REPUBLIC FUNDS, N-30D, 1999-01-11

REPUBLIC FUNDS
N-30D, 1999-01-11

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<PAGE>

---------------------------
REPUBLIC
NEW YORK TAX-FREE BOND FUND

REPUBLIC
EQUITY FUND

REPUBLIC
BOND FUND

REPUBLIC
OVERSEAS EQUITY FUND

REPUBLIC
OPPORTUNITY FUND

[Graphic Omitted]

[Logo]
REPUBLIC ANNUAL REPORT
FAMILY OF FUNDS OCTOBER 31, 1998
- ---------------

<PAGE>

REPUBLIC FUNDS
ANNUAL REPORT - OCTOBER 31, 1998

TABLE OF CONTENTS
PAGE
----
President's Message ........................................... 1
Commentary from the Investment Adviser ........................ 2

REPUBLIC FUNDS
REPUBLIC NEW YORK TAX-FREE BOND FUND AND REPUBLIC EQUITY FUND
Schedules of Investments ...................................... 14
Statements of Assets and Liabilities .......................... 26
Statements of Operations ...................................... 28
Statements of Changes in Net Assets ........................... 29

REPUBLIC BOND FUND, REPUBLIC OVERSEAS EQUITY FUND AND REPUBLIC
OPPORTUNITY FUND
Statements of Assets and Liabilities .......................... 31
Statements of Operations ...................................... 32
Statements of Changes in Net Assets ........................... 33
Notes to Financial Statements ................................. 36
Financial Highlights .......................................... 49
Independent Auditors' Report .................................. 61

REPUBLIC FIXED INCOME PORTFOLIO, REPUBLIC INTERNATIONAL EQUITY
PORTFOLIO, REPUBLIC SMALL CAP EQUITY PORTFOLIO
Schedules of Investments ...................................... 62
Statements of Assets and Liabilities .......................... 88
Statements of Operations ...................................... 89
Statements of Changes in Net Assets ........................... 90
Notes to Financial Statements ................................. 93
Financial Highlights .......................................... 100
Independent Auditors' Report .................................. 103

<PAGE>

PRESIDENT'S MESSAGE

December 1998

DEAR SHAREHOLDER:

We are very pleased to present you with the annual reports for the
Republic Funds for the fiscal year ended October 31, 1998.

In this report we have provided you with a commentary from the Funds'
Investment Adviser, Republic National Bank of New York. We hope you find this
commentary 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.

Financial statements, including portfolio holdings for the Republic Funds
for the fiscal year ended October 31, 1998 also follow. We look forward to
servicing your financial needs and appreciate your continued support.

Respectfully submitted,

/S/ Walter B. Grimm
Walter B. Grimm
President

<PAGE>

COMMENTARY FROM THE INVESTMENT ADVISER -
REPUBLIC NATIONAL BANK OF NEW YORK

U.S. ECONOMIC REVIEW
Real GDP grew at a rate of 1.8% in the second quarter of 1998, somewhat
lower than the expected range of 2-3%. The average forecast for the third
quarter reflects a modest improvement of 2-2.5%. Estimates for the fourth
quarter and into 1999 are in the range of 1.5-2.5%. Given the magnitude of the
shocks experienced by the global financial markets during the past three
months, these estimates demonstrate the resiliency of underlying consumption
in the United States. While the stock market decline and it's dampening effect
on wealth is beginning to lower consumer spending and confidence from their
peak levels, the domestic economy continues to benefit from ongoing employment
gains and growth in real wages. Lower interest rates are also a critical
factor in a no-recession outlook. With the long term U.S. Treasury rates
falling below 5% for the first time in 30 years, residential construction
activity and demand for other consumer durables such as automobiles continues
to expand along with mortgage refinancing applications. Deflationary
conditions abroad have constrained the pricing power of U.S. corporations and
caused commodity prices to fall further. These factors have allowed domestic
inflationary expectations to decline and provided fundamental support for the
Federal Reserve's decision to lower short-term interest rates by 25 basis
points in late September and an additional easing of 25 basis points in mid
October.

GLOBAL ECONOMIC REVIEW
The spread of the Asian contagion beyond the collapse of Russia, has
raised the risk that other developing economies, especially countries in Latin
and South America, may experience recessionary economic conditions next year.
With these factors impacting financial markets, the prospect of a global
recession continues to be a risk. In a continuing effort to preempt this risk,
we believe policy makers will be increasingly inclined to implement monetary
easing strategies following the steps already taken in the United States and
Japan.

Despite the crisis in Asia and most developing markets, the European
economies are still gaining in strength although forecasts for 1999 have been
scaled back from previous projections. Like the United States, growth is
expected to be driven by internal demand rather than strong exports. Consensus
growth expectations remain in the 2-3% range for 1998 and 1999. The
Bundesbank's historic influence on other European central banks is about to be
supplanted by the new European Central Bank (ECB) in preparation for the
inauguration of the European Monetary Union (EMU) at the end of 1998. The
convergence of interest rates by EMU countries over the next three months
could complicate financial market movements during this period. In the third
quarter, central banks in Norway and Denmark, two non-EMU countries, were
forced to raise interest rates to stabilize their currencies.

The collapse of the Russian ruble and the Russian government's decision to
default on it's bonds has generated shock waves in the global financial
markets far out of proportion to the country's role in the world economy.
Hedge funds have been particularly impacted by the heightened concern over
credit quality attributable to the Russian default and the resulting demand
for U.S. Treasury obligations.

In Japan, banks have been forced to pay higher risk premiums on their
liabilities. Although the new Japanese Prime Minister has managed to convince
opposing political parties to pass some bank rescue legislation, market
reaction suggests that more government support is needed.

MARKET ENVIRONMENT
After a strong first half, U.S. equities received a wake up call prior to
the fiscal year end. Triggered by Russia's financial meltdown and the threat
of further deterioration in global economic conditions, the market experienced
negative returns for the second half of the fiscal year, with small
capitalization stocks bearing the brunt of the malaise. For the year ended
October 31, 1998, U.S. large capitalization and small capitalization stocks
posted mixed returns of 19.71% and -11.84% respectively, as measured by the
Russell 1000 and 2000 indices. Major international equity markets in aggregate
posted a moderate gain of 9.91% as measured by the Morgan Stanley Capital
International EAFE Index.

U.S. fixed income markets benefited from a flight to quality during the
fiscal year and continued to post impressive gains. Long term U.S. Treasury
rates hit record lows for the 30-year bond during the period. As a result, the
Salomon Broad Index posted a 9.40% return for the fiscal year ended October
31, 1998.

<PAGE>

REPUBLIC NEW YORK TAX-FREE BOND FUND

The Republic New York Tax-Free Bond Fund (the "Fund") returned 7.65%(1)
for Class A (Investor Shares) and 6.59%(2) for Class B Shares, for the fiscal
year ended October 31, 1998, compared to 7.61% for the Lipper NY Municipal
Bond Fund Index.(3) As of October 31, 1998, the Fund's duration (interest rate
sensitivity) was 10.64 years(4). As of October 31, 1998, the annualized 30-day
SEC yield was 3.83%(1) for Class A Shares and 3.07% for Class B Shares.(5)

Russia's default on it's short term debt and ruble devaluation in August
initiated a flight to quality. This and other major global events pushed
yields sharply lower on benchmark U.S. Treasury bills, notes and bonds towards
the end of the fiscal year. The municipal market lagged the treasury market
during this period. Municipals are never perceived as a flight-to-quality
vehicle by domestic or foreign investors and consequently did not fully
participate in the move to lower yields and higher valuations. Demand has
increased modestly as turmoil in the equity markets has caused investors to
look for more conservative investments. Simultaneously, demand was negatively
impacted by hedge fund difficulties. The hedge funds had been a major source
of demand for long term maturity municipals in the first half of the year. The
Fund has focused and continues to focus on the 15 year area of the yield
curve. The bonds purchased have been for the most part non callable and of the
highest quality. The strategy of the Fund will remain the same for the near
term.

- --------------------------------------------------------------------------------
FISCAL YEAR
ENDED INCEPTION TO
AVERAGE ANNUAL TOTAL RETURN 10/31/98 10/31/98
- --------------------------------------------------------------------------------
% return without deducting
maximum sales charge Class A(1) 7.65% 7.73%
Class B(2) 6.59% 6.87%
- --------------------------------------------------------------------------------
% return after deducting
maximum sales charge Class A(1) 4.71% 6.89%
Class B(2) 3.59% 6.87%
- --------------------------------------------------------------------------------
Value of $10,000
investment after deducting
maximum sales charge Class A(1) n/a $12,628
Class B(2) n/a $12,623
- --------------------------------------------------------------------------------

<PAGE>

COMPARISON OF $10,000 INVESTMENT IN THE
REPUBLIC N.Y. TAX-FREE BOND FUND
(CLASS A (INVESTOR SHARES) AND CLASS B SHARES)
AND LIPPER N.Y. MUNI BOND

Republic Republic
N.Y. Lipper N.Y.
Tax-Free N.Y. Tax-Free
Bond Fund Muni Bond Bond Fund
Class A Fund Index(3) Class B
--------- ------------- ---------
5/01/95 $10,000 $10,000 $10,000
10/31/95 10,640 10,600 10,600
4/30/96 10,710 10,650 10,630
10/31/96 11,140 11,100 11,020
4/30/97 11,310 11,280 11,140
10/31/97 12,060 11,960 11,840
4/30/98 12,330 12,260 12,040
10/31/98 12,984 12,873 12,623

These performance figures are calculated without deducting sales charges
Past performance is not predictive of future performance

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 their original cost.

<PAGE>

REPUBLIC EQUITY FUND

The Republic Equity Fund (the "Fund") returned 19.98%(1), for Class A
(Investor Shares) and 19.27%(2), for Class B shares for the fiscal year ended
October 31, 1998, compared to 13.88% for the Lipper Growth Fund Index(3) and
19.71% for the Russell 1000 Index.(4)(6)

During the first six months of its fiscal year, the Fund benefited from
the strong performance of large capitalization stocks. After attaining record
levels in mid-July, concern over the Asian contagion and weakening global
economies drove the U.S. equity market substantially down towards the end of
August. Two 25 basis point cuts in the federal funds rate by the Fed, one in
September and one in October, contributed to the rebound prior to the Fund's
fiscal year end. Within the large capitalization segment, growth issues
outpaced value issues for the year ended October 31, 1998.

As of October 31, 1998, the Fund's portfolio held 126 securities. The top
sector weightings were approximately 21.4% Consumer Products and Services,
21.3% Technology and Communications, 14.0% Banking & Finance and 7.5%
Pharmaceuticals.(7)
- --------------------------------------------------------------------------------
FISCAL YEAR
ENDED INCEPTION TO
AVERAGE ANNUAL TOTAL RETURN 10/31/98 10/31/98
- --------------------------------------------------------------------------------
% return without deducting
maximum sales charge Class A(1) 19.98% 21.43%
Class B(2) 19.27% 20.63%
- --------------------------------------------------------------------------------
% return after deducting
maximum sales charge Class A(1) 15.81% 20.11%
Class B(2) 15.27% 19.63%
- --------------------------------------------------------------------------------
Value of $10,000
investment after deducting
maximum sales charge Class A(1) n/a $18,148
Class B(2) n/a $18,037
- --------------------------------------------------------------------------------

<PAGE>

COMPARISON OF $10,000 INVESTMENT IN THE
REPUBLIC EQUITY FUND (CLASS A (INVESTOR SHARES)
AND CLASS B SHARES) AND RUSSELL 1000 INDEX

Republic Russell Russell Republic
Equity 1000 1000 Equity
Fund Value Value Fund
Class A Index(5) Index(6) Class B
-------- -------- -------- --------
8/01/95 $10,000 $10,000 $10,000 $10,000
10/31/95 10,280 10,400 10,440 10,260
4/30/96 11,570 11,890 11,860 11,510
10/31/96 12,160 12,840 12,830 12,050
4/30/97 13,470 14,560 14,510 13,300
10/31/97 15,670 17,150 16,970 15,430
4/30/98 19,070 20,720 20,360 18,720
10/31/98 18,806 19,694 19,987 18,405

These performance figures are calculated without deducting sales charges
Past performance is not predictive of future performance

(1) Maximum sales charge for Class A Shares is 3.5% of the public offering
price. Class A Shares bear ongoing 12b-1 fees and distribution fees of 0.25%
of the daily net assets of Class A Shares. These Class A expenses are
reflected in the performance data.
(2) Maximum contingent deferred sales charge for Class B Shares is 4% and is
reduced to 0% after four years. Class B Shares bear ongoing 12b-1 fees and
distribution fees of 1.00% of the daily net assets of Class B Shares. The
Class B expenses are refected in the performance data. The Class B returns
reflect the returns of the Class A Shares, as adjusted for Class B expenses,
for the period up to commencement of the Class B Shares on January 6, 1998.
(3) Lipper Growth Fund Index is an equally weighted index composed of the 30
largest mutual funds within this investment objective.
(4) Following the change in investment policies of the Fund in January 1997, the
Manager believes that it is more appropriate to benchmark the Fund against
the Russell 1000 Index as opposed to the Russell 1000 Value Index.
(5) The Russell 1000 Value Index measures the performance of those Russell 1000
securities with lower price to book ratios and lower forecast growth values.
(6) The Russell 1000 Index consists of the largest 1000 companies in the Russell
3000 Index. This index represents the universe of large capitalization
stocks from which most active money managers typically select.
(7) Portfolio composition is subject to change.

<PAGE>

REPUBLIC BOND FUND

The Republic Bond Fund (the "Fund") returned 5.83%(1) for Class A
(Investor Shares) and 3.87%(2) for Class B Shares, for the fiscal year ended
October 31, 1998, compared to 7.43% for the Lipper A Rated Bond Fund Index(3)
and 9.39% for the Salomon Broad Investment Grade Bond Index.(4) As of October
31, 1998, the annualized 30-day SEC yield was 5.83% for Class A Shares and
5.07% for Class B Shares.(5)

The Fund modestly repositioned its duration, lengthening it to bring it in
line with that of the benchmark. Most Treasury holdings are in inflation-
indexed securities (TIPS) to take advantage of their attractive real yields.
The Fund's yield-curve strategy remains neutral at this time. With real
interest rates at relatively attractive levels in the U.S., it has been
increasingly difficult to identify superior opportunities in non-dollar bonds
within other major industrialized countries. Accordingly, the Fund eliminated
the small position in German bond holdings.(6)

- --------------------------------------------------------------------------------
FISCAL YEAR
ENDED INCEPTION TO
AVERAGE ANNUAL TOTAL RETURN 10/31/98 10/31/98
- --------------------------------------------------------------------------------
% return without deducting
maximum sales charge Class A(1) 5.83% 9.14%
Class B(2) 3.87% 8.03%
- --------------------------------------------------------------------------------
% return after deducting
maximum sales charge Class A(1) 2.89% 8.35%
Class B(2) 0.97% 8.03%
- --------------------------------------------------------------------------------
Value of $10,000
investment after deducting
maximum sales charge Class A(1) n/a $13,573
Class B(2) n/a $13,425
- --------------------------------------------------------------------------------

<PAGE>

COMPARISON OF $10,000 INVESTMENT IN THE
REPUBLIC BOND FUND
(CLASS A (INVESTOR SHARES) AND CLASS B SHARES) AND
SALOMON BROAD INVESTMENT GRADE BOND INDEX

Salomon
Broad
Republic Investment Republic
Bond Fund Grade Bond Fund
Class A Bond Index Class B
--------- ---------- ---------
1/09/95 $10,000 $10,000 $10,000
4/30/95 10,530 10,640 10,500
10/31/95 11,420 11,280 11,350
4/30/96 11,530 11,580 11,390
10/31/96 12,150 12,210 11,970
4/30/97 12,420 12,390 12,220
10/31/97 13,210 13,270 12,930
4/30/98 13,650 13,750 13,160
10/31/98 13,978 14,510 13,425

These performance figures are calculated without deducting sales charges
Past performance is not predictive of future performance

(1) Maximum sales charge for Class A Shares is 2.75% of the public offering
price. Class A Shares bear ongoing 12b-1 fees and distribution fees of 0.25%
of the daily net assets of Class A Shares. These Class A expenses are
refected in the performance data. The performance set forth reflects the
waiver and reimbursement of a portion of the Fund's fees. Without waivers of
fees, total return for the period would have been lower. Inception date for
performance purposes is January 9, 1995. Performance for the period prior to
the Fund's inception is that of the Republic Fixed Income Portfolio,
adjusted to reflect the fees and expenses of the Fund. The Fund's inception
date was August 26, 1996. The average annual total return since the Fund's
inception, without deducting sales charges, was 8.39% for Class A Shares.
(2) Maximum contingent deferred sales charge for Class B Shares is 3% and is
reduced to 0% after three years. Class B Shares bear ongoing 12b-1 fees and
distribution fees of 1.00% of the daily net assets of Class B Shares. The
Class B expenses are reflected in the performance data. The Class B returns
reflect the returns of the Class A Shares, as adjusted for Class B expenses,
for the period up to commencement of the Class B Shares on January 6, 1998.
(3) Lipper A Rated Bond Fund Index is an equally weighted index composed of the
30 largest mutual funds within this investment objective.
(4) Salomon Broad Investment Grade Bond Index is an unmanaged market
capitalization weighted index which includes fixed rate Treasury, government
sponsored, corporate and mortgage securities. All issues mature in one year
or more and have at least $50 million face amount outstanding for entry into
the index.
(5) Without waivers of fees the annualized 30-day SEC yield at October 31, 1998
would have been 5.32% and 4.56% for Class A and Class B, respectively.
(6) Portfolio composition is subject to change.

<PAGE>

REPUBLIC OVERSEAS EQUITY FUND

The Republic Overseas Equity Fund (the "Fund") returned 1.96%(1) for Class
A (Investor Shares) and 1.50%(2) for Class B Shares, for the fiscal year ended
October 31, 1998, compared to 4.64% for the Lipper International Equity Fund
Index(3) and 9.95% for the MSCI EAFE Index.(4)

European equity markets showed mixed results for the Fund's fiscal year.
Despite the crisis in emerging markets, the European economies are still
gaining in strength although forecasts for 1999 have been scaled back from
previous projections. Growth is expected to be driven by internal demand
rather than strong exports as in the past. The Japanese banking crisis and
economic problems dragged onwards despite earlier hopes of progress under the
new Prime Minister. Compared to its benchmark the MSCI EAFE Index, the Fund
remained most significantly underweighted in France, Germany and the United
Kingdom, and overweighted in Sweden, Finland, Canada, and Australia.(5)

As of October 31, 1998, the Republic International Equity Portfolio (the
"Portfolio"), in which the Fund invests all of its investable assets, was
broadly diversified with 141 equity holdings representing 28 countries. The
Portfolio's weightings by geographical region were as follows: Europe 58.4%,
Japan 19.2%, Pacific Ex-Japan 6.8%, and 15.6% in other regions. The largest
five holdings of the Portfolio represent 11.9% of the Portfolio: Mannesmann AG
(Germany: machinery & engineering), Nokia (Finland: telecommunications),
Telefonica (Spain: telecom services), Asahi (Japan: brewing), Zeneca Group Plc
(United Kingdom: Pharmaceutical, agri chemicals).(5)

- --------------------------------------------------------------------------------
FISCAL YEAR
ENDED INCEPTION TO
AVERAGE ANNUAL TOTAL RETURN 10/31/98 10/31/98
- --------------------------------------------------------------------------------
% return without deducting
maximum sales charge Class A(1) 1.96% 9.62%
Class B(2) 1.50% 8.91%
- --------------------------------------------------------------------------------
% return after deducting
maximum sales charge Class A(1) -1.61% 8.60%
Class B(2) -2.50% 7.91%
- --------------------------------------------------------------------------------
Value of $10,000
investment after deducting
maximum sales charge Class A(1) n/a $13,693
Class B(2) n/a $13,364
- --------------------------------------------------------------------------------

<PAGE>

COMPARISON OF $10,000 INVESTMENT IN THE
REPUBLIC OVERSEAS EQUITY FUND
(CLASS A (INVESTOR SHARES) AND CLASS B SHARES) AND
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX

Republic Republic
Overseas Overseas
Equity MSCI Equity
Fund EAFE Fund
Class A Index(4) Class B
--------- -------- ---------
1/09/95 $10,000 $10,000 $10,000
4/30/95 10,200 10,790 10,180
10/31/95 10,810 10,800 10,750
4/30/96 12,050 12,100 11,900
10/31/96 12,120 11,810 12,040
4/30/97 13,360 11,990 13,150
10/31/97 13,820 12,370 13,640
4/30/98 16,080 14,300 15,880
10/31/98 14,092 13,597 13,846

These performance figures are calculated without deducting sales charges
Past performance is not predictive of future performance

(1) Maximum sales charge for Class A Shares is 3.5% of the public offering
price. Class A Shares bear ongoing 12b-1 fees and distribution fees of 0.25%
of the daily net assets of Class A Shares. These Class A expenses are
reflected in the performance data. The performance set forth reflects the
waiver and reimbursement of a portion of the Fund's fees. Without waivers of
fees, total return for the period would have been lower. Inception date for
performance purposes is January 9, 1995. Performance for the period prior to
the Fund's inception is that of the Republic International Equity Portfolio,
adjusted to reflect the fees and expenses of the Fund. The Fund's inception
date was August 26, 1996. The Fund's average annual total return since its
inception without deducting sales charges, was 7.91% for Class A Shares.
(2) Maximum contingent deferred sales charge for Class B Shares is 4% and is
reduced to 0% after four years. Class B Shares bear ongoing 12b-1 fees and
distribution fees of 1.00% of the daily net assets of Class B Shares. The
Class B expenses are reflected in the performance data. The Class B returns
reflect the returns of the Class A Shares, as adjusted for Class B expenses,
for the period up to commencement of the Class B Shares on January 6, 1998.
(3) Lipper International Equity Fund Index is an equally weighted index composed
of the 30 largest mutual funds within this investment objective.
(4) MSCI EAFE Index is based on the share prices of approximately 1,600
companies listed on stock exchanges in the 22 developed countries that make
up the MSCI National Indices.
(5) Portfolio composition is subject to change.

<PAGE>

REPUBLIC OPPORTUNITY FUND

The Republic Opportunity Fund (the "Fund") returned -4.68%(1) for Class A
(Investor Shares) and -4.88%(2) for Class B Shares for the fiscal year ended
October 31, 1998, compared to a return of -13.62% for the Lipper Small Company
Fund Index(3) and -11.84% for the Russell 2000 Index(4).

The first six months of the Fund's fiscal year saw small capitalization
stocks continue to perform well before entering into a bear market for the
remainder of the fiscal year. Small cap portfolios, as any other equity
portfolios, generally were adversely influenced by a global sell-off brought
about by the economic turmoil in Russia and Japan. The Funds performance
suffered compared to its benchmark due to overweightings in the Business
Services, Technology, Health Care and Leisure sectors. However, strong stock
selection in these sectors, and in general, was a positive to relative
performance.

While the recent sell-off in the equity markets has been sharp, one
positive has been that valuations of small cap stocks have been reduced to
historic lows, which provides attractive opportunities. The Fund's portfolio
continues to be structured around solid small cap companies focused on secular
growth dynamics not highly correlated to the economic cycle, which should
result in a quicker earnings bounce than is likely with the larger
capitalization stocks.

As of October 31, 1998, the Small Cap Equity Portfolio, in which the Fund
invests all of its investable assets, was broadly diversified in company
securities. The top equity sector weightings were approximately 18.9% Computer
Software & Services, 16.5% Business Services, 7.8% Medical, Health Technology
& Services and 6.4% Retail Stores(5).

- --------------------------------------------------------------------------------
FISCAL YEAR
ENDED INCEPTION TO
AVERAGE ANNUAL TOTAL RETURN 10/31/98 10/31/98
- --------------------------------------------------------------------------------
% return without deducting
maximum sales charge Class A(1) -4.68% 11.28%
Class B(2) -4.88% 10.95%
- --------------------------------------------------------------------------------
% return after deducting
maximum sales charge Class A(1) -8.02% 9.46%
Class B(2) -8.88% 8.95%
- --------------------------------------------------------------------------------
Value of $10,000
investment after deducting
maximum sales charge Class A(1) n/a $12,155
Class B(2) n/a $11,995
- --------------------------------------------------------------------------------

<PAGE>

COMPARISON OF $10,000 INVESTMENT IN THE
REPUBLIC OPPORTUNITY FUND
(CLASS A (INVESTOR SHARES) AND CLASS B SHARES)
AND RUSSELL 2000 INDEX

Republic Republic
Opportunity Russell Opportunity
Fund 2000 Fund
Class A Index(4) Class B
----------- -------- -----------
9/03/96 $10,000 $10,000 $10,000
10/31/96 10,630 10,250 10,450
4/30/97 10,310 10,410 10,260
10/31/97 13,210 13,250 13,110
4/30/98 15,350 14,820 15,310
10/31/98 12,593 11,682 12,521

These performance figures are calculated without deducting sales charges
Past performance is not predictive of future performance

(1) Maximum sales charge for Class A Shares is 3.5% of the public offering
price. Class A Shares bear ongoing 12b-1 fees and distribution fees of 0.25%
of the daily net assets of Class A Shares. These Class A expenses are
reflected in the performance data. The performance set forth reflects the
waiver and reimbursement of a portion of the Fund's fees. Without waivers of
fees, total return for the period would have been lower. Inception date for
performance purposes is September 3, 1996. Performance for the period prior
to the Fund's inception 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. Average annual total return of the Fund since
its inception, without deducting sales charges, was 8.18% for Class A
Shares.
(2) Maximum contingent deferred sales charge for Class B Shares is 4% and is
reduced to 0% after four years. Class B Shares bear ongoing 12b-1 fees and
distribution fees of 1.00% of the daily net assets of Class B Shares. The
Class B expenses are reflected in the performance data. The Class B returns
reflect the returns of the Class A Shares, as adjusted for Class B expenses,
for the period up to commencement of the Class B Shares on January 6, 1998.
(3) Lipper Small Company Fund Index is an equally weighted index composed of the
30 largest mutual funds within this investment objective.
(4) Russell 2000 Index is a broad index of equity securities of small
capitalization U.S. companies, with an average market capitalization of $728
million as of October 31, 1998.
(5) Portfolio composition is subject to change.

Small company funds typically carry additional risks since smaller companies
generally have a higher company specific risk, and historically, their stocks
have experienced a greater degree of market volatility than larger company
stocks on average.

This material must be preceded or accompanied by a current prospectus.

<PAGE>

REPUBLIC NEW YORK TAX-FREE BOND FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
<TABLE>
<CAPTION>
RATINGS
PRINCIPAL MOODY'S/ VALUE
AMOUNT DESCRIPTION MATURITY S&P(c) (NOTE 2)
------ ----------- -------- ------ --------
<C> <S> <C> <C> <C>
NEW YORK MUNICIPAL
OBLIGATIONS (92.6%) (a)
$ 500,000 Brookhaven New York, General
Obligation, FGIC Insured 5.50% ... 10/1/12 Aaa/AAA $ 542,280
250,000 Erie County, New York, General
Obligation, Series B, FGIC Insured
5.375% ........................... 6/15/07 Aaa/AAA 270,803
600,000 Essex County, New York Industrial
Development Agency PCR 5.550% 1/1/14 A3/BBB- 644,628
285,000 Metropolitan Transit Authority of
New York, Transportation Facility
Revenue - Series C-1, 5.750% ..... 7/1/13 Baa1/BBB+ 313,730
1,000,000 Metropolitan Transit Authority of
New York, Transportation Facility
Revenue - Series C-1, FGIC Insured
5.250% ........................... 7/1/17 Aaa/AAA 1,029,160
610,000 Monroe County New York State General
Obligation 6.00% ................. 3/1/16 Aa2/AA 698,950
100,000 Nassau County New York MBIA 5.400% . 5/1/11 Aaa/AAA 109,185
575,000 Nassau County New York MBIA Hofstra
University 5.250% ................ 7/1/10 Aaa/AAA 621,109
1,000,000 New York, New York, General
Obligation, Series H 6.000% ...... 8/1/14 A3/A- 1,093,330
1,000,000 New York, New York, General
Obligation, Series L 5.875% ...... 8/1/15 A3/A- 1,078,520
1,000,000 New York City Housing Development
Corporation, Multi Family Mortgage
Revenue, Refunding - Series A
5.750% ........................... 11/1/18 Aa2/AA 1,056,520
500,000 New York City Industrial Development
Agency, Special Facilities,
Revenue, Terminal One Group
Project, AMT 6.100% .............. 1/1/09 A3/A 537,500
1,000,000 New York City Industrial Development
Agency, Special Facilities,
Revenue, Terminal One Group
Project, AMT 6.000% .............. 1/1/15 A3/A 1,065,430
750,000 New York City Municipal Water and
Sewer, Finance Authority, Water
and Sewer, Revenue, Refunding -
Series A 5.750% .................. 6/15/16 A1/A 807,443
1,000,000 New York Local Government Assistance
Corp. 6.000% ..................... 4/1/16 A3/A+ 1,099,290
375,000 New York State Dormitory Authority,
Revenue, 6.250% .................. 5/15/17 A3/AAA 419,063
1,000,000 New York State Dormitory Authority,
Revenue, City University, Series
A, AMBAC Insured 5.625% .......... 7/1/16 Aaa/AAA 1,103,140
1,000,000 New York State Dormitory Authority,
Revenue, Court Facilities, Series
A 5.625% ......................... 5/15/13 A3/BBB 1,042,980
1,000,000 New York State Dormitory Authority,
Revenue, Department of Health
5.750% ........................... 7/1/17 Baa1/BBB+ 1,062,000
225,000 New York State Dormitory Authority,
Revenue, Mental Health Service
Facility Series B 6.500% ......... 8/15/11 A3/A 265,613
250,000 New York State Dormitory Authority
University Hospital 5.500% MBIA 11/1/11 Aaa/AAA 273,245
1,000,000 New York State Dormitory Authority,
Revenues, Mental Health Services,
Series B 5.500% .................. 8/15/17 A3/A- 1,044,270
1,000,000 New York State Dormitory Authority,
Revenue, Rochester Institute of
Technology, MBIA Insured 5.300% 7/1/17 Aaa/AAA 1,036,820
500,000 New York State Dormitory Authority,
Revenue, State University,
Educational Facilities, 5.750% ... 5/15/09 A3/A- 550,625
1,000,000 New York State Dormitory Authority,
Revenue, State Secured Hospital
New York Downtown 5.200% ......... 2/15/13 Baa1/BBB+ 1,029,470
200,000 New York State Dormitory Authority,
Revenue, State, Memorial Sloan
Kettering Hospital MBIA Insured
5.250% ........................... 7/1/11 Aaa/AAA 214,452
1,000,000 New York State Environmental
Facilities Corporation 5.200% .... 6/15/18 Aaa/AAA 1,022,820
1,000,000 New York State Environmental
Facilities Corporation Pollution
Control Revenue, Water Revolving
Fund - Series C 5.850% ........... 1/15/15 Aaa/AAA 1,095,130
585,000 New York State General Obligation
AMBAC Insured 5.000% ............. 7/15/16 Aaa/AAA 591,944
1,000,000 New York State Housing Finance
Agency, Service Contract
Obligation, Revenue, Refunding,
Series C 5.875% .................. 9/15/14 Baa1/BBB+ 1,054,180
385,000 New York State Medical Care
Facilities, Revenue, Hospital &
Nursing Home, FHA Insured 6.400% . 8/15/14 NR/AAA 422,976
1,000,000 New York State Mortgage Agency
Revenue AMT 5.600% ............... 10/1/14 Aa2/NR 1,047,100
1,000,000 New York State Mortgage Agency
Revenue AMT 5.375% ............... 10/1/17 Aa2/NR 1,022,520
1,000,000 New York State Thruway Authority,
Service Contract, Revenue, Local
Highway and Bridge 5.875% ........ 4/1/14 Baa1/BBB+ 1,107,940
500,000 New York State Urban Development
Corporation, Revenue 5.750% ...... 4/1/12 Baa1/BBB+ 551,010
1,000,000 New York State Urban Development
Corporation, Revenue 5.750% ...... 4/1/12 Baa1/BBB+ 1,092,020
500,000 Port Authority of New York & New
Jersey, Special Obligation,
Revenue, JFK International
Terminal, MBIA Insured, AMT 5.750% 12/1/22 Aaa/AAA 531,815
335,000 Suffolk County New York FGIC Insured
5.250% ........................... 8/1/12 Aaa/AAA 358,577
420,000 Suffolk County New York FGIC Insured
5.250% ........................... 4/1/14 Aaa/AAA 447,262
400,000 Triborough Bridge & Tunnel Authority
5.500% ........................... 1/1/17 Aa1/A+ 433,920
200,000 Triborough Bridge & Tunnel Authority
6.000% ........................... 1/1/12 Aa3/A+ 230,304
-----------
TOTAL NEW YORK MUNICIPAL OBLIGATIONS
(COST $28,301,930) ................................................ 30,019,074
-----------
OTHER BONDS AND NOTES (6.7%) (a)
1,000,000 Puerto Rico Highway & Naval
Revenue, 5.500% .................. 7/1/08 Baa1/A 1,062,290
1,000,000 Puerto Rico Electric Power Authority
6.000% ........................... 7/1/14 Baa1/BBB+ 1,098,510
-----------
TOTAL OTHER BONDS AND NOTES
(COST $2,026,711) ................................................. 2,160,800
-----------
SHORT-TERM INVESTMENTS (0.7%) (a)
42,600 Provident New York Tax-Free Money
Market Fund ...................... -- -- 42,600
200,000 Nassau County IDA 3.700% ........... 3/1/28 NR/AA+ 200,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $242,600) ................................................... 242,600
-----------
TOTAL INVESTMENTS (100.0%) (COST $30,571,241) (D) ............................... 32,422,474

LIABILITIES IN EXCESS OF OTHER ASSETS (0.0%) ................................... (10,162)
-----------
NET ASSETS (100.0%) ............................................................. $32,412,312
===========

(a) Percentages indicated are based on net assets at October 31, 1998.
(b) Approximately 19.89% of the municipal securities held by the Fund have credit
enhancement features backing them, which the Fund relies on, such as letters of
credit, insurance or guarantees. Without these credit enhancement features the
securities may or may not meet the quality
standards of the Fund.
(c) The Moody's or Standard & Poor's rating indicated is believed to be the most recent
ratings available at October 31, 1998 for the securities listed. Ratings are
generally ascribed to securities at the time of issuance. While the agencies may
from time to time revise such ratings, they undertake no obligation to do so, and
the ratings do not necessarily represent what the agencies would ascribe to these
securities at October 31, 1998. These ratings are unaudited.
(d) For Federal income tax purposes, the cost of securities owned at October 31, 1998
was substantially the same as the cost of securities for financial statement
purposes resulting in net unrealized appreciation of securities as follows:

Gross unrealized appreciation ...................................... 1,866,919
Gross unrealized depreciation ...................................... (15,686)
----------
Net unrealized appreciation ........................................ 1,851,233
==========

AMBAC -American Municipal Bond Assurance Corporation
AMT -Interest on security is subject to Federal Alternative Minimum Tax
FGIC -Federal Guaranty Insurance Corporation
FHA -Federal Housing Administration
IDA -Industrial Development Agency
MBIA -Municipal Bond Insurance Association
PCR -Pollution Control Revenue
</TABLE>

See notes to financial statements
<PAGE>

REPUBLIC EQUITY FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
VALUE
DESCRIPTION SHARES (NOTE 2)
- ----------- ------ --------
COMMON STOCK (93.7%) (b)
AEROSPACE & AIRCRAFT (4.8%)
Lockheed Martin Corp. .......................... 51,600 $ 5,746,950
Raytheon Co. Class B ........................... 50,600 2,937,963
United Technologies Corp. ...................... 28,000 2,667,000
------------
11,351,913
------------
BANKING & FINANCE (9.3%)
Associates First Capital Corp. ................. 27,800 1,959,900
BankBoston Corp. ............................... 2,500 92,031
BankAmerica Corp. .............................. 47,000 2,699,562
Chase Manhattan Corp. .......................... 43,600 2,477,025
Citigroup ...................................... 113,000 5,318,063
First American Corp. ........................... 8,100 334,125
First Security Corp. ........................... 15,200 310,650
Fleet Financial Group Inc. ..................... 37,800 1,509,638
Greenpoint Financial Corp. ..................... 9,500 311,719
Hibernia Corp. ................................. 17,100 285,356
Household Intl Inc. ............................ 23,000 840,938
MBNA Corp. ..................................... 127,850 2,916,578
Regions Financial Corp. ........................ 7,900 292,300
U.S. Bancorp. .................................. 31,062 1,133,763
Wells Fargo & Co. .............................. 3,900 1,443,000
------------
21,924,648
------------
CHEMICALS (1.1%)
Eastman Chemical Co. ........................... 17,000 998,750
Geon Co. ....................................... 8,500 184,344
Great Lakes Chemical Corp. ..................... 9,900 412,088
Praxair Inc. ................................... 21,000 845,250
Witco Corp. .................................... 8,300 156,144
------------
2,596,576
------------
COMMUNICATIONS (1.7%)
CommScope, Inc. (a) ............................ 21,666 301,970
Comverse Technology, Inc. (a) .................. 14,075 647,450
Lucent Technologies ............................ 28,700 2,301,381
Nextel Communications, Inc. (a) ................ 43,100 781,188
------------
4,031,989
------------
CONSTRUCTION & HOUSING (2.3%)
Champion Enterprises, Inc. (a) ................. 1,300 25,838
Comerica, Inc. ................................. 12,700 819,150
Johnson Controls ............................... 14,600 821,250
Lafarge Corp. .................................. 8,900 299,819
Martin Marietta Materials ...................... 9,000 441,563
Masco Corp. .................................... 71,900 2,026,681
Southdown, Inc. ................................ 13,744 748,189
USG Corporation ................................ 7,100 338,581
------------
5,521,071
------------
CONSUMER MANUFACTURING (4.0%)
American Standard Companies (a) ................ 20,800 664,300
General Electric Co. ........................... 58,500 5,118,750
Harley-Davidson, Inc. .......................... 82,000 3,177,500
Lear Corp. (a) ................................. 13,400 430,475
------------
9,391,025
------------
CONSUMER PRODUCTS (9.8%)
Bestfoods ...................................... 22,100 1,204,450
Campbell Soup Co. .............................. 22,300 1,188,869
Coca-Cola Co. .................................. 42,200 2,853,775
Colgate-Palmolive Co. .......................... 37,400 3,305,225
Dial Corp. ..................................... 15,900 438,244
Kimberly-Clark Corp. ........................... 57,700 2,784,025
Nabisco Holdings Corp. ......................... 18,600 702,150
Philip Morris Companies, Inc. .................. 142,200 7,269,975
Procter & Gamble Co. ........................... 13,800 1,226,475
Tyson Foods, Inc. .............................. 57,350 1,319,050
York International Corp. ....................... 19,200 722,400
------------
23,014,638
------------
CONSUMER SERVICES (7.5%)
Circuit City Stores ............................ 32,000 1,158,000
Consolidated Stores Corp. ...................... 21,000 345,188
Dayton Hudson Corp. ............................ 40,200 1,703,475
Electronic Data Systems Corp. .................. 15,600 634,725
Food Lion, Inc. ................................ 70,200 772,200
Home Depot, Inc. ............................... 84,500 3,675,750
Kohl's ......................................... 45,900 2,194,594
Kroger Co. ..................................... 25,700 1,426,350
Sears, Roebuck and Co. ......................... 37,500 1,685,156
Viad Corp. ..................................... 30,300 831,356
Wal-Mart Stores Inc. ........................... 45,700 3,153,300
------------
17,580,094
------------
COSMETICS & TOILETRIES (1.2%)
Avon Products Inc. ............................. 70,600 2,801,938
------------
ELECTRIC SERVICES (3.3%)
CMS Energy Corp. ............................... 39,800 1,753,688
Enron Corp. .................................... 14,800 780,700
Entergy Corp. .................................. 101,900 2,929,625
PECO Energy Co. ................................ 57,700 2,232,269
------------
7,696,282
------------
FARM PRODUCTS (0.4%)
IMC Global Inc. ................................ 32,600 847,600
------------
FOREST PRODUCTS (0.8%)
Champion International Corp. ................... 9,200 293,825
Fort James Corp. ............................... 40,200 1,620,563
------------
1,914,388
------------
HEALTH CARE (6.9%)
Baxter International, Inc. ..................... 50,300 3,014,856
Beckman Coulter, Inc. .......................... 13,300 625,100
Bristol-Myers Squibb Co. ....................... 45,600 5,041,650
Covance, Inc. (a) .............................. 15,500 432,063
HCR Manor Care Inc. ............................ 29,700 965,250
Medtronic, Inc. ................................ 32,000 2,080,000
Pfizer Inc. .................................... 25,900 2,779,394
St. Jude Medical Inc. .......................... 23,400 661,050
Vencor, Inc. (a) ............................... 32,600 150,775
Ventas Inc. .................................... 32,600 372,863
------------
16,123,001
------------
INDUSTRIAL MACHINERY & RELATED SERVICES (0.4%)
Harnischfeger Industries, Inc. ................. 21,500 202,906
Pentair, Inc. .................................. 16,300 613,288
Timken Co. ..................................... 5,400 96,188
------------
912,382
------------
INSURANCE (4.7%)
Aetna Inc. ..................................... 20,400 1,522,350
American International Group ................... 28,000 2,387,000
AON Corp. ...................................... 54,050 3,351,100
CIGNA Corp. .................................... 37,400 2,727,863
Travelers, Property Casualty Corp. ............. 32,600 1,000,413
------------
10,988,726
------------

METALS (0.0%)
Birmingham Steel Corp. ......................... 8,800 45,650
------------
MULTI INDUSTRY COMPANIES (2.0%)
National Service Industries .................... 9,300 333,638
TRW Inc. ....................................... 2,200 125,263
Tyco International Ltd. ........................ 69,900 4,329,431
------------
4,788,332
------------
OIL & GAS (2.0%)
Halliburton Co. ................................ 74,000 2,659,375
Lyondell Petrochemical ......................... 29,700 501,188
Ultramar Diamond Shamrock Corp. ................ 33,400 899,713
Unocal Corp. ................................... 21,600 733,050
------------
4,793,326
------------
PACKAGING & CONTAINERS (0.5%)
Corning, Inc. .................................. 26,400 958,650
Crown Cork & Seal, Inc. ........................ 7,000 223,125
------------
1,181,775
------------
PHARMACEUTICALS (6.5%)
Allergan, Inc. ................................. 19,200 1,198,800
Alza Corp. (a) ................................. 30,800 1,474,550
American Home Products Corp. ................... 28,900 1,408,875
Biogen, Inc. (a) ............................... 7,100 493,450
Genzyme Corp. (a) .............................. 12,400 521,575
Merck & Co., Inc. .............................. 20,400 2,759,100
Schering-Plough Corp. .......................... 71,100 7,314,400
------------
15,170,750
------------
REFUSE SYSTEMS (0.9%)
Waste Management Inc. .......................... 46,000 2,075,750
------------
TECHNOLOGY (15.4%)
Altera Corp. (a) ............................... 38,300 1,594,238
Automatic Data Processing, Inc. ................ 35,800 2,785,688
Cisco Systems, Inc. (a) ........................ 92,050 5,799,150
Compaq Computer Corp. .......................... 91,000 2,877,875
Dell Computer Corp. (a) ........................ 86,200 5,646,100
EMC Corp. (a) .................................. 27,400 1,763,875
First Data Corp. ............................... 54,200 1,436,300
General Semiconductor, Inc. (a) ................ 15,725 124,817
Informix Corp. (a) ............................. 14,800 75,388
Intel Corp. .................................... 17,100 1,525,106
Microsoft Corp. (a) ............................ 22,300 2,361,013
Solectron Corp. (a) ............................ 68,700 3,933,075
Xerox Corp. .................................... 63,600 6,161,250
------------
36,083,875
------------
TELECOMMUNICATION AND BROADCASTING (4.2%)
General Instrument Corp. (a) ................... 70,300 1,805,831
HBO & Company .................................. 64,900 1,703,625
Liberty Media Group ............................ 69,500 2,645,344
MCI Worldcom Inc. .............................. 68,500 3,784,625
------------
9,939,425
------------
TIRE & RUBBER (0.6%)
Goodyear Tire & Rubber Co. ..................... 25,300 1,363,038
------------
TRANSPORTATION (3.4%)
Burlington Northern Santa Fe ................... 154,200 4,760,925
FDX Corp. ...................................... 20,200 1,061,763
Norfolk Southern Corp. ......................... 66,900 2,203,519
------------
8,026,207
------------
TOTAL COMMON STOCK (Cost $191,969,985) ...................... 220,164,399
------------
SHORT TERM INVESTMENTS (2.2%) (b)
Dreyfus Cash Management Fund - Money Market Fund
(Cost $5,319,570) ............................ 5,319,570 5,319,570
------------
TOTAL INVESTMENTS (95.9%)
(Cost $197,289,555) (c) ................................... 225,483,969
OTHER ASSETS IN EXCESS OF LIABILITIES (4.1)% ................ 9,529,730
------------
TOTAL NET ASSETS (100.0%) ................................... $235,013,699
============

(a) Represents non-income producing securities.
(b) Percentages indicated are based on net assets
(c)

For Federal income tax purposes, the cost of securities owned at October
31, 1998 was $198,038,301 resulting in net unrealized appreciation of
securities as follows:

Gross unrealized appreciation ..................... 33,554,569
Gross unrealized depreciation .................... (6,108,901)
-----------
Net unrealized apppreciation ...................... 27,445,668
===========

SCHEDULE OF OPEN FINANCIAL FUTURES CONTRACTS (D)

<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF EXPIRATION CONTRACT APPRECIATION
CONTRACTS CONTRACTS DATE VALUE OF CONTRACTS
--------- --------- ---- ----- ------------

<S> <C> <C> <C> <C>
S&P Future Dec. 98 - Long 39 12/18/98 $10,775,700 $304,802
========
</TABLE>
(d) All of the open financial futures contracts are collateralized by cash and
cash equivalents.

See notes to financial statements
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

REPUBLIC FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<CAPTION>
NEW YORK
TAX-FREE EQUITY
BOND FUND FUND
----------- ------------
ASSETS:
<S> <C> <C>
Investments in securities, at value (cost $30,571,241
and $197,289,555 respectively) ....................... $32,422,474 $225,483,969
Cash ................................................... 61 704,747
Receivable for investments sold ........................ -- 9,934,369
Receivable for fund shares sold ........................ 234,905 19,680
Interest receivable .................................... 459,369 33,250
Dividends receivable ................................... -- 140,919
Variation margin receivable on open futures contracts .. -- 84,825
Deferred organization expenses ......................... 7,071 7,201
----------- ------------
Total Assets ............................................. 33,123,880 236,408,960
----------- ------------

LIABILITIES:
Investment manager fees payable ........................ -- 267,035
Advisory fees payable .................................. -- 144,781
Payable for fund shares redeemed ....................... 542,184 244,598
Payable for investments purchased ...................... -- 557,841
Dividends payable ...................................... 59,866 --
Accrued liabilities .................................... 109,518 181,006
----------- ------------
Total Liabilities ........................................ 711,568 1,395,261
----------- ------------
NET ASSETS ............................................... $32,412,312 $235,013,699
=========== ============
</TABLE>

-- continued --
<PAGE>

<TABLE>
<S> <C> <C>
COMPOSITION OF NET ASSETS:
Paid-in capital ........................................ $30,516,300 $202,089,980
Undistributed net investment (loss)/income ............. (1,200) 24,247
Accumulated net realized gains on investment
transactions ......................................... 45,979 4,400,256
Net unrealized appreciation on investments ............. 1,851,233 28,499,216
----------- ------------
NET ASSETS, OCTOBER 31, 1998 ............................. $32,412,312 $235,013,699
=========== ============
NET ASSETS
Class A (Investor) Shares .............................. $23,153,535 $ 23,558,732
Class B Shares ......................................... 618,222 956,474
Class Y (Adviser) Shares ............................... 8,640,555 210,498,493
----------- ------------
Total Net Assets ......................................... $32,412,312 $235,013,699
=========== ============
SHARES OUTSTANDING (par value $0.001,
unlimited number of shares authorized)
Class A (Investor) Shares .............................. 2,118,346 1,389,974
Class B Shares ......................................... 56,607 56,526
Class Y (Adviser) Shares ............................... 790,691 12,415,622
----------- ------------
Total Shares Outstanding ................................. 2,965,644 13,862,122
=========== ============
CLASS A SHARES (INVESTOR SHARES)
Net asset value and redemption price per share ........... $10.93 $16.95
=========== ============

Maximum offering price per share (Net asset value plus a
sales charge of 2.75% and 3.50% of each Fund's offering
price respectively) .................................... $11.24 $17.56
=========== ============
CLASS B SHARES
Net asset value and offering price per share ............. $10.92 $16.92
=========== ============
CLASS Y SHARES (ADVISER SHARES)
Net asset value, offering price and redemption price per
share .................................................. $10.93 $16.95
=========== ============
</TABLE>

See notes to financial statements.
<PAGE>

REPUBLIC FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
NEW YORK
TAX-FREE EQUITY
BOND FUND FUND
---------- ----------
<S> <C> <C>
INVESTMENT INCOME:
Interest income ......................................... $1,588,229 $ 342,914
Dividend income ......................................... -- 2,182,925
---------- ----------
1,588,229 2,525,839
---------- ----------
EXPENSES:
Advisory fees and investment management fees ............ 75,805 902,442
Administration fees ..................................... 30,139 189,432
Shareholder service fees (Class A and Class B shares) ... 47,059 46,755
Distribution fees (Class B shares) ...................... 1,289 2,650
Fund accounting fees .................................... 44,772 65,208
Custodian fees and expenses ............................. 15,230 98,162
Audit fees .............................................. 18,928 18,928
Transfer agent fees...................................... 44,772 44,772
Reports to shareholders ................................. 15,288 62,876
Legal fees .............................................. 6,916 17,836
Other expenses .......................................... 40,042 79,700
---------- ----------
Total expenses .......................................... 340,240 1,528,761
Less: Voluntary fee reductions and reimbursement
of expenses ........................................... (72,116) --
---------- ----------
Total net expenses ...................................... 268,124 1,528,761
---------- ----------
Net Investment Income ..................................... 1,320,105 997,078
---------- ----------
REALIZED/UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on investment transactions ........... 45,989 4,469,866
Net change in unrealized appreciation on investments .... 898,647 21,654,911
---------- ----------
Net realized/unrealized gains on investments ............ 944,636 26,124,777
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...... $2,264,741 $27,121,855
========== ===========
</TABLE>

See notes to financial statements.
<PAGE>

REPUBLIC NEW YORK TAX-FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
OCTOBER 31,
-------------------------------
1998 1997
------------ ------------
<S> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ............................... $ 1,320,105 $ 1,009,588
Net realized gains on investment transactions ....... 45,989 115,458
Net change in unrealized appreciation on investments 898,647 746,912
----------- -----------
Net increase in net assets resulting from operations .. 2,264,741 1,871,958
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A (Investor) Shares ......................... (921,138) (623,143)
Class B Shares (a) ................................ (6,690) --
Class Y (Adviser) Shares .......................... (393,477) (386,445)
Net realized gains:
Class A (Investor) Shares ......................... (81,787) (14,151)
Class B shares (a) ................................ -- --
Class Y (Adviser) Shares .......................... (33,681) (12,589)
----------- -----------
Decrease in net assets from shareholder distributions . (1,436,773) (1,036,328)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares ....................... 10,904,138 18,908,256
Dividends reinvested ................................ 1,119,898 681,105
Cost of shares redeemed ............................. (10,134,679) (5,315,439)
----------- -----------
Net increase in net assets from capital share
transactions 1,889,357 14,273,922
----------- -----------
NET INCREASE IN NET ASSETS ............................ 2,717,325 15,109,552
NET ASSETS:
Beginning of year ................................... 29,694,987 14,585,435
----------- -----------
End of year (including undistributed net investment
loss of $1,200 and $0, respectively) .............. $32,412,312 $29,694,987
=========== ===========
(a) The Fund commenced offering Class B shares on January 6, 1998.
</TABLE>

See notes to financial statements.
<PAGE>

<TABLE>
<CAPTION>
REPUBLIC EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
OCTOBER 31,
------------------------------
1998 1997
----------- -----------
<S> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ............................... $ 997,078 $ 392,490
Net realized gains on investment transactions ....... 4,469,866 8,543,383
Net change in unrealized appreciation on investments 21,654,911 3,163,098
------------ -----------
Net increase in net assets resulting from operations .. 27,121,855 12,098,971
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A (Investor) Shares ........................... (57,050) (44,001)
Class B Shares (a) .................................. (289) --
Class Y (Adviser) Shares ............................ (918,974) (418,175)
Net realized gains:
Class A (Investor) Shares ........................... (745,988) (80,739)
Class B Shares (a) .................................. -- --
Class Y (Adviser) Shares ............................ (7,858,305) (609,926)
------------ -----------
Decrease in net assets from shareholder distributions . (9,580,606) (1,152,841)
------------ -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares ....................... 206,983,626 31,671,641
Dividends reinvested ................................ 9,269,032 732,663
Cost of shares redeemed ............................. (74,203,507) (5,000,592)
------------ -----------
Net increase in net assets from capital share
transactions ........................................ 142,049,151 27,403,712
------------ -----------
NET INCREASE IN NET ASSETS ............................ 159,590,400 38,349,842
NET ASSETS:
Beginning of year ................................... 75,423,299 37,073,457
------------ -----------
End of year (including undistributed net investment
income of $24,247 and $3,482, respectively) ....... $235,013,699 $75,423,299
============ ===========
(a) The Fund commenced offering Class B shares on January 6, 1998.
</TABLE>

See notes to financial statements.

<PAGE>

<TABLE>
REPUBLIC FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<CAPTION>
OVERSEAS
BOND EQUITY OPPORTUNITY
FUND FUND FUND
---------- ---------- -----------
<S> <C> <C> <C>
ASSETS:
Investment in Republic Fixed Income Portfolio,
Republic International Equity Portfolio and
Republic Small Cap Equity Portfolio,
respectively, at value .......................... $5,315,424 $6,205,546 $13,556,618
Receivable for fund shares sold ................... 15,950 175 11,235
Receivable from Investment Manager ................ 2,044 -- --
Unamortized organization expenses ................. 11,632 11,610 8,609
Miscellaneous receivables and prepayments ......... 8,186 7,536 5,904
---------- ---------- -----------
Total Assets ........................................ 5,353,236 6,224,867 13,582,366
---------- ---------- -----------
LIABILITIES:
Payable for fund shares repurchased ............... 144,782 99,216 57,718
Dividends payable ................................. 13,308 -- --
Accrued liabilities ............................... 5,716 14,182 38,008
---------- ---------- -----------
Total Liabilities ................................... 163,806 113,398 95,726
---------- ---------- -----------
NET ASSETS .......................................... $5,189,430 $6,111,469 $13,486,640
========== ========== ===========
COMPOSITION OF NET ASSETS:
Paid-in capital ................................... $5,152,439 $6,272,700 $13,489,895
Undistributed net investment income (loss) ........ (6,238) 29,114 --
Accumulated net realized gains (losses) on
investment and foreign currency transactions .... 118,166 (153,324) 685,505
Net unrealized depreciation on investments and
foreign currency transactions ................... (74,937) (37,021) (688,760)
---------- ---------- -----------
NET ASSETS, OCTOBER 31, 1998 ........................ $5,189,430 $6,111,469 $13,486,640
========== ========== ===========
Net Assets
Class A Shares (Investor Shares) ................ $4,825,640 $6,069,557 $13,137,316
Class B Shares .................................. 363,790 41,912 349,324
---------- ---------- -----------
Total Net Assets .................................. $5,189,430 $6,111,469 $13,486,640
========== ========== ===========
Shares Outstanding (par value $0.001, unlimited
number of shares authorized) --
Class A Shares (Investor Shares) ................ 459,219 521,435 1,159,151
Class B Shares .................................. 34,610 3,622 30,896
---------- ---------- -----------
Total Shares Outstanding .......................... 493,829 525,057 1,190,047
========== ========== ===========
CLASS A SHARES (INVESTOR SHARES)
Net asset value and redemption price per share .... $10.51 $11.64 $11.33
========== ========== ===========
Maximum offering price per share (Net asset value
plus a sales charge of 2.75%, 3.50% and 3.50%
of each fund's offering price, respectively) .... $10.81 $12.06 $11.74
========== ========== ===========
CLASS B SHARES
Net asset value and offering price per share ...... $10.51 $11.57 $11.31
========== ========== ===========
</TABLE>
See notes to financial statements.
<PAGE>

<TABLE>
REPUBLIC FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1998
<CAPTION>
OVERSEAS
BOND EQUITY OPPORTUNITY
FUND FUND FUND
-------- -------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Investment Income from Republic Fixed Income Port-
folio, Republic International Equity Portfolio and
Republic Small Cap Equity Portfolio, respectively:
Interest income ...................................... $301,887 $ 11,434 $ 39,257
Dividend income (net of foreign withholding tax of
$0, $13,417 and $43, respectively) ................. -- 78,776 16,678
-------- -------- -----------
301,887 90,210 55,935
Allocated Net Expenses from respective Portfolio ....... (28,121) (51,686) (126,028)
-------- -------- -----------
Net investment income (loss) from Republic Fixed
Income Portfolio, Republic International Equity
Portfolio and Republic Small Cap Equity Portfolio,
respectively ......................................... 273,766 38,524 (70,093)
-------- -------- -----------
EXPENSES:
Reports to shareholders .............................. 2,548 2,184 5,460
Shareholder service fees ............................. 12,616 13,468 31,446
Registration fees .................................... 11,284 11,648 11,648
Audit fees ........................................... 9,100 9,100 9,100
Amortization of organization expenses ................ 5,213 5,582 4,510
Legal Fees ........................................... 1,456 1,092 2,912
Administration fees .................................. 2,275 2,668 6,072
Other expenses ....................................... 2,066 2,063 3,134
-------- -------- -----------
Total expenses ....................................... 46,558 47,805 74,282
Less: Voluntary fee reductions and reimbursement of
expenses ........................................... (23,377) (4,642) (863)
-------- -------- -----------
Total net expenses ................................... 23,181 43,163 73,419
-------- -------- -----------
NET INVESTMENT INCOME (LOSS) ........................... 250,585 (4,639) (143,512)
-------- -------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS
FROM REPUBLIC FIXED INCOME PORTFOLIO, REPUBLIC
INTERNATIONAL EQUITY PORTFOLIO AND REPUBLIC SMALL
CAP EQUITY PORTFOLIO, RESPECTIVELY:
Net realized gains (losses) on:
Investment transactions ............................ 104,774 (147,181) 852,630
Foreign currency transactions ...................... 1,718 31,096 --
Net change in unrealized (depreciation)
appreciation on:
Investments ........................................ (108,976) 169,801 (1,475,208)
Foreign currency transactions ...................... (471) (58,230) --
-------- -------- -----------
Net realized/unrealized gains (losses) on investments
from Republic Fixed Income Portfolio, Republic
International Equity Portfolio and Republic Small
Cap Equity Portfolio, respectively ................... (2,955) (4,514) (622,578)
-------- -------- -----------
NET CHANGE IN NET ASSETS RESULTING FROM OPERATIONS ..... $247,630 $ (9,153) $ (766,090)
======== ======== ===========
</TABLE>

See notes to financial statements.

<PAGE>

<TABLE>
REPUBLIC BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
FOR THE YEAR ENDED
OCTOBER 31,
----------------------------
1998 1997
---------- ----------
<S> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ........................................ $ 250,585 $ 51,344
Net realized gains on investment and foreign currency
transactions from Republic Fixed Income Portfolio .......... 106,492 8,311
Net change in unrealized (depreciation) appreciation on
investments and foreign currency transactions from
Republic Fixed Income Portfolio ............................ (109,447) 34,262
---------- ----------
Net increase in net assets resulting from operations ........... 247,630 93,917
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A (Investor) Shares .................................. (242,580) (56,009)
Class B Shares (a) ......................................... (8,005) --
Net realized gains:
Class A (Investor) Shares .................................. -- (7,662)
Class B Shares (a) ......................................... -- --
Capital:
Class A (Investor) Shares .................................. -- (2,541)
Class B Shares (a) ......................................... -- --
---------- ----------
Decrease in net assets from shareholder distributions .......... (250,585) (66,212)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued .................................. 8,083,261 2,707,379
Dividends reinvested ......................................... 221,559 66,374
Cost of shares redeemed ...................................... (5,554,705) (379,760)
---------- ----------
Net increase in net assets from capital share transactions ..... 2,750,115 2,393,993
---------- ----------
NET INCREASE IN NET ASSETS ..................................... 2,747,160 2,421,698
NET ASSETS:
Beginning of year ............................................ 2,442,270 20,572
---------- ----------
End of year (includes undistributed net investment income of
$(6,238) and $382, respectively) ........................... $5,189,430 $2,442,270
========== ==========
ANALYSIS OF FUND SHARE TRANSACTIONS:
CLASS A (INVESTOR) SHARES:
Beginning of year ............................................ 232,614 2,005
Shares sold .................................................. 729,278 260,817
Shares issued in connection with reinvestment of
distributions .............................................. 20,355 6,358
Shares redeemed .............................................. (523,028) (36,566)
---------- ----------
End of year .................................................. 459,219 232,614
========== ==========
CLASS B SHARES:
Beginning of period .......................................... -- --
Shares sold .................................................. 33,955 --
Shares issued in connection with reinvestment of
distributions .............................................. 664 --
Shares redeemed .............................................. (9) --
---------- ----------
End of period ................................................ 34,610 --
========== ==========
(a) The Fund commenced offering Class B Shares on January 6, 1998.
</TABLE>

See notes to financial statements.

<PAGE>

<TABLE>
REPUBLIC OVERSEAS EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
FOR THE YEAR ENDED
OCTOBER 31,
----------------------------
1998 1997
---------- ----------
<S> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment (loss) ........................................ $ (4,639) $ (2,142)
Net realized gains (losses) on investment and foreign
currency transactions from Republic International Equity
Portfolio .................................................. (116,085) 34,304
Net change in unrealized appreciation/(depreciation) on
investments and foreign currency transactions from
Republic International Equity Portfolio .................... 111,571 (149,951)
---------- ----------
Net change in net assets resulting from operations ............. (9,153) (117,789)
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A (Investor) Shares .................................. (25,605) (293)
Class B Shares (a) ......................................... -- --
Net realized gains:
Class A (Investor) Shares .................................. (23,270) (12)
Class B Shares (a) ......................................... -- --
---------- ----------

Decrease in net assets from shareholder distributions .......... (48,875) (305)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issed ................................... 8,796,679 4,057,607
Dividends reinvested ......................................... 48,697 305
Cost of shares redeemed ...................................... (6,335,531) (421,903)
---------- ----------
Net increase in net assets from capital share transactions ..... 2,509,845 3,636,009
---------- ----------
NET INCREASE IN NET ASSETS ..................................... 2,451,817 3,517,915
NET ASSETS:
Beginning of year ............................................ 3,659,652 141,737
---------- ----------
End of year (includes undistributed net investment income of
$29,114 and $12,589, respectively) ......................... $6,111,469 $3,659,652
========== ==========
ANALYSIS OF FUND SHARE TRANSACTIONS:
CLASS A (INVESTOR SHARES):
Beginning of year ............................................ 316,238 13,961
Shares sold .................................................. 773,666 338,261
Shares issued in connection with reinvestment of
distributions .............................................. 4,336 28
Shares redeemed .............................................. (572,805) (36,012)
---------- ----------
End of year .................................................. 521,435 316,238
========== ==========
CLASS B SHARES:
Beginning of period .......................................... -- --
Shares sold .................................................. 4,346 --
Shares issued in connection with reinvestment of
distributions .............................................. -- --
Shares redeemed .............................................. (724) --
---------- ----------
End of period ................................................ 3,622 --
========== ==========
(a) The Fund commenced offering Class B Shares on January 6, 1998.

</TABLE>
See notes to financial statements.

<PAGE>

<TABLE>
REPUBLIC OPPORTUNITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
FOR THE YEAR ENDED
OCTOBER 31,
-----------------------------
1998 1997
----------- ----------
<S> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss ......................................... $ (143,512) $ (58,105)
Net realized gains on investment transactions from Republic
Small Cap Equity Portfolio ................................ 852,630 413,216
Net change in unrealized appreciation/(depreciation) on
investments from Republic Small Cap Equity Portfolio ...... (1,475,208) 906,961
----------- ----------
Net change in net assets resulting from operations ............ (766,090) 1,262,072
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains:
Class A (Investor) Shares ................................. (379,714) (1,661)
Class B Shares (a) ........................................ -- --
----------- ----------
Decrease in net assets from shareholder
distributions ............................................... (379,714) (1,661)
----------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares ................................ 16,138,288 5,893,592
Dividends reinvested ........................................ 379,185 1,661
Cost of shares redeemed ..................................... (11,868,177) (356,479)
----------- ----------
Net increase in net assets from capital share transactions .... 4,649,296 5,538,774
----------- ----------
NET INCREASE IN NET ASSETS .................................... 3,503,492 6,799,185
NET ASSETS:
Beginning of year ........................................... 9,983,148 3,183,963
----------- ----------
End of year ................................................. $13,486,640 $9,983,148
=========== ==========
ANALYSIS OF FUND SHARE TRANSACTIONS:
CLASS A (INVESTOR) SHARES:
Beginning of year ........................................... 806,989 324,745
Shares sold ................................................. 1,328,366 514,331
Shares issued in connection with reinvestment of
distributions ............................................. 33,527 169
Shares redeemed ............................................. (1,009,731) (32,256)
----------- ----------
End of year ................................................. 1,159,151 806,989
=========== ==========
CLASS B SHARES:
Beginning of period ......................................... -- --
Shares sold ................................................. 31,384 --
Shares redeemed ............................................. (488) --
----------- ----------
End of period ............................................... 30,896 --
=========== ==========
(a) The Fund commenced offering Class B Shares on January 6, 1998.

</TABLE>
See notes to financial statements.

<PAGE>

REPUBLIC FUNDS
NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1998

1. ORGANIZATION. The Republic New York Tax-Free Bond Fund, Republic Equity
Fund, Republic Bond Fund, Republic Overseas Equity Fund and Republic
Opportunity Fund (individually a "Fund", collectively the "Funds") are
separate series of Republic Funds (the "Trust"), a Massachusetts business
trust organized on April 22, 1987, which as of October 31, 1998 consisted of
seven funds, each of which has different and distinct investment objectives
and policies. The financial statements for the other two funds are published
separately. The Trust is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end management investment company.

The investment objective of the New York Tax-Free Bond Fund is to
provide shareholders of the Fund with monthly dividends exempt from
regular federal, New York State and New York City personal income taxes as
well as to protect the value of the shareholders investments.

The investment objective of the Equity Fund is long-term growth of
capital and income without excessive fluctuations in market value.

The investment objective of the Republic Bond Fund is to realize
above-average total return over a market cycle of three to five years,
consistent with reasonable risk through investment in a diversified
portfolio of fixed-income securities.

The investment objective of the Republic Overseas Equity Fund is to
seek long-term growth of capital and future income through investment
primarily in securities of non-U.S. issuers and U.S. registered
securities) and securities whose principal markets are outside the United
States.

The investment objective of the Republic Opportunity Fund 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.

Unlike traditional mutual funds, the Bond Fund, Overseas Equity Fund
and Opportunity Fund (individually a "Feeder Fund", collectively the
"Feeder Funds") seek to achieve their investment objectives by investing
substantially all of their assets in the Republic Fixed Income Portfolio,
Republic International Equity Portfolio and Republic Small Cap Equity
Portfolio (individually a "Portfolio", collectively the "Portfolios"),
respectively, which have the same investment objectives as those of the
respective Feeder Funds.

The value of each Feeder Fund's investment in each corresponding
Portfolio included in the accompanying statements of assets and
liabilities reflects each Feeder Fund's proportionate beneficial interest
in the net assets of that Portfolio. At October 31, 1998, the Feeder Funds
held proportionate interests in the corresponding Portfolios in the
following amounts:

Bond Fund .......................................................... 3.1%
Overseas Equity Fund ............................................... 3.1%
Opportunity Fund ................................................... 7.3%

The performance of each Feeder Fund is directly affected by the
performance of its corresponding Portfolio. The financial statements of
each Portfolio, including its schedule of investments, are included
elsewhere within this report and should be read in conjunction with each
corresponding Feeder Fund's financial statements.

The New York Tax-Free Bond Fund and Equity Fund are authorized to
issue three classes of shares, Class A Shares ("Investor Shares"), Class B
Shares and Class Y Shares ("Adviser Shares"). Prior to January 6, 1998 the
Investor Shares were known as Class C Shares. Each class of shares in the
two Funds has identical rights and privileges except with respect to fees
paid under shareholder servicing or distribution plans, voting rights on
matters affecting a single class of shares, and the exchange privilege of
each class of shares. The Bond Fund, Overseas Equity Fund and Opportunity
Fund each are authorized to offer two classes of shares which have the
same features as the Class A (Investor) Shares and Class B Shares of the
New York Tax-Free Bond Fund and Equity Fund.

The Trust retains Republic National Bank of New York ("Republic") to
act as Investment Adviser ("Adviser") to the New York Tax-Free Bond Fund
and as Investment Manager ("Manager") to the Equity Fund as well as
custodian to both Funds. The Feeder Funds automatically invest all of
their investable assets in its corresponding Portfolio and consequently
the Feeder Funds have not retained an Investment Advisor.

The Trust retains BISYS Fund Services, Inc. ("BISYS") to act as
Administrator, Distributor and Sponsor ("Sponsor").

2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies followed by the Funds in the preparation of
their 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 year.
Actual results could differ from those estimates.

SECURITIES VALUATION:
Bonds and other fixed income securities (other than short-term obligations
but including listed issues) in the New York Tax-Free Bond Fund's
portfolio are valued on the basis of valuations furnished by a pricing
service, the use of which has been approved by the Trust's Board of
Trustees. In making such valuations, the pricing service utilizes both
dealer-supplied valuations and electronic data processing techniques which
take into account appropriate factors such as institutional-size trading
in similar groups of securities, yield, quality, coupon rate, maturity,
type of issue, trading characteristics other than market data and without
exclusive reliance upon quoted prices or exchanges or over-the-counter
prices, since such valuations are believed to reflect more accurately the
fair value of such securities. Short-term debt obligations are valued at
amortized cost, which approximates market value, as determined by the
Board of Trustees.

The value of each security held by the Equity Fund is based either on
the last sale price on a national securities exchange, or in the absence
of recorded sales, at the closing bid prices on such exchanges, or at the
quoted bid price in the over-the-counter market. Securities or other
assets for which market quotations are not readily available are valued at
fair market value as determined in good faith by or at the direction of
the Board of Trustees. All debt portfolio securities with a remaining
maturity of less than 60 days are valued at amortized cost, which
approximates market value.

For the Feeder Funds, the valuation of securities held by the
Portfolios is discussed in Note 2 of the notes to the financial statements
of the Portfolios which are included elsewhere in this report.

SECURITIES TRANSACTIONS AND RELATED INCOME:
Security transactions in the New York Tax-Free Bond Fund and the Equity
Fund are accounted for on the date the security is purchased or sold
("trade date"). Interest income is recognized on the accrual basis and
includes, where applicable, the amortization of premium or accretion of
discount. Dividend income is recorded on the ex-dividend date. Gains or
losses realized on sales of securities are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.

The Bond Fund, Overseas Equity Fund and Opportunity Fund record their
proportionate share of the net investment income and realized and
unrealized gains and losses recorded by the corresponding Portfolio on a
daily basis. The net investment income and realized and unrealized gains
and losses are allocated daily to investors in each Portfolio based upon
the proportionate value of their investments in each Portfolio. Such
investments are adjusted on a daily basis.

REPURCHASE AGREEMENTS:
With respect to the New York Tax-Free Bond Fund and Equity Fund, the
investment advisers are authorized to enter into repurchase agreements on
behalf of the Fund only with member banks of the Federal Reserve System or
"primary dealers" (as designated by the Federal Reserve Bank of New York).
The Equity Fund may also enter into repurchase agreements with entities
who are member firms (or a subsidiary thereof) of the New York Stock
Exchange, recognized domestic or foreign securities dealers or
institutions which an Equity Fund sub-adviser has determined to be of
comparable creditworthiness. The repurchase price generally equals the
price paid by a Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the
underlying portfolio securities. The seller, under a repurchase agreement,
is required to maintain the value of collateral held pursuant to the
agreement at not less than the repurchase price (including accrued
interest). Collateral subject to repurchase agreements are held by a
Fund's custodian, either physically or in book entry form.

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
The New York Tax-Free Bond Fund and the Bond Fund declare all net
investment income daily as dividends to their shareholders and distribute
such dividends monthly. Dividends from net investment income are declared
and distributed quarterly in the case of the Equity Fund, semi-annually in
the case of the Opportunity Fund and annually in the case of the Overseas
Equity Fund. Generally, a Fund's net investment income consists of
interest and dividend income less expenses.

The Funds' net realized capital gains, if any, are distributed to
shareholders at least annually. Additional distributions are also made to
the Funds' shareholders to the extent necessary to avoid the federal
excise tax on certain undistributed income and net capital gains of
regulated investment companies.

The amount of distributions from net investment income and net
realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting
principles. These "book/tax" differences are either considered temporary
or permanent in nature. To the extent these differences are permanent in
nature, such amounts are reclassified to paid-in capital; temporary
differences do not require reclassification.

As of October 31, 1998, the following reclassification has been made
to increase (decrease) such accounts with offsetting adjustments made to
paid-in capital:
ACCUMULATED ACCUMULATED NET
UNDISTRIBUTED REALIZED GAIN/
NET INVESTMENT (LOSS)
INCOME ON INVESTMENTS
-------------- ----------------
Bond Fund ........................ $ (6,620) $ 11,833
Overseas Equity Fund ............. 46,769 (37,250)
Opportunity Fund ................. 143,512 (139,002)

Certain mortgage-backed securities of the Fixed Income Portfolio may
provide for periodic or unscheduled payments of principal and interest as
the mortgages underlying the securities are paid or prepaid. However, such
principal payments (not otherwise characterized as ordinary discount
income or bond premium expense) will not normally be considered as income
to the Fixed Income Portfolio and therefore will not be distributed as
dividends to Bond Fund shareholders. Rather, these payments on mortgage-
backed securities generally will be reinvested by the Fixed Income
Portfolio in accordance with its investment objective and policies.

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 where allocations of direct expenses to each fund can
otherwise be made fairly. Expenses directly attributable to a Fund are
charged to that Fund. The Bond Fund, Overseas Equity Fund and Opportunity
Fund's share of their corresponding Portfolio's expenses are charged
against and reduce the amount of their investment in their corresponding
Portfolio. The expenses of the Funds are allocated to each class of shares
in proportion to their respective net asset levels except to expenses
allocable exclusively to a particular class.

FEDERAL INCOME TAXES:
Each Fund is a separate taxable entity for federal income tax purposes.
Each Fund has qualified and intends to continue to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue
Code, as amended, and to distribute substantially all of their taxable net
investment income and net realized gains if any to their shareholders.
Accordingly, no provision for federal income or excise tax is required.

DEFERRED ORGANIZATION EXPENSES:
Each Fund incurred certain costs in connection with its organization. Such
costs have been deferred and are being amortized on a constant (straight-
line) basis over a five year period from the commencement of operations.

3. AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES.

INVESTMENT MANAGEMENT:
Republic National Bank of New York ("Republic" or the "Manager") acts as
investment adviser to the New York Tax-Free Bond. For its services
Republic is entitled to receive a fee, accrued daily and payable monthly,
at an annual rate of 0.25% of the New York Tax Free Bond Fund's average
daily net assets. For the year ended October 31, 1998, this fee amounted
to $75,805 of which Republic waived $65,782.

Republic also serves as investment manager to the Equity Fund. As
investment manager, Republic provides general supervision over the
investment management functions provided by the Sub-Advisers (as defined
below). For its services as investment manager, Republic is entitled to
receive a fee, accrued daily and payable monthly, at an annual rate of
0.175% of the Equity Fund's average daily net assets. For the year ended
October 31, 1998, this fee amounted to $331,506.

SUB-ADVISORY:
Alliance Capital Management L.P and Brinson Partners Inc (collectively,
the "Sub-Advisers") continuously manage the investment portfolio of the
Equity Fund subject to the supervision of the Manager, pursuant to
seperate Sub-Advisory Agreements with the Manager. For their services, the
Sub-Advisers were paid fees by the Equity Fund, computed daily and based
on the Equity Fund's average daily net assets allocated to each of the
Sub-Advisers for management, equal on an annual basis to 0.325% of the net
assets up to $50 million, 0.25% of the net assets over $50 million up to
$100 million, 0.20% of the net assets over $100 million up to $200
million, and 0.15% of net assets over $200 million. For the year ended
October 31, 1998, each received fees totalling $285,468 for services
rendered.

ADMINISTRATION:
The Trust retains BISYS to serve as Administrator, Distributor and
Sponsor. BISYS provides management and administrative services necessary
for the operation of the Funds, furnishes office space and facilities
required for conducting the business of the Fund and pays the compensation
of the Fund's officers. For those services BISYS receives from the New
York Tax-Free Bond Fund and Equity Fund a fee payable monthly at an annual
rate of 0.10% of the first $1 billion of the Funds' average daily net
assets; 0.08% of the next $1 billion of the Funds' average daily net
assets; and 0.07% of such assets in excess of $2 billion.

For its services to the Bond Fund, Overseas Equity Fund and
Opportunity Fund, BISYS receives from each Fund fees payable monthly equal
on an annual basis to 0.05% of the Fund's average daily net assets up to
$1 billion; 0.04% of the next $1 billion of such assets; and 0.035% of
such assets in excess of $2 billion. For the year ended October 31, 1998
the administrative services fees were:

New York Tax-Free Bond Fund .................................... $ 30,139
Equity Fund .................................................... 189,432
Bond Fund ...................................................... 2,275
Overseas Equity Fund ........................................... 2,668
Opportunity Fund ............................................... 6,072

CUSTODY:
The domestic custody function was transferred to Republic National Bank of
New York ("Republic") effective December 1, 1997. Custody fees paid to
Republic for the year ended October 31, 1998 were as follows:

New York Tax-Free Bond Fund ..................................... $12,375
Equity Fund ..................................................... 87,985

DISTRIBUTION PLAN:
The Trust has adopted a non-compensatory Distribution Plan and Agreement
(the "Plan") pursuant to Rule 12b-1 of the Act. The Plan provides for a
monthly payment by the Funds to the Sponsor for amounts representing
actual expenses incurred by the Sponsor for marketing costs and services
rendered in distributing the Funds' shares at a rate not to exceed 0.25%
and 0.75% of the average daily net assets of Investor Shares and Class B
Shares of the Trust Funds, respectively.

SHAREHOLDER SERVICING EXPENSES:
The Trust has entered into a Shareholder Servicing Agreement with its
Shareholder Servicing Agent (which currently consists of Republic and its
affiliates) for providing various shareholder services. The aggregate fees
paid to the Distributor pursuant to the Distribution Plan and to
shareholder servicing agents pursuant to the Shareholder Servicing
Agreement historically have not exceeded 0.25% and 1.00% per annum of each
Fund's average daily net assets of Class A (Investor Shares) and Class B
Shares, respectively. For the year ended October 31, 1998, combined
shareholder servicing and distribution fees were as follows:

New York Tax-Free Bond Fund .................................... $48,348
Equity Fund .................................................... 49,405
Bond Fund ...................................................... 12,616
Overseas Equity Fund ........................................... 13,468
Opportunity Fund ............................................... 31,446

FEE WAIVERS AND REIMBURSEMENT OF EXPENSES:
The Manager has voluntarily agreed to waive a portion of its fees, and to
the extent necessary, reimburse the Funds for certain expenses. For the
year ended October 31, 1998, expenses of the Funds were voluntarily
reduced by amounts as detailed below:
FEES EXPENSES
WAIVED REIMBURSE
------ ---------
New York Tax-Free Bond Fund - Class A (Investor)
Shares ......................................... $47,296 $ 4,730
New York Tax-Free Bond Fund - Class B Shares ..... 466 13
New York Tax-Free Bond Fund - Adviser Shares ..... 18,020 1,591
Bond Fund Class A (Investor) Shares .............. -- 22,527
Bond Fund Class B Shares (a) ..................... -- 850
Overseas Equity Fund - Class A (Investor) shares . -- 4,627
Overseas Equity Fund - Class B Shares (a) ........ -- 15
Opportunity Fund - Class A (Investor) Shares ..... -- 848
Opportunity Fund - Class B Shares (a) ............ -- 15

There was no waiver of fees nor reimbursement of expenses for the Equity
Fund for the year ended October 31, 1998.

(a) The Funds commenced offering Class B shares on January 6, 1998.

4. INVESTMENT TRANSACTIONS: Purchases of and proceeds from sales and maturities
of investments, excluding short-term securities, for the Funds for the year
ended October 31, 1998 amounted to:

PURCHASES PROCEEDS
--------- --------
New York Tax-Free Bond Fund .......... $ 28,018,529 $ 24,986,232
Equity Fund .......................... 215,134,730 91,753,521

During the year ended October 31, 1998, additions and reductions in each
Fund's investment in their corresponding Portfolio amounted to:

ADDITIONS REDUCTIONS
--------- ----------
Bond Fund ............................ $ 8,104,357 $ 5,587,321
Overseas Equity Fund ................. 8,840,728 6,383,548
Opportunity Fund ..................... 16,312,495 11,922,959

5. CONCENTRATION OF CREDIT RISK: The New York Tax-Free Bond Fund invests
primarily in debt obligations issued by the State of New York and its
respective political subdivisions, agencies and public authorities. The Fund
is more susceptible to economic and political factors adversely affecting
issuers of New York specific municipal securities than are municipal bond
funds that are not concentrated in these issuers to the same extent.

6. CAPITAL SHARE TRANSACTIONS BY SHARE CLASS: Transactions in shares of
beneficial interest by class for the New York Tax-Free Bond and Equity Funds
for the year ended October 31, 1998:

<TABLE>
<CAPTION>
CLASS A CLASS Y
(INVESTORS) CLASS B (ADVISOR)
SHARES SHARES(a) SHARES
------------ ---------- ------------
<S> <C> <C> <C>
NEW YORK TAX-FREE BOND FUND
Proceeds from shares issued ............... $ 9,053,946 $ 714,872 $ 1,135,320
Reinvestment of dividends and distributions 987,570 5,467 126,861
Cost of shares redeemed ................... (8,280,543) (105,064) (1,749,072)
------------ ---------- ------------
NET INCREASE (DECREASE) ................... $ 1,760,973 $ 615,275 $ (486,891)
============ ========== ============

EQUITY FUND
Proceeds from shares issued ............... $ 25,237,948 $1,003,947 $180,741,731
Reinvestment of dividends and distributions 802,213 288 8,466,531
Cost of shares redeemed ................... (16,859,901) (68,027) (57,275,579)
------------ ---------- ------------
NET INCREASE .............................. $ 9,180,260 $ 936,208 $131,932,683
============ ========== ============
</TABLE>

(a) The Funds commenced offering Class B shares on January 6, 1998.

Transactions in shares of beneficial interest by class for the New York
Tax-Free Bond and Equity Funds for the year ended October 31, 1997:

<TABLE>
<CAPTION>
CLASS A CLASS Y
(INVESTORS) (ADVISOR)
SHARES SHARES
----------- -----------
<S> <C> <C>
NEW YORK TAX-FREE BOND FUND
Proceeds from shares issued .................... $17,824,243 $ 1,084,013
Reinvestment of dividends and distributions .... 593,163 87,942
Cost of shares redeemed ........................ (4,534,332) (781,107)
----------- -----------
NET INCREASE ................................... $13,883,074 $ 390,848
=========== ===========

CLASS A CLASS Y
<CAPTION>
(INVESTORS) (ADVISOR)
SHARES SHARES
----------- -----------
<S> <C> <C>
EQUITY FUND
Proceeds from shares issued .................... $ 9,098,775 $22,572,866
Reinvestment of dividends and distributions .... 114,750 617,913
Cost of shares redeemed ........................ (1,850,916) (3,149,676)
----------- -----------
NET INCREASE ................................... $ 7,362,609 $20,041,103
=========== ===========
</TABLE>

7. FUND SHARE TRANSACTIONS BY SHARE CLASS: Transactions in shares of beneficial
interest by Class for the New York Tax-Free Bond and Equity Funds for the
year ended October 31, 1998:

<TABLE>
<CAPTION>
CLASS A CLASS Y
(INVESTORS) CLASS B (ADVISOR)
SHARES SHARES(a) SHARES
----------- ----------- -----------
<S> <C> <C> <C>
NEW YORK TAX-FREE BOND FUND
Balance at beginning of year ................ 1,953,662 -- 836,354
Shares issued ............................... 840,385 66,033 105,274
Shares issued in connection with reinvestment
of dividends and distributions ............ 91,604 505 11,779
Shares redeemed ............................. (767,305) (9,931) (162,716)
----------- ----------- -----------
Balance at end of year ...................... 2,118,346 56,607 790,691
=========== =========== ===========

EQUITY FUND
Balance at beginning of year ................ 824,033 -- 4,202,203
Shares issued ............................... 1,624,241 60,642 11,008,053
Shares issued in connection with reinvestment
of dividends and distributions ............ 54,888 17 579,552
Shares redeemed ............................. (1,113,199) (4,133) (3,374,186)
----------- ----------- -----------
Balance at end of year ...................... 1,389,974 56,526 12,415,622
=========== =========== ===========
</TABLE>

(a) The Funds commenced offering Class B shares on January 6, 1998.

Transactions in shares of beneficial interest by class for the New York
Tax-Free Bond and Equity Funds for the year ended October 31, 1997:

<TABLE>
<CAPTION>
CLASS A CLASS Y
(INVESTORS) (ADVISOR)
SHARES SHARES
---------- ----------
NEW YORK TAX-FREE BOND FUND
<S> <C> <C>
Balance at beginning of year ................................. 616,806 799,293
Shares issued ................................................ 1,716,846 103,972
Shares issued in connection with reinvestment of dividends and
distributions .............................................. 56,958 8,468
Shares redeemed .............................................. (436,948) (75,379)
---------- ----------
Balance at end of year ....................................... 1,953,662 836,354
========== ==========

EQUITY FUND
Balance at beginning of year ................................. 328,468 2,779,322
Shares issued ................................................ 623,714 1,601,585
Shares issued in connection with reinvestment of dividends and
distributions .............................................. 9,004 49,432
Shares redeemed .............................................. (137,153) (228,136)
---------- ----------
Balance at end of year ....................................... 824,033 4,202,203
========== ==========
</TABLE>

8. FEDERAL TAX STATUS OF DIVIDENDS (UNAUDITED): Short-term and long-term
capital gain dividends paid during the period are presented below. For
federal income tax purposes, dividends from short-term capital gains are
classified as ordinary income. All net investment income dividends were
ordinary income, except for the Republic New York Tax-Free Bond Fund which
paid $1,314,791 of net investment income dividends as "exempt interest
dividends".

SHORT-TERM LONG-TERM
CAPITAL GAIN CAPITAL GAIN
DIVIDENDS DIVIDENDS
--------- ---------
New York Tax-Free Bond Fund ........... $ 65,202 $ 50,266
Equity Fund ........................... 4,843,133 3,761,160
Overseas Equity Fund .................. -- 23,270
Opportunity Fund ...................... 298,351 81,363

Republic overseas Equity Fund had capital loss carryovers of $152,773,
expiring October 2006, available to effect future capital gains.

9. FOREIGN TAX CREDIT PASS THROUGH - OVERSEAS EQUITY FUND (UNAUDITED):
Pursuant to Treasury Regulations, the Fund will elect to pass through
foreign tax credit for the fiscal year ended October 31, 1998 as follows:

NET INCOME FOREIGN TAX
COUNTRY PERCENTAGE PERCENTAGE
------- ---------- ----------
Argentina 2.03% 2.35%
Australia 7.85% 8.93%
Brazil 2.29% 2.65%
Canada 6.88% 7.02%
Finland 2.74% 2.72%
France 4.63% 4.18%
Germany 4.18% 3.57%
Hong Kong 6.61% 7.66%
Indonesia 0.06% 0.07%
Ireland 0.70% 0.70%
Israel 0.05% 0.05%
Italy 3.99% 3.60%
Japan 7.46% 7.40%
Malaysia 0.49% 0.46%
Mexico 2.40% 2.78%
Netherlands 2.42% 2.62%
New Zealand 0.58% 0.61%
Norway 1.76% 1.60%
Portugal 0.80% 0.92%
Singapore 2.18% 1.87%
South Korea 0.09% 0.11%
South Africa 1.82% 2.10%
Spain 1.95% 1.69%
Sweden 5.67% 4.69%
Switzerland 3.27% 2.46%
UK 26.83% 27.19%
------ ------
Foreign Source Income 99.73% 100.00%
U.S. Income 0.27% 0.00%
------ ------
Total Income 100.00% 100.00%
====== ======

10. YEAR 2000 (UNAUDITED): The services provided to the Funds by their various
service providers depend on the smooth functioning of their computer
systems. Many computer software systems in use today cannot recognize the
year 2000, but revert to 1900 or some other date, due to the manner in which
dates were encoded and calculated. That failure could have a negative impact
on the handling of securities trades, pricing and account services. The
Funds have been advised that their service providers have been working
actively on necessary changes to their own computer systems to prepare for
the year 2000 and expect that their systems will be adapted before that
date, but there can be no assurance that they will be successful, or that
interaction with other non-complying computer systems will not impair their
services at that time. In addition, no assurance can be given that the
Funds' service providers have anticipated every step necessary to avoid any
adverse effect on the Funds attributable to the Year 2000 problem.

<PAGE>

REPUBLIC NEW YORK TAX-FREE BOND FUND
FINANCIAL HIGHLIGHTS - CLASS A (INVESTOR) SHARES

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1, 1995
(COMMENCEMENT
FOR THE YEAR ENDED OCTOBER 31, OF OFFERING) TO
----------------------------------- OCTOBER 31,
1998 1997 1996 1995
------ ------ ------ ---------------
<S> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE,
BEGINNING OF PERIOD....................... $10.64 $10.30 $10.38 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment income .................... 0.47 0.45 0.54 0.25
Net realized and unrealized
gains on investment transactions ....... 0.33 0.36 (0.01) 0.38
------ ------ ------ ------
Total income from investment
operations ............................... 0.80 0.81 0.53 0.63
------ ------ ------ ------
Less dividends and distributions:
Dividends to shareholders from net
investment income ...................... (0.47) (0.45) (0.54) (0.25)
Distributions to shareholders from net
realized gains ......................... (0.04) (0.02) (0.07) --
------ ------ ------ ------
Total dividends and distributions .......... (0.51) (0.47) (0.61) (0.25)
------ ------ ------ ------
Net change in net asset value per share .... 0.29 0.34 (0.08) 0.38
------ ------ ------ ------
NET ASSET VALUE PER SHARE, END OF PERIOD .. $10.93 $10.64 $10.30 $10.38
====== ====== ====== ======
Total return (e) ........................... 7.65% 8.22% 4.75% 6.39%(c)

RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000's) ..... $23,153 $20,794 $6,353 $6,908
Ratio of expenses to average net assets .. 0.95% 0.92% 0.58% 0.50%(b)
Ratio of net investment income to average
net assets ............................. 4.28% 4.46% 4.78% 4.91%(b)
Ratio of expenses to average net assets (a) 1.20% 1.55% 2.21% 2.40%(b)
Ratio of net investment income to average
net assets (a) ......................... 4.03% 3.83% 3.15% 3.10%(b)
Portfolio turnover (d) ................... 100.35% 163.46% 178.11% 130.00%

(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) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole, without distinguishing
between the classes of shares issued.
(e) The total return is calculated excluding the sales charge of 2.75% which applies to purchases of
Class A Shares.

</TABLE>
See notes to financial statements.
<PAGE>
REPUBLIC NEW YORK TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS - CLASS B SHARES
FOR THE PERIOD
JANUARY 6, 1998
(DATE OF INITIAL
OFFERING) TO
OCTOBER 31, 1998
----------------
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD ............. $10.81
------
Income from investment operations:
Net investment income .................................. 0.37
Net realized and unrealized gains on investment
transactions ......................................... 0.11
------
Total income from investment operations .................... 0.48
------
Less dividends and distributions:
Dividends to shareholders from net investment income ... (0.37)
Distributions to shareholders from net realized gains .. --
------
Total dividends and distributions .......................... (0.37)
------
Net change in net asset value per share .................... 0.11
------
NET ASSET VALUE PER SHARE, END OF PERIOD ................... $10.92
======
Total return (e) ........................................... 4.50%(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000's) ................... $ 618
Ratio of expenses to average net assets ................ 1.70%(b)
Ratio of net investment income to average net assets ... 3.53%(b)
Ratio of expenses to average net assets (a) ............ 1.95%(b)
Ratio of net investment income to average net assets (a) 3.28%(b)
Portfolio turnover (d) ................................. 100.35%

(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) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole,
without distinguishing between the classes of shares issued.
(e) The total return is calculated excluding the contingent deferred sales
charge which applies to redemptions of Class B Shares.

See notes to financial statements.
<PAGE>

REPUBLIC NEW YORK TAX-FREE BOND FUND
FINANCIAL HIGHLIGHTS - CLASS Y (ADVISOR) SHARES

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 1, 1996
(DATE OF INITIAL
FOR THE YEAR ENDED OCTOBER 31, OFFERING) TO
------------------------------ OCTOBER 31,
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD . $10.64 $10.30 $10.18
------ ------ ------
Income from investment operations:
Net investment income ........................ 0.49 0.46 0.16
Net realized and unrealized gains on
investment transactions .................... 0.33 0.36 0.12
------ ------ ------
Total income from investment operations ........ 0.82 0.82 0.28
------ ------ ------
Less dividends and distributions:
Dividends to shareholders from net
investment income .......................... (0.49) (0.46) (0.16)
Distributions to shareholders from net
realized gains ............................. (0.04) (0.02) --
------ ------ ------
Total dividends and distributions .............. (0.53) (0.48) (0.16)
------ ------ ------
Net change in net asset value per share ........ 0.29 0.34 0.12
------ ------ ------
NET ASSET VALUE PER SHARE, END
OF PERIOD .................................... $10.93 $10.64 $10.30
====== ====== ======
Total return.................................... 7.87% 8.38% 3.52%(c)

RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000's) ......... $8,641 $8,901 $8,233
Ratio of expenses to average net assets ...... 0.70% 0.78% 0.60%(b)
Ratio of net investment income to average net
assets ..................................... 4.53% 4.66% 4.78%(b)
Ratio of expenses to average net assets (a) 0.95% 1.27% 2.26%(b)
Ratio of net investment income to average net
assets (a) ................................. 4.28% 4.17% 3.12%(b)
Portfolio turnover (d) ....................... 100.35% 163.46% 178.11%

(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) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole, without distinguishing between the
classes of shares issued.
</TABLE>

See notes to financial statements.
<PAGE>

REPUBLIC EQUITY FUND
FINANCIAL HIGHLIGHTS - CLASS A (INVESTOR) SHARES

<TABLE>
<CAPTION>
FOR THE PERIOD
AUGUST 1, 1995
(COMMENCEMENT
FOR THE YEAR ENDED OCTOBER 31, OF OPERATIONS) TO
------------------------------------ OCTOBER 31,
1998 1997 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE,
BEGINNING OF PERIOD....................... $15.00 $11.93 $10.24 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment income .................... 0.05 0.07 0.19 0.04
Net realized and unrealized gains on
investment transactions ................ 2.80 3.32 1.67 0.24
------ ------ ------ ------
Total income from investment operations .... 2.85 3.39 1.86 0.28
------ ------ ------ ------
Less dividends and distributions:
Dividends to shareholders from net
investment income ...................... (0.05) (0.10) (0.17) (0.04)
Distributions to shareholders from net
realized gains ......................... (0.85) (0.22) -- --
------ ------ ------ ------
Total dividends and distributions .......... (0.90) (0.32) (0.17) (0.04)
------ ------ ------ ------
Net change in net asset value per share .... 1.95 3.07 1.69 0.24
------ ------ ------ ------
NET ASSET VALUE PER SHARE, END OF PERIOD .. $16.95 $15.00 $11.93 $10.24
====== ====== ====== ======
Total return (e) ........................... 19.98% 28.92% 18.30% 2.75%(c)

RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of year (000's) $23,559 $12,363 $3,918 $22,092
Ratio of expenses to average net assets .. 1.03% 1.21% 1.28% 1.47%(b)
Ratio of net investment income to average
net assets ............................. 0.30% 0.48% 1.83% 1.59%(b)
Ratio of expenses to average net assets (a) 1.03% 1.28% 1.59% 2.44%(b)
Ratio of net investment income to average
net assets (a) ......................... 0.30% 0.41% 1.51% 0.62%(b)
Portfolio turnover (d) ................... 176.34% 99.02% 86.18% 2.00%(b)

(a) During the year, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred,
the ratios would have been as indicated.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole, without distinguishing between the
classes of shares issued.
(e) The total return is calculated excluding the sales charge of 3.50% which applies to purchases of Class A Shares.

</TABLE>
See notes to financial statements.
<PAGE>
REPUBLIC EQUITY FUND
FINANCIAL HIGHLIGHTS - CLASS B SHARES
FOR THE
PERIOD
JANUARY 6, 1998
(DATE OF INITIAL
OFFERING) TO
OCTOBER 31, 1998
---------------
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD ............. $14.88
------
Income from investment operations:
Net investment loss .................................... (0.01)
Net realized and unrealized gains on investment
transactions ......................................... 2.07
------
Total income from investment operations .................... 2.06
------
Less dividends and distributions:
Dividends to shareholders from net investment income ... (0.02)
Distributions to shareholders from net realized gains .. --
------
Total dividends and distributions .......................... (0.02)
------
Net change in net asset value per share .................... 2.04
------
NET ASSET VALUE PER SHARE, END OF PERIOD ................... $16.92
======
Total return (e) ........................................... 13.84%(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of year (000's) ..................... $ 956
Ratio of expenses to average net assets ................ 1.78%(b)
Ratio of net investment income to average net assets ... (0.45%)(b)
Ratio of expenses to average net assets (a) ............ 1.78%(b)
Ratio of net investment income to average net assets (a) 0.45%)(b)
Portfolio turnover (d) ................................. 176.34%

(a) During the year, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole,
without distinguishing between the classes of shares issued.
(e) The total return is calculated excluding the contingent deferred sales
charge which applies to redemptions of Class B Shares.

See notes to financial statements.
<PAGE>

REPUBLIC EQUITY FUND
FINANCIAL HIGHLIGHTS - CLASS Y (ADVISOR) SHARES

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 1, 1996
(DATE OF INITIAL
FOR THE YEAR ENDED OCTOBER 31, OFFERING) TO
------------------------------ OCTOBER 31,
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD $15.01 $11.93 $11.49
------ ------ ------
Income from investment operations:
Net investment income ....................... 0.08 0.10 0.08
Net realized and unrealized gains on
investment transactions ................... 2.79 3.33 0.42
------ ------ ------
Total income from investment operations ....... 2.87 3.43 0.50
------ ------ ------
Less dividends and distributions:
Dividends to shareholders from net
investment income ......................... (0.08) (0.13) (0.06)
Distributions to shareholders from net
realized gains ............................ (0.85) (0.22) --
------ ------ ------
Total dividends and distributions ............. (0.93) (0.35) (0.06)
------ ------ ------
Net change in net asset value per share ....... 1.94 3.08 0.44
------ ------ ------
NET ASSET VALUE PER SHARE, END OF PERIOD ...... $16.95 $15.01 $11.93
====== ====== ======
Total return .................................. 20.16% 29.28% 4.72%(c)

RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of year (000's) .......... $210,498 $63,060 $33,155
Ratio of expenses to average net assets ..... 0.78% 0.96% 0.66%(b)
Ratio of net investment income to average net
assets .................................... 0.55% 0.77% 1.93%(b)
Ratio of expenses to average net assets (a) 0.78% 1.03% 0.97%(b)
Ratio of net investment income to average net
assets (a) ................................ 0.55% 0.70% 1.62%(b)
Portfolio turnover (d) ...................... 176.34% 99.02% 86.18%

(a) During the year, certain fees were voluntarily reduced. If such voluntary fee reductions
had not occurred, the ratios would have been as indicated.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole, without
distinguishing between the classes of shares issued.
</TABLE>

See notes to financial statements.
<PAGE>

REPUBLIC BOND FUND
FINANCIAL HIGHLIGHTS - CLASS A (INVESTOR) SHARES

<TABLE>
<CAPTION>
FOR THE PERIOD
AUGUST 26, 1996
(COMMENCEMENT
FOR THE YEAR ENDED OCTOBER 31, OF OPERATIONS) TO
------------------------------ OCTOBER 31,
1998 1997 1996
------ ------ -----------------
<S> <C> <C> <C>
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD .. $10.50 $10.26 $10.00
------ ------ ------
Income from investment operations:
Net investment income ......................... 0.59 0.57 0.10
Net realized and unrealized gains on investment
and foreign currency transactions ........... 0.01 0.30 0.26
------ ------ ------
Total income from investment operations ......... 0.60 0.87 0.36
------ ------ ------
Less dividends and distributions:
Dividends to shareholders from net
investment income ........................... (0.59) (0.57) --
Dividends to shareholders from net realized
gains ....................................... -- (0.06) (0.10)
------ ------ ------
Total dividends and distributions ............... (0.59) (0.63) (0.10)
------ ------ ------
Net change in net asset value per share ......... 0.01 0.24 0.26
------ ------ ------
NET ASSET VALUE PER SHARE, END
OF PERIOD ..................................... $10.51 $10.50 $10.26
====== ====== ======
Total return (d) ................................ 5.83% 8.71% 3.61%(c)

RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) ............ $4,826 $2,439 $ 21
Ratio of expenses to average net assets ....... 1.10% 1.10% 1.04%(b)
Ratio of net investment income to average net
assets ...................................... 5.51% 5.40% 5.23%(b)
Ratio of expenses to average net assets (a) ... 1.61% 5.24% 280.50%(b)
Ratio of net investment income to average net
assets (a) .................................. 5.00% 1.27% (274.18%)(b)

(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) Annualized.
(c) Not annualized.
(d) The total return is calculated excluding the sales charge of 2.75% which
applies to purchases of class A shares.
</TABLE>

See notes to financial statements.

<PAGE>

REPUBLIC BOND FUND
FINANCIAL HIGHLIGHTS - CLASS B SHARES
FOR THE PERIOD
JANUARY 6, 1998
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1998
----------------
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD ............. $10.63
------
Income from investment operations:
Net investment income .................................. 0.41
Net realized and unrealized gains on investment
and foreign currency transactions .................... (0.12)
------
Total income from investment operations .................... 0.29
------
Less dividends and distributions:
Dividends to shareholders from net investment income ... (0.41)
Dividends to shareholders from net realized gains ...... --
------
Total dividends and distributions .......................... (0.41)
------
Net change in net asset value per share .................... (0.12)
------
NET ASSET VALUE PER SHARE, END OF PERIOD ................... $10.51
======
Total return (d) ........................................... 2.84%(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) ..................... $ 364
Ratio of expenses to average net assets ................ 1.85%(b)
Ratio of net investment income to average net assets ... 4.76%(b)
Ratio of expenses to average net assets (a) ............ 2.36%(b)
Ratio of net investment income to average net assets ... 4.25%(b)

(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) Annualized.
(c) Not annualized.
(d) The total return is calculated excluding the contingent deferred sales
charge which applies to redemptions of Class B Shares.

See notes to financial statements.

<PAGE>

REPUBLIC OVERSEAS EQUITY FUND
FINANCIAL HIGHLIGHTS - CLASS A (INVESTOR) SHARES

<TABLE>
<CAPTION>
FOR THE PERIOD
AUGUST 26, 1996
(COMMENCEMENT
FOR THE YEAR ENDED OCTOBER 31, OF OPERATIONS) TO
------------------------------ OCTOBER 31,
1998 1997 1996
---------- ----------- ------------------
<S> <C> <C> <C>
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD .. $11.57 $10.15 $10.00
------ ------ ------
Income from investment operations:
Net investment income/(loss) .................. (0.01) (0.00)* --
Net realized and unrealized gains on
investment and foreign currency
transactions ................................ 0.23 1.43 0.15
------ ------ ------
Total income from investment operations ......... 0.22 1.43 0.15
------ ------ ------
Less dividends and distributions:
Dividends to shareholders from net
investment income ........................... (0.08) (0.01) --
Distributions to shareholders from net
realized gains .............................. (0.07) 0.00* --
------ ------ ------
Total dividends and distributions ............... (0.15) (0.01) --
------ ------ ------
Net change in net asset value per share ......... 0.07 1.42 0.15
------ ------ ------
NET ASSET VALUE PER SHARE, END
OF PERIOD ..................................... $11.64 $11.57 $10.15
====== ====== ======
Total return (d)................................. 1.96% 14.08% 1.50%(c)

RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) ............ $6,070 $3,660 $ 142
Ratio of expenses to average net assets 1.77% 1.71% 1.69%(b)
Ratio of net investment income to
average net assets .......................... (0.08%) (0.16%) 0.05%(b)
Ratio of expenses to average net assets (a) 1.86% 4.10% 33.34%(b)
Ratio of net investment income to
average net assets (a) ...................... (0.17%) (2.55%) (31.65%)(b)

(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) Annualized.
(c) Not annualized.
(d) The total return is calculated excluding the sales charge of 3.50% which applies to purchases of class A shares
* Less than $0.01 per share
</TABLE>

See notes to financial statements.

<PAGE>

REPUBLIC OVERSEAS EQUITY FUND
FINANCIAL HIGHLIGHTS - CLASS B SHARES
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 6, 1998
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1998
----------------
<S> <C>
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD ...................... $11.45
------
Income from investment operations:
Net investment income ........................................... (0.07)
Net realized and unrealized gains on investment
and foreign currency transactions ............................. 0.19
------
Total income from investment operations ............................. 0.12
------
Less dividends and distributions:
Dividends to shareholders from net investment income ............ --
Distributions to shareholders from net realized gains ........... --
------
Total dividends and distributions ................................... --
------
Net change in net asset value per share ............................. 0.12
------
NET ASSET VALUE PER SHARE, END OF PERIOD ............................ $11.57
======
Total return (d) .................................................... 1.05%(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) .............................. $ 42
Ratio of expenses to average net assets ......................... 2.52%(b)
Ratio of net investment income to average net assets ............ (0.83%)(b)
Ratio of expenses to average net assets (a) ..................... 2.61%(b)
Ratio of net investment income to average net assets (a) ........ (0.92%)(b)

(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) Annualized.
(c) Not annualized.
(d) The total return is calculated excluding the contingent deferred sales
charge which applies to redemptions of Class B Shares.
* Less than $0.01 per share.
</TABLE>

See notes to financial statements.

<PAGE>

REPUBLIC OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS - CLASS A (INVESTOR) SHARES
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 23, 1996
(COMMENCEMENT
FOR THE YEAR ENDED OCTOBER 31, OF OPERATIONS) TO
------------------------------ OCTOBER 31,
1998 1997 1996
--------------- -------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE PER SHARE,
BEGINNING OF PERIOD ......................... $12.37 $ 9.80 $10.00
------ ------ ------
Income from investment operations:
Net investment loss ......................... (0.13) (0.07) --
Net realized and unrealized gains
(losses) on investment transactions

(0.46) 2.64 (0.20)
------ ------ ------
Total income (loss) from investment
operations .................................. (0.59) 2.57 (0.20)
------ ------ ------
Less dividends and distributions:
Distributions to shareholders from net
realized gains ............................ (0.45) 0.00* --
------ ------ ------
Total dividends and distributions ............. (0.45) 0.00* --
------ ------ ------
Net change in net asset value per share (1.04) 2.57 --
------ ------ ------
NET ASSET VALUE PER SHARE, END
OF PERIOD ................................... $11.33 $12.37 $ 9.80
====== ====== ======
Total return (d)............................... (4.68%) 26.28% (2.00%)(c)

RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000's) $13,137 $9,983 $3,184
Ratio of expenses to average net
assets .................................... 1.63% 1.55% 1.22%(b)
Ratio of net investment loss to
average net assets ........................ (1.17%) (1.05%) (0.28%)(b)
Ratio of expenses to average net
assets (a) ................................ 1.64% 2.01% 2.90%(b)
Ratio of net investment loss to
average net assets (a) .................... (1.18%) (1.51%) (2.06%)(b)

(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) Annualized.
(c) Not annualized.
(d) The total return is calculated excluding the sales charge of 3.50% which
applies to purchases of class A shares.
* Less than $0.01 per share.
</TABLE>

See notes to financial statements.

<PAGE>

REPUBLIC OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS - CLASS B SHARES
FOR THE PERIOD
JANUARY 6, 1998
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1998
-----------------
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD ............. $11.65
------
Income from investment operations:
Net investment loss ...................................... (0.09)
Net realized and unrealized gains (losses) on investment
transactions ........................................... (0.25)
------
Total income (loss) from investment operations ............. (0.34)
------
Less dividends and distributions:
Distributions to shareholders from net realized gains .... --
------
Total dividends and distributions .......................... --
------
Net change in net asset value per share .................... (0.34)
------
NET ASSET VALUE PER SHARE, END OF PERIOD ................... $11.31
======
Total return (d) ........................................... (2.92%)(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000's) ..................... $ 349
Ratio of expenses to average net assets .................. 2.38%(b)
Ratio of net investment loss to average net assets ....... (1.92%)(b)
Ratio of expenses to average net assets (a) .............. 2.39%(b)
Ratio of net investment loss to average net assets (a) ... (1.93%)(b)

(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) Annualized.
(c) Not annualized.
(d) The total return is calculated excluding the contingent deferred sales
charge which applies to redemptions of Class B Shares.

See notes to financial statements.

<PAGE>

[logo] KPMG Peat Marwick LLP

INDEPENDENT AUDITORS' REPORT

The Board of Trustees
Republic Funds:

We have audited the accompanying statements of assets and liabilities of
Republic New York Tax-Free Bond Fund, Republic Equity Fund, Republic Bond
Fund, Republic Overseas Equity Fund and Republic Opportunity Fund (the
"Funds"), portfolios of Republic Funds, including the schedules of investments
of Republic New York Tax-Free Bond Fund and Republic Equity Fund, as of
October 31, 1998 and the related statements of operations for the year then
ended and statements of changes in net assets for each of the years in the
two-year period then ended and financial highlights for each of the years or
periods in the three-year period ended October 31, 1998. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
highlights based on our audits. The financial highlights for Republic New York
Tax-Free Bond Fund Class A Shares (Investor Shares) for the period from May 1,
1995 (commencement of operations) to October 31, 1995 and Republic Equity Fund
Class A Shares (Investor Shares) for the period from August 1, 1995
(commencement of operations) to October 31, 1995 were audited by other
auditors whose reports thereon, dated December 8, 1995, expressed unqualified
opinions on those financial highlights.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned by Republic New York Tax-Free Bond Fund and
Republic Equity Fund as of October 31, 1998 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Republic New York Tax-Free Bond Fund, Republic Equity Fund, Republic Bond
Fund, Republic Overseas Equity Fund and Republic Opportunity Fund as of
October 31, 1998, the results of their operations for the year then ended and
changes in their net assets for each of the years in the two-year period then
ended and financial highlights for each of the years or periods in the three
year period then ended in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

Boston, Massachusetts
December 18, 1998

<PAGE>

REPUBLIC FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
<TABLE>
<CAPTION>

PRINCIPAL VALUE
AMOUNT SECURITY DESCRIPTION (NOTE 2)
------ -------------------- --------
<S> <C> <C>
CORPORATE OBLIGATIONS (31.8%) (f)
BANKING (1.9%)
$ 770,000 BankAmerica Instit, 144A, 8.070%, due 12/31/26 (a) ...... $ 811,665
620,000 First Chicago NBD Instit, 144A, 7.950%, due 12/01/26 (a) 634,047
575,000 First Union Capital, 8.040%, due 12/01/26 ............... 618,210
75,000 Great Western Finance, 8.206%, due 02/01/27 ............. 77,825
730,000 Korea Development Bank, 7.350%, due 9/17/04 ............. 600,520
475,000 PNC Instit Capital Trust A, 144A, 7.950%, due 12/15/26 (a) 499,843
------------
3,242,110
------------
BROADCASTING & PUBLISHING (1.6%)
495,000 CBS Inc., 7.15%, due 05/20/05 ........................... 504,534
700,000 News America Corp, 7.28%, due 06/30/28 .................. 669,690
620,000 Paramount Communications, 8.250%, due 08/01/22 .......... 647,833
715,000 Time Warner Inc., 7.57%, due 02/01/24 ................... 773,594
235,000 Time Warner Inc., 6.95%, due 01/15/28 ................... 237,919
------------
2,833,570
------------
ENERGY (2.3%)
330,000 Callenergy Co. Inc., 8.48%, due 9/15/28 ................. 345,906
300,000 Edison Mission, 144A, 7.330%, due 09/15/08 (a) .......... 323,884
100,000 Empresa Nacional Electric, 7.325%, due 02/01/37 ......... 86,871
670,000 Endesa SA, 7.75%, due 07/15/08 .......................... 607,985
190,000 Israel Electric, 144A, 7.250%, due 12/15/06 (a) ......... 184,885
305,000 Israel Electric, 144A, 7.750%, due 12/15/27 (a) ......... 289,832
165,097 Mobile Energy Services, 8.665%, due 01/01/17 ............ 51,180
345,000 National Power Corp., 7.875%, due 12/15/06 .............. 249,896
350,000 National Power Corp., 8.400%, due 12/15/16 .............. 230,927
274,000 Niagara Mohawk Power, 7.75%, due 06/30/98 ............... 289,292
391,000 Niagara Mohawk Power, 8.5%, due 06/10/98 ................ 289,340
350,000 Paiton Energy Funding BV, 144A, 9.340%, due 02/15/14 (a) 77,000
675,000 RAS Laffan Liquid Natural Gas, 144A, 8.294%,
due 03/15/14 (a) ...................................... 533,151
500,000 Tennessee Gas Pipeline, 7.0%, due 10/15/28 .............. 428,824
------------
3,988,973
------------
FINANCE (14.4%)
365,000 Anthem Insurance, 144A, 9.000%, due 04/01/27 (a) ........ 366,818
605,000 Arcadia Automobile Receivable Trust, 97 c A4, 6.375%,
due 01/15/03 .......................................... 613,906
750,000 Arcadia Automobile Receivable Trust, 97 d, 6.200%,
due 05/15/03 .......................................... 757,515
675,000 Arcadia Automobile Receivable Trust, 98 a A3, 5.900%,
due 11/15/02 .......................................... 678,692
585,000 Associates Corp, 6.0%, due 07/15/05 ..................... 587,498
810,000 BT Institutional Capital, 144A, 8.090%, due 12/01/26 (a) 716,349
1,150,000 Citibank Credit 98 7A, 5.625%, due 05/15/02 ............. 1,146,102
339,945 Credit Card Receivable Trust, 6.478%, due 12/22/02 ...... 341,533
537,332 Chevy Chase Auto Receivables Trust, 97 4 A, 6.25%,
due 06/15/04 .......................................... 539,669
675,000 Conti HEL 98 2 A2B, 5.63%, due 03/15/13 (c) ............. 672,503
150,000 Dr Structured Financial, 1993-K1 A2, 7.43%, due 08/15/18 129,138
250,000 Dr Structured Financial Trust, 1994-K1 A2, 8.375%,
due 08/15/15 .......................................... 234,243
301,314 Dr Structured Financial Trust, 1994-K1 A1, 7.600%,
due 08/15/07 .......................................... 297,237
75,000 Dr Structured Financial Trust, 1994-K2, 9.350%,
due 08/15/19 .......................................... 74,392
535,000 EOP Operating LP, 6.763%, due 06/15/07 .................. 511,540
456,554 EQCC HM EQ Loan Trust, 6.21%, due 12/15/07 .............. 455,969
330,000 Equifax Inc, 6.9%, due 07/01/28 ......................... 334,145
165,000 Equitable COS, 6.5%, due 04/01/08 ....................... 168,008
585,000 Equitable Life, 144A, 6.950%, due 12/01/05 (a) .......... 623,060
475,000 Farmers Insurance Exchange, 144A, 8.625%,
due 05/01/24(a) ....................................... 532,400
425,000 Farmers Exchange Cap 144A, 7.05%, due 07/15/28 (a) ...... 408,633
505,039 First Security Corp., 6.100%, due 04/15/03 .............. 507,656
675,000 First USA CC Mstr Trust 97 10A, 6.05875% ................ 672,611
625,000 Florida Windstorm, 144A, 6.700%, due 08/25/04 (a) ....... 644,281
250,000 Florida Property & Casuality, 144A, 7.375%,
due 07/01/03 (a) ...................................... 261,505
350,000 Forum Finance Corp., 144A, 7.125%, due 05/15/04 (a) ..... 361,995
537,409 Green Tree HEL 98 C A1, 5.95%, 07/15/29 ................. 537,758
825 Home Ownership Funding Corp., 144A, 13.331% (a)(d) ...... 810,992
788,376 Honda Auto Receivable, 97 AA, 5.850%, due 02/15/03 ...... 790,836
955,000 Hutchinson Whampoa Ltd, 7.45%, due 08/01/17 ............. 747,020
70,000 K-Mart Funding Corp., 8.800%, due 07/01/10 .............. 69,140
575,000 Lehman Large Loan 97 LL1 A2 SEQ, 6.840% due 9/12/06 ..... 594,826
249,312 Long Beach Auto 97 2 A, 6.690% due 09/25/04 ............. 250,384
625,000 Metroplitan Life Insurance, 144A, 7.450%, due 11/01/23 (a) 618,706
550,000 Nationwide Mutual Life, 144A, 7.500%, due 02/15/24 (a) .. 545,416
500,000 New York Life, 7.500%, due 12/15/23 ..................... 504,280
635,519 Nissan Auto Receivables Grantor Trust, 6.15%, 02/15/03 .. 638,843
605,000 Petrozuata Finance, Inc., 144A, 8.220% due 04/01/17(a) .. 474,798
600,000 Prudential Insurance Co., 8.300%, due 07/01/25 .......... 669,942
266,428 Smart (CFS) 97 6 A1, 7.710%, due 04/15/06 ............... 221,404
256,914 Smart Sec Multi Asset Rated, 7.45%, due 03/16/06 ........ 198,685
925,000 Team Fleet 98 3 A, 6.13%, due 10/25/04 .................. 917,091
750,000 UCFC 1997 D A2 SEQ, 6.475%, due 06/15/12 ................ 751,478
843,508 UCFC 98C A1, 5.7059%, due 01/15/13 ...................... 842,234
275,000 Washington Mutual Capital, 8.375%, due 06/01/27 ......... 289,699
391,881 World Financial, 144A, 6.910%, due 09/01/13 (a) ......... 399,597
750,000 World Financial, 144A, 6.950%, due 09/01/13 (a) ......... 764,768
625,000 World Omni Automobile Lease Securitization, 97 B A2,
6.080%, due 11/25/03 .................................. 628,081
------------
24,903,376
------------
INDUSTRIAL (7.9%)
400,000 American Standard Co. 7.375%, due 04/15/05 .............. 400,888
625,000 AST Research, Inc., 144A, 7.450%, due 10/01/02 (a) ...... 522,394
120,000 Beckton Dickson L-T Corp Debt, 7.0%, due 08/01/27 ....... 129,895
200,000 Becton Dickenson, 6.7%, 08/01/28 ........................ 208,730
215,000 Columbia HCA Healthcare, 9.000%, due 12/15/14 ........... 228,012
325,000 Columbia HCA Healthcare, 7.58%, due 09/15/25 ............ 272,825
430,000 Columbia HCA Healthcare, 7.19%, due 11/15/15 ............ 364,447
560,000 CSC Holdings Inc., 7.880%, due 12/15/07 ................. 572,600
90,000 Ford Motor Co., 6.5%, due 08/01/18 ...................... 89,493
330,000 Ford Motor Co., 6.25%, due 10/01/28 ..................... 329,762
475,000 Fred Myer Inc., 7.375%, due 03/01/05 .................... 495,981
485,000 General Motors, 6.75%, due 05/01/28 ..................... 485,000
375,000 Glencore Nickel Property Ltd., 9.00%, due 12/01/14 ...... 300,000
380,000 Grupo Minero Mexico, 8.250%, due 04/01/08 ............... 329,384
290,000 Hyundai Semi-Conductor, 144A, 8.625%, due 05/15/07 (a) .. 211,529
75,000 Hyundai Semi-Conductor, 8.250%, due 05/15/04 ............ 56,927
660,000 Lenfest Communications, 7.625%, due 02/15/08 ............ 666,600
160,000 Lenfest Comm, 8.375%, due 11/01/05 ...................... 168,400
275,059 LBCMT 96 c2 A Seq, due 10/25/26 ......................... 291,559
265,000 Multicanal SA, 10.5%, due 04/15/18 ...................... 182,985
550,961 Oil Purchase Co., 144A, 7.100%, due 04/30/02 (a) ........ 495,820
370,000 Oxymar, 144A, 7.500%, due 02/15/16 (a) .................. 357,805
625,000 Petroliam Nasional, 144A, 7.125%, due 10/18/06 (a) ...... 431,538
90,000 Philip Morris Co's.Inc., 7.000%, 07/15/05 ............... 95,808
215,000 Prime Property Funding, 6.800%, due 08/15/02 ............ 215,041
420,000 Prime Property Funding, 144A, 7.000%, due 08/15/04 (a) .. 416,800
585,000 Qwest Communications International, 8.290%, due 02/01/08 435,825
250,000 Reliance Industries, 8.25%, due 01/15/27 ................ 197,878
425,000 Rhone Poulenc Rorer Inc., 8.62%, 01/05/21 ............... 454,708
360,000 Samsung Electronics, 7.450%, due 10/01/02 ............... 302,159
965,000 Scotia Pacific Holdings, 144A, 7.950%, due 01/20/14 (a) . 944,581
500,000 Tenet Healthcare 144A, 9.625% due 06/01/08 (a) .......... 498,780
681,813 Textron Finl 98 A A 1, 5.82%, due 02/15/02 .............. 683,081
140,000 United Technologies, 6.7%, due 08/01/28 ................. 146,495
475,000 USA Waste, 7.00%, due 07/15/28 .......................... 466,203
1,165,000 Worldcom Inc., 6.95%, due 08/15/28 ...................... 1,202,198
------------
13,652,131
------------
RETAIL (0.2%)
464,000 Southland Corp., 5.000%, due 12/15/03 ................... 389,760
------------
TELECOMMUNICATIONS (1.8%)
400,000 Comcast Cable Communications, 8.375%, due 05/01/07 ...... 463,676
400,000 Continental Cablevision, 8.3%, due 05/15/06 ............. 444,612
255,000 Cox Communications, 6.8%, due 08/01/28 .................. 259,896
550,000 GTE Corp, 6.94%, 04/15/28 ............................... 577,814
630,000 Intermedia Comm, 0.00%, due 07/15/07 .................... 422,100
75,000 Intermedia Communication, 8.6%, due 06/01/08 ............ 71,438
200,000 Rogers Cable Systems, 10.000%, due 03/15/05 ............. 216,000
200,000 Rogers Cantel, Inc., 144A, 8.300%, due 10/01/07 (a) ..... 188,000
175,000 TCI Comm Inc, 7.125%, due 02/15/28 ...................... 185,871
245,000 Tele-Communications Inc., 7.875%, due 02/15/26 .......... 282,865
------------
3,112,272
------------
TRANSPORTATION (0.8%)
700,000 Continental Airlines, 6.648%, due 09/15/17 .............. 695,142
175,000 Jet Equipment Trust, 144A, 10.000%, due 06/15/12 (a) .... 224,343
480,000 Union Pacific Co., 6.625%, due 02/01/08 ................. 486,336
------------
1,405,821
------------
OTHER (0.9%)
2,015,000 Mexico Par Ser A Cum Rights, 6.25%, due 12/31/19 ........ 1,503,795
------------
TOTAL CORPORATE OBLIGATIONS
(COST $56,454,913) .................................... 55,031,808
------------
COLLATERALIZED MORTGAGE OBLIGATIONS (10.6%) (f)
494,333 Alcoa Aluminium 96-1, 144A, 7.500%, due 12/16/08 (a) .... 460,431
99,646 American Southwest Financial Securities Corp 7.300%,
due 01/18/09 .......................................... 102,509
4,562,520 American Southwest Financial Securities Corp 1.080%,
due 01/18/09 .......................................... 156,358
150,000 American Southwest Financial Securities Corp 7.400%,
due 11/17/04 .......................................... 154,592
160,840 Asset Securitization Corp. 95 d1 A1 7.590%, due 08/11/27 170,643
1,170,591 Asset Securitization Corp. 95 md4 CS2 IO 2.360%,
due 08/13/29 .......................................... 180,564
500,000 Asset Securitization Corp. 96 md6 A1B SEQ 6.880%,
due 11/13/26 .......................................... 520,740
275,000 Asset Securitization Corp. 96 MDS A1C SEQ 7.040%,
due 11/13/26 .......................................... 288,863
1,002,244 Asset Securitization Corp. 95 md4 A1 7.100%, due 08/13/29 1,050,723
472,254 B A Mortgage Securities Inc., 07/25/26 .................. 473,708
258,660 CIT Group Home Equity Loan Trust 97-1 A3, 6.250%,
due 09/15/11 .......................................... 258,761
575,000 Commercial Mortgage Acceptance Corp., 1997, MLL1 A2, SEQ,
6.53%, due 12/15/30 ................................... 588,587
295,294 Daimler-Benz AGT 1997-A Class A, 6.050%, due 03/20/05 ... 296,906
2,707,375 DLJ Mortage Acceptance Corp. 1997 CF1 S IO, 1.097%,
due 03/15/17 .......................................... 150,097
900,000 Empire Funding Home Loan Owner Trust 97-3 A4, 7.160%,
due 04/25/23 .......................................... 905,850
700,000 Empire Funding Home Loan Owner Trust 97-5 A2, 6.590%,
due 05/25/14 .......................................... 700,742
525,000 Empire Funding Home Loan Owner Trust 97-4 A2, 7.160%,
due 05/25/12 .......................................... 526,906
659,455 Empire Home equity Loan 98 2A1, 5.65%, due 4/25/08 ...... 658,149
315,000 First Plus Home Loan Trust 97-3 A2, 6.480%, due 09/10/08 314,408
310,000 First Plus Home Loan Trust 97-3 A3, 6.570%, due 10/10/10 310,254
350,000 First Plus Home Loan Trust 97-4 A3, 6.300%, due 08/10/09 349,269
325,000 First Plus Home Loan Trust 97-4 A3, 6.400%, due 08/10/11 325,410
858,788 First Plus HEL, 5.65%, due 01/10/11 ..................... 854,400
2,233,297 GMAC 96 C1 X2 I0, 1.967%, due 03/15/21 .................. 160,775
5,455,084 GMAC 97 C2 X I/0, 1.2732%, due 04/15/29 ................. 358,017
585,000 GS Escrow Corp 144A, 7.125%, due 8/01/05 (a) ............ 574,055
525,000 GS Mortgage Securities Corp. 97-GL A2D, 6.940%,
due 07/13/30 .......................................... 550,279
1,285,192 GS Mortgage Securities Corp. 97-GL X2 IO, 1.070%,
due 07/13/30 .......................................... 61,059
1,025,000 Indymac HEL 98 A A1, 5.7237%, due 09/25/20 .............. 1,019,291
605,000 HMH Properties, 7.875%, due 08/01/05 .................... 606,295
3,540,107 Merrill Lynch Mortgage Investors 1995 C1 IO, 2.188%
due 05/25/15 (c) ...................................... 153,747
1,273,561 Merrill Lynch Mortgage Investors 1996 C2 IO, 1.532%
due 11/21/28 .......................................... 98,459
800,000 Midland Realty Acceptance Corporation, 9.233% due 01/25/29 838,424
637,544 Morserv Inc. 1996-2 1A1, 6.54% due 11/25/26 (c) ......... 642,122
125,758 Mortgage Capital Funding 1995 MC1 A1B, 7.600%,
due 05/25/27 .......................................... 129,000
600,000 Mortgage Capital Funding, Inc. 97-MC1 A3, 7.288%,
due 07/20/27 .......................................... 630,468
250,000 Salomon 97 A2, 7.140%, due 03/25/22 ..................... 259,415
1,300,000 WFS AUTO, 5.783%, due 11/20/00 .......................... 1,299,961
625,000 WFS Auto 97D A3, 6.250%, due 03/20/02 ................... 628,663
570,000 WFS Financial Owner Trust 97C A3, 6.100%, due 03/20/02 .. 572,234
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (COST $18,801,288) ........................ 18,381,134
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (86.7%) (f)
FEDERAL GOVERNMENT LOAN MORTGAGE CORPORATION (23.8%)
220,555 PL#A01521, 9.500%, due 12/01/16 ......................... 234,753
10,775,000 TBA Nov, 6.0% due 10/15/28 (b) .......................... 10,657,660
1,700,000 TBA Nov, 6.5%, due 11/15/28 (b) ......................... 1,713,634
28,825,000 TBA Dec., 6.0%, due 12/15/28 (b) ........................ 28,493,225
------------
41,099,272
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (17.1%)
65,987 PL#555201, 11.000%, due 09/01/16 ........................ 73,022
224,955 PL#555283, 10.000%, due 09/01/17 ........................ 243,797
2,471,046 186 IO Strip, 8.0%, due 08/01/27 ........................ 377,601
409,814 GP#D18976 D1 10.000%, due 03/01/20 ...................... 447,882
5,375,000 GP#G00982, 7.5%, due 04/01/28 ........................... 5,497,919
562,861 GP#A00814 AO, 10.0%, due 11/01/20 ....................... 614,464
395,159 PG#A01417AO, 10.00%, due 03/01/21 ....................... 431,656
493,924 GP#AO1663 AO, 10.00%, due 11/01/16 ...................... 539,059
554,954 GP#Ao1706, 10.00%, due 06/01/17 ......................... 605,666
265,000 1632 SA INV, due 11/15/23 (c) ........................... 242,475
6,883,574 1534 K INV IO,1.775%, due 06/15/23 ...................... 350,374
414,175 154FC, 6.125%, due 12/15/21 (c) ......................... 418,312
205,000 1985 PR 10, 8.0%, due 07/15/27 .......................... 411,230
742,295 2030 F MTG, 6.05%, due 02/15/28 (c) ..................... 747,535
557,548 2054 FC MTG, 6.025%, due 05/15/28 (c) ................... 562,611
667,468 1710D MTG, 6.2%, due 06/15/20 (c) ....................... 671,933
75,725 1933 FM CMO, 6.5%, due 03/15/25 (c) ..................... 76,100
130,994 1933 FO COM, 6.5%, due 03/15/25 (c) ..................... 131,642
57,316 GP#180881, 10.500%, due 10/01/11 ........................ 62,761
61,286 PL#308433, 10.500%, due 11/01/18 ........................ 67,109
2,000,000 Federal Mortgage Corp., 5.38%, due 11/05/98 ............. 1,998,505
6,000,000 Fed Home Loan Mortgage Corp., 5.1%, due 11/17/98 ........ 5,985,550
6,000,000 Fed Home Loan Mortgage Corp., 4.76%, due 11/30/98 ....... 5,976,200
3,000,000 FHLB DN, 4.77%, due 11/24/98 ............................ 2,990,460
------------
29,523,863
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (33.2%)
5,000,000 FNMA DN, 5.3%, due 11/04/98 ............................. 4,997,056
474,048 94-50 FD MTG, 6.200%, due 03/25/24 (c) .................. 475,669
101,001 96 14 PC PO, due 12/25/23 ............................... 86,497
6,396 PC#088027 CL, 10.000%, due 01/01/20 ..................... 6,968
8,077 PC#082406 CL, 10.000%, due 09/01/19 ..................... 8,799
9,699 PC#087291 CL, 10.000%, due 01/01/20 ..................... 10,573
12,293 PC#084964 CL, 10.000%, due 11/01/19 ..................... 13,394
12,835 PC#088383 CL, 10.000%, due 11/01/18 ..................... 13,985
13,623 PC#083880 CL, 10.000%, due 11/01/19 ..................... 14,841
22,982 PC#082931 CL, 10.000%, due 10/01/19 ..................... 25,042
48,867 PC#083435 CL, 10.000%, due 11/01/19 ..................... 53,235
62,725 PC#124783, 10.5%, due 12/01/16 .......................... 67,662
67,454 FNMA, 10.00%, due 05/01/22 .............................. 72,119
648,250 FNMA due 06/25/22 ....................................... 46,864
196,894 FNMA 94 97 FC, 6.3875%, due 03/25/24 .................... 198,723
78,180 96 54 O PO, due 11/25/23 ................................ 65,835
128,382 PC#044176 CL, 10.000%, due 06/01/20 ..................... 139,949
312,316 97 70 FA, 6.137%, due 07/18/20 (c) ...................... 314,071
416,533 97 43 FA, 6.1875%, due 7/18.27 (c) ...................... 419,232
457,064 PC#323073CL, 10.500%, due 02/01/28 ...................... 498,200
974,802 FNMA, 9.5%, due 08/01/22 ................................ 1,053,966
981,922 PC#427683, 10.00%, due 06/01/09 ......................... 1,056,410
1,000,000 97 30 SP INV I0, due 04/25/22 ........................... 118,070
1,161,894 98 22 FA, 6.025%, due 04/18/28 (c) ...................... 1,164,485
1,215,948 PC#418458, 10.00%, due 11/01/18 ......................... 1,325,395
3,007,534 291 2 IO, 8.00%, due 11/01/27 ........................... 463,822
45,175,000 TBA Dec, 6.0%, due 12/25/28 (b) ......................... 44,768,590
------------
57,479,452
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (12.6%)
69,214 PL#038500, 11.000%, due 01/15/10 ........................ 76,589
37,603 PL#038712 SF, 11.000%, due 03/15/10 ..................... 41,610
30,996 PL#039798 SF, 11.000%, due 06/15/10 ..................... 34,299
53,166 PL#041650, 11.000%, due 08/15/10 ........................ 58,831
58,762 PL#041840, 11.000%, due 08/15/10 ........................ 65,024
39,343 PL#042490 SF, 11.000%, due 07/15/10 ..................... 43,536
37,028 PL#043699, 11.000%, due 09/15/10 ........................ 40,974
40,732 PL#044103, 11.000%, due 09/15/10 ........................ 45,072
27,352 PL#120587, 13.5%, due 11/15/14 .......................... 31,660
44,349 PL#136224 SF, 10.00%, due 11/15/15 ...................... 48,600
20,998 PL#150312, 11.500%, due 02/15/16 ........................ 23,590
36,993 PL#163997, 10.500%, due 08/15/16 ........................ 40,495
26,075 PL#164353, 10.500%, due 06/15/16 ........................ 28,544
77,765 PL#164356, 10.5%, due 06/15/16 .......................... 86,504
51,407 PL#199010, 10.00%, due 1/15/17 .......................... 56,811
31,851 PL#227192SF, 10.00%, due 06/15/19 ....................... 34,899
47,880 PL#253821 SF, 10.00, due 10/15/18 ....................... 52,468
50,464 PL#257153, 10.00%, due 11/15/18 ......................... 55,299
35,388 PL#258345 SF, 10.00%, due 06/15/19 ...................... 38,775
55,494 PL#266007 SF, 10.00%, due 09/15/19 ...................... 60,805
33,614 PL#265085,10.00%, due 04/15/19 .......................... 36,831
47,674 PL#271874 SF, 10.00%, due 04/15/19 ...................... 52,237
84,352 PL#278742, 10.50%, due 09/15/19 ......................... 92,339
142,392 PL#282210, 10.50%, due 11/15/19 ......................... 158,528
40,694 PL#301274 SF, 10.00%, due 01/15/21 ...................... 44,581
432,051 PL#780066 SP, 10.500%, due 12/15/20 ..................... 477,974
145,446 PL#780081, 10.000%, due 02/15/25 ........................ 159,384
143,923 PL#780127 SP, 10.50%, due 04/15/25 ...................... 159,220
263,406 PL#780164, 10.00%, due 12/15/17 ......................... 288,657
739,662 PL#780203, 9.5%, due 12/15/17 ........................... 800,284
571,723 PL#780311, 9.5%, due 12/15/21 ........................... 617,792
255,856 PL#780378, 11.000%, due 01/15/19 ........................ 286,116
267,771 PL#780384, 11.000%, due 12/15/17 ........................ 299,813
427,539 PL#780472, 10.000%, due 03/15/25 ........................ 468,510
100,069 PL#780517, 10.500%, due 01/15/18 ........................ 110,662
746,736 PL#780614, 11.000%, due 03/15/18 ........................ 776,570
746,736 PL#780784, 10.000%, due 08/15/21 ........................ 818,064
1,985,769 PL# 780804, 10.00%, due 12/15/20 ........................ 2,176,065
1,288,888 PL#780826, 9.5%, due 05/15/18 ........................... 1,394,525
407,517 PL#80106, 6.00%, due 08/20/27 ........................... 409,310
1,210,168 PL# 080123, 6.5%, due 10/20/27 .......................... 1,213,920
1,628,517 PL# 080137, 6.5%, due 11/20/27 .......................... 1,633,565
390,651 PL#80145,6.5%, due 12/20/27 ............................. 391,862
402,220 PL#080156, 6.500%, due 01/20/08 ......................... 403,668
209,225 PL#8599, 6.875%, due 02/20/25 ........................... 210,564
618,285 PL#8613 AR 6.875%, due 03/20/25 ......................... 622,242
156,023 PL# 8619, 6.875%, due 04/20/25 .......................... 156,975
785,713 PL#8621, 6.875%, due 04/20/25 ........................... 790,506
553,145 PL#8623 G2AR, 6.875%, due 04/20/25 ...................... 556,575
1,205,284 GNMA II, 6.875%, due 04/20/25 ........................... 1,213,480
184,185 PL#8628, 6.875%, due 05/20/25 ........................... 185,309
366,457 PL#8631, 6.875%, due 05/20/25 ........................... 368,729
189,838 PL#8634, 6.875%, due 05/20/25 ........................... 191,129
488,578 PL#8643, 6.875%, due 06/20/25 ........................... 491,607
316,557 PL#8646, 7.375%, due 06/20/25 ........................... 318,710
222,521 PL#8663, 7.000%, due 07/20/25 ........................... 223,723
801,489 PL#8686, 7.125%, due 08/20/25 ........................... 805,737
738,664 94 97 FC, 6.3875%, due 07/18/28 ......................... 743,768
760,079 FNR 98 43 FC Mtg Fltr, 6.0375% 07/18/28.................. 762,375
------------
21,876,291
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (COST $150,278,058) ....................... $149,978,878
------------
U.S. TREASURY OBLIGATIONS (8.6%) (f)
2,825,000 U.S. Treasury Note, Inflation Index, 3.625%. due 01/15/08 2,856,589
3,235,901 U.S. Treasury Note, Inflation Index, 3.625%. due 07/15/02 3,291,623
8,016,060 U.S. Treasury Note, Inflation Index, 3.375%. due 01/15/07 8,112,153
2,000,000 U.S. Treasury Strip, 0.00%, due 2/15/19 ................. 642,104
------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $14,633,329) .................................... 14,902,469
------------
YANKEE BONDS (1.0%) (f)
1,745,000 Republic of Argentina, 5.250%, due 03/31/23 ............. 1,208,413
590,000 Republic of Colombia, 8.70%, due 02/15/16 ............... 415,263
235,000 Republic of Korea, 8.875%, due 04/15/08 ................. 211,655
------------
TOTAL YANKEE BONDS (COST $1,925,224) .................... 1,835,331
------------
SHORT TERM INVESTMENTS (5.8%) (f)
10,000,000 Federal Home Loan Mortgage Corp Discount Note,
due 11/08/98 (Cost $9,991,467)......................... 9,991,467
------------
TOTAL INVESTMENTS (144.5%)(g)
(Identified Cost $252,084,279) ..................................... 250,121,087
OTHER LIABILITIES IN EXCESS OF ASSETS (-44.5%) ....................... (77,048,409)
------------
NET ASSETS (100.0%) .................................................. $173,072,678
============
CL - Conventional Loan
CMO - Collateralized Mortgage Obligation
FD - Federal Deposit
FHLB - Federal Home Loan Bank
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
GP - Graduated Payment
INV - Inverse
IO - Interest only
PC# - Pool Number
PL# - Pool Number
PO - Principal only
SA - Spanish/French Corporation
TBA - Pool Number to be Announced

(a) Security exempt from registration under Rule 144A of the Securities Act of 1933.
These securities may be resold in transactions exempt from registration, normally to
qualified institutional buyers.
(b) Security purchased on a delayed delivery basis collateralized by cash and cash
equivalents.
(c) Represents a variable rate note. Interest rate disclosed represents current rate at
October 31, 1998.
(d) Preferred Stock.
(e) For Federal income tax purposes, the cost of securities owned at October 31, 1998 was
$252,395,930 resulting in net unrealized depreciation of securities as follows:

Gross unrealized appreciation ................................ $ 1,483,703
Gross unrealized depreciation ................................ (3,758,546)
------------
Net annualized depreciation .................................. $(2,274,843)
===========
(f) Percentages based on net assets at October 31, 1998.
(g) A large portion of the portfolio pricing procedures are carried out by a separate
division of the sub-adviser.

SCHEDULE OF OPEN FINANCIAL FUTURES CONTRACTS (h)

LONG POSITIONS:
<CAPTION>
NET
UNREALIZED
APPRECIATION
EXPIRATION NUMBER OF CONTRACT (DEPRECIATION)
DATE CONTRACTS CONTRACTS VALUE OF CONTRACTS
---- --------- --------- ----- ------------
<C> <C> <C> <C> <C>
12/31/98 40 Municipal Bond Index $5,018,750 $(29,939)
12/31/98 38 U.S. Treasury 2 Yr. Note 8,080,938 (15,733)
12/31/98 4 U.S. Treasury Long Bond 515,625 978
--------
NET UNREALIZED DEPRECIATION ON OPEN FUTURES CONTRACTS $(44,694)
========
(h) All of the open financial futures contracts are collateralized by cash and cash equivalents.
</TABLE>

See notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------- ------ --------
<S> <C> <C>
COMMON STOCKS (96.8%) (c)
AUSTRALIA (5.2%)
Australia & New Zealand Bank Group ........................... 215,000 $ 1,231,007
Broken Hill Proprietary ...................................... 83,649 711,870
Broken Hill Proprietary ADR .................................. 83,800 1,429,838
Coles Myer Ltd. .............................................. 409,709 1,758,735
Lend Lease Corp Ltd. ......................................... 52,659 1,163,084
Standard Chartered Plc ....................................... 149,800 1,610,878
Western Mining Corp. Holding Ltd. (b) ........................ 354,952 1,205,842
Westpac Banking Corp. ........................................ 255,000 1,552,580
------------
10,663,834
------------
BRAZIL (0.3%)
Centrais Geradoras Do ADR .................................... 4,920 27,840
Electrobras PN ADR ........................................... 3,200 37,020
Telecomunicacoes Brasileiras ADR ............................. 7,700 584,719
------------
649,579
------------
CANADA (7.6%)
Bank of Montreal ............................................. 25,321 1,036,494
Bombardier Inc. Class B ...................................... 169,000 2,000,811
National Bank of Canada ...................................... 52,100 780,740
Newcourt Credit Ltd. ......................................... 70,800 2,330,911
Northern Telecom Ltd. ........................................ 28,000 1,198,750
Rogers Communications, Class B (b) ........................... 53,000 414,063
Royal Bank of Canada ......................................... 48,500 2,237,009
Suncor Energy Inc. ........................................... 39,000 1,238,250
The Bank of Nova Scotia ...................................... 75,000 1,566,656
Thomson Corp. ................................................ 115,000 2,838,631
------------
15,642,315
------------
FINLAND (3.8%)
Metra OY B shares ............................................ 61,000 1,065,820
Nokia Oyj-A .................................................. 47,100 4,292,445
Nokia Corp. .................................................. 8,500 791,031
UPM-Kymmene .................................................. 70,000 1,667,825
------------
7,817,121
------------
FRANCE (7.2%)
Bougues ...................................................... 9,344 1,885,417
Compagnie De Saint Goban ..................................... 11,000 1,627,547
Peugeot SA ................................................... 18,000 3,003,456
Renault SA (b) ............................................... 29,300 1,252,565
Suez Lyonnaise Des Eaux-Dumex ................................ 8,500 1,522,338
Synthelabo ................................................... 11,600 2,213,262
Television Francaise ......................................... 10,000 1,652,387
Valeo ........................................................ 18,460 1,598,254
------------
14,755,226
------------
GERMANY (9.6%)
Bayer AG ..................................................... 22,600 918,411
Bayerische Motoren Werke AG New Shares ....................... 600 409,396
Bayerische Motoren Werke AG .................................. 800 563,734
Coca Cola Bundled ............................................ 199,783 738,459
Deutsche Telekom AG .......................................... 129,800 3,536,366
Mannesmann AG ................................................ 78,500 7,726,285
Metallgesellschaft AG ........................................ 83,300 1,308,274
Munchener Ruck INH ........................................... 1,250 381,921
Munchener Ruck Nam 50% paid .................................. 1,900 869,633
Schw Rueckversicherungs-Reg .................................. 500 1,112,340
Siemens AG ................................................... 37,000 2,225,228
------------
19,790,047
------------
HONG KONG (1.9%)
Hang Seng Bank ............................................... 203,000 1,756,101
Hong Kong Electric Holdings (b) .............................. 254,000 931,388
Hong Kong Telecom ............................................ 610,800 1,222,389
------------
3,909,878
------------
ITALY (4.9%)
Alleanza Assicurazioni SpA Azione Nom ........................ 330 4,082
Assicurazione Generali ....................................... 69,000 2,459,058
ENI SpA ...................................................... 237,400 1,414,683
Telecom Italia Mobile-DNRC ................................... 988,000 3,502,161
Telecom Italia SpA ........................................... 163,611 1,182,259
Telecom Italia SpA RNC ....................................... 310,000 1,568,957
------------
10,131,200
------------
JAPAN (19.4%)
Acom Co. Ltd. ................................................ 18,500 1,034,354
Adventest Corp. .............................................. 24,277 1,532,494
Asahi Breweries Ltd. ......................................... 281,000 4,018,251
Hirose Electronics Co. Ltd. .................................. 34,000 1,971,057
Honda Motor Co., Ltd. ........................................ 40,000 1,202,388
Hoya Corp. ................................................... 49,000 2,099,970
Keyence Corporation .......................................... 16,500 1,655,172
Kokusai Electric ............................................. 44,000 216,155
Kyocera Corp. ................................................ 24,100 1,065,960
Minebea Co., Ltd. ............................................ 21,000 197,492
Murata Manufacturing Co., Ltd. ............................... 58,000 1,937,734
Nichiei Co., Ltd. ............................................ 25,040 1,961,307
Nikon Corp. .................................................. 34,000 311,281
Nintendo Corp. ............................................... 26,500 2,253,188
Nippon Telegraph & Telephone Corp. ........................... 2,080 1,629,201
Nissan Motors ................................................ 480,000 1,302,701
Nomura Securities Co., Ltd. .................................. 130,000 982,522
Rohm Company ................................................. 18,000 1,592,305
Sakura Bank Ltd. ............................................. 170,000 423,412
Sankyo Co., Ltd. ............................................. 500 11,294
Shiseido Co. ................................................. 161,000 1,764,384
Soft Bank Corp. .............................................. 20,286 885,068
Sony Corp. ................................................... 38,800 2,465,925
Sumitomo Realty & Development ................................ 158,000 473,586
Sumitomo Marine & Fire ....................................... 42,000 246,009
Suzuki Motor Corp. ........................................... 101,000 1,163,233
Takefugi Corp. ............................................... 28,200 1,504,032
Tokyo Electron Ltd. .......................................... 85,900 2,796,075
Yasuda F&M Insurance ......................................... 244,000 1,202,869
------------
39,899,419
------------
KOREA (0.6%)
Samsung Electronics GDR (b) .................................. 53,520 1,216,242
------------
MALAYSIA (0.2%)
Malaysian Airline System Berhad .............................. 412,000 192,987
Sime Darby Berhad ............................................ 361,000 262,197
------------
455,184
------------
MEXICO (1.7%)
Cemex SA de CV ADR (b) ....................................... 130,000 706,329
Cemex Spons ADR .............................................. 3,900 17,915
Grupo Financiero Banamex Series "L" Shares ................... 2,337 2,081
Panamerican Beverages, Inc., Class A ......................... 55,000 1,113,750
Telefonos De Mexico ADR ...................................... 29,600 1,561,400
------------
3,401,475
------------
NETHERLANDS (4.4%)
Aegon NV ..................................................... 37,456 3,248,765
ASM Lithography Holding NV ................................... 68,000 1,724,651
Heineken NV .................................................. 30,000 1,597,196
KON Ahold NV ................................................. 71,793 2,385,545
------------
8,956,157
------------
NORWAY (2.2%)
Norsk Hydro ASA .............................................. 72,400 3,158,986
Norsk Hydro ASA ADR .......................................... 3,300 143,344
Orkla AS A-AKSJER (b) ........................................ 68,000 1,154,350
------------
4,456,680
------------
PORTUGAL (0.6%)
Portugal Telecom S.A. ADR .................................... 27,400 1,294,650
------------
SINGAPORE (0.4%)
Singapore Press Holdings Ltd. ................................ 100,370 863,397
------------
SOUTH AFRICA (0.6%)
De Beers Consolidated Mines Ltd. ............................. 79,000 1,135,625
------------
SPAIN (2.3%)
Corporacion Mapfre ........................................... 18,676 493,218
Telefonica ................................................... 93,709 4,231,075
------------
4,724,293
------------
SWEDEN (5.4%)
Astra AB A-F ................................................. 212,733 3,448,104
Ericsson AB B Free ........................................... 97,020 2,187,907
Ericsson LM Telephone ADR .................................... 300 6,788
Forenings Sparbanken ......................................... 46,000 1,246,589
Gambro B ..................................................... 54,100 596,143
Hennes & Mauritz AB A-F ...................................... 20,500 1,444,679
Scania AB-A .................................................. 68,700 1,223,563
Scania AB B .................................................. 60,000 1,076,302
------------
11,230,075
------------
SWITZERLAND (3.9%)
Holderbank Finan Glaris-B .................................... 1,630 1,814,317
Nestle ....................................................... 1,289 2,738,305
Novartis AG Registered ....................................... 1,064 1,914,996
Swisscom AG .................................................. 4,832 1,635,973
------------
8,103,591
------------
TAIWAN (0.6%)
Taiwan Semiconductor ADR (b) ................................. 89,160 1,331,828
------------
UNITED KINGDOM (13.8%)
Barclays plc ................................................. 43,100 920,461
BOC Group .................................................... 154,500 2,177,300
British Petroleum plc ADR .................................... 24,400 2,157,875
British Petroleum plc ........................................ 46,374 694,277
Caradon plc .................................................. 400,000 830,155
Enterprise Oil plc ........................................... 100,000 682,870
HSBC Holdings plc ............................................ 58,300 1,327,043
Imperial Chemical Industries ................................. 81,900 735,413
Lucasvarity .................................................. 345,000 1,177,950
Morgan Crucible Company plc .................................. 154,810 816,182
National Westminister Bank plc ............................... 96,876 1,605,199
Reckitt and Colman plc ....................................... 89,390 1,545,492
Reuters Group plc ADR ........................................ 780 47,288
Reuters Group plc ............................................ 206,666 2,127,266
Shell Transport & Trading plc ................................ 219,000 1,319,545
Storehouse plc ............................................... 420,000 1,230,170
Tate & Lyle plc .............................................. 240,000 1,405,908
T.I. Group plc ............................................... 190,000 1,132,091
United Utilities plc ......................................... 132,247 1,934,527
Zeneca Group plc ADR ......................................... 1,800 70,200
Zeneca Group plc ............................................. 116,100 4,457,622
------------
28,394,834
------------
UNITED STATES (0.2%)
Coca Cola Beverages .......................................... 195,570 399,564
------------
TOTAL COMMON STOCK (COST $188,061,275) ....................... 199,222,214
------------

PREFERRED STOCK (0.6%)
AUSTRALIA (0.3%)
News Corporation Ltd. ........................................ 104,586 629,578
------------
JAPAN (0.3%)
Sakura Finance (Bermuda Trust) Conv Pref Ser II .............. 120,000,000 592,606
------------
TOTAL PREFERRED STOCK (COST $1,430,423) ...................... 1,222,184
------------
PRINCIPAL
AMOUNT
------
LONG TERM CORPORATE DEBT (0.1%)
JAPAN
Asahi Breweries 1.00 DTD 7/1/94 Due 12/26/03
(Cost $165,095) ............................................ JPY 14,000,000 175,188
------------

SHARES
------
SHORT TERM INVESTMENTS (3.6%)
Investors Cash Reserve Fund (Cost $7,391,479) ................ 7,391,479 7,391,479
------------
TOTAL INVESTMENTS (101.1%)
Identified Cost ($189,656,793) (a) ......................... 208,011,065
LIABILITIES IN EXCESS OF OTHER ASSETS (-1.1)% (2,273,703)
------------
TOTAL NET ASSETS (100.0%) .................................... $205,737,362
============

- --------------------------------------------------------------------------------------------------
ADR = American depository receipt GDR = Global depositary receipt
JPY = Japanese Yen

(a) For federal income tax purposes, the cost of securities owned at October 31, 1998 was
$190,168,294 resulting in net unrealized appreciation of securities as follows:
Gross unrealized appreciation ........................ $39,772,990
Gross unrealized depreciation ........................ (21,930,219)
-----------
Net unrealized appreciation .......................... $17,842,771
===========
(b) Represents non income producing security.
(c) Percentages based on net assets at October 31, 1998.

See notes to financial statements
</TABLE>
<PAGE>

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS TO SELL (CONTINUED)

REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1998
SCHEDULE OF OPEN FORWARD FOREIGN CURRENCY CONTRACTS

<TABLE>
<CAPTION>
PRINCIPAL NET
VALUE UNREALIZED
EXPIRATION CONTRACT TO LOCAL VALUE APPRECIATION/
DATE DELIVER/RECEIVE CURRENCY COST U.S.$ (NOTE 2) (DEPRECIATION)
---- --------------- -------- ---------- -------- --------------
<S> <C> <C> <C> <C> <C>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS TO BUY:
02/04/99 German Mark 1,020,188 $ 622,971 $ 618,722 $ (4,249)
11/10/98 German Mark 1,784,886 1,013,728 1,078,345 64,617
11/30/98 German Mark 1,776,483 990,520 1,074,319 83,799
01/06/99 German Mark 1,342,264 826,104 813,137 (12,967)
11/06/98 German Mark 3,929,592 2,400,000 2,373,611 (26,389)
11/06/98 German Mark 3,274,660 2,000,000 1,978,009 (21,991)
04/26/99 German Mark 1,278,287 788,247 777,362 (10,885)
04/28/99 German Mark 946,054 574,309 575,361 1,052
07/30/99 Australian Dollar 1,880,776 1,189,784 1,179,525 (10,259)
01/08/99 Swiss Franc 2,525,786 1,802,395 1,877,940 75,545
01/28/99 Japanese Yen 25,266,160 209,678 219,990 10,312
03/15/99 Japanese Yen 363,156,987 2,740,166 3,181,494 441,328
01/08/99 Japanese Yen 329,532,060 2,462,116 2,860,757 398,641
12/11/98 Japanese Yen 67,409,920 589,315 582,594 (6,721)
12/11/98 Japanese Yen 113,732,635 991,272 982,941 (8,331)
11/02/98 Japanese Yen 32,841,074 279,617 282,176 2,559
11/04/98 Japanese Yen 30,227,586 258,798 259,794 996
11/04/98 Japanese Yen 16,097,980 138,668 138,356 (312)
11/04/98 Japanese Yen 109,894,510 947,048 944,500 (2,548)
11/05/98 Japanese Yen 10,134,763 87,436 87,116 (320)
11/05/98 Japanese Yen 90,587,700 780,794 778,676 (2,118)
----------- ----------- -----------
$21,692,966 $22,664,725 $ 971,759
----------- ----------- -----------
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS TO SELL:
03/23/99 Australian Dollar 1,533,059 $ 895,000 $ 960,995 $ (65,995)
07/08/99 Swiss Franc 2,525,786 1,766,000 1,877,940 (111,940)
11/06/98 German Mark 3,274,660 2,001,748 1,978,009 23,739
11/06/98 German Mark 1,393,592 851,880 841,778 10,102
11/05/98 German Mark 90,870 54,955 54,886 69
07/30/99 British Pound 724,462 1,189,785 1,197,435 (7,650)
01/04/99 British Pound 458,743 780,000 765,251 14,749
01/08/99 Japanese Yen 329,532,060 2,587,000 2,860,757 (273,757)
01/28/99 Japanese Yen 25,266,160 212,000 219,990 (7,990)
03/15/99 Japanese Yen 363,156,987 2,953,000 3,181,494 (228,494)
11/27/98 Japanese Yen 277,191,480 2,104,000 2,390,186 (286,186)
11/04/98 Japanese Yen 109,894,510 781,000 944,500 (163,500)
11/05/98 Japanese Yen 12,824,372 110,641 110,236 405
02/04/99 Japanese Yen 71,000,000 622,971 618,767 4,204
08/06/99 Japanese Yen 71,000,000 627,375 626,273 1,102
11/04/98 Japanese Yen 16,097,980 113,000 138,356 (25,356)
11/05/98 Japanese Yen 90,587,700 630,000 778,676 (148,676)
03/03/99 Japanese Yen 67,896,570 511,000 593,862 (82,862)
06/04/99 Japanese Yen 424,544,000 3,200,000 3,757,207 (557,207)
12/10/98 Japanese Yen 220,743,140 1,691,000 1,907,468 (216,468)
12/11/98 Japanese Yen 113,732,635 841,000 982,941 (141,941)
12/11/98 Japanese Yen 67,409,920 512,000 582,594 (70,594)
12/17/98 Japanese Yen 36,582,480 279,000 316,482 (37,482)
12/21/98 Japanese Yen 160,365,600 1,200,000 1,388,278 (188,278)
10/13/99 Japanese Yen 189,354,000 1,650,000 1,701,620 (51,620)
04/26/99 Japanese Yen 90,317,390 788,248 795,726 (7,478)
04/26/99 Japanese Yen 93,308,794 811,000 822,081 (11,081)
04/28/99 Japanese Yen 66,895,500 574,309 589,531 (15,222)
11/04/98 Japanese Yen 6,483,520 55,510 55,723 (213)
01/15/99 Swedish Krona 1,736,508 221,000 223,110 (2,110)
11/04/98 Swedish Krona 489,712 62,866 62,758 108
05/17/99 Singapore Dollar 322,401 188,000 200,561 (12,561)
11/10/98 Canadian Dollar 1,548,520 1,013,728 1,004,542 9,186
11/30/98 Canadian Dollar 1,545,440 990,520 1,002,531 (12,011)
01/06/99 Canadian Dollar 1,275,917 826,104 827,780 (1,676)
11/02/98 Canadian Dollar 30,049 19,387 19,493 (106)
11/03/98 Canadian Dollar 48,544 31,465 31,491 (26)
----------- ----------- -----------
$33,746,492 $36,411,308 $(2,664,816)
----------- ----------- -----------
NET UNREALIZED DEPRECIATION ON OPEN FORWARD
FOREIGN CURRENCY CONTRACTS ............................................................... $(1,693,057)
===========
</TABLE>

See notes to financial statements
<PAGE>

REPUBLIC SMALL CAP EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------- ------ --------
<S> <C> <C>
COMMON STOCKS (95.6%) (c)
AIRLINES (1.4%)
Atlas Air, Inc. (a) .......................................... 53,900 $ 1,859,550
Skywest Inc. ................................................. 28,000 714,000
------------
2,573,550
------------
BROADCASTING (2.4%)
Hearst-Argyle Television Inc (a) ............................. 13,500 373,781
Heftel Broadcasting Corp. (a) ................................ 23,900 982,888
Jacor Communications, Inc. (a) ............................... 56,325 3,097,875
------------
4,454,544
------------
BUILDING (1.6%)
Newport News Shipbuilding .................................... 112,700 2,965,419
------------

BUSINESS SERVICES (16.5%)
ABR Information Services, Inc. ............................... 11,000 207,625
Boron Lepore & Associates .................................... 700 18,900
Bright Horizons Inc. ......................................... 9,500 175,750
Ceridian Corp. ............................................... 29,400 1,686,801
Dendrite International, Inc. (a) ............................. 50,824 1,048,245
Diamond Technology Partners Inc. (a) ......................... 2,100 27,038
DST Systems, Inc. (a) ........................................ 71,030 3,551,500
Equity Corporation International (a) ......................... 58,485 1,451,159
Franklin Covey Co. (a) ....................................... 20,800 410,800
Galileo International Inc. ................................... 34,600 1,312,638
Gemstar Intl. Group Ltd. ..................................... 81,500 4,451,937
Global Directmail Corp. (a) .................................. 93,650 1,334,513
Infousa Inc. (Class B) ....................................... 68,045 348,731
Infousa Inc. (Class A) ....................................... 108,845 408,169
Interim Services, Inc. (a) ................................... 122,124 2,595,135
International Network Services (a) ........................... 8,900 378,250
Memberworks Inc. (a) ......................................... 18,400 425,500
META Group, Inc. (a) ......................................... 64,170 1,540,080
Modis Professional Services .................................. 108,464 1,911,678
National Processing, Inc. (a) ................................ 75,100 441,213
Parexel International Corp. .................................. 12,400 273,575
Personnel Group of Amer Inc. ................................. 34,800 539,400
Renaissance Worldwide Inc. ................................... 46,700 440,731
Snyder Communications, Inc. (a) .............................. 9,327 332,857
Superior Consultant Holdings (a) ............................. 18,200 673,400
Technology Solutions Co. (a) ................................. 185,425 2,225,100
TeleTech Holdings, Inc. (a) .................................. 42,100 415,738
Transaction Systems Architects, Inc. (Class A) (a) ........... 57,735 2,083,876
------------
30,710,339
------------
COMPUTER & OFFICE EQUIPMENT (4.1%)
Advanced Fibre Communication ................................. 30,100 291,594
Affiliated Computer Services (a) ............................. 154,405 5,712,985
Corporate Express, Inc. (a) .................................. 105,900 1,237,706
Kla-Tencor Corporation ....................................... 11,600 427,750
------------
7,670,035
------------
COMPUTER SOFTWARE & SYSTEMS (18.8%)
Acxiom Corp. ................................................. 59,640 1,498,455
Aspen Technologies, Inc. (a) ................................. 80,600 1,128,400
Autodesk Inc. ................................................ 17,300 539,544
Black Box Corp. (a) .......................................... 25,100 837,713
BMC Software, Inc. ........................................... 8,400 403,725
Cadence Design Systems, Inc. (a) ............................. 173,066 3,699,286
Caliber Learning Network Inc. ................................ 24,900 104,269
Cambridge Technology Partners ................................ 89,500 1,980,188
CBT Group Plc (ADR) .......................................... 294,800 3,519,175
Clarify, Inc. (a) ............................................ 30,600 416,925
Computer Learning Center (a) ................................. 93,200 832,975
Compuware Corp. (a) .......................................... 30,600 1,658,138
Edify Corporation (a) ........................................ 41,000 210,125
Elsag Bailey Process Auto NV ................................. 8,400 307,650
Fair, Isaac & Co, Inc. ....................................... 28,300 1,135,538
Gartner Group Inc (Class A) .................................. 22,500 447,188
Harbinger Corp. (a) .......................................... 81,350 538,944
Intelligroup, Inc. (a) ....................................... 8,700 150,075
JDA Software Group ........................................... 61,700 586,150
Mecon, Inc. (a) .............................................. 40,300 261,950
Novellus System Inc. ......................................... 16,700 648,169
Peerless Systems Corp. (a) ................................... 33,300 228,938
RWD Technologies, Inc. (a) ................................... 7,500 141,563
SCB Computer Technology, Inc. (a) ............................ 40,240 296,770
Security Dynamics Technologies, Inc. (a) ..................... 87,400 895,850
Sterling Software, Inc. (a) .................................. 74,900 1,961,444
Summit Design, Inc. (a) ...................................... 82,900 694,288
SunGard Data Systems, Inc. (a) ............................... 59,252 1,999,755
Sylvan Learning Systems Inc. ................................. 17,700 546,488
Synopsys, Inc. (a) ........................................... 101,018 4,571,065
USCS International, Inc. (a) ................................. 72,000 2,142,000
Vantive Corp. (a) ............................................ 66,400 485,550
Xionics Document Tech, Inc. (a) .............................. 71,800 224,375
------------
35,092,668
------------
CONSTRUCTION SERVICES (0.3%)
Barnett, Inc. (a) ............................................ 34,135 477,890
------------
CONSUMER GOODS & SERVICES (0.9%)
Alternative Resources Corp. (a) .............................. 58,070 508,113
Blyth Industries, Inc. (a) ................................... 39,375 1,087,734
------------
1,595,847
------------
ELECTRONICS (1.4%)
Actel Corp. (a) .............................................. 39,200 502,250
Belden, Inc. ................................................. 39,045 568,593
Microchip Technology, Inc. (a) ............................... 16,582 448,750
PMC-Sierra, Inc. (a) ......................................... 24,900 1,117,388
------------
2,636,981
------------
ELECTRICAL EQUIPMENT (4.3%)
AFC Cable Systems, Inc. (a) .................................. 26,600 655,025
Analog Devices (a) ........................................... 64,940 1,290,683
Burr (Brown Corp. (a) ........................................ 80,043 1,485,798
Dupont Photomasks, Inc. (a) .................................. 17,315 627,669
Lattice Semiconductor Corp. (a) .............................. 37,900 1,288,600
Phototronics, Inc. (a) ....................................... 54,400 1,186,600
Sipex Corporation (a) ........................................ 53,900 1,495,725
------------
8,030,100
------------
FINANCIAL SERVICES (4.1%)
BA Merchant Services, Inc. (Class A) (a) ..................... 38,700 628,875
Conning Corp. ................................................ 24,000 354,000
Fiserv Incorporation ......................................... 39,875 1,854,187
NOVA Corporation (a) ......................................... 90,240 2,605,680
Paymentech, Inc. (a) ......................................... 53,200 817,950
Professional Detailing Inc. .................................. 7,800 182,325
Waddell & Reed Financial Class A ............................. 59,800 1,252,063
------------
7,695,080
------------
FOOD & BEVERAGE PRODUCTS (1.9%)
Buffetts, Inc. (a) ........................................... 113,094 1,222,829
Robert Mondavi Corp. (Class A) ............................... 35,800 1,214,963
Tootsie Roll Industries, Inc. ................................ 26,826 1,061,304
------------
3,499,096
------------
INSURANCE (1.0%)
Annuity and Life Re Holdings Ltd. (a) ........................ 800 18,700
Executive Risk, Inc. ......................................... 17,300 821,750
Life Re Corp. ................................................ 11,100 1,035,769
------------
1,876,219
------------
MEDICAL & HEALTH PRODUCTS (4.7%)
CYTYC Corp. (a) .............................................. 68,300 1,144,025
Henry Schein Inc. ............................................ 8,500 328,844
IDEXX Laboratories, Inc. (a) ................................. 165,600 3,777,750
KOS Pharmaceuticals, Inc. (a) ................................ 8,300 45,650
Megabios Corp. (a) ........................................... 15,200 80,750
NCS HealthCare, Inc. (Class A) (a) ........................... 67,900 1,196,738
PSS World Medical Inc. (a) ................................... 90,200 1,995,675
Ventana Medical Systems ...................................... 13,700 253,450
------------
8,822,882
------------
MEDICAL HEALTH TECHNOLOGY & SERVICES (7.8%)
Amerisource Health Corp. (Class A) (a) ....................... 10,400 545,350
Apache Medical Systems, Inc. (a) ............................. 20,100 23,869
Concentra Managed Care, Inc. (a) ............................. 287,783 2,949,776
Envoy Corporation ............................................ 59,300 1,749,350
HCIA, Inc. (a) ............................................... 64,200 204,638
Healthsouth Corp. (a) ........................................ 22,700 275,238
Hologic, Inc. (a) ............................................ 55,200 755,550
Ims Health Inc. .............................................. 14,325 952,613
IDX Systems Corp. (a) ........................................ 35,100 1,487,363
Mid Atlantic Medical Services ................................ 67,600 528,125
Ocular Sciences Inc. (a) ..................................... 2,700 67,838
Orthodonic Centers of America (a) ............................ 32,300 611,681
Quorum Health Group, Inc. (a) ................................ 51,600 748,200
Steris Corp. (a) ............................................. 45,000 1,035,000
Total Renal Care Holdings, Inc. (a) .......................... 103,992 2,547,804
------------
14,482,395
------------
NON RETAIL STORES (1.3%)
Micro Warehouse, Inc. (a) .................................... 37,480 817,533
Office Depot ................................................. 64,100 1,602,500
------------
2,420,033
------------
OIL SERVICES (1.5%)
Dril-Quip, Inc. (a) .......................................... 18,200 382,200
Global Industries Ltd. (a) ................................... 121,100 1,165,588
National-Oilwell, Inc. (a) ................................... 31,700 503,238
Weatherford Enterra, Inc. (a) ................................ 25,270 687,028
------------
2,738,054
------------
OIL (0.5%)
Newfield Exploration Co. (a) ................................. 35,100 853,369
------------
PRINTING & PUBLISHING (2.0%)
Applied Graphics Technologies, Inc. (a) ...................... 31,100 371,256
Harte Hanks Communications ................................... 39,400 957,913
Scholastic Corp. (a) ......................................... 61,900 2,441,181
------------
3,770,350
------------
REAL ESTATE (0.3%)
Kilroy Realty Corp. .......................................... 24,200 536,938
------------
RESTAURANTS LODGING & HOSPITALITY (3.6%)
Applebee's International, Inc. ............................... 41,945 854,630
Four Seasons Hotels Inc. ..................................... 22,700 522,100
Harrah's Entertainment, Inc. (a) ............................. 62,465 882,318
Landry's Seafood Restaurants ................................. 63,700 533,488
Meristar Hospitality Corp. ................................... 48,100 889,850
Morton's Restaurants Group Inc. .............................. 1,500 29,250
Papa John's Intl. Inc. ....................................... 15,200 577,126
Patriot American Hospitality Inc. ............................ 73,329 650,795
Prime Hospitality Corp. (a) .................................. 35,100 320,288
Promus Hotel Corp. (a) ....................................... 10,940 348,713
Sholodge, Inc. (a) ........................................... 12,600 69,300
Sonic Corp. (a) .............................................. 41,427 787,113
TaCo Cabana-Class A (a) ...................................... 33,920 214,120
------------
6,679,091
------------
RETAIL STORES (6.4%)
Ann Taylor Stores Corp. (a) .................................. 45,400 1,316,600
BJ'S Wholesale Club Inc. (a) ................................. 21,500 772,656
CSK Auto Corp. (a) ........................................... 45,300 1,180,631
Duane Reade Inc. (a) ......................................... 10,100 390,113
Fred Myer Inc. ............................................... 43,270 2,306,832
Gymboree Corp. (a) ........................................... 125,800 841,288
Mazel Stores, Inc. (a) ....................................... 42,400 397,500
Petco Animal Supplies, Inc. (a) .............................. 134,400 1,192,800
Regis Corp. .................................................. 54,900 1,684,744
Rite Aid Corp. (a) ........................................... 31,798 1,261,983
Stage Stores Inc. ............................................ 40,000 530,000
------------
11,875,147
------------
SPECIAL PRODUCTS & SERVICES (1.5%)
Catalina Marketing Corp. (a) ................................. 30,700 1,464,006
Input/Output Inc. ............................................ 11,300 100,288
Learning Tree International, Inc. (a) ........................ 144,500 1,300,500
------------
2,864,794
------------
TELECOMMUNICATIONS (6.0%)
Allegiance Telecom Inc. ...................................... 13,200 150,975
American Tower Corp. ......................................... 53,885 1,178,734
Ascend Communication Inc. .................................... 7,500 361,875
Aspect Telecommunications Corp. (a) .......................... 115,100 1,740,888
Cable Design Technologies (a) ................................ 80,947 1,335,626
Citadel Communications ....................................... 14,000 287,000
Hyperion Telecomm Inc. ....................................... 45,600 444,600
Intermedia Communications, Inc. (a) .......................... 21,900 405,150
Lightbridge Inc. (a) ......................................... 77,700 422,494
Natural Microsystems Corp. (a) ............................... 33,000 295,970
Nextlink Communications, Inc. (a) ............................ 38,400 984,000
Proxim, Inc. (a) ............................................. 36,800 549,700
Saville Systems Ireland (ADR) ................................ 42,900 723,938
Sportsline USA ............................................... 37,100 521,719
Transaction Network Services (a) ............................. 48,100 1,316,738
VDI Media (a) ................................................ 20,100 170,850
V.I. Technologies Inc. ....................................... 47,000 387,750
------------
11,278,007
------------
WASTE (0.4%)
Superior Services, Inc. (a) .................................. 38,900 816,900
------------
OTHER (0.9%)
Student Loan Corp. ........................................... 37,500 1,757,813
------------
TOTAL COMMON STOCKS (COST $183,525,815) ...................... 178,173,541
------------
PRINCIPAL
AMOUNT
------
US GOVERNMENT AGENCY OBLIGATIONS (4.1%) (c)
Tennessee Valley Authority, discount note, due 11/02/98 ...... $2,800,000 2,799,260
Tennessee Valley Authority discount note, due 11/05/98 ....... 2,500,000 2,498,299
Student Loan Marketing Association due 11/02/98 .............. 2,400,000 2,399,277
------------
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(COST $7,696,836) .......................................... 7,696,836
------------
TOTAL INVESTMENTS (99.7%)
(Identified Cost $191,222,651) ............................. 185,870,377

OTHER ASSETS IN EXCESS OF LIABILITIES (0.3%) 647,017
------------
TOTAL NET ASSETS - 100.0% .................................... $186,517,394
============
- -------------------------------------------------------------------------------------------------
ADR = American Depository Receipt
(a) Non-Income Producing Security
(b) For Federal income tax purposes, the cost of securities owned at October 31, 1998 was
$192,499,014 resulting in net unrealized depreciation at securities as follows:

Gross unrealized appreciation .......... $ 26,601,949
Gross unrealized depreciation .......... (33,230,586)
------------
Net unrealized depreciation ............ $ (6,628,637)
============

See notes to financial statements
<PAGE>

REPUBLIC PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<CAPTION>
FIXED INTERNATIONAL SMALL CAP
INCOME EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------ -----------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value (cost
$252,084,279, $189,656,793, and
$191,222,651, respectively) .............. $250,121,087 $208,011,065 $185,870,377
Cash ....................................... -- -- 66,648
Receivable for investments sold ............ 81,993,911 1,174,343 2,422,768
Interest receivable ........................ 1,652,033 1,341 --
Unrealized appreciation on open forward
foreign currency contracts ............... -- 1,142,513 --
Dividends receivable ....................... -- 530,213 4,698
Unamortized organization expenses .......... 16,504 15,696 24,264
------------ ------------ ------------
Total Assets ................................. 333,783,535 210,875,171 188,388,755
------------ ------------ ------------
LIABILITIES:
Advisory fees payable ...................... 221,939 360,579 774,888
Investment manager fees payable ............ 199,406 370,909 278,542
Overdraft payable to custodian bank ........ 1,220,096 744,011 --
Payable for investments purchased .......... 158,957,093 628,706 667,036
Variation margin payable on futures
contracts ................................ 15,813 -- --
Unrealized depreciation on open forward
foreign currrency contracts .............. -- 2,835,570 --
Accrued liabilities ........................ 96,510 198,034 150,895
------------ ------------ ------------
Total Liabilities ............................ 160,710,857 5,137,809 1,871,361
------------ ------------ ------------
NET ASSETS:
Applicable to investors' beneficial interest $173,072,678 $205,737,362 $186,517,394
============ ============ ============
</TABLE>

See notes to financial statements.
<PAGE>

REPUBLIC PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
FIXED INTERNATIONAL SMALL CAP
INCOME EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ............................... $9,540,277 $ 474,624 $ 684,292
Dividend income (net of foreign withholding tax
of $0, $561,948 and $850, respectively) ..... 109,981 3,532,896 288,182
---------- ---------- ----------
Total Investment Income ......................... 9,650,258 4,007,520 972,474
---------- ---------- ----------
EXPENSES:
Advisory fees and investment management fees 639,127 1,619,835 1,864,536
Administration fees ........................... 72,228 112,489 106,179
Fund accounting fees .......................... 40,040 49,868 40,040
Custodian fees and expenses ................... 63,368 283,296 133,897
Audit fees .................................... 17,836 17,836 17,836
Amortization of organization expenses ......... 13,468 13,828 8,008
Legal fees .................................... 22,568 45,864 42,588
Other expenses ................................ 30,551 55,121 39,312
---------- ---------- ----------
Total expenses ............................ 899,186 2,198,137 2,252,396
Less: Investment management fee waiver ...... -- -- (59,125)
---------- ---------- ----------
Total net expenses ........................ 899,186 2,198,137 2,193,271
---------- ---------- ----------
Net Investment Income (Loss) .................... 8,751,072 1,809,383 (1,220,797)
---------- ---------- ----------
NET REALIZED/UNREALIZED GAINS (LOSSES) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gains (losses) on:
Investment transactions ..................... 4,690,395 4,986,459 23,431,405
Foreign currency transactions ............... 44,773 1,888,614 --
Futures ..................................... (284,304) -- --
Net change in unrealized appreciation
(depreciation) on investments ............... (4,487,164) (2,191,379) (33,590,706)
Net change in unrealized appreciation
(depreciation) on foreign currency transactions 63,764 (1,899,092) --
Net change in unrealized depreciation on
futures contracts ........................... (14,528) -- --
---------- ---------- ----------
Net realized/unrealized gains (losses) on
investments and foreign currency transactions . 12,936 2,784,602 (10,159,301)
---------- ---------- ----------
NET CHANGE IN NET ASSETS RESULTING FROM
OPERATIONS .................................... $8,764,008 $4,593,985 $(11,380,098)
========== ========== ============
</TABLE>

See notes to financial statements.
<PAGE>

REPUBLIC FIXED INCOME PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
------------------------------
1998 1997
------------ -----------
<S> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ................................ $ 8,751,072 $ 5,693,664
Net realized gains on investment transactions, foreign
currency transactions and futures .................. 4,450,864 1,474,742
Net change in unrealized (depreciation)/appreciation
on investments, foreign currency and futures ....... (4,437,928) 1,574,239
------------ ------------
Net increase in net assets resulting from operations ... 8,764,008 8,742,645
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Contributions ........................................ 73,620,340 59,757,590
Withdrawals .......................................... (27,716,618) (14,273,669)
------------ ------------
Net increase in net assets from capital share
transactions ......................................... 45,903,722 45,483,921
------------ ------------
NET INCREASE IN NET ASSETS ............................. 54,667,730 54,226,566
NET ASSETS:
Beginning of year .................................... 118,404,948 64,178,382
------------ ------------
End of year .......................................... $173,072,678 $118,404,948
============ ============
</TABLE>
See notes to financial statements.
<PAGE>

REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
-------------------------------
1998 1997
------------ ------------
<S> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ............................... $ 1,809,383 $ 1,806,052
Net realized gains on investment transactions,
foreign currency transactions and futures ......... 6,875,073 10,878,480
Net change in unrealized (depreciation)/appreciation
on investments, foreign currency and futures ...... (4,090,471) 11,662,650
------------ ------------
Net increase in net assets resulting from operations .. 4,593,985 24,347,182
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Contributions ....................................... 80,542,039 84,915,450
Withdrawals ......................................... (86,527,737) (37,372,081)
------------ ------------
Net change in net assets from capital share
transactions ........................................ (5,985,698) 47,543,369
------------ ------------
NET CHANGE IN NET ASSETS .............................. (1,391,713) 71,890,551
NET ASSETS:
Beginning of year ................................... 207,129,075 135,238,524
------------ ------------
End of year ......................................... $205,737,362 $207,129,075
============ ============
</TABLE>
See notes to financial statements.
<PAGE>

REPUBLIC SMALL CAP EQUITY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
-------------------------------
1998 1997
------------- -----------
<S> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss .................................. $ (1,220,797) $ (559,423)
Net realized gains on investment transactions ........ 23,431,405 20,375,972
Net change in unrealized (depreciation)/appreciation
on investments ..................................... (33,590,706) 23,351,706
------------- ------------
Net change in net assets resulting from operations ..... (11,380,098) 43,168,255
------------- ------------
CAPITAL SHARE TRANSACTIONS:
Contributions ........................................ 55,600,547 79,877,809
Withdrawals .......................................... (71,442,897) (29,207,088)
------------- ------------
Net change in net assets from capital share transactions (15,842,350) 50,670,721
------------- ------------
NET CHANGE IN NET ASSETS ............................... (27,222,448) 93,838,976
NET ASSETS:
Beginning of year .................................... 213,739,842 119,900,866
------------- ------------
End of year .......................................... $186,517,394 $213,739,842
============ ============
</TABLE>
See notes to financial statements.
<PAGE>

REPUBLIC PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1998

1. ORGANIZATION. The Republic Fixed Income Portfolio, Republic International
Equity Portfolio and Republic Small Cap Equity Portfolio (collectively the
"Portfolios") are diversified series of the Republic Portfolios (the
"Portfolio Trust"), an open-end management investment company, which
currently has only these three series. The Portfolio Trust was organized as a
master trust fund under the laws of the State of New York on November 1,
1994. The Portfolios operate as master funds in master-feeder arrangements.
The Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Portfolios.

The investment objective of the Republic Fixed Income Portfolio is to
realize above-average total return over a market cycle of three to five
years, consistent with reasonable risk, through investment in a diversified
portfolio of U.S. Government securities, corporate bonds (including bonds
rated below investment grade commonly referred to as "junk bonds"), foreign
fixed-income securities, mortgage-backed securities of domestic issuers and
other fixed-income securities. The Fixed Income Portfolio's average weighted
maturity will ordinarily exceed five years.

The investment objective of the Republic International Equity Portfolio is
to seek long-term growth of capital and future income through investment
primarily in securities of non-U.S. issuers (including American Depository
Receipts ("ADR's") and U.S. registered securities) and securities whose
principal markets are outside of the United States.

The investment objective of the Small Cap Equity Portfolio 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").

Republic National Bank of New York ("Republic" or the "Manager") serves as
investment manager to the Portfolios. BISYS Fund Services, Inc., ("BISYS")
serves as administrator to the Portfolios.

2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies followed by the Portfolios in the preparation
of their 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 year.
Actual results could differ from those estimates.

SECURITIES VALUATION:
The value of each Portfolio's net assets is determined each day on which the
New York Stock Exchange ("NYSE") is open for trading. Each Sub-Adviser (see
Note 3) 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.
Foreign currency exchange rates are also determined prior to 4:00 p.m.,
however, if extraordinary events occur that are expected to affect the value
of a Portfolio security after the close of the primary exchange on which it
is traded, the security will be valued at fair value as determined in good
faith by or under the direction of the Board of Trustees of the Portfolio
Trust.

Equity 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.

Bonds and other fixed-income securities which are traded over-the-counter
and on a stock exchange will be valued according to the broadest and most
representative market. It is expected that for bonds and other fixed income
securities this ordinarily will be the over-the-counter market. Bonds and
other fixed income securities (other than short-term obligations but
including listed issues) in the Portfolios may be valued on the basis of
valuations furnished by a pricing service, the use of which has been approved
by the Board of Trustees of the Portfolio Trust. In making such valuations,
the pricing service utilizes both dealer-supplied valuations and electronic
data processing techniques which take into account appropriate factors such
as institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics and
other market data, without exclusive reliance upon quoted prices or exchange
or over-the-counter prices, since such valuations are believed to reflect
more accurately the fair value of such securities. Short-term debt
obligations are valued at amortized cost, which constitutes fair value as
determined by the Board of Trustees of the Portfolio Trust.

Bonds and other fixed income securities listed on a foreign exchange are
valued at the last quoted sales price available before the time when assets
are valued.

Futures contracts are normally valued at the settlement price on the
exchange on which they are traded.

Portfolio securities (other than short-term obligations) for which there
are no such valuations are valued at fair value as determined in good faith
by or under the direction of the Board of Trustees of the Portfolio Trust.

FOREIGN CURRENCY TRANSLATION:
The accounting records of the Portfolios are maintained in U.S. dollars.
Foreign currency amounts are translated into U.S. dollars at the current rate
of exchange to determine the value of investments, assets and liabilities.
Purchases and sales of securities, and income and expenses are translated at
the prevailing rate of exchange on the respective dates of such transactions.
The Portfolios do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS:
The Portfolios may enter into forward foreign currency exchange contracts in
connection with planned purchases or sales of securities, or to hedge the
U.S. dollar value of portfolio securities denominated in a particular
currency. The Portfolios could be exposed to risks if the counter-parties to
the contracts are unable to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The forward foreign currency exchange contracts are adjusted by
the daily exchange rate of the underlying currency and any gains or losses
are recorded for financial statement purposes as unrealized gains or losses
until the contract settlement date.

FUTURES:
A futures contract is an agreement to purchase/sell a specified quantity of
an underlying instrument at a specified future date or to make/receive a cash
payment based on the value of a securities index. The price at which the
purchase and sale will take place is fixed when the Portfolio enter into the
contract. Upon entering into such a contract the Portfolio is required to
pledge to the broker an amount of cash and/or securities equal to the minimum
"initial margin" requirements of the exchange. Pursuant to the contract, the
Portfolio agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or payments
are known as "variation margin" and are recorded by the Portfolio as
unrealized gains or losses. When the contract is closed, the Portfolio
records a realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time when it was
closed. The Fixed Income Portfolio invests in futures contracts solely for
the purpose of hedging its existing portfolio securities, or securities it
intends to purchase, against fluctuations in value caused by changes in
prevailing market interest rates. The use of futures transactions involves
the risk of imperfect correlation in movements in the price of futures
contracts, interest rates and the underlying hedged assets, and the possible
inability of counterparties to meet the terms of their contracts. The summary
of open financial futures contracts at October 31, 1998 is included in the
Fixed Income Portfolio's Schedule of Open Futures Contracts which is included
elsewhere in this report.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Fixed Income Portfolio records when-issued or delayed delivery
transactions on the trade date and maintains qualifying liquid assets having
a value sufficient to make payment for securities purchased. Securities
purchased on a when-issued or delayed delivery basis are marked to market
daily and begin earning interest on the settlement date. Losses may arise due
to changes in the market value of the underlying securities or if the
counterparty does not perform under the contract.

SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities transactions are accounted for on a trade date basis. Interest
income, including accretion of discount and amortization of premium, is
accrued daily. Dividend income and other distributions from the Portfolio
securities are recorded on the ex-dividend date, except, if the ex-dividend
date has passed, then certain dividends from foreign securities are recorded
when the Portfolio is informed of the ex-dividend date. Dividend income is
recorded net of foreign taxes withheld. Realized gains and losses on
securities transactions are determined on the identified cost basis.

EXPENSES 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:
Each Portfolio will be treated as a partnership for U.S. federal income tax
purposes. Accordingly, each Portfolio passes through all of its net
investment income and gains and losses to its partners, and is therefore not
subject to U.S. federal income tax. As such, each investor in the Portfolios
will be taxed on its share of the Portfolios' ordinary income and capital
gains. It is intended that the Portfolios will be managed in such a way that
an investor will be able to satisfy the requirements of the Internal Revenue
Code applicable to regulated investment companies.

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.

UNAMORTIZED ORGANIZATION EXPENSES:
Each Portfolio incurred certain costs in connection with it's organization.
Such costs have been deferred and are being amortized on a straight-line
basis over a five year period from the commencement of operations.

3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGEMENT:
Republic National Bank of New York ("Republic" or the "Manager") serves as
the Investment Manager to the Portfolios pursuant to an investment management
contract with the Portfolio Trust. Subject to the general guidance and the
policies set by the Trustees of the Portfolio Trust, Republic provides
general supervision over the investment management functions performed by the
Sub-Advisers (defined below). For its services under the Investment
Management Contract, the Manager is entitled to receive from the Portfolios,
fees accrued daily and payable monthly, at an annual rate of 0.20% of the
Fixed Income Portfolio's average daily net assets and at an annual rate of
0.25% of each of the International Equity Portfolio's and Small Cap Equity
Portfolio's average daily net assets. The Manager can voluntarily agree to
waive a proportion or all of these fees. Details of fees incurred and waived
are listed below.

INVESTMENT
PORTFOLIO MANAGER FEES FEES WAIVED
--------- ------------ -----------
Fixed Income Portfolio ...................... $288,913 $ --
International Equity Portfolio .............. 562,443 --
Small Cap Equity Portfolio .................. 517,892 59,125

SUB-ADVISORY:
Miller, Anderson & Sherrerd (the "Fixed Income Sub-Adviser") continuously
manages the investment portfolio of the Fixed Income Portfolio pursuant to a
sub-advisory agreement with the Manager. For its services, the Fixed Income
Sub-Adviser is paid a fee by the Fixed Income Portfolio, computed daily and
based on the Fixed Income Portfolio's average daily net assets, equal on an
annual basis to 0.375% of the net assets up to $50 million, 0.25% of the net
assets over $50 million up to $95 million, $300,000 in total when net assets
exceed $95 million, up to $150 million, 0.20% of net assets over $150 million
up to $250 million, and 0.15% of net assets over $250 million.

Capital Guardian Trust Company (the "International Equity Sub-Adviser")
continuously manages the investment portfolio of the International Equity
Portfolio pursuant to a sub-advisory agreement with the Manager. For its
services, the International Equity Sub-Adviser is paid a fee by the
International Equity Portfolio, computed daily and based on the International
Equity Portfolio's average daily net assets, equal on an annual basis to
0.70% of the net assets up to $25 million, 0.55% of the net assets over $25
million up to $50 million, 0.425% of net assets over $50 million up to $250
million, and 0.375% of net assets over $250 million.

MFS Institutional Advisors, Inc. (the "Small Cap Equity Sub-Adviser")
continuously manages the investment portfolio of the Small Cap Equity
Portfolio pursuant to a sub-advisory agreement with the Manager. For its
services, the Small Cap Equity Sub-Adviser is paid a fee by the Small Cap
Equity Portfolio, computed daily and based on the Small Cap Equity
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-Advisers not only to make investment
decisions for their respective Portfolio, but also to place purchase and sale
orders for the portfolio transactions of their respective Portfolio. For the
year ended October 31, 1998 the Sub-Advisory fees for each Portfolio were as
follows.

Fixed Income Portfolio ............................ $ 350,214
International Equity Portfolio .................... 1,057,392
Small Cap Equity Portfolio ........................ 1,346,644

ADMINISTRATION:
Pursuant to an administration agreement with the Portfolio Trust, BISYS Fund
Services Ireland Ltd., ("BISYS") provides the Portfolios with general office
facilities, and supervises the overall administration of the Portfolios
including, among other responsibilities, assisting in the preparation and
filing of all documents required for compliance by the Portfolios with
applicable laws and regulations and arranges for the maintenance of books and
records of the Portfolios. For those services, BISYS receives from each
Portfolio, fees accrued daily and payable monthly, equal on an annual basis
to 0.05% of the first $1 billion of a Portfolio's average daily assets; 0.04%
of the next $1 billion of such assets; and 0.035% of such assets in excess of
$2 billion. For the year ended October 31, 1998 the administration fees were:

Fixed Income Portfolio .............................. $ 72,228
International Equity Portfolio ....................... 112,489
Small Cap Equity Portfolio ........................... 106,179

FUND ACCOUNTING:
Pursuant to a Fund Accounting Agreement, Investors Bank and Trust Co.,
("IBT") serves as fund accounting agent to the Portfolios. For its services
to the Portfolio's, IBT receives fees payable monthly equal on an annual
basis to $40,000, $50,000 and $40,000, respectively. For the year ended
October 31, 1998, the following fees were incurred for these services.

Fixed Income Portfolio ............................... $40,040
International Equity Portfolio ....................... 49,868
Small Cap Equity Portfolio ........................... 40,040

TRUSTEES' FEES:
The fees paid and out-of-pocket expenses reimbursed to the Trustees for the
year ended October 31, 1998 were as follows:

Fixed Income Portfolio ................................ $1,820
International Equity Portfolio ........................ 3,640
Small Cap Equity Portfolio ............................ 3,640

CUSTODY:
The custody function was transferred to Republic National Bank of New York
effective from December 1, 1997 for the Funds and the Portfolios excluding
the International Equity Portfolio.

4. INVESTMENT TRANSACTIONS:
During the year ended October 31, 1998, each Portfolio purchased and sold
securities, excluding short-term securities, in the following amounts:

PURCHASES SALES
--------- -----
Fixed Income Portfolio ........................ $684,947,329 $567,508,455
International Equity Portfolio ................ 104,296,380 101,930,167
Small Cap Equity Portfolio .................... 138,992,166 153,820,711

5. CONCENTRATION OF RISK:
The Fixed Income Portfolio conducts a high level of trading and invests a
substantial portion of its assets in when-issued federal agency securities,
and therefore, it may be more affected by economic developments in these
markets than would be a comparable fixed income mutual fund.

6. YEAR 2000 (UNAUDITED):
The services provided to the Portfolios by its various service providers
depend on the smooth functioning of their computer systems. Many computer
software systems in use today cannot recognize the year 2000, but revert to
1900 or some other date, due to the manner in which dates were encoded and
calculated. That failure could have a negative impact on the handling of
securities trades, pricing and account services. The Portfolios have been
advised that their service providers have been working actively on necessary
changes to their own computer systems to prepare for the year 2000 and expect
that their systems will be adapted before that date, but there can be no
assurance that they will be successful, or that interaction with other
non-complying computer systems will not impair their services at that time.
In addition, no assurance can be given that the Portfolios' service providers
have anticipated every step necessary to avoid any adverse effect on the
Portfolios attributable to the Year 2000 problem.
<PAGE>

REPUBLIC FIXED INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 9, 1995
FOR THE YEAR ENDED OCTOBER 31, (COMMENCEMENT
----------------------------------- OF OPERATIONS) TO
1998 1997 1996 OCTOBER 31, 1995
-------- -------- ------- ----------------
<S> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000) ......... $173,073 $118,405 $64,178 $30,023
Ratio of expenses to average net assets ... 0.62% 0.57% 0.67% 0.46%(b)
Ratio of net investment income to average
net assets .............................. 6.03% 6.17% 5.66% 6.04%(b)
Ratio of expenses to average net assets (a) 0.62% 0.77% 0.90% 1.00%(b)
Ratio of net investment income to average
net assets (a) .......................... 6.03% 5.97% 5.43% 5.51%(b)
Portfolio turnover ........................ 126.40% 349.00% 152.00% 100.00%

See notes to financial statements.
<PAGE>

REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 9, 1995
FOR THE YEAR ENDED OCTOBER 31, (COMMENCEMENT
------------------------------------- OF OPERATIONS) TO
1998 1997 1996 OCTOBER 31, 1995
--------- --------- --------- ----------------
<S> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year (000) .......... $205,737 $207,129 $135,239 $39,929
Ratio of expenses to average net assets .. 0.97% 0.76% 0.83% 0.64%(b)
Ratio of net investment income to average
net assets ............................. 0.80% 1.21% 1.14% 1.55%(b)
Ratio of expenses to average net assets (a) 0.97% 1.01% 1.10% 1.39%(b)
Ratio of net investment income to average
net assets (a) ......................... 0.80% 0.96% 0.87% 0.80%(b)
Portfolio turnover ....................... 40.47% 30.00% 23.30% 3.07%

See notes to financial statements.
<PAGE>

REPUBLIC SMALL CAP EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED SEPTEMBER 3, 1996
OCTOBER 31, (COMMENCEMENT
----------------------- OF OPERATIONS) TO
1998 1997 OCTOBER 31, 1996
--------- --------- -----------------
<S> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year (000) ................. $186,517 $213,740 $119,901
Ratio of expenses to average net assets ......... 1.03% 0.84% 0.82%(b)
Ratio of net investment loss to average net
assets ........................................ (0.57)% (0.33)% (0.11)%(b)
Ratio of expenses to average net assets (a) 1.06% 1.09% 1.10%(b)
Ratio of net investment loss to average net
assets (a) .................................... (0.60)% (0.58)% (0.39)%(b)
Portfolio turnover .............................. 154.69% 92.18% 50.55%

(a) During the period, certain fees were voluntarily reduced. If such voluntary fee reductions and expense
reimbursements had not occurred, the ratios would have been as indicated.
(b) Annualized.
</TABLE>

See notes to financial statements.
<PAGE>

KPMG

INDEPENDENT AUDITORS' REPORT

The Board of Trustees
Republic Portfolios:

We have audited the accompanying statements of net assets of Republic
Fixed Income Portfolio, Republic International Equity Portfolio and Republic
Small Cap Equity Portfolio (the "Funds"), portfolios of Republic Portfolios,
including the schedules of investments, as of October 31, 1998, and the
related statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended and financial
highlights for each of the years or periods in the three-year period then
ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights of the Republic Fixed Income Portfolio and
Republic International Equity Portfolio for the period from January 9, 1995
(commencement of operations) to October 31, 1995 were audited by other
auditors whose reports thereon, dated December 8, 1995, expressed unqualified
opinions on those financial highlights.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities as of October 31, 1998 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Republic Fixed Income Portfolio, Republic International Equity Portfolio and
Republic Small Cap Equity Portfolio as of October 31, 1998, the results of
their operations for the year then ended, changes in their net assets for each
of the years in the two-year period then ended and financial highlights for
each of the years or periods in the three-year period then ended, in
conformity with generally accepted accounting principles.

KPMG LLP

Toronto, Ontario
December 18, 1998
<PAGE>

REPUBLIC NEW YORK TAX-FREE BOND FUND
REPUBLIC EQUITY FUND
REPUBLIC BOND FUND
REPUBLIC OVERSEAS EQUITY FUND
REPUBLIC OPPORTUNITY FUND

REPUBLIC FAMILY OF FUNDS: SUB-ADVISERS
CUSTOMER SERVICE REPUBLIC EQUITY FUND
Republic National Bank of New York Alliance Capital Management, L.P.
452 Fifth Avenue 1345 Avenue of the Americas
New York, NY 10018 New York, NY 10105
(888) 525-5757 (Toll Free)
Brinson Partners, Inc.
INVESTMENT ADVISER AND CUSTODIAN 209 South LaSalle Street
Republic National Bank of New York Chicago, IL 60604
452 Fifth Avenue
New York, NY 10018 REPUBLIC BOND FUND
Miller Anderson & Sherrerd
ADMINISTRATOR, DISTRIBUTOR AND SPONSOR One Tower Bridge
BISYS Fund Services West Conshohocken, PA 19428
3435 Stelzer Road
Columbus, OH 43219 REPUBLIC OVERSEAS EQUITY FUND
(614) 470-8000 Capital Guardian Trust Company
11100 Santa Monica Boulevard
CUSTODIAN AND TRANSFER AGENT Los Angeles, CA 90025
Investors Bank & Trust Company
89 South Street REPUBLIC OPPORTUNITY FUND
Boston, MA 02111 MFS Institutional Advisors, Inc.
(800) 782-8183 500 Boylston Street
Boston, MA 02116
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
99 High Street
Boston, MA 02110

LEGAL COUNSEL
Dechert Price & Rhoads
1775 Eye Street, N.W.
Washington, D.C. 20006