CRESTAR
[LOGO OMITTED]
NOVEMBER 30, 1998
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:
The ups and downs of the U.S. financial markets during 1998 tested the
mettle of many investors, but those who rode out the turbulent times were well
rewarded. The stock market generated a fourth consecutive year of double-digit
returns; a feat unequaled since the 1949-1952 era. The fixed-income markets also
produced above average returns during the year, and money market funds returns
were three times the level of inflation.
In our last annual letter we warned that a number of events could rattle
the financial markets in 1998, but that if the economy continued to expand and
inflation remained low, as we forecasted, the overall backdrop for financial
assets would remain positive. Economic growth, in aggregate, was very good, and
inflation remained below 2%. This helped the U.S. markets weather the problems
and fallout from the Asian financial crisis. While we are encouraged by the
steps that have been taken by policy makers around the world in dealing with
this problem, we also know that it will remain a significant issue as we enter
1999.
A REVIEW OF 1998
The past year was another one of exceptional growth accompanied by low
inflation. Unlike previous years, the strength in the U.S. economy was more
narrowly concentrated in the consumer sector (the "front end" of the economy),
while the manufacturing sector (the "back end" of the economy) began to
experience slower growth.
In typical business cycles, excessive spending growth causes inflation to
accelerate. This forces the Federal Reserve to raise interest rates to slow the
economy and curb inflation. The current environment is quite different, however,
in that the negative economic pressures are largely related to problems in Asia,
Russia and Latin America, and their impact on U.S. manufacturers. Said another
way, the U.S. economy was "rear-ended" by the Asian financial crisis. Exports
from U.S. companies to those regions fell significantly in 1998. In addition,
U.S. manufacturers competing with Asian producers felt pricing pressure linked
to the rising value of the dollar. The result was a gradual slowing in S&P 500
operating profits, which had declined approximately 3% on a year-over-year basis
by the third quarter, and are likely to remain sluggish for several more
quarters.
This economic stress was compounded by a world financial markets crisis
brought on by the unexpected "restructuring" of sovereign debt by Russia in
early Summer. Smaller, less developed financial systems in emerging market
economies experienced a sudden flight of capital to the relative safety of U.S.
Treasury securities. The S&P 500 fell nearly 20% between July 17th and the end
of August, as investors fled the high-flying stock market for the fixed-income
and money markets. In fact, the damage to the overall stock market was even
greater. The average stock in the S&P 500 fell over 28% from its 52-week high by
the end of the third quarter, and small-cap stocks fared even worse. The average
decline from the 52-week high by small-cap stocks (less than $250 million in
market capitalization) was over 53% by September 30th.
The reaction to the crisis by world central banks and the fixed-income
markets was quick and dramatic. Long U.S. Treasury yields fell from nearly 5.75%
to just over 4.70% in six weeks. The Federal Reserve lowered interest rates
three times in an effort to restore liquidity to the stock and bond markets.
Between October 1st and November 30th, central banks around the world cut
interest rates over 50 times in total. President Clinton appeared on national
television to urge Congress to approve additional funding for the International
Monetary Fund.
Ironically, the initial impact of these crises on the American consumer
(the front end) was very positive: home mortgage rates fell to 30-year lows, the
strong dollar increased purchasing power, and commodity prices, especially oil
and gasoline, fell. Consumers in the U.S. took advantage of their newly
discovered wealth by purchasing homes, refinancing existing mortgages, and
buying new cars. Inflation-adjusted consumption expenditures grew at over 4% at
an annual rate during the third quarter.
The quick and somewhat coordinated reaction by central banks combined with
renewed consumer spending propelled the stock markets higher in early October
and the S&P 500 reached a new high on November 24th, just before Thanksgiving
Day. The S&P 500 closed the fiscal year (November 30, 1998) with price-only gain
of 21.8%. This was one of the quickest stock market recoveries in recent memory.
U.S. Treasury yields reversed a portion of the Summer rally, but the 30-year
Treasury bond closed the fiscal year with a yield of 5.07% compared to a 6.04%
yield on November 30, 1997.
1
<PAGE>
THE OUTLOOK FOR 1999
There are three key factors affecting the outlook for 1999. The first is
the outlook for inflation. The Consumer Price Index rose just 1.5% in the twelve
months ended November 1998, compared with a 1.7% rise for all of 1997 and 3.5%
in 1996. Low inflation is a positive influence on both the stock and bond
markets. For stocks, low inflation justifies higher multiples that investors pay
for future earnings. Analysts often measure this by calculating the
price/earnings ratio or P/E ratio. In the fixed-income markets low inflation
rates translate into higher real returns for bond investors. We continue to
believe that inflation will remain low in the year ahead, but we are less
confident that inflation will move significantly lower as it has in recent
years.
The second factor is the outlook for U.S. corporate profits and what the
impact will be from the continuing spread of the global financial crises.
Companies have "confessed" that near term earnings may not match analysts'
expectations. Many companies have merged as a means of sustaining or creating
growth and achieving new efficiencies, and layoffs have increased. In this
sense, the front end of the economy is only now beginning to feel the negative
effects of the "Asian Flu".
The third factor is what value investors will place on earnings. The low
inflation environment that has developed since the early 1980s has given
investors greater confidence to buy equities and attach greater value to
expected future earnings. Over the past fifteen years, approximately one-third
of the return in stocks is estimated to have come from investors paying more for
each dollar earned; low inflation equates to higher price/earnings ratios. By
the end of November 1998, the P/E ratio was at record levels. If inflation,
while low, does not move significantly lower next year, current valuations may
only remain steady at best. This would lead one to believe that a more
reasonable expectation for 1999 would be a return comparable to the year over
year growth in corporate profits. But, as we know, records are made to be
broken.
Our current expectation is that corporate profits could continue to reflect
the stresses and strains of the global financial crises in the coming quarters.
Further mergers and acquisitions could reflect desires to improve market share
position as well as achieve additional cost efficiencies. It is still not
evident that companies have the ability to raise prices as a means of improving
profit margins. If current P/E ratios hold, we would expect stock returns to
rise in the mid to high-single digits in the coming year. This would be
attractive relative to inflation, but below the double-digit returns many
investors have received in recent years. Despite the drop in interest rates over
the past year, we continue to believe that bonds represent value in a projected
environment of slower economic growth and low inflation.
On behalf of all of us who manage CrestFunds, thank you for the opportunity
to serve you. Please let us know if there is more we can do to help fulfill your
investment objectives.
Sincerely,
/s/Ben L. Jones, CFA
Ben L. Jones, CFA
President & Chief Investment Officer
Crestar Asset Management Company
a wholly-owned subsidiary of Crestar Bank
and part of the Crestar Investment Group
November, 1998
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
The fixed-income markets had another good year of above-average returns. Bonds
benefited from continued low inflation as well as turmoil in the global capital
markets. The yield on the 30-year Treasury bond fell nearly a full percentage
point from 6.04% to 5.07% by November 30, 1998, the close of the fiscal year. A
significant development during the year was a more pronounced yield differential
between the highest quality U.S. Treasury securities and other fixed-income
bonds such as corporate and mortgage-backed issues. This could present
attractive investment opportunities for the coming year.
The economy continued to expand at a strong pace for much of the year, in part
due to a decision by the Federal Reserve to hold short-term interest rates
steady in the wake of the 1997 Asian financial crisis. The fear or expectation
was that the economic decline in the Far East would act as a brake on the
domestic expansion. While exports to Asia did fall dramatically, consumer
spending propelled the economy forward, supported by job growth, lower mortgage
rates and falling commodity prices, especially for gasoline. Two areas that
reflected the strength in consumption were the housing and auto markets which
hit new cyclical highs during the year.
Inflation remained low in 1998, as reflected by a modest 1.5% rise in the
Consumer Price Index during the twelve months ended November 1998. The favorable
trend was due in part to significant declines in commodity prices during the
year, particularly for energy. Concerns of a sharp rise in wages due to tight
labor markets were not realized in part due to continued gains in productivity.
Perhaps the most significant factor affecting the bond markets during the year
was the renewed deterioration in the Asian economies that spread to Russia and
Latin America during the third quarter. The impact on U.S. fixed-income markets
was two-fold. The first was a global flight to the perceived safety of U.S.
Treasury securities, pushing yields sharply lower over the summer. The second
effect was a drying up of liquidity for other types of bonds, pushing quality
spreads up to levels not seen since the last recession. Many investors became
concerned that the sharp drop in demand for U.S. exports and reduced U.S.
competitiveness might increase the risk of default in many companies. Severe
illiquidity in the bond markets was a major reason behind the three Federal
Reserve interest rate cuts between the end of September and November.
As a result of these forces, long term Treasury securities generated the
greatest returns for the year, followed by U.S. agency bonds and investment
grade corporate notes. As expected, bonds of companies with limited or no
exposure to foreign economies outperformed the overall corporate market. The
general decline in interest rates, increased volatility, and a sharp
acceleration in mortgage pre-payments caused the high-quality mortgage-backed
security market to lag in performance.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Corporates -- 26%
Municipal Bonds -- 1%
Cash Equivalents -- 4%
Treasuries & Agencies -- 5%
Mortgage/Asset Backed -- 64%
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]
Plot points to follow:
CrestFunds Limited Term Merrill Lynch 1-5 Year Lehman Intermediate
Bond Fund, Trust Class Gov't/Corp. Bond Index Gov't/Corp. Bond Index
9/30/92 $1,000,000 $1,000,000 $1,000,000
11/92 988,000 987,000 983,000
11/93 1,076,000 1,065,000 1,079,000
11/94 1,059,000 1,061,000 1,059,000
11/95 1,181,000 1,190,000 1,213,000
11/96 1,234,000 1,260,000 1,284,000
11/97 1,306,000 1,336,000 1,365,000
The CrestFunds Limited Term Bond Fund investment strategy was to selectively
increase exposure to mortgage-backed and corporate securities during these
turbulent times as a means of improving current yield as well as future total
return within the fund. The average duration of the fund was kept relatively
neutral to the benchmark.
We remain optimistic on the outlook for bonds in the coming year. Economic
growth is likely to be positive and inflation pressures should remain in check.
Continued growth in the economy reduces the risk of credit downgrades and
defaults, and inflation-adjusted yields still present an attractive vehicle for
many investors. While Federal Reserve policy is likely to be neutral over the
near-term, we believe that the Fed will be willing to lower short term rates
further if the economy shows signs of weakness. We look for high volatility to
persist into 1999 as these global challenges surface and are addressed, but we
believe the bond markets offer attractive potential returns to long term
investors.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
--------------------------------------
TRUST CLASS
-----------
1 YEAR 6.39%
3 YEAR 5.58%
LIFE OF FUND 5.49%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS
-----------
1 YEAR 6.39%
3 YEAR 17.69%
LIFE OF FUND 39.04%
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
The fixed-income markets had another good year of above-average returns. Bonds
benefited from continued low inflation as well as turmoil in the global capital
markets. The yield on the 30-year Treasury bond fell nearly a full percentage
point from 6.04% to 5.07% by November 30, 1998, the close of the fiscal year. A
significant development during the year was a more pronounced yield differential
between the highest quality U.S. Treasury securities and other fixed-income
bonds such as corporate and mortgage-backed issues. This could present
attractive investment opportunities for the coming year.
The economy continued to expand at a strong pace for much of the year, in part
due to a decision by the Federal Reserve to hold short-term interest rates
steady in the wake of the 1997 Asian financial crisis. The fear or expectation
was that the economic decline in the Far East would act as a brake on the
domestic expansion. While exports to Asia did fall dramatically, consumer
spending propelled the economy forward, supported by job growth, lower mortgage
rates and falling commodity prices, especially for gasoline. Two areas that
reflected the strength in consumption were the housing and auto markets which
hit new cyclical highs during the year.
Inflation remained low in 1998, as reflected by a modest 1.5% rise in the
Consumer Price Index during the twelve months ended November 1998. The favorable
trend was due in part to significant declines in commodity prices during the
year, particularly for energy. Concerns of a sharp rise in wages due to tight
labor markets were not realized in part due to continued gains in productivity.
Perhaps the most significant factor affecting the bond markets during the year
was the renewed deterioration in the Asian economies that spread to Russia and
Latin America during the third quarter. The impact on U.S. fixed-income markets
was two-fold. The first was a global flight to the perceived safety of U.S.
Treasury securities, pushing yields sharply lower over the summer. The second
effect was a drying up of liquidity for other types of bonds, pushing quality
spreads up to levels not seen since the last recession. Many investors became
concerned that the sharp drop in demand for U.S. exports and reduced U.S.
competitiveness might increase the risk of default in many companies. Severe
illiquidity in the bond markets was a major reason behind the three Federal
Reserve interest rate cuts between the end of September and November.
As a result of these forces, long term Treasury securities generated the
greatest returns for the year, followed by U.S. agency bonds and investment
grade corporate notes. As expected, bonds of companies with limited or no
exposure to foreign economies outperformed the overall corporate market. The
general decline in interest rates, increased volatility, and a sharp
acceleration in mortgage pre-payments caused the high-quality mortgage-backed
security market to lag in performance.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Treasuries & Agencies -- 14%
Cash Equivalents -- 4%
Municipal Bonds -- 1%
Corporates -- 13%
Mortgage/Asset Backed -- 68%
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]
Plot points to follow:
CrestFunds Intermediate Bond Lehman Brothers
Fund, Trust Class Aggregate Bond Index
9/30/92 $1,000,000 $1,000,000
11/92 976,000 987,000
11/93 1,079,000 1,094,000
11/94 1,028,000 1,061,000
11/95 1,208,000 1,248,000
11/96 1,251,000 1,324,000
11/97 1,332,000 1,424,000
11/98 1,432,000 1,559,000
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]
Plot points to follow:
CrestFunds Intermediate Bond Fund, Lehman Brothers
Investor A Class 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
11/98 13,309 14,804
The CrestFunds Intermediate Bond Fund investment strategy was to selectively
increase exposure to mortgage-backed and corporate securities during these
turbulent times as a means of improving current yield as well as future total
return within the fund. The average duration of the fund was kept relatively
neutral to the benchmark.
We remain optimistic on the outlook for bonds in the coming year. Economic
growth is likely to be positive and inflation pressures should remain in check.
Continued growth in the economy reduces the risk of credit downgrades and
defaults, and inflation-adjusted yields still present an attractive vehicle for
many investors. While Federal Reserve policy is likely to be neutral over the
near-term, we believe that the Fed will be willing to lower short term rates
further if the economy shows signs of weakness. We look for high volatility to
persist into 1999 as these global challenges surface and are addressed, but we
believe the bond markets offer attractive potential returns to long term
investors.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
1 YEAR 7.52% 4.27% 7.51%
3 YEAR 5.96% 4.89% 5.95%
LIFE OF FUND 6.04% 5.12% 5.71%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
1 YEAR 7.52% 4.27% 7.51%
3 YEAR 18.95% 8.52% 18.92%
LIFE OF FUND 43.69% 32.00% 36.13%
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
The fixed-income markets had another good year of above-average returns. Bonds
benefited from continued low inflation as well as turmoil in the global capital
markets. The yield on the 30-year Treasury bond fell nearly a full percentage
point from 6.04% to 5.07% by November 30, 1998, the close of the fiscal year. A
significant development during the year was a more pronounced yield differential
between the highest quality U.S. Treasury securities and other fixed-income
bonds such as corporate and mortgage-backed issues. This could present
attractive investment opportunities for the coming year.
The economy continued to expand at a strong pace for much of the year, in part
due to a decision by the Federal Reserve to hold short-term interest rates
steady in the wake of the 1997 Asian financial crisis. The fear or expectation
was that the economic decline in the Far East would act as a brake on the
domestic expansion. While exports to Asia did fall dramatically, consumer
spending propelled the economy forward, supported by job growth, lower mortgage
rates and falling commodity prices, especially for gasoline. Two areas that
reflected the strength in consumption were the housing and auto markets which
hit new cyclical highs during the year.
Inflation remained low in 1998, as reflected by a modest 1.5% rise in the
Consumer Price Index during the twelve months ended November 1998. The favorable
trend was due in part to significant declines in commodity prices during the
year, particularly for energy. Concerns of a sharp rise in wages due to tight
labor markets were not realized in part due to continued gains in productivity.
Perhaps the most significant factor affecting the bond markets during the year
was the renewed deterioration in the Asian economies that spread to Russia and
Latin America during the third quarter. The impact on U.S. fixed-income markets
was two-fold. The first was a global flight to the perceived safety of U.S.
Treasury securities, pushing yields sharply lower over the summer. The second
effect was a drying up of liquidity for other types of bonds, pushing quality
spreads up to levels not seen since the last recession. Many investors became
concerned that the sharp drop in demand for U.S. exports and reduced U.S.
competitiveness might increase the risk of default in many companies. Severe
illiquidity in the bond markets was a major reason behind the three Federal
Reserve interest rate cuts between the end of September and November.
As a result of these forces, long term Treasury securities generated the
greatest returns for the year, followed by U.S. agency bonds and investment
grade corporate notes. As expected, bonds of companies with limited or no
exposure to foreign economies outperformed the overall corporate market. The
general decline in interest rates, increased volatility, and a sharp
acceleration in mortgage pre-payments caused the high-quality mortgage-backed
security market to lag in performance.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Treasuries & Agencies -- 17%
Cash Equivalents -- 5%
Municipal Bonds -- 1%
Corporates -- 8%
Mortgage/Asset Backed -- 69%
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]
Plot points to follow:
CrestFunds Government Bond Lehman Brothers
Fund, Trust Class Goverment Bond Index
4/30/95 $1,000,000 $1,000,000
11/95 1,110,000 1,100,000
11/96 1,144,000 1,158,000
11/97 1,213,000 1,243,000
11/98 1,317,000 1,377,000
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]
Plot points to follow:
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 11,885 12,432
11/98 12,486 13,770
The CrestFunds Government Bond Fund investment strategy was to selectively
increase exposure to mortgage-backed and corporate securities during these
turbulent times as a means of improving current yield as well as future total
return within the fund. The average duration of the fund was kept relatively
neutral to the benchmark.
We remain optimistic on the outlook for bonds in the coming year. Economic
growth is likely to be positive and inflation pressures should remain in check.
Continued growth in the economy reduces the risk of credit downgrades and
defaults, and inflation-adjusted yields still present an attractive vehicle for
many investors. While Federal Reserve policy is likely to be neutral over the
near-term, we believe that the Fed will be willing to lower short term rates
further if the economy shows signs of weakness. We look for high volatility to
persist into 1999 as these global challenges surface and are addressed, but we
believe the bond markets offer attractive potential returns to long term
investors.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 8.63% 2.58% 7.58%
3 YEAR 5.87% 4.02% 4.93%
LIFE OF FUND 8.05% 6.38% 7.08%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 8.63% 2.58% 7.58%
3 YEAR 18.67% 12.55% 15.54%
LIFE OF FUND 32.73% 25.09% 28.09%
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 high current
income exempt from federal and Virginia income tax in a manner consistent with
the preservation of capital by investing in municipal bonds of investment-grade
quality. The Fund is managed to maintain a dollar-weighted average portfolio
maturity of between 5 and 10 years.
YEAR IN REVIEW
The fixed-income markets had another good year of returns. Bonds generally
benefited from continued low inflation as well as turmoil in the global capital
markets. The yield on the 30-year Treasury bond fell nearly a full percentage
point from 6.04% to 5.07% by November 30, 1998, the close of the fiscal year.
Municipal bond yields also fell but to a lesser degree. The yield on a 10-year
AAA general obligation bond fell from 4.59% on November 30, 1997 to 4.16% at the
end of the fiscal year. This was a significant development in the tax-exempt
markets and could present attractive investment opportunities for the coming
year.
The economy continued to expand at a strong pace for much of the year, in part
due to a decision by the Federal Reserve to hold short-term interest rates
steady in the wake of the 1997 Asian financial crisis. The fear or expectation
was that the economic decline in the Far East would act as a brake on the
domestic expansion. While exports to Asia did fall dramatically, consumer
spending propelled the economy forward, supported by job growth, lower mortgage
rates and falling commodity prices, especially for gasoline. Two areas that
reflected the strength in consumption were the housing and auto markets which
hit new cyclical highs during the year.
Inflation remained low in 1998, as reflected by a modest 1.5% rise in the
Consumer Price Index during the twelve months ended November 1998. The favorable
trend was due in part to significant declines in commodity prices during the
year, particularly for energy. Concerns of a sharp rise in wages due to tight
labor markets were not realized in part due to continued gains in productivity.
Perhaps the most significant factor affecting the bond markets during the year
was the renewed deterioration in the Asian economies that spread to Russia and
Latin America during the third quarter. The impact on U.S. fixed-income markets
was two-fold. The first was a global flight to the perceived safety of U.S.
Treasury securities, pushing yields sharply lower over the summer. The second
effect was a drying up of liquidity for other types of bonds, pushing quality
spreads up to levels not seen since the last recession. Severe illiquidity in
the bond markets was a major reason behind the three Federal Reserve interest
rate cuts between the end of September and November. Tax-exempt yields were also
slow to decline due in part to an increase in new debt issues coming to market.
At its extreme, some municipal yields were actually higher than the comparable
Treasury maturity even before adjusting for the favorable tax treatment.
MATURITY DISTRIBUTION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
25 + Years -- 6%
20-25 Years -- 11%
15-20 Years -- 13%
10-15 Years -- 24%
0-3 Years -- 12%
3-5 Years -- 7%
5-7 Years -- 7%
7-10 Years -- 20%
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]
Plot points follow:
CrestFunds VA Intermediate Lehman Brothers 5 Year Lehman Brothers G.O.
Muni Bond Fund, Trust Class G.O. Bond Index Bond Index
1/31/93 $ 9,650,000 $10,000,000 $10,000,000
11/93 9,996,000 10,340,000 10,428,000
11/94 9,340,000 10,246,000 9,970,000
11/95 10,844,000 11,475,000 11,695,000
11/96 11,279,000 12,090,000 12,398,000
11/97 11,916,000 12,741,000 13,246,000
11/98 12,654,000 13,547,000 14,286,000
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]
Plot points follow:
CrestFunds VA Intermediate Lehman Brothers 5 Year Lehman Brothers G.O.
Muni Bond Fund, G.O. Bond Index Bond Index
Investor A Class
5/31/93 $10,000 $10,000 $10,000
11/93 10,660 10,590 10,810
11/94 9,960 10,500 10,330
11/95 11,570 11,760 12,120
11/96 12,030 12,390 12,850
11/97 12,700 13,050 13,730
11/98 13,470 13,880 14,810
The CrestFunds Virginia Intermediate Municipal Bond Fund investment strategy was
to maximize tax exempt income to its shareholders. Using thorough and careful
credit analysis, the fund selectively increased its exposure to revenue, housing
and other higher-yielding municipal securities. The average duration of the fund
was neutral to slightly longer than the benchmark.
We remain optimistic on the outlook for bonds in the coming year. Economic
growth is likely to be positive and inflation pressures should remain in check.
Continued growth in the economy reduces the risk of credit downgrades and
defaults, and inflation-adjusted yields still present an attractive vehicle for
many investors. While Federal Reserve policy is likely to be neutral over the
near-term, we believe that the Fed will be willing to lower short term rates
further if the economy shows signs of weakness. We look for high volatility to
persist into 1999 as these global challenges surface and are addressed, but we
believe the bond markets offer attractive potential returns to long term
investors.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
--------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
1 YEAR 6.10% 2.52% 6.19%
3 YEAR 5.22% 4.04% 5.28%
LIFE OF FUND 5.30% 4.27% 4.94%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
--------------------------------------
TRUST CLASS INVESTORS CLASS A
----------- -----------------
with load without load
1 YEAR 6.10% 2.52% 6.19%
3 YEAR 16.48% 4.92% 16.69%
LIFE OF FUND 35.54% 26.22% 30.78%
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 high current income exempt
from federal and Virginia income tax in a manner consistent with the
preservation of capital by investing in municipal bonds of investment-grade
quality. There are no limits on the dollar-weighted portfolio maturity of the
Fund.
YEAR IN REVIEW
The fixed-income markets had another good year of returns. Bonds generally
benefited from continued low inflation as well as turmoil in the global capital
markets. The yield on the 30-year Treasury bond fell nearly a full percentage
point from 6.04% to 5.07% by November 30, 1998, the close of the fiscal year.
Municipal bond yields also fell but to a lesser degree. The yield on a 10-year
AAA general obligation bond fell from 4.59% on November 30, 1997 to 4.16% at the
end of the fiscal year. This was a significant development in the tax-exempt
markets and could present attractive investment opportunities for the coming
year.
The economy continued to expand at a strong pace for much of the year, in part
due to a decision by the Federal Reserve to hold short-term interest rates
steady in the wake of the 1997 Asian financial crisis. The fear or expectation
was that the economic decline in the Far East would act as a brake on the
domestic expansion. While exports to Asia did fall dramatically, consumer
spending propelled the economy forward, supported by job growth, lower mortgage
rates and falling commodity prices, especially for gasoline. Two areas that
reflected the strength in consumption were the housing and auto markets which
hit new cyclical highs during the year.
Inflation remained low in 1998, as reflected by a modest 1.5% rise in the
Consumer Price Index during the twelve months ended November 1998. The favorable
trend was due in part to significant declines in commodity prices during the
year, particularly for energy. Concerns of a sharp rise in wages due to tight
labor markets were not realized in part due to continued gains in productivity.
Perhaps the most significant factor affecting the bond markets during the year
was the renewed deterioration in the Asian economies that spread to Russia and
Latin America during the third quarter. The impact on U.S. fixed-income markets
was two-fold. The first was a global flight to the perceived safety of U.S.
Treasury securities, pushing yields sharply lower over the summer. The second
effect was a drying up of liquidity for other types of bonds, pushing quality
spreads up to levels not seen since the last recession. Severe illiquidity in
the bond markets was a major reason behind the three Federal Reserve interest
rate cuts between the end of September and November. Tax-exempt yields were also
slow to decline due in part to an increase in new debt issues coming to market.
At its extreme, some municipal yields were actually higher than the comparable
Treasury maturity even before adjusting for the favorable tax treatment.
MATURITY DISTRIBUTION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
25 + Years -- 21%
20-25 Years -- 19%
0-3 Years -- 4%
7-10 Years -- 3%
10-15 Years -- 19%
15-20 Years -- 34%
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
Plot points follow:
CrestFunds Virginia Lehman Brothers General
Municipal Bond Fund, Obligation Bond Index
Trust Class
4/30/95 $1,000,000 $1,000,000
11/95 1,083,000 1,082,000
11/96 1,121,000 1,147,000
11/97 1,193,000 1,225,000
11/98 1,279,000 1,321,000
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
Plot points follow:
CrestFunds Virginia Municipal Bond Fund, Lehman Brothers 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 11,689 12,250
11/98 12,119 13,212
The CrestFunds Virginia Municipal Bond Fund investment strategy was to maximize
tax exempt income to its shareholders. Using thorough and careful credit
analysis, the fund selectively increased its exposure to revenue, housing and
other higher-yielding municipal securities. The average duration of the fund was
neutral to slightly longer than the benchmark.
We remain optimistic on the outlook for bonds in the coming year. Economic
growth is likely to be positive and inflation pressures should remain in check.
Continued growth in the economy reduces the risk of credit downgrades and
defaults, and inflation-adjusted yields still present an attractive vehicle for
many investors. While Federal Reserve policy is likely to be neutral over the
near-term, we believe that the Fed will be willing to lower short term rates
further if the economy shows signs of weakness. We look for high volatility to
persist into 1999 as these global challenges surface and are addressed, but we
believe the bond markets offer attractive potential returns to long term
investors.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 7.19% 1.24% 6.24%
3 YEAR 5.69% 3.87% 4.79%
LIFE OF FUND 6.78% 5.04% 5.76%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 7.19% 1.24% 6.24%
3 YEAR 18.09% 12.07% 15.06%
LIFE OF FUND 27.14% 19.56% 22.56%
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 high 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
The fixed-income markets had another good year of returns. Bonds generally
benefited from continued low inflation as well as turmoil in the global capital
markets. The yield on the 30-year Treasury bond fell nearly a full percentage
point from 6.04% to 5.07% by November 30, 1998, the close of the fiscal year.
Municipal bond yields also fell but to a lesser degree. The yield on a 10-year
AAA general obligation bond fell from 4.59% on November 30, 1997 to 4.16% at the
end of the fiscal year. This was a significant development in the tax-exempt
markets and could present attractive investment opportunities for the coming
year.
The economy continued to expand at a strong pace for much of the year, in part
due to a decision by the Federal Reserve to hold short-term interest rates
steady in the wake of the 1997 Asian financial crisis. The fear or expectation
was that the economic decline in the Far East would act as a brake on the
domestic expansion. While exports to Asia did fall dramatically, consumer
spending propelled the economy forward, supported by job growth, lower mortgage
rates and falling commodity prices, especially for gasoline. Two areas that
reflected the strength in consumption were the housing and auto markets which
hit new cyclical highs during the year.
Inflation remained low in 1998, as reflected by a modest 1.5% rise in the
Consumer Price Index during the twelve months ended November 1998. The favorable
trend was due in part to significant declines in commodity prices during the
year, particularly for energy. Concerns of a sharp rise in wages due to tight
labor markets were not realized in part due to continued gains in productivity.
Perhaps the most significant factor affecting the bond markets during the year
was the renewed deterioration in the Asian economies that spread to Russia and
Latin America during the third quarter. The impact on U.S. fixed-income markets
was two-fold. The first was a global flight to the perceived safety of U.S.
Treasury securities, pushing yields sharply lower over the summer. The second
effect was a drying up of liquidity for other types of bonds, pushing quality
spreads up to levels not seen since the last recession. Severe illiquidity in
the bond markets was a major reason behind the three Federal Reserve interest
rate cuts between the end of September and November. Tax-exempt yields were also
slow to decline due in part to an increase in new debt issues coming to market.
At its extreme, some municipal yields were actually higher than the comparable
Treasury maturity even before adjusting for the favorable tax treatment.
MATURITY DISTRIBUTION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
25 + Years -- 30%
20-25 Years -- 5%
15-20 Years -- 21%
0-3 Years -- 15%
3-5 Years -- 2%
5-7 Years -- 6%
7-10 Years -- 8%
10-15 Years -- 13%
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]
Plot points to follow:
CrestFunds Maryland Bond Lehman Brothers General
Fund, Trust Class Obligation Bond Index
3/31/96 $1,000,000 $1,000,000
11/96 1,041,000 1,058,000
11/97 1,109,000 1,131,000
11/98 1,187,000 1,219,000
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]
Plot points to follow:
CrestFunds Maryland Municipal Bond Fund, Lehman Brothers General Obligation
Investor B Class Bond Index
4/30/96 $10,000 $10,000
11/96 10,459 10,619
11/97 11,049 11,346
11/98 11,430 12,236
The CrestFunds Maryland Municipal Bond Fund investment strategy was to maximize
tax exempt income to its shareholders. Using thorough and careful credit
analysis, the fund selectively increased its exposure to revenue, housing and
other higher-yielding municipal securities. The average duration of the fund was
neutral to slightly longer than the benchmark.
We remain optimistic on the outlook for bonds in the coming year. Economic
growth is likely to be positive and inflation pressures should remain in check.
Continued growth in the economy reduces the risk of credit downgrades and
defaults, and inflation-adjusted yields still present an attractive vehicle for
many investors. While Federal Reserve policy is likely to be neutral over the
near-term, we believe that the Fed will be willing to lower short term rates
further if the economy shows signs of weakness. We look for high volatility to
persist into 1999 as these global challenges surface and are addressed, but we
believe the bond markets offer attractive potential returns to long term
investors.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 7.03% 1.17% 6.17%
LIFE OF FUND 5.18% 5.25% 6.31%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS B
----------- -----------------
with back-end load without back-end load
1 YEAR 7.03% 1.17% 6.17%
LIFE OF FUND 14.88% 14.24% 17.24%
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
The past year was a volatile one for the stock markets, but investors who
weathered the turbulent periods were well rewarded. Both the S&P 500 and the Dow
Jones Industrial Average recorded double-digit returns for the twelve months
ended November 30, 1998, marking the fourth consecutive year of strong
performance. The last four-year stretch of total returns above 10% was in the
1949-52 period. While the large cap equity markets moved higher during the year,
both the volatility of the markets and the narrowness of participation required
careful company selection.
The environment for stocks over the past year was benefited by continued
above-average economic growth, low inflation and declining interest rates.
Growth for 1998 is estimated to have exceeded 3 1/2% compared with a historical
average of 2-2 1/2%. Consumer spending was the driving force behind the gains,
supported by job growth, lower mortgage rates and continued low inflation. Two
areas that reflected the strength in consumption were the housing and auto
markets which hit new cyclical highs during the year.
Inflation remained low in 1998, as shown by a modest 1.5% rise in the Consumer
Price Index during the twelve months ended November 1998. The favorable trend
was due in part to significant declines in commodity prices during the year,
particularly for energy. Interest rates fell during the year, in part due to
continued low inflation, but also from the attractiveness of U.S. Treasury
securities during times of uncertainty, and a shift in Federal Reserve policy
toward stimulus. These factors along with increased merger activities and a high
level of funds available to invest, helped push stock valuations, as measured by
the price/earnings ratio to historic highs.
Perhaps the most significant negative factor affecting the stock markets during
the year was the broad deterioration in the Asian economies that spread to
Russia and Latin America. The weakness in the economies sharply reduced demand
for U.S. exports and reduced U.S. competitiveness in many commodity-driven
markets. The global financial crisis that hit the markets during the summer
punctuated the magnitude of the decline or potential decline in these economies
and the negative impact on earnings of companies connected with these regions.
Many companies were unable to either increase prices or completely pass along
cost increases, resulting in reduced profit margins. Corporate earnings growth
slowed as the year progressed reflecting these pressures, and in the third
quarter, S&P 500 operating profits fell 3% below year-earlier levels.
Sectors that fared well during the year tended to have a domestic,
consumer-oriented focus or were linked to technology and productivity
investment. Healthcare companies and consumer cyclicals represented the former,
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Utilities -- 8%
Transportation -- 1%
Technology -- 16%
Finance -- 19%
Basic Materials -- 6%
Capital Goods -- 8%
Consumer Cyclicals -- 8%
Consumer Non-Durables -- 23%
Energy -- 11%
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]
Plot points as follows:
CrestFunds Value Fund, Trust Class Standard & Poor's 500 Composite Index
9/30/92 $1,000,000 $1,000,000
11/92 1,043,000 1,038,000
11/93 1,147,000 1,142,000
11/94 1,142,000 1,154,000
11/95 1,470,000 1,580,000
11/96 1,804,000 2,020,000
11/97 2,262,000 2,595,000
11/98 2,570,000 3,210,000
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
Trust Class, versus the Standard & Poor's 500 Composite Index
CrestFunds Value Fund, Investor A Class Standard & Poor's 500 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
11/98 21,603 29,233
while networking, software, and computer-related companies represented the
latter category. Commodity based sectors such as energy and basis materials fell
during the year.
The CrestFunds Value Fund performed well against its peer group for the year due
to its balanced sector representation and exposure to the strong sectors
mentioned above, as well as individual stock selection. In a year in which large
growth issues performed extremely well while most value-oriented stocks
struggled, it is not surprising that the best performance was realized from
technology holdings such as Cisco Systems, Microsoft, Intel and Sun
Microsystems. Outside of technology, holdings such as Lowe's, Schering-Plough,
Amgen, CIGNA, and Phillip Morris also contributed strong relative performance.
We are cautiously optimistic on the outlook for equities in the coming year.
Economic growth is likely to be positive and inflation pressures should remain
in check. The decision by the Federal Reserve to lower short term interest rates
during the fall reflects a monetary policy that is ready to stimulate the
economy should growth begin to falter significantly. The recent rise in some of
the major stock indexes reflects a market that may have "discounted" most of the
risks associated with the problems in the emerging markets around the world.
Many analysts have become very optimistic on the outlook for renewed corporate
earnings growth in 1999, reflecting many of these positive factors. To the
extent profit performance is unable to meet or surpass these lofty goals,
investors could be disappointed. As a result, we will continue to emphasize
stocks of companies with the ability to sustain growth or a credible game plan
to resume growth under the economic conditions we have described above. We also
expect the resurgence in market volatility to persist into 1999.
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]
Plot points as follows:
CrestFunds Value Fund, Investor B Class Standard & Poor's 500 Composite Index
4/30/95 $10,000 $10,000
11/95 11,423 11,946
11/96 13,914 15,272
11/97 17,342 19,626
11/98 19,258 24,273
16
<PAGE>
CRESTFUNDS, INC.: VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with back-end load without back-end load
<S> <C> <C> <C> <C> <C>
1 YEAR 13.64% 8.60% 13.69% 8.22% 12.78%
3 YEAR 20.47% 18.64% 20.48% 18.93% 19.63%
LIFE OF FUND 16.70% 15.43% 16.39% 20.09% 20.59%
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
with load without load with back-end load without back-end load
<S> <C> <C> <C> <C> <C>
1 YEAR 13.64% 8.60% 13.69% 8.22% 12.78%
3 YEAR 74.84% 52.38% 74.86% 63.30% 71.21%
LIFE OF FUND 159.61% 122.30% 132.77% 95.23% 98.23%
</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
The past year was a volatile one for the stock markets, but investors who
weathered the turbulent periods were well rewarded. Both the S&P 500 and the Dow
Jones Industrial Average recorded double-digit returns for the twelve months
ended November 30, 1998 marking the fourth consecutive year of strong
performance. The last four-year stretch of total returns above 10% was in the
1949-52 period. But while the large cap equity markets moved higher during the
year, both the volatility of the markets and the narrowness of much of the gains
required careful company selection.
The environment for stocks over the past year was benefited by continued
above-average economic growth, low inflation and declining interest rates.
Growth for 1998 is estimated to have exceeded 3 1/2% compared with a historical
average of 2-2 1/2%. Consumer spending was the driving force behind the gains,
supported by job growth, lower mortgage rates and continued low inflation. Two
areas that reflected the strength in consumption were the housing and auto
markets which hit new cyclical highs during the year.
Inflation remained low in 1998, as shown by a modest 1.5% rise in the Consumer
Price Index during the twelve months ended November 1998. The favorable trend
was due in part to significant declines in commodity prices during the year,
particularly for energy. Interest rates fell during the year, in part due to
continued low inflation, but also from the attractiveness of U.S. Treasury
securities during times of uncertainty, and a shift in Federal Reserve policy
toward stimulus. These factors along with increased merger activities and a high
level of funds available to invest, helped push stock valuations, as measured by
the price/earnings ratio to historic highs.
Perhaps the most significant negative factor affecting the stock markets during
the year was the broad deterioration in the Asian economies that spread to
Russia and Latin America. The weakness in the economies sharply reduced demand
for U.S. exports and reduced U.S. competitiveness in many commodity-driven
markets. The global financial crisis that hit the markets during the Summer
punctuated the magnitude of the decline or potential decline in these economies
and the negative impact on earnings of companies connected with these regions.
Many companies were unable to either increase prices or completely pass along
cost increases reducing profit margins. Corporate earnings growth slowed as the
year progressed reflecting these pressures, and in the third quarter, S&P 500
operating profits fell 3% below year-earlier levels.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Utilities -- 5%
Technology -- 22%
Finance -- 17%
Energy -- 2%
Basic Materials -- 15%
Capital Goods -- 7%
Consumer Cyclicals -- 20%
Consumer Non-Durables -- 12%
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]
Plot points to follow:
CrestFunds Capital Appreciation Frank Russell
Fund, Trust Class 1000 Growth Index
1/31/93 $1,000,000 $1,000,000
11/93 963,600 1,023,100
11/94 1,003,300 1,051,000
11/95 1,211,400 1,457,700
11/96 1,518,900 1,841,100
11/97 1,879,000 2,329,200
11/98 2,228,300 2,996,700
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]
Plot points to follow:
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
11/98 21,908 30,065
Sectors that fared well during the year tended to have a domestic,
consumer-oriented focus or were linked to technology and productivity
investment. Healthcare companies and consumer cyclicals represented the former,
while technology and communications companies represented the latter category.
Commodity based sectors such as energy and basis materials fell during the year.
The CrestFunds Capital Appreciation Fund performed well against its peer group
for the year due to its emphasis on the strong sectors mentioned above as well
as individual stock selection. The fund had a high weight relative to the S&P
500 in the technology, healthcare, consumer cyclical and communications sectors.
Some of the companies that performed well for the fund include: Sun Microsystems
and Lucent Technologies in technology, Amgen in healthcare, Wal-Mart in consumer
cyclicals, and MCI Worldcom in communications.
We are cautiously optimistic on the outlook for equities in the coming year.
Economic growth is likely to remain positive and inflation pressures could
remain in check. The decision by the Federal Reserve to lower short term
interest rates during the fall suggests a monetary policy that is ready to
stimulate the economy should growth begin to falter significantly. Indeed, the
recent rise in some of the major stock indexes reflects a market that may have
"discounted" most of the risks associated with the problems in the emerging
markets around the world. Many analysts have become very optimistic on the
outlook for renewed corporate earnings growth in 1999, reflecting many of these
positive factors. To the extent profit performance is unable to meet or surpass
these lofty goals, investors could be disappointed. As a result, we will
continue to emphasize stocks of companies with the ability to sustain growth or
a credible game plan to resume growth under the economic conditions we have
described above. We also expect the resurgence in market volatility to persist
into 1999.
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]
Plot points to follow:
CrestFunds Capital Appreciation Frank Russell
Fund, Investor B Class 1000 Growth Index
8/31/97 $10,631 $10,000
11/97 10,631 10,533
11/98 12,090 13,522
19
<PAGE>
CRESTFUNDS, INC.: CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with load without load
<S> <C> <C> <C> <C> <C>
1 YEAR 18.59% 13.27% 18.58% 12.49% 17.49%
3 YEAR 22.52% 20.66% 22.54% -- --
LIFE OF FUND 14.91% 15.89% 16.85% 16.32% 19.38%
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with load without load
<S> <C> <C> <C> <C> <C>
1 YEAR 18.59% 13.27% 18.58% 12.49% 17.49%
3 YEAR 83.94% 60.30% 84.00% -- --
LIFE OF FUND 126.61% 127.30% 137.91% 20.89% 24.89%
</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.
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
The past year was a volatile one for the stock markets, and the highest
investment returns were concentrated in a relatively small number of large
companies. The S&P 500 Index recorded double-digit returns for the twelve months
ended November 30, 1998, but the S&P 600 SmallCap Index (which more closely
reflects the Special Equity Fund) fell.
The environment for stocks over the past year was benefited by continued
above-average economic growth, low inflation and declining interest rates.
Growth for 1998 is estimated to have exceeded 3 1/2% compared with a historical
average of 2-2 1/2%. Consumer spending was the driving force behind the gains,
supported by job growth, lower mortgage rates and continued low inflation. Two
areas that reflected the strength in consumption were the housing and auto
markets which hit new cyclical highs during the year.
Inflation remained low in 1998, as shown by a modest 1.5% rise in the Consumer
Price Index during the twelve months ended November 1998. The favorable trend
was due in part to significant declines in commodity prices during the year,
particularly for energy. Interest rates fell during the year, in part due to
continued low inflation, but also from the attractiveness of U.S. Treasury
securities during times of uncertainty, and a shift in Federal Reserve policy
toward stimulus. These factors along with increased merger activities and a high
level of funds available to invest, helped push stock valuations, as measured by
the price/earnings ratio to historic highs.
However, the stock markets experienced significant turbulence during the year,
and much of the effects were felt in the small-cap stocks. Perhaps the most
significant negative factor affecting the stock markets during the year was the
broad deterioration in the Asian economies that spread to Russia and Latin
America. The weakness in the economies sharply reduced demand for U.S. exports
and reduced U.S. competitiveness in many commodity-driven markets. The global
financial crisis that hit the markets during the Summer punctuated the magnitude
of the decline or potential decline in these economies and the negative impact
on earnings of companies connected with these regions. Smaller companies with a
greater relative exposure to the region or to companies that compete with the
region experienced some of the largest price declines.
Sectors that fared well during the year tended to have a domestic,
consumer-oriented focus or were linked to technology and productivity
investment. Healthcare companies and consumer cyclicals represented the former,
while technology and communications companies represented the latter category.
Commodity based sectors such as energy and basis materials fell during the year.
FUND COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Utilities -- 5%
Technology -- 27%
Finance -- 11%
Energy -- 4%
Basic Materials -- 4%
Capital Goods -- 16%
Consumer Cyclicvals -- 17%
Consumer Non-Durables -- 16%
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]
Plot points to follow:
CrestFunds Special Equity Frank Russell Value Line
Fund, Trust Class 2000 Growth Index Index
9/30/92 $1,000,000 $1,000,000 $1,000,000
12/92 1,110,110 1,138,240 1,054,330
11/93 1,266,300 1,275,390 1,161,030
11/94 1,206,280 1,263,660 1,112,150
11/95 1,448,380 1,658,050 1,331,570
11/96 1,686,490 1,849,550 1,523,720
11/97 2,079,100 2,128,460 1,823,250
11/98 1,792,810 1,977,130 1,717,860
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]
Plot points to follow:
CrestFunds Special Equity Frank Russell 2000 Value Line
Fund, 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 16,056
11/98 14,390 16,772 15,128
The CrestFunds Special Equity Fund struggled early in the year relative to its
peer group. "However, by the fourth quarter, several important adjustments to
sector weights helped position the fund for the market rebound near the close of
the fiscal year," according to Ann Gurkin, portfolio manager for the fund. "The
fund had a high relative weight in the technology, healthcare, consumer cyclical
and communications sectors. Some of the companies that performed well for the
fund include: Flextronics and General Instruments in technology, Wellpoint in
healthcare, and American Eagle Outfitters in consumer cyclicals."
We are cautiously optimistic on the outlook for equities in the coming year.
Economic growth is likely to continue and inflation pressures could remain in
check. The decision by the Federal Reserve to lower short term interest rates
during the fall suggests a monetary policy that is ready to stimulate the
economy should growth begin to falter significantly. Indeed, the recent rise in
some of the major stock indexes reflects a market that may have "discounted"
most of the risks associated with the problems in the emerging markets around
the world. Small company stocks in particular have lagged the major market
indexes for some time and are currently near historically low valuation levels.
However, many analysts have become very optimistic on the outlook for renewed
corporate earnings growth in 1999, reflecting many of these positive factors. To
the extent profit performance is unable to meet or surpass these lofty goals,
investors could be disappointed. As a result, we will continue to emphasize
stocks of companies with the ability to sustain growth or a credible game plan
to resume growth under the economic conditions we have described above. We also
expect the resurgence in market volatility to persist into 1999.
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]
Plot points to follow:
CrestFunds Special Equity Fund, Frank Russell 2000 Value 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 15,705 15,369 15,114
11/98 13,101 14,276 14,240
22
<PAGE>
CRESTFUNDS, INC.: SPECIAL EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with back-end load without back-end load
<S> <C> <C> <C> <C> <C>
1 YEAR (13.77%) (17.74%) (13.84%) (18.34%) (14.67%)
3 YEAR 7.37% 5.71% 7.34% 5.51% 6.39%
LIFE OF FUND 10.08% 6.97% 7.86% 8.54% 9.19%
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS INVESTORS CLASS A INVESTORS CLASS B
----------- ----------------- -----------------
with load without load with back-end load without back-end load
<S> <C> <C> <C> <C> <C>
1 YEAR (13.77%) (17.74%) (13.84%) (18.34%) (14.67%)
3 YEAR 23.78% 7.66% 23.67% 5.74% 20.42%
LIFE OF FUND 80.71% 45.22% 52.07% 34.54% 37.54%
</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
The past year was a volatile one for the stock markets, and the highest
investment returns were concentrated in a relatively small number of large
companies. The S&P 500 Index recorded double-digit returns for the twelve months
ended November 30, 1998, but the S&P 600 SmallCap Index fell. Also, the growth
style of investing continued to outperform the value style.
The environment for stocks over the past year was benefited by continued
above-average economic growth, low inflation and declining interest rates.
Growth for 1998 is estimated to have exceeded 3 1/2% compared with a historical
average of 2-2 1/2%. Consumer spending was the driving force behind the gains,
supported by job growth, lower mortgage rates and continued low inflation. Two
areas that reflected the strength in consumption were the housing and auto
markets which hit new cyclical highs during the year.
Inflation remained low in 1998, as shown by a modest 1.5% rise in the
Consumer Price Index during the twelve months ended November 1998. The favorable
trend was due in part to significant declines in commodity prices during the
year, particularly for energy. Interest rates fell during the year, in part due
to continued low inflation, but also from the attractiveness of U.S. Treasury
securities during times of uncertainty, and a shift in Federal Reserve policy
toward stimulus. These factors along with increased merger activities and a high
level of funds available to invest, helped push stock valuations, as measured by
the price/earnings ratio to historic highs.
However, the stock markets experienced significant turbulence during the
year, and the effects were felt most in the small-cap stocks. Perhaps the most
significant negative factor affecting the stock markets during the year was the
broad deterioration in the Asian economies that spread to Russia and Latin
America. The global financial crisis that hit the markets during the Summer
punctuated the magnitude of the decline or potential decline in these economies
and the negative impact on earnings of companies connected with these regions.
Smaller companies with a greater relative exposure to the region or to companies
that compete with the region experienced some of the largest price declines.
Sectors that fared well during the year tended to have a domestic,
consumer-oriented focus or were linked to technology and productivity
investment. Healthcare companies and consumer cyclicals represented the former,
while technology and communications companies
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Cash Reserve -- 8%
Value -- 40%
Capital Appreciation -- 31%
Special Equity -- 21%
* 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 Frank Russell 2000 Index, and the Salomon 3-Month T-Bill
[LINE GRAPH OMITTED]
Plot points to follow:
CrestFunds Maximum Growth Portfolio 60/30/10 Hybrid of the Above
12/92 $10,000 $10,000
11/93 10,929 11,002
11/94 10,679 11,085
11/95 13,215 14,526
11/96 15,804 17,747
11/97 19,075 22,153
11/98 20,321 24,874
represented the latter category. The Life Vision Maximum Growth Portfolio
benefited from a relatively heavy weighting in these sectors relative to the
benchmark. However, the lagging performance of the value and small cap styles
(historically strong styles) lowered overall returns.
We are cautiously optimistic on the outlook for equities in the coming year.
Economic growth is likely to continue and inflation pressures could remain in
check. The decision by the Federal Reserve to lower short term interest rates
during the fall suggests a monetary policy that is ready to stimulate the
economy should growth begin to falter significantly. Indeed, the recent rise in
some of the major stock indexes reflects a market that may have "discounted"
most of the risks associated with the problems in the emerging markets around
the world. Small company stocks in particular have lagged the major market
indexes for some time and are currently near historically low valuation levels.
However, many analysts have become very optimistic on the outlook for renewed
corporate earnings growth in 1999, reflecting many of these positive factors. To
the extent profit performance is unable to meet or surpass these lofty goals,
investors could be disappointed. As a result, we will continue to emphasize
stocks of companies with the ability to sustain growth or a credible game plan
to resume growth under the economic conditions we have described above. We also
expect the resurgence in market volatility to persist into 1999.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS
-----------
1 YEAR 6.53%
3 YEAR 15.42%
LIFE OF PORTFOLIO 12.73%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS
-----------
1 YEAR 6.53%
3 YEAR 53.77%
LIFE OF PORTFOLIO 103.20%
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
The past year was a volatile one for the stock markets, and the highest
investment returns were concentrated in a relatively small number of large
companies. The S&P 500 Index recorded double-digit returns for the twelve months
ended November 30, 1998, but the S&P 600 SmallCap Index fell. Also, the growth
style of investing continued to outperform the value style. The fixed-income
markets generated above-average returns.
The environment for bonds over the past year was benefited by continued low
inflation and investor concerns about the global financial markets, while stocks
benefited from above-average economic growth, and declining interest rates.
Growth for 1998 is estimated to have exceeded 3 1/2% compared with a historical
average of 2-2 1/2%. Consumer spending was the driving force behind the gains,
supported by job growth, lower mortgage rates and continued low inflation.
Inflation remained low in 1998, as shown by a modest 1.5% rise in the Consumer
Price Index during the twelve months ended November 1998. The favorable trend
was due in part to significant declines in commodity prices during the year,
particularly for energy.
Perhaps the most significant factor affecting the markets during the year was
the broad deterioration in the Asian economies that spread to Russia and Latin
America. The global financial crisis that hit the markets during the Summer
punctuated the magnitude of the decline or potential decline in these economies
and the negative impact on earnings of companies connected with these regions.
Smaller companies with a greater relative exposure to the region or to companies
that compete with the region experienced some of the largest price declines.
While this event sent stock prices sharply lower, the fixed-income markets
experienced a strong rally as yields on U.S. Treasury securities fell to 30-year
lows.
Equity sectors that fared well during the year tended to have a domestic,
consumer-oriented focus or were linked to technology and productivity
investment. Healthcare companies and consumer cyclicals represented the former,
while technology and communications companies represented the latter category.
The Life Vision Growth and Income Portfolio benefited from a relatively heavy
weighting in these sectors relative to the benchmark. However, the lagging
performance of the value and small cap styles (historically strong styles)
lowered overall returns.
We are cautiously optimistic on the outlook for the markets in the coming
year. Economic growth is likely to continue and inflation pressures could remain
in check. The decision by the Federal Reserve to lower short term
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Limited Term Bond -- 8%
Intermediate Bond -- 9%
Government Bond -- 9%
Value -- 31%
Cash Reserve -- 4%
Capital Appreciation -- 21%
Special Equity -- 18%
* 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, Frank Russell 2000 Index,
and the Salomon 3-Month T-Bill
[LINE GRAPH OMITTED]
Plot points to follow:
CrestFunds Growth & 50/25/20/5 Blend of
Income Portfolio the Following Indices
12/92 $10,000 $10,000
11/93 10,808 10,983
11/94 10,566 10,962
11/95 12,828 14,100
11/96 14,735 16,761
11/97 17,120 20,301
11/98 18,339 22,991
interest rates during the fall suggests a monetary policy that is ready to
stimulate the economy should growth begin to falter significantly. Indeed, the
recent rise in some of the major stock indexes reflects a market that may have
"discounted" most of the risks associated with the problems in the emerging
markets around the world. Small company stocks in particular have lagged the
major market indexes for some time and are currently near historically low
valuation levels. However, many analysts have become very optimistic on the
outlook for renewed corporate earnings growth in 1999, reflecting many of these
positive factors. To the extent profit performance is unable to meet or surpass
these lofty goals, investors could be disappointed. As a result, we will
continue to emphasize stocks of companies with the ability to sustain growth or
a credible game plan to resume growth under the economic conditions we have
described above. We also expect the resurgence in market volatility to persist
into 1999.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS
-----------
1 YEAR 7.12%
3 YEAR 12.65%
LIFE OF PORTFOLIO 10.80%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS
-----------
1 YEAR 7.12%
3 YEAR 42.96%
LIFE OF PORTFOLIO 83.38%
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
The past year was a volatile one for the stock markets, and the highest
investment returns were concentrated in a relatively small number of large
companies. The S&P 500 Index recorded double-digit returns for the twelve months
ended November 30, 1998, but the S&P 600 SmallCap Index fell. Also, the growth
style of investing continued to outperform the value style. The fixed-income
markets generated above-average returns.
The environment for bonds over the past year was benefited by continued low
inflation and investor concerns about the global financial markets, while stocks
benefited from above-average economic growth, and declining interest rates.
Growth for 1998 is estimated to have exceeded 3 1/2% compared with a historical
average of 2-2 1/2%. Consumer spending was the driving force behind the gains,
supported by job growth, lower mortgage rates and continued low inflation.
Inflation remained low in 1998, as shown by a modest 1.5% rise in the Consumer
Price Index during the twelve months ended November 1998. The favorable trend
was due in part to significant declines in commodity prices during the year,
particularly for energy.
Perhaps the most significant factor affecting the markets during the year was
the broad deterioration in the Asian economies that spread to Russia and Latin
America. The global financial crisis that hit the markets during the Summer
punctuated the magnitude of the decline or potential decline in these economies
and the negative impact on earnings of companies connected with these regions.
Smaller companies with a greater relative exposure to the region or to companies
that compete with the region experienced some of the largest price declines.
While this event sent stock prices sharply lower, the fixed-income markets
experienced a strong rally as yields on U.S. Treasury securities fell to 30-year
lows.
Equity sectors that fared well during the year tended to have a domestic,
consumer-oriented focus or were linked to technology and productivity
investment. Healthcare companies and consumer cyclicals represented the former,
while technology and communications companies represented the latter category.
The Life Vision Balanced Portfolio benefited from a relatively heavy weighting
in these sectors relative to the benchmark. However, the lagging performance of
the value and small cap styles (historically strong styles) lowered overall
returns.
We are cautiously optimistic on the outlook for the markets in the coming year.
Economic growth is likely to continue and inflation pressures could remain in
check. The decision by the Federal Reserve to lower short term interest rates
during the fall suggests a monetary policy
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
AS OF NOVEMBER 30, 1998
[PIE CHART OMITTED]
Cash Reserve -- 5%
Limited Term Bond -- 9%
Intermediate Bond -- 19%
Government Bond -- 9%
Capital Appreciation -- 21%
Special Equity -- 11%
Value -- 26%
* 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, Frank Russell 2000 Index,
and the Salomon 3-Month T-Bill
[LINE GRAPH OMITTED]
Plot points follow:
CrestFunds Balanced Portfolio 40/35/20/5 Blend of the Following Indices
12/92 $10,000 $10,000
11/93 10,770 10,988
11/94 10,554 10,922
11/95 12,591 13,838
11/96 14,226 16,148
11/97 16,309 19,216
11/98 17,597 21,518
that is ready to stimulate the economy should growth begin to falter
significantly. Indeed, the recent rise in some of the major stock indexes
reflects a market that may have "discounted" most of the risks associated with
the problems in the emerging markets around the world. Small company stocks in
particular have lagged the major market indexes for some time and are currently
near historically low valuation levels. However, many analysts have become very
optimistic on the outlook for renewed corporate earnings growth in 1999,
reflecting many of these positive factors. To the extent profit performance is
unable to meet or surpass these lofty goals, investors could be disappointed. As
a result, we will continue to emphasize stocks of companies with the ability to
sustain growth or a credible game plan to resume growth under the economic
conditions we have described above. We also expect the resurgence in market
volatility to persist into 1999.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS
-----------
1 YEAR 7.90%
3 YEAR 11.81%
LIFE OF PORTFOLIO 10.03%
CUMULATIVE TOTAL RETURN
FOR THE PERIOD ENDED NOVEMBER 30, 1998
---------------------------------------
TRUST CLASS
-----------
1 YEAR 7.90%
3 YEAR 39.76%
LIFE OF PORTFOLIO 76.01%
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, 1998 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, 1998 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, 1998, 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 15, 1999
30
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
CASH RESERVE FUND
Face
Amount Value
(000) (000)
------ -----
COMMERCIAL PAPER (37.2%)
AUTOMOTIVE (2.3%)
Ford Motor
5.000%, 12/17/98 ............... $30,000 $ 29,933
- ------------------------------------------------------------
CHEMICALS (4.1%)
DuPont (E.I.) de Nemours
5.060%, 01/27/99 ............... 55,000 54,559
- ------------------------------------------------------------
ENTERTAINMENT (4.4%)
Walt Disney
4.460%, 07/13/99 ............... 60,000 58,335
- ------------------------------------------------------------
FINANCIAL SERVICES (26.4%)
CS First Boston
5.800%, 05/06/99 ............... 15,000 15,000
Den Norske Bank
5.380%, 05/04/99 ............... 20,000 19,540
4.860%, 08/10/99 ............... 20,000 19,320
Ford Motor Credit
5.450%, 01/13/99 ............... 35,000 34,772
General Electric Capital
5.270%, 01/20/99 ............... 30,000 29,780
5.410%, 02/22/99 ............... 25,000 24,688
General Motors Acceptance
5.070%, 01/28/99 ............... 55,000 54,551
Goldman Sachs
5.480%, 02/09/99 ............... 30,000 29,680
5.000%, 04/20/99 ............... 30,000 29,417
Merrill Lynch
4.820%, 06/17/99 ............... 40,000 38,940
Morgan Stanley, Dean Witter Discover
5.170%, 03/26/99 ............... 55,000 54,092
- ------------------------------------------------------------
349,780
- ------------------------------------------------------------
Total Commercial Paper
(Cost $492,607) ............ 492,607
- ------------------------------------------------------------
CERTIFICATES OF DEPOSIT (14.4%)
Bankers Trust (A)
4.830%, 12/01/98 ............... 20,000 19,997
Barclays Bank
5.530%, 02/23/99 ............... 15,400 15,391
CS First Boston
5.920%, 12/14/98 ............... 10,000 10,000
First Union
5.660%, 04/15/99 ............... 30,000 30,000
NationsBank
5.600%, 12/21/98 ............... 40,000 40,000
Societe Generale
5.850%, 12/17/98 ............... 10,000 10,000
5.700%, 01/07/99 ............... 20,000 20,003
5.670%, 03/11/99 ............... 20,000 19,998
Swiss Bank
5.750%, 05/07/99 ............... 25,000 24,998
- ------------------------------------------------------------
Total Certificates of Deposit
(Cost $190,387) ............ 190,387
- ------------------------------------------------------------
Face
Amount Value
(000) (000)
------ ------
BANK NOTES (9.0%)
First Union Bank (A)
5.427%, 02/17/99 ............... $30,000 $ 30,000
Key Bank NA (A)
4.800%, 12/01/98 ............... 40,000 39,994
PNC Bank NA (A)
4.790%, 12/01/98 ............... 20,000 19,993
4.800%, 12/01/98 ............... 30,000 29,992
- ------------------------------------------------------------
Total Bank Notes
(Cost $119,979) ............ 119,979
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (9.5%)
BANKS (0.8%)
NationsBank MTN (A)
5.303%, 01/04/99 ............... 10,000 9,999
- ------------------------------------------------------------
FINANCIAL SERVICES (6.1%)
CS First Boston (A)
4.860%, 12/01/98 ............... 25,000 25,000
General Motors Acceptance
7.125%, 06/01/99 ............... 10,614 10,684
Merrill Lynch MTN (A)
5.302%, 02/05/99 ............... 5,000 4,997
5.852%, 02/15/99 ............... 10,000 10,041
PHH MTN (A)
4.860%, 12/01/98 ............... 30,000 29,999
- ------------------------------------------------------------
80,721
- ------------------------------------------------------------
SECURITY BROKERAGE/DEALERS (2.6%)
Bear Stearns MTN
5.700%, 03/02/99 ............... 15,000 15,000
5.715%, 07/30/99 ............... 20,000 20,000
- ------------------------------------------------------------
35,000
- ------------------------------------------------------------
Total Corporate Obligations
(Cost $125,720) ............ 125,720
- ------------------------------------------------------------
INSURANCE FUNDING AGREEMENTS (9.8%)
General American Life (A)
5.790%, 12/01/98 ............... 65,000 65,000
Integrity Life (A)
5.790%, 12/01/98 ............... 65,000 65,000
- ------------------------------------------------------------
Total Insurance Funding Agreements
(Cost $130,000) ............ 130,000
- ------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATION (3.7%)
FNMA
5.165%, 03/15/99 ............... 50,000 49,254
- ------------------------------------------------------------
Total U.S. Government Agency Obligation
(Cost $49,254) ............. 49,254
- ------------------------------------------------------------
31
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
CASH RESERVE FUND (concluded)
Face
Amount Value
(000) (000)
------ ------
REPURCHASE AGREEMENTS (16.2%)
Barclays
5.40%, dated 11/30/98, matures
12/01/98, repurchase price
$13,007,367 (collateralized
by various U.S. Government
Agency obligations: total
market value $13,266,221) ......... $13,005 $ 13,005
Deutsche Bank
5.40%, dated 11/30/98, matures
12/01/98, repurchase price
$24,129,524 (collateralized by
FNMA obligation: total market
value $24,608,424) ................ 24,126 24,126
J.P. Morgan
5.40%, dated 11/30/98, matures
12/01/98, repurchase price
$21,954,838 (collateralized by
various GNMA obligations: total
market value $22,390,577) ......... 21,952 21,952
Merrill Lynch
5.40%, dated 11/30/98, matures
12/01/98, repurchase price
$44,967,121 (collateralized by
various U.S. Government Agency
obligations: total market
value $45,860,920) ................ 44,960 44,960
PaineWebber
5.40%, dated 11/30/98, matures
12/01/98, repurchase price
$92,937,871 (collateralized by
various U.S. Government Agency
obligations: total market
value $94,785,395) ................ 92,924 92,924
Prudential Bache
5.40%, dated 11/30/98, matures
12/01/98, repurchase price
$17,356,122 (collateralized by
various U.S. Government Agency
obligations: total market
value $17,701,517) ................ 17,353 17,353
- ------------------------------------------------------------
Total Repurchase Agreements
(Cost $214,320) .............. 214,320
- ------------------------------------------------------------
Total Investments (99.7%)
(Cost $1,322,267) ............ 1,322,267
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.3%) 3,379
- ------------------------------------------------------------
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 4.0 billion shares
authorized) based on 1,135,622,673
outstanding shares ........................ $1,135,626
Portfolio Shares of Investor Class A
($.001 par value -- .25 billion shares
authorized) based on 189,936,510
outstanding shares ........................ 189,937
Portfolio Shares of Investor Class B
($.001 par value -- .25 billion shares
authorized) based on 132,545
outstanding shares ........................ 133
Distribution in excess of net investment income (4)
Accumulated net realized loss on investments (46)
- ------------------------------------------------------------
Total Net Assets: (100.0%) ............. $1,325,646
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(1,135,570,776 / 1,135,622,673
SHARES OUTSTANDING) ......................... $1.00
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS A
(189,942,249 / 189,936,510
SHARES OUTSTANDING) ......................... $1.00
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS B (1)
(132,878 / 132,545 SHARES OUTSTANDING) ...... $1.00
- ------------------------------------------------------------
- ------------------------------------------------------------
(A) Adjustable Rate Security--The rate reflected on the Statement of Net Assets
is the rate in effect on November 30, 1998. 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 deferrred sales charge. For description
of a possible redemption charge, see the notes to the financial statements.
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, 1998
- --------------------------------------------------------------------------------
U.S. TREASURY MONEY FUND
Face
Amount Value
(000) (000)
------ ------
U.S. TREASURY OBLIGATIONS (17.7%)
U.S. Treasury Bills
4.425%, 03/04/99 ................ $ 30,000 $ 29,657
4.435%, 05/27/99 ................ 30,000 29,346
U.S. Treasury Notes
5.000%, 01/31/99 ................ 10,000 9,960
5.000%, 02/15/99 ................ 10,000 9,989
6.250%, 03/31/99 ................ 10,000 10,023
6.375%, 04/30/99 ................ 10,000 10,034
6.250%, 05/31/99 ................ 10,000 10,032
6.750%, 06/30/99 ................ 15,000 15,105
- ------------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $124,146) ............. 124,146
- ------------------------------------------------------------
REPURCHASE AGREEMENTS (82.6%)
Barclays
5.24%, dated 11/30/98, matures
12/01/98, repurchase price
$31,688,305 (collateralized by
U.S. Treasury Note: total market
value $32,317,888) ............... 31,684 31,684
Deutsche Bank
5.24%, dated 11/30/98, matures
12/01/98, repurchase price
$28,500,331 (collateralized by
various U.S. Treasury obligations:
total market value $29,067,044) . 28,496 28,496
Greenwich Bank
5.24%, dated 11/30/98, matures
12/01/98, repurchase price
$168,520,187 (collateralized by
various U.S. Treasury obligations:
total market value $171,866,836) 168,496 168,496
J.P. Morgan
5.24%, dated 11/30/98, matures
12/01/98, repurchase price
$31,110,384 (collateralized by
U.S. Treasury Bond: total market
value $31,728,686) .............. 31,106 31,106
Lehman Brothers
5.24%, dated 11/30/98, matures
12/01/98, repurchase price $30,874,021
(collateralized by various U.S.
Treasury obligations:
total market value $31,484,512) 30,870 30,870
Merrill Lynch
5.24%, dated 11/30/98, matures
12/01/98, repurchase price
$30,494,381 (collateralized by
various U.S. Treasury obligations:
total market value $31,100,391) 30,490 30,490
Face
Amount Value
(000) (000)
------ ------
Morgan Stanley
5.24%, dated 11/30/98, matures
12/01/98, repurchase price
$28,010,408 (collateralized by
U.S. Treasury Note: total market
value $28,567,661) ............ $ 28,006 $ 28,006
Prudential Bache
5.24%, dated 11/30/98, matures
12/01/98, repurchase price
$30,543,563 (collateralized by
U.S. Treasury Note: total market
value $31,150,099) ............. 30,539 30,539
Salomon Brothers
5.24%, dated 11/30/98, matures
12/01/98, repurchase price $30,026,517
(collateralized by various U.S.
Treasury obligations:
total market value $30,799,426) 30,022 30,022
Warburg
5.24%, dated 11/30/98, matures
12/01/98, repurchase price $168,036,560
(collateralized by various U.S.
Treasury obligations:
total market value $171,419,708) 168,012 168,012
- ------------------------------------------------------------
Total Repurchase Agreements
(Cost $577,721) ............... 577,721
- ------------------------------------------------------------
Total Investments (100.3%)
(Cost $701,867) ............... 701,867
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-0.3%) (1,944)
- ------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 3.75 billion shares
authorized) based on 699,922,404
outstanding shares ................. 699,924
Distribution in excess of net investment income (1)
- ------------------------------------------------------------
Total Net Assets: (100.0%) ...... $699,923
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(699,922,949 / 699,922,404
SHARES OUTSTANDING) .................. $1.00
- ------------------------------------------------------------
- ------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
TAX-FREE MONEY FUND
Face
Amount Value
(000) (000)
------ ------
MUNICIPAL BONDS (98.5%)
COLORADO (1.3%)
Denver, Public Facility Improvements,
Major League Baseball Stadium Project,
Ser A, RB, FGIC
5.900%, 10/01/99 ................. $ 3,500 $ 3,573
- ------------------------------------------------------------
DISTRICT OF COLUMBIA (0.4%)
District of Columbia, Healthcare Facility,
St. John's Child Development Center, RB (A)
3.350%, 12/02/98 ................. 1,125 1,125
- ------------------------------------------------------------
HAWAII (0.9%)
Hawaii State, Housing Finance &
Development Authority, Single
Family Housing, AMT, RB (A)
3.400%, 12/03/98 ................. 2,600 2,600
- ------------------------------------------------------------
ILLINOIS (6.1%)
Chicago, GO (A)
3.300%, 12/03/98 ................. 7,000 7,000
Chicago, O'Hare International Airport,
AMT, RB (A)
3.350%, 12/03/98 ................. 5,000 5,000
Chicago, Public Improvements,
GO, Ser C (B)
3.050%, 10/31/99 ................. 5,000 5,000
- ------------------------------------------------------------
17,000
- ------------------------------------------------------------
KANSAS (0.9%)
Johnson County, School Improvements,
GO, AMBAC
8.000%, 09/01/99 ................. 2,525 2,615
- ------------------------------------------------------------
LOUISIANA (2.8%)
Jefferson Parish, Home Mortgage, RB (A)
3.400%, 12/03/98 ................. 7,720 7,720
- ------------------------------------------------------------
MARYLAND (6.7%)
Montgomery County, Housing Opportunity
Commission, Issue 1, AMT, RB (A) (B)
3.350%, 12/02/98 ................. 10,000 10,000
Montgomery County, TECP
3.350%, 02/24/99 ................. 2,850 2,850
3.200%, 03/12/99 ................. 6,000 6,000
- ------------------------------------------------------------
18,850
- ------------------------------------------------------------
MASSACHUSETTS (3.6%)
Massachusetts, Puttable
Tax Exempt Receipts (A) (B)
3.450%, 12/03/98 ................. 10,000 10,000
- ------------------------------------------------------------
NEW YORK (8.9%)
Long Island, Power Authority,
Electric System Project, RB (A)
3.400%, 12/03/98 ................. 4,000 4,000
New York City, GO (A)
3.350%, 12/03/98 ................. 11,960 11,960
Face
Amount Value
(000) (000)
------ ------
New York City, Water & Sewer
Finance Authority, RB (A)
3.350%, 12/03/98 ................. $ 9,000 $ 9,000
- ------------------------------------------------------------
24,960
- ------------------------------------------------------------
NORTH CAROLINA (5.7%)
Charlotte, Housing Authority,
Multi Family Housing, Merrywood
Senior Adult Project, RB (A) (B)
3.250%, 12/02/98 ................. 2,000 2,000
North Carolina State, Medical Care
Community Hospital Pooled Finance
Project, Ser A, RB (A) (B)
3.350%, 12/01/98 ................. 9,800 9,800
Wake County, Public Improvements, GO
4.400%, 03/01/99 ................. 4,000 4,008
- ------------------------------------------------------------
15,808
- ------------------------------------------------------------
PENNSYLVANIA (8.7%)
Emmaus, General Authority, RB, FSA (A)
3.150%, 12/02/98 ................. 12,000 12,000
Philadelphia, Redevelopment Housing
Authority, Courts Project, Ser A, RB (A) (B)
3.100%, 12/03/98 ................. 4,425 4,425
Pittsburgh, GO (A)
3.250%, 12/03/98 ................. 8,000 8,000
- ------------------------------------------------------------
24,425
- ------------------------------------------------------------
SOUTH CAROLINA (2.9%)
Florence County, McLeod Regional Medical
Center Project, Ser A, RB, FGIC (A)
3.450%, 12/03/98 ................. 8,200 8,200
- ------------------------------------------------------------
SOUTH DAKOTA (1.8%)
Heartland Consumers Power District,
RB, FSA (A)
3.300%, 12/03/98 ................. 5,035 5,035
- ------------------------------------------------------------
TENNESSEE (1.8%)
Shelby County, Health, Educational &
Housing Facilities, Multi Family Housing,
AMT, Ser A, RB (A) (B)
3.500%, 12/02/98 ................. 5,000 5,000
- ------------------------------------------------------------
TEXAS (7.5%)
Houston, Water & Sewer System,
RB, FGIC (A)
3.300%, 12/03/98 ................. 5,000 5,000
Plano, TECP, MBIA
3.100%, 01/22/99 ................. 7,000 7,000
San Antonio, Electric & Gas, RB,
Partially Prerefunded
02/01/07 @101 (A) (B)
3.300%, 12/03/98 ................. 9,000 9,000
- ------------------------------------------------------------
21,000
- ------------------------------------------------------------
34
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
TAX-FREE MONEY FUND (CONTINUED)
Face
Amount Value
(000) (000)
------ ------
VIRGINIA (34.9%)
Alexandria, Redevelopment & Housing
Authority, Goodwin House Project,
Ser B, RB (A) (B)
3.350%, 12/01/98 ................. $ 2,500 $ 2,500
Fairfax County, Public
Improvements, GO (A)
3.300%, 12/03/98 ................. 3,300 3,300
King George County, Industrial
Development Authority,
Birchwood Power Partners,
Ser A, RB (A) (B)
3.450%, 12/01/98 ................. 2,600 2,600
King George County, Industrial
Development Authority,
Birchwood Power Partners,
Ser B, RB (A) (B)
3.450%, 12/01/98 ................. 7,400 7,400
Louisa County, Industrial
Development Authority, RB (A) (B)
3.200%, 12/03/98 ................. 2,000 2,000
Norfolk, Industrial Development
Authority, Childrens Hospital
Project (A) (B)
3.200%, 12/03/98 ................. 4,000 4,000
Petersburg, Hospital Authority,
Southside Regional Project,
RB (A) (B)
3.350%, 12/01/98 ................. 4,125 4,125
Pulaski County, Industrial Development
Authority, Pulaski Furniture Project,
Ser A, RB (A)
3.350%, 12/02/98 ................. 4,219 4,219
Pulaski County, Industrial Development
Authority, Pulaski Furniture Project,
Ser B, RB (A)
3.350%, 12/02/98 ................. 500 500
Richmond, Redevelopment &
Housing Authority, Multi Family
Housing, RB (A)
3.350%, 12/03/98 ................. 13,000 13,000
Spotsylvania, Industrial Development
Authority, Residential Care Facility,
Chancellors Village Project, RB (A) (B)
3.150%, 12/02/98 ................. 2,465 2,465
Suffolk, Redevelopment & Housing
Authority, Multi Family Housing,
Windsor Fieldstone Project, RB (A)
3.350%, 12/02/98 ................. 4,288 4,288
Face
Amount Value
(000) (000)
------ ------
Virginia State College, Building
Authority, Public Higher Education
Financing, Ser A, RB
3.150%, 09/01/99 ................. $ 1,850 $ 1,850
Virginia State, Polytechnic
Institute & University, RB (A)
3.400%, 12/03/98 ................. 650 650
Virginia State, Polytechnic
Institute & University, RB (A) (B)
3.400%, 12/03/98 ................. 3,475 3,475
Virginia State, Port Authority Facility,
AMT, RB, MBIA (A)
3.350%, 12/03/98 ................. 10,100 10,100
Virginia State, Public Building
Authority, RB
5.100%, 08/01/99 ................. 7,115 7,212
Virginia State, Public School
Authority, School Equipment
Financing, Issue V, RB
3.600%, 04/01/99 ................. 5,000 5,000
Waynesboro, Residential
Care Facilities, Sunnyside
Presbyterian Project, RB (A) (B)
3.350%, 12/01/98 ................. 10,240 10,240
York County, TECP
3.400%, 02/18/99 ................. 8,800 8,800
- ------------------------------------------------------------
97,724
- ------------------------------------------------------------
WASHINGTON (3.6%)
Washington State, Public Power Supply
System, Nuclear Project Number 1,
Prerefunded 07/01/99 @ 100
6.000%, 07/01/17 ................. 10,000 10,131
- ------------------------------------------------------------
Total Municipal Bonds
(Cost $275,766) .............. 275,766
- ------------------------------------------------------------
CASH EQUIVALENTS (0.9%)
Financial Square Tax Free Portfolio . 1,118 1,118
SEI Institutional Tax Free Portfolio 1,277 1,277
- ------------------------------------------------------------
Total Cash Equivalents
(Cost $2,395) ................ 2,395
- ------------------------------------------------------------
Total Investments (99.4%)
(Cost $278,161) .............. 278,161
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.6%) 1,589
- ------------------------------------------------------------
35
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
TAX-FREE MONEYFUND (CONCLUDED)
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .9 billion shares
authorized) based on 270,909,225
outstanding shares ........................ $270,911
Portfolio Shares of Investor Class A
($.001 par value -- .1 billion shares
authorized) based on 8,849,887
outstanding shares ........................ 8,850
Distribution in excess of net investment income (2)
Accumulated net realized loss on investments (9)
- ------------------------------------------------------------
Total Net Assets: (100.0%) ............. $279,750
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(270,899,215 / 270,909,225
SHARES OUTSTANDING) ......................... $1.00
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS A
(8,851,371 / 8,849,887
SHARES OUTSTANDING) ......................... $1.00
- ------------------------------------------------------------
- ------------------------------------------------------------
(A) Adjustable Rate Security--The rate reflected on the Statement of Net Assets
is the rate in effect on November 30, 1998. 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 Insurance Company
FSA--Financial Securities Assurance, Inc.
GO--General Obligation
MBIA--Municipal Bond Insurance Association
RB--Revenue Bond
Ser--Series
TECP--Tax Exempt Commercial Paper
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
LIMITED TERM BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
U.S. GOVERNMENT AGENCY OBLIGATION (1.3%)
FFCB MTN
7.125%, 06/01/01 ................. $ 1,000 $ 1,052
- ------------------------------------------------------------
Total U.S. Government Agency Obligation
(Cost $1,002) ................ 1,052
- ------------------------------------------------------------
U.S. AGENCY MORTGAGE BACKED OBLIGATIONS (54.1%)
FHLMC Pool E00412
7.000%, 01/01/11 ................. 1,413 1,446
FHLMC Pool G10664
7.000%, 02/01/12 ................. 3,865 3,953
FHLMC REMIC 1585 E
5.750%, 06/15/16 ................. 1,593 1,592
FHLMC REMIC 2061 PC
6.250%, 10/15/20 ................. 1,200 1,218
FNMA Pool 250820
7.000%, 01/01/27 ................. 2,146 2,191
FNMA Pool 251761
6.500%, 06/01/13 ................. 2,816 2,858
FNMA Pool 397657
7.500%, 09/01/27 ................. 934 960
FNMA Pool 401494
7.500%, 10/01/27 ................. 873 898
FNMA Pool 401899
7.500%, 12/01/27 ................. 908 934
FNMA Pool 404124
7.500%, 12/01/27 ................. 665 683
FNMA Pool 411484
7.500%, 12/01/27 ................. 853 877
FNMA Pool 414639
7.500%, 11/01/27 ................. 804 827
FNMA Pool 419420
7.500%, 03/01/28 ................. 861 886
FNMA Pool 420787
6.500%, 06/01/13 ................. 1,967 1,997
FNMA Pool 420917
7.500%, 09/01/26 ................. 798 821
FNMA Pool 423276
7.500%, 01/01/28 ................. 910 936
FNMA Pool 429562
7.500%, 06/01/28 ................. 506 520
FNMA Pool 439745
6.500%, 09/01/13 ................. 1,963 1,992
FNMA Pool 444572
6.500%, 09/01/13 ................. 1,096 1,113
FNMA REMIC 1992-199 A
5.250%, 11/25/99 ................. 133 132
FNMA REMIC 1996-30 PC
7.000%, 11/25/20 ................. 2,600 2,652
FNMA REMIC 1998-44 QD
6.000%, 07/18/16 ................. 1,200 1,200
FNMA REMIC 1998-8 PB
6.250%, 06/18/19 ................. 2,575 2,658
Face Market
Amount Value
(000) (000)
------ ------
FNMA TBA
6.000%, 12/15/13 ................. $ 3,000 $ 3,001
GNMA Pool 359503
7.500%, 04/15/24 ................. 57 59
GNMA Pool 359975
7.500%, 01/15/24 ................. 58 60
GNMA Pool 398793
7.500%, 07/15/26 ................. 349 361
GNMA Pool 399107
7.500%, 02/15/27 ................. 523 540
GNMA Pool 410839
7.500%, 11/15/25 ................. 427 441
GNMA Pool 417143
7.500%, 10/15/25 ................. 329 340
GNMA Pool 431365
7.500%, 10/15/26 ................. 455 470
GNMA Pool 439009
7.500%, 10/15/26 ................. 59 61
GNMA Pool 439051
7.500%, 02/15/27 ................. 27 28
GNMA Pool 443502
7.500%, 07/15/27 ................. 423 437
GNMA Pool 780332
8.000%, 11/15/09 ................. 1,594 1,652
GNMA TBA
6.500%, 12/17/28 ................. 1,500 1,515
7.000%, 12/17/28 ................. 3,000 3,070
- ------------------------------------------------------------
Total U.S. Agency Mortgage Backed Obligations
(Cost $44,986) ............... 45,379
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (27.9%)
AGRICULTUrE (2.4%)
Alcan Aluminum
5.875%, 04/01/00 ................. 2,000 2,017
- ------------------------------------------------------------
BANKS (4.9%)
Capital One Bank MTN
6.830%, 05/17/99 ................. 2,000 2,010
Popular North America
6.625%, 10/27/02 ................. 2,000 2,097
- ------------------------------------------------------------
4,107
- ------------------------------------------------------------
BUILDING & CONSTRUCTION SUPPLIES (2.4%)
Penn Central
9.750%, 08/01/99 ................. 2,000 2,052
- ------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (3.2%)
US Cellular, Callable 08/15/04 @ 100
7.250%, 08/15/07 ................. 2,525 2,645
- ------------------------------------------------------------
ELECTRICAL SERVICES (1.6%)
Ohio Edison
6.875%, 09/15/99 ................. 1,300 1,313
- ------------------------------------------------------------
37
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
LIMITED TERM BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
FINANCIAL SERVICES (5.2%)
CIT Group Holdings
6.375%, 08/01/02 .................. $ 1,345 $ 1,384
Macsaver Financial Services
7.875%, 08/01/03 .................. 3,000 2,996
- ------------------------------------------------------------
4,380
- ------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (1.6%)
Petroleum Geo-Services
7.500%, 03/31/07 .................. 1,255 1,316
- ------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST (2.4%)
United Dominion Realty
7.250%, 01/15/07 .................. 2,000 2,022
- ------------------------------------------------------------
SECURITY BROKERAGE/DEALERS (4.2%)
Jefferies Group, Callable 05/01/99 @ 103
8.875%, 05/01/04 .................. 2,000 2,218
Salomon Brothers
7.125%, 08/01/99 .................. 1,300 1,316
- ------------------------------------------------------------
3,534
- ------------------------------------------------------------
Total Corporate Obligations
(Cost $22,913) ................ 23,386
- ------------------------------------------------------------
ASSET BACKED SECURITIES (11.8%)
AUTOMOTIVE (0.3%)
Chase Manhattan Grantor Trust,
Ser 1995-B A
5.900%, 11/15/01 .................. 257 258
- ------------------------------------------------------------
CREDIT CARDS (8.8%)
Advanta Credit Card Master Trust,
Ser 1995-F A1
6.050%, 08/01/03 .................. 1,000 1,017
American Express Master Trust,
Ser 1992-2 A
6.600%, 05/15/00 .................. 2,000 2,012
Chase Credit Card Master Trust,
Ser 1997-5 A
6.194%, 08/15/05 .................. 1,280 1,319
Discover Card Master Trust I,
Ser 1998-4 A
5.750%, 10/16/03 .................. 1,990 2,008
Spiegel Master Trust,
Ser 1995-A A
7.500%, 09/15/04 .................. 1,000 1,035
- ------------------------------------------------------------
7,391
- ------------------------------------------------------------
HOME EQUITY (2.7%)
CoreStates Home Equity Trust, Ser 1994-1 A
6.650%, 05/15/09 .................. 762 773
EQCC Home Equity Loan Trust, Ser 1994-1 A
5.800%, 03/15/09 .................. 665 673
Face Market
Amount Value
(000) (000)
------ ------
Equivantage, Ser 1996-1 A
6.550%, 10/25/25 .................. $ 832 $ 850
- ------------------------------------------------------------
2,296
- ------------------------------------------------------------
Total Asset Backed Securities
(Cost $9,782) ................. 9,945
- ------------------------------------------------------------
MORTGAGE BACKED SECURITIES (2.1%)
Merrill Lynch Mortgage Investors,
Ser 1998-C2 D (A)
6.957%, 02/15/30 .................. 1,800 1,784
- ------------------------------------------------------------
Total Mortgage Backed Securities
(Cost $1,812) ................. 1,784
- ------------------------------------------------------------
MUNICIPAL BOND (1.2%)
Los Angeles County, CA, Taxable GO,
Ser A, AMBAC
8.000%, 06/30/01 .................. 940 1,000
- ------------------------------------------------------------
Total Municipal Bond
(Cost $997) ................... 1,000
- ------------------------------------------------------------
COMMERCIAL PAPER (3.5%)
Citibank Capital Markets
5.530%, 01/06/99 .................. 1,000 994
Peacock Funding
5.200%, 02/11/99 .................. 2,000 1,979
- ------------------------------------------------------------
Total Commercial Paper
(Cost $2,973) ................. 2,973
- ------------------------------------------------------------
CASH EQUIVALENT (4.3%)
Aim Liquid Assets Portfolio .......... 3,622 3,622
- ------------------------------------------------------------
Total Cash Equivalent
(Cost $3,622) ................. 3,622
- ------------------------------------------------------------
REPURCHASE AGREEMENT (2.1%)
J.P. Morgan
5.57%, dated 11/30/98, matures
12/01/98, repurchase price $1,779,914
(collateralized by various GNMA obligations:
total market value $1,815,238) ..... 1,780 1,780
- ------------------------------------------------------------
Total Repurchase Agreement
(Cost $1,780) ................. 1,780
- ------------------------------------------------------------
Total Investments (108.3%)
(Cost $89,867) ................ 90,921
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-8.3%) (6,941)
- ------------------------------------------------------------
38
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
LIMITED TERM BOND FUND (concluded)
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 1.4 billion shares
authorized) based on 8,414,665
outstanding shares .......................... $84,753
Distribution in excess of net investment income (16)
Accumulated net realized loss on investments .. (1,811)
Net unrealized appreciation on investments .... 1,054
- ------------------------------------------------------------
Total Net Assets: (100.0%) ............... $83,980
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(83,980,180 / 8,414,665
SHARES OUTSTANDING) ........................... $9.98
- ------------------------------------------------------------
- ------------------------------------------------------------
(A) Adjustable Rate Security--The rate reflected on the Statement of Net Assets
is the rate in effect on November 30, 1998. 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.
AMBAC--American Municipal Bond Assurance Corporation
FFCB--Federal Farm Credit Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
GO--General Obligation
MTN--Medium Term Note
REMIC--Real Estate Mortgage Investment Conduit
Ser--Series
TBA--To Be Announced
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
U.S. TREASURY OBlIGATIONS (5.1%)
U.S. Treasury Bonds
6.125%, 11/15/27 ................. $10,900 $12,304
5.250%, 11/15/28 ................. 3,500 3,596
- ------------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $15,590) ............... 15,900
- ------------------------------------------------------------
U.S. AGENCY MORTGAGE BACKED OBLIGATIONS (67.3%)
FHLMC Pool E00412
7.000%, 01/01/11 ................. 1,759 1,799
FHLMC Pool G10664
7.000%, 02/01/12 ................. 9,996 10,227
FHLMC REMIC Ser 1585 E
5.750%, 06/15/16 ................. 3,480 3,478
FHLMC REMIC Ser 1726 B
6.750%, 11/15/04 ................. 7,000 7,143
FHLMC REMIC Ser 1934 E
6.500%, 02/15/12 ................. 9,243 9,483
FHLMC REMIC Ser 2061 PC
6.250%, 10/15/20 ................. 8,460 8,590
FNMA Pool 250820
7.000%, 01/01/27 ................. 8,546 8,725
FNMA Pool 250951
7.500%, 06/01/27 ................. 89 92
FNMA Pool 251115
7.500%, 08/01/27 ................. 85 87
FNMA Pool 251502
6.500%, 02/01/13 ................. 389 394
FNMA Pool 251571
6.500%, 02/01/13 ................. 4,741 4,810
FNMA Pool 313737
7.500%, 09/01/27 ................. 515 530
FNMA Pool 358491
7.500%, 12/01/26 ................. 217 223
FNMA Pool 373169
7.500%, 03/01/27 ................. 68 70
FNMA Pool 378999
7.500%, 05/01/27 ................. 482 496
FNMA Pool 394212
7.500%, 07/01/27 ................. 227 233
FNMA Pool 394345
7.500%, 07/01/27 ................. 483 496
FNMA Pool 395051
6.500%, 02/01/13 ................. 1,848 1,876
FNMA Pool 397091
7.500%, 10/01/27 ................. 542 557
FNMA Pool 400521
7.500%, 10/01/07 ................. 233 240
FNMA Pool 401402
7.500%, 10/01/27 ................. 239 246
FNMA Pool 402136
7.500%, 10/01/27 ................. 497 511
Face Market
Amount Value
(000) (000)
------ ------
FNMA Pool 402895
7.500%, 01/01/28 ................. $ 208 $ 214
FNMA Pool 403467
7.500%, 05/01/28 ................. 96 99
FNMA Pool 405102
7.500%, 08/01/27 ................. 95 97
FNMA Pool 407454
7.500%, 11/01/27 ................. 218 224
FNMA Pool 407612
7.500%, 12/01/27 ................. 68 69
FNMA Pool 407841
7.500%, 12/01/27 ................. 621 639
FNMA Pool 407886
6.500%, 02/01/13 ................. 874 887
FNMA Pool 407890
6.500%, 02/01/13 ................. 374 380
FNMA Pool 409201
6.500%, 01/01/13 ................. 950 964
FNMA Pool 409446
7.500%, 01/01/28 ................. 248 255
FNMA Pool 411360
7.500%, 01/01/28 ................. 95 98
FNMA Pool 412223
7.500%, 01/01/28 ................. 524 538
FNMA Pool 413994
6.500%, 01/01/13 ................. 876 889
FNMA Pool 414673
7.500%, 04/01/28 ................. 486 500
FNMA Pool 414887
6.500%, 02/01/13 ................. 1,814 1,841
FNMA Pool 415853
7.500%, 01/01/28 ................. 540 555
FNMA Pool 416896
7.500%, 05/01/28 ................. 504 518
FNMA Pool 419054
7.500%, 04/01/28 ................. 79 81
FNMA Pool 419576
7.500%, 02/01/28 ................. 270 278
FNMA Pool 422659
7.500%, 06/01/28 ................. 104 107
FNMA Pool 424174
7.500%, 04/01/28 ................. 498 512
FNMA Pool 424908
7.500%, 04/01/28 ................. 87 90
FNMA Pool 425123
7.500%, 05/01/28 ................. 100 103
FNMA Pool 425233
7.500%, 04/01/28 ................. 229 235
FNMA Pool 425956
7.500%, 05/01/28 ................. 216 222
FNMA Pool 428402
7.500%, 04/01/28 ................. 277 285
FNMA Pool 447023
6.500%, 02/01/13 ................. 1,674 1,698
40
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
FNMA REMIC Ser 1993-127 K
6.500%, 10/25/21 .................. $ 4,500 $ 4,561
FNMA REMIC Ser 1997-42 ZC
6.500%, 07/18/27 .................. 12,634 12,458
FNMA REMIC Ser 1997-63 PC
6.500%, 03/18/26 .................. 9,160 9,526
FNMA REMIC Ser 1998-8 PB
6.250%, 06/18/19 .................. 8,530 8,805
FNMA REMIC Ser 1998-17 TC
6.250%, 08/18/21 .................. 7,035 7,133
FNMA REMIC Ser 1998-44 QD
6.000%, 07/18/16 .................. 9,000 8,997
FNMA TBA
6.000%, 12/15/13 .................. 16,965 16,970
GNMA Pool 347246
7.000%, 04/15/27 .................. 130 133
GNMA Pool 353157
7.000%, 12/15/27 .................. 643 658
GNMA Pool 372462
7.000%, 12/15/27 .................. 750 768
GNMA Pool 376345
6.500%, 12/15/23 .................. 6,556 6,623
GNMA Pool 377447
7.000%, 01/15/27 .................. 396 406
GNMA Pool 387124
7.000%, 09/15/25 .................. 375 384
GNMA Pool 393375
7.000%, 02/15/27 .................. 47 48
GNMA Pool 399119
7.000%, 02/15/27 .................. 514 526
GNMA Pool 402549
7.000%, 04/15/26 .................. 396 406
GNMA Pool 412383
7.000%, 12/15/27 .................. 467 478
GNMA Pool 429349
7.000%, 03/15/26 .................. 325 332
GNMA Pool 430006
7.000%, 11/15/27 .................. 99 101
GNMA Pool 432390
7.000%, 03/15/27 .................. 479 495
GNMA Pool 433369
7.000%, 01/15/27 .................. 412 422
GNMA Pool 433594
6.500%, 02/15/28 .................. 191 193
GNMA Pool 440185
7.000%, 02/15/27 .................. 499 511
GNMA Pool 440268
7.000%, 03/15/27 .................. 521 534
GNMA Pool 441681
7.000%, 12/15/27 .................. 86 88
GNMA Pool 441790
7.000%, 02/15/27 .................. 49 51
Face Market
Amount Value
(000) (000)
------ ------
GNMA Pool 442007
7.000%, 03/15/27 .................. $ 340 $ 349
GNMA Pool 443942
7.000%, 04/15/27 .................. 329 337
GNMA Pool 448095
6.500%, 02/15/28 .................. 882 891
GNMA Pool 450663
6.500%, 03/15/28 .................. 880 889
GNMA Pool 453303
7.000%, 08/15/27 .................. 618 633
GNMA Pool 453416
7.000%, 11/15/27 .................. 84 86
GNMA Pool 454475
6.500%, 09/15/28 .................. 43 43
GNMA Pool 455015
7.000%, 10/15/27 .................. 24 25
GNMA Pool 456254
6.500%, 04/15/28 .................. 408 412
GNMA Pool 456558
7.000%, 10/15/27 .................. 392 401
GNMA Pool 457089
6.500%, 09/15/28 .................. 499 504
GNMA Pool 457558
7.000%, 12/15/27 .................. 742 759
GNMA Pool 458708
7.000%, 11/15/27 .................. 804 823
GNMA Pool 458911
6.500%, 08/15/28 .................. 36 36
GNMA Pool 459132
7.000%, 12/15/27 .................. 277 284
GNMA Pool 459520
7.000%, 03/15/28 .................. 65 66
GNMA Pool 459593
7.000%, 03/15/28 .................. 262 268
GNMA Pool 459702
7.000%, 11/15/27 .................. 155 159
GNMA Pool 459960
7.000%, 03/15/28 .................. 269 276
GNMA Pool 460007
6.500%, 03/15/28 .................. 692 700
GNMA Pool 460253
6.500%, 03/15/28 .................. 119 120
GNMA Pool 460254
6.500%, 03/15/28 .................. 1,914 1,934
GNMA Pool 460282
6.500%, 03/15/28 .................. 126 128
GNMA Pool 460484
6.500%, 03/15/28 .................. 1,502 1,518
GNMA Pool 460658
7.000%, 12/15/27 .................. 825 845
GNMA Pool 460928
7.000%, 10/15/27 .................. 282 289
GNMA Pool 461010
7.000%, 11/15/27 .................. 321 329
41
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
GNMA Pool 461064
7.000%, 12/15/27 ................... $ 581 $ 595
GNMA Pool 461086
7.000%, 12/15/27 ................... 659 675
GNMA Pool 462268
7.000%, 11/15/27 ................... 791 810
GNMA Pool 462388
7.000%, 12/15/27 ................... 811 831
GNMA Pool 462432
7.000%, 12/15/27 ................... 67 68
GNMA Pool 463640
6.500%, 03/15/28 ................... 1,150 1,162
GNMA Pool 463641
6.500%, 03/15/28 ................... 1,984 2,005
GNMA Pool 465364
6.500%, 08/15/28 ................... 161 162
GNMA Pool 465387
6.500%, 02/15/28 ................... 421 425
GNMA Pool 465784
7.000%, 04/15/28 ................... 638 654
GNMA Pool 471087
7.000%, 08/15/28 ................... 47 48
GNMA Pool 471102
6.500%, 05/15/28 ................... 454 459
GNMA Pool 475111
6.500%, 09/15/28 ................... 494 499
GNMA Pool 486543
6.500%, 09/15/28 ................... 494 499
GNMA Pool 780332
8.000%, 11/15/09 ................... 6,835 7,081
GNMA Pool 780463
7.000%, 11/15/26 ................... 545 559
GNMA Pool 780525
7.000%, 03/15/27 ................... 750 768
GNMA Pool 780651
7.000%, 10/15/27 ................... 145 149
GNMA TBA
6.500%, 12/17/28 ................... 8,185 8,264
7.000%, 12/17/28 ................... 17,785 18,202
- ------------------------------------------------------------
Total U.S. Agency Mortgage Backed Obligations
(Cost $207,877) ................ 211,310
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (15.0%)
AUTOMOTIVE (0.7%)
Ford Motor
6.625%, 10/01/28 ................... 2,085 2,179
- ------------------------------------------------------------
BANKS (1.8%)
Capital One MTN
6.830%, 05/17/99 ................... 2,300 2,311
Central Fidelity
8.150%, 11/15/02 ................... 3,000 3,326
- ------------------------------------------------------------
5,637
- ------------------------------------------------------------
Face Market
Amount Value
(000) (000)
------ ------
FINANCIAL SERVICES (7.3%)
Americal Financial Group
7.125%, 12/15/07 ................... $ 7,000 $ 7,429
Household Finance MTN
6.250%, 08/15/03 ................... 5,825 5,949
Macsaver Financial Services
7.875%, 08/01/03 ................... 9,550 9,538
- ------------------------------------------------------------
22,916
- ------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (0.3%)
Philip Morris
7.125%, 08/15/02 ................... 1,000 1,042
- ------------------------------------------------------------
GAS/NATURAL GAS (1.5%)
Petroleum Geo-Services
7.125%, 03/30/28 ................... 4,945 4,747
- ------------------------------------------------------------
SECURITY BROKERAGE/DEALERS (3.4%)
Jefferies Group, Callable 05/01/99 @ 103
8.875%, 05/01/04 ................... 7,000 7,761
Lehman Brothers
10.000%, 05/15/99 .................. 3,000 3,041
- ------------------------------------------------------------
10,802
- ------------------------------------------------------------
Total Corporate Obligations
(Cost $46,161) ................. 47,323
- ------------------------------------------------------------
ASSET BACKED SECURITIES (7.6%)
American Express Master Trust,
Ser 1992-2 A
6.600%, 05/15/00 ................... 6,350 6,389
Chase Credit Card Master Trust,
Ser 1997-5 A
6.194%, 08/15/05 ................... 7,215 7,436
Discover Card Master Trust I,
Ser 1998-4 A
5.750%, 10/16/03 ................... 8,190 8,264
EQCC Home Equity Loan Trust,
Ser 1994-1 A
5.800%, 03/15/09 ................... 548 555
Olympic Automobile Receivables Trust,
Ser 1995-D A4
6.050%, 11/15/00 ................... 1,365 1,368
- ------------------------------------------------------------
Total Asset Backed Securities
(Cost $23,729) ................. 24,012
- ------------------------------------------------------------
MORTGAGE BACKED SECURITIES (2.4%)
Merrill Lynch Mortgage Investors,
Ser 1998-C1 A1
6.310%, 11/15/26 ................... 413 423
Merrill Lynch Mortgage Investors,
Ser 1998-C2 D (A)
6.957%, 02/15/30 ................... 7,100 7,038
- ------------------------------------------------------------
Total Mortgage Backed Securities
(Cost $7,562) .................. 7,461
- ------------------------------------------------------------
42
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND (concluded)
Face Market
Amount Value
(000) (000)
------ ------
MUNICIPAL BOND (1.2%)
Los Angeles County, CA, Taxable GO,
Ser A, AMBAC
8.000%, 06/30/01 ................. $ 3,480 $ 3,702
- ------------------------------------------------------------
Total Municipal Bond
(Cost $3,692) ................ 3,702
- ------------------------------------------------------------
COMMERCIAL PAPER (0.4%)
Peacock Funding
5.200%, 02/11/99 ................. 1,345 1,331
- ------------------------------------------------------------
Total Commercial Paper
(Cost $1,331) ................ 1,331
- ------------------------------------------------------------
CASH EQUIVALENT (5.0%)
Aim Liquid Assets Portfolio ......... 15,635 15,635
- ------------------------------------------------------------
Total Cash Equivalent
(Cost $15,635) ............... 15,635
- ------------------------------------------------------------
REPURCHASE AGREEMENT (9.6%)
J.P. Morgan
5.45%, dated 11/30/98, matures
12/01/98, repurchase price $30,171,703
(collateralized by various GNMA obligations:
total market value $30,770,479) ... 30,167 30,167
- ------------------------------------------------------------
Total Repurchase Agreement
(Cost $30,167) ............... 30,167
- ------------------------------------------------------------
Total Investments (113.6%)
(Cost $351,744) .............. 356,841
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-13.6%) (42,666)
- ------------------------------------------------------------
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 1.4 billion shares
authorized) based on 30,704,293
outstanding shares ................ $301,088
Portfolio Shares of Investor Class A
($.001 par value -- .1 billion shares
authorized) based on 324,873
outstanding shares ................ 3,241
Undistributed net investment income 96
Accumulated net realized gain on investments 4,653
Net unrealized appreciation on investments 5,097
- ------------------------------------------------------------
Total Net Assets: (100.0%) ..... $314,175
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(310,885,054 / 30,704,293
SHARES OUTSTANDING) ................. $10.13
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS A
(3,290,260 / 324,873
SHARES OUTSTANDING) ................. $10.13
- ------------------------------------------------------------
OFFER PRICE PER SHARE -- INVESTOR CLASS A
($10.13 / 97.0%) .................... $10.44
- ------------------------------------------------------------
- ------------------------------------------------------------
(A) Adjustable Rate Security--The rate reflected on the Statement of Net Assets
is the rate in effect on November 30, 1998. 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.
AMBAC--American Municipal Bond Assurance Corporation
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
GO--General Obligation
MTN--Medium Term Note
REMIC--Real Estate Mortgage Investment Conduit
Ser--Series
TBA--To Be Announced
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
U.S. TREASURY OBLIGATIONS (13.3%)
U.S. Treasury Bonds
6.625%, 02/15/27 .................. $ 960 $ 1,144
6.125%, 11/15/27 .................. 3,795 4,283
5.250%, 11/15/28 .................. 1,500 1,541
- ------------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $6,749) ................. 6,968
- ------------------------------------------------------------
U.S. AGENCY MORTGAGE BACKED OBLIGATIONS (66.3%)
FHLMC Pool E00412
7.000%, 01/01/11 .................. 347 355
FHLMC Pool E66605
6.500%, 03/01/12 .................. 2,945 2,990
FHLMC Pool G10664
7.000%, 02/01/12 .................. 1,189 1,217
FHLMC REMIC 1585 E
5.750%, 06/15/16 .................. 1,045 1,044
FHLMC REMIC 1934 E
6.500%, 02/15/12 .................. 1,856 1,905
FHLMC REMIC 2061 PC
6.250%, 10/15/20 .................. 1,260 1,279
FNMA Pool 250820
7.000%, 01/01/27 .................. 1,106 1,129
FNMA Pool 251761
6.500%, 06/01/13 .................. 348 353
FNMA Pool 420787
6.500%, 06/01/13 .................. 1,314 1,333
FNMA Pool 444572
6.500%, 09/01/13 .................. 207 211
FNMA REMIC 1996-30 PC
7.000%, 11/25/20 .................. 2,000 2,040
FNMA REMIC 1997-42 ZC
6.500%, 07/18/27 .................. 1,535 1,513
FNMA REMIC 1997-63 PC
6.500%, 03/18/26 .................. 1,140 1,186
FNMA REMIC 1998-8 PB
6.250%, 06/18/19 .................. 1,140 1,177
FNMA REMIC 1998-17 TC
6.250%, 08/18/21 .................. 910 923
FNMA REMIC 1998-44 QD
6.000%, 07/18/16 .................. 1,260 1,260
FNMA TBA
6.000%, 12/15/13 .................. 1,400 1,400
GNMA Pool 352020
6.500%, 11/15/23 .................. 830 839
GNMA Pool 353917
7.000%, 10/15/27 .................. 80 82
GNMA Pool 361275
6.500%, 11/15/23 .................. 377 381
GNMA Pool 384994
7.000%, 12/15/27 .................. 50 52
GNMA Pool 423454
7.500%, 01/15/26 .................. 488 505
Face Market
Amount Value
(000) (000)
------ ------
GNMA Pool 429989
7.500%, 10/15/27 .................. $ 50 $ 52
GNMA Pool 433528
7.000%, 01/15/28 .................. 160 164
GNMA Pool 443942
7.000%, 04/15/27 .................. 833 853
GNMA Pool 445209
7.000%, 10/15/27 .................. 70 72
GNMA Pool 445282
7.000%, 12/15/27 .................. 71 73
GNMA Pool 445361
7.000%, 11/15/27 .................. 65 66
GNMA Pool 449499
7.000%, 01/15/28 .................. 291 298
GNMA Pool 451900
7.500%, 07/15/27 .................. 390 403
GNMA Pool 452415
7.000%, 09/15/27 .................. 73 74
GNMA Pool 452647
7.000%, 11/15/27 .................. 855 875
GNMA Pool 454996
7.000%, 12/15/27 .................. 786 804
GNMA Pool 456254
6.500%, 04/15/28 .................. 88 89
GNMA Pool 456308
7.000%, 11/15/27 .................. 276 283
GNMA Pool 459912
7.500%, 01/15/28 .................. 384 397
GNMA Pool 460535
7.000%, 01/15/28 .................. 851 872
GNMA Pool 465677
6.500%, 03/15/28 .................. 149 150
GNMA Pool 468226
6.500%, 09/15/28 .................. 569 575
GNMA Pool 475841
6.500%, 06/15/28 .................. 42 42
GNMA Pool 483637
6.500%, 09/15/28 .................. 449 454
GNMA Pool 780332
8.000%, 11/15/09 .................. 1,031 1,068
GNMA Pool 780429
7.500%, 09/15/26 .................. 762 788
GNMA Pool 780525
7.000%, 03/15/27 .................. 270 276
GNMA Pool 780651
7.000%, 10/15/27 .................. 727 745
GNMA TBA
6.500%, 12/17/28 .................. 700 707
7.000%, 12/17/28 .................. 1,400 1,433
- ------------------------------------------------------------
Total U.S. Agency Mortgage Backed Obligations
(Cost $34,256) ................ 34,787
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (9.0%)
BANKS (0.5%)
Capital One MTN
6.830%, 05/17/99 .................. 250 251
- ------------------------------------------------------------
44
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND (concluded)
Face Market
Amount Value
(000) (000)
------ ------
COMMUNICATIONS EQUIPMENT (2.0%)
US Cellular, Callable 08/15/04 @ 100
7.250%, 08/15/07 ................. $ 1,000 $ 1,048
- ------------------------------------------------------------
FINANCIAL SERVICES (1.9%)
Macsaver Financial Services
7.400%, 02/15/02 ................. 1,000 991
- ------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (1.1%)
Philip Morris
7.625%, 05/15/02 ................. 550 580
- ------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (1.4%)
Petroleum Geo-Services
7.125%, 03/30/28 ................. 765 734
- ------------------------------------------------------------
SECURITY BROKERAGE/DEALERS (2.1%)
Jefferies Group, Callable 05/01/99 @ 103
8.875%, 05/01/04 ................. 1,000 1,109
- ------------------------------------------------------------
Total Corporate Obligations
(Cost $4,613) ................ 4,713
- ------------------------------------------------------------
ASSET BACKED SECURITIES (5.7%)
AFG Receivables Trust, Ser 1997-A A
6.350%, 10/31/02 ................. 516 519
Chase Credit Card Master Trust,
Ser 1997-5 A
6.194%, 08/15/05 ................. 845 871
Discover Card Master Trust I,
Ser 1998-4 A
5.750%, 10/16/03 ................. 1,180 1,191
EQCC Home Equity Loan Trust,
Ser 1994-1 A
5.800%, 03/15/09 ................. 69 69
Olympic Automobile Receivables Trust,
Ser 1995-D A4
6.050%, 11/15/00 ................. 319 320
- ------------------------------------------------------------
Total Asset Backed Securities
(Cost $2,938) ................ 2,970
- ------------------------------------------------------------
MORTGAGE BACKED SECURITIES (2.1%)
Merrill Lynch Mortgage Investors,
Ser 1998-C2 D (A)
6.957%, 02/15/30 ................. 1,100 1,090
- ------------------------------------------------------------
Total Mortgage Backed Securities
(Cost $1,108) ................ 1,090
- ------------------------------------------------------------
MUNICIPAL BOND (1.2%)
Los Angeles County, CA, Taxable GO,
Ser A, AMBAC
8.000%, 06/30/01 ................. 580 617
- ------------------------------------------------------------
Total Municipal Bond
(Cost $615) .................. 617
- ------------------------------------------------------------
CASH EQUIVALENT (4.8%)
Aim Liquid Assets Portfolio ......... 2,531 2,531
- ------------------------------------------------------------
Total Cash Equivalent
(Cost $2,531) ................ 2,531
- ------------------------------------------------------------
Face Market
Amount Value
(000) (000)
------ ------
REPURCHASE AGREEMENT (4.3%)
J.P. Morgan
5.45%, dated 11/30/98, matures
12/01/98, repurchase price $2,273,226
(collateralized by various GNMA obligations:
total market value $2,318,340) .... $ 2,273 $ 2,273
- ------------------------------------------------------------
Total Repurchase Agreement
(Cost $2,273) ................ 2,273
- ------------------------------------------------------------
Total Investments (106.7%)
(Cost $55,083) ............... 55,949
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-6.7%) (3,501)
- ------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .75 billion shares
authorized) based on 4,706,086
outstanding shares ................ 48,180
Portfolio Shares of Investor Class B
($.001 par value -- .125 billion shares
authorized) based on 224,524
outstanding shares ................ 2,345
Distribution in excess of net investment income (2)
Accumulated net realized gain on investments 1,059
Net unrealized appreciation on investments 866
- ------------------------------------------------------------
Total Net Assets: (100.0%) ..... $52,448
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(50,050,993 / 4,706,086
SHARES OUTSTANDING) ................. $10.64
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS B (1)
(2,396,603 / 224,524
SHARES OUTSTANDING) ................. $10.67
- ------------------------------------------------------------
- ------------------------------------------------------------
(A) Adjustable Rate Security--The rate reflected on the Statement of Net Assets
is the rate in effect on November 30, 1998. 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 deferrred sales charge. For description
of a possible redemption charge, see the notes to the financial statements.
AMBAC--American Municipal Bond Assurance Corporation
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
GO--General Obligation
MTN--Medium Term Note
REMIC--Real Estate Mortgage Investment Conduit
Ser--Series
TBA--To Be Announced
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
MUNICIPAL BONDS (97.8%)
VIRGINIA (97.8%)
Abingdon, Industrial Development
Authority, Johnston Memorial
Hospital Project, RB,
Callable 07/01/08 @102
5.250%, 07/01/16 .................. $2,000 $2,020
Arlington County, Industrial
Development Authority, Ogden
Martin Systems Project, Resource
Recovery Alexandria/Arlington,
Ser A, RB, FSA
5.250%, 01/01/05 .................. 4,000 4,260
Arlington County, Refunding Bond,
Public Improvements, GO,
Callable 10/01/08 @ 101
5.000%, 10/01/11 .................. 3,220 3,401
Chesapeake Bay, Bridge &
Tunnel Authority, RB,
Callable 07/01/05 @ 102 MBIA
5.000%, 07/01/22 .................. 2,000 1,992
Chesapeake Bay, Bridge &
Tunnel Authority, RB,
Prerefunded 07/01/01 @ 102 MBIA
6.375%, 07/01/22 .................. 7,000 7,604
Chesapeake, Hospital Authority,
General Hospital Project, RB,
Callable 07/01/00 @ 102
8.200%, 07/01/05 .................. 1,000 1,076
Chesapeake, Public Improvements, GO
5.800%, 08/01/02 .................. 2,000 2,140
Chesapeake, Refunding Bond, GO
5.400%, 12/01/08 .................. 2,500 2,741
Chesterfield County, Health Center
Community Project, Lucy Corr
Nursing Home Project, RB,
Callable 12/01/06 @ 102 (B)
5.875%, 12/01/21 .................. 500 532
Chesterfield County, Public Improvements,
Ser A, GO, Callable 01/01/08 @ 100 (B)
4.400%, 01/01/09 .................. 2,000 2,032
4.700%, 01/01/12 .................. 3,215 3,259
Chesterfield County, Refunding Bond, GO
5.650%, 07/15/00 .................. 3,000 3,105
Danville, Industrial Development Authority,
Danville Regional Medical Center
Project, RB AMBAC
5.250%, 10/01/28 .................. 4,250 4,478
Fairfax County, Economic Development
Authority, Resource Recovery, Ogden
Martin Systems Project, Ser A, AMT, RB,
Callable 02/01/99 @ 103
7.750%, 02/01/11 .................. 1,000 1,036
Face Market
Amount Value
(000) (000)
------ ------
Fairfax County, Industrial Development
Authority, Inova Health System Project,
RB, Callable 08/15/06 @ 102
5.300%, 08/15/07 .................. $1,500 $1,601
Fairfax County, Industrial Development
Authority, Inova Health System Project,
Ser A, RB, Callable 02/15/08 @ 101
5.000%, 08/15/10 .................. 2,890 2,991
Fairfax County, School & Transit Improvements,
Ser B, GO, Callable 06/01/01 @ 102 (B)
5.200%, 06/01/13 .................. 5,000 5,169
Fairfax County, Sewer Authority Refunding,
RB, Callable 11/15/03 @ 102 AMBAC
5.500%, 11/15/09 .................. 3,000 3,202
Fluvanna County, Industrial Development
Authority, Elementary School Project,
RB, Callable 04/01/99 @ 100
4.150%, 01/15/01 .................. 4,000 4,001
Fredericksburg, Industrial Development
Authority, Hospital Facilities Project,
Medicorp Health System, RB,
Callable 06/15/07 @ 102 AMBAC
5.250%, 06/15/16 .................. 5,000 5,137
Hampton Roads Sanitation District,
Wastewater Authority, Capital
Improvements, RB,
Callable 10/01/03 @ 102
4.900%, 10/01/06 .................. 2,000 2,092
Harrisonburg, Industrial Development
Authority, Rockingham Memorial
Hospital Project, RB,
Callable 12/01/02 @ 102 MBIA
5.750%, 12/01/13 .................. 3,000 3,206
Henrico County, Industrial Development
Authority, Solid Waste Facility
Browning Ferris Project, RB,
Mandatory Put 12/01/05 @ 100 (A)
5.300%, 12/01/98 .................. 1,000 1,049
Henrico County, Industrial Development
Authority, Government Projects, RB,
Callable 06/01/06 @ 102
5.150%, 06/01/07 .................. 2,500 2,681
Henrico County, Industrial Development
Authority, Residential & Health Care Facility,
Our Lady of Hope Project, RB,
Callable 07/01/03 @ 102 (B)
6.150%, 07/01/26 .................. 2,000 2,020
Henrico County, Industrial Development
Authority, Residential Care Facility
Westminister-Canterbury Project,
RB, Callable 02/17/99 @ 100.5
7.300%, 10/01/99 .................. 1,060 1,072
46
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
Henry County, Public Improvements, GO,
Callable 07/15/04 @ 102
6.000%, 07/15/14 .................. $1,000 $1,082
Loudoun County, Sanitation Authority,
Water & Sewer Project, RB,
Callable 01/01/03 @ 102 FGIC
6.100%, 01/01/04 .................. 1,250 1,373
Loudoun County, Sanitation Authority,
Water & Sewer Project, RB,
Callable 01/01/07 @ 102 FGIC
5.125%, 01/01/26 .................. 3,250 3,287
Loudoun County, Sanitation Authority,
Water & Sewer Project, RB FGIC
5.900%, 01/01/02 .................. 1,000 1,062
Loudoun County, School & Public
Improvement, Ser A, GO,
Callable 08/01/07 @ 102 (B)
5.000%, 08/01/17 .................. 2,000 2,030
Lynchburg, Refunding Bond, GO,
Callable 04/01/03 @ 102
5.250%, 04/01/08 .................. 2,000 2,122
Newport News, Recreational Facility
Improvements, Ser A, GO,
Callable 07/01/05 @ 102 MBIA
5.500%, 07/01/12 .................. 2,500 2,697
Newport News, Refunding &
Improvements Bond, Ser B, GO,
Callable 07/01/99 @ 101.50
5.700%, 07/01/05 .................. 2,000 2,054
Newport News, Water, Utility & Public
Improvements, GO,
Callable 01/15/07 @ 102
5.250%, 01/15/14 .................. 3,530 3,689
Norfolk, Capital Improvements, GO,
Callable 06/01/07 @ 101 FGIC
5.375%, 06/01/09 .................. 1,000 1,089
Norfolk, Industrial Development Authority,
Bon Secours Health Project, RB,
Callable 08/15/07 @ 102 MBIA
5.250%, 08/15/26 .................. 4,200 4,289
Norfolk, Industrial Development Authority,
Children's Hospital Project, RB AMBAC
6.900%, 06/01/06 .................. 1,000 1,176
Norfolk, Industrial Development Authority,
Children's Hospital Project, RB,
Callable 06/01/04 @ 102 AMBAC
5.100%, 06/01/07 .................. 1,000 1,055
Norfolk, Industrial Development Authority,
Public Health Center Project, RB,
Callable 09/15/06 @ 102
5.625%, 09/15/17 .................. 1,600 1,682
Face Market
Amount Value
(000) (000)
------ ------
Norfolk, Industrial Development Authority,
Sentara Hospital Project, Ser A, RB,
Callable 11/01/04 @ 102
4.900%, 11/01/07 .................. $ 2,500 $ 2,578
5.000%, 11/01/08 .................. 2,500 2,575
Norfolk, Redevelopment & Housing
Authority, Educational Facilities Revenue,
Tidewater Community College Campus
Project, RB, Callable 11/01/05 @ 102
5.800%, 11/01/08 .................. 700 776
Norfolk, Refunding & Improvement
Bond, Ser A, GO
5.100%, 02/01/00 .................. 4,000 4,075
Peninsula Ports, Hospital Authority,
Mary Immaculate Project, RB,
Escrowed to Maturity
8.000%, 08/01/99 .................. 245 250
Peninsula Ports, Industrial Development
Authority, Olde Hampton Hotel Project,
RB, Mandatory Put 07/01/99 @ 100 (B)
4.875%, 07/01/16 .................. 480 482
Peumansend Creek, Regional Jail Authority,
Grant Anticipation Note, RB,
Callable 04/01/99 @ 100
4.550%, 04/01/00 .................. 5,000 5,017
Portsmouth, Refunding Bond, GO,
Callable 08/01/03 @ 102
5.450%, 08/01/07 .................. 2,000 2,135
Portsmouth, Public Improvements, GO,
Prerefunded 08/01/00 @ 102
6.750%, 08/01/04 .................. 1,500 1,607
Prince William County, Park Authority,
Recreational Facility Improvement, RB
5.500%, 10/15/99 .................. 500 510
5.800%, 10/15/01 .................. 500 524
Prince William County, Park Authority,
Recreational Facility Improvement, RB,
Callable 10/15/04 @ 102
6.200%, 10/15/05 .................. 500 552
Prince William County, Refunding Bond,
Ser C, RB, Callable 08/01/03 @ 102 (B)
5.000%, 08/01/07 .................. 5,000 5,269
Prince William County, Water & Sewer
Authority, Water & Sewer Improvements,
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 1,627
Richmond, Public Improvements,
Ser A, GO
6.100%, 01/15/01 .................. 2,750 2,887
47
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
Richmond, Public Improvements,
Ser A, GO, Callable 01/15/05 @ 102
5.300%, 01/15/09 ................ $ 1,500 $ 1,614
Richmond, Public Utility, Ser A, RB
5.250%, 01/15/06 ................ 2,200 2,348
Richmond, Redevelopment & Housing
Authority, Richmeade Project, AMT, RB (A)
4.000%, 12/24/98 ................ 500 500
Roanoke Valley, Solid Waste System
Authority, Resource Recovery
Improvements, RB
5.400%, 09/01/02 ................ 1,450 1,504
Roanoke, Industrial Development Authority,
Roanoke Memorial Hospital Project,
Ser B, RB, Callable 07/01/02 @ 102
5.900%, 07/01/06 ................ 2,500 2,669
Roanoke, Public Improvements, GO
4.900%, 02/01/06 ................ 1,000 1,051
Roanoke, Public Improvements, GO,
Callable 02/01/06 @ 102
5.000%, 02/01/12 ................ 3,165 3,276
Southeastern Public Service Authority,
Ser A, RB, MBIA
5.150%, 07/01/09 ................ 5,000 5,350
Spotsylvania County, Refunding Bond,
Special Assessments, GO, FSA
4.500%, 07/15/09 ................ 1,375 1,402
Suffolk, Refunding & Improvement
Bond, GO
5.200%, 08/01/02 ................ 1,500 1,575
Suffolk, Refunding Bond, GO,
Callable 08/01/03 @ 102
5.600%, 08/01/06 ................ 2,000 2,170
5.700%, 08/01/07 ................ 2,000 2,175
Tazewell County, Industrial Development
Authority, Courthouse Project, RB,
Callable 01/01/07 @ 102 MBIA
5.300%, 01/01/27 ................ 1,000 1,029
Virginia Beach, Development Authority,
Residential & Health Care Facility Project,
1st Mortgage, Our Lady of Perpetual Hope
Project, RB, Callable 07/01/07 @102
6.050%, 07/01/20 ................ 1,500 1,536
Virginia Beach, Development Authority,
Sentara Bayside Hospital Project, RB,
Callable 11/01/01 @ 102
6.300%, 11/01/21 ................ 1,750 1,873
Virginia Beach, Refunding Bond, GO
5.000%, 07/15/03 ................ 1,000 1,050
5.300%, 07/15/07 ................ 2,000 2,165
5.250%, 08/01/08 ................ 2,000 2,165
5.450%, 07/15/11 ................ 1,000 1,098
Virginia Beach, Refunding Bond, GO,
Prerefunded 11/01/04 @ 102 (B)
5.750%, 11/01/10 ................ 3,500 3,885
Face Market
Amount Value
(000) (000)
------ ------
Virginia State, College Building Authority,
Public Higher Education Financing,
Ser A, RB, Callable 09/01/08 @ 100
4.800%, 09/01/17 ................ $1,500 $ 1,463
Virginia State, College Building Authority,
Public Higher Education Financing,
Ser A, RB, Callable 09/01/08 @ 100
4.625%, 09/01/15 ................ 3,080 2,972
Virginia State, College Building Authority,
University of Richmond Project, RB,
Callable 11/01/02 @ 102
6.250%, 11/01/12 ................ 2,000 2,178
Virginia State, College Building Authority,
University of Richmond Project, RB,
Optional Put 11/01/04 @ 100
5.550%, 11/01/19 ................ 6,500 7,053
Virginia State, Commonwealth Transportation
Board, Northern Transit District, RB,
Callable 05/15/07 @ 101
5.125%, 05/15/19 ................ 2,250 2,261
Virginia State, Commonwealth Transportation
Board, Oak Grove Connector Project,
Ser A, RB, Callable 05/15/07 @ 101
5.250%, 05/15/22 ................ 2,250 2,292
Virginia State, Education Loan Authority,
AMT, Ser B, RB, Prerefunded to Various
Call Dates @ 100 (B)
5.550%, 09/01/10 ................ 1,800 1,897
Virginia State, Education Loan Authority,
Refunding Bond, Student Loan Program,
AMT, Ser B, RB, Escrowed to Maturity
4.850%, 09/01/01 ................ 520 535
Virginia State, Education Loan Authority,
Refunding Bond, Student Loan Program,
AMT, Ser D, RB, Escrowed to Maturity
5.600%, 03/01/03 ................ 2,500 2,659
Virginia State, Housing Development Authority,
Commonwealth Mortgage, Ser B,
SubSer B-3, RB, Callable 01/01/06 @ 102
6.350%, 01/01/15 ................ 3,000 3,206
Virginia State, Housing Development Authority,
Commonwealth Mortgage, Ser E,
SubSer E-1, RB, Callable 07/01/08 @ 101
4.950%, 01/01/11 ................ 1,250 1,261
Virginia State, Housing Development Authority,
Multi Family Housing, AMT, Ser I, RB,
Callable 01/01/09 @ 101
4.875%, 11/01/12 ................ 1,950 1,931
Virginia State, Housing Development Authority,
Multi Family Housing, RB,
Callable 01/01/2008 @ 102
5.350%, 11/01/11 ................ 1,250 1,313
Virginia State, Housing Development Authority,
Multi Family Housing, Ser B, RB,
Callable 05/01/00 @ 102
7.375%, 05/01/05 ................ 1,000 1,038
48
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (concluded)
Face Market
Amount Value
(000) (000)
------ ------
Virginia State, Housing Development
Authority, Multi Family Housing,
Ser C, RB, Callable 05/01/04 @ 102
5.700%, 05/01/05 ................. $1,000 $ 1,068
Virginia State, Housing Development
Authority, Multi Family Mortgage,
Ser I, RB, Callable 01/01/08 @ 102
5.450%, 05/01/18 ................. 2,000 2,053
Virginia State, Housing Development
Authority, Ser C, SubSer C-8,
RB, Callable
01/01/02 @ 102
6.000%, 07/01/06 ................. 2,000 2,095
Virginia State, Housing Development
Authority, Single Family Housing, Ser C,
SubSer C-4, RB, Callable 01/01/02 @ 102
5.550%, 01/01/11 ................. 3,000 3,086
Virginia State, Polytechnic Institute &
University, University & College
Improvements, Ser A, RB,
Callable 06/01/06 @ 102
5.350%, 06/01/09 ................. 2,000 2,143
Virginia State, Public Building Authority,
RB, Callable 08/01/05 @ 101
5.200%, 08/01/15 ................. 1,500 1,532
Virginia State, Public Building Authority,
Ser A, RB
6.000%, 08/01/06 ................. 6,000 6,758
Virginia State, Public Building Authority,
Ser B, RB
5.600%, 08/01/01 ................. 4,000 4,195
Virginia State, Public School Authority,
Refunding Bond, RB,
Callable 01/01/02 @ 102
6.250%, 01/01/08 ................. 2,000 2,165
Virginia State, Public School Authority,
Refunding Bond, Ser B, RB
5.000%, 01/01/04 ................. 2,000 2,100
Virginia State, Public School Authority,
School Financing, Ser B, RB,
Callable 01/01/03 @ 102 (B)
5.600%, 01/01/05 ................. 1,880 2,033
Virginia State, Public School Authority,
School Improvements, Ser B, RB,
Callable 01/01/00 @ 102
5.850%, 01/01/02 ................. 1,500 1,564
Virginia State, Refunding Bond, GO
5.600%, 06/01/02 ................. 4,750 5,041
Virginia State University, Virginia
Commonwealth University, Ser A, RB,
Callable 05/01/06 @ 102
5.625%, 05/01/16 ................. 2,500 2,606
Winchester, Public Improvements, GO
6.050%, 03/01/00 ................. 500 516
- ------------------------------------------------------------
Total Municipal Bonds
(Cost $235,408) .............. 245,986
- ------------------------------------------------------------
Face Market
Amount Value
(000) (000)
------ ------
CASH EQUIVALENTS (0.9%)
Aim Tax Free Institutional
Cash Reserve $2,324 $ 2,324
Federated Virginia Municipal Cash Trust 47 47
- ------------------------------------------------------------
Total Cash Equivalents
(Cost $2,371) ................ 2,371
- ------------------------------------------------------------
Total Investments (98.7%)
(Cost $237,779) .............. 248,357
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (1.3%) 3,148
- ------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .75 billion shares
authorized) based on 23,324,262
outstanding shares ................ 231,400
Portfolio Shares of Investor Class A
($.001 par value -- .25 billion shares
authorized) based on 756,065
outstanding shares ................ 7,758
Undistributed net investment income . 44
Accumulated net realized gain on investments 1,725
Net unrealized appreciation on investments 10,578
- ------------------------------------------------------------
Total Net Assets: (100.0%) ..... $251,505
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(243,606,173 / 23,324,262
SHARES OUTSTANDING) ................. $10.44
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS A
(7,898,816 / 756,065
SHARES OUTSTANDING) ................. $10.45
- ------------------------------------------------------------
OFFER PRICE PER SHARE -- INVESTOR CLASS A
($10.45 / 96.5%) .................... $10.83
- ------------------------------------------------------------
- ------------------------------------------------------------
(A) Adjustable Rate Security--The rate reflected on the Statement of Net Assets
is the rate in effect on November 30, 1998. 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 Insurance Company
FSA--Financial Securities Assurance
GO--General Obligation
MBIA--Municipal Bond Insurance Association
RB--Revenue Bond
Ser--Series
The accompanying notes are an integral part of the financial statements.
49
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VIRGINIA MUNICIPAL BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
MUNICIPAL BONDS (94.0%)
VIRGINIA (94.0%)
Albemarle County, Industrial Development
Authority, Martha Jefferson Hospital
Project, RB, Callable 10/01/03 @ 102
5.800%, 10/01/09 ................... $500 $527
Albemarle County, Industrial Development
Authority, Our Lady of Peace Project,
Ser A, RB, Callable 07/01/05 @102
5.800%, 07/01/25 ................... 500 496
Alexandria, Industrial Development Authority,
Episcopal High School Project, RB,
Callable 01/01/06 @ 102
5.300%, 01/01/11 ................... 500 525
Alexandria, Industrial Development Authority,
Potomac Electric Project, Ser A, RB,
Callable 02/15/04 @ 102 MBIA
5.375%, 02/15/24 ................... 400 410
Alexandria, Redevelopment & Housing
Authority, Buckingham Village Apartments
Project, RB, Callable 01/01/06 @ 102
6.050%, 07/01/16 ................... 250 263
Alexandria, Redevelopment & Housing
Authority, Essex House Project,
Ser A, AMT, RB, Callable 01/01/08 @ 102
5.550%, 07/01/28 ................... 1,000 1,015
Arlington County, Industrial Development
Authority, Headquarters Facility Project,
Ser A, RB, Callable 07/01/07 @ 102
5.250%, 07/01/12 ................... 300 313
Arlington County, Public Improvements,
GO, Callable 06/01/05 @ 101.50
5.400%, 06/01/12 ................... 250 267
Brunswick County, Industrial Development
Authority, Correctional Facility Lease,
RB, Callable 07/01/06 @ 102 MBIA
5.500%, 07/01/17 ................... 400 420
Chesapeake, Refunding Bond, GO
5.250%, 12/01/06 ................... 500 541
Chesapeake, Water & Sewer, Ser A, GO,
Callable 12/01/05 @ 102
5.000%, 12/01/25 ................... 475 475
Chesapeake Bay, Bridge & Tunnel Commission,
RB, Callable 07/01/05 @ 102 MBIA
5.000%, 07/01/22 ................... 1,000 996
Dinwiddie County, Industrial Development
Authority, County School Completion Project,
Ser A, RB, Callable 02/01/08 @ 102 MBIA
5.000%, 02/01/19 ................... 1,500 1,506
Fairfax County, Industrial Development
Authority, Inova Health System
Project, RB FSA
5.250%, 08/15/19 ................... 500 522
Face Market
Amount Value
(000) (000)
------ ------
Fairfax County, Industrial Development
Authority, Inova Health System Project,
Ser A, RB, Callable 02/15/08 @ 101
5.000%, 08/15/25 ................... $500 $490
Fairfax County, Public Improvements,
Ser A, GO, Callable 06/01/03 @ 102
5.000%, 06/01/07 ................... 500 526
Fairfax County, Redevelopment & Housing
Authority, Mott & Gum Springs Community
Centers, RB, Callable 06/01/06 @ 102
5.500%, 06/01/12 ................... 425 444
Fairfax County, Redevelopment & Housing
Authority, Paul Spring Center Project,
Ser A, RB, Callable 12/01/06 @ 103 (A)
5.900%, 06/15/17 ................... 250 268
Fairfax County, Water Authority, Refunding
Bond, RB, Callable 04/01/07 @ 102 AMBAC
6.000%, 04/01/22 ................... 315 352
Fredericksburg, Industrial Development
Authority, Hospital Facilities Project,
Medicorp Health System Obligation,
RB, Callable 06/15/07 @ 102 AMBAC
5.300%, 06/15/10 ................... 500 539
5.250%, 06/15/23 ................... 300 306
Henrico County, Industrial Development
Authority, Our Lady of Hope Project,
RB, Callable 07/01/03 @102 (A)
6.100%, 07/01/20 ................... 1,000 1,010
Henry County, Industrial Development
Authority, Martinsville & Henry Hospital
Project, RB, Callable 01/01/07 @ 101
6.000%, 01/01/17 ................... 500 534
James City County, Public Improvements,
GO, Callable 12/15/05 @ 102 FGIC
5.250%, 12/15/14 ................... 250 261
Leesburg, Public Improvements, GO,
Callable 06/01/05 @ 102 AMBAC
5.400%, 06/01/10 ................... 250 269
Leesburg, Utility Systems, RB,
Callable 07/01/07 @ 102 MBIA
5.000%, 07/01/10 ................... 750 787
Loudoun County, Sanitation Authority,
Water & Sewer Project, RB,
Callable 01/01/07 @ 102 FGIC
5.125%, 01/01/26 ................... 750 758
Loudoun County, School Improvements,
Ser A, GO, Callable 06/01/06 @ 102 (A)
5.600%, 06/01/10 ................... 250 275
Lynchburg, Industrial Development Authority,
Healthcare Facility, Centra Health Project,
RB, Callable 01/01/08 @ 101
5.200%, 01/01/23 ................... 500 500
5.200%, 01/01/28 ................... 1,000 994
50
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VIRGINIA MUNICIPAL BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
Lynchburg, Public Improvements, GO,
Callable 05/01/06 @ 102
5.100%, 05/01/11 ................. $ 500 $ 526
Manassas, Water Utility Improvements,
Ser A, GO, Callable 01/01/08 @ 102
5.000%, 01/01/18 ................. 500 507
Newport News, Redevelopment & Housing
Authority, GNMA Mortgage Financing,
Ser A, RB, Callable 08/20/07 @102 GNMA (A)
5.850%, 12/20/30 ................. 500 517
Norfolk, Industrial Development Authority,
Bon Secours Health Care Project, RB,
Callable 08/15/07 @ 102 MBIA
5.250%, 08/15/17 ................. 750 771
Norfolk, Public Improvements, GO,
Callable 06/01/06 @ 101
5.250%, 06/01/09 ................. 500 539
Portsmouth, Public Improvements, GO,
Callable 08/01/06 @ 101 FGIC
5.250%, 08/01/21 ................. 500 511
Rappahannock, Regional Jail Authority, RB,
Callable 12/01/08 @102 MBIA
5.000%, 12/01/30 ................. 1,000 986
Roanoke, Public Improvements, GO,
Callable 08/01/04 @ 102
5.150%, 08/01/12 ................. 250 260
Spotsylvania County, Refunding Bond,
GO, FSA
5.000%, 07/15/14 ................. 1,000 1,029
Spotsylvania County, Water & Sewer System,
RB, Callable 06/01/07 @ 102 MBIA
5.250%, 06/01/12 ................. 500 526
5.250%, 06/01/22 ................. 250 257
Upper Occoquan, Sewer Authority, Regional
Sewer Project, Ser A, RB,
Callable 07/01/06 @ 102 MBIA
5.000%, 07/01/25 ................. 500 498
Virginia Beach, Industrial Development
Authority, Our Lady of Perpetual Hope
Project, RB, Callable 07/01/07 @ 102
6.150%, 07/01/27 ................. 250 256
Virginia Beach, Refunding Bond, GO
5.450%, 07/15/11 ................. 200 219
Virginia State, College Building Authority,
Educational Facilites, Marymount University
Project, RB, Callable 07/01/08 (A)
5.100%, 07/01/18 ................. 1,000 1,005
Virginia Polytechnic Institute & State
University, University Service Systems,
RB, Callable 06/01/06 @ 102
5.500%, 06/01/16 ................. 200 206
Face Market
Amount Value
(000) (000)
------ ------
Virginia State, Biotechnology Research Park
Authority, Biotech Two Project, RB,
Callable 09/01/06 @ 101
5.250%, 09/01/18 ................. $ 500 $ 509
Virginia State, Housing Development
Authority, Commonwealth Mortgage
Project, GO, Ser E
5.125%, 07/01/17 ................. 2,000 2,003
Virginia State, Housing Development
Authority, Commonwealth Mortgage
Project, Ser A, SubSer 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, Ser A, SubSer A-4, RB,
Callable 01/01/03 @ 102
6.400%, 07/01/17 ................. 985 1,047
Virginia State, Public Building Authority,
Public Improvements, RB,
Callable 08/01/05 @ 101
5.200%, 08/01/16 ................. 300 306
Virginia State, Public School Authority,
School Financing, Ser A, RB,
Callable 08/01/07 @ 102 (A)
5.375%, 08/01/18 ................. 500 526
Virginia State University, University &
College Improvements, Ser A, RB,
Callable 05/01/06 @ 102
5.625%, 05/01/16 ................. 1,000 1,043
West Point, Industrial Development
Authority, Chesapeake Corporation
Project, Ser B, RB,
Callable 03/01/04 @ 102
6.250%, 03/01/19 ................. 165 178
- ------------------------------------------------------------
Total Municipal Bonds
(Cost $29,891) ............... 30,973
- ------------------------------------------------------------
CASH EQUIVALENT (4.0%)
Aim Tax Free Institutional Cash Reserve 1,320 1,320
- ------------------------------------------------------------
Total Cash Equivalent
(Cost $1,320) ................ 1,320
- ------------------------------------------------------------
Total Investments (98.0%)
(Cost $31,211) ............... 32,293
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (2.0%) 656
- ------------------------------------------------------------
51
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VIRGINIA MUNICIPAL BOND FUND (concluded)
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .75 billion shares
authorized) based on 2,738,566
outstanding shares ...................... $28,098
Portfolio Shares of Investor Class B
($.001 par value -- .125 billion shares
authorized) based on 344,686
outstanding shares ...................... 3,593
Undistributed net investment income ....... 1
Accumulated net realized gain on investments 175
Net unrealized appreciation on investments 1,082
- ------------------------------------------------------------
Total Net Assets: (100.0%) ........... $32,949
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(29,251,597 / 2,738,566
SHARES OUTSTANDING) ....................... $10.68
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS B (1)
(3,697,582 / 344,686
SHARES OUTSTANDING) ....................... $10.73
- ------------------------------------------------------------
- ------------------------------------------------------------
(A) Security backed by letter of credit or credit support.
(1) Investors Class B has a contingent deferrred 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
GNMA--Government National Mortgage Association
GO--General Obligation
MBIA--Municipal Bond Insurance Association
RB--Revenue Bond
Ser--Series
The accompanying notes are an integral part of the financial statements.
52
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
MARYLAND MUNICIPAL BOND FUND
Face Market
Amount Value
(000) (000)
------ ------
MUNICIPAL BONDS (88.5%)
MARYLAND (81.7%)
Annapolis, Public Improvements, Refunding
Bond, GO, Callable 11/01/08 @ 101
4.800%, 11/01/13 ................... $500 $507
Anne Arundel County, Water Utility
Improvements, Refunding Bond, GO,
Callable 02/01/08 @ 101
5.125%, 02/01/24 ................... 750 767
Baltimore County, Construction & Public
Improvements, GO,
Callable 06/01/06 @ 101
5.500%, 06/01/16 ................... 250 264
Baltimore County, Pension Funding, GO,
Callable 08/01/08 @ 101
5.125%, 08/01/15 ................... 500 519
Baltimore County, Public Improvements,
GO, RB Callable 07/01/08 @101
4.750%, 07/01/09 ................... 500 526
Baltimore County, Revenue Authority, RB,
Prerefunded 07/01/99 @ 102
7.200%, 07/01/19 ................... 200 209
Baltimore, Emergency Telecommunication
Facilities, Certificate of Participation,
Ser A, Callable 10/01/07 @ 102 AMBAC
5.000%, 10/01/17 ................... 400 405
Baltimore, Parking Authority, City Parking
System Facilities, RB FGIC
4.350%, 07/01/02 ................... 200 204
Baltimore, Pollution Control, General Motors
Corporate Project, RB
5.350%, 04/01/08 ................... 250 269
Calvert County, Economic Development
Authority, Asbury-Solomons Project, RB,
Callable 01/01/08 @ 102 MBIA
5.000%, 01/01/17 ................... 250 252
5.000%, 01/01/27 ................... 250 250
Calvert County, Pollution Control, Baltimore
Gas & Electric Company Project, RB,
Callable 07/15/04 @ 102
5.550%, 07/15/14 ................... 250 262
Carroll County, Public Improvements, GO,
Callable 12/01/06 @ 101
5.125%, 12/01/14 ................... 500 516
Harford County, Public Improvements, GO,
Callable 12/01/07 @ 102
4.900%, 12/01/11 ................... 500 519
Howard County, Metropolitan District,
Public Improvements, Ser A, GO,
Prerefunded 02/15/05 @ 101
5.650%, 02/15/16 ................... 100 110
Howard County, Public Improvements,
Ser A, GO
4.750%, 02/15/13 ................... 250 253
Face Market
Amount Value
(000) (000)
------ ------
Maryland State, Department of Housing &
Community Development, Ser B, AMT, RB,
Callable 03/01/07 @ 101.50 (B)
5.875%, 09/01/25 ................... $ 500 $ 518
Maryland State, Department of Housing
& Community Development, Single
Family Housing, First Ser, RB,
Callable 04/01/07 @ 101.50 (B)
5.600%, 04/01/18 ................... 430 445
Maryland State, GO (A)
3.580%, 12/03/98 ................... 200 200
Maryland State, Health & Higher
Educational Facilities Authority,
Anne Arundel Medical Center Project,
RB, FSA Callable 7/01/08 @ 101
5.125%, 07/01/28 ................... 1,500 1,519
Maryland State, Health & Higher
Educational Facilities Authority,
Broadmead Project, RB,
Callable 07/01/07 @ 102
5.500%, 07/01/17 ................... 300 301
Maryland State, Health & Higher
Educational Facilities Authority,
Calvert Memorial Hospital Project,
RB, Callable @ 102 7/01/08
5.000%, 07/01/13 ................... 400 398
Maryland State, Health & Higher
Educational Facilities Authority, Johns
Hopkins Health System Project, RB,
Callable 07/01/07 @ 102 AMBAC
5.250%, 07/01/17 ................... 350 362
Maryland State, Health & Higher
Educational Facilities Authority,
Loyola College Project, Ser A, RB,
Callable 10/01/06 @ 102 MBIA
5.500%, 10/01/16 ................... 250 268
Maryland State, Health & Higher
Educational Facilities Authority,
Pickersgill Project, Ser A, RB,
Callable 01/01/07 @ 102
6.000%, 01/01/15 ................... 350 373
Maryland State, Health & Higher
Educational Facilities Authority,
University of Maryland Medical
Systems Project, Ser A, RB,
Prerefunded 07/01/01 @ 100 FGIC
6.500%, 07/01/21 ................... 200 214
Maryland State, Health & Higher
Educational Facilities Authority,
Upper Chesapeake Hospital Project,
RB, FSA Callable 01/01/08 @ 101
5.125%, 01/01/33 ................... 1,500 1,511
53
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
MARYLAND MUNICIPAL BOND FUND (continued)
Face Market
Amount Value
(000) (000)
------ ------
Maryland State, Industrial Development
Authority, Holy Cross Health System,
RB, Callable 12/01/03 @ 102
5.500%, 12/01/15 .................... $100 $103
Maryland State, Park & Planning Commission,
Prince George County, BAN (A)
3.350%, 12/01/98 .................... 200 200
Maryland State, Public Improvements,
First Ser, GO, Callable 02/15/06 @ 101.50
4.700%, 02/15/10 .................... 300 310
Maryland State, Public Improvements,
Third Ser, GO
5.500%, 10/15/04 .................... 500 543
Maryland State, Stadium Authority,
Sports Facility Project, RB,
Callable 03/01/06 @ 101 AMBAC
5.800%, 03/01/26 .................... 250 268
Maryland State, Transportation Authority,
Transportation Facilities Project, RB,
Escrowed to Maturity
6.800%, 07/01/16 .................... 120 145
Montgomery County, Pollution Control,
Potomac Electric Power Company Project,
RB, Callable 02/15/04 @ 102
5.375%, 02/15/24 .................... 100 102
Montgomery County, Refunding Bond,
Ser A, GO
5.800%, 07/01/07 .................... 500 564
Montgomery County, Revenue Authority,
Human Services Headquarters Project, RB
5.400%, 08/01/06 .................... 200 218
Northeast Maryland, Waste Disposal Authority,
Montgomery County Resource Recovery
Project, RB, Callable 07/01/03 @ 102
6.200%, 07/01/10 .................... 275 299
Prince Georges County, Dimensions Health
Project, RB, Callable 07/01/04 @ 102
5.375%, 07/01/14 .................... 250 254
5.300%, 07/01/24 .................... 250 251
Prince Georges County, Public Improvements,
Ser A, GO, Callable 03/01/02 @ 102 MBIA
5.625%, 09/01/04 .................... 250 267
Queen Annes County, School Improvements,
GO, FGIC
5.125%, 11/15/06 .................... 350 375
Saint Mary's County, Public Facilities, GO,
Callable 11/01/03 @ 102 AMBAC
5.500%, 11/01/07 .................... 150 162
Saint Mary's County, Public Improvements,
GO, MBIA
4.500%, 09/01/00 .................... 500 509
University of Maryland, System Auxiliary
Facility & Tuition Revenue, Ser A, RB,
Callable 04/01/08 @ 100
5.000%, 04/01/19 .................... 500 504
Face Market
Amount Value
(000) (000)
------ ------
University of Maryland, University &
College Improvements, Ser A, RB
5.000%, 04/01/05 .................... $ 400 $ 423
University of Maryland, University &
College Improvements, Ser A, RB,
Callable 04/01/05 @ 102
5.400%, 04/01/09 .................... 100 108
University of Maryland, University &
College Improvements, Ser A, RB,
Callable 04/01/06 @ 101
5.500%, 04/01/08 .................... 100 108
University of Maryland, University &
College Improvements, Ser C, RB
4.350%, 10/01/03 .................... 250 256
Washington County, Public Improvements,
GO, Callable 01/01/03 @ 102 FGIC
5.250%, 01/01/07 .................... 100 106
Washington County, Suburban Sanitation
District, GO, Callable 06/01/06 @ 100
5.600%, 06/01/19 .................... 250 263
- ------------------------------------------------------------
18,279
- ------------------------------------------------------------
PUERTO RICO (5.9%)
Commonwealth Highway & Transportation
Authority, Ser Y, RB, Callable 07/01/06 @
101.50
5.500%, 07/01/26 .................... 300 313
Electric Power Authority, RB, Ser DD,
MBIA Callable On 7/01/08 @ 101.50
5.000%, 07/01/28 .................... 1,000 1,005
- ------------------------------------------------------------
1,318
- ------------------------------------------------------------
TEXAS (0.9%)
Grapevine, Industrial Development Authority,
American Airlines Project, Ser A2, RB (A) (B)
3.250%, 12/01/98 .................... 200 200
- ------------------------------------------------------------
Total Municipal Bonds
(Cost $19,105) .................. 19,797
- ------------------------------------------------------------
CASH EQUIVALENTS (9.8%)
Aim Tax Free Institutional Cash Reserve 1,101 1,101
Federated Maryland Municipal Cash Trust 1,094 1,094
- ------------------------------------------------------------
Total Cash Equivalents
(Cost $2,195) ................... 2,195
- ------------------------------------------------------------
Total Investments (98.3% )
(Cost $21,300) .................. 21,992
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (1.7%) 369
- ------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
54
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
MARYLAND MUNICIPAL BOND FUND (concluded)
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .9 billion shares
authorized) based on 1,869,654
outstanding shares ......................... $18,460
Portfolio Shares of Investor Class B
($.001 par value -- 50 million shares
authorized) based on 316,865
outstanding shares ......................... 3,181
Accumulated net realized gain on investments . 28
Net unrealized appreciation on investments ... 692
- ------------------------------------------------------------
Total Net Assets: (100.0%) .............. $22,361
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(19,115,472 / 1,869,654
SHARES OUTSTANDING) .......................... $10.22
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS B (1)
(3,245,845 / 316,865
SHARES OUTSTANDING) .......................... $10.24
- ------------------------------------------------------------
- ------------------------------------------------------------
(A) Adjustable Rate Security--The rate reflected on the Statement of Net Assets
is the rate in effect on November 30, 1998. 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.
(1) Investors Class B has a contingent deferrred 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
BAN--Bond Anticipation Note
FGIC--Financial Guaranty Insurance Company
FSA--Financial Securities Assurance
GO--General Obligation
MBIA--Municipal Bond Insurance Association
RB--Revenue Bond
Ser--Series
The accompanying notes are an integral part of the financial statements.
55
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VALUE FUND
Market
Value
Shares (000)
------ ------
COMMON STOCKS (92.7%)
BANKS (5.3%)
BankAmerica ......................... 300,000 $19,556
BankBoston .......................... 150,000 6,244
KeyCorp ............................. 250,000 7,672
- ------------------------------------------------------------
33,472
- ------------------------------------------------------------
CHEMICALS (2.2%)
Great Lakes Chemical ................ 350,000 13,978
- ------------------------------------------------------------
COMPUTERS, SOFTWARE & SERVICES (14.6%)
Advanced Micro Devices* ............. 300,000 8,306
Cisco Systems* ...................... 200,000 15,075
Hewlett Packard ..................... 50,000 3,137
IBM ................................. 100,000 16,500
Intel ............................... 150,000 16,144
Microsoft* .......................... 100,000 12,200
Quantum* ............................ 325,000 7,191
Sun Microsystems* ................... 200,000 14,812
- ------------------------------------------------------------
93,365
- ------------------------------------------------------------
CONSUMER PRODUCTS (1.8%)
Fort James .......................... 300,000 11,737
- ------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (6.0%)
General Electric .................... 140,000 12,670
Philips Electronics, ADR ............ 225,000 14,245
Textron ............................. 150,000 11,653
- ------------------------------------------------------------
38,568
- ------------------------------------------------------------
FINANCIAL SERVICES (3.3%)
Fannie Mae .......................... 200,000 14,550
Morgan Stanley, Dean Witter, Discover 90,000 6,277
- ------------------------------------------------------------
20,827
- ------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (10.0%)
Coca-Cola ........................... 125,000 8,758
Kellogg ............................. 225,000 8,241
PepsiCo ............................. 300,000 11,606
Philip Morris ....................... 350,000 19,578
Quaker Oats ......................... 250,000 15,344
- ------------------------------------------------------------
63,527
- ------------------------------------------------------------
GAS/NATURAL GAS (1.8%)
Columbia Energy Group ............... 200,000 11,350
- ------------------------------------------------------------
INSURANCE (7.2%)
American International Group ........ 150,000 14,100
Cigna ............................... 180,000 14,006
General RE .......................... 75,000 17,512
- ------------------------------------------------------------
45,618
- ------------------------------------------------------------
MACHINERY (1.6%)
Ingersoll-Rand ...................... 225,000 10,533
- ------------------------------------------------------------
Market
Value
Shares (000)
------ ------
MEDICAL PRODUCTS & SERVICES (10.7%)
Aetna ............................... 125,000 $ 9,664
Amgen* .............................. 175,000 13,169
Johnson & Johnson ................... 175,000 14,219
Merck ............................... 45,000 6,969
Schering Plough ..................... 135,000 14,361
Tenet Healthcare* ................... 325,000 9,608
- ------------------------------------------------------------
67,990
- ------------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES (0.7%)
Modis Professional Services* ........ 400,000 4,775
- ------------------------------------------------------------
PAPER & PAPER PRODUCTS (1.9%)
International Paper ................. 275,000 11,945
- ------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (8.5%)
Exxon ............................... 200,000 15,013
Helmerich & Payne ................... 300,000 5,175
Mobil ............................... 155,000 13,359
Schlumberger ........................ 275,000 12,289
USX-Marathon Group .................. 300,000 8,513
- ------------------------------------------------------------
54,349
- ------------------------------------------------------------
RAILROADS (1.4%)
Canadian Pacific Limited ............ 400,000 8,825
- ------------------------------------------------------------
RECREATIONAL PRODUCTS & SERVICES (1.0%)
Walt Disney ......................... 200,000 6,438
- ------------------------------------------------------------
RETAIL (6.3%)
Federated Department Stores* ........ 325,000 13,548
Lowes ............................... 200,000 8,450
Warnaco Group, Cl A ................. 400,000 9,900
Wendy's International ............... 400,000 8,000
- ------------------------------------------------------------
39,898
- ------------------------------------------------------------
SAVINGS & LOANS (1.8%)
Washington Mutual ................... 300,000 11,625
- ------------------------------------------------------------
TELEPHONES & TELECOMMUNICATION (3.7%)
AT&T ................................ 225,000 14,020
SBC Communications .................. 200,000 9,588
- ------------------------------------------------------------
23,608
- ------------------------------------------------------------
UTILITIES, ELECTRIC, & GAS (2.9%)
Calenergy ........................... 300,000 9,394
Southern ............................ 300,000 8,850
- ------------------------------------------------------------
18,244
- ------------------------------------------------------------
Total Common Stocks
(Cost $453,258) .............. 590,672
- ------------------------------------------------------------
56
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
VALUE FUND (concluded)
Shares/
Face Market
Amount Value
(000) (000)
------ ------
PREFERRED STOCK (0.5%)
Calenergy Cap Trust III .............. 75,000 $ 3,338
- ------------------------------------------------------------
Total Preferred Stock
(Cost $3,253) ................. 3,338
- ------------------------------------------------------------
CASH EQUIVALENT (3.7%)
Aim Liquid Assets Portfolio .......... $23,524 23,524
- ------------------------------------------------------------
Total Cash Equivalent
(Cost $23,524) ................ 23,524
- ------------------------------------------------------------
REPURCHASE AGREEMENT (2.0%)
J.P. Morgan
5.45%, dated 11/30/98, matures
12/01/98, repurchase price $12,711,933
(collateralized by various GNMA obligations:
total market value $12,964,210) .... 12,710 12,710
- ------------------------------------------------------------
Total Repurchase Agreement
(Cost $12,710) ................ 12,710
- ------------------------------------------------------------
Total Investments (98.9%)
(Cost $492,745) ............... 630,244
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (1.1%) 6,888
- ------------------------------------------------------------
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 1.0 billion shares
authorized) based on 38,219,356
outstanding shares ...................... $405,499
Portfolio Shares of Investor Class A
($.001 par value -- .25 billion shares
authorized) based on 2,264,619
outstanding shares ...................... 28,536
Portfolio Shares of Investor Class B
($.001 par value -- .25 billion shares
authorized) based on 1,694,820
outstanding shares ...................... 23,958
Accumulated net realized gain on investments 41,640
Net unrealized appreciation on investments 137,499
- ------------------------------------------------------------
Total Net Assets: (100.0%) ........... $637,132
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(577,042,313 / 38,219,356
SHARES OUTSTANDING) ....................... $15.10
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS A
(34,434,153 / 2,264,619
SHARES OUTSTANDING) ....................... $15.21
- ------------------------------------------------------------
OFFER PRICE PER SHARE -- INVESTOR CLASS A
($15.21 / 95.5%) .......................... $15.93
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS B (1)
(25,655,880 / 1,694,820
SHARES OUTSTANDING) ....................... $15.14
- ------------------------------------------------------------
(1) Investors Class B has a contingent deferrred sales charge. For description
of a possible redemption charge, see the notes to the financial statements.
* Non-income producing security.
ADR--American Depository Receipt
Cl--Class
GNMA--Government National Mortgage Association
The accompanying notes are an integral part of the financial statements.
57
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND
Market
Value
Shares (000)
------ ------
COMMON STOCKS (94.9%)
BANKS (4.2%)
Fifth Third Bancorp .................. 37,500 $2,489
Firstar .............................. 8,400 615
State Street ......................... 40,000 2,745
- ------------------------------------------------------------
5,849
- ------------------------------------------------------------
CHEMICALS (1.2%)
Praxair .............................. 45,000 1,718
- ------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (4.1%)
Ascend Communications* ............... 26,000 1,461
Lucent Technologies .................. 4,600 396
Philips Electronics .................. 32,000 2,026
Tellabs* ............................. 35,000 1,892
- ------------------------------------------------------------
5,775
- ------------------------------------------------------------
COMPUTERS, SOFTWARE & SERVICES (16.8%)
BMC Software* ........................ 65,000 3,319
Cisco Systems* ....................... 50,000 3,769
Hewlett Packard ...................... 29,000 1,820
Intel ................................ 33,000 3,552
Microsoft* ........................... 32,000 3,904
Networks Associates* ................. 67,500 3,434
Storage Technology* .................. 20,000 700
Sun Microsystems* .................... 42,000 3,111
- ------------------------------------------------------------
23,609
- ------------------------------------------------------------
COSMETICS, SOAPS & TOILETRIES (1.1%)
Procter & Gamble ..................... 17,000 1,490
- ------------------------------------------------------------
DRUGS (11.9%)
Abbott Laboratories .................. 73,000 3,504
Amgen* ............................... 37,000 2,784
Bristol-Myers Squibb ................. 5,500 674
Merck ................................ 20,000 3,098
Pfizer ............................... 9,000 1,005
Schering Plough ...................... 28,700 3,053
Watson Pharmaceuticals* .............. 48,000 2,586
- ------------------------------------------------------------
16,704
- ------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (1.1%)
General Electric ..................... 16,500 1,493
- ------------------------------------------------------------
FINANCIAL SERVICES (7.4%)
Citigroup ............................ 45,000 2,258
Fannie Mae ........................... 40,000 2,910
Fiserv* .............................. 57,000 2,519
T. Rowe Price Associates ............. 75,000 2,681
- ------------------------------------------------------------
10,368
- ------------------------------------------------------------
Market
Value
Shares (000)
------ ------
FOOD, BEVERAGE & TOBACCO (6.3%)
Coca-Cola ............................ 21,000 $ 1,471
Hershey Foods ........................ 15,000 1,009
PepsiCo .............................. 24,000 928
Philip Morris ........................ 43,000 2,405
Quaker Oats .......................... 20,000 1,228
Sara Lee ............................. 30,000 1,751
- ------------------------------------------------------------
8,792
- ------------------------------------------------------------
INSURANCE (4.4%)
American International Group ......... 39,000 3,666
Jefferson-Pilot ...................... 37,500 2,559
- ------------------------------------------------------------
6,225
- ------------------------------------------------------------
MACHINERY (3.3%)
Dover ................................ 55,000 1,959
Illinois Tool Works .................. 41,000 2,606
- ------------------------------------------------------------
4,565
- ------------------------------------------------------------
MANUFACTURING (2.3%)
Tyco International Limited ........... 50,000 3,291
- ------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (4.1%)
Cardinal Health ...................... 13,000 892
Healthsouth Rehabilitation* .......... 130,000 1,747
Johnson & Johnson .................... 38,000 3,088
- ------------------------------------------------------------
5,727
- ------------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES (0.6%)
Modis Professional Services* ......... 75,000 895
- ------------------------------------------------------------
PAPER & PAPER PRODUCTS (0.8%)
Fort James ........................... 27,500 1,076
- ------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS (1.9%)
Schlumberger ......................... 38,000 1,698
Transocean Offshore .................. 20,000 494
Vintage Petroleum .................... 50,000 516
- ------------------------------------------------------------
2,708
- ------------------------------------------------------------
PRINTING & PUBLISHING (1.5%)
Gannett .............................. 32,000 2,066
- ------------------------------------------------------------
PROFESSIONAL SERVICES (1.5%)
Service Corporation International .... 55,000 2,056
- ------------------------------------------------------------
RECREATIONAL PRODUCTS & SERVICES (1.4%)
Walt Disney .......................... 60,000 1,931
- ------------------------------------------------------------
58
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND (concluded)
Shares/
Face Market
Amount Value
(000) (000)
------ ------
RETAIL (14.5%)
Abercrombie & Fitch* ................. 30,000 $ 1,680
Dayton Hudson ........................ 45,000 2,025
Home Depot ........................... 70,000 3,483
Lowes ................................ 80,000 3,380
Office Depot* ........................ 60,000 1,950
Pier 1 Imports ....................... 35,000 376
TJX .................................. 64,000 1,640
Wal-Mart Stores ...................... 30,000 2,259
Walgreen ............................. 65,000 3,490
- ------------------------------------------------------------
20,283
- ------------------------------------------------------------
TELEPHONES & TELECOMMUNICATION (4.5%)
MCI WorldCom* ........................ 84,999 5,014
SBC Communications ................... 27,000 1,294
- ------------------------------------------------------------
6,308
- ------------------------------------------------------------
Total Common Stocks
(Cost $92,058) ................ 132,929
- ------------------------------------------------------------
CASH EQUIVALENT (3.8%)
Aim Liquid Assets Portfolio .......... $5,326 5,326
- ------------------------------------------------------------
Total Cash Equivalent
(Cost $5,326) ................. 5,326
- ------------------------------------------------------------
REPURCHASE AGREEMENT (0.9%)
J.P. Morgan
5.45%, dated 11/30/98, matures
12/01/98, repurchase price $1,325,934
(collateralized by various GNMA obligations:
total market value $1,355,729) ..... 1,326 1,326
- ------------------------------------------------------------
Total Repurchase Agreement
(Cost $1,326) ................. 1,326
- ------------------------------------------------------------
Total Investments (99.6%)
(Cost $98,710) ................ 139,581
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.4%) 578
- ------------------------------------------------------------
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .75 billion shares
authorized) based on 6,983,382
outstanding shares ....................... $ 88,592
Portfolio Shares of Investor Class A
($.001 par value -- .25 billion shares
authorized) based on 633,183
outstanding shares ....................... 7,940
Portfolio Shares of Investor Class B
($.001 par value -- .125 billion shares
authorized) based on 278,179
outstanding shares ....................... 4,549
Accumulated net realized loss on investments (1,793)
Net unrealized appreciation on investments . 40,871
- ------------------------------------------------------------
Total Net Assets: (100.0%) ............ $140,159
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(124,182,636 / 6,983,382
SHARES OUTSTANDING) ........................ $17.78
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS A
(11,136,046 / 633,183
SHARES OUTSTANDING) ........................ $17.59
- ------------------------------------------------------------
OFFER PRICE PER SHARE -- INVESTOR CLASS A
($17.59 / 95.5%) ........................... $18.42
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS B (1)
(4,840,760 / 278,179
SHARES OUTSTANDING) ........................ $17.40
- ------------------------------------------------------------
- ------------------------------------------------------------
(1) Investors Class B has a contingent deferrred sales charge. For description
of a possible redemption charge, see the notes to the financial statements.
* Non-income producing security.
GNMA--Government National Mortgage Association
The accompanying notes are an integral part of the financial statements.
59
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND
Market
Value
Shares (000)
------ ------
COMMON STOCKS (97.9%)
AEROSPACE & DEFENSE (0.9%)
Avondale Industries* .................. 32,000 $ 884
- ------------------------------------------------------------
AUTOMOTIVE (2.6%)
Avis Rent A Car* ...................... 27,000 569
Navistar International* ............... 39,000 1,009
Superior Industries International ..... 37,000 962
- ------------------------------------------------------------
2,540
- ------------------------------------------------------------
BANKS (4.0%)
Regions Financial ..................... 60,000 2,325
SouthTrust ............................ 44,250 1,626
- ------------------------------------------------------------
3,951
- ------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING (1.6%)
TMP Worldwide* ........................ 20,000 640
Young & Rubicam* ...................... 30,000 896
- ------------------------------------------------------------
1,536
- ------------------------------------------------------------
BUILDING & CONSTRUCTION SUPPLIES (2.8%)
Centex Construction Products .......... 13,000 461
Giant Cement Holding* ................. 30,000 720
Southdown ............................. 27,300 1,590
- ------------------------------------------------------------
2,771
- ------------------------------------------------------------
CHEMICALS (0.9%)
Solutia ............................... 40,000 895
- ------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (4.5%)
Corsair Communications* ............... 95,000 427
General Instrument* ................... 32,500 914
Tekelec* .............................. 199,000 3,084
- ------------------------------------------------------------
4,425
- ------------------------------------------------------------
Market
Value
Shares (000)
------ ------
COMPUTERS, SOFTWARE & SERVICES (21.8%)
Cambridge Technology Partners* ........ 100,000 $ 2,087
Checkpoint Software* .................. 82,000 2,660
Computer Task Group ................... 24,000 648
Comverse Technology* .................. 45,150 2,596
Fair, Isaac ........................... 24,000 966
Fundtech Limited* ..................... 5,000 85
Genesys Telecom Labs* ................. 32,000 918
Micros Systems* ....................... 92,500 2,636
Novell* ............................... 50,000 828
Onsale Inc* ........................... 12,000 738
Psinet* ............................... 100 1,875
QuadraMed* ............................ 45,000 1,080
Quantum* .............................. 33,000 730
theglobe.com* ......................... 8,000 280
USWeb* ................................ 122,000 2,775
Xircom* ............................... 15,000 453
- ------------------------------------------------------------
21,355
- ------------------------------------------------------------
DRUGS (0.9%)
Watson Pharmaceuticals* ............... 17,000 916
- ------------------------------------------------------------
ELECTRICAL SERVICES (1.7%)
Bangor Hydro-Electric* ................ 20,000 243
El Paso Electric* ..................... 91,700 848
Public Service of New Mexico .......... 28,000 544
- ------------------------------------------------------------
1,635
- ------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (5.2%)
AFC Cable Systems* .................... 75,000 2,222
DII Group* ............................ 40,000 835
DSP Group* ............................ 60,000 1,226
Flextronics International* ............ 12,000 798
- ------------------------------------------------------------
5,081
- ------------------------------------------------------------
EMPLOYMENT SERVICES (2.7%)
Interim Services* ..................... 66,000 1,369
Metamor Worldwide* .................... 52,000 1,232
- ------------------------------------------------------------
2,601
- ------------------------------------------------------------
ENERGY SERVICES (1.4%)
AES* .................................. 31,000 1,418
- ------------------------------------------------------------
60
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND (continued)
Market
Value
Shares (000)
------ ------
FOOD, BEVERAGE & TOBACCO (3.5%)
American Italian Pasta* ............... 30,000 $ 757
Earthgrains ........................... 25,000 803
Suiza Foods* .......................... 20,000 947
Universal ............................. 25,000 880
- ------------------------------------------------------------
3,387
- ------------------------------------------------------------
GAS/NATURAL GAS (0.6%)
Public Service of North Carolina ...... 23,300 566
- ------------------------------------------------------------
GENERAL CONSTRUCTION (2.0%)
DR Horton ............................. 52,000 982
Foster Wheeler ........................ 60,000 1,028
- ------------------------------------------------------------
2,010
- ------------------------------------------------------------
HOUSEHOLD FURNITURE & FIXTURES (0.6%)
Ethan Allen Interiors ................. 14,000 553
- ------------------------------------------------------------
INSURANCE (6.8%)
American Heritage Life Investment ..... 42,000 1,032
American Medical Security Group ....... 40,400 578
Annuity & Life Re Holdings* ........... 52,000 1,319
Enhance Financial Services Group ...... 25,000 734
Fremont General ....................... 29,900 1,506
Protective Life ....................... 38,000 1,480
- ------------------------------------------------------------
6,649
- ------------------------------------------------------------
LEASING & RENTING (0.6%)
Renters Choice* ....................... 24,750 597
- ------------------------------------------------------------
MACHINERY (1.6%)
Crane ................................. 50,000 1,616
- ------------------------------------------------------------
MANUFACTURING (0.4%)
Exide ................................. 20,000 349
- ------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (10.1%)
Biomatrix* ............................ 32,000 1,554
Impath* ............................... 18,500 709
Pharmaceutical Product Development* ... 92,000 2,634
Pharmerica* ........................... 112,748 465
Safeskin* ............................. 70,000 1,330
Steris* ............................... 38,000 1,019
Trigon Healthcare* .................... 25,000 927
Total Renal Care Holdings* ............ 24,000 637
Wellpoint Health Networks* ............ 8,000 657
- ------------------------------------------------------------
9,932
- ------------------------------------------------------------
Shares/
Face Market
Amount Value
(000) (000)
------ ------
PETROLEUM & FUEL PRODUCTS (2.8%)
HS Resources* ......................... 47,900 $ 416
Santa Fe Energy Resources* ............ 105,000 807
Transocean Offshore ................... 61,000 1,506
- ------------------------------------------------------------
2,729
- ------------------------------------------------------------
PRINTING & PUBLISHING (2.1%)
Mail-Well* ............................ 160,000 2,070
- ------------------------------------------------------------
RETAIL (8.3%)
American Eagle Outfitters* ............ 19,000 1,135
Ann Taylor* ........................... 15,000 494
Barnes & Noble* ....................... 20,000 663
Buckle* ............................... 17,000 436
Men's Wearhouse* ...................... 38,000 962
Pacific Sunwear of California* ........ 44,000 652
Papa John's International* ............ 34,000 1,426
Pier 1 Imports ........................ 36,000 387
Whole Foods Market* ................... 20,000 930
Zale* ................................. 36,000 1,031
- ------------------------------------------------------------
8,116
- ------------------------------------------------------------
SEMI-CONDUCTORS/INSTRUMENTS (0.8%)
MIPS Technologies* .................... 15,000 363
Transwitch* ........................... 15,000 418
- ------------------------------------------------------------
781
- ------------------------------------------------------------
STEEL & STEEL WORKS (0.6%)
LTV ................................... 105,000 578
- ------------------------------------------------------------
TELEPHONES & TELECOMMUNICATION (3.0%)
Hyperion Telecommunications, Cl A* .... 145,000 1,577
Pacific Gateway Exchange* ............. 15,000 671
Tel-Save Holdings* .................... 55,000 657
- ------------------------------------------------------------
2,905
- ------------------------------------------------------------
TRUCKING (2.0%)
US Freightways ........................ 73,000 1,962
- ------------------------------------------------------------
WHOLESALE (1.1%)
Richfood Holdings ..................... 60,000 1,114
- ------------------------------------------------------------
Total Common Stocks
(Cost $89,158) ................. 95,922
- ------------------------------------------------------------
CASH EQUIVALENT (3.0%)
Aim Liquid Assets Portfolio ........... $2,936 2,936
- ------------------------------------------------------------
Total Cash Equivalent
(Cost $2,936) .................. 2,936
- ------------------------------------------------------------
Total Investments (100.9%)
(Cost $92,094) ................. 98,858
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-0.9%) (873)
- ------------------------------------------------------------
61
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND (concluded)
Market
Value
(000)
------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- .75 billion shares
authorized) based on 7,385,421
outstanding shares ......................... $90,320
Portfolio Shares of Investor Class A
($.001 par value -- .125 billion shares
authorized) based on 406,849
outstanding shares ......................... 4,915
Portfolio Shares of Investor Class B
($.001 par value -- .125 billion shares
authorized) based on 227,431
outstanding shares ......................... 3,234
Accumulated net realized loss on investments . (7,248)
Net unrealized appreciation on investments ... 6,764
- ------------------------------------------------------------
Total Net Assets: (100.0%) .............. $97,985
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(90,310,869 / 7,385,421
SHARES OUTSTANDING) .......................... $12.23
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR CLASS A
(4,973,327 / 406,849
SHARES OUTSTANDING) .......................... $12.22
- ------------------------------------------------------------
OFFER PRICE PER SHARE -- INVESTOR CLASS A
($12.22 / 95.5%) ............................. $12.80
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE - INVESTOR CLASS B (1)
(2,700,646 / 227,431
SHARES OUTSTANDING) .......................... $11.87
- ------------------------------------------------------------
(1) Investors Class B has a contingent deferrred 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.
62
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
LIFE VISION MAXIMUM GROWTH PORTFOLIO
Market
Value
Shares (000)
------ ------
EQUITY FUNDS (91.1%)
CrestFunds Capital Appreciation Fund,
Trust Class ...................... 281,391 $ 5,003
CrestFunds Special Equity Fund,
Trust Class ...................... 268,833 3,293
CrestFunds Value Fund,
Trust Class ...................... 430,072 6,494
- ------------------------------------------------------------
Total Equity Funds
(Cost $14,276) ............... 14,790
- ------------------------------------------------------------
MONEY MARKET FUND (8.9%)
CrestFunds Cash Reserve Fund,
Trust Class ....................... 1,442,904 1,443
- ------------------------------------------------------------
Total Money Market Fund
(Cost $1,443) ................ 1,443
- ------------------------------------------------------------
Total Investments (100.0%)
(Cost $15,719) ............... 16,233
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.0%) (3)
- ------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 3.75 billion shares
authorized) based on 1,433,532
outstanding shares ................ 14,439
Undistributed net investment income . 2
Accumulated net realized gain on investments 1,275
Net unrealized appreciation on investments 514
- ------------------------------------------------------------
Total Net Assets: (100.0%) ..... $16,230
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(16,229,858 / 1,433,532
SHARES OUTSTANDING) ................. $11.32
- ------------------------------------------------------------
- ------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
63
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
LIFE VISION GROWTH AND INCOME PORTFOLIO
Market
Value
Shares (000)
------ ------
EQUITY FUNDS (69.9%)
CrestFunds Capital Appreciation Fund,
Trust Class ...................... 227,116 $ 4,038
CrestFunds Special Equity Fund,
Trust Class ...................... 275,908 3,380
CrestFunds Value Fund,
Trust Class ...................... 390,419 5,895
- ------------------------------------------------------------
Total Equity Funds
(Cost $13,035) ............... 13,313
- ------------------------------------------------------------
FIXED INCOME FUNDS (25.7%)
CrestFunds Government Bond Fund,
Trust Class ....................... 147,900 1,574
CrestFunds Intermediate Bond Fund,
Trust Class ....................... 172,078 1,743
CrestFunds Limited Term Bond Fund,
Trust Class ....................... 157,865 1,575
- ------------------------------------------------------------
Total Fixed Income Funds
(Cost $4,747) ................ 4,892
- ------------------------------------------------------------
MONEY MARKET FUND (4.4%)
CrestFunds Cash Reserve Fund,
Trust Class ....................... 827,861 828
- ------------------------------------------------------------
Total Money Market Fund
(Cost $828) .................. 828
- ------------------------------------------------------------
Total Investments (100.0%)
(Cost $18,610) ............... 19,033
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.0%) 9
- ------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 3.75 billion shares
authorized) based on 1,721,538
outstanding shares ................ 16,538
Undistributed net investment income . 7
Accumulated net realized gain on investments 2,074
Net unrealized appreciation on investments 423
- ------------------------------------------------------------
Total Net Assets: (100.0%) ..... $19,042
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(19,042,401 / 1,721,538
SHARES OUTSTANDING) ................. $11.06
- ------------------------------------------------------------
- ------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
64
<PAGE>
STATEMENT OF NET ASSETS CRESTFUNDS, INC.
November 30, 1998
- --------------------------------------------------------------------------------
LIFE VISION BALANCED PORTFOLIO
Market
Value
Shares (000)
------ ------
EQUITY FUNDS (58.1%)
CrestFunds Capital Appreciation Fund,
Trust Class .......................1,122,821 $19,964
CrestFunds Special Equity Fund,
Trust Class ....................... 805,630 9,869
CrestFunds Value Fund,
Trust Class .......................1,609,481 24,303
- ------------------------------------------------------------
Total Equity Funds
(Cost $52,452) ................ 54,136
- ------------------------------------------------------------
FIXED INCOME FUNDS (37.2%)
CrestFunds Government Bond Fund,
Trust Class ........................ 816,058 8,683
CrestFunds Intermediate Bond Fund,
Trust Class ........................1,710,187 17,324
CrestFunds Limited Term Bond Fund,
Trust Class ........................ 870,654 8,689
- ------------------------------------------------------------
Total Fixed Income Funds
(Cost $33,674) ................ 34,696
- ------------------------------------------------------------
MONEY MARKET FUND (4.6%)
CrestFunds Cash Reserve Fund,
Trust Class ........................4,288,154 4,288
- ------------------------------------------------------------
Total Money Market Fund
(Cost $4,288) 4,288
- ------------------------------------------------------------
Total Investments (99.9%)
(Cost $90,414) ....................... 93,120
- ------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.1%) .... 91
- ------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Trust Class
($.001 par value -- 3.75 billion shares
authorized) based on 8,465,539
outstanding shares ........................ 84,549
Undistributed net investment income ......... 42
Accumulated net realized gain on investments 5,914
Net unrealized appreciation on investments .. 2,706
- ------------------------------------------------------------
Total Net Assets: (100.0%) ............. $93,211
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS
(93,210,589 / 8,465,539
SHARES OUTSTANDING) ......................... $11.01
- ------------------------------------------------------------
- ------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
65
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS CRESTFUNDS, INC.
For the Year Ended November 30, 1998
(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: .................................. $67,006 $33,565 $8,624 $5,165 $20,359
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ....................... 4,310 2,412 963 408 1,885
Waiver of Investment Advisory Fees ............. -- -- -- -- --
Administrative Fees ............................ 1,780 927 361 122 471
Waiver of Administrative Fees .................. -- -- -- -- --
Custodian/Transfer Agent Fees .................. 1,048 539 216 63 257
Professional Fees .............................. 126 65 24 9 34
Director Fees .................................. 18 9 3 1 6
Registration & Filing Fees ..................... 148 68 21 8 21
Insurance Expense .............................. 7 4 2 1 2
Distribution Fees--Trust Class ................. 1,541 927 349 156 599
Waiver of Distribution Fees--Trust Class ....... (1,541) (927) (349) (150) (575)
Distribution Fees--Investors Class A ........... 637 -- 33 -- 4
Waiver of Distribution Fees--Investors Class A . (637) -- (33) -- (4)
Distribution Fees--Investors Class B ........... 1 -- -- -- --
Waiver of Distribution Fees--Investors Class B . -- -- -- -- --
Printing Fees .................................. 101 24 9 3 24
Miscellaneous Fees ............................. -- 36 1 1 34
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses ............................... 7,539 4,084 1,600 622 2,758
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income ............................. 59,467 29,481 7,024 4,543 17,601
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments ........... -- -- (9) 67 6,795
Change in Net Unrealized Appreciation (Depreciation)
of Investments ................................. -- -- -- 453 (1,500)
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Realized and Unrealized Gain (Loss)
on Investments ................................. -- -- (9) 520 5,295
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
from Operations ................................ $59,467 $29,481 $7,015 $5,063 $22,896
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
<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.
66
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS CRESTFUNDS, INC.
For the Year Ended November 30, 1998
(IN THOUSANDS)
---------------------------------------------------------------------
VIRGINIA INTERMEDIATE VIRGINIA MARYLAND
GOVERNMENT MUNICIPAL MUNICIPAL MUNICIPAL VALUE
BOND FUND BOND FUND BOND FUND BOND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest Income: ................................... $2,959 $12,776 $1,419 $826 $ 1,915
Dividend Income: ................................... -- -- -- -- 8,628
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ........................ 282 1,248 167 105 4,749
Waiver of Investment Advisory Fees .............. (47) -- (28) (61) --
Administrative Fees ............................. 71 375 42 26 950
Waiver of Administrative Fees ................... (56) -- (36) -- --
Custodian/Transfer Agent Fees ................... 46 218 24 14 555
Professional Fees ............................... 8 29 5 2 70
Director Fees ................................... 1 6 -- -- 10
Registration & Filing Fees ...................... 2 11 5 4 42
Insurance Expense ............................... -- 1 -- -- 3
Distribution Fees--Trust Class .................. 87 464 48 30 1,116
Waiver of Distribution Fees--Trust Class ........ (83) (445) (46) (29) (1,029)
Distribution Fees--Investors Class A ............ -- 13 -- -- 50
Waiver of Distribution Fees--Investors Class A .. -- (13) -- -- (50)
Distribution Fees--Investors Class B ............ 17 -- 26 18 203
Waiver of Distribution Fees--Investors Class B .. (1) -- (1) (1) (51)
Printing Fees ................................... 2 24 1 1 39
Miscellaneous Fees .............................. 3 36 9 16 27
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses ................................ 332 1,967 216 125 6,684
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income .............................. 2,627 10,809 1,203 701 3,859
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain on Investments ................... 1,063 1,725 175 58 42,161
Change in Net Unrealized Appreciation
of Investments .................................. 171 2,380 507 406 33,416
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Realized and Unrealized Gain
on Investments .................................. 1,234 4,105 682 464 75,577
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
from Operations ................................. $3,861 $14,914 $1,885 $1,165 $79,436
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
<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>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS CRESTFUNDS, INC.
For the Year Ended November 30, 1998
(IN THOUSANDS)
---------------------------------------------------------------------
CAPITAL SPECIAL LIFE VISION LIFE VISION LIFE VISION
APPRECIATION EQUITY MAXIMUM GROWTH AND BALANCED
FUND FUND GROWTH PORTFOLIO INCOME PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest Income: .................................. $ 290 $ 282 $ -- $ -- $ --
Dividend Income: .................................. 872 697 76 410 2,295
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ....................... 948 890 40 53 233
Waiver of Investment Advisory Fees ............. -- -- (26) (32) (120)
Administrative Fees ............................ 190 178 40 40 40
Waiver of Administrative Fees .................. -- -- (40) (40) (40)
Custodian/Transfer Agent Fees .................. 113 106 13 17 75
Professional Fees .............................. 11 17 2 2 10
Director Fees .................................. 1 2 -- -- 1
Registration & Filing Fees ..................... 18 18 4 5 19
Insurance Expense .............................. 1 1 -- -- --
Distribution Fees--Trust Class ................. 220 212 -- -- --
Waiver of Distribution Fees--Trust Class ....... (202) (199) -- -- --
Distribution Fees--Investors Class A ........... 14 9 -- -- --
Waiver of Distribution Fees--Investors Class A . (14) (9) -- -- --
Distribution Fees--Investors Class B ........... 24 28 -- -- --
Waiver of Distribution Fees--Investors Class B . (1) (1) -- -- --
Printing Fees .................................. 4 5 1 1 5
Miscellaneous Fees ............................. 3 -- 6 7 10
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses ............................... 1,330 1,257 40 53 233
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) ...................... (168) (278) 36 357 2,062
- ---------------------------------------------------------------------------------------------------------------------------
Capital Gain Received from Investments ............ -- -- 1,739 2,121 6,921
Net Realized Loss on Investments .................. (986) (7,030) (463) (45) (1,004)
Change in Net Unrealized Appreciation (Depreciation)
of Investments ................................. 22,458 (10,799) (226) (580) (1,024)
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Realized and Unrealized Gain (Loss)
on Investments ................................. 21,472 (17,829) 1,050 1,496 4,893
- ---------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting
from Operations ................................ $21,304 $(18,107) $1,086 $1,853 $6,955
- ---------------------------------------------------------------------------------------------------------------------------
<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.
68
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Year Ended November 30, 1998
(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
------------ ------------ ------------- ------------- ---------- ----------
12/01/97 12/01/96 12/01/97 12/01/96 12/01/97 12/01/96
TO 11/30/98 TO 11/30/97 TO 11/30/98 TO 11/30/97 TO 11/30/98 TO 11/30/97
- -----------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income .................... $ 59,467 $ 43,108 $ 29,481 $ 24,451 $ 7,024 $ 6,505
Net Realized Gain (Loss) on Investments .. -- 32 -- -- (9) 3
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From Operations 59,467 43,140 29,481 24,451 7,015 6,508
- ---------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Net Investment Income
Trust Class .............................. (51,521) (38,023) (29,476) (24,456) (6,778) (6,352)
Investors Class A ........................ (7,946) (5,133) -- -- (239) (161)
Investors Class B ........................ (2) (1) -- -- -- --
Capital Gains
Trust Class .............................. -- -- -- -- -- --
Investors Class A ........................ -- -- -- -- -- --
Investors Class B ........................ -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions .................... (59,469) (43,157) (29,476) (24,456) (7,017) (6,513)
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Assets .......................... (2) (17) 5 (5) (2) (5)
- ---------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (All at $1.00 Per Share):
Trust Class:
Proceeds from Shares Issued .............. 1,946,496 1,704,048 1,131,937 1,251,595 369,536 393,449
Reinvestment of Cash Distributions ....... -- 733 4 146 -- --
Cost of Shares Redeemed .................. (1,659,055) (1,477,765) (1,064,404) (1,008,406) (325,471) (348,927)
--------- --------- --------- --------- ------- -------
Total Trust Class Transactions ......... 287,441 227,016 67,537 243,335 44,065 44,522
--------- --------- --------- --------- ------- -------
Investors Class A:
Proceeds from Shares Issued .............. 206,651 135,942 -- -- 22,060 16,177
Reinvestment of Cash Distributions ....... 7,713 4,595 -- -- 237 144
Cost of Shares Redeemed .................. (159,937) (70,439) -- -- (21,081) (11,681)
--------- --------- --------- --------- ------- -------
Total Investors Class A Transactions ... 54,427 70,098 -- -- 1,216 4,640
--------- --------- --------- --------- ------- -------
Investors Class B:
Proceeds from Shares Issued .............. 99 23 -- -- -- --
Reinvestment of Cash Distributions ....... 2 1 -- -- -- --
Cost of Shares Redeemed .................. (6) (1) -- -- -- --
--------- --------- --------- --------- ------- -------
Total Investors Class B Transactions ... 95 23 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from
Capital Share Transactions ................. 341,963 297,137 67,537 243,335 45,281 49,162
- ---------------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets ........... 341,961 297,120 67,542 243,330 45,279 49,157
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ........................ 983,685 686,565 632,381 389,051 234,471 185,314
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period .............................. $1,325,646 $ 983,685 $ 699,923 $ 632,381 $279,750 $ 234,471
===========================================================================================================================
<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.
69
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Year Ended November 30, 1998
(IN THOUSANDS)
- ----------------------------------------------------------------------------------------------------------------------------
LIMITED TERM LIMITED TERM INTERMEDIATE INTERMEDIATE GOVERNMENT GOVERNMENT
BOND FUND BOND FUND BOND FUND BOND FUND BOND FUND BOND FUND
------------ ------------ ------------ ------------ ---------- -----------
12/01/97 12/01/96 12/01/97 12/01/96 12/01/97 12/01/96
TO 11/30/98 TO 11/30/97 TO 11/30/98 TO 11/30/97 TO 11/30/98 TO 11/30/97
- ----------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income ..................... $ 4,543 $ 4,443 $ 17,601 $ 17,429 $ 2,627 $ 2,160
Net Realized Gain (Loss) on Investments ... 67 (284) 6,795 (194) 1,063 89
Change in Net Unrealized Appreciation
(Depreciation)of Investments ............ 453 107 (1,500) 1,022 171 300
- -------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From Operations 5,063 4,266 22,896 18,257 3,861 2,549
- -------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Net Investment Income
Trust Class ............................... (4,543) (4,387) (17,347) (17,309) (2,552) (2,116)
Investors Class A ......................... (13) (58) (158) (131) -- --
Investors Class B ......................... -- -- -- -- (78) (45)
Capital Gains
Trust Class ............................... -- -- -- -- -- --
Investors Class A ......................... -- -- -- -- -- --
Investors Class B ......................... -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Total Distributions ..................... (4,556) (4,445) (17,505) (17,440) (2,630) (2,161)
- -------------------------------------------------------------------------------------------------------------------------
Change in Net Assets ........................... 507 (179) 5,391 817 1,231 388
=========================================================================================================================
Capital Share Transactions:
Trust Class:
Proceeds from Shares Issued ............... 33,030 32,072 66,054 71,860 30,145 31,044
Reinvestment of Cash Distributions ........ 1,869 2,281 1,844 1,966 805 846
Cost of Shares Redeemed ................... (29,088) (41,456) (62,185) (56,005) (16,097) (18,428)
------ ------ ------ ------ ------ ------
Total Trust Class Transactions .......... 5,811 (7,103) 5,713 17,821 14,853 13,462
------ ------ ------ ------ ------ ------
Investors Class A:
Proceeds from Shares Issued ............... 37 39 2,024 783 -- --
Reinvestment of Cash Distributions ........ 9 47 119 105 -- --
Cost of Shares Redeemed ................... (1,006) (277) (1,149) (874) -- --
------ ------ ------ ------ ------ ------
Total Investors Class A Transactions .... (960) (191) 994 14 -- --
------ ------ ------ ------ ------ ------
Investors Class B:
Proceeds from Shares Issued ............... -- -- -- -- 1,501 485
Reinvestment of Cash Distributions ........ -- -- -- -- 59 33
Cost of Shares Redeemed ................... -- -- -- -- (422) (11)
------ ------ ------ ------ ------ ------
Total Investors Class B Transactions .... -- -- -- -- 1,138 507
- -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions .................. 4,851 (7,294) 6,707 17,835 15,991 13,969
- -------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets . 5,358 (7,473) 12,098 18,652 17,222 14,357
- -------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ......................... 78,622 86,095 302,077 283,425 35,226 20,869
- -------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period ............................... $83,980 $ 78,622 $ 314,175 $302,077 $52,448 $ 35,226
- -------------------------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Trust Class:
Shares Issued ............................. 4,098 3,333 6,568 7,474 3,027 3,087
Shares Issued in Lieu of Cash Distributions 188 231 183 204 76 77
Shares Redeemed ........................... (3,707) (4,288) (6,163) (5,853) (1,681) (1,824)
------ ------ ------ ------ ------ ------
Total Trust Class Share Transactions .... 579 (724) 588 1,825 1,422 1,340
------ ------ ------ ------ ------ ------
Investors Class A:
Shares Issued ............................. 4 4 201 80 -- --
Shares Issued in Lieu of Cash Distributions 1 5 12 11 -- --
Shares Redeemed ........................... (98) (28) (114) (89) -- --
------ ------ ------ ------ ------ ------
Total Investors Class A Share Transactions (93) (19) 99 2 -- --
------ ------ ------ ------ ------ ------
Investors Class B:
Shares Issued ............................. -- -- -- -- 142 48
Shares Issued in Lieu of Cash Distributions -- -- -- -- 6 3
Shares Redeemed ........................... -- -- -- -- (40) (1)
------ ------ ------- ------ ------ ------
Total Investors Class B Share Transactions -- -- -- -- 108 50
- -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital Share
Transaction .................................... 486 (743) 687 1,827 1,530 1,390
=========================================================================================================================
<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.
70
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Year Ended November 30, 1998
(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
------------ ------------ --------- --------- --------- -----------
12/01/97 12/01/96 12/01/97 12/01/96 12/01/97 12/01/96
TO 11/30/98 TO 11/30/97 TO 11/30/98 TO 11/30/97 TO 11/30/98 TO 11/30/97
- ---------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income .............. $ 10,809 $ 11,260 $ 1,203 $ 832 $ 701 $ 374
Net Realized Gain (Loss) on Investments 1,725 1,641 175 67 58 (5)
Change in Net Unrealized Appreciation
of Investments ................... 2,380 490 507 278 406 241
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
From Operations .................... 14,914 13,391 1,885 1,177 1,165 610
- ---------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Net Investment Income
Trust Class ........................ (10,471) (10,835) (1,116) (792) (645) (363)
Investors Class A .................. (364) (353) -- -- -- --
Investors Class B .................. -- -- (87) (40) (56) (11)
Capital Gains
Trust Class ........................ (793) -- (50) (12) -- --
Investors Class A .................. (28) -- -- -- -- --
Investors Class B .................. -- -- (4) (1) -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions .............. (11,656) (11,188) (1,257) (845) (701) (374)
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Assets .................... 3,258 2,203 628 332 464 236
- ---------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Proceeds from Shares Issued ........ 36,891 35,373 13,751 9,497 13,041 6,495
Reinvestment of Cash Distributions . 629 22 60 26 11 2
Cost of Shares Redeemed ............ (34,155) (43,571) (5,172) (5,693) (5,813) (1,067)
------- -------- -------- ------ ------ ------
Total Trust Class Transactions ... 3,365 (8,176) 8,639 3,830 7,239 5,430
------- -------- -------- ------ ------ ------
Investors Class A:
Proceeds from Shares Issued ........ 2,174 938 -- -- -- --
Reinvestment of Cash Distributions . 289 274 -- -- -- --
Cost of Shares Redeemed ............ (2,503) (1,639) -- -- -- --
------- -------- -------- ------ ------ ------
Total Investors Class A Transactions (40) (427) -- -- -- --
------- -------- -------- ------ ------ ------
Investors Class B:
Proceeds from Shares Issued ........ -- -- 2,474 743 2,772 518
Reinvestment of Cash Distributions . -- -- 64 31 41 9
Cost of Shares Redeemed ............ -- -- (376) (115) (177) (92)
------- -------- -------- ------ ------ ------
Total Investors Class B Transactions -- -- 2,162 659 2,636 435
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions ........... 3,325 (8,603) 10,801 4,489 9,875 5,865
- ---------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 6,583 (6,400) 11,429 4,821 10,339 6,101
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period .................. 244,922 251,322 21,520 16,699 12,022 5,921
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period ........................ $251,505 $244,922 $32,949 $21,520 $22,361 $12,022
===========================================================================================================================
Shares Issued and Redeemed:
Trust Class:
Shares Issued ...................... 3,557 3,476 1,302 928 1,292 667
Shares Issued in Lieu of Cash Distributions 61 2 6 2 1 --
Shares Redeemed .................... (3,293) (4,278) (488) (559) (575) (110)
-------- -------- -------- ------ ------ ------
Total Trust Class Share Transactions 325 (800) 820 371 718 557
-------- -------- -------- ------ ------ ------
Investors Class A:
Shares Issued ...................... 210 92 -- -- -- --
Shares Issued in Lieu of Cash Distributions 28 27 -- -- -- --
Shares Redeemed .................... (241) (161) -- -- -- --
-------- -------- -------- ------ ------ ------
Total Investors Class A Share Transactions (3) (42) -- -- -- --
-------- -------- -------- ------ ------ ------
Investors Class B:
Shares Issued ...................... -- -- 233 73 274 53
Shares Issued in Lieu of Cash Distributions -- -- 6 3 4 1
Shares Redeemed .................... -- -- (35) (11) (17) (9)
-------- -------- -------- ------ ------ ------
Total Investors Class B Share Transactions -- -- 204 65 261 45
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital
Share Transactions ................. 322 (842) 1,024 436 979 602
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
<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.
71
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Year Ended November 30, 1998
(IN THOUSANDS)
---------------------------------------------------------------------------
CAPITAL CAPITAL SPECIAL SPECIAL
VALUE VALUE APPRECIATION APPRECIATION EQUITY EQUITY
FUND FUND FUND FUND FUND FUND
----------- ----------- ------------ ------------ ----------- ---------
12/01/97 12/01/96 12/01/97 12/01/96 12/01/97 12/01/96
TO 11/30/98 TO 11/30/97 TO 11/30/98 TO 11/30/97 TO 11/30/98 TO 11/30/97
- ----------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income (Loss) ........ $ 3,859 $ 5,276 $ (168) $ 223 $ (278) $ (80)
Net Realized Gain (Loss) on Investments 42,161 118,138 (986) 5,700 (7,030) 15,883
Change in Net Unrealized Appreciation
(Depreciation) of investments ..... 33,416 7,024 22,458 12,790 (10,799) 4,525
- ----------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting
From Operations ....................... 79,436 130,438 21,304 18,713 (18,107) 20,328
- ----------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Trust Class ......................... (3,768) (5,360) (46) (218) -- (30)
Investors Class A ................... (212) (214) (4) (17) -- (2)
Investors Class B ................... -- (24) -- -- -- --
Capital Gains
Trust Class ......................... (110,281) (2,857) (5,886) (1,515) (14,918) (2,129)
Investors Class A ................... (5,275) (96) (468) (226) (783) (129)
Investors Class B ................... (2,562) (27) (30) -- (299) (26)
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions ............... (122,098) (8,578) (6,434) (1,976) (16,000) (2,316)
- ----------------------------------------------------------------------------------------------------------------------
Change in Net Assets ..................... (42,662) 121,860 14,870 16,737 (34,107) 18,012
- ----------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Proceeds from Shares Issued ......... 92,390 86,500 47,490 81,085 32,377 42,454
Reinvestment of Cash Distributions .. 88,294 2,679 3,995 364 12,720 1,455
Cost of Shares Redeemed ............. (153,783) (167,444) (40,145) (30,703) (35,499) (26,423)
------- ------- ------ ------ ------ ------
Total Trust Class Transactions .... 26,901 (78,265) 11,340 50,746 9,598 17,486
------- ------- ------ ------ ------ ------
Investors Class A:
Proceeds from Shares Issued ......... 11,222 9,602 3,291 2,569 943 1,154
Reinvestment of Cash Distributions .. 5,277 303 469 241 758 123
Cost of Shares Redeemed ............. (8,617) (4,558) (1,628) (881) (994) (930)
------ ------- ------ ------ ------ ------
Total Investors Class A Transactions 7,882 5,347 2,132 1,929 707 347
------ ------- ------ ------ ------ ------
Investors Class B:
Proceeds from Shares Issued ......... 12,797 7,216 4,386 432 1,511 1,192
Reinvestment of Cash Distributions .. 2,504 51 30 -- 295 26
Cost of Shares Redeemed ............. (2,494) (782) (295) (1) (447) (181)
------ ------- ------ ------ ------ ------
Total Investors Class B Transactions 12,807 6,485 4,121 431 1,359 1,037
- ----------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions ............ 47,590 (66,433) 17,593 53,106 11,664 18,870
- ----------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net
Assets 4,928 55,427 32,463 69,843 (22,443) 36,882
- ----------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ................... 632,204 576,777 107,696 37,853 120,428 83,546
- ----------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period ......................... $637,132 $632,204 $140,159 $107,696 $ 97,985 $120,428
======================================================================================================================
Shares Issued and Redeemed:
Trust Class:
Shares Issued ....................... 10,513 6,467 3,240 6,090 3,492 2,987
Shares Issued in Lieu of Cash
Distributions 6,789 193 273 28 935 110
Shares Redeemed ..................... (14,789) (12,286) (2,755) (2,322) (3,872) (1,942)
------ ------- ------ ------ ------ ------
Total Trust Class Share Transactions 2,513 (5,626) 758 3,796 555 1,155
------ ------- ------ ------ ------ ------
Investors Class A:
Shares Issued ....................... 764 636 199 183 65 73
Shares Issued in Lieu of Cash Distributions 402 21 32 19 56 9
Shares Redeemed ..................... (591) (304) (99) (64) (72) (63)
------ ------- ------ ------ ------ ------
Total Investors Class A Share Transactions 575 353 132 138 49 19
------ ------- ------ ------ ------ ------
Investors Class B:
Shares Issued ....................... 874 467 267 27 107 73
Shares Issued in Lieu of Cash Distributions 192 4 2 -- 22 2
Shares Redeemed ..................... (171) (53) (18) -- (33) (13)
------ ------- ------ ------ ------ ------
Total Investors Class B Share Transactions 895 418 251 27 96 62
- ----------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital
Share Transactions 3,983 (4,855) 1,141 3,961 700 1,236
======================================================================================================================
<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.
72
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS CRESTFUNDS, INC.
For the Period Ended November 30, 1998
(IN THOUSANDS)
----------------------------------------------------------------------------------------
LIFE VISION LIFE VISION LIFE VISION LIFE VISION LIFE VISION
MAXIMUM MAXIMUM GROWTH AND GROWTH AND BALANCED
GROWTH PORTFOLIO GROWTH PORTFOLIO INCOME PORTFOLIO INCOME PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------------------
12/01/97 07/01/97 12/01/97 07/01/97 12/01/97
TO 11/30/98 TO 11/30/97* TO 11/30/98 TO 11/30/97* TO 11/30/98
- --------------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C>
Net Investment Income $ 36 $ 39 $ 357 $ 190 $ 2,062
Capital Gain Received from Investments 1,739 -- 2,121 -- 6,921
Net Realized Gain (Loss) on Investments (463) (1) (45) 20 (1,004)
Change in Net Unrealized Appreciation
(Depreciation) of investments (226) 740 (580) 1,003 (1,024)
- --------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting From
Operations 1,086 778 1,853 1,213 6,955
- --------------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders:
Trust Class (35) (38) (360) (180) ( 2,072)
Capital Gains
Trust Class -- -- (22) -- (238)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions (35) (38) (382) (180) (2,310)
- --------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets 1,051 740 1,471 1,033 4,645
- --------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Proceeds from Shares Issued 5,852 13,614 2,591 21,846 15,849
Reinvestment of Cash Distributions 36 38 382 180 2,310
Cost of Shares Redeemed (4,421) (680) (7,923) (538) (19,035)
----- ------ ------ ------ ------
Total Trust Class Transactions 1,467 12,972 (4,950) 21,488 (876)
----- ------ ------ ------ ------
- --------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 1,467 12,972 (4,950) 21,488 (876)
- --------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net
Assets 2,518 13,712 (3,479) 22,521 3,769
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period 13,712 -- 22,521 -- 89,442
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets:
End of Period $ 16,230 $ 13,712 $ 19,042 $ 22,521 $ 93,211
================================================================================================================================
Shares Issued and Redeemed:
Trust Class:
Shares Issued 599 1,350 239 2,177 1,449
Shares Issued in Lieu of Cash Distributions 3 4 35 17 214
Shares Redeemed (456) (66) (695) (52) (1,743)
----- ------ ------ ------ ------
Total Trust Class Share Transactions 146 1,288 (421) 2,142 (80)
----- ------ ------ ------ ------
- --------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital Share
Transactions 146 1,288 (421) 2,142 (80)
================================================================================================================================
(IN THOUSANDS)
----------------
LIFE VISION
BALANCED
PORTFOLIO
- --------------------------------------------------------------
07/01/97
TO 11/30/97*
- --------------------------------------------------------------
Investment Activities:
<S> <C>
Net Investment Income $ 993
Capital Gain Received from Investments --
Net Realized Gain (Loss) on Investments 235
Change in Net Unrealized Appreciation
(Depreciation) of investments 3,730
- --------------------------------------------------------------
Increase in Net Assets Resulting From
Operations 4,958
- --------------------------------------------------------------
Distribution to Shareholders:
Trust Class (941)
Capital Gains
Trust Class --
- --------------------------------------------------------------
Total Distributions (941)
- --------------------------------------------------------------
Change in Net Assets 4,017
- --------------------------------------------------------------
Capital Share Transactions:
Trust Class:
Proceeds from Shares Issued 94,371
Reinvestment of Cash Distributions 941
Cost of Shares Redeemed (9,887)
-----
Total Trust Class Transactions 85,425
-----
- --------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 85,425
- --------------------------------------------------------------
Total Increase (Decrease) in Net
Assets 89,442
- --------------------------------------------------------------
Net Assets:
Beginning of Period --
- --------------------------------------------------------------
Net Assets:
End of Period $ 89,442
==============================================================
Shares Issued and Redeemed:
Trust Class:
Shares Issued 9,446
Shares Issued in Lieu of Cash Distributions 90
Shares Redeemed (990)
-----
Total Trust Class Share Transactions 8,546
-----
- --------------------------------------------------------------
Net Increase (Decrease) from Capital Share
Transactions 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.
73
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET -------------------------------------------------------- NET NET OF EXPENSES
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS
BEGINNING INVESTMENT GAIN INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS
- ------------------------------------------------------------------------------------------------------------------------------------
- -----------------
CASH RESERVE FUND
- -----------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $1.00 0.050 -- (0.050) -- $1.00 5.13% $1,135,571 0.63% 0.78%
1997 1.00 0.050 -- (0.050) -- 1.00 5.16% 848,140 0.65% 0.80%
1996 1.00 0.049 -- (0.049) -- 1.00 4.98% 621,139 0.66% 0.81%
1995 1.00 0.053 -- (0.053) -- 1.00 5.45% 520,185 0.66% 0.81%
1994 1.00 0.034 -- (0.034) -- 1.00 3.46% 377,493 0.66% 0.66%
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $1.00 0.050 -- (0.050) -- $1.00 5.12% $ 189,942 0.64% 1.04%
1997 1.00 0.050 -- (0.050) -- 1.00 5.15% 135,507 0.65% 1.05%
1996 1.00 0.049 -- (0.049) -- 1.00 4.97% 65,411 0.67% 1.07%
1995 1.00 0.053 -- (0.053) -- 1.00 5.44% 40,240 0.67% 1.07%
1994 1.00 0.033 -- (0.033) -- 1.00 3.36% 11,832 0.68% 0.97%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $1.00 0.041 -- (0.041) -- $1.00 4.13% $ 133 1.59% 1.65%
1997 1.00 0.042 -- (0.042) -- 1.00 4.22% 38 1.56% 1.71%
1996 1.00 0.040 -- (0.040) -- 1.00 4.08% 15 1.52% 1.67%
1995(1) 1.00 0.028 -- (0.028) -- 1.00 2.82%* 21 1.52%* 1.67%*
- ------------------------
U.S. TREASURY MONEY FUND
- ------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $1.00 0.048 -- (0.048) -- $1.00 4.89% $ 699,923 0.66% 0.81%
1997 1.00 0.048 -- (0.048) -- 1.00 4.91% 632,381 0.65% 0.80%
1996 1.00 0.047 -- (0.047) -- 1.00 4.80% 389,051 0.66% 0.81%
1995 1.00 0.052 -- (0.052) -- 1.00 5.29% 370,454 0.66% 0.81%
1994 1.00 0.033 -- (0.033) -- 1.00 3.30% 319,477 0.66% 0.66%
INVESTORS CLASS A (2)
FOR THE YEARS ENDED NOVEMBER 30,:
1994 $1.00 0.008 -- (0.008) -- $1.00 0.79% $ -- 0.92%* 29.16%*
- -------------------
TAX-FREE MONEY FUND
- -------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $1.00 0.029 -- (0.029) -- $1.00 2.97% $ 270,899 0.66% 0.81%
1997 1.00 0.030 -- (0.030) -- 1.00 3.06% 226,837 0.66% 0.81%
1996 1.00 0.029 0.002 (0.029) (0.002) 1.00 3.14% 182,320 0.66% 0.81%
1995 1.00 0.032 -- (0.032) -- 1.00 3.26% 202,333 0.66% 0.81%
1994 1.00 0.021 -- (0.021) -- 1.00 2.07% 157,602 0.67% 0.67%
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $1.00 0.030 -- (0.030) -- $1.00 2.96% $ 8,851 0.67% 1.07%
1997 1.00 0.030 -- (0.030) -- 1.00 3.05% 7,634 0.68% 1.08%
1996 1.00 0.029 0.002 (0.029) (0.002) 1.00 3.13% 2,994 0.67% 1.07%
1995 1.00 0.031 -- (0.031) -- 1.00 3.25% 1,627 0.67% 1.07%
1994 1.00 0.020 -- (0.020) -- 1.00 1.98% 757 0.76% 1.44%
RATIO OF
NET INVESTMENT
RATIO OF INCOME TO
NET INVESTMENT AVERAGE
INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS RATE
- --------------------------------------------------
- -----------------
CASH RESERVE FUND
- -----------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C>
1998 5.01% 4.86% --
1997 5.04% 4.89% --
1996 4.87% 4.72% --
1995 5.31% 5.16% --
1994 3.37% 3.37% --
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1998 5.00% 4.60% --
1997 5.04% 4.64% --
1996 4.85% 4.45% --
1995 5.31% 4.91% --
1994 3.35% 3.06% --
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 4.00% 3.94% --
1997 4.17% 4.02% --
1996 4.02% 3.87% --
1995(1) 4.45%* 4.30%* --
- ------------------------
U.S. TREASURY MONEY FUND
- ------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 4.77% 4.62% --
1997 4.82% 4.67% --
1996 4.69% 4.54% --
1995 5.16% 5.01% --
1994 3.23% 3.23% --
INVESTORS CLASS A (2)
FOR THE YEARS ENDED NOVEMBER 30,:
1994 2.31%* (25.93%)* --
- -------------------
TAX-FREE MONEY FUND
- -------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 2.92% 2.77% --
1997 3.02% 2.87% --
1996 2.88% 2.73% --
1995 3.19% 3.04% --
1994 2.06% 2.06% --
INVESTORS CLASS A
FOR THE YEARS ENDED NOVEMBER 30,:
1998 2.92% 2.52% --
1997 3.42% 3.02% --
1996 2.86% 2.46% --
1995 3.16% 2.76% --
1994 1.97% 1.29% --
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commencement of operations for this class April 19, 1995.
(2) Ceased operations March 31, 1994.
* 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.
74
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET -------------------------------------------------------- NET NET OF EXPENSES
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------------
LIMITED TERM BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $ 9.92 0.557 0.061 (0.558) -- $ 9.98 6.39% $ 83,980 0.76% 0.95%
1997 9.93 0.570 (0.010) (0.570) -- 9.92 5.84% 77,696 0.75% 0.90%
1996 10.03 0.534 (0.097) (0.537) -- 9.93 4.52% 84,973 0.78% 0.93%
1995 9.49 0.532 0.534 (0.526) -- 10.03 11.50% 88,789 0.78% 0.93%
1994 10.16 0.480 (0.640) (0.480) (0.030) 9.49 (1.56%) 83,369 0.76% 0.76%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (1) $ 9.93 0.185 (0.026) (0.189) -- $ 9.90 1.59% $ -- 0.76% 0.91%
1997 9.95 0.563 (0.012) (0.569) -- 9.93 5.71% 926 0.77% 0.92%
1996 10.06 0.535 (0.109) (0.536) -- 9.95 4.40% 1,122 0.79% 0.94%
1995 9.50 0.530 0.556 (0.526) -- 10.06 11.70% 1,458 0.79% 0.94%
1994 10.17 0.480 (0.650) (0.470) (0.030) 9.50 (1.72%) 593 0.77% 1.03%
- ----------------------
INTERMEDIATE BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $ 9.96 0.564 0.167 (0.561) -- $10.13 7.52% $310,885 0.88% 1.06%
1997 9.94 0.594 0.021 (0.595) -- 9.96 6.46% 299,820 0.87% 1.02%
1996 10.12 0.550 (0.175) (0.555) -- 9.94 3.92% 281,187 0.88% 1.03%
1995 9.16 0.569 0.954 (0.563) -- 10.12 17.07% 81,870 0.88% 1.03%
1994 10.20 0.530 (1.000) (0.530) (0.040) 9.16 (4.72%) 77,143 0.88% 0.88%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $ 9.96 0.562 0.168 (0.560) -- $10.13 7.51% $ 3,290 0.88% 1.03%
1997 9.94 0.592 0.022 (0.594) -- 9.96 6.45% 2,257 0.88% 1.03%
1996 10.12 0.543 (0.169) (0.554) -- 9.94 3.91% 2,238 0.89% 1.04%
1995 9.16 0.572 0.951 (0.563) -- 10.12 17.08% 1,729 0.89% 1.04%
1994 10.19 0.520 (0.990) (0.520) (0.040) 9.16 (4.72%) 1,030 0.89% 1.05%
- --------------------
GOVERNMENT BOND FUND
- --------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $10.36 0.591 0.281 (0.592) -- $10.64 8.63% $ 50,051 0.67% 1.07%
1997 10.37 0.605 (0.010) (0.605) -- 10.36 6.04% 34,013 0.66% 1.06%
1996 10.66 0.591 (0.290) (0.591) -- 10.37 3.02% 20,171 0.69% 1.09%
1995(3) 10.00 0.412 0.753 (0.412) (0.093) 10.66 11.85%* 10,211 0.71%* 1.11%*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $10.39 0.594 0.278 (0.592) -- $10.67 7.58% $ 2,397 1.62% 1.89%
1997 10.39 0.516 -- (0.516) -- 10.39 5.17% 1,213 1.57% 1.97%
1996 10.68 0.503 (0.291) (0.502) -- 10.39 2.12% 698 1.55% 1.95%
1995(2) 10.03 0.338 0.738 (0.333) (0.093) 10.68 10.86%* 325 1.55%* 1.95%*
RATIO OF
NET INVESTMENT
RATIO OF INCOME TO
NET INVESTMENT AVERAGE
INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------
- ----------------------
LIMITED TERM BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C>
1998 5.57% 5.38% 142%
1997 5.79% 5.64% 64%
1996 5.41% 5.26% 51%
1995 5.44% 5.29% 36%
1994 4.92% 4.92% 47%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (1) 5.79% 5.64% 142%
1997 5.77% 5.62% 64%
1996 5.39% 5.24% 51%
1995 5.46% 5.31% 36%
1994 4.92% 4.66% 47%
- ----------------------
INTERMEDIATE BOND FUND
- ----------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 5.60% 5.42% 178%
1997 6.07% 5.92% 66%
1996 5.70% 5.55% 35%
1995 5.89% 5.74% 37%
1994 5.53% 5.53% 39%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 5.59% 5.44% 178%
1997 6.06% 5.91% 66%
1996 5.54% 5.39% 35%
1995 5.87% 5.72% 37%
1994 5.51% 5.35% 39%
- --------------------
GOVERNMENT BOND FUND
- --------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 5.60% 5.20% 220%
1997 5.99% 5.59% 144%
1996 5.75% 5.35% 16%
1995(3) 6.00%* 5.60%* 28%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 4.65% 4.38% 220%
1997 5.07% 4.67% 144%
1996 4.89% 4.49% 16%
1995(2) 5.05%* 4.65%* 28%
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Ceased operations March 29, 1998.
(2) Commencement of operations for this class April 19, 1995.
(3) Commencement of operations for this class April 5, 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.
75
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET -------------------------------------------------------- NET NET OF EXPENSES
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS
- ------------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- -----------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $10.31 0.449 0.166 (0.450) (0.035) $10.44 6.10% $243,606 0.79% 0.97%
1997 10.22 0.463 0.089 (0.462) -- 10.31 5.55% 237,096 0.78% 0.93%
1996 10.24 0.419 (0.021) (0.418) -- 10.22 4.01% 243,137 0.78% 0.93%
1995 9.21 0.428 1.030 (0.428) -- 10.24 16.09% 43,373 0.72% 0.94%
1994 10.33 0.440 (1.100) (0.440) (0.020) 9.21 (6.53%) 41,365 0.65% 0.77%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $10.31 0.454 0.171 (0.450) (0.035) $10.45 6.19% $ 7,899 0.79% 0.94%
1997 10.21 0.468 0.093 (0.461) -- 10.31 5.65% 7,826 0.79% 0.94%
1996 10.23 0.415 (0.018) (0.417) -- 10.21 4.01% 8,185 0.79% 0.94%
1995 9.20 0.428 1.029 (0.427) -- 10.23 16.10% 8,649 0.73% 0.95%
1994 10.32 0.440 (1.100) (0.440) (0.020) 9.20 (6.56%) 7,481 0.66% 0.80%
- ----------------------------
VIRGINIA MUNICIPAL BOND FUND
- ----------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $10.44 0.468 0.267 (0.468) (0.026) $10.68 7.19% $ 29,252 0.69% 1.10%
1997 10.28 0.475 0.168 (0.475) (0.008) 10.44 6.46% 20,044 0.69% 1.09%
1996 10.40 0.465 (0.120) (0.465) -- 10.28 3.48% 15,911 0.71% 1.11%
1995 (1) 10.00 0.309 0.445 (0.310) (0.044) 10.40 7.67%* 6,247 0.71%* 1.11%*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $10.48 0.367 0.276 (0.367) (0.026) $10.73 6.24% $ 3,697 1.64% 1.92%
1997 10.31 0.387 0.176 (0.385) (0.008) 10.48 5.58% 1,476 1.60% 2.00%
1996 10.43 0.378 (0.121) (0.377) -- 10.31 2.58% 787 1.57% 1.97%
1995 (2) 10.06 0.237 0.409 (0.232) (0.044) 10.43 6.51%* 628 1.57%* 1.97%*
- ----------------------------
MARYLAND MUNICIPAL BOND FUND
- ----------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $ 9.95 0.416 0.270 (0.416) -- $10.22 7.03% $ 19,115 0.62% 1.15%
1997 9.76 0.426 0.190 (0.426) -- 9.95 6.50% 11,461 0.63% 1.16%
1996 (3) 10.00 0.309 (0.240) (0.309) -- 9.76 1.07%* 5,808 0.71%* 1.36%*
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $ 9.96 0.325 0.281 (0.326) -- $10.24 6.17% $ 3,246 1.57% 1.96%
1997 9.76 0.338 0.199 (0.337) -- 9.96 5.64% 561 1.54% 2.00%
1996 (4) 9.53 0.200 0.226 (0.196) -- 9.76 7.67%* 113 1.55%* 2.20%*
- ----------
VALUE FUND
- ----------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $16.55 0.093 1.638 (0.095) (3.085) $15.10 13.64% $577,042 1.03% 1.21%
1997 13.39 0.137 3.237 (0.145) (0.070) 16.55 25.41% 590,824 1.02% 1.17%
1996 11.60 0.166 2.380 (0.165) (0.591) 13.39 22.68% 553,648 1.02% 1.17%
1995 10.73 0.245 2.619 (0.262) (1.732) 11.60 28.76% 220,386 1.02% 1.17%
1994 11.38 0.200 (0.240) (0.190) (0.420) 10.73 (0.49%) 166,713 1.01% 1.01%
RATIO OF
NET INVESTMENT
RATIO OF INCOME TO
NET INVESTMENT AVERAGE
INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------
- -----------------------------------------
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
- -----------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 4.33% 4.15% 24%
1997 4.57% 4.42% 30%
1996 4.35% 4.20% 25%
1995 4.34% 4.12% 28%
1994 4.48% 4.36% 24%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 4.33% 4.18% 24%
1997 4.56% 4.41% 30%
1996 4.12% 3.97% 25%
1995 4.33% 4.11% 28%
1994 4.47% 4.33% 24%
- ----------------------------
VIRGINIA MUNICIPAL BOND FUND
- ----------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 4.41% 4.00% 28%
1997 4.65% 4.25% 39%
1996 4.61% 4.21% 24%
1995 (1) 4.61%* 4.21%* 35%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 3.46% 3.18% 28%
1997 3.73% 3.33% 39%
1996 3.73% 3.33% 24%
1995 (2) 3.76%* 3.36%* 35%
- ----------------------------
MARYLAND MUNICIPAL BOND FUND
- ----------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 4.11% 3.58% 12%
1997 4.38% 3.85% 5%
1996 (3) 4.30%* 3.65%* 9%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 3.16% 2.77% 12%
1997 3.43% 2.97% 5%
1996 (4) 3.42%* 2.77%* 9%
- ----------
VALUE FUND
- ----------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 0.63% 0.45% 71%
1997 0.92% 0.77% 100%
1996 1.38% 1.23% 82%
1995 2.16% 2.01% 175%
1994 1.82% 1.82% 116%
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commencement of operations for this class April 5, 1995
(2) Commencement of operations for this class April 17, 1995
(3) Commencement of operations for this class March 1, 1996.
(4) 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.
76
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET -------------------------------------------------------- NET NET OF EXPENSES
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------------
VALUE FUND (CONTINUED)
- ----------------------
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $16.64 0.096 1.655 (0.096) (3.085) $15.21 13.69% $ 34,434 1.03% 1.18%
1997 13.47 0.136 3.248 (0.143) (0.070) 16.64 25.42% 28,112 1.03% 1.18%
1996 11.66 0.169 2.396 (0.164) (0.591) 13.47 22.63% 17,997 1.03% 1.18%
1995 10.78 0.250 2.623 (0.261) (1.732) 11.66 28.71% 12,633 1.03% 1.18%
1994 11.42 0.180 (0.220) (0.180) (0.420) 10.78 (0.45%) 8,115 1.02% 1.04%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $16.59 (0.007) 1.642 -- (3.085) $15.14 12.78% $ 25,656 1.78% 2.03%
1997 13.44 0.037 3.234 (0.051) (0.070) 16.59 24.63% 13,269 1.73% 2.09%
1996 11.64 0.091 2.384 (0.084) (0.591) 13.44 21.81% 5,131 1.68% 2.03%
1995 (1) 11.11 0.120 1.618 (0.136) (1.072) 11.64 15.78%* 2,086 1.68%* 2.03%*
- -------------------------
CAPITAL APPRECIATION FUND
- -------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $15.96 (0.018) 2.780 (0.007) (0.935) $17.78 18.59% $124,182 1.03% 1.21%
1997 13.58 0.037 3.005 (0.041) (0.621) 15.96 23.71% 99,364 1.02% 1.17%
1996 10.87 0.043 2.709 (0.042) -- 13.58 25.38% 32,983 1.10% 1.25%
1995 10.17 0.043 2.035 (0.046) (1.332) 10.87 20.74% 19,592 1.10% 1.25%
1994 9.79 0.010 0.380 (0.010) -- 10.17 4.13% 12,869 1.05% 1.05%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $15.80 (0.016) 2.747 (0.006) (0.935) $17.59 18.58% $ 11,136 1.03% 1.18%
1997 13.44 0.038 2.983 (0.040) (0.621) 15.80 23.80% 7,900 1.03% 1.18%
1996 10.76 0.043 2.677 (0.040) -- 13.44 25.34% 4,870 1.11% 1.26%
1995 10.08 0.044 2.013 (0.045) (1.332) 10.76 20.72% 3,261 1.11% 1.26%
1994 9.74 0.010 0.340 (0.010) -- 10.08 3.70% 1,509 1.06% 1.18%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $15.77 (0.077) 2.642 -- (0.935) $17.40 17.49% $ 4,841 1.97% 2.02%
1997 (2) 15.21 (0.016) 0.580 (0.004) -- 15.77 27.07% 432 1.93%* 2.07%*
- -------------------
SPECIAL EQUITY FUND
- -------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $16.45 (0.031) (2.013) -- (2.176) $12.23 (13.77%)$ 90,311 1.04% 1.22%
1997 13.73 (0.009) 3.114 (0.005) (0.380) 16.45 23.28% 112,403 1.01% 1.16%
1996 12.12 0.050 1.926 (0.053) (0.313) 13.73 16.44% 77,931 1.04% 1.19%
1995 10.56 0.100 1.928 (0.108) (0.360) 12.12 20.07% 54,221 1.04% 1.19%
1994 12.76 0.030 (0.460) (0.020) (1.750) 10.56 (4.74%) 43,640 1.03% 1.03%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $16.45 (0.027) (2.027) -- (2.176) $12.22 (13.84%)$ 4,973 1.04% 1.19%
1997 13.72 (0.011) 3.126 (0.005) (0.380) 16.45 23.38% 5,892 1.02% 1.17%
1996 12.12 0.052 1.911 (0.050) (0.313) 13.72 16.34% 4,660 1.05% 1.20%
1995 10.56 0.100 1.927 (0.107) (0.360) 12.12 20.06% 4,693 1.05% 1.20%
1994 12.76 0.030 (0.460) (0.020) (1.750) 10.56 (4.76%) 3,436 1.04% 1.10%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $16.18 (0.084) (2.050) -- (2.176) $11.87 (14.67%)$ 2,701 1.98% 2.03%
1997 13.62 (0.063) 3.002 -- (0.380) 16.18 22.22% 2,133 1.93% 2.08%
1996 12.08 (0.043) 1.899 (0.003) (0.313) 13.62 15.47% 955 1.90% 2.05%
1995 (3) 10.61 0.007 1.501 (0.038) -- 12.08 14.22%* 554 1.90%* 2.05%*
RATIO OF
NET INVESTMENT
RATIO OF INCOME TO
NET INVESTMENT AVERAGE
INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------
- ----------------------
VALUE FUND (CONTINUED)
- ----------------------
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C>
1998 0.63% 0.48% 71%
1997 0.89% 0.74% 100%
1996 1.35% 1.20% 82%
1995 2.14% 1.99% 175%
1994 1.81% 1.79% 116%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (0.13%) (0.38%) 71%
1997 0.15% (0.20%) 100%
1996 0.71% 0.36% 82%
1995 (1) 1.13%* 0.78%* 175%
- -------------------------
CAPITAL APPRECIATION FUND
- -------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (0.11%) (0.29%) 39%
1997 0.27% 0.12% 123%
1996 0.37% 0.22% 86%
1995 0.40% 0.25% 470%
1994 0.17% 0.17% 271%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (0.11%) (0.26%) 39%
1997 0.27% 0.12% 123%
1996 0.36% 0.21% 86%
1995 0.39% 0.24% 470%
1994 0.16% 0.04% 271%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (1.08%) (1.13%) 39%
1997 (2) (0.87%)* (1.01%)* 123%
- -------------------
SPECIAL EQUITY FUND
- -------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (0.21%) (0.39%) 231%
1997 (0.07%) (0.22%) 148%
1996 0.39% 0.24% 98%
1995 0.90% 0.75% 81%
1994 0.32% 0.32% 117%
INVESTORS CLASS A (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (0.21%) (0.36%) 231%
1997 (0.08%) (0.23%) 148%
1996 0.40% 0.25% 98%
1995 0.89% 0.74% 81%
1994 0.31% 0.25% 117%
INVESTORS CLASS B (**)
FOR THE YEARS ENDED NOVEMBER 30,:
1998 (1.15%) (1.20%) 231%
1997 (1.00%) (1.15%) 148%
1996 (0.47%) (0.62%) 98%
1995 (3) (0.04%)* (0.19%)* 81%
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commencement of operations for this class April 19, 1995.
(2) Commencement of operations for this class September 2, 1997.
(3) Commencement of operations for this class April 5, 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.
77
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CRESTFUNDS, INC.
For a Share Outstanding Throughout the Year
INVESTMENT ACTIVITIES DISTRIBUTIONS RATIO
NET -------------------------------------------------------- NET NET OF EXPENSES
ASSET NET REALIZED ASSET ASSETS, RATIO TO AVERAGE
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES NET ASSETS
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE EXCLUDING
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS FEE WAIVERS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------
LIFE VISION MAXIMUM GROWTH PORTFOLIO
- ------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $ 10.65 0.025 0.670 (0.025) -- $11.32 6.53% $16,230 0.25% 0.66%
1997(1) 10.00 0.032 0.650 (0.032) -- 10.65 6.82% 13,712 0.25%* 0.73%*
- ---------------------------------------
LIFE VISION GROWTH AND INCOME PORTFOLIO
- ---------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $ 10.51 0.183 0.561 (0.184) (0.010) $11.06 7.12% $19,042 0.25% 0.59%
1997(1) 10.00 0.091 0.506 (0.087) -- 10.51 5.97% 22,521 0.25%* 0.59%*
- ------------------------------
LIFE VISION BALANCED PORTFOLIO
- ------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 $ 10.46 0.239 0.579 (0.240) (0.028) $11.01 7.90% $93,211 0.25% 0.42%
1997(1) 10.00 0.116 0.454 (0.110) -- 10.46 5.70% 89,442 0.25%* 0.42%*
RATIO OF
NET INVESTMENT
RATIO OF INCOME TO
NET INVESTMENT AVERAGE
INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS RATE
- ------------------------------------------
- ------------------------------------
LIFE VISION MAXIMUM GROWTH PORTFOLIO
- ------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 0.23% (0.18)% 75%
1997(1) 0.72%* 0.24%* 34%
- ---------------------------------------
LIFE VISION GROWTH AND INCOME PORTFOLIO
- ---------------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 1.68% 1.34% 57%
1997(1) 2.11%* 1.77%* 25%
- ------------------------------
LIFE VISION BALANCED PORTFOLIO
- ------------------------------
TRUST CLASS
FOR THE YEARS ENDED NOVEMBER 30,:
1998 2.21% 2.04% 52%
1997(1) 2.66%* 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.
78
<PAGE>
NOTES TO FINANCIAL STATEMENTS CRESTFUNDS, INC.
November 30, 1998
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 security 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, equalization, and other distribution classes, which for
tax purposes have been used to offset net short-term capital gains, have
been reclassified to the following accounts:
ACCUMULATED UNDISTRIBUTED
PAID-IN- REALIZED NET INVESTMENT
CAPITAL GAIN (LOSS) INCOME
FUND (000) (000) (000)
------------------ --------- ----------- --------------
Cash Reserve $ 2 $ 1 $ (3)
U.S. Treasury 1 -- (1)
Tax Free Money 2 (1) (1)
Limited Term Bond -- 1 (1)
Intermediate Term Bond (1) 3 (2)
Government Bond -- (2) 2
Virginia Intermediate
Municipal Bond -- 2 (2)
Virginia Municipal Bond -- (1) 1
Value 3 (100) 97
Capital Appreciation (97) (121) 218
Special Equity (278) -- 278
79
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) CRESTFUNDS, INC.
November 30, 1998
CLASSES--Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/unrealized gains and losses are allocated to
the respective classes on the basis of the relative daily net assets.
SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Costs used in determining realized gains and losses on the sale of
investment securities are those of the specific securities sold adjusted
for the accretion and amortization of purchase discounts and premiums
during the respective holding periods. Interest income is recorded on the
accrual basis; dividend income is recorded on the ex-dividend date.
REPURCHASE AGREEMENTS--Each Fund, with the exception of Tax Free Money
Fund, Virginia Intermediate Municipal Bond Fund, 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.
On July 20, 1998 it was announced that Crestar Financial Corporation
("Crestar"), the parent of Crestar Bank which is the parent of Crestar
Asset Management Company ("CAMCO"), the Funds' investment adviser, and
SunTrust Banks, Inc. ("SunTrust"), had signed a definitive agreement for
the acquisition of Crestar by SunTrust. The acquisition of Crestar by
SunTrust was completed on December 31, 1998. It is currently the intention
of Crestar and SunTrust to file an exemptive application with the
Securities and Exchange Commission to permit the combination of certain of
the CrestFunds with certain of the STI Classic Funds (mutual funds that are
served by investment advisers that are subsidiaries of SunTrust). Any
combination of CrestFunds and STI Classic Funds would require the approval
of the board of directors and the shareholders of the CrestFunds.
ADMINISTRATION AND DISTRIBUTION FEES--SEI Investments Mutual Fund Services
(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
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) CRESTFUNDS, INC.
November 30, 1998
Funds. The Administrator has voluntarily agreed to waive a portion of its
fee for Government Bond Fund and Virginia 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 the period ending November 30, 1998.
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 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
Shares 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%.
On July 20, 1998, the CrestFunds, Inc. adopted a shareholder service plan
(the "Plan") for Trust Class shares of the following Portfolios of the
Fund: Limited Term Bond Fund; Intermediate Bond Fund; Government Bond Fund;
Maryland Municipal Bond Fund; Virginia Intermediate Municipal Bond Fund;
Virginia Municipal Bond Fund; (the "Bond Funds"), Value Fund; Capital
Appreciation Fund; and Special Equity Fund (the "Equity Funds" and,
together with the Bond Funds, the "Portfolios").
Under the Plan, a Portfolio may pay the Distributor a negotiated fee at a
rate of up to .25% annually of the average daily net assets of such
Portfolio attributable to the Shares that are subject to the arrangement in
return for provision of a broad range of shareholder and administrative
services. The Distributor has agreed to waive a portion of its shareholder
service plan for trust class shares in order to limit shareholder service
fees to .05% for bond funds and .10% for equity funds.
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
81
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded) CRESTFUNDS, INC.
November 30, 1998
4. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale of securities,
including U.S. Government securities, other than temporary cash investments,
during the period ended November 30, 1998, for each Fund is as follows:
PURCHASES SALES
(000) (000)
---------- ----------
Limited Term Bond ................. $113,666 $106,658
Intermediate Bond ................. 532,683 524,326
Government Bond ................... 115,418 99,778
Virginia Intermediate Municipal Bond 56,454 59,640
Virginia Municipal Bond ........... 17,674 7,473
Maryland Municipal Bond ........... 9,650 1,903
Value ............................. 420,448 508,508
Capital Appreciation .............. 57,819 47,657
Special Equity .................... 262,653 267,457
Maximum Growth .................... 15,142 11,930
Growth and Income ................. 12,061 14,927
Balanced .......................... 54,310 48,445
At November 30, 1998, 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,
1998, for each Fund is as follows:
NET
APPRECIATION DEPRECIATION APPRECIATION
(000) (000) (000)
------------ ------------ ------------
Limited Term Bond .. $ 1,137 $ (83) $ 1,054
Intermediate Bond .. 5,628 (531) 5,097
Government Bond .... 942 (76) 866
Virginia Intermediate
Municipal Bond .. 10,734 (156) 10,578
Virginia Municipal
Bond ............ 1,091 (9) 1,082
Maryland Municipal
Bond ............ 692 -- 692
Value .............. 154,168 (16,669) 137,499
Capital Appreciation 45,367 (4,496) 40,871
Special Equity ..... 12,394 (5,630) 6,764
Maximum Growth ..... 1,232 (718) 514
Growth and Income .. 1,168 (745) 423
Balanced ........... 5,258 (2,552) 2,706
The Funds had capital losses carryforward at November 30, 1998, to the extent
provided in the regulations for Federal income tax as follows:
CAPITAL LOSS
CARRYOVER EXPIRES
11/30/98 2002
------------ ----------
Cash Reserve ....... $ 46,160 $ --
Tax Free ........... 8,746 --
Limited Term Bond .. 1,764,896 671,857
Special Equity ..... 5,969,050 --
Capital Appreciation 1,589,565 --
EXPIRES EXPIRES EXPIRES EXPIRES
2003 2004 2005 2006
---------- ---------- ---------- ------------
Cash Reserve ....... $ -- $ 31,799 $ 14,361 $ --
Tax Free ........... -- -- -- 8,746
Limited Term Bond .. 254,023 555,287 283,729 --
Special Equity ..... -- -- -- 5,969,050
Capital Appreciation -- -- -- 1,589,565
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.
- --------------------------------------------------------------------------------
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 DISTRIBUTION 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 DISTRIBUTION CO. AND CRESTAR BANK ARE NOT AFFILIATED.
- --------------------------------------------------------------------------------
82
<PAGE>
NOTICE TO SHAREHOLDERS OF
THE CRESTFUNDS, INC.
(Unaudited)
For Shareholders that do not have a November 30, 1998 taxable year end, this
notice is for informational purposes only. For shareholders with a November 30,
1998 taxable year end, please consult your tax advisor as to the pertinence of
the notice.
For the fiscal year ended November 30, 1998, each fund has designated the
following items with regard to distributions paid during the year:
<TABLE>
<CAPTION>
(A) (B) (C)
LONG TERM MID TERM ORDINARY
CAPITAL GAINS CAPITAL GAIN INCOME
DISTRIBUTIONS DISTRIBUTION DISTRIBUTIONS
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS)
-------------- -------------- ---------------
<S> <C> <C> <C>
Cash Reserve............................................... 0% 0% 100%
U.S. Treasury.............................................. 0% 0% 100%
Tax Free Money Market...................................... 0% 0% 0%
Limited Term Bond.......................................... 0% 0% 100%
Intermediate Bond.......................................... 0% 0% 100%
Government Bond............................................ 0% 0% 100%
Virginia Intermediate Municipal Bond....................... 0% 7% 0%
Virginia Municipal Bond.................................... 2% 3% 0%
Maryland Municipal Bond.................................... 0% 0% 0%
Value...................................................... 30% 32% 38%
Capital Appreciation....................................... 2% 30% 68%
Special Equity............................................. 26% 31% 43%
Life Vision Maximum Growth................................. 0% 0% 100%
LIFE VISION GROWTH AND INCOME.............................. 0% 0% 100%
Life Vision Balanced....................................... 0% 0% 100%
</TABLE>
<TABLE>
<CAPTION>
(E)
(A+B+C+D)
(D) TOTAL (F)
TAX EXEMPT DISTRIBUTION QUALIFYING
FUND INTEREST (TAX BASIS) DIVIDENDS (1)
---- ----------- ----------- ----------
<S> <C> <C> <C>
Cash Reserve............................................... 0% 100% 0%
U.S. Treasury.............................................. 0% 100% 0%
Tax Free Money Market...................................... 100% 100% 0%
Limited Term Bond.......................................... 0% 100% 0%
Intermediate Bond.......................................... 0% 100% 0%
Government Bond............................................ 0% 100% 0%
Virginia Intermediate Municipal Bond....................... 93% 100% 0%
Virginia Municipal Bond.................................... 95% 100% 0%
Maryland Municipal Bond.................................... 100% 100% 0%
Value...................................................... 0% 100% 97%
Capital Appreciation....................................... 0% 100% 100%
Special Equity............................................. 0% 100% 46%
Life Vision Maximum Growth................................. 0% 100% 86%
Life Vision Growth and Income.............................. 0% 100% 48%
Life Vision Balanced....................................... 0% 100% 48%
<FN>
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
* Items (A), (B), (C) and (D) are based on a percentage of each fund's
total distributions.
</FN>
</TABLE>
83
<PAGE>
NOTES
<PAGE>
CREST
-----
FUNDS
A FAMILY OF MUTUAL FUNDS
MANAGED BY
CRESTAR ASSET MANAGEMENT COMPANY
