<PAGE>
THESE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY [LOGO]
THE U.S. GOVERNMENT, THE FDIC, THE FEDERAL RESERVE ARISTATA
BOARD OR ANY OTHER GOVERNMENTAL AGENCY OR INSURER. MUTUAL FUNDS
A CLASS ABOVE
INVESTMENT ADVISER
Tempest, Isenhart, Chafee, Lansdowne &
Associates, Inc.
1380 Lawrence Street
Suite 1050
Denver, CO 80204
ADMINISTRATOR, DISTRIBUTOR, TRANSFER AGENT ANNUAL REPORT
& FUND ACCOUNTANT
ALPS Mutual Funds Services, Inc. APRIL 30, 1998
370 Seventeenth Street
Suite 3100
Denver, CO 80202
LEGAL COUNSEL
Davis, Graham & Stubbs LLP
370 Seventeenth Street
Suite 4700
Denver, CO 80202
INDEPENDENT AUDITORS
Deloitte & Touche LLP
555 Seventeenth Street
Suite 3600
Denver, Colorado 80202
CUSTODIAN
Fifth Third Bank, N.A.
Fifth Third Center
38 Fountain Square Plaza
Cincinnati, Ohio 45263
MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT
PROSPECTUS.
FOR MORE INFORMATION, PLEASE CALL 1-800-644-8595
ALPS MUTUAL FUND SERVICES
- -------------------------
SPONSOR AND DISTRIBUTOR [GRAPHIC]
<PAGE>
LETTER FROM THE INVESTMENT ADVISER
- --------------------------------------------------------------------------------
Dear Fellow Shareholders:
It is with a great deal of pride that we deliver to you our first annual
shareholder report for the Aristata Funds. We want to thank our many long-time
investors for their loyalty, and whose outstanding support made a successful
launch of the Aristata Funds. We also extend a warm welcome to our new
investors. While this report format is new, you may be confident that this
information builds on our 22 year tradition of sharing important regular
communications with our investment clients. We appreciate the confidence you
have placed in us, and we are committed to making your investment in the
Aristata Funds a long-term rewarding experience.
FINANCIAL MARKET OBSERVATIONS
Since the launch of the Aristata Equity Fund on March 2, 1998, the stock markets
have continued their strong performance. In fact, both recent and longer term
stock market returns have been exceptional. This year's stock market advance
reflects a continuation of the above market rise of the last several years. As
of April 30, 1998, the Standard & Poor's 500 Index total return for the last
twelve months came to an extraordinary 38.7%. Stretching the time horizon over
the last three years, the comparable market return is a remarkable 31.9% per
year.
The financial markets have benefitted, at least to some extent, from an equally
attractive backdrop of economic developments. THE LITANY OF ALL THESE
DEVELOPMENTS IS LONG, AND THE LIST IS COMPELLINGLY BULLISH:
- Record corporate profits;
- An economy entering its eighth year of expansion with no signs of
dramatic slow down;
- Inflation under control;
- Unemployment at a 28 year low;
- A government deficit turned to a surplus;
- New technology, spreading to every aspect of the economy, and creating
unparalleled opportunities and efficiencies;
- The U.S. dollar is king;
- The demise of the Soviet Union, and with it the cost of fighting an
expensive Cold War, which frees capital for more productive uses in
economics around the world.
It is the confluence of these positive events which has created a constant flow
of good news about the economy, and fostered investor optimism.
However, when it comes to the financial markets, investor perceptions are often
more important than the underlying economic events. It seems quite clear that
the investing public is very content. Life is good. Jobs are plentiful, the
economy is growing, the stock market is wonderful; and the way things are going
retirement is just a matter of a few more points on the Dow Jones! In fact,
American workers--like never before--continue to plow dollars into the stock and
bond markets automatically via 401(k) and other
[GRAPHIC] -------------------------------------------------------------------- 1
<PAGE>
LETTER FROM THE INVESTMENT ADVISER
- --------------------------------------------------------------------------------
retirement plans. Our concern is that this is being done out of habit or
perhaps an expectation of a quick return, rather than through a fundamental
understanding of the markets and a reasoned risk and reward analysis.
AS WE MANAGE OUR INVESTMENTS IN THE ARISTATA FUNDS, WE FEEL IT IS IMPORTANT TO
REMAIN FOCUSED ON MANAGING RISK AS WELL AS OPPORTUNITY. We share the view
expressed, years ago, by Benjamin Graham, the father of modern day security
analysis:
"...BUT THE IMPORTANT THING FOR US TO BEAR IN MIND AS PRACTICING ANALYSTS (and
investors) IS THAT, WHEN YOU PAY FULL VALUE FOR COMMON STOCKS, YOU ARE IN GREAT
DANGER OF LATER APPEARING TO HAVE PAID TOO MUCH."
Currently, the stock market is priced at 23 times next year's estimated
earnings, and the dividend yield is a low 1.3%. These are lofty levels by
historical standards. Today's market levels strengthen our conviction to stick
with the investment disciplines of buying high quality companies, in promising
industries. We do not chase stock prices. Our buying is often made in those
companies and industries that are being temporarily overlooked by other
investors. These disciplines help to insure we are buying investments at
reasonable prices irrespective of where the overall stock market trades. The
stocks we buy typically have lower price earnings ratios (PE's) and offer higher
dividend yields than the market. In short, the stocks we select should have
more inherent value, at less cost.
The economic and financial market background has been very conducive to the bond
markets. Current low inflation trends and the moderate growth outlook should
provide a healthy environment for bonds. These positive trends seem well
recognized by investors and, as a result, current bond prices, not unlike the
stock market, reflect investors' optimism. Our bond strategy, which is
discussed in greater detail later, is placing emphasis on high quality bonds.
After more than seven years of economic expansion and record levels of corporate
profits, we do not view this as an appropriate time to be buying lower quality
bonds. We are not "reaching for yield" in the bond portfolios. Rather, we are
investing in intermediate (5 to 8 year) maturities where attractive income can
be secured without assuming the risk and price swings of longer maturity bonds.
Furthermore, these intermediate maturities provide flexibility to restructure
the bond investments and to take advantage of opportunities that might arise in
the constantly changing fixed income markets.
IT IS IN FINANCIAL MARKETS EXACTLY LIKE TODAY, THAT OUR STOCK AND BOND
INVESTMENT DISCIPLINES SHOULD OFFER GROWTH OPPORTUNITIES WITH LESS RISK.
On behalf of all the members of our organization, we appreciate the trust and
confidence you have placed with us as investment adviser to the Aristata Funds.
As co-investors with you in these Funds, our firm is dedicated to providing you
with long-term successful investment results.
Sincerely,
/s/ H. David Lansdowne
H. David Lansdowne, CFA
President
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc.
2 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
FUND REVIEW
- --------------------------------------------------------------------------------
ARISTATA EQUITY FUND
PERFORMANCE
Since the launch of the Aristata Equity Fund on March 2, 1998, the stock markets
have continued their strong performance. The first fiscal year is unusually
short, and encompasses only two months. The Fund's total return was 4.54% for
the period March 2, 1998 to its fiscal year end April 30, 1998. The comparable
return for the Standard & Poor's 500 index was 6.20%, and the broader market as
measured by Value Line Composite Index had a total return of 5.02%. Net assets
of the Fund as of April 30, 1998 were $101.6 million.
EQUITY MARKET OVERVIEW
The exceptionally strong stock market returns in recent years have fostered an
ever increasing popularity of market analysis, news commentary, and a growing
but less productive prognosticating of "What's the market going to do?" Our
long-held belief is that speculation on what the markets are going to do is a
most unproductive use of one's time and energy. Nor do we know of anyone with
the skill to successfully predict near-term market moves. We adhere to the
belief that one should resist the temptation to crystal ball gaze, since it
often leads to having to eat ground glass!
There is an important point about today's stock market in which we do have
confidence. Recent bull market returns have had an intoxicating affect on
investors. For the three years ended April 30, 1998, the popular stock market
indexes have achieved greater than 30% annual returns. While the long-term
growth of the economy is only 2% to 4.5% each year, with an occasional recession
thrown in, the risks for investors seem to be rising. The risk is future
investment returns will not likely achieve the optimistic expectations held by
many of today's investors.
[CHART]
ARISTATA EQUITY FUND
SECTOR PROFILE
As of April 30, 1998
<TABLE>
<S> <C>
Utilities 13.65%
Transportation 3.16%
Industrial Services 1.89%
Industrial Products 15.88%
Health Care 6.32%
Financial 8.38%
Energy 9.77%
Consumer Staples 18.06%
Consumer Services 1.79%
Consumer Durables 1.67%
Building/Real Estate 9.42%
Basic Materials 5.55%
Other 0.09%
Short-Term Investments 3.12%
Closed-End Funds 1.25%
</TABLE>
Our long-held investment disciplines seem especially compelling for investors in
today's financial market. With the stock market having reached new record
highs, we continue to focus on our strategy of managing risks as well as
providing the opportunity for long-term growth. We are seeking to invest in
good quality companies, in promising industries, but are looking to make
purchases at reasonable prices--low PEs (low price to earnings ratios). We
expect these investment standards will continue to reward investors in what now,
as always, seem like uncertain times in the stock market.
[GRAPHIC] -------------------------------------------------------------------- 3
<PAGE>
FUND REVIEW
- --------------------------------------------------------------------------------
ARISTATA EQUITY FUND (CON'T.)
PORTFOLIO UPDATE
EQUITY FUND
The Fund is diversified across several important industries. Energy related
stocks currently comprise about 10% of the Fund. Atlantic Richfield and
Texaco are oil stock investments which are in the Fund's top ten holdings.
These stocks are priced at reasonable valuations and offer earnings growth in
an environment where corporate profits are likely to slow in coming quarters.
IBM remains one of our larger investments. We have been an investor in IBM
for several years, and consider the company's improving earnings outlook as
positive. We view IBM as a market leader and we find its price, currently at
a discount to other technology companies, not fully reflecting the positive
outlook. We have been increasing the investments in real estate investment
trusts (REITs). We view real estate as an asset undergoing further upward
price appraisal. The REITs offer attractive upfront dividend yields and
favorable valuations (low PEs) in today's market. The Fund's investments
continue to seek out attractively valued stocks for their potential to
deliver above-average earnings and dividend growth.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE ARISTATA EQUITY FUND,
THE S&P 500 AND THE VALUE LINE COMPOSITE.
[GRAPH]
<TABLE>
<CAPTION>
PERFORMANCE
AS OF APRIL 30, 1998
- ---------------------------------
<S> <C>
TOTAL RETURN (1)
Since Inception 4.54%
<CAPTION>
FUND VALUE VS. INDEX VALUE
AT APRIL 30, 1998
- ---------------------------------------
<S> <C>
Aristata Equity Fund $10,454
S&P 500 $10,620
Value Line Composite $10,477
</TABLE>
4 -------------------------------------------------------------------- [GRAPHIC]
<PAGE>
FUND REVIEW
- --------------------------------------------------------------------------------
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
PERFORMANCE
Since inception on March 2, 1998 to its fiscal year end April 30, 1998, the
Aristata Quality Bond Fund's total return was 0.69%. The comparable return
for the Lehman Brothers Government/Corporate Bond Index and the Lehman
Brothers Intermediate Government/Corporate Bond Index were 0.81% and 0.82%,
respectively. Net assets of the Fund as of April 30, 1998 were $57.5 million.
For the same period since inception March 2, 1998, the Aristata Colorado
Quality Tax-Exempt Fund's total return was 0.22% and its net assets were
$23.4 million. The comparable returns for the Lipper Municipal Intermediate
Bond and the Lehman Brothers Municipal Bond Index were -0.47% and -0.36%,
respectively.
FIXED INCOME MARKET REVIEW
1998 has been characterized by an economy with low inflation and low
unemployment. Fixed income markets have reacted favorably to this environment
as investors remained confident. Inflation has been surprisingly low throughout
the 1990's and currently stands at nearly 1.5%. This lack of inflation has
reinforced the competitive pressures in the U.S. economy. Hence, the ability of
companies to increase prices on their goods has been greatly diminished.
The U.S. economy has grown strongly at an annual rate of 4.2% in the first
quarter of 1998. Domestic demand from consumers remains strong and low interest
rates have stimulated the housing market. New and existing home sales jumped to
a record high in February. The nation's unemployment rate has fallen to a 25
year low as the level of job growth extends its solid pace.
Looking ahead, however, weakness in the global economies, especially Asia, may
have an impact on the U.S. economy. Interest rate differentials between the
U.S. and foreign bonds currently favor U.S. assets. Although U.S. real rates
(inflation adjusted) are high, the tight labor markets remain a concern for the
Federal Reserve. Wage price pressures may emerge from the tight labor markets
and heighten inflationary fears in the marketplace.
In the months ahead, the Federal Reserve monetary policy may be guided by
international events. However, the U.S. dollar remains strong as the currency
has become a safe haven for many foreign investors. Since the current business
expansion in 1990, the U.S. economy has been able to sustain moderate growth
with low inflation, making U.S. assets particularly attractive for many
investors.
[CHART]
ARISTATA QUALITY BOND FUND
SECTOR PROFILE
as of April 30, 1998
<TABLE>
<S> <C>
Industrial 28.61%
Financial 19.03%
Electric Utilities 1.42%
Communications 4.98%
U.S. Government & Agency Obligations 38.41%
Other 0.96%
Short-Term Investments 6.59%
</TABLE>
[GRAPHIC] -------------------------------------------------------------------- 5
<PAGE>
FUND REVIEW
- --------------------------------------------------------------------------------
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
(CON'T.)
PORTFOLIO UPDATE
ARISTATA QUALITY BOND FUND
Our fixed income strategy remains focused on the high quality intermediate
sectors. Our goal has been to seek the best relative values in the market while
providing a steady stream of income to our shareholders. We seek to improve the
risk/reward balance in the Fund through a diversified portfolio of investments.
As of April 30, 1998, the Fund held 54% in corporate bonds and 38% in U.S.
Government and agency obligations. The corporate issues were comprised of 29%
industrial, 19% financial, 5% communication and 1% utilities issues. The Fund's
average maturity on April 30 was 6.3 years. The yield curve (difference between
1 year and 30 year Treasury bonds) remained relatively flat during the period;
encouraging us to find value in intermediate maturity securities. Credit
quality spreads remain narrow as demand for high yield bonds continue to grow.
A strong U.S. economy has helped sustain sound credit fundamentals on many
corporate issues. Government securities have enjoyed a "flight to quality"
during the period, as weakness in Asia has led many foreign investors into U.S.
Treasuries.
[CHART]
ARISTATA QUALITY BOND FUND
QUALITY PROFILE (2)
as of April 30, 1998
<TABLE>
<S> <C>
Other 6%
AAA 42%
AA 14%
A 37%
BBB 1%
</TABLE>
6 -------------------------------------------------------------------- [GRAPHIC]
<PAGE>
FUND REVIEW
- --------------------------------------------------------------------------------
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
(CON'T.)
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE ARISTATA QUALITY BOND
FUND, THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX AND THE LEHMAN
BROTHERS GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX.
[GRAPH]
<TABLE>
<CAPTION>
PERFORMANCE
AS OF APRIL 30, 1998
- ----------------------------------
<S> <C>
TOTAL RETURN (1)
Since Inception 0.69%
<CAPTION>
FUND VALUE VS. INDEX VALUE
AT APRIL 30, 1998
- -----------------------------------------------------
<S> <C>
Aristata Quality Bond Fund $10,069
Lehman Bros. Gov't/Corp. Bond Index $10,081
Lehman Bros. Gov't/Corp. Interm. Bond Index $10,082
</TABLE>
[GRAPHIC] -------------------------------------------------------------------- 7
<PAGE>
FUND IN REVIEW
- --------------------------------------------------------------------------------
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
(CON'T.)
PORTFOLIO UPDATE
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
Strong municipal issuance during the first quarter of 1998 has led to the
increased ratio of municipal yields versus treasury yields. Due to the abundant
supply, ten year municipals yielded close to 80% of treasury yields, a level
that has historically been attractive to investors. Ten year municipal yields
increased approximately 20 basis points for the period ending April 30, 1998.
The Fund is well diversified with many Colorado municipal issues. As of April
30, 1998, the Fund's holdings include 97% "A rated" or better securities. As
credit spreads remain narrow our emphasis has been on the upper-tier rated
credits. The average maturity of the Fund is 7.6 years as of April 30, 1998.
To limit the volatility in the markets, while capturing higher yields, we
concentrated our investments in the high quality intermediate sector of the
Colorado municipal market.
[CHART]
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND QUALITY PROFILE (2)
as of April 30, 1998
<TABLE>
<S> <C>
Other 3%
AAA 57%
AA 26%
A 14%
</TABLE>
[CHART]
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND SECTOR PROFILE
as of April 30, 1998
<TABLE>
<S> <C>
Other 3%
Prerefunded Bonds 23%
General Obligation Bonds 41%
Revenue Bonds 33%
</TABLE>
The Fund's assets, being in a majority of Colorado issues, are subject to the
economic conditions affecting Colorado. Colorado's economy is well diversified
in many sectors including services, tourism, construction, and agriculture.
Colorado's economy has significantly improved since the late 1980's economic
downturn. This improvement in the state's growth rate and its fiscal position
has strengthened the credit quality of many municipalities in the region.
8 -------------------------------------------------------------------- [GRAPHIC]
<PAGE>
FUND IN REVIEW
- --------------------------------------------------------------------------------
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
(CON'T.)
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE ARISTATA COLORADO
QUALITY TAX-EXEMPT FUND, THE LIPPER MUNICIPAL INTERMEDIATE BOND FUND INDEX, AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX.
[GRAPH]
<TABLE>
<CAPTION>
PERFORMANCE
AS OF APRIL 30, 1998
- ---------------------------------
<S> <C>
TOTAL RETURN (1)
Since Inception 0.22%
<CAPTION>
FUND VALUE VS. INDEX VALUE
AT APRIL 30, 1998
- ----------------------------------------------------
<S> <C>
Aristata Colorado Quality Tax-Exempt Fund $10,022
Lipper Municipal Interm. Bond Fund Index $9,953
Lehman Brothers Municipal Bond Index $9,964
</TABLE>
(1) TOTAL RETURN IS THE CHANGE IN THE VALUE OF AN INVESTMENT IN THE FUND AFTER
REINVESTING ALL INCOME AND CAPITAL GAINS. IT IS CALCULATED BY DIVIDING THE
CHANGE IN TOTAL INVESTMENT VALUE BY THE INITIAL VALUE OF THE INVESTMENT. TOTAL
RETURN FIGURES ARE NET OF ALL FUND EXPENSES AND REFLECT ALL FEE WAIVERS.
WITHOUT THESE FEE WAIVERS, TOTAL RETURN WOULD HAVE BEEN LOWER. THE INCEPTION
DATE OF EACH FUND IS MARCH 2, 1998. THE INVESTMENT RETURN AND PRINCIPAL VALUE
OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE TOTAL RETURN FIGURES
REPRESENT PAST PERFORMANCE AND ARE NOT INDICATIVE OF FUTURE RESULTS.
(2) QUALITY PROFILE BASED ON EACH SECURITY'S HIGHEST RATING FROM MOODY'S OR
S&P.
THE VIEWS EXPRESSED IN THIS ADVISER UPDATE REFLECT THE ADVISER'S VIEW ONLY
THROUGH APRIL 30, 1998. THE ADVISER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME
BASED ON MARKET AND OTHER CONDITIONS.
[GRAPHIC] -------------------------------------------------------------------- 9
<PAGE>
FUND IN REVIEW
- --------------------------------------------------------------------------------
DEFINITION OF INDICES
The STANDARD & POOR'S 500 INDEX (S&P 500) is an unmanaged index containing
common stocks of 500 industrial, transportation, utility and financial
companies, regarded as generally representative of the U.S. stock market. The
index return reflects the investment of income dividends and capital gain
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing.
The VALUE LINE COMPOSITE INDEX is an unmanaged equally weighted geometric
average composed of approximately 1700 stocks traded on the New York Stock
Exchange, American Stock Exchange, and over- the-counter that are tracked by the
Value Line Investment Survey. The index return reflects the investment of
income dividends and capital gain distributions, if any, but does not reflect
fees, brokerage commissions, or other expenses of investing.
The LEHMAN GOVERNMENT/CORPORATE BOND INDEX and the LEHMAN GOVERNMENT/CORPORATE
INTERMEDIATE BOND INDEX are unmanaged indices which are a broad measure of bond
performance that reflects the investment of income dividends and capital gain
distributions, if any, but do not reflect fees, brokerage commissions, or other
expenses of investing. Intermediate indices include bonds with maturities of up
to ten years.
The LEHMAN MUNICIPAL BOND INDEX is an unmanaged index which is a broad measure
of tax-exempt bond performance that reflects the investment of income dividends
and capital gain distributions, if any, but does not reflect fees, brokerage
commissions, or other expenses of investing.
The LIPPER INTERMEDIATE MUNICIPAL FUND INDEX is an unmanaged index which
measures the performance of the 30 largest intermediate municipal debt funds
(i.e. those with dollar-weighted average maturities of 5 to 10 years). The
index return reflects the investment of income dividends and capital gain
distributions, if any.
10 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
FINANCIAL INVESTORS TRUST:
We have audited the accompanying statements of assets and liabilities,
including the statements of investments, of the Aristata Equity Fund, Aristata
Quality Bond Fund and Aristata Colorado Quality Tax-Exempt Fund of Financial
Investors Trust as of April 30, 1998, the related statements of operations, the
statements of changes in net assets, and financial highlights for the period
then ended. These financial statements and financial highlights are the
responsibility of the Trust's Management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at April 30, 1998, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Aristata Equity
Fund, Aristata Quality Bond Fund and Aristata Colorado Quality Tax-Exempt Fund
of Financial Investors Trust as of April 30, 1998, and the results of their
operations, the changes in their net assets and financial highlights for the
period then ended in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
DENVER, COLORADO
JUNE 2, 1998
[LOGO]
[GRAPHIC] ------------------------------------------------------------------- 11
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA EQUITY FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE*
------ ------
<S> <C> <C>
COMMON STOCKS - 95.54%
BASIC MATERIALS - 5.55%
CHEMICALS - 2.25%
Betzdearborn, Inc. 21,000 $ 1,126,125
Sigma Aldrich Corp. 29,200 1,164,350
------------
2,290,475
------------
METALS - 0.87%
Worthington Industries, Inc. 49,000 880,471
------------
PAPER/PACKAGING - 2.43%
Caraustar Industries, Inc. 41,500 1,421,375
Wausau-Mosinee Paper Corp. 49,500 1,048,781
------------
2,470,156
------------
TOTAL BASIC MATERIALS 5,641,102
------------
BUILDING/REAL ESTATE - 9.42%
BUILDING MATERIALS - 4.47%
Lafarge Corp. 57,000 2,280,000
Vulcan Materials Co. 19,700 2,266,731
------------
4,546,731
------------
ENG./CONST./HOME BLDG - 0.98%
Foster Wheeler Corp. 36,000 996,750
------------
R.E.I.T./REAL ESTATE - 3.97%
Duke Realty Investment, Inc. 85,000 2,024,062
Health & Retirement Pptys Trust 45,000 877,500
The Meditrust Companies 37,589 1,130,019
------------
4,031,581
------------
TOTAL BUILDING/REAL ESTATE 9,575,062
------------
CONSUMER DURABLES - 1.67%
HOUSEHOLD GOODS - 1.67%
Eastman Kodak Co. 23,500 1,696,406
------------
CONSUMER SERVICES - 1.79%
HOTEL/RESORT - 1.03%
Carnival Corp. Class A 15,000 1,043,437
------------
RESTAURANTS - 0.76%
Bob Evans Farms, Inc. 38,000 774,250
------------
TOTAL CONSUMER SERVICES 1,817,687
------------
CONSUMER STAPLES - 18.06%
FOOD/BEVERAGE - 6.88%
Corn Products Int'l, Inc.** 17,000 605,625
Earthgrains Co. 52,000 2,431,000
IBP, Inc. 25,500 525,938
Riviana Foods, Inc. 66,000 1,530,375
SuperValu, Inc. 43,500 1,900,406
------------
6,993,344
------------
PACKAGED GOODS - 1.93%
Avon Products, Inc. 23,800 1,956,063
------------
RETAIL - 5.45%
Dayton Hudson Corp. 30,000 2,619,375
May Department Stores Co. 21,000 1,295,437
Nordstrom, Inc. 15,000 981,563
Sears Roebuck & Co. 10,800 640,575
------------
5,536,950
------------
TEXTILE/APPAREL - 3.80%
Burlington Industries, Inc.** 122,000 2,135,000
V. F. Corp. 33,200 1,726,400
------------
3,861,400
------------
TOTAL CONSUMER STAPLES 18,347,757
------------
ENERGY - 9.77%
OIL & GAS - 9.77%
Amoco Corp. 38,600 1,708,050
Atlantic Richfield Co. 43,800 3,416,400
Forest Oil Corp.** 44,000 687,500
Royal Dutch Petroleum Co. 19,200 1,086,000
Texaco, Inc. 49,200 3,025,800
------------
TOTAL ENERGY 9,923,750
------------
FINANCIAL - 8.38%
BANKS/S & L/FINANCE/LEASE - 5.01%
Morgan J. P. & Co., Inc. 13,000 1,706,250
</TABLE>
12 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA EQUITY FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE*
------ ------
<S> <C> <C>
FINANCIAL (CONTINUED)
BANKS/S & L/FINANCE/LEASE (CONTINUED)
PNC Bankcorp 33,400 $ 2,018,613
Ryder System, Inc. 39,300 1,368,131
------------
5,092,994
------------
BROKERS/FINANCIAL SERVICES - 2.42%
Marsh & McLennan Cos., Inc. 27,000 2,460,375
------------
INSURANCE - 0.95%
Allstate Corp. 10,010 963,463
------------
TOTAL FINANCIAL 8,516,832
------------
HEALTHCARE - 6.32%
DRUGS - 4.85%
American Home Products Corp. 21,000 1,955,625
AMGEN, Inc.** 12,000 715,500
Mallinckrodt, Inc. 17,000 548,250
Merck & Co., Inc. 14,200 1,711,100
------------
4,930,475
------------
HEALTHCARE SERVICES - 1.47%
United Healthcare Corp. 21,200 1,489,300
------------
TOTAL HEALTHCARE 6,419,775
------------
INDUSTRIAL PRODUCTS - 15.88%
ELECTRICAL PRODUCTS - 3.85%
ABB AB Sponsored ADR 15,700 2,449,200
Emerson Electric Co. 23,000 1,463,375
------------
3,912,575
------------
ELECTRONICS - 0.50%
AMP, Inc. 12,900 507,131
------------
INDUSTRIAL COMPONENTS - 5.23%
CAE, Inc. 157,500 1,365,368
Ingersoll Rand Co. 59,750 2,752,234
Pall Corp. 61,000 1,197,125
------------
5,314,727
------------
OFFICE EQUIPMENT/E.D.P. - 6.30%
Electronic Data Systems Corp. 25,000 1,075,000
Hewlett-Packard Co. 17,500 1,317,969
International Business
Machines Corp. 26,000 3,012,750
Seagate Technology, Inc.** 15,000 400,313
Storage Technology Corp.** 7,000 591,063
------------
6,397,095
------------
TOTAL INDUSTRIAL PRODUCTS 16,131,528
------------
INDUSTRIAL SERVICES - 1.89%
BUSINESS INFORMATION/SERVICES - 1.89%
Cognizant Corp. 17,700 910,444
Unisource Worldwide, Inc. 80,000 1,015,000
------------
TOTAL INDUSTRIAL SERVICES 1,925,444
------------
TRANSPORTATION - 3.16%
RAILS/TRUCKS/MARINE - 3.16%
Roadway Express, Inc. 104,500 2,592,906
Stolt-Nielsen S A 33,000 622,875
------------
TOTAL TRANSPORTATION 3,215,781
------------
UTILITIES - 13.65%
COMMUNICATIONS - 3.70%
Bellsouth Corp. 28,000 1,797,250
GTE Corp. 33,500 1,957,656
------------
3,754,906
------------
ELECTRIC UTILITIES - 2.85%
New Century Energies, Inc. 61,150 2,904,625
------------
GAS UTILITIES - 7.10%
Enron Corp. 55,000 2,705,312
Northwest Natural Gas Co. 81,750 2,207,250
Questar Corp. 53,050 2,301,044
------------
7,213,606
------------
TOTAL UTILITIES 13,873,137
------------
TOTAL COMMON STOCKS 97,084,261
(Cost $54,704,801) ------------
</TABLE>
[GRAPHIC] ------------------------------------------------------------------- 13
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA EQUITY FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE*
------ ------
<S> <C> <C>
CLOSED-END FUNDS - 1.25%
FOREIGN - 1.25%
Asia Tigers Fund 75,000 $ 567,187
Morgan Stanley Asia-Pac. Fund 95,000 706,563
------------
TOTAL CLOSED-END FUNDS 1,273,750
(Cost $1,324,223) ------------
SHORT-TERM INVESTMENTS - 3.12%
MUTUAL FUNDS - 3.12%
Fountain Square C/P Fund 3,171,222 3,171,222
------------
TOTAL SHORT-TERM INVESTMENTS 3,171,222
(Cost $3,171,222) ------------
TOTAL INVESTMENTS 99.91% $101,529,233
(Cost $59,200,246)
Other Assets in Excess
of Liabilities .09% 84,601
----------------------------
NET ASSETS 100.00% $101,613,834
----------------------------
----------------------------
</TABLE>
* See note 1 to financial statements.
**Denotes non-income producing security.
ARISTATA QUALITY BOND FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT &
AGENCY OBLIGATIONS - 38.41%
U.S. TREASURY BILLS - 3.41%
06/25/98 5.330% Aaa $1,000,000 $ 991,700
12/10/98 5.230% Aaa 1,000,000 968,842
-----------
1,960,542
-----------
U.S. TREASURY NOTES - 6.79%
02/15/99 8.875% Aaa 400,000 410,250
08/15/05 6.500% Aaa 1,900,000 1,984,314
07/15/06 7.000% Aaa 1,400,000 1,512,001
-----------
3,906,565
-----------
U.S. TREASURY BONDS - 6.07%
02/15/07 7.625% Aaa 1,367,000 1,451,156
11/15/07 7.875% Aaa 920,000 1,002,513
05/15/10 10.000% Aaa 840,000 1,039,763
-----------
3,493,432
-----------
FEDERAL FARM CREDIT BANK - 2.43%
08/06/07 7.210% Aaa 900,000 903,672
01/22/08 6.120% Aaa 500,000 492,450
-----------
1,396,122
-----------
FEDERAL HOME LOAN BANK - 3.68%
07/27/07 7.000% Aaa 800,000 811,405
11/14/07 7.000% Aaa 300,000 303,689
01/07/13 7.010% Aaa 500,000 500,702
02/19/13 7.040% Aaa 500,000 497,432
-----------
2,113,228
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.30%
11/05/12 7.115% Aaa 800,000 823,419
03/18/13 6.650% Aaa 500,000 500,044
-----------
1,323,463
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 13.73%
05/26/98 5.390% Aaa 2,000,000 1,992,505
01/21/03 6.060% Aaa 500,000 496,904
12/27/04 6.400% Aaa 500,000 500,510
09/20/06 7.930% Aaa 800,000 821,979
</TABLE>
14 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA QUALITY BOND FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT &
AGENCY OBLIGATIONS (CONTINUED)
FEDERAL NATIONAL MORTGAGE ASSOCIATION (CONTINUED)
06/26/07 7.170% Aaa $ 500,000 $ 511,801
01/29/08 6.460% Aaa 500,000 497,985
04/24/08 6.650% Aaa 500,000 496,528
05/05/08 6.780% Aaa 250,000 250,490
10/16/12 7.080% Aaa 400,000 404,091
12/03/12 6.920% Aaa 800,000 806,876
01/22/13 6.440% Aaa 500,000 494,572
01/25/13 5.920% Aaa 500,000 492,677
03/10/16 8.200% Aaa 105,000 127,062
-----------
7,893,980
-----------
TOTAL U.S GOVERNMENT &
AGENCY OBLIGATIONS 22,087,332
(Cost $20,945,358) -----------
Bond Rating**
Moody's/S&P
-------------
CORPORATE BONDS - 54.04%
COMMUNICATIONS - 4.98%
Chesapeake & Potomac Telephone Co.
05/01/09 7.250% Aa2/AA 610,000 616,390
MCI Communications Corp.
03/23/99 6.250% Baa2/A 500,000 500,477
New England Telephone & Telegraph Co.
10/15/07 7.375% Aa2/AA 100,000 101,217
New York Telephone Co.
02/15/04 6.250% A2/A+ 500,000 500,867
Southern New England Telephone Co.
12/15/03 6.125% Aa3/AA 700,000 701,423
Southwestern Bell Telephone Co.
06/01/03 5.875% Aa3/AA 145,000 142,756
06/01/08 6.750% Aa3/AA 300,000 300,071
-----------
TOTAL COMMUNICATIONS 2,863,201
-----------
ELECTRIC UTILITIES - 1.42%
Consolidated Edison Co.
02/01/02 6.625% A1/A+ 800,000 814,470
-----------
FINANCIAL - 19.03%
AUTOMOBILE - 0.88%
Ford Motor Credit Co.
06/30/03 6.625% A1/A 500,000 508,758
-----------
INSURANCE - 2.19%
Allstate Insurance Corp.
06/15/03 6.750% A1/A+ 550,000 564,323
CNA Financial Corp.
11/15/03 6.250% A3/A- 700,000 692,834
-----------
1,257,157
-----------
BANKS/S & L/FINANCE/LEASE - 7.95%
BankAmerica Corp.
05/12/05 7.125% Aa3/A+ 500,000 520,378
Bankers Trust New York Corp.
03/01/01 9.400% A3/A- 350,000 378,663
01/15/02 7.500% A3/A- 300,000 311,783
Citicorp
08/15/05 6.750% A1/A 700,000 715,756
First Bank System
10/15/03 6.000% A2/A 500,000 496,607
Heller Financial, Inc.
03/15/00 5.625% A3/BBB+ 550,000 544,272
NCNB Corp.
08/01/02 7.750% A2/A+ 200,000 200,180
NationsBank Corp.
04/15/00 5.375% Aa3/A+ 700,000 693,475
Norwest Financial, Inc.
01/15/00 8.375% Aa3/AA- 700,000 709,626
-----------
4,570,740
-----------
BROKERS/FINANCIAL SERVICES - 8.01%
Associates Corp. of North America
03/15/00 6.000% Aa3/AA- 800,000 800,189
Bear Stearns Cos., Inc.
04/15/03 6.750% A2/A 750,000 765,730
Dean Witter, Discover Co.
03/01/03 6.875% A1/A+ 350,000 359,593
International Lease Finance Corp.
08/15/99 6.500% A1/A+ 700,000 704,670
</TABLE>
[GRAPHIC] ------------------------------------------------------------------- 15
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA QUALITY BOND FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
FINANCIAL (Continued)
BROKERS/FINANCIAL SERVICES (CONTINUED)
Lehman Brothers, Inc.
11/15/98 5.750% Baa1/A $ 50,000 $ 49,949
Lehman Brothers Holdings
02/15/99 8.375% Baa1/A 200,000 203,320
Merrill Lynch & Co.
04/27/08 7.000% Aa3/AA- 700,000 728,102
Morgan Stanley Dean Witter & Co.
10/15/01 8.875% A1/A+ 400,000 432,828
01/15/07 8.330% A1/A+ 500,000 562,568
-----------
4,606,949
-----------
TOTAL FINANCIAL 10,943,604
-----------
INDUSTRIAL - 28.61%
AEROSPACE - 0.88%
Boeing Co.
06/15/03 6.350% Aa3/AA+ 500,000 503,499
-----------
AUTOMOBILE - 1.53%
Ford Motor Co.
09/15/01 9.000% A1/A 350,000 380,038
General Motors Corp.
05/01/05 6.250% A3/A 500,000 499,657
-----------
879,695
-----------
BROADCASTING/ENTERTAINMENT - 0.90%
Walt Disney Co.
03/30/06 6.750% A2/A 500,000 519,811
-----------
BUILDING MATERIALS - 1.77%
Hanson Trust PLC
01/15/03 7.375% A3/A- 300,000 314,129
Martin Marietta Corp.
04/15/03 6.500% A3/BBB+ 700,000 705,835
-----------
1,019,964
-----------
BUSINESS INFORMATION/SERVICES - 2.52%
WMX Technologies
11/15/99 8.250% Baa3/BBB 200,000 205,963
12/01/03 6.375% Baa3/BBB 500,000 496,370
Xerox Corp.
04/15/02 8.125% A2/A 700,000 748,416
-----------
1,450,749
-----------
CHEMICALS - 2.03%
DuPont E I De Nemours & Co.
12/01/01 6.000% Aa3/AA- 425,000 425,593
03/15/04 8.125% Aa3/AA- 200,000 219,986
ICI Wilmington, Inc.
01/15/02 7.500% Baa1/A- 500,000 522,958
-----------
1,168,537
-----------
DRUGS - 0.73%
American Home Products Corp.
02/15/00 7.700% A2/A 200,000 205,761
Eli Lilly & Co.
12/01/01 8.125% Aa3/AA 200,000 213,463
-----------
419,224
-----------
FOOD/BEVERAGE - 2.66%
Archer Daniels Midland Co.
05/15/03 6.250% Aa3/AA- 700,000 704,410
PepsiCo, Inc.
10/01/98 7.750% A1/A 200,000 201,574
Philip Morris Cos., Inc.
05/15/02 7.625% A2/A 600,000 625,563
-----------
1,531,547
-----------
HOTEL/RESORT - 0.86%
Carnival Corp.
04/15/08 6.150% A2/A 500,000 492,789
-----------
HOUSEHOLD GOODS - 1.82%
Colgate Palmolive Co.
12/01/99 6.860% A1/A 700,000 711,878
Whirlpool Corp.
03/01/03 9.000% Baa1/A- 300,000 332,753
-----------
1,044,631
-----------
INDUSTRIAL COMPONENTS - 0.88%
Ingersoll Rand Co.
08/07/00 6.540% A3/A- 500,000 505,156
-----------
METALS - 1.22%
Alcan Aluminum Ltd.
04/01/00 5.875% A2/A- 700,000 701,253
-----------
</TABLE>
16 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA QUALITY BOND FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
INDUSTRIAL (CONTINUED)
OFFICE EQUIPMENT/E.D.P. - 2.52%
Honeywell, Inc.
08/16/99 7.460% A2/A $ 700,000 $ 714,608
International Business Machines Corp.
11/01/02 7.250% A1/A+ 700,000 733,592
-----------
1,448,200
-----------
OIL & GAS - 1.30%
British Petroleum Co.
05/15/02 7.875% Aa2/AA 700,000 745,620
-----------
OIL FIELD SERVICES - 1.23%
Dresser Industries, Inc.
06/01/00 6.250% Aa3/A 700,000 705,032
-----------
PACKAGED GOODS - 0.87%
Fortune Brands, Inc.
04/01/08 6.250% A2/A 500,000 501,729
-----------
PAPER/PACKAGING - 1.43%
Avery Dennison Corp.
04/15/05 6.750% A2/A 800,000 822,106
-----------
RESTAURANTS - 1.24%
McDonalds Corp.
09/01/05 6.625% Aa2/AA 700,000 715,104
-----------
RETAIL - 2.22%
Dillard Department Stores
06/01/06 7.375% A2/A+ 500,000 535,422
JC Penney,Inc.
11/15/03 6.125% A2/A 750,000 745,752
-----------
1,281,174
-----------
TOTAL INDUSTRIAL 16,455,820
-----------
TOTAL CORPORATE BONDS 31,077,095
(Cost $30,003,398) -----------
<CAPTION>
Due Principal
Date Amount Value*
- ---- ------ ------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 6.59%
MUTUAL FUNDS - 6.59%
Fountain Square C/P Fund $ 2,000,000 $ 2,000,000
Fountain Square
U.S. Treasury Fund 1,792,176 1,792,176
-----------
TOTAL SHORT-TERM INVESTMENTS 3,792,175
(Cost $3,792,175) -----------
TOTAL INVESTMENTS 99.04% $56,956,602
(Cost $54,740,931)
Other Assets in Excess
of Liabilities 0.96% 553,108
------------------------------
NET ASSETS 100.00% $57,509,710
------------------------------
------------------------------
</TABLE>
*See note 1 to financial statements.
**Ratings - The Moody's and S&P ratings are believed to be the most recent
ratings at April 30, 1998. Ratings are not covered by the Report of Independent
Auditors.
[GRAPHIC] ------------------------------------------------------------------- 17
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
COLORADO MUNICIPAL OBLIGATIONS - 97.25%
PREREFUNDED - 23.42%
Adams County, GO
School District #1, FGIC
12/01/07 6.500% Aaa/AAA $ 400,000 $ 439,232
Adams County, GO
School District #12, FGIC
12/15/07 7.300% Aaa/AAA 100,000 107,862
Arapahoe County, GO
School District #5
12/15/10 7.125% Aa2/AA 400,000 433,008
Colorado Health Facilities, Rev
Rose Medical Center, MBIA
08/15/04 6.700% Aaa/AAA 350,000 382,147
Colorado Springs Utilities, Rev
11/15/01 7.500% Aaa/AAA 200,000 221,228
11/15/15 6.500% Aa2/AAA 15,000 16,373
Denver City & County
School District #1
Certificates of Participation
12/01/06 6.600% NR/A 500,000 549,350
Douglas County, GO
School District #Re-1, FGIC
12/15/08 7.100% Aaa/AAA 200,000 210,112
El Paso County, GO
School District #20
12/15/10 7.150% NR/NR 400,000 414,688
Fort Collins, GO
12/01/07 7.300% Aa2/AA 500,000 526,020
Greeley Water, Rev
12/01/11 6.600% A1/AA- 400,000 431,772
Larimer County, GO
School District #R-1
12/15/11 7.000% NR/NR 250,000 268,003
Platte River Power Authority, Rev
06/01/18 5.750% Aaa/A+ 900,000 937,215
Regional Transportation District, Rev
Sales Tax, FGIC
11/01/04 7.000% Aaa/AAA 500,000 538,675
-----------
TOTAL PREREFUNDED
(Cost $4,896,498) 5,475,685
-----------
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
GENERAL OBLIGATION BONDS - 40.67%
Adams & Weld Counties, FGIC
School District #27J
12/01/17 5.000% Aaa/AAA $ 500,000 $ 486,585
Adams County
School District #12, FGIC
12/15/09 5.250% Aaa/AAA 500,000 520,640
Adams County
School District #50
12/01/10 5.250% NR/AA- 500,000 512,475
Aurora Water
11/01/98 4.625% A1/AA- 500,000 502,135
Avon, FSA
12/01/07 5.100% Aaa/AAA 300,000 311,823
Boulder County Library
10/01/06 5.900% Aa1/AA 300,000 314,901
Boulder County Open Space
06/15/08 5.100% NR/AA- 500,000 514,675
Boulder Valley
School District #Re-2
10/15/08 6.250% A1/AA 500,000 529,365
Denver City & County
08/01/07 5.750% Aa2/AA 500,000 522,165
Douglas County
School District #Re-1, MBIA
12/15/03 5.650% Aaa/AAA 400,000 424,652
El Paso County
School District #20, MBIA
12/15/03 5.150% Aaa/AAA 250,000 259,240
Fort Collins
12/01/02 6.000% Aa2/AA 200,000 213,680
Garfield, Pitkin & Eagle Counties
School District #Re-1
12/15/05 6.000% A3/NR 400,000 413,572
Highlands Ranch
Metropolitan District #4
12/01/01 5.200% Aa1/AA+ 250,000 258,232
12/01/03 5.375% Aa1/AA+ 250,000 262,135
Jefferson County
School District #R-1, AMBAC
12/15/07 6.000% Aaa/AAA 300,000 323,382
</TABLE>
18 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
GENERAL OBLIGATION BONDS (CONTINUED)
Morgan & Washington Counties
School District #Re-2J
12/01/01 5.600% Aaa/AAA $ 500,000 $ 524,075
San Miguel County
School District #R-1, MBIA
12/01/06 5.200% Aaa/AAA 500,000 520,340
South Suburban Park &
Recreation District, FGIC
12/15/06 5.050% Aaa/AAA 500,000 515,865
12/15/10 6.700% Aaa/AAA 500,000 540,810
Summit County
School District #Re-1, FGIC
12/01/07 5.250% Aaa/AAA 500,000 518,970
Thornton, FSA
12/01/07 5.150% Aaa/AAA 500,000 519,140
-----------
TOTAL GENERAL OBLIGATION BONDS 9,508,857
(Cost $9,101,812) -----------
REVENUE BONDS - 33.16%
EDUCATION - 3.28%
Boulder Valley
School District #Re-2
Certificates of Participation
12/01/06 5.450% A2/A 250,000 253,715
Colorado State Colleges
Mesa State College, MBIA
05/15/03 5.000% Aaa/AAA 250,000 256,485
Colorado State Colleges
Western State College, MBIA
05/15/03 5.000% Aaa/AAA 250,000 256,485
-----------
766,685
-----------
FINANCE - 8.52%
Arvada
Urban Renewal Authority
09/01/06 5.100% Aaa/AAA 500,000 512,590
Aurora
Certificates of Participation
12/01/00 5.600% A/A 500,000 509,960
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
Douglas County, MBIA
Certificates of Participation
11/01/09 5.500% Aaa/AAA $ 500,000 $ 534,315
El Paso County
School District #38
Certificates of Participation
12/01/05 6.750% A2/NR 400,000 434,552
-----------
1,991,417
-----------
HOSPITAL - 2.23%
Denver
Children's Hospital, FGIC
10/01/03 5.400% Aaa/AAA 500,000 522,630
-----------
HOUSING - 1.89%
Colorado Housing Finance Authority
Single Family Housing
11/01/14 7.150% Aa1/AA- 225,000 232,828
Colorado Housing Finance Authority
Multi-Family Housing
10/01/19 6.000% Aa/AA 15,000 15,028
Commerce City
Single Family Housing
03/01/12 6.875% Aa1/NR 55,000 57,463
Littleton Building Authority
Multi-Family Housing
03/01/01 5.500% NR/A+ 135,000 137,182
-----------
442,501
-----------
POWER - 1.34%
Adams County
Pollution Control, MBIA
04/01/08 5.625% Aaa/AAA 300,000 313,395
-----------
SPECIAL TAX - 4.92%
Boulder Sales/Use Tax
08/15/02 5.350% A1/A+ 500,000 518,910
Broomfield Sales/Use Tax, AMBAC
06/01/05 6.000% Aaa/AAA 300,000 318,984
Douglas County Sales/Use Tax, MBIA
10/15/07 5.250% Aaa/AAA 300,000 312,462
-----------
1,150,356
-----------
</TABLE>
[GRAPHIC] ------------------------------------------------------------------- 19
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
STATEMENT OF INVESTMENTS
APRIL 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- ------ ------
<S> <C> <C> <C> <C>
REVENUE BONDS (CONTINUED)
TRANSPORTATION - 1.11%
Arapahoe County
Highway E-470, MBIA
08/31/05 5.150% Aaa/AAA $ 250,000 $ 259,247
-----------
UTILITY - 9.87%
Colorado Springs Utilities
11/15/15 6.500% Aa2/AA 235,000 253,433
Colorado Water Reservoir & Power
Development Authority, FGIC
11/01/06 6.550% Aaa/AAA 500,000 542,270
Colorado Water Reservoir & Power
Development Authority
09/01/07 5.250% Aa1/AAA 250,000 261,240
Fort Collins Storm Drainage
12/01/11 6.625% A1/NR 300,000 326,556
Fountain Valley Authority
Water Treatment
12/01/07 5.200% Aa/AA 400,000 414,672
Westminster
Waste Water, AMBAC
12/01/99 5.100% Aaa/AAA 500,000 509,340
-----------
2,307,511
-----------
TOTAL REVENUE BONDS 7,753,742
(Cost $7,393,996) -----------
TOTAL COLORADO MUNICIPAL
OBLIGATIONS 22,738,284
(Cost $21,392,306) -----------
TOTAL INVESTMENTS 97.25% $22,738,284
(Cost $21,392,306)
Other Assets in Excess
of Liabilities 2.75% 642,323
------------------------------
NET ASSETS 100.00% $23,380,607
------------------------------
------------------------------
</TABLE>
*See Note 1 to financial statements
**Ratings - The Moody's and S&P ratings are believed to be the most recent
ratings at April 30, 1998. Ratings are not covered by the Report of Independent
Auditors.
The Aristata Colorado Quality Tax-Exempt Fund had the following insurance
concentration greater than 10% at April 30, 1998 (as a percentage of net
assets):
FGIC 21.1%
MBIA 15.1%
20 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998
<TABLE>
<CAPTION>
COLORADO
QUALITY
EQUITY QUALITY BOND TAX-EXEMPT
---------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost - see below) $101,529,233 $56,956,602 $22,738,284
Cash 0 0 282,363
Dividends receivable 156,692 0 0
Interest receivable 13,340 900,040 456,930
Receivable for portfolio shares purchased 660 0 0
Organizational costs, net of accumulated
amortization 37,078 23,678 7,846
Prepaid and other assets 536 905 119
---------------------------------------------
Total Assets 101,737,539 57,881,225 23,485,542
---------------------------------------------
LIABILITIES:
Payable for investments purchased 0 250,000 0
Payable for portfolio shares redeemed 0 18,200 0
Accrued investment advisory fee 51,920 14,876 413
Accrued administration fee 16,758 9,430 4,931
Dividends payable 35,987 65,816 94,292
Other payables 19,040 13,193 5,299
---------------------------------------------
Total Liabilities 123,705 371,515 104,935
---------------------------------------------
NET ASSETS $101,613,834 $57,509,710 $23,380,607
---------------------------------------------
---------------------------------------------
COST OF INVESTMENTS $59,200,246 $54,740,931 $21,392,306
---------------------------------------------
---------------------------------------------
COMPOSITION OF NET ASSETS:
Paid-in capital $58,039,464 $55,242,791 $22,038,822
Undistributed net investment income 9,136 71 20
Accumulated net realized gain (loss)
on investments 1,236,247 51,177 (4,213)
Net unrealized appreciation in value
of investments 42,328,987 2,215,671 1,345,978
---------------------------------------------
NET ASSETS $101,613,834 $57,509,710 $23,380,607
---------------------------------------------
---------------------------------------------
NET ASSET VALUE PER SHARE:
Net Assets $101,613,834 $57,509,710 $23,380,607
Shares of beneficial interest outstanding 9,732,527 5,766,594 2,351,160
Net asset value and redemption price per share $10.44 $9.97 $9.94
</TABLE>
See notes to financial statements.
[GRAPHIC] ------------------------------------------------------------------- 21
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD MARCH 2, 1998 TO APRIL 30, 1998
<TABLE>
<CAPTION>
COLORADO
QUALITY
EQUITY QUALITY BOND TAX-EXEMPT
---------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 32,040 $ 627,284 $ 214,130
Dividends 266,057 0 0
---------------------------------------------
Total Income 298,097 627,284 214,130
---------------------------------------------
EXPENSES:
Investment advisory fee 141,096 47,180 19,665
Administration fee 33,199 18,872 9,863
Legal 4,980 2,831 1,180
Registration 11,560 6,757 2,901
Amortization of organization costs 1,265 816 267
Insurance 1,049 524 262
Other 2,102 1,356 1,967
---------------------------------------------
Total Expenses Before Waiver 195,251 78,336 36,105
Expenses waived by investment adviser (37,555) (17,002) (18,406)
---------------------------------------------
Net Expenses 157,696 61,334 17,699
---------------------------------------------
NET INVESTMENT INCOME 140,401 565,950 196,431
---------------------------------------------
Net realized gain (loss) on investments 1,236,247 51,177 (4,213)
Change in net unrealized
appreciation/depreciation 3,076,768 (210,020) (124,231)
---------------------------------------------
Net gain (loss) on investments 4,313,015 (158,843) (128,444)
---------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 4,453,416 $ 407,107 $ 67,987
---------------------------------------------
---------------------------------------------
</TABLE>
See notes to financial statements.
22 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD MARCH 2, 1998 TO APRIL 30, 1998
<TABLE>
<CAPTION>
COLORADO
QUALITY
EQUITY QUALITY BOND TAX-EXEMPT
---------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 140,401 $ 565,950 $ 196,431
Net realized gain (loss) on investments 1,236,247 51,177 (4,213)
Change in net unrealized
appreciation/depreciation 3,076,768 (210,020) (124,231)
---------------------------------------------
Net increase in net assets from operations 4,453,416 407,107 67,987
---------------------------------------------
DISTRIBUTIONS FROM NET INVESTMENT INCOME: (131,265) (565,879) (196,411)
---------------------------------------------
SHARE TRANSACTIONS (NOTE 2):
Proceeds from sale of shares 840,478 1,700,477 270,455
Proceeds from shares issued in connection
with commingled pool conversion (Note 6) 98,552,917 57,599,038 24,728,848
Reinvested dividends 95,278 432,179 2,973
Cost of shares redeemed (2,196,990) (2,063,212) (1,493,245)
---------------------------------------------
Net increase in net assets from
share transactions 97,291,683 57,668,482 23,509,031
NET INCREASE IN NET ASSETS 101,613,834 57,509,710 23,380,607
---------------------------------------------
NET ASSETS:
Beginning of period 0 0 0
---------------------------------------------
End of period* $101,613,834 $57,509,710 $23,380,607
---------------------------------------------
---------------------------------------------
*Includes undistributed net investment income of $ 9,136 $ 71 $ 20
</TABLE>
See notes to financial statements.
[GRAPHIC] ------------------------------------------------------------------- 23
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding
throughout the period March 2, 1998 to April 30, 1998
<TABLE>
<CAPTION>
COLORADO
QUALITY
EQUITY QUALITY BOND TAX-EXEMPT
---------------------------------------------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA:
Net asset value - beginning of period $10.00 $10.00 $10.00
Income from investment operations: ---------------------------------------------
Net investment income 0.01 0.10 0.08
Net realized and unrealized gain (loss)
on investments 0.44 (0.03) (0.06)
---------------------------------------------
Total income from investment operations 0.45 0.07 0.02
---------------------------------------------
Distributions from net investment income (0.01) (0.10) (0.08)
---------------------------------------------
Net asset value - end of period $10.44 $9.97 $9.94
---------------------------------------------
---------------------------------------------
TOTAL RETURN 4.54% 0.69% 0.22%
---------------------------------------------
---------------------------------------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $101,614 $57,510 $23,381
---------------------------------------------
---------------------------------------------
Ratio of expenses to average net assets (1) 0.95% 0.65% 0.45%
---------------------------------------------
Ratio of net investment income to ---------------------------------------------
average net assets (1) 0.84% 6.00% 5.00%
---------------------------------------------
Ratio of expenses to average net ---------------------------------------------
assets without fee waivers (1) 1.17% 0.83% 0.92%
---------------------------------------------
Ratio of net investment income to ---------------------------------------------
average net assets without fee waivers (1) 0.62% 5.82% 4.53%
---------------------------------------------
---------------------------------------------
Portfolio turnover rate (1) 14.20% 11.44% 17.64%
---------------------------------------------
---------------------------------------------
</TABLE>
(1) Annualized
See notes to financial statements.
24 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Financial Investors Trust, a Delaware business trust, is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. The financial statements included herein relate to the
Trust's Aristata Family of Funds. The Aristata Family of Funds includes the
Equity Fund, Quality Bond Fund and Colorado Quality Tax-Exempt Fund. The
financial statements of the remaining portfolios of the Trust are presented
separately.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATION: Securities of the Funds are valued at 4:00 p.m.
(Eastern time) on each trading day. Listed and unlisted securities for which
such information is regularly reported are valued at the last sales price of the
day or, in the absence of sales, at values based on the average closing bid and
asked price. Securities for which market quotations are not readily available
are valued under procedures established by the Board of Trustees to determine
fair value in good faith. Short-term securities having a remaining maturity of
60 days or less are valued at amortized cost which approximates market value.
FEDERAL INCOME TAXES: It is the Funds' policy to comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of their taxable income to shareholders.
Therefore, no federal income tax provision is required.
DIVIDENDS: The Aristata Equity Fund will declare and pay dividends from
net investment income, if any, monthly. Dividends from net investment income
are declared daily and paid monthly for the Aristata Quality Bond and Colorado
Quality Tax-Exempt Funds. Dividends from net realized gains, if any, are
declared at least once a year. Dividends to shareholders are recorded on the
ex-dividend date.
ORGANIZATION COSTS: The Funds have deferred certain costs incurred in
connection with the organization, initial registration and public offering of
Fund shares. Such costs are being amortized over a 60 month period from the
commencement of operations.
OTHER: Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Dividend income is recorded on
the ex-dividend date. Interest income is accrued and recorded daily. Realized
gains and losses from investment transactions and unrealized appreciation and
depreciation of investments are reported on an identified cost basis which is
the same basis the Funds use for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
[GRAPHIC] ------------------------------------------------------------------- 25
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
On April 30, 1998, there was an unlimited number of no par value
shares of beneficial interest authorized. Transactions in shares of beneficial
interest for the period ended April 30, 1998 were as follows:
<TABLE>
<CAPTION>
ARISTATA COLORADO QUALITY
ARISTATA EQUITY FUND ARISTATA QUALITY BOND FUND TAX-EXEMPT FUND
-------------------- -------------------------- ---------------
<S> <C> <C> <C>
Shares sold 81,457 170,061 26,994
Shares issued in connection with
commingled pool conversion 9,855,292 5,759,904 2,472,885
Shares reinvested 9,126 43,326 299
Shares redeemed 213,348 206,697 149,018
- ------------------------------------------------------------------------------------------------------------------
Net Increase 9,732,527 5,766,594 2,351,160
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
<TABLE>
<CAPTION>
ARISTATA COLORADO QUALITY
ARISTATA EQUITY FUND ARISTATA QUALITY BOND FUND TAX-EXEMPT FUND
-------------------- -------------------------- ---------------
<S> <C> <C> <C>
As of April 30, 1998
Gross appreciation (excess of
value over cost) 43,796,676 2,315,414 1,359,484
Gross depreciation (excess of
cost over value) (1,467,689) (99,743) (13,506)
- ------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation 42,328,987 2,215,671 1,345,978
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
4. INVESTMENT ADVISORY FEES, ADMINISTRATION FEES AND OTHER RELATED
PARTY TRANSACTIONS
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc. (the "Adviser")
serves as investment adviser to each Fund pursuant to separate investment
advisory agreements (the "Advisory Agreements") with the Trust. For its
services, the Adviser is entitled to receive a fee, computed daily and payable
monthly, at the annual rate of 0.85%, 0.50% and 0.50% of the average net assets
for the Aristata Equity Fund, Aristata Quality Bond Fund and Aristata Colorado
Quality Tax-Exempt Fund, respectively. The Adviser has agreed to voluntarily
waive a portion of its fees so that the total annual expenses of each Fund will
not exceed the voluntary expense limitations adopted by the Adviser. Fee
waivers by the Adviser are voluntary and may be terminated at any time.
ALPS Mutual Funds Services, Inc. ("ALPS") serves as the administrator to
each Fund. ALPS is entitled to receive a fee from each Fund, computed daily and
payable monthly, at the annual rate of .20% of the average net assets of each
Fund, subject to a minimum annual fee of $180,000 for the Aristata Equity Fund,
$90,000 for the Aristata Quality Bond Fund and $60,000 for the Aristata Colorado
Quality Tax-Exempt Fund. In addition to administration services, the
administration fee also covers the costs of fund accounting, custody,
shareholder servicing, transfer agency, audit and Trustees' fees.
As of April 30, 1998, one shareholder owned 43 percent and 42 percent of
the outstanding shares of the Aristata Equity Fund and Aristata Quality Bond
Fund, respectively.
26 ------------------------------------------------------------------- [GRAPHIC]
<PAGE>
ARISTATA FUNDS
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from the sale of securities,
other than temporary cash investments, during the period ended April 30, 1998
were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES ALL OTHER TOTAL
-----------------------------------------------------------
<S> <C> <C> <C>
ARISTATA EQUITY FUND
Purchases $ 0 $2,821,073 $2,821,073
Sales $ 0 $2,256,528 $2,256,528
ARISTATA QUALITY BOND FUND
Purchases $1,250,000 $1,499,260 $2,749,260
Sales $ 0 $ 901,190 $ 901,190
ARISTATA COLORADO QUALITY
TAX-EXEMPT FUND
Purchases $ 0 $ 667,184 $ 667,184
Sales $ 0 $ 909,105 $ 909,105
</TABLE>
6. CONVERSION OF COMMINGLED POOLS
Each Fund, at its inception date (March 2, 1998), issued shares at $10.00
per share in a tax-free conversion to acquire the net assets of certain
unregistered commingled pools of Colorado State Bank and Trust. The following
is a summary of shares issued, net assets acquired and unrealized appreciation
as of March 2, 1998:
<TABLE>
<CAPTION>
ARISTATA COLORADO QUALITY
ARISTATA EQUITY FUND ARISTATA QUALITY BOND FUND TAX-EXEMPT FUND
-------------------- -------------------------- ---------------
<S> <C> <C> <C>
Shares issued 9,855,292 5,759,904 2,472,885
Net assets acquired $98,552,917 $57,599,038 $24,728,848
Unrealized appreciation $39,252,218 $2,425,692 $1,470,209
</TABLE>
7. SHAREHOLDER TAX INFORMATION (Unaudited)
During the period ended April 30, 1998, 100% of the dividends paid by the
Aristata Colorado Quality Tax-Exempt Fund from net investment income should be
treated as tax-exempt dividends and 100% of the dividends paid by the Aristata
Equity Fund from net investment income qualify for the corporate dividends
received deduction.
[GRAPHIC] ------------------------------------------------------------------- 27
