<PAGE>
PRESIDENT'S MESSAGE
December 1996
Dear Shareholder:
We are very pleased to present you with the annual report for the Republic
Opportunity Fund for the period ending October 31, 1996. In this report, we have
provided you with a letter from the Investment Adviser, Republic National Bank
of New York.
We hope you find this letter and accompanying financial summaries
informative and as always we would be delighted to hear from you to answer any
questions you might have or provide you with additional information.
Audited financial statements and portfolio holdings for the Fund for the
period ending October 31, 1996 also follow. We look forward to servicing your
financial needs and appreciate your continued support.
Respectfully submitted,
/s/ George O. Martinez
George O. Martinez
President
<PAGE>
REPUBLIC OPPORTUNITY FUND
ANNUAL REPORT -- OCTOBER 31, 1996
TABLE OF CONTENTS
PAGE
----
President's Message ................................................ 1
Letter to Shareholders from Investment Adviser ..................... 3
Performance Graph .................................................. 4
REPUBLIC OPPORTUNITY FUND
Statement of Assets and Liabilities ................................ 5
Statement of Operations ............................................ 6
Statement of Changes in Net Assets ................................. 7
Financial Highlights ............................................... 8
Notes to Financial Statements ...................................... 9
Independent Auditors' Report ....................................... 12
REPUBLIC SMALL CAP EQUITY PORTFOLIO
Schedule of Investments ............................................ 13
Statement of Assets and Liabilities ................................ 22
Statement of Operations ............................................ 23
Statement of Changes in Net Assets ................................. 24
Financial Highlights ............................................... 24
Notes to Financial Statements ...................................... 25
Independent Auditors' Report ....................................... 28
<PAGE>
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
December 1996
DEAR SHAREHOLDER:
We are pleased to present you with the annual report for the Republic
Opportunity Fund (the "Fund") for the fiscal year ended October 31, 1996.
For the period from inception* to October 31, 1996, the Fund returned 4.64%,
outperforming the 2.46% gain of the Russell 2000 Index and 2.90% gain of the
Lipper Small Company Fund Index.
The US Equity market stumbled momentarily at the beginning of September
following a Federal Reserve statement that it would consider a
higher-than-expected interest rate increase at its next committee meeting unless
clear signs of an economic slowdown emerged. Economic signals were mixed as
strength was reported in housing, employment, wages, and consumer confidence,
while weakness was evident in automobiles, durable goods, and corporate earnings
of such companies as Motorola and AT&T. This uncertainty eased market fears of
any major Fed action, and markets rallied sharply through the remainder of the
month, before giving back part of the advance in October.
The Fund's strategy is based on the belief that we are in an earnings-driven
market, and that individual stock selection will be unusually important in
producing above average portfolio returns. With market volatility expected to
continue in the months ahead; the portfolio focus is on well-positioned and
attractively valued growth stocks that can perform well regardless of the
economic backdrop. As of October 31, 1996, the Small Cap Equity Portfolio in
which the Fund invests all of its investable assets, was broadly diversified in
176 company securities, with an emphasis on Technology, Healthcare and Leisure
stocks. We are confident that the Fund is positioned to deliver strong relative
performance as the market environment becomes more challenging in the months
ahead.
Audited financial statements and portfolio holdings as of October 31, 1996
follow. We appreciate your continued support.
Sincerely,
Republic National Bank of New York
Lipper Small Company Fund Index: an equally weighted composite composed of
the 30 largest mutual funds within this investment objective.
Russell 2000 Index: a broad index of equity securities of small
capitalization U.S. companies, with an average market capitalization of
$421 million as of July 31, 1996.
The performance data quoted represents past performance and is not an
indication of future results. The investment return and Net Asset Value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than the original cost.
The total return set forth may reflect the waiver of a portion of the fund's
advisory or administrative fees for certain periods since the inception
date. In such instances, and without waiver of fees, total return would have
been lower.
*Inception date for performance purposes is September 3, 1996. The
performance stated is that of the Republic Small Cap Equity Portfolio,
adjusted to reflect the fees and expenses of the Fund. The Fund's inception
date was September 23, 1996. Total return since inception of the Fund was
(2.00%).
<PAGE>
COMPARISON OF $10,000 INVESTMENT IN THE
REPUBLIC OPPORTUNITY FUND AND
RUSSELL 2000 INDEX
- --------------------------------------------------------------------------------
- --------------------------
TOTAL RETURN*
- --------------------------
Inception
to 10/31/96
- --------------------------
4.64%
- --------------------------
REPUBLIC OPPORTUNITY FUND RUSSELL 2000 INDEX
9/ 4/96 10.00 10.00
10/31/96 10.46 10.25
Past performance is not predictive of future performance
- --------------------------------------------------------------------------------
BISYS FUND SERVICES, INC. IS THE DISTRIBUTOR OF THE REPUBLIC OPPORTUNITY FUND
(THE "FUND").
REPUBLIC NATIONAL BANK OF NEW YORK ("REPUBLIC") SERVES AS INVESTMENT MANAGER AND
MAKES THE FUND AVAILABLE SOLELY IN ITS CAPACITY AS SHAREHOLDER SERVICING AGENT
FOR CUSTOMERS. INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, REPUBLIC OR ANY OTHER BANK. SHARES OF THE FUND ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER GOVERNMENTAL AGENCY.
PERFORMANCE DATA QUOTED HEREIN REPRESENTS PAST PERFORMANCE. PLEASE REMEMBER THAT
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE PERFORMANCE. FUND RETURNS ARE NET
OF FEES. ALL RETURNS ASSUME REINVESTMENT OF INCOME AND CAPITAL GAINS AND REFLECT
THE REIMBURSEMENT OF CERTAIN FUND EXPENSES AS DESCRIBED IN THE PROSPECTUS.
MORE COMPLETE INFORMATION ABOUT THE FUND, INCLUDING MANAGEMENT FEES AND OTHER
EXPENSES, IS PROVIDED IN THE PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE
INVESTING. YOU MAY OBTAIN ADDITIONAL COPIES OF THE PROSPECTUS BY CALLING
1-800-782-8183.
*INCEPTION DATE FOR PERFORMANCE PURPOSES IS SEPTEMBER 3, 1996. THE PERFORMANCE
STATED IS THAT OF THE REPUBLIC SMALL CAP EQUITY PORTFOLIO, ADJUSTED TO REFLECT
THE FEES AND EXPENSES OF THE FUND. THE FUND'S INCEPTION DATE WAS SEPTEMBER 23,
1996. TOTAL RETURN SINCE INCEPTION OF THE FUND WAS (2.00%).
<PAGE>
REPUBLIC OPPORTUNITY FUND
STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 1996
ASSETS:
Investment in Republic Small Cap Equity Portfolio
("Portfolio"), at value (Note 1) ....................... $3,169,667
Unamortized organization expenses ........................ 26,399
Receivable for Fund shares sold .......................... 18,304
-----------
Total Assets ....................................... 3,214,370
-----------
LIABILITIES:
Administration fee payable (Note 3) ...................... 137
Organization expenses payable ............................ 26,399
Audit fee payable ........................................ 2,000
Other accrued expenses ................................... 1,871
-----------
Total Liabilities .................................. 30,407
-----------
NET ASSETS:
Applicable to 324,745 shares of beneficial interest
outstanding (par value $0.001, unlimited number of
authorized shares) ...................................... $3,183,963
==========
REPRESENTED BY:
Paid-in capital .......................................... $3,300,560
Undistributed net investment loss ........................ --
Accumulated net realized gain from Portfolio ............. 3,916
Net unrealized depreciation from Portfolio ............... (120,513)
-----------
Net Assets ......................................... $3,183,963
==========
Net Asset Value, Offering and Redemption Price Per Share . $9.80
=====
See notes to financial statements
<PAGE>
REPUBLIC OPPORTUNITY FUND
STATEMENT OF OPERATIONS -- FOR THE PERIOD ENDED OCTOBER 31, 1996*
NET INVESTMENT INCOME FROM PORTFOLIO (NOTE 2):
Interest income ................................................. $ 2,416
Dividend income ................................................. 234
Allocated expenses .............................................. (2,615)
----------
Net investment income from Portfolio ........................ 35
EXPENSES (NOTE 2):
Administration fees (Note 3) ...................... $ 1,446
Audit fees ........................................ 2,000
Fund accounting fees (Note 3) ..................... 1,000
Reports to shareholders ........................... 1,029
Legal fees ........................................ 842
---------
Total expenses .................................. 6,317
Reimbursement of expenses ....................... (3,000)
Voluntary fee reductions (Note 3) ............... (2,309)
---------
Net expenses ................................................ 1,008
----------
NET INVESTMENT LOSS ............................................. (973)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO:
Net realized gain from Portfolio ................................ 3,916
Net unrealized depreciation from Portfolio ...................... (120,513)
----------
Net realized and unrealized loss from Portfolio ................. (116,597)
----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $(117,570)
=========
*For the period September 23, 1996 (commencement of operations) to October 31,
1996.
See notes to financial statements
<PAGE>
REPUBLIC OPPORTUNITY FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD
SEPTEMBER 23, 1996
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1996
----------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment loss ...................................... $ (973)
Net realized gain from Portfolio ......................... 3,916
Net unrealized depreciation from Portfolio ............... (120,513)
----------
Net decrease in net assets resulting from operations . (117,570)
----------
CAPITAL TRANSACTIONS:
Proceeds from sales of shares ............................ 3,301,433
---------
Net increase in net assets from capital share
transactions ....................................... 3,301,433
----------
TOTAL INCREASE IN NET ASSETS ............................. 3,183,863
NET ASSETS:
Beginning of period .................................. 100
----------
End of period ........................................ $3,183,963
==========
ANALYSIS OF FUND SHARE TRANSACTIONS:
Shares sold .............................................. 324,745
----------
End of period ............................................ 324,745
==========
See notes to financial statements
<PAGE>
REPUBLIC OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
FOR THE PERIOD
SEPTEMBER 23, 1996
(COMMENCEMENT
OR OPERATIONS) TO
OCTOBER 31, 1996
----------------
NET ASSET VALUE, BEGINNING OF PERIOD ..................... $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .................................... 0.00
Net realized and unrealized loss from Portfolio ........ (0.20)
------
Total decrease from investment operations ............ (0.20)
------
LESS DIVIDENDS:
Net investment income .................................. --
------
Net asset value, end of period ......................... $ 9.80
======
TOTAL RETURN ............................................. (2.00%)(b)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000) ...................... $3,184 (c)
Ratio of expenses to average net assets ................ 1.22% (c)
Ratio of net investment loss to average net assets ..... (0.28%)(c)
Ratio of expenses to average net assets (a)............. 2.90% (c)
Ratio of net investment loss to average net assets (a).. (2.06%)(c)
- ------------------------------------------------------------------------------
(a) During the period, certain fees were voluntarily reduced and expenses
reimbursed. If such voluntary fee reductions and expense reimbursements had
not occurred, the ratios would have been as indicated.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
<PAGE>
REPUBLIC OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 1996
1. ORGANIZATION. Republic Opportunity Fund (the "Fund") is a diversified
separate series of the Republic Funds (the "Trust"), a Massachusetts
business trust organized on April 22, 1987, which currently consists of
seven funds, each of which has different and distinct investment objectives
and policies. The Fund commenced operations on September 23, 1996. The
financial statements for the other six funds are presented separately. The
Trust is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a no load open-end management investment company.
The Fund's investment objective is to seek long-term growth of capital
by investing, under normal market conditions at least 80% of its assets in
equity securities of small and medium sized companies that are early in
their life cycle but which may have potential to become major enterprises
(emerging growth companies). The Fund invests all of its investable assets
in the Republic Small Cap Equity Portfolio (the "Portfolio"). The Portfolio
is a diversified open-end management investment company which has the same
objective as the Fund. The value of such investment reflects the Fund's
proportionate interest (2.64% as of October 31, 1996) in the net assets of
the Portfolio. The performance of the Fund is directly affected by the
performance of the Portfolio. The financial statements of the Portfolio,
including the schedule of investments, are included elsewhere in this report
and should be read in conjunction with the Fund's financial statements.
Republic National Bank of New York ("Republic" or the "Manager") acts as
Investment Manager to the Portfolio. MFS Management, Inc., ("MFS") acts as
Sub-Adviser ("Sub Adviser") to the Portfolio. BISYS Fund Services Inc.,
("BISYS") serves as Administrator of the Trust and the Portfolio and as
Distributor and Sponsor ("Sponsor") of the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies followed by the Fund in the preparation of
its financial statements. The policies are in conformity with generally
accepted accounting principles. The preparation of financial statements
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses for the period.
Actual results could differ from those estimates.
SECURITIES VALUATION:
Valuation of securities by the portfolio is discussed in Note 2 of the
Portfolio's Notes to Financial Statements that are included elsewhere in
this report.
SECURITY TRANSACTIONS AND RELATED INCOME:
All the net investment income and realized and unrealized gain and loss of
the Portfolio is allocated pro rata among the Fund and other investors in
the Portfolio each day.
DIVIDENDS TO SHAREHOLDERS:
Dividends substantially equal to all of the Fund's net investment income
earned are distributed to the Fund shareholders of record semi-annually.
Generally, the Fund's net investment income consists of the interest and
dividend income it earns, less expenses. In computing interest income,
premiums are not amortized nor are discounts accrued on long-term debt
securities in the Portfolio, except as required for federal income tax
purposes.
The Funds net realized short-term and long-term capital gains, if any,
are distributed to shareholders annually. Additional distributions are also
made to the Fund's Shareholders to the extent necessary to avoid application
of the 4% non-deductible federal excise tax on certain undistributed income
and net capital gains of regulated investment companies.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. For the period ended October 31, 1996, the Fund reclassified the
effects of certain differences between the financial statement amounts and
distributions determined in accordance with income tax regulations. These
differences increased undistributed net investment income by $973.
Unless a shareholder elects to receive dividends in cash, dividends are
distributed in the form of additional shares of the Fund (purchased at their
net asset value without a sales charge).
EXPENSE ALLOCATION:
Expenses incurred by the Trust with respect to any two or more funds in the
Trust are allocated in proportion to the net assets of each fund in the
Trust, except when allocations of direct expenses to each fund can otherwise
be made fairly. Expenses directly attributable to a fund are charged to that
fund. The Fund's share of the Portfolio's expenses are charged against and
reduce the amount of the Fund's investment in the Portfolio.
FEDERAL INCOME TAXES:
The Fund intends to qualify each year as a "regulated investment company"
under Subchapter M of the Internal Revenue Code, as amended, (the "Code").
By so qualifying, the Fund will be exempt from regular federal income taxes
to the extent that it distributes substantially all of its net investment
income and net realized gains to its shareholders.
UNAMORTIZED ORGANIZATION EXPENSES:
The Fund incurred organization expenses in the amount of $26,399. These
costs were deferred and are being amortized by the Fund on a straight-line
basis over the next five fiscal years.
3. RELATED PARTY TRANSACTIONS.
ADMINISTRATION:
Pursuant to an Administrative Services Agreement, BISYS Fund Services, Inc.,
("BISYS") provides the Fund with general office facilities, and supervises
the overall administration of the Fund including, among other
responsibilities, the preparation and filing of all documents required for
compliance by the Fund with applicable laws and regulations and arranging
for the maintenance of books and records of the Fund. For its services to
the Fund, BISYS received from the Fund fees payable monthly equal on an
annual basis to 0.05% of the Fund's average daily net assets; for the period
September 23, 1996 through October 31, 1996 BISYS received $1,446 for its
services of which $1,309 was voluntarily reduced.
FUND ACCOUNTING:
Pursuant to a Fund Accounting Agreement, Investors Bank & Trust Company
("IBT") serves as fund accounting agent to the Fund. For its services to the
Fund, IBT received fees payable monthly equal on an annual basis to $12,000.
For the period September 23, 1996 through October 31, 1996, fees for these
services aggregated $1,000, of which the entire amount was voluntarily
waived.
WAIVER OF EXPENSES:
BISYS and IBT have voluntarily agreed to waive a portion of their fees, and
to the extent necessary, reimburse the Fund for additional expenses during
the period September 23, 1996 through October 31, 1996, expenses of the Fund
were voluntarily limited to no more than 1.55% of the average daily net
assets on an annualized basis. For the period ended October 31, 1996, BISYS
and IBT voluntarily reduced fees and reimbursed expenses aggregating $5,309.
4. INVESTMENT TRANSACTIONS. Additions in the Fund's investment in the
Portfolio amount to $3,286,229.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
Republic Funds:
We have audited the accompanying statement of net assets of Republic
Opportunity Fund (the "Fund"), a portfolio of Republic Funds, as of October 31,
1996 and the related statements of operations and changes in net assets and the
financial highlights for the period from September 23, 1996 (commencement of
operations) to October 31, 1996. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audit 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the 1996 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Republic Opportunity Fund at October 31, 1996, the results of
its operations, the changes in its net assets and the financial highlights for
the period from September 23, 1996 to October 31, 1996 in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
December 20, 1996
<PAGE>
REPUBLIC SMALL CAP EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- OCTOBER 31, 1996
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------- ------ --------
COMMON STOCKS -- 99.8%
ACCOUNTING, AUDITING AND BOOK-KEEPING -- 0.2%
Walsh International ............................... 21,480 $ 187,950
------------
ADVERTISING SERVICES -- 1.3%
Heritage Media Corp. .............................. 97,575 1,488,019
ICT Group, Inc. ................................... 4,030 23,676
------------
1,511,695
------------
AMUSEMENT & RECREATION -- 0.0%
Grand Casinos, Inc. ............................... 10 149
------------
BROADCASTING -- 1.0%
American Radio Systems Corp. ...................... 19,070 581,635
Sinclair Broadcast Group Class A .................. 21,290 649,345
------------
1,230,980
------------
BUILDING-RESIDENT/COMMERCIAL -- 0.2%
CRA Managed Care, Inc. ............................ 4,135 209,851
------------
CABLE & OTHER PAY TV SERVICES -- 0.1%
Young Broadcasting Corp. Class A .................. 6,005 171,143
------------
CHILDERN'S & INFANTS' WEAR STORES -- 1.4%
Gymboree Corp. .................................... 52,395 1,637,344
------------
COMMUNICATIONS EQUIPMENT -- 2.1%
Cable Design Technologies ......................... 11,465 298,090
Glenayre Technologies, Inc. ....................... 88,091 2,268,343
U.S. Satellite Broadcasting Co. ................... 300 4,838
------------
2,571,271
------------
COMMUNICATIONS SERVICES -- 1.2%
Dupont Photomasks, Inc. ........................... 7,415 270,647
Rogers Cantel Mobile Comm Class B ................. 51,400 1,201,475
------------
1,472,122
------------
COMPUTER BUSINESS EQUIPMENT/SERVICES -- 0.7%
Actel Corp. ....................................... 22,000 393,250
Alternative Resources Corp. ....................... 18,770 377,746
HMT Technology Corp. .............................. 4,250 58,969
------------
829,965
------------
COMPUTER & OTHER DATA PROCESSING SERVICE -- 14.7%
ADT Ltd ........................................... 80,700 1,593,825
Altera Corp. ...................................... 6,010 372,620
BISYS Group, Inc. ................................. 20,925 779,456
BMC Software, Inc. ................................ 37,410 3,105,030
Cadence Design Systems, Inc. ...................... 107,813 3,935,175
Catalyst International, Inc. ...................... 23,250 104,625
Computer Sciences Corp. ........................... 19,460 1,444,905
Compuware Corp. ................................... 30,600 1,614,150
DST Systems, Inc. ................................. 10,430 320,723
Dendrite International ............................ 5,970 158,951
E Trade Group, Inc. ............................... 1,080 12,015
Imnet Systems, Inc. ............................... 9,160 128,240
Intersolv, Inc. ................................... 18,900 153,563
Mecon, Inc. ....................................... 30,100 579,425
SPS Transaction Services Corp. .................... 46,490 743,840
Softquad International, Inc. ...................... 13,864 65,854
Sterling Software ................................. 12,400 403,000
Symantec .......................................... 43,420 472,193
Technology Solutions Company ...................... 37,900 1,473,363
Xionics Document Tech, Inc. ....................... 12,300 156,825
------------
17,617,778
------------
COMPUTER & OFFICE EQUIPMENT -- 1.6%
Global Directmail Corp. ........................... 7,150 352,137
Office Depot ...................................... 70,775 1,388,959
U.S. Robotics Corp. ............................... 670 42,127
Uromed Corp. ...................................... 10,535 106,666
------------
1,889,889
------------
CONSUMER SERVICES -- 3.6%
American List Corp. ............................... 11,770 323,675
Cabletron Systems ................................. 63,845 3,982,332
------------
4,306,007
------------
COMPUTER SOFTWARE AND SERVICES -- 1.8%
Adobe Systems, Inc. ............................... 43,515 1,506,707
BDM International, Inc. ........................... 13,980 702,495
------------
2,209,202
------------
DRUGS -- 0.0%
NCS Healthcare, Inc. Class A ...................... 720 21,870
------------
DRUG STORES & PROPRIETARY STORES -- 2.2%
Owen Healthcare, Inc. ............................. 89,905 1,337,337
Thrifty Payless Holdings Class B .................. 57,845 1,236,437
------------
2,573,774
------------
EATING & DRINKING PLACES -- 1.0%
Apple South, Inc. ................................. 13,830 162,503
Outback Steakhouse, Inc. .......................... 18,785 435,577
Sonic Corp. ....................................... 25,785 586,609
------------
1,184,689
------------
ELECTRONICS -- 2.4%
HCIA, Inc. ........................................ 40,400 1,121,100
PMT Services ...................................... 17,700 354,000
LSI Logic ......................................... 53,430 1,415,895
------------
2,890,995
------------
ELECTRONIC COMPONENTS & ACESSORIES -- 1.9%
Atmel Corp. ....................................... 6,290 159,608
Burr -- Brown Corp. ............................... 26,175 556,219
Linear Technology Corp. ........................... 12,735 426,622
Microchip Technology, Inc. ........................ 9,355 339,118
VLSI Technology ................................... 17200 296,700
Xilinx, Inc. ...................................... 16,350 535,462
------------
2,313,729
------------
ELECTRONIC AND PROCESSING EQUIPMENT -- 0.4%
Belden, Inc. ...................................... 17,145 492,919
------------
ENVIRONMENTAL MANAGEMENT -- 1.3%
U.S.A Waste Services, Inc. ........................ 50,246 1,607,872
------------
EOP & OFFICE EQUIPMENT -- 2.8%
Ceridian Corp. .................................... 35,100 1,741,838
Control Data Systems, Inc. ........................ 68,555 1,611,042
------------
3,352,880
------------
FARM & GARDEN MACHINERY & EQUIPMENT -- 0.5%
AgCo Corp. ........................................ 21,580 547,593
------------
FINANCIAL SERVICES -- 5.2%
Amerisource Distribution Corp. .................... 16,600 703,425
Chartwell Leisure, Inc. ........................... 10,175 158,984
Franklin Resources, Inc. .......................... 64,820 4,569,810
Hub Group, Inc. Class A ........................... 50 1,113
Physician Sales & Service ......................... 5,045 107,206
Rural/Metro Corp. ................................. 8,555 312,258
Transaction Systems Archit Class A ................ 9,135 379,103
------------
6,231,899
------------
FIRE, MARINE, CASUALTY & SURETY INSURANCE CAR -- 1.1%
Pacificare Health Systems Class B ................. 18,790 1,319,998
------------
FOOD AND BEVERAGES -- 0.3%
Fine Host Corp. ................................... 26,100 378,450
------------
FOOD CHAINS -- 0.9%
Sybase, Inc. ...................................... 63,746 1,123,524
------------
FOOTWEAR -- 0.6%
Nine West Group, Inc. ............................. 13,430 669,821
------------
FOREIGN -- 3.4%
Analog Devices .................................... 48,455 1,259,830
Applebee's International, Inc. .................... 27,945 681,159
Clear Channel Communications ...................... 16,650 1,215,450
System Software Assoc Inc. ........................ 80,145 936,695
------------
4,093,134
------------
FUNERAL SERVICES -- 0.3%
Equity Corporation International .................. 16,785 386,055
------------
GAMING -- 0.3%
Talbots, Inc. ..................................... 13,000 370,500
------------
HEALTH CARE -- 1.1%
Pacificare Health Systems Class A ................. 17,775 1,195,369
Superior Consultant Holdings ...................... 2,500 61,250
Sterling Healthcare Group ......................... 3,115 54,902
------------
1,311,521
------------
HOSPITALITY -- 4.5%
Doubletree Corp. .................................. 7,640 309,898
HFS, Inc. ......................................... 41,775 3,060,019
Harrah's Entertainment, Inc. ...................... 41,165 689,514
Mirage Resorts, Inc. .............................. 31,095 684,090
Promus Hotel Corp. ................................ 9,885 313,849
Renaissance Hotel Group ........................... 5,985 109,974
Rio Hotel and Casino, Inc. ........................ 6,970 101,065
Sholodge, Inc. .................................... 12,700 168,275
------------
5,436,684
------------
INDUSTRIAL ORGANIC CHEMICALS -- 0.4%
Hanna (M. A.) Co. ................................. 23,645 502,456
------------
INDUSTRIAL SERVICES -- 0.3%
Meta Group, Inc. .................................. 9,480 298,620
------------
INSURANCE -- 0.2%
Healthsource, Inc. ................................ 13,165 161,271
Ris Corp., Inc. Class A ........................... 22,865 114,325
------------
275,596
------------
LIFE, ACCIDENT & HEALTH INSURANCE CARRIERS -- 3.0%
Equitable Of Iowa Companies ....................... 52,200 2,185,875
Loewen Group, Inc. ................................ 21,040 832,466
United Cos Financial Corp. ........................ 30,400 908,200
------------
3,926,541
------------
LODGING & RESTAURANT -- 0.3%
Wyndham Hotel Corp. ............................... 16,250 308,750
------------
MAJ GROUP-EATING & DRINKING PLACES -- 0.1%
TaCo Cabana Class A ............................... 21,420 125,843
------------
MEDICAL & OTHER HEALTH SERVICES -- 2.7%
American Business Information ..................... 35,045 674,616
Compdent Corp. .................................... 18,495 635,766
Coventry Corp. .................................... 24,465 247,708
Genesis Health Ventures, Inc. ..................... 22,115 505,881
Manor Care, Inc. .................................. 545 21,391
Mariner Health Group, Inc. ........................ 4,805 40,843
Pediatric Services of America ..................... 33,660 551,183
Regency Health Services Inc. ...................... 25,450 286,313
Safeguard Health Enterprises ...................... 9,850 177,300
Phymatrix, Inc. ................................... 2,995 49,792
------------
3,190,793
------------
MEN'S & BOY'S FURNISHING -- 0.0%
Mothers Work, Inc. ................................ 4,000 43,250
------------
MICS SVCS INCEDENTAL -- 0.0%
CCC Information Services Group .................... 505 9,469
------------
MISCELLANEOUS BUSINESS SERVICES -- 0.2%
Physician Support Systems ......................... 6,295 108,589
SCB Computer Technology, Inc. ..................... 7,680 157,440
------------
266,029
------------
MISCELLANEOUS FOOD PREPARATIONS &
KINDERED PRODUCE -- 0.6%
Buffetts, Inc. .................................... 65,394 727,508
------------
MISCELLANEOUS FOOD STORES -- 1.3%
General Nutrition Companies ....................... 82,380 1,503,435
------------
MISCELLANEOUS INDUSTRIAL & COMMERCIAL
NACH & EQUIPMENT -- 1.4%
Cognos, Inc. ...................................... 53,070 1,665,071
------------
MISCELLANEOUS SHOPPING GOODS STORES -- 0.8%
Officemax Inc. .................................... 73,923 997,961
------------
MISCELLANEOUS 500 -- 0.8%
Blyth Industries, Inc. ............................ 13,450 522,869
Integrated Living Communities ..................... 15,800 94,800
Polymer Group, Inc. ............................... 1,855 23,651
------------
641,320
------------
MOTOR VEHICLES & EQUIPMENT -- 0.2%
Discount Auto Parts, Inc. ......................... 12,040 261,870
------------
NEWSPAPERS -- 1.7%
Harte-Hanks Communications ........................ 16,300 421,762
Pulitzer Publishing Co. ........................... 25,697 1,631,759
------------
2,053,521
------------
NON STORE RETAILORS -- 0.4%
Micro Warehouse, Inc. ............................. 19,180 441,140
------------
OILS & NATURAL GAS SERVICE AND DRILLING -- 0.3%
Barrett Resources Corp. ........................... 8,210 315,059
------------
OFFICE EQUIPMENT -- 0.1%
BT Office Products International .................. 16,435 135,589
------------
PERSONAL CREDIT INSTITUTIONS -- 0.6%
Advanta Corp. Class B ............................. 14,440 675,070
------------
PERSONAL SERVICES -- 1.3%
Career Horizons, Inc. ............................. 4,225 171,641
Interim Services, Inc. ............................ 34,212 1,368,480
------------
1,540,121
------------
PETREOLEUM & PETREOLEUM PRODUCTS -- 0.1%
National-Oilwell, Inc. ............................ 5,000 116,250
------------
PRINTING -- 0.0%
Xeikon Nv ADR ..................................... 730 6,844
------------
PROFESSIONAL & COMMERCIAL EQUIPMENT -- 1.1%
Danka Business Systems Plc ADR .................... 33,595 1,331,202
------------
RAILROADS -- 0.3%
Wisconsin Central Transport ....................... 10,335 372,060
------------
RETAIL-SPECIALITY -- 0.1%
Spectrum Holobyte, Inc. ........................... 13,995 78,722
------------
RADIO & TELEVISION BROADCASTING -- 1.4%
Chancellor Broadcasting Class A ................... 5,560 179,310
Infinity Broadcasting Class A ..................... 18,378 532,962
Jacore Communications, Inc. ....................... 27,825 779,100
SFX Broadcasting, Inc. Class A .................... 3,000 129,000
------------
1,620,372
------------
SANITARY SERVICES -- 1.8%
Affiliated Computer Services Class A .............. 44,695 2,458,225
------------
SECURITY SYSTEMS SERVICES -- 4.0%
CUC International, Inc. ........................... 57,280 1,403,360
Employee Solutions, Inc. .......................... 47,390 1,048,504
Franklin Quest Co. ................................ 29,500 597,375
Mossimo, Inc. ..................................... 9,800 211,925
Synopsys, Inc. .................................... 32,625 1,468,125
Trusted Information Systems ....................... 800 10,800
------------
4,740,089
------------
SERVICES--HEALTH & ALLIED SERVICES -- 3.3%
Healthsouth Corp. ................................. 78,304 2,936,400
Lincare Holdings, Inc. ............................ 22,065 827,438
Mid Atlantic Medical Services ..................... 20 215
Total Renal Care Holdings ......................... 5,755 224,445
------------
3,988,498
------------
SERVICE HOSPITALS -- 2.3%
Foundation Health Corp. ........................... 35,775 1,068,778
Health Management Associates Class A .............. 77,416 1,703,152
------------
2,771,930
------------
SURGICAL, MEDICAL, DENTAL INSTRUMENT & SUPPLY -- 1.2%
St Jude Medical, Inc. ............................. 35,695 1,409,953
------------
TELECOMMUNICATIONS -- 1.0%
Cellular Communications of Puerto Rico ............ 28,195 641,436
EZ Communications, Inc. Class A ................... 2,050 78,925
Pagemart Wireless, Inc. Class A ................... 1,055 7,912
Premiere Technologies, Inc. ....................... 725 11,781
Renaissance Communications ........................ 11,460 405,398
------------
1,145,452
------------
TELEPHONE COMMUNICATION -- 0.6%
Paging Network, Inc. .............................. 6,685 114,481
Transaction Network Services ...................... 45,600 621,300
------------
735,781
------------
TERMINAL & SERVICE FACS FOR MOTOR VEHICLE -- 0.3%
Central Parking Corp. ............................. 9,370 324,436
------------
VARIETY STORES -- 1.6%
Dollar General .................................... 34,175 948,356
Duty Free Internationa, Inc. ...................... 3,700 59,200
Lin Television Corp. .............................. 22,355 846,696
------------
1,854,252
------------
WESTCORE-AUTOS -- 1.3%
Fiserv, Inc. Corp. ................................ 40,950 1,571,456
------------
WHOLESALER TRADE-MISC WHOLESALERS -- 0.1%
Barnett, Inc. ..................................... 6,035 142,577
------------
OTHER -- 2.5.%
Education Management .............................. 3,100 50,763
National Processing, Inc. ......................... 9,900 188,100
Schweltzer-Mauduit ................................ 600 18,450
Student Loan Corp. ................................ 33,400 1,135,600
Vivra, Inc. ....................................... 49,090 1,564,735
------------
2,957,648
------------
TOTAL COMMON STOCKS (COST $116,653,571) ........... 119,684,012
------------
PRINCIPAL
AMOUNT
------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 13.0%
Federal Home Loan Mortgage Corp.,due 11/4/96, 5.2% $6,200,000 6,197,313
Federal Home Loan Mortgage Corp., due 11/14/96,
5.18% ........................................... 3,400,000 3,393,640
Federal National Mortgage Association, due
11/12/96, 5.17% ................................. 3,000,000 2,995,262
Student Loan Mortgage Association, due 11/01/96,
5.5% ............................................ 3,000,000 3,000,000
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $15,567,182) .............................. 15,586,215
------------
TOTAL INVESTMENTS -- 112.8%
(Identified Cost $132,220,753)* ................. 135,270,227
OTHER ASSETS LESS LIABILITIES -- (12.8%) .......... (15,369,361)
------------
TOTAL NET ASSETS -- 100.0% ........................ $119,900,866
============
* The aggregate cost of investments owned at October 31, 1996 for federal income
tax purposes is $132,707,963. Gross unrealized appreciation and depreciation
of securities was $7,180,675 and $4,618,411, respectively, resulting in net
unrealized appreciation of $2,562,264.
All securities are non-income producing except for:
American List. Corp. Equitable of Iowa Companies
Adobe Systems, Inc. Harte-Hanks Communications
Apple South, Inc. Pulitzer Publishing Co.
Linear Technology Corp. Advanta Corp.
Belden, Inc. Danka Business Systems Plc
AgCo Corp. Dollar General
Franklin Resources, Inc. Duty Free International, Inc.
Applebee's International, Inc. Schweltzer-Mauduit
System Software Assoc., Inc. Student Loan Corp.
Hanna (M.A.) Co.
<PAGE>
REPUBLIC SMALL CAP EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 1996
ASSETS:
Investment at value (cost $132,220,753)....................... $135,270,227
Receivable for investments sold .............................. 920,228
Unamortized organization expenses ........................... 20,000
Dividends receivable ......................................... 4,202
------------
Total Assets ........................................... 136,214,657
------------
LIABILITIES:
Payable for investments purchased ............................ 16,178,468
Due to custodian ............................................. 14,299
Sub-advisory fee payable (Note 3) ............................ 85,616
Organization expenses payable ................................ 20,000
Administration fee payable (Note 3) .......................... 3,478
Other accrued expenses ....................................... 11,930
------------
Total Liabilities ...................................... 16,313,791
------------
NET ASSETS:
Applicable to investors' beneficial interest ................ $119,900,866
============
See notes to financial statements
<PAGE>
REPUBLIC SMALL CAP EQUITY PORTFOLIO
STATEMENT OF OPERATIONS -- FOR THE PERIOD ENDED OCTOBER 31, 1996*
INVESTMENT INCOME (NOTE 2):
Interest income ..................................... $ 78,352
Dividend income ..................................... 9,680
-------
$ 88,032
EXPENSES (NOTE 2):
Manager and sub-advisory fees (Note 3) ............ $116,419
Administration fees (Note 3) ...................... 6,161
Fund accounting fees (Note 3) ..................... 8,334
Custodian fees and expenses ....................... 3,585
Reports to shareholders ........................... 500
Other expenses .................................... 1,127
-------
Total expenses .................................. 136,126
Voluntary fee reductions (Note 3) ............... (35,152)
-------
Net expenses ................................................ 100,974
----------
NET INVESTMENT LOSS ............................................. (12,942)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Investments ................................................. 283,247
Net unrealized appreciation of investments ...................... 3,030,441
----------
Net realized and unrealized gain on investments ................. 3,313,688
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $3,300,746
==========
*For the period September 3, 1996 (commencement of operations) to October 31,
1996.
See notes to financial statements
<PAGE>
REPUBLIC SMALL CAP EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD
SEPTEMBER 3, 1996
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1996
----------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment loss ....................................... $ (12,942)
Net realized gain from investment and foreign currency
transactions .............................................. 283,247
Net unrealized appreciation of investments ................ 3,030,441
------------
Net increase in net assets resulting from operations .. 3,300,746
------------
CAPITAL TRANSACTIONS:
Contributions ............................................. 116,600,020
------------
Net increase in net assets from capital transactions .. 116,600,020
------------
TOTAL INCREASE IN NET ASSETS .............................. 119,900,766
NET ASSETS:
Beginning of period ................................... 100
------------
End of period ......................................... $119,900,866
============
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR THE PERIOD
SEPTEMBER 3, 1996
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1996
----------------
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000) ..................... $119,901
Ratio of expenses to average net assets ............... 0.82% (b)
Ratio of net investment loss to average net assets .... (0.11%)(b)
Ratio of expenses to average net assets (a) ........... 1.10% (b)
Ratio of net investment loss to average net assets (a) (0.39%)(b)
Portfolio Turnover .................................... 50.55%
Average Commissions rate .............................. 0.93%
- ------------------------------------------------------------------------------
(a)During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(b)Annualized.
See notes to financial statements
<PAGE>
REPUBLIC SMALL CAP EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 1996
1. ORGANIZATION. The Republic Small Cap Equity Portfolio (the "Portfolio") is a
diversified separate series of Republic Portfolios (the "Portfolio Trust"),
which is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a no-load, open-end management investment company. The
Portfolio was organized as a master trust fund under the laws of the State
of New York on November 21, 1994. The Portfolio commenced operations on
September 3, 1996. The Declaration of Trust permits the Trustees to issue an
unlimited number of beneficial interests in the Portfolio.
The Fund's investment objective is to seek long-term growth of capital by
investing primarily in equity securities of small and medium-sized companies
that are early in their life-cycle but which may have potential to become
major enterprises (emerging growth companies).
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies followed by the Portfolio in the preparation
of financial statements. The policies are in conformity with U.S. generally
accepted accounting principles. The preparation of financial statements
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses for the period.
Actual results could differ from those estimates.
INVESTMENT VALUATION:
The net asset value of the Portfolio is determined on each day on which the
New York Stock Exchange ("NYSE") is open for trading. The Sub-Adviser
typically completes its trading on behalf of the Portfolio in various
markets before 4:00 p.m., and the value of the portfolio securities is
determined when the primary market for those securities closes for the day.
Portfolio securities are valued at the last reported sales price on the
securities exchange on which such securities are primarily traded or at the
last reported sales price on the NASDAQ national securities market on the
date of valuation.
Short-term obligations are valued at amortized cost, which constitutes fair
value as determined by the Board of Trustees of the Portfolio Trust.
ACCOUNTING FOR INVESTMENTS:
Securities transactions are recorded on a trade date basis. For financial
and tax reporting purposes, realized gains and losses are determined on the
basis of specific identification. Dividend income and other distributions
from the portfolio securities are recorded on the ex-dividend date, except,
if the ex-dividend has passed. Certain dividends from foreign securities are
recorded as the Portfolio is informed of the ex-dividend date. Dividend
income is recorded net of foreign taxes withheld where recovery of such
taxes is not assured. Interest income is accrued daily.
EXPENSE ALLOCATION:
Expenses incurred by the Portfolio Trust with respect to any two or more
portfolios in the Trust are allocated in proportion to the net assets of
each portfolio, except when allocations of direct expenses to each portfolio
can otherwise be made fairly. Expenses directly attributable to a portfolio
are charged to that portfolio.
TAXES:
Income received by the Portfolio from sources within foreign countries may
be subject to withholding and other income or similar taxes imposed by such
countries.
The Portfolio intends to comply with the requirements of the U.S. Internal
Revenue Code (the "Code"). The Portfolio intends to conduct its operations
so that the Funds investing in the Portfolio can qualify as registered
investment companies under subchapter M of the Code. The Portfolio will be
treated as a partnership for U.S. federal income tax purposes and is
therefore not subject to federal income tax.
3. RELATED PARTY TRANSACTIONS.
INVESTMENT MANAGEMENT:
Republic National Bank of New York ("Republic" or the "Manager") is the
Investment Manager to the Portfolio pursuant to an investment management
agreement with the Portfolio Trust. For its services, the Investment Manager
is entitled to receive from the Portfolio, a fee, payable monthly at an
annual rate of 0.25% of the Portfolio's average daily assets. For the period
ended October 31, 1996 the Manager waived its entire fee of $30,803.
SUB-ADVISORY:
MFS Asset Management, Inc. (the "Sub-Adviser") continuously manages the
investment portfolio of the Portfolio pursuant to a Sub-Advisery Agreement
with the Manager. For its services, the Sub-Adviser is paid a fee by the
Portfolio, computed daily and based on the Portfolio's average daily net
assets, equal on an annual basis to 0.75% of the net assets up to $50
million and 0.60% of the net assets in excess of $50 million. It is the
responsibility of the Sub-Adviser not only to make investment decisions for
the Portfolio, but also to place purchase and sale orders for the portfolio
transactions of the Portfolio. For the period ended October 31, 1996 the
sub-advisory fee was $85,616, none of which was waived.
ADMINISTRATION:
Pursuant to an Administrative Services Agreement, Signature Broker-Dealer
Services, Inc. ("Signature") provided the Portfolio with general office
facilities, and supervised the overall administration of the Portfolio
including, among other responsibilities, the preparation and filing of all
documents required for compliance by the Portfolio with applicable laws and
regulations and arranged for the maintenance of books and records of the
Portfolio for the period September 3, 1996 through September 30, 1996. For
its services to the Portfolio, Signature received from the Portfolio fees
payable monthly equal on an annual basis to 0.05% of the Portfolio's average
daily net assets; for this period Signature received $2,683 for its services
of which the entire amount was voluntarily reduced.
Effective October 1, 1996, BISYS Fund Services, Inc., ("BISYS") was
appointed as administrator to the Portfolio, pursuant to an Administrative
Services Agreement. BISYS serves as administrator with substantially
identical terms as described above. In this capacity, BISYS earned $3,478
for the period October 1, 1996 through October 31, 1996.
FUND ACCOUNTING:
Pursuant to a Fund Accounting Agreement, Signature Financial Services, Inc.,
("SFSI") served as fund accounting agent to the Portfolio for the period
September 3, 1996 through September 30, 1996. For its services to the
Portfolio, SFSI received fees payable monthly equal on an annual basis to
$50,000. For this period, fees for these services aggregated $4,167 of which
$833 was waived.
Effective October 1, 1996, Investors Bank and Trust Co., ("IBT"),
provides fund accounting services to the Portfolio. For the period October
1, 1996 through October 31, 1996 the IBT fee for these services aggregated
$4,167 of which $833 was waived.
REIMBURSEMENT AND WAIVER OF EXPENSES:
The Manager, IBT, and SFSI have voluntarily agreed to waive a portion of
their fees, and to the extent necessary, reimburse the Portfolio for
additional expenses. For the period ended October 31, 1996 expenses of the
Portfolio were voluntarily limited to no more than an annualized rate of
0.82% of the average daily net assets. For the period ended October 31, 1996
the Manager, IBT, and SFSI waived fees and reimbursed expense aggregating
$35,152.
4. INVESTMENT TRANSACTIONS. Purchases and sales of investments, other than
US Government securities and short-term obligations, aggregated
$64,049,950, and $6,976,660, respectively for the period.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
Republic Portfolios:
We have audited the accompanying statement of net assets of Republic Small
Cap Equity Portfolio (the "Fund"), a portfolio of Republic Portfolios, as of
October 31, 1996 and the related statements of operations and changes in net
assets and the financial highlights for the period from September 3, 1996
(commencement of operations) to October 31, 1996. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with United States 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 October 31, 1996 by correspondence with the custodian or brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 1996 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Republic Small Cap Equity Portfolio at October 31, 1996, the results
of its operations, the changes in its net assets and the financial highlights
for the period from September 3, 1996 (commencement of operations) to October
31, 1996, in conformity with United States generally accepted accounting
principles.
KPMG
Toronto, Ontario
December 20, 1996
<PAGE>
- --------
REPUBLIC
OPPORTUNITY
FUND
INVESTMENT MANAGER
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
SUB-ADVISER
Massachusetts Financial Services Co.
500 Boylston Street
Boston, MA 02116
ADMINISTRATOR, DISTRIBUTOR AND SPONSOR
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
CUSTODIAN AND TRANSFER AGENT
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
99 High Street
Boston, MA 02110
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
SHAREHOLDER SERVICING AGENTS:
Republic National Bank of New York
Republic Bank For Savings
452 Fifth Avenue
New York, NY 10018
(800) 782-8183
FOR NON-REPUBLIC CLIENTS:
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
(800) 782-8183
[graphic omitted]
- --------
REPUBLIC
OPPORTUNITY
FUND
ANNUAL REPORT
OCTOBER 31, 1996
