THE INSTITUTIONAL MONEY MARKET FUND
SEMIANNUAL
REPORT
APRIL 30,
1997
Victory Funds(R)
TABLE OF CONTENTS
Investment Review and Outlook 2
<TABLE>
<CAPTION>
Financial Statements
<S> <C>
Schedule of Investments 3
Statement of Assets and Liabilities 6
Statement of Operations 7
Statement of Changes in Net Assets 8
Notes to Financial Statements 9
Financial Highlights 11
</TABLE>
Key Asset Management Inc. (KAM), a
subsidiary of KeyCorp, is the investment adviser
to The Victory Funds. The Victory Funds are sponsored and distributed
by BISYS Fund Services, which is not affiliated with KeyCorp or its
subsidiaries. KAM receives a fee for its services from The Victory
Funds.
This report is not authorized for distribution
to prospective investors unless preceded
or accompanied by a current prospectus
for The Victory Funds.
NOT FDIC INSURED
Shares of The Victory Funds are not insured by
the FDIC, are not deposits or other obligations of, or guaranteed
by, any KeyCorp bank, Key Asset Management Inc., or their affiliates,
and are subject to investment risks, including possible loss of
the principal amount invested.
Victory Funds
1-800-KEY-FUND(R)
(1-800-539-3863)
Investment
Review and
Outlook
1997 began with some trepidation among fund managers, whose overriding
concern was, "How long will this scenario of low inflation and high
employment last?" The Federal Reserve Board, which sets monetary policy,
seemed to share this concern when
it raised the Federal Funds rate by a quarter of a percentage point
in March. This move was deemed "anticipatory" because visible signs
of inflation had not yet kicked in.
The market is concerned about inflation and the resultant impact on
interest rates because this affects the value of the future stream
of cash flows. For now this concern has been lulled by recent economic
reports that indicate that inflation has not yet become a major problem.
Of these, perhaps the most important was the employment cost index
(released April 29) which revealed no appreciable acceleration in
wages and salaries, despite the tightest labor market in some years.
Thus, despite the strong GDP growth rate of 5.8% in the first quarter
of 1997, the Federal Reserve Board left interest rates unchanged at
its subsequent meeting on May 20. The support for this move came in
the form of retail sales, which slipped in April, and factory
production, which declined for the first time in more than a year. As of
April, producer prices had also fallen for four months in a row. On the
flip side, the unemployment rate--the percentage of labor force that
cannot find work--is at a 30 year low, well below the "natural" rate
that economists consider sustainable without inflation.
Business cycles--alternate periods of boom and recessions--have been
an inevitable feature of the economy. Given the fact that the current
business expansion has completed its sixth year, and is one of the
longest on record, it is natural for the financial markets to feel
some anxiety. Improved inventory management by companies and more
effective monetary policy by the Fed are possibly stretching out the
current period of expansion. The primary source of current economic
strength is consumer spending, which is being fueled by a strong labor
market and rising income levels. But some of this current strength in
spending is being borrowed from the future, and therefore it is likely
that the second half of 1997 will see activity slowing to a more
sustainable pace.
/s/ Charlie Crane
Charlie Crane, Chief Market Strategist
Key Asset Management Inc.
May 30, 1997
<TABLE>
The Victory Portfolios Schedule of Investments
Institutional Money Market Fund April 30, 1997
(Amounts in Thousands) (Unaudited)
<CAPTION>
Principal Amortized
Amount Security Description Cost
<S> <C> <C>
Bank Deposit Notes (2.9%)
$10,000 Bankers' Trust,
5.71%<F3>, 5/1/97<F4> $ 9,997
7,000 Huntington National Bank,
5.58%<F3>, 5/1/97<F4> 6,999
9,000 Huntington National Bank,
5.85%, 9/30/97 9,000
Total Bank Deposit Notes 25,996
Banker's Acceptances (1.2%)
3,000 Deutsche Bank,
5.60%, 5/19/97 2,991
7,904 Deutsche Bank,
5.60%, 6/13/97 7,852
Total Banker's Acceptances 10,843
Certificates of Deposit (3.4%)
10,000 Republic Bank of New York
(Canada), 5.45%, 5/7/97 10,000
15,000 Republic Bank of New York
(Canada), 5.75%, 7/2/97 15,001
6,000 Societe Generale,
5.60%, 11/14/97 5,993
Total Certificates of Deposit 30,994
Commercial Paper (38.1%)
15,000 Ameritech Corp.,
5.25%, 5/15/97 14,969
5,215 Arizona Educational
Loan Marketing Corp.,
5.55%, 5/21/97,
LOC Mellon Bank 5,199
15,000 Associates Corp.,
5.62%, 6/11/97 14,904
10,000 Australian Wheat Board,
5.55%, 5/30/97 9,955
10,000 Australian Wheat Board,
5.55%, 6/4/97 9,948
5,000 Australian Wheat Board,
5.33%, 6/13/97 4,968
12,619 California Higher Education
Loan Authority,
5.58%, 5/8/97, LOC
State Street Bank 12,605
39,000 Fleet Funding Corp.,
5.55%, 5/21/97 38,880
30,000 Ford Motor Credit Co.,
5.55%, 5/21/97 29,908
5,000 General Motors Acceptance
Corp., 5.54%, 5/20/97 4,985
10,000 Great Lakes Chemical Corp.,
5.52%, 5/14/97 9,980
25,000 Morgan Stanley Group, Inc.,
5.70%, 5/1/97 25,000
4,041 Retailer Funding Corp.,
5.55%, 5/23/97 4,027
20,000 Sara Lee Corp.,
5.55%, 6/25/97 19,831
15,000 Sara Lee Corp.,
5.55%, 6/26/97 14,871
20,000 Sheffield Receivables Corp.,
5.55%, 5/2/97 19,997
40,000 Smith Barney, Inc.,
5.54%, 5/21/97 39,877
10,371 Southern California Edison,
5.55%, 6/5/97 10,315
25,000 Southwestern Bell
Telephone Co.,
5.52%, 5/12/97 24,958
8,000 Unibanco,
5.40%, 5/1/97,
LOC Westdeutsche Landesbank 8,000
9,000 Vehicle Services,
5.36%, 5/12/97,
LOC NationsBank Texas 8,985
10,000 Vehicle Services,
5.31%, 5/28/97,
LOC NationsBank Texas 9,960
Total Commercial Paper 342,122
Corporate Notes (28.5%)
10,000 Anne Arundel Medical Center,
5.75%<F3>, 5/7/97,<F4>
LOC Mellon Bank N.A. 10,000
3,000 Associates Corp. N.A.,
6.82%, 5/12/97 3,001
3,000 Associates Corp. N.A.,
6.75%, 6/13/97 3,003
4,000 Associates Corp. N.A.,
5.88%, 8/15/97 3,997
2,120 Automated Packaging System,
5.78%<F3>, 5/1/97,<F4>
LOC National City Bank 2,120
25,000 Bank One Milwaukee, N.A.,
5.61%<F3>, 5/1/97<F4> 24,999
7,000 Bear Stearns Cos., Inc.,
5.74%<F3>, 5/14/97<F4> 7,000
8,000 Beta Finance, Inc.,
5.79%, 8/13/97 8,003
5,000 Beta Finance, Inc.,
5.87%, 1/30/98 5,005
1,300 Buckeye Corrugated, Inc.
Project, 5.70%<F3>,
5/1/97,<F4>
LOC National City Bank 1,300
2,975 Burton I Saltzman,
5.78%<F3>, 5/1/97,<F4>
LOC National City Bank 2,975
8,000 Capital One Funding Corp.,
5.70%<F3>, 5/1/97,<F4>
LOC Bank One,Texas<F2> 8,000
1,250 Fairborn Christel Mann,
5.66%<F3>, 5/1/97,<F4>
LOC Fifth Third Bank 1,250
2,000 Ford Motor Credit Co.,
6.75%, 6/16/97 2,002
4,535 Ford Motor Credit Co.,
7.25%, 6/18/97 4,545
25,000 General American
Life Insurance,
5.91%<F3>, 5/1/97, GIC<F4> 25,000
2,785 General Electric
Capital Corp.,
6.00%, 9/12/97 2,787
1,700 General Electric
Capital Corp.,
7.84%, 2/5/98 1,720
2,940 General Electric
Capital Corp.,
7.50%, 2/27/98 2,968
5,000 General Motors
Acceptance Corp.,
8.38%, 1/30/98 5,079
2,000 General Motors
Acceptance Corp.,
7.13%, 5/11/98 2,015
4,875 Hannah Boulevard Limited
Partnership,5.62%<F3>,
5/1/97,<F4>
LOC Comerical Bank 4,875
1,455 Industrial Dimensions, Inc.,
5.78%<F3>, 5/1/97,<F4>
LOC National City Bank 1,455
25,000 Lehman Government Securities
Master Note,
5.98%<F3>, 5/1/97<F4> 25,000
5,900 Lexington Financial Services,
5.75%<F3>, 5/7/97,<F4>
LOC LaSalle National Bank 5,900
1,850 Maximum Principal
Mubea Project,
5.70%<F3>, 5/1/97,<F4>
LOC Fifth Third Bank 1,850
11,000 Merrill Lynch & Co., Inc.,
5.78%<F3>, 5/1/97<F4> 11,006
890 Miami Valley Steel,
5.70%<F3>, 5/1/97,<F4>
LOC National City Bank 890
2,310 Monticello Investments,
5.70%<F3>, 5/1/97,<F4>
LOC National City Bank 2,310
9,000 Morgan Guaranty Trust Co.,
5.38%<F3>, 5/14/97<F4> 8,997
13,000 Morgan Stanley Group, Inc.,
5.66%<F3>, 6/13/97<F4> 13,000
475 Perfection Corp.,
5.70%<F3>, 5/1/97,<F4>
LOC National City Bank 475
3,000 Phillip Morris Cos., Inc.,
8.75%, 6/15/97 3,010
2,250 Pomeroy Investments,
5.63%<F3>, 5/1/97,<F4>
LOC Fifth Third Bank 2,250
1,495 Professional Center
Associates Ltd.,
5.70%<F3>, 5/1/97,<F4>
LOC National City Bank 1,495
25,000 Republic New York Corp.,
5.88%<F3>, 5/6/97<F4> 25,000
14,600 SeaRiver Maritime, Inc.,
5.70%<F3>, 5/1/97,<F4>
Guarantee by Exxon Corp., 14,600
Continuously callable after
10/1/93 @ 100
2,070 Sedlak Interiors, Inc.,
5.66%<F3>, 5/1/97,<F4>
LOC Fifth Third Bank 2,070
400 Tube Products,
5.70<F3>, 5/1/97,<F4>
LOC Bank One Dayton 400
5,000 USL Capital Corp.,
5.56%<F3>, 6/2/97<F4> 5,000
Total Corporate Notes 256,352
Taxable Municipal Bonds (2.0%)
Michigan (0.1%):
1,030 Ottawa County, EDR,
Sunset Manor, Inc., Series C,
5.80%<F3>, 5/1/97,<F4>
LOC Old Kent Bank 1,030
Pennsylvania (1.1%):
10,000 Armstrong County
Hospital Authority,
Hospital Revenue Refunding,
St. Francis Corp., Series B,
5.75%<F3>, 5/7/97,<F4>
LOC First National Bank,
Chicago 10,000
Virginia (0.8%):
7,000 Industrial Development
Authority of Bedford, VA
5.79%<F3>, 6/27/97, LOC
Societe Generale 7,000
Total Taxable Municipal Bonds 18,030
U.S. Government Agencies (15.9%)
Federal Farm Credit Bank:
7,000 5.93%, 7/1/97 7,002
Federal Home Loan Bank:
4,000 5.90%, 6/24/97 4,002
9,000 4.25%, 6/30/97 8,975
5,000 5.81%, 1/30/98, callable
7/30/97 @ 100 5,000
Federal National Mortgage Assoc.:
25,000 5.54%<F3>, 5/6/97<F4> 25,000
33,000 5.68%<F3>, 5/6/97<F4> 33,000
Student Loan Marketing Assoc.:
32,500 5.57%<F3>, 5/2/97<F4>
continuously callable
8/2/95 @ 100 32,500
4,000 5.55%<F3>, 5/6/97<F4>
continuously callable
9/28/94 @ 100 4,000
7,250 5.55%<F3>, 5/6/97<F4> 7,248
6,000 5.57%<F3>, 5/6/97<F4>
continuously callable
1/13/95 @ 100 6,000
1,190 5.71%<F3>, 5/6/97<F4> 1,191
9,000 5.54%, 2/25/98 8,994
Total U.S. Government Agencies 142,912
U.S. Treasury Notes (3.5%)
10,000 5.75%, 9/30/97 9,998
6,000 5.25%, 12/31/97 5,989
10,000 7.88%, 1/15/98 10,150
5,000 6.13%, 3/31/98 5,005
Total U.S. Treasury Notes 31,142
Total Investments 832,395
Repurchase Agreements (4.4%)
39,776 Paine Webber Securities Corp.,
5.42%, 5/1/97,
(Collateralized by $40,
830 U.S. Treasury Notes,
5.88%, 11/30/01,
market value--$40,574) 39,776
Total Repurchase Agreements 39,776
Total (Cost $898,167)<F1> $872,171
<FN>
Percentages indicated are based on net assets of $898,810.
<F1> Cost for federal income tax and financial reporting purposes
are the same.
<F2> Represents a private placement security.
<F3> Variable rate securities having liquidity sources through bank
letters of credit or other credit and/or liquidity agreements. The
interest rate, which will change periodically, is based upon bank
prime rates or an index of market interest rates. The rate reflected
on the Schedule of Portfolio Investments is the rate in effect at
April 30, 1997. Maturity date reflects the next rate change date.
<F4> Put and demand features exist allowing the Fund to require
the repurchase of the instrument within variable time periods including
daily, weekly, monthly, or semi-annually.
EDR--Economic Development Revenue
GIC--Guaranteed Insurance Contract
LOC--Letter of Credit
See notes to financial statements.
</TABLE>
<TABLE>
The Victory Portfolios Statement of Assets and Liabilities
Institutional Money Market Fund April 30, 1997
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<CAPTION>
<S> <C>
ASSETS:
Investments, at amortized cost $858,391
Repurchase agreements, at cost 39,776
Total 898,167
Interest receivable 4,816
Prepaid expenses and other assets 115
Total Assets 903,098
LIABILITIES:
Dividends payable 4,034
Accrued expenses and other payables:
Investment advisory fees 99
Administration fees 8
Custodian fees 17
Accounting and transfer agent fees 2
Shareholder service fees -- Select Shares 73
Other 55
Total Liabilities 4,288
NET ASSETS:
Capital 898,663
Undistributed net investment income 147
Net Assets $898,810
Net Assets
Investor Shares $542,863
Select Shares 355,947
Total $898,810
Outstanding units of beneficial interest (shares)
Investor Shares 542,850
Select Shares 355,948
Total 898,798
Offering and redemption price per share -- Investor Shares $ 1.00
Offering and redemption price per share -- Select Shares $ 1.00
See notes to financial statements.
</TABLE>
<TABLE>
The Victory Portfolios Statement of Operations
Institutional Money Market Fund April 30, 1997
(Amounts in Thousands) (Unaudited)
<CAPTION>
<S> <C>
Investment Income:
Interest income $28,079
Expenses:
Investment advisory fees 1,268
Administration fees 761
Shareholder service fees 478
Accounting fees 60
Custodian fees 99
Legal and audit fees 50
Trustees' fees and expenses 17
Transfer agent fees 27
Registration and filing fees 81
Printing fees 36
Other 7
Expenses voluntarily reduced (982)
Net Expenses 1,902
Net Investment Income 26,177
Realized Gains from Investments:
Net realized gains from investment transactions 7
Change in net assets resulting from operations $26,184
See notes to financial statements.
</TABLE>
<TABLE>
The Victory Portfolios
Institutional Money Market Fund Statement of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<CAPTION>
Six Months Ended Year Ended
April 30, October 31,
1997 1996
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 26,177 $ 40,393
Net realized gains (losses) from
investment transactions 7 2
Change in net assets resulting from operations 26,184 40,395
Distributions to Shareholders:
From net investment income
Investor Shares (16,474) (33,269)
Select Shares (9,703) (7,124)
From net realized gains from investment transactions -- (2)
In excess of net realized gains from
investment transactions -- (24)
Change in net assets from distributions
to shareholders (26,177) (40,419)
Capital Transactions:
Proceeds from shares issued 1,910,178 2,708,661
Dividends reinvested 10,200 6,114
Cost of shares redeemed (2,066,240) (2,186,101)
Change in net assets from capital transactions (145,862) 528,674
Change in net assets (145,855) 528,650
Net Assets:
Beginning of period 1,044,665 516,015
End of period $ 898,810 $1,044,665
Share Transactions:
Issued 1,910,178 2,708,661
Reinvested 10,200 6,114
Redeemed (2,066,240) (2,186,101)
Change in shares (145,862) 528,674
See notes to financial statements.
</TABLE>
The Victory Portfolios Notes to Financial Statements
Institutional Money Market Fund April 30, 1997
(Unaudited)
1. Organization:
The Victory Portfolios (collectively, the "Funds" and individually,
a "Fund") were organized on February 5, 1986, and are registered under
the Investment Company Act of 1940, as amended, (the "1940 Act") as
an open-end investment company established as a Delaware business
trust. The Funds are authorized to issue an unlimited number of shares
which are units of beneficial interest without par value. The Funds
presently offer shares of 26 active funds. The accompanying financial
statements and financial highlights are those of the Institutional
Money Market (the "Fund") only.
The Fund is authorized to issues two classes of shares: Investor Shares
and Select Shares. Each class of shares has identical rights and
privileges except with respect to fees paid under shareholders service
plans, expenses allocable exclusively to each class of shares, voting
rights on matters affecting a single class of shares, and the exchange
privilege of each class of shares.
The Fund seeks to obtain a high level of current income as is consistent
with preserving capital and providing liquidity.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed
by the Fund 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 period. Actual results
could differ from those estimates.
Securities Valuation:
Investments of the Fund are valued at either amortized cost which
approximates market value, or at original cost which, combined with
accrued interest, approximates market value. Under the amortized cost
valuation method, discount or premium is amortized on a constant basis
to the maturity of the security. In addition, the Fund may not (a)
purchase any instrument with a remaining maturity greater than 397
days unless such instrument is subject to a demand feature, or (b)
maintain a dollar-weighted-average portfolio maturity which exceeds
90 days.
Securities Transactions and Related Income:
Securities transactions 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 pro rata
amortization of premium or accretion of discount. Dividend income is
recorded on the ex-dividend date, net of foreign taxes withheld. 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.
Repurchase Agreements:
The Fund may acquire repurchase agreements from financial institutions
such as banks and broker-dealers which the Fund's investment adviser
deems creditworthy under guidelines approved by the Board of Trustees,
subject to the seller's agreement to repurchase such securities at
a mutually agreed-upon date and price. 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 Fund 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). Securities subject to repurchase agreements are
held by the Fund's custodian or another qualified custodian or in
the Federal Reserve/Treasury book-entry system. Repurchase agreements
are considered to be loans by the Fund under the 1940 Act.
Securities Purchased on a When-Issued Basis:
The Fund may purchase securities on a "when-issued" basis. When-issued
securities are securities purchased for delivery beyond the normal
settlement date at a stated price and/or yield, thereby, involving
the risk that the price and/or yield obtained may be more or less
than those available in the market when delivery takes place. At the
time the Fund makes the commitment to purchase a security on a when-
issued basis, the Fund records the transaction and reflects the value of
the security in determining net asset value. Normally, the settlement
date occurs within one month of the purchase. A segregated account
is established and the Fund maintain cash and marketable securities
at least equal in value to commitments for when-issued securities.
Securities purchased on a when-issued basis do not earn income until
settlement date.
Dividends to Shareholders:
Dividends from net investment income are declared daily and paid monthly
for the Fund. Distributable net realized capital gains, if any, are
declared and distributed at least annually.
Dividends from net investment income and from net realized capital
gains are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for mortgage-
backed securities, foreign currency transactions, expiring capital loss
carryforwards and deferrals of certain losses. Permanent book and tax
basis differences are reflected in the components of net assets.
Federal Income Taxes:
It is the policy of the Fund to continue to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of net investment income and
net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
Other:
Expenses that are directly related to one of the Fund are charged
directly to that Fund. Other operating expenses of the Fund are prorated
on the basis of relative net assets or other appropriate basis. Fees
paid under the Fund's shareholder servicing or distribution plans
are borne by the specific class of shares to which they apply.
3. Related Party Transactions:
Investment advisory services are provided to the Fund by Key Asset
Management Inc. ("the Adviser"), a wholly owned subsidiary of KeyBank
National Association ("Key"), formerly Society National Bank, a wholly
owned subsidiary of KeyCorp. On February 28, 1997, Key Asset Management
Inc. became the surviving corporation after the reorganization of
four indirect investment adviser subsidiaries of KeyCorp, including
KeyCorp Mutual Fund Advisers. Under the terms of the investment advisory
agreements, the Adviser is entitled to receive fees based on a
percentage of the average daily net assets of the Fund. KeyTrust Company
of Ohio N.A., serving as custodian for all of the Fund, received
custodian fees in addition to reimbursement of actual out-of-pocket
expenses incurred.
Key and its affiliated brokerage and banking companies also serve
as Shareholder Servicing Agents for the Institutional Money Market
Fund (Select Shares). As such, Key and its affiliates provide support
services to their clients who are shareholders, which may include
establishing and maintaining accounts and records, processing dividend
and distribution payments, providing account information, assisting
in processing of purchase, exchange and redemption requests, and
assisting shareholders in changing dividend options, account
designations and addresses. For providing such services, Key and its
affiliates may receive a fee of up to 0.25% of the average daily net
assets of the Fund serviced.
BISYS Fund Services (the "Administrator"), an indirect, wholly-owned
subsidiary of The BISYS Group, Inc. ("BISYS") serves as the
administrator and distributor to the Fund. Certain officers of the Fund
are affiliated with BISYS. Such officers receive no direct payments or
fees from the Fund for serving as officers of the Fund.
Under the terms of the administration agreement, the Administrator's
fee is computed at the annual rate of 0.15% of the average daily net
assets of the Fund.
Fees may be voluntarily reduced to assist the Fund in maintaining
competitive expense ratios.
Additional information regarding related party transactions is as
follows for the six months ended April 30, 1997:
<TABLE>
<CAPTION>
Mutual Fund
Investment Advisory Fees Administration Fees Accountant Fees Custodian Fees
Percentage
of Average Daily Voluntary Voluntary Semi Semi
Net Assets Fee Reductions Fee Reductions Annual Fee Annual Fee
(000) (000) (000) (000)
<S> <C> <C> <C> <C> <C>
Institutional Money
Market Fund 0.25% $267 $715 $60 $99
</TABLE>
4. Capital Share Transactions:
Transactions in capital shares were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, October 31,
1997 1996
<S> <C> <C>
Capital and Share Transactions:
Investor Shares:
Issued $ 795,811 $1,367,293
Reinvested 578 493
Redeemed (925,105) (1,200,727)
Total $ (128,716) $ 167,059
Select Shares:
Issued $1,114,367 $1,341,368
Reinvested 9,622 5,621
Redeemed (1,141,135) (985,374)
Total $ (17,146) $ 361,615
</TABLE>
<TABLE>
The Victory Portfolios
Institutional Money Market Fund Financial Highlights
<CAPTION>
Investor Shares<F6> Select Shares<F6>
Six Months Year Six Months Six Months Year June 5,
Ended Ended Ended Ended Ended 1995
April 30, October 31, October 31, April 30, October 31, October 31,
1997 1996 1995<F5> 1997 1996 1995<F2>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment Activities
Net investment income 0.026 0.053 0.290 0.025 0.050 0.012
Distributions
Net investment income (0.026) (0.053) (0.290) (0.025) (0.050) (0.012)
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 2.64%<F3> 5.41% 2.90%<F3> 2.51%<F3> 5.16% 1.23%<F3>
Ratios/Supplemental Data:
Net Assets, End of
Period (000) $542,863 $671,575 $504,536 $355,947 $373,090 $ 11,479
Ratio of expenses to
average net assets 0.28%<F4> 0.27% 0.26%<F4> 0.53%<F4> 0.52% 0.51%<F4>
Ratio of net investment
income to average
net assets 5.26%<F4> 5.27% 5.69%<F4> 5.00%<F4> 4.97% 5.33%<F4>
Ratio of expenses to
average net assets<F1> 0.47%<F4> 0.48% 0.49%<F4> 0.73%<F4> 0.73% 1.00%<F4>
Ratio of net investment
income to average
net assets<F1> 5.06%<F4> 5.06% 5.46%<F4> 4.81%<F4> 4.77% 4.84%<F4>
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and /or reimbursements
had not occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective June 5, 1995, the Victory Institutional Money Market
Portfolio became the Institutional Money Market Fund, and the Fund
designated the existing shares as Institutional Shares and commenced
offering Service Shares.
<F6> Effective March 1, 1996, the Fund redesignated Institutional
Shares as Investor Shares and Service Shares as Select Shares.
</TABLE>
<TABLE>
The Victory Portfolios
Institutional Money Market Fund Financial Highlights
<CAPTION>
Year Ended April 30,
1995 1994 1993
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000
Investment Activities
Net investment income 0.500 0.028 0.032
Distributions
Net investment income (0.500) (0.028) (0.032)
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000
Total Return 4.91% 2.80% 3.26%
Ratios/Supplemental Data:
Net Assets, End of
Period (000) $449,814 $541,229 $155,097
Ratio of expenses to
average net assets 0.27% 0.55% 0.43%
Ratio of net investment
income to average
net assets 4.91% 2.78% 3.19%
Ratio of expenses to
average net assets<F1> 0.51% 0.55% 0.48%
Ratio of net investment
income to average
net assets<F1> 4.67% 2.78% 3.14%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and /or reimbursements
had not occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective June 5, 1995, the Victory Institutional Money Market
Portfolio became the Institutional Money Market Fund, and the Fund
designated the existing shares as Institutional Shares and commenced
offering Service Shares.
<F6> Effective March 1, 1996, the Fund redesignated Institutional
Shares as Investor Shares and Service Shares as Select Shares.
</TABLE>
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Bulk Rate
U.S. Postage
PAID
Cleveland, OH
Permit No. 469
Victory Funds(R)
1-800-KEY-FUND(R)
(1-800-539-3863)
1IMM-SEMI-AR 4/97<EP>
