,
Good Samaritan Hospital Project,
RB, Callable 07/01/03 @ 102
5.750%, 07/01/19 ............... $100 $103
Maryland State Health & Higher
Educational Facilities Authority,
Johns Hopkins Health System,
RB, Callable 07/01/07 @ 102, AMBAC
5.250%, 07/01/17 ............... 350 354
Maryland State Health & Higher
Educational Facilities Authority,
Loyola College Project, RB,
Callable 10/01/06 @ 102, MBIA
5.500%, 10/01/16 ............... 250 258
Maryland State Health & Higher
Educational Facilities Authority,
North Arundel Hospital, Ser A, RB, (A) (B)
4.000%, 12/01/97 ............... 700 700
Maryland State Health & Higher Education
Facilities Authority, Pickersgill Project,
Ser A, RB, Callable 01/01/07 @ 102
6.000%, 01/01/15 ............... 350 367
Maryland State Health & Higher
Educational Facilities Authority,
University of Maryland Medical
Systems Project, Ser A,
Prerefunded 07/01/01 @ 100, FGIC
6.500%, 07/01/21 ............... 200 215
Maryland State Industrial Development
Authority, Holy Cross Health System,
RB, Callable 12/01/03 @ 102
5.500%, 12/01/15 ............... 100 101
Maryland State National Park & Planning
Authority, Prince Georges Project, GO,
Prerefunded 07/01/00 @ 102
6.900%, 07/01/02 ............... 100 108
Maryland State Public Improvements,
Ser 1, GO, Callable 02/15/06 @ 101.50
4.700%, 02/15/10 ............... 300 297
Maryland State Stadium Authority,
Sports Facility, RB,
Callable 03/01/06 @ 101, AMBAC
5.800%, 03/01/26 ............... 250 258
Maryland State Transportation
Authority, RB, ETM
6.800%, 07/01/16 ............... 120 141
Montgomery County, Community Housing
Authority Multi-Family Housing Project,
Ser A, RB, Callable 07/01/05 @ 102
6.000%, 07/01/20 ............... 100 105
Montgomery County, Human Services
Headquarters Project, RB
5.400%, 08/01/06 ............... 200 212
Montgomery County, Pollution Control
Potomac Electric Power Company Project,
RB, Callable 02/15/04 @ 102
5.375%, 02/15/24 ............... 100 100
49
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
MARYLAND MUNICIPAL BOND FUND (concluded)
Face Market
Amount Value
(000) (000)
------ ------
MARYLAND (continued)
Montgomery County, Refunding Bond,
Ser A, GO
5.800%, 07/01/07 ............... $500 $ 551
Northeast Maryland Waste Disposal
Authority Montgomery County Project,
RB, Callable 07/01/03 @ 102
6.200%, 07/01/10 ............... 275 288
Ocean City, Refunding Bond, GO, MBIA
4.500%, 10/15/05 ............... 100 99
Prince Georges County, Dimensions Health
Project, RB, Callable 07/01/04 @ 102
5.375%, 07/01/14 ............... 250 252
5.300%, 07/01/24 ............... 250 246
Prince Georges County, Public Improvements,
GO, Callable 09/01/02 @ 102
5.625%, 09/01/04 ............... 250 267
Prince Georges County, Water Utility
Improvements Stormwater Management
Project, GO, Callable 03/15/03 @ 102
5.500%, 03/15/13 ............... 100 101
Queen Annes County, School
Improvements, GO
5.125%, 11/15/06 ............... 350 368
Saint Mary's County, GO,
Callable 11/01/03 @ 102, AMBAC
5.500%, 11/01/07 ............... 150 159
Saint Mary's County,GO, MBIA
4.500%, 09/01/00 ............... 500 505
University of Maryland, Systems Auxiliary
Facility & Tuition, Ser A, RB,
Callable 04/01/05 @ 102
5.400%, 04/01/09 ............... 100 104
University of Maryland, Systems Auxiliary
Faculty & Tuition, Ser A, RB,
Callable 04/01/06 @ 101
5.500%, 04/01/08 ............... 100 106
University of Maryland, Systems Auxiliary
Faculty & Tuition, Ser C, RB
4.350%, 10/01/03 ............... 250 251
Washington County, Refunding Bond, GO,
Callable 01/01/03 @ 102, FGIC
5.250%, 01/01/07 ............... 100 104
Washington County, Suburban Sanitation
District, GO, Callable 06/01/06 @ 100
5.600%, 06/01/19 ............... 250 256
Worcester County, Refunding Bond, GO,
Callable 08/01/06 @ 101, MBIA
5.500%, 08/01/12 ............... 100 105
- ---------------------------------------------------------
11,404
- ---------------------------------------------------------
PUERTO RICO (2.5%)
Commonwealth Highway
and Transportation Authority,
Ser Y, RB, Callable 07/01/06 @ 101.50
5.500%, 07/01/26 ............... 300 301
- ---------------------------------------------------------
Total Municipal Bonds
(Cost $11,419) .............. 11,705
- ---------------------------------------------------------
Face Market
Amount Value
(000) (000)
------ ------
CASH EQUIVALENTS (5.4%)
Aim Tax Free Institutional
Cash Reserve ..................... $141 $ 141
Federated Maryland Municipal
Cash Trust ....................... 512 512
- ---------------------------------------------------------
Total Cash Equivalents
(Cost $653) ................. 653
- ---------------------------------------------------------
Total Investments (102.8%)
(Cost $12,072) .............. 12,358
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-2.8%) (336)
- ---------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .9 billion
shares authorized) based on
1,152,349 outstanding shares ..... 11,221
Portfolio Shares of Investors Class B
($.001 par value -- .05 billion shares
authorized) based on 56,361
outstanding shares ............... 545
Accumulated net realized loss
on investments ................... (30)
Net unrealized appreciation
on investments ................... 286
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $12,022
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($11,460,851 / 1,152,349
SHARES OUTSTANDING) ................ $9.95
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS B (1)
($561,433 / 56,361 SHARES OUTSTANDING) $9.96
=========================================================
(A) Floating Rate Security--The rate reflected on the
Statement of Net Assets is the rate in effect on
November 30, 1997. 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.
(C) Security is restricted as to resale until April 2,
1998. This security acts as collateral for unsettled
security purchases. At the end of the year, this
security amounted to 4.28% of net assets.
(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 Corporation
COP--Certificate of Participation
ETM--Escrowed to Maturity
FGIC--Federal Guaranty Insurance Company
GO--General Obligation
MBIA--Municipal Bond Investors Assurance
RB--Revenue Bond
Ser--Series
The accompanying notes are an integral part of the financial statements.
50
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VALUE FUND
Market
Value
Shares (000)
------ ------
COMMON STOCKS (95.9%)
AIRCRAFT (1.2%)
Coltec Industries* ................. 325,000 $ 7,577
- ---------------------------------------------------------
BANKS (2.2%)
BankAmerica ........................ 75,000 5,475
NationsBank ........................ 140,000 8,409
- ---------------------------------------------------------
13,884
- ---------------------------------------------------------
CHEMICALS (1.4%)
Great Lakes Chemical ............... 200,000 8,975
- ---------------------------------------------------------
CONSUMER SERVICES (1.8%)
Accustaff* ......................... 375,000 11,086
- ---------------------------------------------------------
COMPUTERS, SOFTWARE & SERVICES (13.0%)
BMC Software* ...................... 100,000 6,487
Cabletron Systems* ................. 350,000 8,050
Cisco Systems* ..................... 125,000 10,773
Compaq Computer .................... 200,000 12,487
IBM ................................ 40,000 4,382
Intel .............................. 150,000 11,644
Microsoft* ......................... 60,000 8,486
Quantum* ........................... 325,000 8,592
Storage Technology* ................ 175,000 11,298
- ---------------------------------------------------------
82,199
- ---------------------------------------------------------
DIVERSIFIED (3.2%)
Loews .............................. 90,000 9,551
Textron ............................ 212,000 12,534
- ---------------------------------------------------------
22,085
- ---------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (1.5%)
General Electric ................... 100,000 7,375
- ---------------------------------------------------------
ENERGY & POWER (0.8%)
Calenergy* ......................... 150,000 4,987
- ---------------------------------------------------------
ENERGY SERVICES (2.0%)
Dresser Industries ................. 200,000 7,475
Schlumberger ....................... 60,000 4,939
- ---------------------------------------------------------
12,414
- ---------------------------------------------------------
FINANCIAL SERVICES (3.8%)
Fannie Mae ......................... 200,000 10,563
Morgan Stanley, Dean Witter, Discover 248,450 13,494
- ---------------------------------------------------------
24,057
- ---------------------------------------------------------
Market
Value
Shares (000)
------ ------
FOOD, BEVERAGE & TOBACCO (8.8%)
Archer Daniels Midland ............. 400,000 $ 8,550
Coca Cola .......................... 85,000 5,313
Kellogg ............................ 175,000 8,116
Nabisco Holdings, Cl A ............. 250,000 11,656
Philip Morris ...................... 200,000 8,700
Quaker Oats ........................ 250,000 13,250
- ---------------------------------------------------------
55,585
- ---------------------------------------------------------
GAS/NATURAL GAS (1.7%)
Columbia Gas Systems ............... 150,000 10,913
- ---------------------------------------------------------
HEALTHCARE SERVICES (1.5%)
Aetna .............................. 125,000 9,422
- ---------------------------------------------------------
INSURANCE (5.1%)
American International Group ....... 80,000 8,065
Cigna .............................. 85,000 14,216
General RE ......................... 50,000 9,925
- ---------------------------------------------------------
32,206
- ---------------------------------------------------------
MACHINERY (3.5%)
Case ............................... 125,000 7,750
Caterpillar ........................ 110,000 5,273
Ingersoll-Rand ..................... 225,000 9,197
- ---------------------------------------------------------
22,220
- ---------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (9.2%)
Amgen* ............................. 225,000 11,503
Beverly Enterprises* ............... 300,000 5,100
Merck .............................. 100,000 9,456
Schering Plough .................... 175,000 10,970
Tenet Healthcare* .................. 350,000 11,091
United States Surgical ............. 375,000 9,891
- ---------------------------------------------------------
58,011
- ---------------------------------------------------------
METALS & MINING (1.4%)
Alumax* ............................ 290,000 9,117
- ---------------------------------------------------------
PAPER & PAPER PRODUCTS (1.5%)
Fort James ......................... 249,999 9,781
- ---------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (7.1%)
Apache ............................. 150,000 5,513
Exxon .............................. 95,000 5,795
Mobil .............................. 100,000 7,194
Phillips Petroleum ................. 125,000 6,055
Unocal ............................. 300,000 11,944
USX-Marathon Group ................. 250,000 8,563
- ---------------------------------------------------------
45,064
- ---------------------------------------------------------
51
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
VALUE FUND (concluded)
Shares/
Face Market
Amount Value
(000) (000)
------ ------
PRINTING & PUBLISHING (1.4%)
Gannett ............................ 150,000 $ 8,709
- ---------------------------------------------------------
RAILROADS (1.8%)
Canadian Pacific Limited ........... 400,000 11,325
- ---------------------------------------------------------
REAL ESTATE INVESTMENT TRUST (2.1%)
Hospitality Properties Trust ....... 375,000 13,336
- ---------------------------------------------------------
RECREATIONAL PRODUCTS & SERVICES (1.5%)
Carnival Cruise Lines, Cl A ........ 175,000 9,461
- ---------------------------------------------------------
RETAIL (8.0%)
Federated Department Stores* ....... 175,000 7,973
J.C. Penney ........................ 75,000 4,819
Kroger* ............................ 300,000 10,331
Lowes .............................. 225,000 10,336
Toys R Us* ......................... 200,000 6,825
Wendy's International .............. 500,000 10,500
- ---------------------------------------------------------
50,784
- ---------------------------------------------------------
SAVINGS & LOANS (1.4%)
Golden West Financial .............. 100,000 8,962
- ---------------------------------------------------------
STEEL & STEEL WORKS (1.7%)
AK Steel Holding ................... 100,000 1,969
Nucor .............................. 175,000 8,750
- ---------------------------------------------------------
10,719
- ---------------------------------------------------------
TELEPHONES & TELECOMMUNICATION (3.0%)
AT&T ............................... 300,000 16,763
Worldcom* .......................... 75,000 2,400
- ---------------------------------------------------------
19,163
- ---------------------------------------------------------
UTILITIES, ELECTRIC, & GAS (4.3%)
CMS Energy ......................... 200,000 7,875
Southern ........................... 300,000 7,200
Texas Utilities .................... 300,000 12,000
- ---------------------------------------------------------
27,075
- ---------------------------------------------------------
Total Common Stocks
(Cost $502,409) ............. 606,492
- ---------------------------------------------------------
CASH EQUIVALENT (3.7%)
Aim Liquid Assets Portfolio ........ $23,310 23,310
- ---------------------------------------------------------
Total Cash Equivalent
(Cost $23,310) .............. 23,310
- ---------------------------------------------------------
Total Investments (99.6%)
(Cost $525,719) ............. 629,802
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.4%) 2,402
- ---------------------------------------------------------
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 1.0 billion
shares authorized) based on
35,706,922 outstanding shares .... $378,595
Portfolio Shares of Investors Class A
($.001 par value -- .25 billion
shares authorized) based on
1,689,172 outstanding shares ..... 20,654
Portfolio Shares of Investors Class B
($.001 par value -- .25 billion
shares authorized) based on 799,622
outstanding shares ............... 11,151
Undistributed net investment income 24
Accumulated net realized gain
on investments ................... 117,697
Net unrealized appreciation
on investments ................... 104,083
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $632,204
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($590,823,969 / 35,706,922
SHARES OUTSTANDING) ................ $16.55
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS A
($28,111,539 / 1,689,172
SHARES OUTSTANDING) ................ $16.64
- ---------------------------------------------------------
OFFERING PRICE PER SHARE -- INVESTORS CLASS A
($16.64 / 95.5%) ................... $17.42
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS B (1)
($13,268,770 / 799,622
SHARES OUTSTANDING) ................ $16.59
=========================================================
* Non-income producing security.
Cl--Class
(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.
52
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND
Market
Value
Shares (000)
------ ------
COMMON STOCKS (94.6%)
APPAREL/TEXTILES (1.1%)
Unifi .............................. 30,000 $ 1,140
- ---------------------------------------------------------
BANKS (1.9%)
State Street ....................... 35,000 2,082
- ---------------------------------------------------------
CHEMICALS (1.8%)
Praxair ............................ 45,000 1,977
- ---------------------------------------------------------
COMPUTERS, SOFTWARE & SERVICES (17.3%)
BMC Software* ...................... 38,000 2,465
Cabletron Systems* ................. 45,000 1,035
Cisco Systems* ..................... 15,000 1,293
Compaq Computer .................... 28,000 1,748
Computer Associates International .. 36,000 1,874
Electronics for Imaging* ........... 37,000 1,776
Hewlett Packard .................... 20,000 1,221
Intel .............................. 22,000 1,708
Mcafee Associates* ................. 40,000 1,825
Microsoft* ......................... 10,000 1,414
Storage Technology* ................ 35,000 2,260
- ---------------------------------------------------------
18,619
- ---------------------------------------------------------
COSMETICS, SOAPS & TOILETRIES (0.7%)
Procter & Gamble ................... 10,000 763
- ---------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (1.0%)
General Electric ................... 15,000 1,106
- ---------------------------------------------------------
FINANCIAL SERVICES (5.5%)
Fiserv* ............................ 30,000 1,453
Fannie Mae ......................... 42,000 2,218
T. Rowe Price and Associates ....... 35,000 2,275
- ---------------------------------------------------------
5,946
- ---------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (6.8%)
Coca Cola .......................... 18,000 1,125
Hershey Foods ...................... 15,000 921
Kellogg ............................ 21,000 974
Nabisco Holdings, Cl A ............. 14,000 653
PepsiCo ............................ 24,000 885
Philip Morris ...................... 43,000 1,870
Quaker Oats ........................ 16,000 848
- ---------------------------------------------------------
7,276
- ---------------------------------------------------------
INSURANCE (5.6%)
American International Group ....... 22,000 2,218
Jefferson-Pilot .................... 25,000 1,908
Travelers .......................... 37,500 1,894
- ---------------------------------------------------------
6,020
- ---------------------------------------------------------
Market
Value
Shares (000)
------ ------
MACHINERY (3.9%)
Dover .............................. 30,000 $2,012
Illinois Tool Works ................ 40,000 2,192
- ---------------------------------------------------------
4,204
- ---------------------------------------------------------
MANUFACTURING (4.2%)
Mattel ............................. 63,000 2,524
Tyco International Limited ......... 50,000 1,962
- ---------------------------------------------------------
4,486
- ---------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (13.2%)
Abbott Laboratories ................ 30,000 1,950
Amgen* ............................. 35,000 1,789
Johnson & Johnson .................. 43,000 2,706
Merck .............................. 20,000 1,891
Schering Plough .................... 40,000 2,508
United States Surgical ............. 60,000 1,583
Watson Pharmaceuticals* ............ 60,000 1,785
- ---------------------------------------------------------
14,212
- ---------------------------------------------------------
PAPER & PAPER PRODUCTS (1.0%)
Fort James ......................... 27,500 1,076
- ---------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (5.8%)
Nabors Industries* ................. 30,000 1,052
Oryx Energy* ....................... 35,000 945
Schlumberger ....................... 20,000 1,646
Tidewater .......................... 30,000 1,682
Vintage Petroleum .................. 50,000 969
- ---------------------------------------------------------
6,294
- ---------------------------------------------------------
PRINTING & PUBLISHING (3.0%)
Gannett ............................ 32,000 1,858
Meredith ........................... 40,000 1,395
- ---------------------------------------------------------
3,253
- ---------------------------------------------------------
PROFESSIONAL SERVICES (3.2%)
Accustaff* ......................... 55,000 1,626
Service International .............. 50,000 1,828
- ---------------------------------------------------------
3,454
- ---------------------------------------------------------
RECREATIONAL PRODUCTS & SERVICES (1.3%)
Carnival Cruise Lines, Cl A ........ 25,000 1,352
- ---------------------------------------------------------
53
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND (concluded)
Shares/
Face Market
Amount Value
(000) (000)
------ -------
RETAIL (10.3%)
Cracker Barrel Old Country Stores .. 30,000 $ 960
Home Depot ......................... 48,000 2,685
Lowe's ............................. 40,000 1,838
TJX ................................ 70,000 2,415
Toys R Us* ......................... 13,000 444
Walgreen ........................... 40,000 1,288
Wendy's International .............. 70,000 1,470
- ---------------------------------------------------------
11,100
- ---------------------------------------------------------
STEEL & STEEL WORKS (1.9%)
Nucor .............................. 40,000 2,000
- ---------------------------------------------------------
TELEPHONES & TELECOMMUNICATION (2.8%)
Worldcom* .......................... 95,000 3,040
- ---------------------------------------------------------
WHOLESALE (2.3%)
Richfood Holdings .................. 90,000 2,458
- ---------------------------------------------------------
Total Common Stocks
(Cost $83,445) .............. 101,858
- ---------------------------------------------------------
CASH EQUIVALENT (4.1%)
Aim Liquid Assets Portfolio ........ $4,399 4,399
- ---------------------------------------------------------
Total Cash Equivalent
(Cost $4,399) ............... 4,399
- ---------------------------------------------------------
Total Investments (98.7%)
(Cost $87,844) .............. 106,257
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (1.3%) 1,439
- ---------------------------------------------------------
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class ($.001
par value -- .75 billion shares
authorized) based on
6,224,485 outstanding shares ..... $ 77,338
Portfolio Shares of Investors Class A
($.001 par value -- .25 billion shares
authorized) based on
500,096 outstanding shares ....... 5,816
Portfolio Shares of Investors Class B
($.001 par value -- .25 billion shares
authorized) based on 27,421
outstanding shares ............... 431
Accumulated net realized gain
on investments ................... 5,698
Net unrealized appreciation
on investments ................... 18,413
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $107,696
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($99,364,153 / 6,224,485
SHARES OUTSTANDING) ................ $15.96
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS A
($7,899,810 / 500,096
SHARES OUTSTANDING) ................ $15.80
- ---------------------------------------------------------
OFFERING PRICE PER SHARE -- INVESTORS CLASS A
($15.80 / 95.5%) ................... $16.54
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS B (1)
($432,305 / 27,421 SHARES OUTSTANDING) $15.77
=========================================================
(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 security.
Cl--Class
The accompanying notes are an integral part of the financial statements.
54
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND
Market
Value
Shares (000)
------ ------
COMMON STOCKS (98.5%)
AEROSPACE & DEFENSE (2.5%)
Avondale Industries * .............. 36,000 $1,017
Tracor* ............................ 70,000 1,964
- ---------------------------------------------------------
2,981
- ---------------------------------------------------------
AIRCRAFT (2.2%)
Coltec Industries Inc* ............. 115,000 2,681
- ---------------------------------------------------------
AUTOMOTIVE (1.6%)
Arvin Industries ................... 31,000 1,069
Sonic Automotive* .................. 80,000 840
- ---------------------------------------------------------
1,909
- ---------------------------------------------------------
BANKS (2.2%)
Golden State Bancorp* .............. 47,500 1,582
SouthTrust ......................... 18,500 1,008
- ---------------------------------------------------------
2,590
- ---------------------------------------------------------
BUILDING & CONSTRUCTION (0.8%)
Group Maintenance America* ......... 9,000 126
Martin Marietta Materials .......... 24,500 848
- ---------------------------------------------------------
974
- ---------------------------------------------------------
COMMUNICATIONS EQUIPMENT (3.3%)
Boston Technology* ................. 43,000 924
Comverse Technology* ............... 68,200 2,297
Davox* ............................. 24,300 784
- ---------------------------------------------------------
4,005
- ---------------------------------------------------------
COMPUTERS, SOFTWARE & SERVICES (16.0%)
Avid Technology* ................... 30,000 877
Etec Systems* ...................... 41,200 1,869
HMT Technology* .................... 170,000 2,231
Inacom* ............................ 27,000 766
Memco Software Limited* ............ 57,000 1,282
Microage* .......................... 50,000 1,006
Microtouch Systems* ................ 60,000 1,237
Procom Technology* ................. 42,500 653
Splash Technologies Holdings* ...... 26,000 832
Storage Technology* ................ 45,300 2,925
Stratus Computer* .................. 96,200 3,133
Symantec* .......................... 35,000 875
Tech Data* ......................... 41,000 1,640
- ---------------------------------------------------------
19,326
- ---------------------------------------------------------
Market
Value
Shares (000)
------ ------
ELECTRICAL SERVICES (0.9%)
El Paso Electric* .................. 90,000 $ 608
Public Service of New Mexico ....... 25,000 511
- ---------------------------------------------------------
1,119
- ---------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (5.1%)
AFC Cable Systems* ................. 62,800 1,664
Encore Wire* ....................... 67,000 2,278
Essex International* ............... 20,000 646
SCI Systems* ....................... 34,000 1,558
- ---------------------------------------------------------
6,146
- ---------------------------------------------------------
ENERGY SERVICES (1.1%)
AES* ............................... 36,000 1,319
- ---------------------------------------------------------
FINANCIAL SERVICES (4.2%)
First Alliance* .................... 67,500 1,401
Imperial Credit* ................... 70,000 1,085
The Money Store .................... 76,000 1,900
T & W Financial* ................... 40,000 645
- ---------------------------------------------------------
5,031
- ---------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (2.8%)
General Cigar Holdings* ............ 35,000 823
Schweitzer-Manduit International ... 29,000 1,030
Universal .......................... 37,000 1,464
- ---------------------------------------------------------
3,317
- ---------------------------------------------------------
GAS/NATURAL GAS (0.5%)
Public Service of North Carolina ... 30,000 608
- ---------------------------------------------------------
HOTELS & LODGING (1.4%)
Prime Hospitality* ................. 85,500 1,635
- ---------------------------------------------------------
INSURANCE (7.8%)
American Bankers Insurance Group ... 10,000 405
Amerin* ............................ 40,300 942
Amerus Life Holdings, Cl A ......... 25,000 813
CMAC Investment .................... 43,000 2,233
Fremont General .................... 62,000 2,852
Life Re ............................ 8,600 491
Old Republic International ......... 45,000 1,623
- ---------------------------------------------------------
9,359
- ---------------------------------------------------------
LEASING & RENTING (0.8%)
Renters Choice* .................... 42,000 945
- ---------------------------------------------------------
55
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND (continued)
Market
Value
Shares (000)
------ ------
MACHINERY (5.9%)
Agco ............................... 65,500 $1,793
CFM Technologies* .................. 50,000 925
Kulicke & Soffa Industries* ........ 35,000 965
Parker Hannifin .................... 30,000 1,335
Trinity Industries ................. 46,000 2,087
- ---------------------------------------------------------
7,105
- ---------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (7.4%)
Beverly Enterprises* ............... 39,000 663
Healthplan Services ................ 66,000 1,275
Mariner Health Group* .............. 22,000 319
Maxxim Medical* .................... 39,300 860
United Wisconsin Services .......... 80,400 1,960
Watson Pharmaceuticals* ............ 73,000 2,172
Wellpoint Health Networks* ......... 35,000 1,610
- ---------------------------------------------------------
8,859
- ---------------------------------------------------------
PAPER & PAPER PRODUCTS (0.9%)
Bowater ............................ 25,000 1,122
- ---------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (6.7%)
Cooper Cameron* .................... 41,000 2,498
HS Resources* ...................... 47,900 763
Key Energy Group* .................. 40,000 973
Santa Fe Energy Resources* ......... 90,000 1,007
Trico Marine Services* ............. 55,000 1,533
Vintage Petroleum .................. 67,900 1,316
- ---------------------------------------------------------
8,090
- ---------------------------------------------------------
PETROLEUM REFINING (1.7%)
Tesoro Petroleum Corporation* ...... 6,900 115
Valero Energy ...................... 60,000 1,883
- ---------------------------------------------------------
1,998
- ---------------------------------------------------------
PROFESSIONAL SERVICES (2.7%)
Corestaff* ......................... 39,500 1,062
On Assignment* ..................... 102,000 2,244
- ---------------------------------------------------------
3,306
- ---------------------------------------------------------
REAL ESTATE INVESTMENT TRUST (0.2%)
Prime Group Realty Trust* .......... 4,000 80
Tanger Outlet Center ............... 7,100 205
- ---------------------------------------------------------
285
- ---------------------------------------------------------
RECREATION (0.9%)
Callaway Golf ...................... 35,000 1,116
- ---------------------------------------------------------
Shares/
Face Market
Amount Value
(000) (000)
------ ------
RETAIL (11.7%)
Buckle* ............................ 71,200 $ 2,341
Cracker Barrel Old Country Stores .. 17,500 560
Eagle Hardware & Garden* ........... 125,000 2,125
Heilig-Meyers ...................... 75,000 970
Proffitts* ......................... 80,000 2,445
Ross Stores ........................ 27,000 1,053
Russ Berrie ........................ 50,000 1,494
Stein Mart* ........................ 30,000 885
Zale* .............................. 101,000 2,247
- ---------------------------------------------------------
14,120
- ---------------------------------------------------------
STEEL & STEEL WORKS (4.1%)
AK Steel Holding ................... 43,800 862
Bethlehem Steel* ................... 240,000 2,460
Schnitzer Steel Industries, Cl A ... 58,500 1,623
- ---------------------------------------------------------
4,945
- ---------------------------------------------------------
TELEPHONES & TELECOMMUNICATION (1.9%)
Advanced Fibre Communication* ...... 20,000 513
Cidco* ............................. 62,500 1,266
Electric Lightwave* ................ 30,000 480
- ---------------------------------------------------------
2,259
- ---------------------------------------------------------
TESTING LABORATORIES (0.0%)
Perseptive Biosystems* ............. 68 1
Perseptive Biosystems Warrants* .... 39 --
- ---------------------------------------------------------
1
- ---------------------------------------------------------
WHOLESALE (1.2%)
Richfood Holdings, CI A ............ 52,000 1,420
- ---------------------------------------------------------
Total Common Stocks
(Cost $101,008) ............. 118,571
- ---------------------------------------------------------
CASH EQUIVALENT (1.9%)
Aim Liquid Assets Portfolio ........ $ 2,293 2,293
- ---------------------------------------------------------
Total Cash Equivalent
(Cost $2,293) ............... 2,293
- ---------------------------------------------------------
Total Investments (100.4%)
(Cost $103,301) ............. 120,864
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-0.4%) (436)
- ---------------------------------------------------------
56
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND (concluded)
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class ($.001
par value -- .75 billion shares
authorized) based on
6,831,554 outstanding shares ..... $ 80,978
Portfolio Shares of Investors Class A ($.001
par value -- .125 billion shares
authorized) based on
358,118 outstanding shares ....... 4,222
Portfolio Shares of Investors Class B ($.001
par value -- .125 billion shares
authorized) based on
131,853 outstanding shares ....... 1,883
Accumulated net realized gain
on investments ................... 15,782
Net unrealized appreciation
on investments ................... 17,563
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $120,428
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($112,403,182 / 6,831,554
SHARES OUTSTANDING) ................ $16.45
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS A
($5,891,648 / 358,118
SHARES OUTSTANDING) ................ $16.45
- ---------------------------------------------------------
OFFERING PRICE PER SHARE -- INVESTORS CLASS A
($16.45 / 95.5%) ................... $17.23
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTORS CLASS B (1)
($2,132,752 / 131,853
SHARES OUTSTANDING) ................ $16.18
=========================================================
* Non-income producing security.
Cl--Class
(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.
57
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
LIFE VISION MAXIMUM GROWTH PORTFOLIO
Market
Value
Shares (000)
------ ------
EQUITY FUNDS (95.0%)
CrestFunds Capital Appreciation Fund,
Trust Class ..................... 259 $ 4,135
CrestFunds Special Equity Fund,
Trust Class ..................... 202 3,331
CrestFunds Value Fund,
Trust Class ..................... 336 5,562
- ---------------------------------------------------------
Total Equity Funds
(Cost $12,288) .............. 13,028
- ---------------------------------------------------------
MONEY MARKET FUND (5.0%)
CrestFunds Cash Reserve Fund,
Trust Class ...................... 683 683
- ---------------------------------------------------------
Total Money Market Fund
(Cost $683) ................. 683
- ---------------------------------------------------------
Total Investments (100.0%)
(Cost $12,971) .............. 13,711
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.0%) 1
- ---------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class ($.001
par value -- 3.75 billion shares
authorized) based on
1,287,678 outstanding shares ..... 12,972
Undistributed net investment income 1
Accumulated net realized loss
on investments ................... (1)
Net unrealized appreciation
on investments ................... 740
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $13,712
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($13,712,111 / 1,287,678
SHARES OUTSTANDING) ................ $10.65
=========================================================
The accompanying notes are an integral part of the financial statements.
58
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
LIFE VISION GROWTH AND INCOME PORTFOLIO
Market
Value
Shares (000)
------ ------
EQUITY FUNDS (69.9%)
CrestFunds Capital Appreciation Fund,
Trust Class ..................... 283 $ 4,520
CrestFunds Special Equity Fund,
Trust Class ..................... 266 4,371
CrestFunds Value Fund,
Trust Class ..................... 414 6,844
- ---------------------------------------------------------
Total Equity Funds
(Cost $14,814) .............. 15,735
- ---------------------------------------------------------
FIXED INCOME FUNDS (25.3%)
CrestFunds Government Bond Fund,
Trust Class ..................... 110 1,138
CrestFunds Intermediate Bond Fund,
Trust Class ..................... 228 2,276
CrestFunds Limited Term Bond Fund,
Trust Class ..................... 229 2,276
- ---------------------------------------------------------
Total Fixed Income Funds
(Cost $5,609) ............... 5,690
- ---------------------------------------------------------
MONEY MARKET FUND (4.8%)
CrestFunds Cash Reserve Fund,
Trust Class ..................... 1,099 1,099
- ---------------------------------------------------------
Total Money Market Fund
(Cost $1,099) ............... 1,099
- ---------------------------------------------------------
Total Investments (100%)
(Cost $21,521) .............. 22,524
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.0%) (3)
- ---------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class ($.001
par value -- 3.75 billion shares
authorized) based on
2,142,319 outstanding shares ..... 21,488
Undistributed net investment income. 10
Accumulated net realized gain
on investments ................... 20
Net unrealized appreciation
on investments ................... 1,003
- ---------------------------------------------------------
Total Net Assets: (100.0%) .... $22,521
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($22,521,095 / 2,142,319
SHARES OUTSTANDING) ................ $10.51
=========================================================
The accompanying notes are an integral part of the financial statements.
59
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1997
- --------------------------------------------------------------------------------
LIFE VISION BALANCED PORTFOLIO
Value
Shares (000)
------ ------
EQUITY FUNDS (58.9%)
CrestFunds Capital Appreciation Fund,
Trust Class ....................... 1,108 $17,688
CrestFunds Special Equity Fund,
Trust Class ....................... 775 12,748
CrestFunds Value Fund,
Trust Class ....................... 1,345 22,252
- ---------------------------------------------------------
Total Equity Funds
(Cost $49,452) ................ 52,688
- ---------------------------------------------------------
FIXED INCOME FUNDS (34.7%)
CrestFunds Government Bond Fund,
Trust Class ....................... 428 4,439
CrestFunds Intermediate Bond Fund,
Trust Class ....................... 1,782 17,753
CrestFunds Limited Term Bond Fund,
Trust Class ....................... 895 8,877
- ---------------------------------------------------------
Total Fixed Income Funds
(Cost $30,575) ................ 31,069
- ---------------------------------------------------------
MONEY MARKET FUND (6.2%)
CrestFunds Cash Reserve Fund,
Trust Class ....................... 5,528 5,528
- ---------------------------------------------------------
Total Money Market Fund
(Cost $5,522) ................. 5,528
- ---------------------------------------------------------
Total Investments (99.8%)
(Cost $85,555) ................ 89,285
- ---------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.2%) 157
- ---------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class ($.001
par value -- 3.75 billion shares
authorized) based on
8,546,050 outstanding shares ....... 85,425
Undistributed net investment income .. 52
Accumulated net realized gain
on investments ..................... 235
Net unrealized appreciation
on investments ..................... 3,730
- ---------------------------------------------------------
Total Net Assets: (100.0%) ...... $89,442
- ---------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
($89,441,676 / 8,546,050
SHARES OUTSTANDING) .................. $10.47
=========================================================
The accompanying notes are an integral part of the financial statements.
60
<PAGE>
<PAGE>
STATEMENT OF OPERATIONS CRESTFUNDS, INC.
For the Year Ended November 30, 1997
<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: ..................................... $48,584 $27,766 $7,918 $5,022 $19,939
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees .......................... 3,195 2,010 862 384 1,721
Waiver of Investment Advisory Fees ................ -- -- -- -- --
Administrative Fees ............................... 1,323 761 323 115 430
Waiver of Administrative Fees ..................... -- -- -- -- --
Custodian/Transfer Agent Fees ..................... 748 410 182 69 254
Professional Fees ................................. 73 53 22 1 29
Director Fees ..................................... 15 9 4 1 6
Registration & Filing Fees ........................ 91 49 14 4 58
Insurance Expense ................................. 4 2 1 -- 2
Distribution Fees--Trust Class .................... 1,131 761 315 114 427
Waiver of Distribution Fees--Trust Class .......... (1,131) (761) (315) (114) (427)
Distribution Fees--Investors Class A .............. 407 -- 21 1 3
Waiver of Distribution Fees--Investors Class A .... (407) -- (21) (1) (3)
Distribution Fees--Investors Class B .............. -- -- -- -- --
Waiver of Distribution Fees--Investors Class B .... -- -- -- -- --
Printing Fees ..................................... 18 13 6 -- 8
Miscellaneous Fees ................................ 9 8 (1) 5 2
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses .................................. 5,476 3,315 1,413 579 2,510
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income ................................ 43,108 24,451 6,505 4,443 17,429
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments .............. 32 -- 3 (284) (194)
Change in Net Unrealized Appreciation
of Investments .................................... -- -- -- 107 1,022
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Realized and Unrealized Gain (Loss)
on Investments .................................... 32 -- 3 (177) 828
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
from Operations ................................... $43,140 $24,451 $6,508 $4,266 $18,257
===========================================================================================================================
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
61
<PAGE>
STATEMENT OF OPERATIONS CRESTFUNDS, INC.
For the Year Ended November 30, 1997
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------------------------------------------------------------
VIRGINIA
INTERMEDIATE VIRGINIA MARYLAND
GOVERNMENT MUNICIPAL MUNICIPAL MUNICIPAL VALUE
BOND FUND BOND FUND BOND FUND BOND FUND (1) FUND
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest Income: .................................... $2,408 $13,184 $ 967 $431 $ 2,276
Dividend Income: .................................... -- -- -- -- 8,944
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ......................... 217 1,233 108 62 4,337
Waiver of Investment Advisory Fees ............... (36) -- (18) (43) --
Administrative Fees .............................. 55 370 34 11 867
Waiver of Administrative Fees .................... (54) -- (27) -- --
Custodian/Transfer Agent Fees .................... 32 222 19 8 520
Professional Fees ................................ 4 17 3 -- 58
Director Fees .................................... 1 4 -- -- 11
Registration & Filing Fees ....................... 14 63 9 6 52
Insurance Expense ................................ 2 2 -- -- 53
Distribution Fees--Trust Class ................... 53 358 26 12 821
Waiver of Distribution Fees--Trust Class ......... (53) (358) (26) (12) (821)
Distribution Fees--Investors Class A ............. -- 12 -- -- 34
Waiver of Distribution Fees--Investors Class A ... -- (12) -- -- (34)
Distribution Fees--Investors Class B ............. 9 -- 7 3 40
Waiver of Distribution Fees--Investors Class B ... (1) -- (2) -- (29)
Printing Fees .................................... 1 5 1 1 15
Miscellaneous Fees ............................... 4 8 1 9 20
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses ................................. 248 1,924 135 57 5,944
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income ............................... 2,160 11,260 832 374 5,276
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments ............. 89 1,641 67 (5) 118,138
Change in Net Unrealized Appreciation
of Investments ................................... 300 490 278 241 7,024
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Realized and Unrealized Gain
on Investments ................................... 389 2,131 345 236 125,162
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
from Operations .................................. $2,549 $13,391 $1,177 $610 $130,438
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Commenced Operations on March 1, 1996.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
62
<PAGE>
STATEMENT OF OPERATIONS CRESTFUNDS, INC.
For the Year Ended November 30, 1997
<TABLE>
<CAPTION>
(IN THOUSANDS)
---------------------------------------------------------------------
LIFE LIFE LIFE
CAPITAL SPECIAL VISION VISION GROWTH VISION
APPRECIATION EQUITY MAXIMUM GROWTH AND INCOME BALANCED
FUND FUND PORTFOLIO* INCOME PORTFOLIO* PORTFOLIO*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest Income: ................................... $ 405 $ 392 $-- $ -- $ --
Dividend Income: ................................... 652 568 52 212 1,086
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ........................ 614 763 13 23 93
Waiver of Investment Advisory Fees .............. -- -- (9) (14) (48)
Administrative Fees ............................. 123 153 17 17 17
Waiver of Administrative Fees ................... -- -- (17) (17) (17)
Custodian/Transfer Agent Fees ................... 72 91 4 7 28
Professional Fees ............................... 6 11 1 1 4
Director Fees ................................... 1 2 -- -- 1
Registration & Filing Fees ...................... 20 10 2 3 12
Insurance Expense ............................... -- 3 -- -- --
Distribution Fees--Trust Class .................. 113 143 -- -- --
Waiver of Distribution Fees--Trust Class ........ (113) (143) -- -- --
Distribution Fees--Investors Class A ............ 9 8 -- -- --
Waiver of Distribution Fees--Investors Class A .. (9) (8) -- -- --
Distribution Fees--Investors Class B ............ -- 11 -- -- --
Waiver of Distribution Fees--Investors Class B .. -- (2) -- -- --
Printing Fees ................................... 1 3 -- -- --
Miscellaneous Fees .............................. (3) (5) 2 2 3
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses ................................ 834 1,040 13 22 93
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) ....................... 223 (80) 39 190 993
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments ............ 5,700 15,883 (1) 20 235
Change in Net Unrealized Appreciation
of Investments .................................. 12,790 4,525 740 1,003 3,730
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Realized and Unrealized Gain
on Investments .................................. 18,490 20,408 739 1,023 3,965
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
from Operations ................................. $18,713 $20,328 $778 $1,213 $4,958
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
*Commenced Operations on June 30, 1997.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
63
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Year Ended November 30, 1997
<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
------------- ----------- -------------- ------------- ---------- -----------
12/01/96 12/01/95 12/01/96 12/01/95 12/01/96 12/01/95
TO 11/30/97 TO 11/30/96 TO 11/30/97 TO 11/30/96 TO 11/30/97 TO 11/30/96
- -----------------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income ................... $ 43,108 $ 28,174 $ 24,451 $ 18,524 $ 6,505 $ 5,282
Net Realized Gain on Investments ........ 32 7 -- -- 3 392
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From Operations 43,140 28,181 24,451 18,524 6,508 5,674
- -----------------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Net Investment Income
Trust Class ............................. (38,023) (25,572) (24,456) (18,524) (6,352) (5,218)
Investors Class A ....................... (5,133) (2,601) -- -- (161) (64)
Investors Class B ....................... (1) (1) -- -- -- --
Capital Gains
Trust Class ............................. -- -- -- -- -- (380)
Investors Class A ....................... -- -- -- -- -- (4)
Investors Class B ....................... -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions ................... (43,157) (28,174) (24,456) (18,524) (6,513) (5,666)
- -----------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets ......................... (17) 7 (5) -- (5) 8
- -----------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (All at $1.00 Per Share):
Trust Class:
Shares Issued ........................... 1,704,048 948,964 1,251,595 897,803 393,449 275,099
Shares Issued in Lieu of Cash Distributions 733 833 146 137 -- --
Shares Redeemed ......................... (1,477,765) (848,850) (1,008,406) (879,343) (348,927) (295,120)
---------- -------- ---------- -------- -------- ---------
Total Trust Class Transactions ........ 227,016 100,947 243,335 18,597 44,522 (20,021)
---------- -------- ---------- -------- -------- ---------
Investors Class A:
Shares Issued ........................... 135,942 74,370 -- -- 16,177 5,955
Shares Issued in Lieu of Cash Distributions 4,595 2,608 -- -- 144 69
Shares Redeemed ......................... (70,439) (51,807) -- -- (11,681) (4,657)
---------- -------- ---------- -------- -------- ---------
Total Investors Class A Transactions .. 70,098 25,171 -- -- 4,640 1,367
---------- -------- ---------- -------- -------- ---------
Investors Class B:
Shares Issued ........................... 23 -- -- -- -- --
Shares Issued in Lieu of Cash Distributions 1 1 -- -- -- --
Shares Redeemed ......................... (1) (7) -- -- -- --
---------- -------- ---------- -------- -------- ---------
Total Investors Class B Transactions .. 23 (6) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions ................ 297,137 126,112 243,335 18,597 49,162 (18,654)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 297,120 126,119 243,330 18,597 49,157 (18,646)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ....................... 686,565 560,446 389,051 370,454 185,314 203,960
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period ............................. $983,685 $686,565 $632,381 $389,051 $234,471 $185,314
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
64
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Year Ended November 30, 1997
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------------------------------------------------------------------------
LIMITED TERM LIMITED TERM INTERMEDIATE INTERMEDIATE GOVERNMENT GOVERNMENT
BOND FUND BOND FUND BOND FUND BOND FUND BOND FUND BOND FUND(1)
------------ ------------ ------------ ------------ ----------- ------------
12/01/96 12/01/95 12/01/96 12/01/95 12/01/96 12/01/95
TO 11/30/97 TO 11/30/96 TO 11/30/97 TO 11/30/96 TO 11/30/97 TO 11/30/96
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income ..................... $ 4,443 $ 4,783 $ 17,429 $ 7,930 $ 2,160 $ 918
Net Realized Gain (Loss) on Investments ... (284) (555) (194) 524 89 (92)
Change in Net Unrealized Appreciation
(Depreciation) of Investments ........... 107 (476) 1,022 1,883 300 (155)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From Operations 4,266 3,752 18,257 10,337 2,549 671
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Net Investment Income
Trust Class ............................... (4,387) (4,716) (17,309) (7,848) (2,116) (893)
Investors Class A ......................... (58) (90) (131) (115) -- --
Investors Class B ......................... -- -- -- -- (45) (25)
In Excess of Net Investment Income
Trust Class ............................... -- -- -- -- -- --
Investors Class A ......................... -- -- -- -- -- --
Investors Class B ......................... -- -- -- -- -- --
Capital Gains
Trust Class ............................... -- -- -- -- -- --
Investors Class A ......................... -- -- -- -- -- --
Investors Class B ......................... -- -- -- -- --
In Excess of Capital Gains
Trust Class ............................... -- -- -- -- -- --
Investors Class A ......................... -- -- -- -- -- --
Investors Class B ......................... -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions ..................... (4,445) (4,806) (17,440) (7,963) (2,161) (918)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets ........................... (179) (1,054) 817 2,374 388 (247)
=================================================================================================================================
Capital Share Transactions:
Trust Class:
Shares Issued ............................. 32,072 30,369 71,860 232,804 31,044 13,571
Shares Issued in Lieu of Cash Distributions 2,281 2,917 1,966 2,198 846 42
Shares Redeemed ........................... (41,456) (36,075) (56,005) (38,078) (18,428) (3,415)
-------- -------- -------- ------- -------- -------
Total Trust Class Transactions .......... (7,103) (2,789) 17,821 196,924 13,462 10,198
-------- -------- -------- ------- -------- -------
Investors Class A:
Shares Issued ............................. 39 587 783 758 -- --
Shares Issued in Lieu of Cash Distributions 47 73 105 98 -- --
Shares Redeemed ........................... (277) (969) (874) (328) -- --
-------- -------- -------- ------- -------- -------
Total Investors Class A Transactions .... (191) (309) 14 528 -- --
-------- -------- -------- ------- -------- -------
Investors Class B:
Shares Issued ............................. -- -- -- -- 485 381
Shares Issued in Lieu of Cash Distributions -- -- -- -- 33 19
Shares Redeemed ........................... -- -- -- -- (11) (18)
-------- -------- -------- ------- -------- -------
Total Investors Class B Transactions .... -- -- -- -- 507 382
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions .................. (7,294) (3,098) 17,835 197,452 13,969 10,580
- ---------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets . (7,473) (4,152) 18,652 199,826 14,357 10,333
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ......................... 86,095 90,247 283,425 83,599 20,869 10,536
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period ............................... $78,622 $ 86,095 $302,077 $283,425 $35,226 $ 20,869
Shares Issued and Redeemed:
Trust Class:
Shares Issued ............................. 3,333 3,067 7,474 23,858 3,087 1,315
Shares Issued in Lieu of Cash Distributions 231 295 204 225 77 4
Shares Redeemed ........................... (4,288) (3,652) (5,853) (3,883) (1,824) (332)
-------- -------- -------- ------- -------- -------
Total Trust Class Share Transactions .... (724) (290) 1,825 20,200 1,340 987
-------- -------- -------- ------- -------- -------
Investors Class A:
Shares Issued ............................. 4 59 80 78 -- --
Shares Issued in Lieu of Cash Distributions 5 7 11 9 -- --
Shares Redeemed ........................... (28) (98) (89) (33) -- --
-------- -------- -------- ------- -------- -------
Total Investors Class A Share Transactions (19) (32) 2 54 -- --
-------- -------- -------- ------- -------- -------
Investors Class B:
Shares Issued ............................. -- -- -- -- 48 37
Shares Issued in Lieu of Cash Distributions -- -- -- -- 3 2
Shares Redeemed ........................... -- -- -- -- (1) (2)
-------- -------- -------- ------- -------- -------
Total Investors Class B Share Transactions -- -- -- -- 50 37
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital
Share Transactions ........................ (743) 322 1,827 20,254 1,390 1,024
=================================================================================================================================
<FN>
(1)Commenced operations on April 5, 1995.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
65
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Year Ended November 30, 1997
<TABLE>
<CAPTION>
(IN THOUSANDS)
-----------------------------------------------------------------------------
VIRGINIA VIRGINIA
INTERMEDIATE INTERMEDIATE VIRGINIA VIRGINIA MARYLAND MARYLAND
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND BOND FUND BOND FUND BOND FUND(1)
------------ ------------ ----------- ----------- ----------- -----------
12/01/96 12/01/95 12/01/96 12/01/95 12/01/96 03/01/96
TO 11/30/97 TO 11/30/96 TO 11/30/97 TO 11/30/96 TO 11/30/97 TO 11/30/96
- ------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income .............. $ 11,260 $ 3,992 $ 832 $ 553 $ 374 $ 132
Net Realized Gain (Loss) on Investments 1,641 123 67 -- (5) (25)
Change in Net Unrealized Appreciation
of Investments ................... 490 7,143 278 82 241 45
- ------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
From Operations ....................... 13,391 11,258 1,177 635 610 152
- ------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Net Investment Income
Trust Class ........................ (10,835) (3,639) (792) (527) (363) (130)
Investors Class A .................. (353) (349) -- -- -- --
Investors Class B .................. -- -- (40) (26) (11) (2)
In Excess of Net Investment Income
Trust Class ........................ -- -- -- -- -- --
Investors Class A .................. -- -- -- -- -- --
Investors Class B .................. -- -- -- -- -- --
Capital Gains
Trust Class ........................ -- -- (12) -- -- --
Investors Class A .................. -- -- -- -- -- --
Investors Class B .................. -- -- (1) -- -- --
In Excess of Capital Gains
Trust Class ........................ -- -- -- -- -- --
Investors Class A .................. -- -- -- -- -- --
Investors Class B .................. -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions .............. (11,188) (3,988) (845) (553) (374) (132)
- ------------------------------------------------------------------------------------------------------------------------
Change in Net Assets .................... 2,203 7,270 332 82 236 20
- ------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Proceeds from Shares Issued ........ 35,373 214,918 9,497 13,472 6,495 6,095
Reinvestment of Cash Distributions . 22 11 26 5 2 2
Cost of Shares Redeemed ............ (43,571) (22,461) (5,693) (3,895) (1,067) (306)
------- -------- -------- ------ ------ ------
Total Trust Class Transactions ... (8,176) 192,468 3,830 9,582 5,430 5,791
------- -------- -------- ------ ------ ------
Investors Class A:
Proceeds from Shares Issued ........ 938 1,145 -- -- -- --
Reinvestment of Cash Distributions . 274 277 -- -- -- --
Cost of Shares Redeemed ............ (1,639) (1,860) -- -- -- --
------- -------- -------- ------ ------ ------
Total Investors Class A Transactions (427) (438) -- -- -- --
------- -------- -------- ------ ------ ------
Investors Class B:
Proceeds from Shares Issued ........ -- -- 743 359 518 113
Reinvestment of Cash Distributions . -- -- 31 17 9 2
Cost of Shares Redeemed ............ -- -- (115) (216) (92) (5)
------- -------- -------- ------ ------ ------
Total Investors Class B Transactions -- -- 659 160 435 110
- ------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions ........... (8,603) 192,030 4,489 9,742 5,865 5,901
- ------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in
Net Assets .................... (6,400) 199,300 4,821 9,824 6,101 5,921
- ------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period .................. 251,322 52,022 16,699 6,875 5,921 --
- ------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period ........................ $244,922 $251,322 $21,520 $16,699 $12,022 $5,921
- ------------------------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Trust Class:
Shares Issued ...................... 3,476 21,786 928 1,331 667 627
Shares Issued in Lieu of Cash
Distributions .................... 2 1 2 -- -- --
Shares Redeemed .................... (4,278) (2,225) (559) (384) (110) (32)
------- -------- -------- ------ ------ ------
Total Trust Class Share Transactions (800) 19,562 371 947 557 595
------- -------- -------- ------ ------ ------
Investors Class A:
Shares Issued ...................... 92 113 -- -- -- --
Shares Issued in Lieu of Cash Distributions 27 27 -- -- -- --
Shares Redeemed .................... (161) (184) -- -- -- --
------- -------- -------- ------ ------ ------
Total Investors Class A Share
Transactions ................... (42) (44) -- -- -- --
------- -------- -------- ------ ------ ------
Investors Class B:
Shares Issued ...................... -- -- 73 35 53 13
Shares Issued in Lieu of Cash Distributions -- -- 3 2 1 --
Shares Redeemed .................... -- -- (11) (21) (9) (1)
------- -------- -------- ------ ------ ------
Total Investors Class B Share
Transactions .................. -- -- 65 16 45 12
- ------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital
Share Transactions ................... (842) 19,518 436 963 602 607
========================================================================================================================
<FN>
(1) Commenced operations on March 1, 1996.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
66
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Year Ended November 30, 1997
<TABLE>
<CAPTION>
(IN THOUSANDS)
-----------------------------------------------------------------------------
CAPITAL CAPITAL SPECIAL SPECIAL
VALUE VALUE APPRECIATION APPRECIATION EQUITY EQUITY
FUND FUND FUND FUND FUND FUND
----------- ----------- ------------ ------------ ----------- -----------
12/01/96 12/01/95 12/01/96 12/01/95 12/01/96 12/01/95
TO 11/30/97 TO 11/30/96 TO 11/30/97 TO 11/30/96 TO 11/30/97 TO 11/30/96
- ------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income (Loss) ......... $ 5,276 $ 4,777 $ 223 $ 104 $ (80) $ 257
Net Realized Gain on Investments ..... 118,138 16,756 5,700 1,899 15,883 3,928
Change in Net Unrealized Appreciation
of investments ..................... 7,024 79,107 12,790 4,702 4,525 7,966
- ------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
From Operations ......................... 130,438 100,640 18,713 6,705 20,328 12,151
- ------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Trust Class .......................... (5,360) (4,346) (218) (83) (30) (247)
Investors Class A .................... (214) (199) (17) (14) (2) (19)
Investors Class B .................... (24) (23) -- -- -- --
In Excess of Net Investment Income
Trust Class .......................... -- -- -- -- -- --
Investors Class A .................... -- -- -- -- -- --
Investors Class B .................... -- -- -- -- -- --
Capital Gains
Trust Class .......................... (2,857) (14,523) (1,515) -- (2,129) (1,429)
Investors Class A .................... (96) (743) (226) -- (129) (110)
Investors Class B .................... (27) (186) -- -- (26) (21)
In Excess of Capital Gains
Trust Class .......................... -- -- -- -- -- --
Investors Class A .................... -- -- -- -- -- --
Investors Class B .................... -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions ................ (8,578) (20,020) (1,976) (97) (2,316) (1,826)
- ------------------------------------------------------------------------------------------------------------------------
Change in Net Assets ...................... 121,860 80,620 16,737 6,608 18,012 10,325
- ------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Proceeds from Shares Issued .......... 86,500 324,452 81,085 17,305 42,454 29,781
Reinvestment of Cash Distributions ... 2,679 10,467 364 8 1,455 1,316
Cost of Shares Redeemed .............. (167,444) (79,508) (30,703) (9,622) (26,423) (17,031)
-------- -------- -------- -------- -------- --------
Total Trust Class Transactions ..... (78,265) 255,411 50,746 7,691 17,486 14,066
-------- -------- -------- -------- -------- --------
Investors Class A:
Proceeds from Shares Issued .......... 9,602 4,589 2,569 1,389 1,154 689
Reinvestment of Cash Distributions ... 303 931 241 14 123 122
Cost of Shares Redeemed .............. (4,558) (2,402) (881) (702) (930) (1,437)
-------- -------- -------- -------- -------- --------
Total Investors Class A Transactions 5,347 3,118 1,929 701 347 (626)
-------- -------- -------- -------- -------- --------
Investors Class B:
Proceeds from Shares Issued .......... 7,216 2,571 432 -- 1,192 366
Reinvestment of Cash Distributions ... 51 207 -- -- 26 21
Cost of Shares Redeemed .............. (782) (255) (1) -- (181) (74)
-------- -------- -------- -------- -------- --------
Total Investors Class B Transactions 6,485 2,523 431 -- 1,037 313
- ------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions ............. (66,433) 261,052 53,106 8,392 18,870 13,753
- ------------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets ....... 55,427 341,672 69,843 15,000 36,882 24,078
- ------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period .................... 576,777 235,105 37,853 22,853 83,546 59,468
- ------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period .......................... $632,204 $576,777 $107,696 $37,853 $120,428 $ 83,546
- ------------------------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Trust Class:
Shares Issued ........................ 6,467 27,872 6,090 1,425 2,987 2,402
Shares Issued in Lieu of Cash Distributions 193 848 28 1 110 100
Shares Redeemed ...................... (12,286) (6,393) (2,322) (799) (1,942) (1,300)
-------- -------- -------- -------- -------- --------
Total Trust Class Share Transactions (5,626) 22,327 3,796 627 1,155 1,202
-------- -------- -------- -------- -------- --------
Investors Class A:
Shares Issued ........................ 636 369 183 117 73 53
Shares Issued in Lieu of Cash Distributions 21 75 19 1 9
9
Shares Redeemed ...................... (304) (192) (64) (59) (63) (110)
-------- -------- -------- -------- -------- --------
Total Investors Class A Share Transactions 353 252 138 59 19 (48)
-------- -------- -------- -------- -------- --------
Investors Class B:
Shares Issued ........................ 467 205 27 -- 73 28
Shares Issued in Lieu of Cash Distributions 4 17 -- -- 2 2
Shares Redeemed ...................... (53) (20) -- -- (13) (6)
-------- -------- -------- -------- -------- --------
Total Investors Class B Share Transactions 418 202 27 -- 62 24
- ------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital Share
Transactions (4,855) 22,781 3,961 686 1,236 1,178
========================================================================================================================
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
67
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Period Ended November 30, 1997
<TABLE>
<CAPTION>
(IN THOUSANDS)
------------------------------------------------
LIFE VISION LIFE VISION LIFE VISION
MAXIMUM GROWTH AND BALANCED
GROWTH PORTFOLIO INCOME PORTFOLIO PORTFOLIO
------------------ --------------- -----------
07/01/97 07/01/97 07/01/97
TO 11/30/97* TO 11/30/97* TO 11/30/97*
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C>
Net Investment Income ..................................................... $ 39 $ 190 $ 993
Net Realized Gain (Loss) on Investments ................................... (1) 20 235
Change in Net Unrealized Appreciation of investments ...................... 740 1,003 3,730
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From Operations ............................... 778 1,213 4,958
- ----------------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Trust Class ............................................................... (38) (180) (941)
Investors Class A ......................................................... -- -- --
Investors Class B ......................................................... -- -- --
In Excess of Net Investment Income
Trust Class ............................................................... -- -- --
Investors Class A ......................................................... -- -- --
Investors Class B ......................................................... -- -- --
Capital Gains
Trust Class ............................................................... -- -- --
Investors Class A ......................................................... -- -- --
Investors Class B ......................................................... -- -- --
In Excess of Capital Gains
Trust Class ............................................................... -- -- --
Investors Class A ......................................................... -- -- --
Investors Class B ......................................................... -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions ..................................................... (38) (180) (941)
- ----------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets ........................................................... 740 1,033 4,017
- ----------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Proceeds from Shares Issued ............................................... 13,614 21,846 94,371
Reinvestment of Cash Distributions ........................................ 38 180 941
Cost of Shares Redeemed ................................................... (680) (538) (9,887)
-------- ------- ------
Total Trust Class Transactions .......................................... 12,972 21,488 85,425
-------- ------- ------
Investors Class A:
Proceeds from Shares Issued ............................................... -- -- --
Reinvestment of Cash Distributions ........................................ -- -- --
Cost of Shares Redeemed ................................................... -- -- --
-------- ------- ------
Total Investors Class A Transactions .................................... -- -- --
-------- ------- ------
Investors Class B:
Proceeds from Shares Issued ............................................... -- -- --
Reinvestment of Cash Distributions ........................................ -- -- --
Cost of Shares Redeemed ................................................... -- -- --
-------- ------- ------
Total Investors Class B Transactions .................................... -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Capital Share Transactions ..................... 12,972 21,488 85,425
- ----------------------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets ............................................ 13,712 22,521 89,442
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ......................................................... -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period ............................................................... 13,712 22,521 89,442
- ----------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Trust Class:
Shares Issued ............................................................. 1,350 2,177 9,446
Shares Issued in Lieu of Cash Distributions ............................... 4 17 90
Shares Redeemed ........................................................... (66) (52) (990)
-------- ------- ------
Total Trust Class Share Transactions .................................... 1,288 2,142 8,546
-------- ------- ------
Investors Class A:
Shares Issued ............................................................. -- -- --
Shares Issued in Lieu of Cash Distributions ............................... -- -- --
Shares Redeemed ........................................................... -- -- --
-------- ------- ------
Total Investors Class A Share Transactions .............................. -- -- --
-------- ------- ------
Investors Class B:
Shares Issued ............................................................. -- -- --
Shares Issued in Lieu of Cash Distributions ............................... -- -- --
Shares Redeemed ........................................................... -- -- --
-------- ------- ------
Total Investors Class B Share Transactions .............................. -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase from Capital Share Transactions ................................... 1,288 2,142 8,546
- ----------------------------------------------------------------------------------------------------------------------------------
<FN>
*Commenced Operations on June 30, 1997.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
68
<PAGE>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET ------------------------- ------------------ NET NET OF EXPENSES RATIO OF
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE NET INVESTMENT
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS INCOME
BEGINNING INVESTMENT GAIN(LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
- ------------------
CASH RESERVE FUND
- ------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $1.00 0.050 -- (0.050) -- $1.00 5.16% 848,140 0.65% 0.80% 5.04%
1996 1.00 0.049 -- (0.049) -- 1.00 4.98% 621,139 0.66% 0.81% 4.87%
1995 1.00 0.053 -- (0.053) -- 1.00 5.45% 520,185 0.66% 0.81% 5.31%
1994 1.00 0.034 -- (0.034) -- 1.00 3.46% 377,493 0.66% 0.66% 3.37%
1993 1.00 0.027 -- (0.027) -- 1.00 2.76% 408,036 0.66% 0.66% 2.75%
1992 1.00 0.036 -- (0.036) -- 1.00 3.66% 496,847 0.61% 0.61% 3.50%
1991 1.00 0.060 -- (0.060) -- 1.00 6.17%* 396,534 0.51% 0.58% 6.00%
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $1.00 0.050 -- (0.050) -- $1.00 5.15% 135,507 0.65% 1.05% 5.04%
1996 1.00 0.049 -- (0.049) -- 1.00 4.97% 65,411 0.67% 1.07% 4.85%
1995 1.00 0.053 -- (0.053) -- 1.00 5.44% 40,240 0.67% 1.07% 5.31%
1994 1.00 0.033 -- (0.033) -- 1.00 3.36% 11,832 0.68% 0.97% 3.35%
1993 (1) 1.00 0.014 -- (0.014) -- 1.00 1.49%* 73 1.16%* 13.00%* 2.25%*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $1.00 0.042 -- (0.042) -- $1.00 4.22% 38 1.56% 1.71% 4.17%
1996 1.00 0.040 -- (0.040) -- 1.00 4.08% 15 1.52% 1.67% 4.02%
1995 (2) 1.00 0.028 -- (0.028) -- 1.00 2.82%* 21 1.52%* 1.67%* 4.45%*
- -------------------------
U.S. TREASURY MONEY FUND
- -------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $1.00 0.048 -- (0.048) -- $1.00 4.91% 632,381 0.65% 0.80% 4.82%
1996 1.00 0.047 -- (0.047) -- 1.00 4.80% 389,051 0.66% 0.81% 4.69%
1995 1.00 0.052 -- (0.052) -- 1.00 5.29% 370,454 0.66% 0.81% 5.16%
1994 1.00 0.033 -- (0.033) -- 1.00 3.30% 319,477 0.66% 0.66% 3.23%
1993 1.00 0.025 -- (0.025) -- 1.00 2.51% 342,537 0.66% 0.66% 2.52%
1992 1.00 0.034 -- (0.034) -- 1.00 3.55% 482,881 0.64% 0.65% 3.37%
1991 1.00 0.058 -- (0.058) -- 1.00 6.00% 279,790 0.56% 0.62% 5.61%
INVESTORS CLASS A (+)
FOR THE YEARS ENDED NOVEMBER 30,:
1994 $1.00 0.008 -- (0.008) -- $1.00 0.79% -- 0.92%* 29.16%* 2.31%*
1993 1.00 0.003 -- (0.003) -- 1.00 0.34% 17 1.16%* 36.60%* 2.02%*
- --------------------
TAX-FREE MONEY FUND
- --------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $1.00 0.030 -- (0.030) -- $1.00 3.06% 226,837 0.66% 0.81% 3.02%
1996 1.00 0.029 0.002 (0.029) (0.002) 1.00 3.14% 182,320 0.66% 0.81% 2.88%
1995 1.00 0.032 -- (0.032) -- 1.00 3.26% 202,333 0.66% 0.81% 3.19%
1994 1.00 0.021 -- (0.021) -- 1.00 2.07% 157,602 0.67% 0.67% 2.06%
1993 1.00 0.019 -- (0.019) -- 1.00 1.88% 142,284 0.66% 0.66% 1.85%
1992 1.00 0.031 -- (0.031) -- 1.00 3.03% 155,458 0.47% 0.62% 3.00%
1991 1.00 0.046 -- (0.046) -- 1.00 4.72% 166,670 0.27% 0.70% 4.39%
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $1.00 0.030 -- (0.030) -- $1.00 3.05% 7,634 0.68% 1.08% 3.42%
1996 1.00 0.029 0.002 (0.029) (0.002) 1.00 3.13% 2,994 0.67% 1.07% 2.86%
1995 1.00 0.031 -- (0.031) -- 1.00 3.25% 1,627 0.67% 1.07% 3.16%
1994 1.00 0.020 -- (0.020) -- 1.00 1.98% 757 0.76% 1.44% 1.97%
1993 (3) 1.00 0.009 -- (0.009) -- 1.00 0.88%* 228 1.16%* 3.00%* 1.35%*
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
NET INVESTMENT
INCOME TO
AVERAGE
NET ASSETS PORTFOLIO
EXCLUDING TURNOVER
FEE WAIVERS RATE
- --------------------------------
- ------------------
CASH RESERVE FUND
- ------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C>
1997 4.89% --
1996 4.72% --
1995 5.16% --
1994 3.37% --
1993 2.75% --
1992 3.50% --
1991 5.93% --
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1997 4.64% --
1996 4.45% --
1995 4.91% --
1994 3.06% --
1993(1) (14.09%)* --
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 4.02% --
1996 3.87% --
1995(2) 4.30%* --
- -------------------------
U.S. TREASURY MONEY FUND
- -------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 4.67% --
1996 4.54% --
1995 5.01% --
1994 3.23% --
1993 2.52% --
1992 3.36% --
1991 5.55% --
INVESTORS CLASS A (+)
FOR THE YEARS ENDED NOVEMBER 30,:
1994 (25.93%)* --
1993 (33.42%)* --
- --------------------
TAX-FREE MONEY FUND
- --------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 2.87% --
1996 2.73% --
1995 3.04% --
1994 2.06% --
1993 1.85% --
1992 2.85% --
1991 3.96% --
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1997 3.02% --
1996 2.46% --
1995 2.76% --
1994 1.29% --
1993(3) (0.49%)* --
<FN>
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. The accompanying
notes are an integral part of the financial statements.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
69
<PAGE>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET ------------------------- ------------------ NET NET OF EXPENSES RATIO OF
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE NET INVESTMENT
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS INCOME
BEGINNING INVESTMENT GAIN(LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------
LIMITED TERM BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $ 9.93 0.570 (0.010) (0.570) -- $ 9.92 5.84% 77,696 0.75% 0.90% 5.79%
1996 10.03 0.534 (0.097) (0.537) -- 9.93 4.52% 84,973 0.78% 0.93% 5.41%
1995 9.49 0.532 0.534 (0.526) -- 10.03 11.50% 88,789 0.78% 0.93% 5.44%
1994 10.16 0.480 (0.640) (0.480) (0.030) 9.49 (1.56%) 83,369 0.76% 0.76% 4.92%
1993 9.81 0.500 0.350 (0.500) -- 10.16 8.84% 85,968 0.77% 0.77% 4.95%
1992 (4) 10.00 0.070 (0.190) (0.070) -- 9.81 (1.22%) 72,590 1.04%* 1.04%* 4.46%*
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $ 9.95 0.563 (0.012) (0.569) -- $ 9.93 5.71% 926 0.77% 0.92% 5.77%
1996 10.06 0.535 (0.109) (0.536) -- 9.95 4.40% 1,122 0.79% 0.94% 5.39%
1995 9.50 0.530 0.556 (0.526) -- 10.06 11.70% 1,458 0.79% 0.94% 5.46%
1994 10.17 0.480 (0.650) (0.470) (0.030) 9.50 (1.72%) 593 0.77% 1.03% 4.92%
1993 (5) 10.11 0.260 0.060 (0.260) -- 10.17 3.16%* 427 1.02%* 1.48%* 4.70%*
- ----------------------
INTERMEDIATE BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $ 9.94 0.594 0.021 (0.595) -- $ 9.96 6.46% 299,820 0.87% 1.02% 6.07%
1996 10.12 0.550 (0.175) (0.555) -- 9.94 3.92% 281,187 0.88% 1.03% 5.70%
1995 9.16 0.569 0.954 (0.563) -- 10.12 17.07% 81,870 0.88% 1.03% 5.89%
1994 10.20 0.530 (1.000) (0.530) (0.040) 9.16 (4.72%) 77,143 0.88% 0.88% 5.53%
1993 9.70 0.520 0.500 (0.520) -- 10.20 10.69% 58,487 0.90% 0.90% 5.15%
1992 (4) 10.00 0.080 (0.300) (0.080) -- 9.70 (2.20%)* 13,759 1.15%* 1.15%* 4.63%*
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $ 9.94 0.592 0.022 (0.594) -- $ 9.96 6.45% 2,257 0.88% 1.03% 6.06%
1996 10.12 0.543 (0.169) (0.554) -- 9.94 3.91% 2,238 0.89% 1.04% 5.54%
1995 9.16 0.572 0.951 (0.563) -- 10.12 17.08% 1,729 0.89% 1.04% 5.87%
1994 10.19 0.520 (0.990) (0.520) (0.040) 9.16 (4.72%) 1,030 0.89% 1.05% 5.51%
1993 (6) 10.20 0.290 (0.010) -- (0.290) 10.19 2.72%* 618 1.15%* 1.58%* 4.90%*
- ---------------------
GOVERNMENT BOND FUND
- ---------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $10.37 0.605 (0.010) (0.605) -- $10.36 6.04% 34,013 0.66% 1.06% 5.99%
1996 10.66 0.591 (0.290) (0.591) -- 10.37 3.02% 20,171 0.69% 1.09% 5.75%
1995(7) 10.00 0.412 0.753 (0.412) (0.093) 10.66 11.85%* 10,211 0.71%* 1.11%* 6.00%*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $10.39 0.516 -- (0.516) -- $10.39 5.17% 1,213 1.57% 1.97% 5.07%
1996 10.68 0.503 (0.291) (0.502) -- 10.39 2.12% 698 1.55% 1.95% 4.89%
1995(8) 10.03 0.338 0.738 (0.333) (0.093) 10.68 10.86%* 325 1.55%* 1.95%* 5.05%*
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
NET INVESTMENT
INCOME TO
AVERAGE
NET ASSETS PORTFOLIO
EXCLUDING TURNOVER
FEE WAIVERS RATE
- -------------------------------
- ----------------------
LIMITED TERM BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C>
1997 5.64% 64%
1996 5.26% 51%
1995 5.29% 36%
1994 4.92% 47%
1993 4.95% 61%
1992(4) 4.46%* 2%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 5.62% 64%
1996 5.24% 51%
1995 5.31% 36%
1994 4.66% 47%
1993(5) 4.24%* 61%
- ----------------------
INTERMEDIATE BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 5.92% 66%
1996 5.55% 35%
1995 5.74% 37%
1994 5.53% 39%
1993 5.15% 28%
1992(4) 4.63%* 0%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 5.91% 66%
1996 5.39% 35%
1995 5.72% 37%
1994 5.35% 39%
1993(6) 4.47%* 28%
- ---------------------
GOVERNMENT BOND FUND
- ---------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 5.59% 144%
1996 5.35% 16%
1995(7) 5.60%* 28%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 4.67% 144%
1996 4.49% 16%
1995(8) 4.65%* 28%
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(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.
* Annualized.
** Total return does not reflect the sales charge or redemption charge, where
applicable.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
70
<PAGE>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET ------------------------- ------------------ NET NET OF EXPENSES RATIO OF
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE NET INVESTMENT
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS INCOME
BEGINNING INVESTMENT GAIN(LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- ------------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $10.22 0.463 0.089 (0.462) -- $10.31 5.55% 237,096 0.78% 0.93% 4.57%
1996 10.24 0.419 (0.021) (0.418) -- 10.22 4.01% 243,137 0.78% 0.93% 4.35%
1995 9.21 0.428 1.030 (0.428) -- 10.24 16.09% 43,373 0.72% 0.94% 4.34%
1994 10.33 0.440 (1.100) (0.440) (0.020) 9.21 (6.53%) 41,365 0.65% 0.77% 4.48%
1993 (9) 10.00 0.390 0.330 (0.390) -- 10.33 7.25%* 39,392 0.71%* 0.85%* 4.25%*
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $10.21 0.468 0.093 (0.461) -- $10.31 5.65% 7,826 0.79% 0.94% 4.56%
1996 10.23 0.415 (0.018) (0.417) -- 10.21 4.01% 8,185 0.79% 0.94% 4.12%
1995 9.20 0.428 1.029 (0.427) -- 10.23 16.10% 8,649 0.73% 0.95% 4.33%
1994 10.32 0.440 (1.100) (0.440) (0.020) 9.20 (6.56%) 7,481 0.66% 0.80% 4.47%
1993 (3) 10.22 0.260 0.100 (0.260) -- 10.32 (3.53%)* 4,805 0.66%* 0.90%* 4.27%*
- ----------------------------
VIRGINIA MUNICIPAL BOND FUND
- ----------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $10.28 0.475 0.168 (0.475) (0.008) $10.44 6.46% 20,044 0.69% 1.09% 4.65%
1996 10.40 0.465 (0.120) (0.465) -- 10.28 3.48% 15,911 0.71% 1.11% 4.61%
1995(7) 10.00 0.309 0.445 (0.310) (0.044) 10.40 7.67%* 6,247 0.71%* 1.11%* 4.61%*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $10.31 0.387 0.176 (0.385) (0.008) $10.48 5.58% 1,476 1.60% 2.00% 3.73%
1996 10.43 0.378 (0.121) (0.377) -- 10.31 2.58% 787 1.57% 1.97% 3.73%
1995(10) 10.06 0.237 0.409 (0.232) (0.044) 10.43 6.51%* 628 1.57%* 1.97%* 3.76%*
- -----------------------------
MARYLAND MUNICIPAL BOND FUND
- -----------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $ 9.76 0.426 0.190 (0.426) -- $ 9.95 6.50% 11,461 0.63% 1.28% 4.38%
1996(12) 10.00 0.309 (0.240) (0.309) -- 9.76 1.07%* 5,808 0.71%* 1.36%* 4.30%*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $ 9.76 0.338 0.199 (0.337) -- $ 9.96 5.64% 561 1.55% 2.20% 3.44%
1996(13) 9.53 0.200 0.226 (0.196) -- 9.76 7.67%* 113 1.55%* 2.20%* 3.42%*
- -----------
VALUE FUND
- -----------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $13.39 0.137 3.237 (0.145) (0.070) $16.55 25.41% 590,824 1.02% 1.17% 0.92%
1996 11.60 0.166 2.380 (0.165) (0.591) 13.39 22.68% 553,648 1.02% 1.17% 1.38%
1995 10.73 0.245 2.619 (0.262) (1.732) 11.60 28.76% 220,386 1.02% 1.17% 2.16%
1994 11.38 0.200 (0.240) (0.190) (0.420) 10.73 (0.49%) 166,713 1.01% 1.01% 1.82%
1993 10.50 0.180 0.870 (0.170) -- 11.38 10.05% 167,337 1.03% 1.03% 1.64%
1992 (4) 10.00 0.030 0.500 (0.030) -- 10.50 5.30%* 82,944 1.28%* 1.28%* 1.74%*
RATIO OF
NET INVESTMENT
INCOME TO
AVERAGE
NET ASSETS PORTFOLIO AVERAGE
EXCLUDING TURNOVER COMMISSION
FEE WAIVERS RATE RATE (A)
- ----------------------------------------------
- ------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- ------------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 4.42% 30% n/a
1996 4.20% 25% n/a
1995 4.12% 28% n/a
1994 4.36% 24% n/a
1993(9) 4.11%* 39% n/a
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 4.41% 30% n/a
1996 3.97% 25% n/a
1995 4.11% 28% n/a
1994 4.33% 24% n/a
1993(3) 4.03%* 39% n/a
- ----------------------------
VIRGINIA MUNICIPAL BOND FUND
- ----------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 4.25% 39% n/a
1996 4.21% 24% n/a
1995(7) 4.21%* 35% n/a
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 3.33% 39% n/a
1996 3.33% 24% n/a
1995(10) 3.36%* 35% n/a
- -----------------------------
MARYLAND MUNICIPAL BOND FUND
- -----------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 3.73% 5% n/a
1996(12) 3.65%* 9% n/a
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 2.79% 5% n/a
1996(13) 2.77%* 9% n/a
- -----------
VALUE FUND
- -----------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 0.77% 100% $.0122
1996 1.23% 82% .0548
1995 2.01% 175% n/a
1994 1.82% 116% n/a
1993 1.64% 77% n/a
1992(4) 1.74%* 5% n/a
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(A) Average commission rate paid per share for the security purchases and sales
made during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(3) Commencement of operations for this class May 5, 1993.
(4) Commencement of operations for this class September 28, 1992.
(9) Commencement of operations for this class January 11, 1993.
(10) Commencement of operations for this class April 17, 1995.
(12) Commencement of operations for this class March 1, 1996.
(13) Commencement of operations for this class April 25, 1996.
* Annualized.
** Total return does not reflect the sales charge or redemption charge, where
applicable.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
71
<PAGE>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET ------------------------- ------------------ NET NET OF EXPENSES RATIO OF
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE NET INVESTMENT
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS INCOME
BEGINNING INVESTMENT GAIN(LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------
VALUE FUND (CONTINUED)
- -----------------------
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $13.47 0.136 3.248 (0.143) (0.070) $16.64 25.42% 28,112 1.03% 1.18% 0.89%
1996 11.66 0.169 2.396 (0.164) (0.591) 13.47 22.63% 17,997 1.03% 1.18% 1.35%
1995 10.78 0.250 2.623 (0.261) (1.732) 11.66 28.71% 12,633 1.03% 1.18% 2.14%
1994 11.42 0.180 (0.220) (0.180) (0.420) 10.78 (0.45%) 8,115 1.02% 1.04% 1.81%
1993 (11) 11.06 0.060 0.350 (0.050) -- 11.42 3.71%* 4,058 1.16%* 1.16%* 1.51%*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $13.44 0.037 3.234 (0.051) (0.070) $16.59 24.63% 13,269 1.73% 2.09% 0.15%
1996 11.64 0.091 2.384 (0.084) (0.591) 13.44 21.81% 5,131 1.68% 2.03% 0.71%
1995 (7) 11.11 0.120 1.618 (0.136) (1.072) 11.64 15.78%* 2,086 1.68%* 2.03%* 1.13%*
- --------------------------
CAPITAL APPRECIATION FUND
- --------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $13.58 0.037 3.005 (0.041) (0.621) $15.96 23.71% 99,364 1.02% 1.17% 0.27%
1996 10.87 0.043 2.709 (0.042) -- 13.58 25.38% 32,983 1.10% 1.25% 0.37%
1995 10.17 0.043 2.035 (0.046) (1.332) 10.87 20.74% 19,592 1.10% 1.25% 0.40%
1994 9.79 0.010 0.380 (0.010) -- 10.17 4.13% 12,869 1.05% 1.05% 0.17%
1993 (9) 10.00 0.010 (0.210) (0.010) -- 9.79 (2.00%)* 7,741 1.11%* 1.11%* 0.20%*
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $13.44 0.038 2.983 (0.040) (0.621) $15.80 23.80% 7,900 1.03% 1.18% 0.27%
1996 10.76 0.043 2.677 (0.040) -- 13.44 25.34% 4,870 1.11% 1.26% 0.36%
1995 10.08 0.044 2.013 (0.045) (1.332) 10.76 20.72% 3,261 1.11% 1.26% 0.39%
1994 9.74 0.010 0.340 (0.010) -- 10.08 3.70% 1,509 1.06% 1.18% 0.16%
1993 (10) 9.42 -- 0.320 -- -- 9.74 3.40%* 649 1.36%* 1.80%* (0.05%)*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 (12) $15.21 (0.016) 0.580 (0.004) -- $15.77 27.07% 432 1.93%* 2.07%* (0.87%)*
- --------------------
SPECIAL EQUITY FUND
- --------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $13.73 (0.009) 3.114 (0.005) (0.380) $16.45 23.28% 112,403 1.01% 1.16% (0.07%)
1996 12.12 0.050 1.926 (0.053) (0.313) 13.73 16.44% 77,931 1.04% 1.19% 0.39%
1995 10.56 0.100 1.928 (0.108) (0.360) 12.12 20.07% 54,221 1.04% 1.19% 0.90%
1994 12.76 0.030 (0.460) (0.020) (1.750) 10.56 (4.74%) 43,640 1.03% 1.03% 0.32%
1993 11.19 0.010 1.560 -- -- 12.76 14.07% 32,706 1.03% 1.03% 0.06%
1992 (4) 10.00 0.010 1.180 -- -- 11.19 11.90%* 21,925 1.28%* 1.28%* 0.23%*
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $13.72 (0.011) 3.126 (0.005) (0.380) $16.45 23.38% 5,892 1.02% 1.17% (0.08%)
1996 12.12 0.052 1.911 (0.050) (0.313) 13.72 16.34% 4,660 1.05% 1.20% 0.40%
1995 10.56 0.100 1.927 (0.107) (0.360) 12.12 20.06% 4,693 1.05% 1.20% 0.89%
1994 12.76 0.030 (0.460) (0.020) (1.750) 10.56 (4.76%) 3,436 1.04% 1.10% 0.31%
1993 (3) 11.69 -- 1.070 -- -- 12.76 9.19%* 938 1.28%* 1.61%* (0.19%)*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 $13.62 (0.063) 3.002 -- (0.380) $16.18 22.22% 2,133 1.93% 2.08% (1.00%)
1996 12.08 (0.043) 1.899 (0.003) (0.313) 13.62 15.47% 955 1.90% 2.05% (0.47%)
1995 (7) 10.61 0.007 1.501 (0.038) -- 12.08 14.22%* 554 1.90%* 2.05%* (0.04%)*
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
NET INVESTMENT
INCOME TO
AVERAGE
NET ASSETS PORTFOLIO AVERAGE
EXCLUDING TURNOVER COMMISSION
FEE WAIVERS RATE RATE (A)
- --------------------------------------------
- -----------------------
VALUE FUND (CONTINUED)
- -----------------------
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C>
1997 0.74% 100% $.0122
1996 1.20% 82% .0548
1995 1.99% 175% n/a
1994 1.79% 116% n/a
1993(11) 1.51%* 77% n/a
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 (0.20%) 100% $.0122
1996 0.36% 82% .0548
1995(7) 0.78%* 175% n/a
- --------------------------
CAPITAL APPRECIATION FUND
- --------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 0.12% 123% $.0086
1996 0.22% 86% .0764
1995 0.25% 470% n/a
1994 0.17% 271% n/a
1993(9) 0.20%* 133% n/a
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 0.12% 123% $.0086
1996 0.21% 86% .0764
1995 0.24% 470% n/a
1994 0.04% 271% n/a
1993(10)(0.49%)* 133% n/a
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997(12)(1.01%)* 123% $.0086
- --------------------
SPECIAL EQUITY FUND
- --------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1997 (0.22%) 148% $.0092
1996 0.24% 98% .0620
1995 0.75% 81% n/a
1994 0.32% 117% n/a
1993 0.06% 95% n/a
1992(4) 0.23%* 3% n/a
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 (0.23%) 148% $.0092
1996 0.25% 98% .0620
1995 0.74% 81% n/a
1994 0.25% 117% n/a
1993 (3)(0.52%)* 95% n/a
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1997 (1.15%) 148% $.0092
1996 (0.62%) 98% .0620
1995 (7)(0.19%)* 81% n/a
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(A) Average commission rate paid per share for the security purchases and sales
made during the period. Presentation of the rate is only required for
fiscal years beginning after September 1, 1995.
(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 May 7, 1993.
(11) Commencement of operations for this class May 7, 1993.
(12) Commencement of operations for this class September 2, 1997.
* Annualized.
** Total return does not reflect the sales charge or redemption charge, where
applicable.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
72
<PAGE>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO OF
NET ------------------------- ------------------ NET NET OF EXPENSES RATIO OF
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE NET INVESTMENT
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS INCOME
BEGINNING INVESTMENT GAIN(LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------
LIFE VISION MAXIMUM GROWTH PORTFOLIO
- ------------------------------------
TRUST CLASS
FOR THE PERIOD ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(1) $ 10.00 0.032 0.650 (0.032) -- $10.65 6.82% 13,712 0.25%* 0.73%* 0.72%*
- ---------------------------------------
LIFE VISION GROWTH AND INCOME PORTFOLIO
- ---------------------------------------
TRUST CLASS
FOR THE PERIOD ENDED NOVEMBER 30,:
1997(1) $ 10.00 0.091 0.506 (0.087) -- $10.51 5.97% 22,521 0.25%* 0.59%* 2.11%*
- ------------------------------
LIFE VISION BALANCED PORTFOLIO
- ------------------------------
TRUST CLASS
FOR THE PERIOD ENDED NOVEMBER 30,:
1997(1) $ 10.00 0.116 0.454 (0.110) -- $10.46 5.70% 89,442 0.25%* 0.42%* 2.66%*
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
NET INVESTMENT
INCOME TO
AVERAGE
NET ASSETS PORTFOLIO
EXCLUDING TURNOVER
FEE WAIVERS RATE
- --------------------------------
- ------------------------------------
LIFE VISION MAXIMUM GROWTH PORTFOLIO
- ------------------------------------
TRUST CLASS
FOR THE PERIOD ENDED NOVEMBER 30,:
<S> <C> <C>
1997(1) 0.24%* 34%
- ---------------------------------------
LIFE VISION GROWTH AND INCOME PORTFOLIO
- ---------------------------------------
TRUST CLASS
FOR THE PERIOD ENDED NOVEMBER 30,:
1997(1) 1.77%* 25%
- ------------------------------
LIFE VISION BALANCED PORTFOLIO
- ------------------------------
TRUST CLASS
FOR THE PERIOD ENDED NOVEMBER 30,:
1997(1) 2.49%* 43%
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commencement of operations June 30, 1997.
* Annualized.
** Total return does not reflect the sales charge or redemption charge, where
applicable.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
73
<PAGE>
NOTES TO FINANCIAL STATEMENTS CRESTFUNDS, INC.
November 30, 1997
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 fifteen
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
Capital Appreciation Fund
Special Equity Fund
BOND FUNDS
Limited Term Bond Fund
Intermediate Bond Fund
Government Bond Fund
Virginia Intermediate Municipal Bond Fund
Virginia Municipal Bond Fund
Maryland Municipal Bond Fund
MONEY MARKET FUNDS
Cash Reserve Fund
U.S. Treasury Money Fund
Tax Free Money Fund
LIFE VISION PORTFOLIOS
Life Vision Maximum Growth Portfolio
Life Vision Growth and Income Portfolio
Life Vision Balanced Portfolio
The Funds' prospectus provides a description of each Fund's investment
objectives, policies and strategies.
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 are 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 supervision of the
Funds' Directors.
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. To the extent these
differences are permanent, adjustments are made to the appropriate equity
accounts in the period that the difference arises. Accordingly, the
following permanent differences, primarily attributable to certain net
operating losses, which for tax purposes have been used to offset net
short-term capital gains, have been reclassified to the following accounts:
ACCUMULATED UNDISTRIBUTED
NET REALIZED NET INVESTMENT
GAIN/(LOSS) INCOME
------------ --------------
Capital Appreciation $ (2) $ 2
Special Equity (96) 96
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
74
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) CRESTFUNDS, INC.
November 30, 1997
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, Virginia Municipal Bond
Fund, and Maryland Municipal Bond Fund may invest in repurchase 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, Crestar
Asset Management Company, (formerly Capitoline Investment Services,
Incorporated), is responsible for determining that the value of these
underlying securities remains at least 102% of 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.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS--The Financial
Statements have been prepared in conformity with generally accepted
accounting principles which require management to make certain estimates
and assumptions at the date of the financial statements.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES--The Company's investment advisor is Crestar Asset
Management Company (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, Maryland Municipal Bond Fund and Virginia Municipal Bond Fund;
.60% of each Fund's average daily net assets; Maximum Growth Portfolio,
Growth and Income Portfolio, and Balanced Portfolio; .25% of each
Portfolio'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 Fund Resources (the
Administrator), a Delaware business trust, serves as administrator to the
Company. SEI Investments Management Corporation, a wholly-owned subsidiary
of SEI Investments Company (SEI), is the owner of all beneficial interest
in the Administrator. 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 Equity, Bond, and Money Market Funds. The
Administrator has voluntarily agreed to waive a portion of its fee for
Government Bond Fund, Virginia Municipal Bond Fund and Maryland Municipal
Bond Fund in order to limit operating expenses. The Administrator is
entitled to receive a fee of $40,000 annually for each Life Vision
Portfolio. The Administrator has voluntarily agreed to have its fee waived
for each Life Vision Portfolio for a twelve month period following the
commencement of operations.
SEI Investments Distribution Co. (the Distributor), a wholly-owned
subsidiary of SEI, 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
75
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) CRESTFUNDS, INC.
November 30, 1997
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 .95% for each Fund, except for the Value Fund for
which the limit is .75%.
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 the Equity, Bond, and Money Market
Fund's average daily net assets and up to .03% of each LifeVision
Portfolio's average net assets.
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.
CONTINGENT
FROM DATE OF DEFERRED SALES
PURCHASE CHARGE
------------ --------------
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
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 year ended November 30, 1997, for each Fund is as follows:
PURCHASE SALES
(000) (000)
-------- ---------
Limited Term Bond ................. $ 43,433 $ 50,943
Intermediate Bond ................. 201,487 180,307
Government Bond ................... 61,940 47,933
Virginia Intermediate Municipal Bond 71,350 80,832
Virginia Municipal Bond ........... 9,704 6,750
Maryland Municipal Bond ........... 5,523 398
Value ............................. 537,157 599,802
Capital Appreciation .............. 140,507 91,388
Special Equity .................... 160,810 139,154
Maximum Growth .................... 16,499 3,527
Growth and Income ................. 25,952 4,451
Balanced .......................... 115,936 30,616
At November 30, 1997, 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,
1997, for each Fund is as follows:
NET
APPRECIATION DEPRECIATION APPRECIATION/DEPRECIATION
(000) (000) (000)
------------ ------------ -------------------------
Limited Term Bond .. $ 755 $ (154) $ 601
Intermediate Bond .. 6,833 (242) 6,591
Government Bond .... 702 (7) 695
Virginia Intermediate
Municipal Bond .. 8,253 (55) 8,198
Virginia Municipal
Bond ............ 563 -- 563
Maryland Municipal
Bond ............ 287 (1) 286
Value .............. 116,466 (12,383) 104,083
Capital
Appreciation .... 20,480 (2,067) 18,413
Special Equity ..... 22,376 (4,813) 17,563
Maximum Growth ..... 775 (35) 740
Growth and Income .. 1,040 (37) 1,003
Balanced ........... 3,729 -- 3,729
Subsequent to October 31, 1997, Capital Appreciation recognized net capital
losses of $392,369 for tax purposes that have been deferred to 1998. The Funds
also had capital losses carryforward at November 30, 1997, to the extent
provided in the regulations for Federal income tax as follows:
CAPITAL LOSS
CARRYOVER
11/30/97 EXPIRES 2000 EXPIRES 2001
------------- ------------ ------------
Cash Reserve ........... $ 46,160 $ -- $ --
Limited Term Bond ...... 1,877,822 -- --
Intermediate Bond ...... 2,140,613 -- --
Government Bond ........ 4,098 -- --
Maryland Municipal Bond 30,436 -- --
76
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded) CRESTFUNDS, INC.
November 30, 1997
EXPIRES EXPIRES EXPIRES EXPIRES
2002 2003 2004 2005
------- ------- ------- -------
Cash Reserve .....$ 31,799 $ 14,361 $ -- $ --
Limited Term Bond 784,783 254,023 555,287 283,729
Intermediate Bond 1,279,577 667,656 -- 193,380
Government Bond .. -- -- 4,098 --
Maryland Municipal
Bond .......... -- -- 25,459 4,977
5. CONCENTRATION OF CREDIT RISK
The Virginia Intermediate Municipal Bond Fund, the Virginia Municipal Bond Fund,
and the Maryland Municipal Bond Fund invest in debt securities in their
respective states. 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.
6. AFFILIATED TRANSACTIONS:
On September 20, 1996, the assets of Crestar Bank's Common Trust Funds: the
SouthEast Equity, Value, Tax Exempt and Bond Funds, consisting entirely of
securities and certain related receivables, were converted on a tax-free basis
into the Special Equity, Value, Virginia Intermediate Bond and Intermediate Bond
Funds, respectively. The number of shares issued for each fund and the net
assets of each fund (including net unrealized gain/loss) immediately before the
conversion were as follows:
UNREALIZED
COMMON TRUST FUND ASSETS GAIN/(LOSS)
- ----------------- ------ -----------
SouthEast Equities $ 11,962,678 $ 1,839,279
Value 198,034,029 19,525,691
Tax Exempt 188,792,454 3,213,456
Bond 156,399,438 (1,355,800)
MUTUAL FUNDS NET ASSETS SHARES ISSUED
- ------------ ---------- -------------
Special Equity $ 59,964,348 904,208.452
Value 333,187,057 16,022,170.650
Virginia Intermediate
Municipal Bond 67,497,327 18,879,245.360
Intermediate Bond 118,798,561 16,257,737.881
The Net Asset value of shares issued in exchange for the assets and number of
shares in the tax-free conversions are included in capital share transactions
and shares issued and redeemed, respectively, of the Trust Class in the
Statement of Changes in Net Assets for each respective fund.
- --------------------------------------------------------------------------------
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
INVESTMENTS DISTRIBUTIONS CO. 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
INVESTMENTS DISTRIBUTIONS CO. AND CRESTAR BANK ARE NOT AFFILIATED.
- --------------------------------------------------------------------------------
77
<PAGE>
NOTICE TO SHAREHOLDERS OF
THE CRESTFUNDS, INC.
(Unaudited)
For Shareholders that do not have a November 30, 1997 taxable year end, this
notice is for informational purposes only. For shareholders with a November 30,
1996 taxable year end, please consult your tax advisor as to the pertinence of
the notice.
For the fiscal year ended November 30, 1997, 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 DISTRIBUTION
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%
Maryland Municipal Bond.................................... 0% 100% 100%
Value...................................................... 21% 79% 100%
Capital Appreciation....................................... 43% 57% 100%
Special Equity............................................. 99% 1% 100%
Life Vision Maximum Growth................................. 0% 100% 100%
Life Vision Growth and Income.............................. 0% 100% 100%
Life Vision Balanced....................................... 0% 100% 100%
(D) (E) (F)
QUALIFYING TAX EXEMPT FOREIGN
FUND DIVIDENDS (1) INTEREST TAX CREDIT
---- ----------- ----------- ----------
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% 99% 0%
Virginia Municipal Bond.................................... 0% 100% 0%
Maryland Municipal Bond.................................... 0% 100% 0%
Value...................................................... 100% 0% 0%
Capital Appreciation....................................... 100% 0% 0%
Special Equity............................................. 46% 0% 0%
Life Vision Maximum Growth................................. 44% 0% 0%
Life Vision Growth and Income.............................. 34% 0% 0%
Life Vision Balanced....................................... 31% 0% 0%
<FN>
(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.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
78
<PAGE>
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<PAGE>
[THIS PAGE LEFT INTENTIONALLY BLANK]
<PAGE>
CREST
-----
FUNDS
A FAMILY OF MUTUAL FUNDS
MANAGED BY
CRESTAR ASSET MANAGEMENT COMPANY
CFU0059
