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Previous: VARIABLE ACCOUNT A AMERICAN INTL LIFE ASSUR CO OF NEW YORK, 24F-2NT, 1996-02-29 |
Next: AVESTA TRUST, NSAR-B, 1996-02-29 |
<PAGE>
Texas Commerce Bank National Association
AVESTA Trust
ANNUAL REPORT
December 31, 1995
<TABLE>
<CAPTION>
Officers Supervisory Committee
- ------------------------------------------------------ -------------------------------------------
<S> <C>
Henry J. Lartigue, Chief Executive Officer Henry J. Lartigue, Chairman
Cheryl M. Morgan, Treasurer Frank A. Liddell, Jr.
Marguerite Williams, Controller and Chief Accounting Officer George E. McDavid
Thomas J. Press, Compliance Officer and Secretary Kenneth L. Otto
Guy Barba, Portfolio Officer H. Michael Tyson
Denise Byington, Portfolio Officer
H. Mitchell Harper, Portfolio Officer
Deborah Williams-McGehee, Portfolio Officer
Sylvia Cruz, Assistant Compliance Officer
Joy H. Rose, Assistant Compliance Officer
Trustee
---------------------------------------------
Texas Commerce Bank National Association
712 Main
Houston, Texas 77002
Legal Counsel Independent Accountants
----------------------------------------- ---------------------------------------
Simpson Thacher & Bartlett Price Waterhouse, LLP
425 Lexington Avenue 1201 Louisiana, Suite 2900
New York, New York 10017 Houston, Texas 77002
AVESTA Trust
-----------------------------------
7-TCT-37
P. O. Box 1555
Houston, Texas 77251-1555
</TABLE>
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
AVESTA Equity Growth Fund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Average Annual Total Return* 1 Year 3 Years 5 Years Since Inception
April 4, 1988
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Period ended 12/31/95 25.78% 8.50% 12.35% 11.47%
- -----------------------------------------------------------------------------------------------
</TABLE>
The Equity Growth Fund seeks to increase retirement assets by investing in
securities that provide capital appreciation. Current income is a secondary
objective. Primary emphasis is on equity-based securities, which include
common stocks and those debt securities and preferred stocks that are
convertible into common stocks. Throughout 1995, growth stocks outperformed
the value sector. During the first half of 1995, the Fund's performance was
enhanced by a mix of large and mid-capitalization common stocks. The Fund's
Adviser continued steps towards a broader portfolio, representative of a large
and mid-capitalization growth style. During the second half of the year,
performance was helped by a moderate weighting in technology stocks, which
experienced a significant decrease in value. The Fund's exposure to large,
multinational consumer and health care stocks also helped performance as these
sectors outperformed the market. During the period, the Adviser reduced the
Fund's position in media holdings as investors focused on acquisition as CBS
was acquired by Westinghouse and Capital Cities/ABC was acquired by Disney.
As technology stocks declined, the Adviser purchased attractively priced
technology issues. The Adviser expects growing companies to continue to
perform well as interest rates continue to decline. With the Fund's focus on
valuation and growing earnings, the Adviser continues to find opportunities in
growth stocks.
The Equity Growth Fund's total return* for 1995 was 25.78%, compared to the
Standard & Poor's 500 Stock Index return of 37.57%
The following graph illustrates total return* based on a $10,000 investment
in the Fund made at the date of inception (April 4, 1988) and held through
December 31, 1995, as well as the performance of the Standard & Poor's 500
Stock Index. Past performance is not predictive of future returns.
[CHART APPEARS HERE]
The Standard & Poor's 500 Stock Index covers 500 industrial, utility,
transportation and financial companies of the U.S. markets (mostly NYSE
issues). The index represents about 75% of NYSE market capitalization and 30%
of NYSE issues. It is a capitalization-weighted index calculated on a total
return basis with dividends reinvested.
**Total returns are net of expenses and fees and reflect reimbursement of
certain expenses and the Fund's policy of not distributing income and capital
gains on a current basis.
<PAGE>
AVESTA Equity Income Fund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Average Annual Total Return* 1 Year 3 Years 5 Years Since Inception
April 4, 1988
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Period ended 12/31/95 33.72% 13.22% 13.36% 11.92%
- -----------------------------------------------------------------------------------------------
</TABLE>
The Equity Income Fund seeks to increase retirement assets through investing
in equity securities that provide both capital appreciation as well as current
income. Investment emphasis is on equity-based securities, which include
common stocks and those debt securities and preferred stocks convertible into
common stocks. The top five performance sectors for the Equity Income Fund for
the year were utilities, financial services, producer durables, materials &
processing, and energy. Changes in the portfolio holdings for 1995 generally
reflect the Advisers search for investments with the Fund's classic combination
of higher yielding stocks with attractive valuations and superior earnings
growth potential. The Adviser trimmed the Fund's technology issues late in
the third quarter as several individual stocks exceeded its most optimistic
intermediate term price objectives. Weightings in the consumer and healthcare
sectors were increased throughout the year as the Adviser started to shift
away from companies in the portfolios whose earnings power is largely driven by
the level of economic activity. A continuation of this strategy is warranted,
we believe, based on our observation that despite current record profit levels
for Standard & Poor's 500 companies, actual profit margins for many companies
have already clearly peaked for this phase of the business cycle.
The Equity Income Fund's total return* for 1995 was 33.72%, compared to the
return of the Standard & Poor's 500 Stock Index of 37.57%.
The following graph illustrates the total return* based on a $10,000
investment in the Fund made at the date of inception (April 4, 1988) and held
through December 31, 1995, as well as the performance of the Standard & Poor's
500 Stock Index. Past performance is not predictive of future returns.
[CHART APPEARS HERE]
The Standard & Poor's 500 Stock Index covers 500 industrial, utility,
transportation and financial companies of the U.S. markets (mostly NYSE
issues). The index represents about 75% of NYSE market capitalization and 30%
of NYSE issues. It is a capitalization-weighted index calculated on a total
return basis with dividends reinvested.
*Total returns for the Fund are net of expenses and fees and reflect
reimbursement of certain expenses and the Fund's policy of not distributing
income and capital gains on a current basis.
<PAGE>
AVESTA Balanced Fund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Average Annual Total Return* 1 Year 3 Years 5 Years Since Inception
April 4, 1988
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Period ended 12/31/95 23.83% 8.66% 10.90% 10.22%
- -----------------------------------------------------------------------------------------------
</TABLE>
The Balanced Fund seeks to increase retirement assets by investing in a
combination of bonds and equity-based securities, which include common stocks,
debt securities and preferred stocks that are convertible into common stocks,
to provide a balance of current income and growth of capital. Investment
emphasis is on common stocks and fixed income securities. At the beginning of
1995, the Fund was invested to achieve a ratio of 50% equity investments and
50% fixed-income investments. Within the equity portion of the portfolio,
positions in technology, large multinational consumer issues and health care
holdings were added throughout the year. Within the Fund's fixed-income
sector, the Adviser increased the Fund's duration and maturity to take
advantage of the appreciation in long-term bonds.
The Balanced Fund's total return* for 1995 was 23.83%, compared to the
Lehman Brothers Government/Corporate Bond Index of 19.24% and the Standard &
Poor's 500 Stock Index of 37.57%, respectively.
The following graph illustrates the total return* based on a $10,000
investment in the Fund made at the date of inception (April 4, 1988) and held
through December 31, 1995, as well as the performance of the Lehman Brothers
Government/Corporate Bond Index and the Standard & Poor's 500 Stock Index.
Past performance is not predictive of future returns.
[CHART APPEARS HERE]
The Lehman Brothers Government/Corporate Bond Index is composed of all bonds
that are investment grade (rated Baa or higher by Moody's or BBB or higher by
S&P, if unrated by Moody's). Issues must have amounts outstanding in excess of
$25 million and have at least one year to maturity. The Standard & Poor's 500
Stock Index covers industrial, utility, transportation and financial companies
of the U.S. markets (mostly NYSE issues). The Index represents about 75% of
NYSE market capitalization and 30% of NYSE issues. It is a
capitalization-weighted index calculated on a total return basis with dividends
reinvested.
*Total returns are net of expenses and fees and reflect reimbursement of
certain expenses and the Fund's policy of not distributing income and capital
gains on a current basis.
<PAGE>
AVESTA Income Fund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Average Annual Total Return* 1 Year 3 Years 5 Years Since Inception
April 1, 1988
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Period ended 12/31/95 18.38% 7.61% 8.30% 8.04%
- -----------------------------------------------------------------------------------------------
</TABLE>
The Income Fund seeks to increase retirement assets by investing in
securities that earn a high level of current income with consideration also
given to safety of principal. By stressing current yield through fixed-income
securities, and managing maturities, the Income Fund attempts to provide
greater stability of unit value than certain of the other AVESTA funds. While
the Income Fund may participate to a limited extent in the general equity
markets, capital appreciation is an incidental consideration, and investment
emphasis is on fixed-income securities. As a matter of operating policy, the
fixed income securities purchased by the Fund normally have a maturity in
excess of one year. Throughout 1995, the Fund's average maturity fluctuated
between 8.8 years and 10.7 years. Interest rates decreased dramatically during
the year as the bond market rallied in reaction to tightening fiscal policy,
slowing economic growth, and falling inflation. Reflecting its view of the
debt markets and the interest rate environment, the Adviser increased the
Fund's position in government bonds from 68% at the end of 1994 to 71% by the
end of the fourth quarter of 1995.
The Income Fund's total return* for 1995 was 18.38%, compared to 19.24% for
the Lehman Brothers Government/Corporate Bond Index.
The following graph illustrates the total return* based on a $10,000
investment in the Fund made at the date of inception (April 4, 1988) and held
through December 31, 1995, as well as the performance of the Lehman Brothers
Government/Corporate Bond Index. Past performance is not predictive of future
performance.
[CHART APPEARS HERE]
The Lehman Brothers Government/Corporate Bond Index is composed of all bonds
that are investment grade (rated Baa or higher by Moody's or BBB or higher by
S&P, if unrated by Moody's). Issues must have amounts outstanding in excess of
$25 million and have at least one year to maturity. Total return for the Index
comprises price appreciation/depreciation and income as a percentage of the
original investment. The Index is rebalanced monthly by market capitalization.
*Total returns for the Income Fund are net of expenses and fees and reflect
reimbursement of certain expenses, waivers of certain fees and the Fund's
policy of not distributing income and gain on a current basis.
<PAGE>
AVESTA Core Equity Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return* 1 Year Since Inception
April 1, 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Period ended 12/31/95 25.53% 10.03%
- -------------------------------------------------------------------------------
</TABLE>
The Core Equity Fund seeks to increase retirement assets by maximizing total
investment return by emphasizing long-term capital appreciation and current
income consistent with reasonable risk. The Fund pursues its objective by
investing at least 70% of its total assets in a diversified portfolio of common
stocks of well-established companies that are domiciled in the U.S. The Fund
may also invest in other equity-based securities, such as debt securities and
preferred stocks that are convertible into common stocks. The Fund
underperformed, compared to the Standard & Poor's 500 Stock Index, during the
first half of the year as a result of a slight underweighting in the
technology, financial services, and consumer discretionary sectors.
Performance was also hurt by a cash position of 7% to 10% of total assets.
During the second half, the Fund's Adviser increased its holdings in large
capitalization companies and added to consumer discretionary, health care and
technology companies with good growth prospects.
The Core Equity Fund's total return* from inception on April 1, 1993 through
December 31, 1995 was 10.03%. For the full year 1995, the Fund returned
25.53%, compared to the return of the Standard & Poor's 500 Stock Index of
37.57%.
The following graph illustrates the total return* based on a $10,000
investment in the Fund made at the date of inception (April 1, 1993) and held
through December 31, 1995, as well as the performance of the Standard & Poor's
500 Stock Index. Past performance is not predictive of future returns.
[CHART APPEARS HERE]
The Standard & Poor's 500 Stock Index covers 500 industrial, utility,
transportation and financial companies of the U.S. markets (mostly NYSE
issues). The index represents about 75% of NYSE market capitalization and 30%
of NYSE issues. It is a capitalization-weighted index calculated on a total
return basis with dividends reinvested.
*Total returns are net of expenses and fees and reflect reimbursement of
certain expenses and the Fund's policy of not distributing income and capital
gains on a current basis.
<PAGE>
AVESTA Small Capitalization Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return* 1 Year Since Inception
April 1, 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Period ended 12/31/95 31.14% 11.26%
- -------------------------------------------------------------------------------
</TABLE>
The Small Capitalization Fund seeks to increase retirement assets primarily
through capital appreciation. Although the Fund, in seeking its objective, may
receive current income from dividends and interest, income is only an
incidental consideration. The Small Capitalization Fund invests primarily in
common stocks of U.S. Companies having stock market capitalizations of up to
$750 million. The Fund tries to identify smaller rapidly growing companies in
growth sectors of the economy. These smaller capitalization companies may be
more volatile than larger capitalization companies. The Fund's performance,
during the first half of 1995, was helped by holdings in the consumer
discretionary sector. The Adviser increased the Fund's weightings in the
health care and consumer discretionary sectors. During the second half of the
year, the Fund's performance was helped by this overweighing as health care
equities outperformed. The Fund also benefited from its financial issues,
which performed well as interest rates declined. The Adviser believes the
prospect of a capital gains tax cut and superior relative earnings could result
in small cap stocks outperforming large capitalization issues.
The Small Capitalization Fund's total return* from inception on April 1,
1993 through December 31, 1995 was 11.26%. For the full year 1995, the Fund
returned 31.14% compared to the Russell 2000/R/ Small Stock Index of 28.40%.
The following graph illustrates total return* based on a $10,000 investment
in the Fund made at the date of inception (April 1, 1993) and held through
December 31, 1995, as well as the performance of the Russell 2000/R/ Small Stock
Index. Past performance is not predictive of future returns.
[CHART APPEARS HERE]
The Russell 2000/R/ Small Stock Index contains the 2,000 smallest companies in
the Russell 3000/R/ Index, representing approximately 7% of the Russell 3000/R/
total market capitalization.
*Total returns for the Fund are net of expenses and fees and reflect
reimbursement of certain expenses, waivers of certain fees and the Fund's
policy of not distributing income and gain on a current basis.
<PAGE>
AVESTA Short-Intermediate Term U.S. Government Securities Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return* 1 Year Since Inception
April 1, 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Period ended 12/31/95 12.01% 4.74%
- -------------------------------------------------------------------------------
</TABLE>
The Short-Intermediate Term U.S. Government Securities Fund seeks to
increase retirement assets by providing as high a level of current income as is
consistent with preservation of capital. The Fund invests primarily in U.S.
Government Securities and related repurchase agreements. "U.S. Government
Securities" include debt securities issued by the Treasury that are direct
obligations of the United States government. These securities are backed by
the full faith and credit of U.S. agencies or instrumentalities. These
securities are not direct obligations of the Treasury. As a matter of
operating policy, the Fund maintains a dollar-weighted average maturity, under
normal market conditions, of two to five years measured at the time of
investment. The Fund maintained its maturity structure between 2.1 years and
3.5 years throughout the full year 1995. During the year, over 90% of the
Fund's assets were invested in Treasury and U.S. Government agency securities.
As interest rates decreased during the year, the Fund remained relatively long
in its maturity structure. At December 31, 1995 the average maturity of the
Fund's portfolio securities was 3.4 years.
The Short-Intermediate Term U.S. Government Securities Fund's average annual
total return* from inception on April 1, 1993 through December 31, 1995 was
4.74%. For the full year 1995, the Fund returned 12.01%. The return on the
Lehman Brothers 1-3 Year Government Index and the Lehman Brothers
Intermediate Government Bond Index was 14.41% and 15.33%, respectively, for
1995.
The following graph illustrates total return* based on a $10,000 investment
in the Fund made at the date of inception (April 1, 1993) and held through
December 31, 1995, as well as the performance of the Lehman Brothers 1-3 Year
Government Index and the Lehman Brothers Intermediate Government Bond Index
over the same period. Past performance is not predictive of future
performance.
[CHART APPEARS HERE]
The Lehman Brothers Intermediate Government Bond Index is composed of all
bonds covered by the Lehman Brothers Government Bond Index with maturities
between one and 9.99 years. The Lehman Brothers 1-3 Year Government Index is
composed of all bonds covered by the Lehman Brothers Government Bond Index with
maturities between one and three years.
*Total returns for the Fund are net of expenses and fees and reflect
reimbursement of certain expenses and the Fund's policy of not distributing
income and gain on a current basis.
<PAGE>
AVESTA U. S. Government Securities Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return* 1 Year Since Inception
April 1, 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Period ended 12/31/95 30.11% 10.03%
- -------------------------------------------------------------------------------
</TABLE>
The U.S. Government Securities Fund seeks to increase retirement assets by
providing current income with an emphasis on capital preservation. The Fund
intends to invest primarily in U.S. Government Securities and related
repurchase agreements. The average maturity ranged from 24.4 years to 25.6
years during the full year 1995. There are no restrictions on the maturity of
the securities in the Fund's portfolio. Substantially all of the assets of the
Fund were invested in U. S Government and Government Agency Securities
throughout 1995. Interest rates declined during the first half of the year,
with yields on long term Treasury securities dropping 125 basis points. During
the second half the Fund's duration and average maturity were structured
significantly more aggressively than that of its benchmark to take advantage of
the decline in rates. The Fund remained invested only in the longest maturity
U.S. Government Securities as interest rates fell during the period.
The U.S. Government Securities Fund's total return* from inception on April
1, 1993 through December 31, 1995 was 10.03%. For the full year 1995, the Fund
returned 30.11%. The total return of the Lehman Brothers Government Long-Term
Bond Index was 30.90% for 1995.
The following graph illustrates the total return based on a $10,000
investment in the Fund made at the date of inception (April 1, 1993) and held
through December 31, 1995, as well as the performance of the Lehman Brothers
Government Long-Term Bond Index during such period. Past performance is not
predictive of future performance.
[CHART APPEARS HERE]
The Lehman Brothers Government Long-Term Bond Index is composed of all bonds
covered by the Lehman Brothers Government Bond Index with maturities of ten
years or greater. Total return for the Index comprises price
appreciation/depreciation and income as a percentage of the original
investment. The Index is rebalanced monthly by market capitalization.
*Total returns for the Fund are net of expenses and fees and reflect
reimbursement of certain expenses, waivers of certain fees and the Fund's
policy of not distributing income and gain on a current basis.
<PAGE>
AVESTA Intermediate Term Bond Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return* 1 Year Since Inception
October 3, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Period ended 12/31/95 16.79% 13.15%
- -------------------------------------------------------------------------------
</TABLE>
The Intermediate Term Bond Fund seeks to increase retirement assets
primarily through current income, with consideration given to stability of
principal. Primary investment emphasis will be on intermediate term,
investment grade fixed-income debt securities. The Fund will maintain a dollar
weighted average portfolio maturity ranging from three to ten years. Under
normal market conditions, at least 65% of the Intermediate Term Bond Fund's
total assets will be invested in bonds, notes, or debentures issued by domestic
or foreign corporations, U.S. Government Securities and debt obligations
collateralized by U.S. Government Securities. During the first half of the
year, interest rates declined significantly, and the yield on five-year U.S.
Treasury bonds declined 180 basis points, lifting the value of the securities
in the Fund's portfolio. The Adviser increased the Fund's holdings of
corporate securities by 27% and agency securities by 4% to increase the Fund's
yield and total return. During the second half of the year, interest rates
continued to decline and the Adviser structured the Fund's portfolio more
aggressively than its benchmark index.
The AVESTA Intermediate Term Bond Fund had total return* from inception on
October 3, 1994 through December 31, 1995 of 13.15%. For the full year 1995,
the Fund returned 16.79%. The return of the Lehman Brothers Government/
Corporate Bond Index was 19.24% over the same period. Past performance is not
predictive of future returns.
[CHART APPEARS HERE]
The Lehman Brothers Government/Corporate Bond Index is composed of all bonds
that are investment grade (rated Baa or higher by Moody's or BBB or higher by
S&P, if unrated by Moody's). Issues must have amounts outstanding in excess of
$25 million and have at least one year to maturity. Total return for the
Indexes comprises price appreciation/depreciation and income as a percentage of
the original investment. The indexes are rebalanced monthly by market
capitalization.
*Total return for the AVESTA Intermediate Term Bond Fund is net of expenses
and fees and reflect reimbursement of certain expenses and the Fund's policy of
not distributing income and gain on a current basis.
<PAGE>
AVESTA Risk Manager-Income Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return* 1 Year Since Inception
October 3, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Period ended 12/31/95 15.41% 11.88%
- -------------------------------------------------------------------------------
</TABLE>
The Risk Manager-Income Fund seeks to increase retirement assets by
investing in a combination of debt and, to a lesser extent, equity-based
securities to achieve high current income, and where appropriate, capital
appreciation. The Fund seeks to achieve its objectives by following an asset
allocation strategy that contemplates investing in a flexible portfolio of
fixed-income, equity-based and money market securities of domestic and foreign
issuers. During the first half of the year, interest rates declined
significantly and the yield on five-year U.S. Treasury bonds declined 180 basis
points, lifting the value of the securities in the Fund's portfolio. The
Adviser increased the Fund's holdings of corporate securities by 27% and agency
securities by 4% to increase the Fund's yield and total return. During the
second half of the year, interest rates continued to decline and the Fund was
structured more aggressively than its benchmark index.
The AVESTA Risk Manager-Income Fund had a total return* from inception on
October 3, 1994 through December 31, 1995 of 11.88%. For the full year 1995,
the Fund returned 15.41%. The return of the Lehman Brothers Government/
Corporate Bond Index was 19.24%; the Standard & Poor's 500 Stock Index returned
37.57% for the same time period.
The following graph illustrates total return* based on a $10,000 investment
in the Fund made at the date of inception (October 3, 1994) and held through
December 31, 1995, as well as the performance of the Lehman Brothers
Government/Corporate Bond Index and the Standard & Poor's 500 Stock Index for
the same time period. Past performance is not predictive of future returns.
[CHART APPEARS HERE]
The Lehman Brothers Government/Corporate Bond Index is composed of all bonds
that are investment grade (rated Baa or higher by Moody's or BBB or higher by
S&P, if unrated by Moody's). Issues must have amounts outstanding in excess of
$25 million and have at least one year to maturity. The Standard & Poor's 500
Stock Index covers industrial, utility, transportation and financial companies
of the U.S. markets (mostly NYSE issues). Total return of the Indexes
comprises price appreciation/depreciation and income as a percentage of the
original investment. Indexes are rebalanced monthly by market capitalization.
*Total return for the AVESTA Risk Manager-Income Fund is net of expenses and
fees and reflects reimbursement of certain expenses and the Fund's policy of
not distributing income and gain on a current basis.
<PAGE>
AVESTA Risk Manager-Balanced Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return* 1 Year Since Inception
October 3, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Period ended 12/31/95 17.59% 13.25%
- -------------------------------------------------------------------------------
</TABLE>
The Risk Manager-Balanced Fund seeks to increase retirement assets by
investing in a combination of debt and equity-based securities, which include
common stocks and debt securities and preferred stocks that are convertible
into common stocks, to provide high total return. The Fund seeks to achieve
its objectives by following an asset allocation strategy that contemplates
investing in a flexible portfolio of equity-based, fixed-income and money
market securities of domestic and foreign issuers. During the first half of
1995, interest rates declined significantly. Yields on five-year U.S. Treasury
Bonds dropped 180 basis points. The Adviser increased the Fund's exposure to
corporate bonds by 17% and to agency holdings by 6% to increase the Fund's
yield and return. During the second half of the year, interest rates continued
to decline. The equity portion of the Fund was hindered by an underweighted
position in large capitalization consumer companies, utilities, and drug
companies. The Adviser increased the Fund's large capitalization, consumer
discretionary and health care holdings as well as selected technology companies
with good growth prospects late in the fourth quarter.
The AVESTA Risk Manager-Balanced Fund had a total return* from inception on
October 3, 1994 through December 31, 1995 of 13.25%. For the full year 1995,
the Fund returned 17.59%. The return of the Lehman Brothers Government/
Corporate Bond Index was 19.24% and the Standard & Poor's 500 Stock Index
returned 37.57% for the same time period, respectively.
The following graph illustrates total return* based on a $10,000 investment
in the Fund made at the date of inception (October 3, 1994) and held through
December 31, 1995, as well as the performance of the Lehman Brothers
Government/Corporate Bond Index and the Standard & Poor's 500 Stock Index for
the same time period. Past performance is not predictive of future returns.
[CHART APPEARS HERE]
The Lehman Brothers Government/Corporate Bond Index is composed of all bonds
that are investment grade (rated Baa or higher by Moody's or BBB or higher by
S&P, if unrated by Moody's). Issues must have amounts outstanding in excess of
$25 million and have at least one year to maturity. The Standard & Poor's 500
Stock Index covers industrial, utility, transportation and financial companies
of the U.S. markets (mostly NYSE issues). The Index represents about 75% of NYSE
market capitalization and 30% of NYSE issues. It is a capitalization-weighted
index calculated on a total return basis with dividends reinvested. Total return
of the Indexes comprises price appreciation/depreciation and income as a
percentage of the original investment. Indexes are rebalanced monthly by market
capitalization.
*Total return for the AVESTA Risk Manager-Balanced Fund is net of expenses
and fees and reflects reimbursement of certain expenses and the Fund's policy
of not distributing income and gain on a current basis.
<PAGE>
AVESTA Risk Manager-Growth Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return* 1 Year Since Inception
October 3, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Period ended 12/31/95 22.15% 16.40%
- -------------------------------------------------------------------------------
</TABLE>
The Risk Manager-Growth Fund seeks to increase retirement assets by
investing in a combination of equity-based securities, and to a lesser extent,
debt securities, to achieve capital appreciation and, secondarily, current
income. The Fund seeks to achieve its objectives by following an asset
allocation strategy that contemplates investing in a flexible portfolio of
equity-based, fixed-income and money market securities of domestic and foreign
issuers. During the first half of 1995, interest rates declined significantly.
Yields on five-year U.S. Treasury Bonds dropped 180 basis points. The Adviser
increased the Fund's exposure to corporate bonds by 17% and to agency
securities by 6% to increase the Fund's yield and return. During the second
half of the year, interest rates continued to decline. The equity portion of
the Fund was hindered by an underweighted position in large capitalization
consumer companies, utilities, and large drug companies. The Adviser increased
the Funds large capitalization, consumer discretionary and health care holdings
as well as selected technology companies with good growth prospects late in the
fourth quarter.
The AVESTA Risk Manager-Growth Fund had a total return* from inception on
October 3, 1994 through December 31, 1995 of 16.40%. For the full year 1995,
the Fund returned 22.15%. The return of the Lehman Brothers Government/
Corporate Bond Index was 19.24% and the Standard & Poor's 500 Index returned
37.57% for the same time period, respectively.
The following graph illustrates total return* based on a $10,000 investment
in the Fund made at the date of inception (October 3, 1994) and held through
December 31, 1995, as well as the performance of the Lehman Brothers
Government/Corporate Bond Index and the Standard & Poor's 500 Stock Index for
the same time period. Past performance is not predictive of future returns.
[CHART APPEARS HERE]
The Lehman Brothers Government/Corporate Bond Index is composed of all bonds
that are investment grade (rated Baa or higher by Moody's or BBB or higher by
S&P, if unrated by Moody's). Issues must have amounts outstanding in excess of
$25 million and have at least one year to maturity. The Standard & Poor's 500
Stock Index covers industrial, utility, transportation and financial companies
of the U.S. markets (mostly NYSE issues). The Index represents about 75% of
NYSE market capitalization and 30% of NYSE issues. It is a
capitalization-weighted index calculated on a total return basis with dividends
reinvested. Total return of the Indexes comprises price
appreciation/depreciation and income as a percentage of the original
investment. Indexes are rebalanced monthly by market capitalization.
* Total return for the AVESTA Risk Manager-Growth Fund is net of expenses and
fees and reflects reimbursement of certain expenses and the Fund's policy of
not distributing income and gain on a current basis.
<PAGE>
[LETTERHEAD OF PRICE WATERHOUSE LLP]
REPORT OF INDEPENDENT ACCOUNTANTS
February 16, 1996
To The Unitholders and the Supervisory Committee of
the AVESTA Trust
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the selected per share data and ratios for the funds
listed in the accompanying index on page i, present fairly, in all material
respects, the financial position of each of the funds listed at December 31,
1995, the results of each of their operations, the changes in each of their net
assets and the selected per unit data and ratios for each of the periods
specified in the accompanying index, in conformity with generally accepted
accounting principles. The thirteen funds listed in the accompanying index
constitute the AVESTA Trust (the "Trust"). These financial statements and
selected per share data and ratios (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1995 by correspondence with custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
<PAGE>
[LOGO]
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INDEX TO FUND FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
Page ref.
---------
<S> <C>
Equity Growth Fund(1) 1-7
Equity Income Fund(1) 8-14
Balanced Fund(1) 15-22
Income Fund(1) 23-27
Core Equity Fund(2) 28-34
Small Capitalization Fund(2) 35-42
Short-Intermediate Term U.S. Government Securities Fund(2) 43-47
U.S. Government Securities Fund(2) 48-51
Intermediate Term Bond Fund(3) 52-57
Risk Manager-Income Fund(3) 58-65
Risk Manager-Balanced Fund(3) 66-73
Risk Manager-Growth Fund(3) 74-81
Money Market Fund(1) 82-86
</TABLE>
- -------------
(1) Financial statements and schedules include the Portfolio of Investments and
Statement of Assets and Liabilities as of December 31, 1995, Statements of
Operations for the year ended December 31, 1995, Statement of Changes in Net
Assets for the two years ended December 31, 1995, and Selected per unit data
and ratios for each of the five years in the period ended December 31, 1995.
(2) Financial statements and schedules include the Portfolio of Investments and
Statements of Assets and Liabilities as of December 31, 1995, Statements of
Operations in Net Assets for the two years ended December 31, 1995, and
Selected per unit data and ratios for the two years ended December 31, 1995
and for the period from April 1, 1993 (inception) through December 31, 1993.
(3) Financial statements and schedules include the Portfolio of Investments and
Statements of Assets and Liabilities as of December 31, 1995, Statements of
Operations for the year ended December 31, 1995, Statement of Changes for in
Net Assets and Selected per unit data and ratios for the year ended December
31, 1995 and for the period from October 3, 994 (inception) through December
31, 1994.
-i-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<C> <S> <C>
COMMON STOCKS-93.5%
Consumer Discretionary-19.5%
11,000 Disney (Walt) Company $ 649,000
46,600 Federated Department Stores* 1,281,500
10,500 Gannett Company, Inc. 644,438
43,100 Gap, Inc. 1,810,200
38,800 Kroger Company* 1,455,000
7,100 McDonalds Corporation 320,388
13,200 Omnicom Group, Inc. 491,700
4,800 Sears Roebuck & Company 187,200
26,500 Viacom, Inc.* 1,255,437
35,000 Wal Mart Stores, Inc. 783,125
----------
Total Consumer Discretionary 8,877,988
----------
Consumer Staples-10.7%
24,600 Coca Cola Company 1,826,550
8,900 Gillette Company 463,913
15,900 Phillip Morris Companies, Inc. 1,438,950
13,800 Procter & Gamble Company 1,145,400
----------
Total Consumer Staples 4,874,813
----------
Financial Services-4.7%
31,900 American Express Company 1,319,862
5,000 American International Group, Inc. 462,500
2,800 Federal National Mortgage Association 347,550
----------
Total Financial Services 2,129,912
----------
</TABLE>
1
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<C> <S> <C>
Healthcare-19.2%
28,200 Amgen, Inc.* $1,674,375
11,000 Johnson & Johnson 941,875
19,800 Medtronic, Inc. 1,106,325
24,800 Merck & Company, Inc. 1,630,600
13,400 Pfizer, Inc. 844,200
16,700 Schering Plough Corporation 914,325
35,400 Teva Pharmaceutical Industries, Ltd. ADR 1,641,675
----------
Total Healthcare 8,753,375
----------
Integrated Oil-1.0%
6,000 Exxon Corporation 480,750
----------
Materials & Processing-8.2%
15,100 Aluminum Company of America 798,413
19,200 Inco, Ltd. 638,400
5,200 Minnesota Mining & Manufacturing Company 344,500
10,200 Phelps Dodge Corporation 634,950
18,900 Potash Corporation of Saskatchewan, Inc. 1,339,537
----------
Total Materials & Processing 3,755,800
----------
Producer Durables-7.8%
7,300 Boeing Company 572,138
15,600 Fluor Corporation 1,029,600
26,900 General Electric Company 1,936,800
----------
Total Producer Durables 3,538,538
----------
</TABLE>
2
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<C> <S> <C>
Technology-14.0%
9,900 Adobe Systems, Inc. $ 613,800
15,400 Cisco Systems* 1,149,225
13,200 Hewlett Packard Company 1,105,500
18,300 Intel Corporation 1,038,525
14,000 Microsoft Corporation* 1,228,500
10,000 Motorola, Inc. 570,000
15,700 Newbridge Networks Corporation* 649,588
-----------
Total Technology 6,355,138
-----------
Utilities-8.4%
31,100 AT&T Company 2,013,725
7,000 Bell Atlantic Corporation 468,125
15,500 QUALCOMM, Inc.* 666,500
19,500 WorldCom, Inc.* 687,375
-----------
Total Utilities 3,835,725
-----------
Total Common Stocks (Cost $34,951,487) 42,602,039
-----------
Principal
Amount SHORT-TERM INVESTMENTS-6.3%
-----------
Repurchase Agreements-6.1%
$ 527,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due 527,000
01/02/96 in the amount of $527,000 (collateralized by
$456,733 U.S. Treasury Note, 7.25%, due 08/15/22,
with a market value of $540,906 at 12/31/95),
repurchase proceeds $527,336.
2,270,000 Lehman Government Securities, dated 12/29/95, 6.10%, due 2,270,000
01/02/96 in the amount of $2,270,000 (collateralized by
$2,130,395 U.S. Treasury Note, 7.13%, due 02/29/00 with
a market value of $2,318,912 at 12/31/95), repurchase
proceeds $2,271,538.
-----------
Total Repurchase Agreements 2,797,000
-----------
</TABLE>
3
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ----------
<C> <S> <C>
Short-Term Investment Fund-0.2%
98,758 Goldman Sachs-Institutional Liquid
Assets-Government Portfolio $ 98,758
-----------
Total Short-Term Investments
(Cost $2,895,758) 2,895,758
-----------
Total Investments (Cost
$37,847,245)-99.8% 45,497,797
-----------
Other assets in excess of
liabilities-0.2% 80,012
-----------
NET ASSETS - 100% $45,577,809
===========
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
4
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $37,847,245) $45,497,797
Cash 804
Investment income receivable 64,228
Receivable for units issued 65,160
-----------
Total assets 45,627,989
-----------
LIABILITIES
Management fee payable 38,213
Payable for units redeemed 11,967
-----------
Total liabilities 50,180
-----------
NET ASSETS $45,577,809
===========
Net assets were comprised of:
Units of beneficial interest $30,506,243
Accumulated net investment income 1,602,744
Accumulated net realized gain 5,818,270
Net unrealized appreciation 7,650,552
-----------
Net assets at December 31, 1995 $45,577,809
===========
Unit value, offering price and redemp-
tion price per unit ($45,577,809 /
1,964,561 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $23.20
===========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY GROWTH FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 543,227
Interest 183,667
----------
Total income 726,894
----------
Expenses
Management fee (Note 2) 407,599
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 4,498
Legal fees 4,734
Registration fees 3,275
Shareholder reports 1,833
Miscellaneous 3,450
----------
Total expenses 448,116
Expense subsidy (Note 3) (40,517)
----------
Net expenses 407,599
----------
Net investment income 319,295
----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 2,467,251
Unrealized appreciation in value
of investments during the year 6,401,728
----------
Net gain on investments 8,868,979
----------
Net Increase in Net Assets
Resulting from Operations $9,188,274
==========
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 319,295 $ 328,129
Net realized gain/(loss) on investments 2,467,251 (356,809)
Unrealized appreciation/(depreciation)
in value of investments during the year 6,401,728 (352,480)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 9,188,274 (381,160)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 9,610,716 20,327,923
Cost of units redeemed (9,904,550) (13,911,006)
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions (293,834) 6,416,917
----------- -----------
Total increase in net assets 8,894,440 6,035,757
Net assets, beginning of year 36,683,369 30,647,612
----------- -----------
Net assets, end of year $45,577,809 $36,683,369
=========== ===========
Net Change in Units Outstanding
Units issued 447,019 1,097,025
Units redeemed (471,304) (754,845)
----------- -----------
(24,285) 342,180
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
6
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY GROWTH FUND
SELECTED PER UNIT DATA AND RATIOS*
(Selected data for a unit outstanding throughout each of the years indicated)
<TABLE>
<CAPTION>
Years ended December 31,
----------------------------------------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993 1992 1991
----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investment income $ 0.38 $ 0.38 $ 0.38 $ 0.36 $ 0.42
Expenses (0.23) (0.21) (0.21)# (0.21) (0.21)
Expense subsidy 0.02 0.03 0.03 0.04 0.05
------ ------ ------ ------ ------
Net investment income 0.17 0.20 0.20 0.19 0.26
Net realized and unrealized gain/(loss)
on investments 4.59 (0.37) 0.25 0.91 3.84
------ ------ ------ ------ ------
Net increase/(decrease) in net asset
value 4.76 (0.17) 0.45 1.10 4.10
Net asset value, beginning of year 18.44 18.61 18.16 17.06 12.96
------ ------ ------ ------ ------
Net asset value, end of year $23.20 $18.44 $18.61 $18.16 $17.06
====== ====== ====== ====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 1.00% 1.00% 1.00%## 1.00% 1.00%
Net investment income 0.78% 1.07% 1.12% 1.16% 1.73%
OTHER:
Average net assets (000 omitted) $40,753 $30,806 $29,305 $20,343 $11,102
Portfolio turnover 99% 116% 97% 99% 135%
Number of units outstanding at
end of year (000 omitted) 1,965 1,989 1,646 1,405 980
Total return 25.78% (0.90%) 2.48% 6.43% 31.69%
</TABLE>
- -------------------
# Reflects voluntary fee waiver of $11,479 or $0.01 per unit. Without
voluntary fee waiver, expense per unit is $0.22.
## Does not reflect voluntary waiver of management fees of $11,479. Net of
the voluntary management fee waiver, the net expense ratio is 0.96% of
average net assets.
* Amounts adjusted to reflect 10:1 reverse split for the years ended 1991 -
1993.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
7
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
COMMON STOCKS-84.2%
Auto & Transportation-5.6%
26,200 Ford Motor Company $ 759,800
16,900 General Motors Corporation 893,587
10,000 Norfolk Southern Corporation 793,750
9,200 Union Pacific Corporation 607,200
----------
Total Auto & Transportation 3,054,337
----------
Bank-1.8%
14,900 Suntrust Banks, Inc. 1,020,650
----------
Consumer Discretionary-2.7%
16,450 International Flavors & Fragrances, Inc. 789,600
15,000 Penney (J.C.) Company, Inc. 714,375
----------
Total Consumer Discretionary 1,503,975
----------
Consumer Staples-2.0%
8,000 Anheuser-Busch Companies 535,000
6,500 Proctor & Gamble Company 539,500
----------
Total Consumer Staples 1,074,500
----------
Financial Services-10.0%
27,500 American Express Company 1,137,813
13,987 American International Group, Inc. 1,293,797
9,800 First Union Corporation 545,125
12,200 St. Paul Companies, Inc. 678,625
15,800 Transamerica Corporation 1,151,425
10,900 Travelers Corporation 685,338
----------
Total Financial Services 5,492,123
----------
</TABLE>
8
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Healthcare-7.0%
5,800 American Home Products Corporation $ 562,600
10,100 Bristol-Myers Squibb Company 867,337
6,000 Johnson & Johnson 513,750
12,000 Lilly (Eli) & Company 675,000
9,200 Merck & Company, Inc. 604,900
9,700 Pfizer, Inc. 611,100
----------
Total Healthcare 3,834,687
----------
Integrated Oils-9.0%
10,000 Amoco Corporation 718,750
15,300 Chevron Corporation 803,250
12,700 Mobil Corporation 1,422,400
9,393 Royal Dutch Petroleum Company ADR 1,325,587
8,550 Texaco, Inc. 671,175
----------
Total Integrated Oils 4,941,162
----------
Materials & Processing-11.1%
21,800 Dover Corporation 803,875
8,500 Dow Chemical Company 598,188
13,000 Dupont (E. I.) De Nemours & Company 908,375
32,900 Hanna (M.A.) Company 921,200
22,500 Hercules, Inc. 1,268,437
11,900 International Paper Company 450,713
9,500 Monsanto Company 1,163,750
----------
Total Materials & Processing 6,114,538
----------
Other Energy-1.9%
15,200 Enron Corporation 579,500
13,200 Sonat, Inc. 470,250
----------
Total Other Energy 1,049,750
----------
</TABLE>
9
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<S> <C> <C>
Producer Durables-9.6%
11,900 General Electric Company $ 856,800
18,400 Lockheed Martin Corporation 1,453,600
19,600 Raytheon Company 926,100
13,400 Sundstrand Corporation 943,025
21,525 Thermo Electron Corporation* 1,119,300
-----------
Total Producer Durables 5,298,825
-----------
Technology-8.0%
6,000 Hewlett Packard Company 502,500
12,500 International Business Machines Corporation 1,146,875
17,200 Motorola, Inc. 980,400
15,000 Texas Instruments, Inc. 776,250
7,200 Xerox Corporation 986,400
-----------
Total Technology 4,392,425
-----------
Utilities-15.5%
19,000 Ameritech Corporation 1,121,000
16,100 AT&T Company 1,042,475
14,700 Bell Atlantic Corporation 983,063
26,500 BellSouth Corporation 1,152,750
36,600 DQE, Inc. 1,125,450
20,000 Duke Power Company 947,500
25,400 Nipsco Industries, Inc. 971,550
20,100 SBC Communications, Inc. 1,155,750
-----------
Total Utilities 8,499,538
-----------
Total Common Stocks (Cost $33,497,476) 46,276,510
-----------
</TABLE>
10
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----------
<S> <C> <C>
SHORT-TERM INVESTMENTS-9.5%
Repurchase Agreements-9.5%
$2,570,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due $ 2,570,000
01/02/96 in the amount of $2,570,000 (collateralized
by $2,227,333 U.S. Treasury Note, 7.25%, due 08/15/22,
with a market value of $2,637,816 at 12/31/95),
repurchase proceeds $2,571,642.
2,570,000 Lehman Government Securities, dated 12/29/95, 6.10%, due 2,570,000
01/02/96 in the amount of $2,570,000 (collateralized by $2,411,945
U.S. Treasury Note, 7.13%, due 02/29/00, with a market value of
$2,625,376 at 12/31/95), repurchase proceeds $2,571,742.
90,000 Merrill Lynch Government Securities, dated 12/29/95, 5.60% due 90,000
01/02/96 in the amount of $90,000 (collateralized by $90,450
U.S. Treasury Note, 5.63%, due 10/31/97, with a market value of
$91,981 at 12/31/95), repurchase proceeds $90,056.
-----------
Total Repurchase Agreements 5,230,000
-----------
Number
of Shares Short Term Investment Fund-0.0%
-----------
1,612 Goldman Sachs-Institutional Liquid Assets-Government Portfolio 1,612
-----------
Total Short-Term Investments (Cost $5,231,612) 5,231,612
-----------
Total Investments (Cost $38,729,088)-93.7% 51,508,122
-----------
Other assets in excess of liabilities-6.3% 3,476,955
-----------
NET ASSETS - 100% $54,985,077
===========
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
11
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $38,729,088) $51,508,122
Cash 466
Investment income receivable 77,851
Receivable for units issued 3,446,717
-----------
Total assets 55,033,156
-----------
LIABILITIES
Management fee payable 43,548
Payable for units redeemed 4,531
-----------
Total liabilities 48,079
-----------
NET ASSETS $54,985,077
===========
Net assets were comprised of:
Units of beneficial interest $35,954,575
Accumulated net investment income 3,721,516
Accumulated net realized gain 2,529,952
Net unrealized appreciation 12,779,034
-----------
Net assets at December 31, 1995 $54,985,077
===========
Unit value, offering price and redemp-
tion price per unit ($54,985,077 /
2,297,324 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $23.93
===========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY INCOME FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 1,154,363
Interest 230,446
-----------
Total income 1,384,809
-----------
Expenses
Management fee (Note 2) 446,506
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 4,498
Legal fees 4,734
Registration fees 3,578
Shareholder reports 1,833
Miscellaneous 3,765
-----------
Total expenses 487,641
Expense subsidy (Note 3) (41,135)
-----------
Net expenses 446,506
-----------
Net investment income 938,303
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 884,985
Unrealized appreciation in value
of investments during the year 11,054,690
-----------
Net gain on investments 11,939,675
-----------
Net Increase in Net Assets
Resulting from Operations $12,877,978
===========
</TABLE>
The accompanying notes are an integral part of this statement.
12
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $938,303 $893,006
Net realized gain on investments 884,985 587,464
Unrealized appreciation/(depreciation)
in value of investments during the year 11,054,690 (2,995,916)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 12,877,978 (1,515,446)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 12,190,344 16,353,926
Cost of units redeemed (9,379,681) (17,147,240)
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions 2,810,663 (793,314)
----------- -----------
Total increase/(decrease) in net assets 15,688,641 (2,308,760)
Net assets, beginning of year 39,296,436 41,605,196
----------- -----------
Net assets, end of year $54,985,077 $39,296,436
=========== ===========
Net Change in Units Outstanding
Units issued 552,331 902,344
Units redeemed (450,395) (952,989)
----------- -----------
101,936 (50,645)
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
13
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
EQUITY INCOME FUND
SELECTED PER UNIT DATA AND RATIOS*
(Selected data for a unit outstanding throughout each of the years indicated)
<TABLE>
<CAPTION>
Years ended December 31,
----------------------------------------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993 1992 1991
----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investment income $ 0.65 $ 0.57 $ 0.52 $ 0.55 $ 0.61
Expenses (0.23) (0.20) (0.20)# (0.19) (0.20)
Expense subsidy 0.02 0.02 0.03 0.03 0.05
------ ------ ------ ------ ------
Net investment income 0.44 0.39 0.35 0.39 0.46
Net realized and unrealized gain/(loss)
on investments 5.59 (1.01) 1.68 0.50 2.35
------ ------ ------ ------ ------
Net increase/(decrease) in net asset
value 6.03 (0.62) 2.03 0.89 2.81
Net asset value, beginning of year 17.90 18.52 16.49 15.60 12.79
------ ------ ------ ------ ------
Net asset value, end of year $23.93 $17.90 $18.52 $16.49 $15.60
====== ====== ====== ====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 1.00% 1.00% 1.00%## 1.00% 1.00%
Net investment income 2.10% 2.13% 1.98% 2.52% 3.25%
OTHER:
Average net assets (000 omitted) $44,651 $41,889 $31,308 $18,565 $10,298
Portfolio turnover 11% 42% 40% 25% 39%
Number of units outstanding at
end of year (000 omitted) 2,297 2,195 2,246 1,389 903
Total return 33.72% (3.37%) 12.34% 5.61% 22.10%
</TABLE>
- -------------------
# Reflects voluntary fee waiver of $17,330 or $0.01 per unit. Without
voluntary fee waiver, expense per unit is $0.21.
## Does not reflect voluntary waiver of management fees of $17,330. Net of
the voluntary management fee waiver, the net expense ratio is 0.95% of
average net assets.
* Amounts adjusted to reflect 10:1 reverse split for the years ended 1991 -
1993.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
14
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
---------- ----------
<C> <S> <C>
LONG-TERM INVESTMENTS-91.6%
Common Stocks-52.3%
Consumer Discretionary-11.0%
2,900 Disney (Walt) Company $ 171,100
12,300 Federated Department Stores * 338,250
2,800 Gannett Company, Inc. 171,850
11,400 Gap, Inc. 478,800
10,300 Kroger Company * 386,250
1,900 McDonalds Corporation 85,738
3,400 Omnicom Group, Inc. 126,650
1,300 Sears Roebuck & Company 50,700
7,000 Viacom, Inc. * 331,625
9,300 Wal Mart Stores, Inc. 208,087
----------
Total Consumer Discretionary 2,349,050
----------
Consumer Staples-6.1%
6,500 Coca Cola Company 482,625
2,400 Gillette Company 125,100
4,200 Phillip Morris Companies, Inc. 380,100
3,700 Procter & Gamble Company 307,100
----------
Total Consumer Staples 1,294,925
----------
Financial Services-2.6%
8,400 American Express Company 347,550
1,300 American International Group, Inc. 120,250
700 Federal National Mortgage Association 86,888
----------
Total Financial Services 554,688
----------
</TABLE>
15
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
---------- ----------
<C> <S> <C>
Healthcare-10.8%
7,500 Amgen, Inc. * $ 445,313
2,900 Johnson & Johnson 248,312
5,200 Medtronic, Inc. 290,550
6,600 Merck & Company, Inc. 433,950
3,500 Pfizer, Inc. 220,500
4,400 Schering Plough Corporation 240,900
9,400 Teva Pharmaceutical Industries, Ltd. ADR 435,925
----------
Total Healthcare 2,315,450
----------
Integrated Oil-0.6%
1,600 Exxon Corporation 128,200
----------
Materials & Processing-4.6%
4,000 Aluminum Company of America 211,500
5,100 Inco, Ltd. 169,575
1,400 Minnesota Mining & Manufacturing Company 92,750
2,700 Phelps Dodge Corporation 168,075
5,000 Potash Corporation of Saskatchewan, Inc. 354,375
----------
Total Materials & Processing 996,275
----------
Producer Durables-4.1%
1,900 Boeing Company 148,912
4,100 Fluor Corporation 270,600
6,500 General Electric Company 468,000
----------
Total Producer Durables 887,512
----------
</TABLE>
16
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
---------- ----------
<C> <S> <C>
Technology-7.8%
2,600 Adobe Systems, Inc. $ 161,200
4,050 Cisco Systems * 302,231
3,500 Hewlett Packard Company 293,125
4,800 Intel Corporation 272,400
3,700 Microsoft Corporation * 324,675
2,600 Motorola, Inc. 148,200
4,200 Newbridge Networks Corporation * 173,775
----------
Total Technology 1,675,606
----------
Utilities-4.7%
8,200 AT&T Company 530,950
1,900 Bell Atlantic Corporation 127,063
4,100 QUALCOMM, Inc. * 176,300
5,200 WorldCom, Inc. * 183,300
----------
Total Utilities 1,017,613
----------
Total Common Stocks (Cost $9,199,170) 11,219,319
----------
Principal
Amount Corporate Bonds-7.4%
-----------
Auto & Transportation-2.1%
$360,000 Ford Motor Company, 8.88%, due 01/15/22 448,388
----------
Banks-3.6%
400,000 BankAmerica Corporation, 6.85%, due 03/01/03 414,928
360,000 U.S. West Financial Services, Inc., 6.45%,
due 11/06/97 365,558
----------
Total Banks 780,486
----------
</TABLE>
17
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ----------
<C> <S> <C>
Financial Services-1.7%
$360,000 Beneficial Corporation, 6.60%, due 10/29/97 $ 366,394
----------
Total Corporate Bonds (Cost $1,482,615) 1,595,268
----------
U.S. Government and Agency Obligations-31.9%
U.S. Government Agency Obligations-4.4%
500,000 Federal Home Loan Mortgage Corporation, 8.35%,
due 10/06/04 518,947
400,000 Federal National Mortgage Association, 7.80%,
due 06/10/02 411,270
----------
Total U.S. Government Agency Obligations 930,217
----------
U.S. Treasury Obligations-27.5%
2,575,000 U.S. Treasury Bond, 6.25%, due 08/15/23 2,646,618
400,000 U.S. Treasury Bond, 8.13%, due 05/15/21 506,250
1,230,000 U.S. Treasury Note, 5.88%, due 02/15/04 1,254,984
1,450,000 U.S. Treasury Note, 6.25%, due 05/31/00 1,499,390
----------
Total U.S. Treasury Obligations 5,907,242
----------
Total U.S. Government and Agency Obligations
(Cost $6,363,516) 6,837,459
----------
Total Long-Term Investments (Cost $17,045,301) 19,652,046
----------
</TABLE>
18
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ----------
<C> <S> <C>
SHORT-TERM INVESTMENTS-4.7%
Repurchase Agreement-4.2%
$907,000 Lehman Government Securities, dated 12/29/95, 6.10%, due $ 907,000
01/02/96 in the amount of $907,000 (collateralized by $851,220 -----------
U.S. Treasury Note, 7.13%, due 02/29/00, with a market value
of $926,543 at 12/31/95), repurchase proceeds $907,615.
Number
of Shares Short-Term Investment Funds-0.5%
-----------
17,000 Fidelity Institutional Cash Portfolios-U.S. Government Portfolio 17,000
93,846 Goldman Sachs-Institutional Liquid Assets-Government Portfolio 93,846
-----------
Total Short-Term Investment Funds 110,846
-----------
Total Short-Term Investments (Cost $1,017,846) 1,017,846
-----------
Total Investments (Cost $18,063,147)-96.3% 20,669,892
-----------
Other assets in excess of liabilities-3.7% 801,555
-----------
NET ASSETS - 100% $21,471,447
===========
</TABLE>
- -------------
* Non-income producing security.
The accompanying notes are an integral part of this statement.
19
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $18,063,147) $20,669,892
Cash 543
Investment income receivable 161,856
Receivable for investment securities sold 634,123
Receivable for units issued 23,820
-----------
Total assets 21,490,234
-----------
LIABILITIES
Management fee payable 18,787
-----------
Total liabilities 18,787
-----------
NET ASSETS $21,471,447
===========
Net assets were comprised of:
Units of beneficial interest $ 5,796,617
Accumulated net investment income 6,206,148
Accumulated net realized gain 6,861,937
Net unrealized appreciation 2,606,745
-----------
Net assets at December 31, 1995 $21,471,447
===========
Unit value, offering price and redemp-
tion price per unit ($21,471,447 /
1,010,562 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $21.25
===========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 184,469
Interest 675,657
----------
Total income 860,126
----------
Expenses
Management fee (Note 2) 218,177
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 4,019
Legal fees 4,734
Registration fees 2,185
Shareholder reports 1,833
Miscellaneous 2,488
----------
Total expenses 256,163
Expense subsidy (Note 3) (37,986)
----------
Net expenses 218,177
----------
Net investment income 641,949
----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 1,560,947
Unrealized appreciation in value
of investments during the year 2,414,091
----------
Net gain on investments 3,975,038
----------
Net Increase in Net Assets
Resulting from Operations $4,616,987
==========
</TABLE>
The accompanying notes are an integral part of this statement.
20
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
-----------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 641,949 $ 749,579
Net realized gain/(loss) on investments 1,560,947 (105,513)
Unrealized appreciation/(depreciation) in value
of investments during the year 2,414,091 (1,408,322)
----------- ------------
Net increase/(decrease) in net assets
resulting from operations 4,616,987 (764,256)
----------- ------------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 3,492,374 8,354,427
Cost of units redeemed (9,439,693) (22,064,355)
----------- ------------
Net decrease in net assets resulting
from unit transactions (5,947,319) (13,709,928)
----------- ------------
Total decrease in net assets (1,330,332) (14,474,184)
Net assets, beginning of year 22,801,779 37,275,963
----------- ------------
Net assets, end of year $21,471,447 $ 22,801,779
=========== ============
Net Change in Units Outstanding
Units issued 179,016 487,228
Units redeemed (496,947) (1,281,307)
----------- ------------
(317,931) (794,079)
=========== ============
</TABLE>
The accompanying notes are an integral part of this statement.
21
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
BALANCED FUND
SELECTED PER UNIT DATA AND RATIOS*
(Selected data for a unit outstanding throughout each of the years indicated)
<TABLE>
<CAPTION>
Years ended December 31,
--------------------------------------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993 1992 1991
--------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Investment income $0.76 $0.63 $0.64 $0.68 $0.68
Expenses (0.23) (0.20) (0.19) (0.18) (0.18)
Expense subsidy 0.04 0.03 0.02 0.02 0.04
------ ------ ------ ------ ------
Net investment income 0.57 0.46 0.47 0.52 0.54
Net realized and unrealized
gain/(loss) on investments 3.52 (0.86) 0.52 0.32 2.52
------ ------ ------ ------ ------
Net increase/(decrease) in net asset
value 4.09 (0.40) 0.99 0.84 3.06
Net asset value, beginning of year 17.16 17.56 16.57 15.73 12.67
------ ------ ------ ------ ------
Net asset value, end of year $21.25 $17.16 $17.56 $16.57 $15.73
====== ====== ====== ====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income 2.94% 2.69% 2.78% 3.33% 3.77%
OTHER:
Average net assets (000 omitted) $21,843 $27,825 $51,971 $43,061 $22,446
Portfolio turnover 98% 157% 148% 187% 213%
Number of units outstanding at
end of year (000 omitted) 1,011 1,328 2,123 3,084 1,942
Total return 23.83% (2.27%) 6.01% 5.32% 24.16%
</TABLE>
- --------------
* Amounts adjusted to reflect 10:1 reverse split for the years ended
1991 - 1993.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
22
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -----------
<C> <S> <C>
LONG-TERM INVESTMENTS-79.9%
Corporate Bonds-8.5%
Auto & Transportation-2.5%
$1,140,000 Ford Motor Company, 8.88%, due 01/15/22 $ 1,419,894
-----------
Banks-4.0%
1,100,000 BankAmerica Corporation, 6.85%, due 03/01/03 1,141,053
1,140,000 U.S. West Financial Services, Inc., 6.45%, due 11/06/97 1,157,602
-----------
Total Banks 2,298,655
-----------
Financial Services-2.0%
1,140,000 Beneficial Corporation, 6.60%, due 10/29/97 1,160,246
-----------
Total Corporate Bonds (Cost $4,530,890) 4,878,795
-----------
U.S. Government and Agency Obligations-71.4%
U.S. Government Agency Obligations-8.2%
2,550,000 Federal Home Loan Mortgage Corporation, 8.35%, due 10/06/04 2,646,632
2,000,000 Federal National Mortgage Association, 7.80%, due 06/10/02 2,056,352
-----------
Total U.S. Government Agency Obligations (Cost $4,595,746) 4,702,984
-----------
U.S. Treasury Obligations-63.2%
7,600,000 U.S. Treasury Bond, 6.25%, due 08/15/23 7,811,379
6,000,000 U.S. Treasury Bond, 8.13%, due 05/15/21 7,593,750
5,300,000 U.S. Treasury Note, 5.88%, due 02/15/04 5,407,653
15,000,000 U.S. Treasury Note, 6.25%, due 05/31/00 15,510,928
-----------
Total U.S. Treasury Obligations (Cost $34,248,032) 36,323,710
-----------
Total U.S. Government and Agency Obligations
(Cost $38,843,778) 41,026,694
-----------
Total Long-Term Investments (Cost $43,374,668) 45,905,489
-----------
</TABLE>
23
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS-19.2%
Repurchase Agreements-9.9%
$2,866,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due 01/02/96 $2,866,000
in the amount of $2,866,000 (collateralized by $2,483,867 U.S.
Treasury Note, 7.25%, due 08/15/22, with a market value of $2,941,627
at 12/31/95), repurchase proceeds of $2,867,831.
972,000 Lehman Government Securities, dated 12/29/95, 6.10%, due 01/02/96 972,000
in the amount of $972,000 (collateralized by $912,222 U.S. Treasury
Note, 7.13%, due 02/29/00, with a market value of $992,944 at
12/31/95), repurchase proceeds $972,659.
1,836,000 Merrill Lynch Government Securities, dated 12/29/95, 5.60%, due 1,836,000
01/02/96 in the amount of $1,836,000 (collateralized by $1,845,180
U.S. Treasury Note, 5.63%, due 10/31/97, with a market value of
$1,876,419 at 12/31/95), repurchase proceeds $1,837,142. -----------
Total Repurchase Agreements 5,674,000
-----------
Number
of Shares Short-Term Investment Funds-4.6%
----------
2,562,000 Fidelity Institutional Cash Portfolios-U.S. Government Portfolio 2,562,000
76,091 Goldman Sachs-Institutional Liquid Assets-Government Portfolio 76,091
-----------
Total Short-Term Investment Funds 2,638,091
-----------
Principal
Amount U.S. Government Obligation-4.7%
- ------------
$2,728,000 U.S. Treasury Bill, 5.37%, due 02/22/96 2,710,145
-----------
Total Short-Term Investments (Cost $11,022,236) 11,022,236
-----------
Total Investments (Cost $54,396,904)-99.1% 56,927,725
-----------
Other assets in excess of liabilities-0.9% 523,902
-----------
NET ASSETS - 100% $57,451,627
===========
</TABLE>
The accompanying notes are an integral part of this statement.
24
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $54,396,904) $56,927,725
Cash 480
Investment income receivable 606,264
Receivable for units issued 15,550
-----------
Total assets 57,550,019
-----------
LIABILITIES
Management fee payable 36,908
Payable for units redeemed 61,484
-----------
Total liabilities 98,392
-----------
NET ASSETS $57,451,627
===========
Net assets were comprised of:
Units of beneficial interest $35,363,416
Accumulated net investment income 17,856,273
Accumulated net realized gain 1,701,117
Net unrealized appreciation 2,530,821
-----------
Net assets at December 31, 1995 $57,451,627
===========
Unit value, offering price and redemp-
tion price per unit ($57,451,627 /
3,154,357 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $18.21
===========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INCOME FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 74,408
Interest 3,488,861
-----------
Total income 3,563,269
-----------
Expenses
Management fee (Note 2) 546,375
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 4,738
Legal fees 4,734
Registration fees 3,734
Shareholder reports 1,833
Miscellaneous 4,673
-----------
Total expenses 588,814
Expense subsidy (Note 3) (42,439)
Voluntary fee reduction (Note 3) (136,617)
-----------
Net expenses 409,758
-----------
Net investment income 3,153,511
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 1,136,606
Unrealized appreciation in value
of investments during the year 4,897,758
-----------
Net gain on investments 6,034,364
-----------
Net Increase in Net Assets
Resulting from Operations $9,187,875
===========
</TABLE>
The accompanying notes are an integral part of this statement.
25
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 3,153,511 $ 3,465,862
Net realized gain/(loss) on investments 1,136,606 (2,135,445)
Unrealized appreciation/(depreciation)
in value of investments during the year 4,897,758 (4,597,137)
------------ ------------
Net increase/(decrease) in net assets
resulting from operations 9,187,875 (3,266,720)
------------ ------------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 10,958,151 12,905,219
Cost of units redeemed (14,929,065) (33,488,420)
------------ ------------
Net decrease in net assets resulting
from unit transactions (3,971,065) (20,583,201)
------------ ------------
Total increase/(decrease) in net assets 5,216,810 (23,849,921)
Net assets, beginning of year 52,234,817 76,084,738
------------ ------------
Net assets, end of year $57,451,627 $52,234,817
============ ============
Net Change in Units Outstanding
Units sold 643,190 828,838
Units redeemed (883,838) (2,157,807)
----------- -----------
(240,648) (1,328,969)
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
26
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INCOME FUND
SELECTED PER UNIT DATA AND RATIOS*
(Selected data for a unit outstanding throughout each of the years indicated)
<TABLE>
<CAPTION>
Years ended December 31,
----------------------------------------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993 1992 1991
----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investment income $ 1.09 $ 0.97 $ 0.97 $ 1.02 $ 0.97
Expenses (0.14)** (0.14)** (0.17) (0.16) (0.15)
Expense subsidy 0.02 0.01 0.02 0.02 0.02
------ ------ ------ ------ ------
Net investment income 0.97 0.84 0.82 0.88 0.84
Net realized and unrealized gain/(loss)
on investments 1.85 (1.56) 0.67 (0.16) 0.84
------ ------ ------ ------ ------
Net increase/(decrease) in net asset
value 2.82 (0.72) 1.49 0.72 1.68
Net asset value, beginning of year 15.39 16.11 14.62 13.90 12.22
------ ------ ------ ------ ------
Net asset value, end of year $18.21 $15.39 $16.11 $14.62 $13.90
====== ====== ====== ====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 0.75%*** 0.75%*** 1.00% 1.00% 1.00%
Net investment income 5.77% 5.43% 5.20% 6.21% 6.57%
OTHER:
Average net assets (000 omitted) $54,637 $63,817 $70,750 $53,886 $29,199
Portfolio turnover 93% 239% 156% 285% 304%
Number of units outstanding at
end of year (000 omitted) 3,154 3,395 4,724 4,413 3,012
Total return 18.38% (4.47%) 10.18% 5.13% 13.73%
</TABLE>
- -------------------
* Amounts adjusted to reflect 10:1 reverse split for the years ended 1991 -
1993.
** Reflects management fee reduction of $136,617 or $0.04 per unit and $99,627
or $0.03 per unit for the years ended December 31, 1995 and 1994
respectively. Without management fee reduction, expense per unit is $0.18
and $0.17 for the years ended December 31, 1995 and 1994 respectively.
*** Reflects management fee reductions of .25% or $136,617 and $99,627 for the
years ended December 31, 1995 and 1994 respectively. For the year ended
December 31, 1994 the actual net expense ratio for the year was .8% of
average net assets as the fee reduction went into effect on 5/2/94.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
27
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<S> <C> <C>
COMMON STOCKS-95.0%
Auto & Transportation-4.3%
5,000 AMR Corporation * $ 371,250
7,500 Chrysler Corporation 415,313
5,000 General Motors Corporation 264,375
----------
Total Auto & Transportation 1,050,938
----------
Consumer Discretionary-11.1%
4,000 Disney (Walt) Company 236,000
5,000 Eastman Kodak Company 335,000
10,000 Federated Department Stores * 275,000
9,500 Mattel, Inc. 292,125
6,750 McDonalds Corporation 304,594
13,500 News Corporation, Ltd. 288,563
9,500 Sears Roebuck & Company 370,500
6,750 Tambrands, Inc. 322,313
12,500 Wal Mart Stores, Inc. 279,688
-----------
Total Consumer Discretionary 2,703,783
-----------
Consumer Staples-8.3%
6,000 Clorox Company 429,750
5,000 Coca Cola Company 371,250
4,500 Philip Morris Companies, Inc. 407,250
10,500 Sara Lee Corporation 334,687
14,500 Sysco Corporation 471,250
-----------
Total Consumer Staples 2,014,187
-----------
</TABLE>
28
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<S> <C> <C>
Financial Services-12.6%
8,500 American Express Company $ 351,688
6,000 American International Group, Inc. 555,000
4,500 Federal National Mortgage Association 558,563
6,000 MBIA, Inc. 450,000
8,000 Student Loan Marketing Association 527,000
10,000 Travelers Corporation 628,750
----------
Total Financial Services 3,071,001
----------
Healthcare-11.4%
4,500 American Home Products Corporation 436,500
6,000 Bristol-Myers Squibb Company 515,250
8,500 Columbia HCA/Healthcare 431,375
4,400 Genzyme Corporation * 274,450
12,500 Humana, Inc. * 342,187
3,000 Johnson & Johnson 256,875
8,000 Merck & Company, Inc. 526,000
----------
Total Healthcare 2,782,637
----------
Integrated Oils-8.4%
7,500 Amoco Corporation 539,063
4,553 British Petroleum Company PLC 464,975
6,000 Exxon Corporation 480,750
5,000 Mobil Corporation 560,000
----------
Total Integrated Oils 2,044,788
----------
Materials & Processing-6.6%
9,500 Dover Corporation 350,313
4,500 Dow Chemical Company 316,688
4,000 Dupont (E.I.) de Nemours & Company 279,500
11,500 James River Corporation of Virginia 277,438
5,750 Minnesota Mining & Manufacturing Company 380,938
----------
Total Materials & Processing 1,604,877
----------
</TABLE>
29
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<S> <C> <C>
Other Energy-2.5%
8,800 Panhandle Eastern Corporation $ 245,300
7,500 Tenneco, Inc. 372,188
----------
Total Other Energy 617,488
----------
Producer Durables-6.6%
6,500 Allied Signal, Inc. 308,750
4,000 Caterpillar, Inc. 235,000
5,000 Emerson Electric Company 408,750
9,000 General Electric Company 648,000
----------
Total Producer Durables 1,600,500
----------
Technology-11.6%
9,500 Ceridian Corporation * 391,875
4,250 Hewlett Packard Company 355,938
6,500 Intel Corporation 368,875
4,250 International Business Machines Corporation 389,937
3,300 Microsoft Corporation * 289,575
6,500 Motorola, Inc. 370,500
11,500 Silicon Graphics, Inc. * 316,250
2,500 Xerox Corporation 342,500
----------
Total Technology 2,825,450
----------
Utilities-11.6%
8,500 AT & T Company 550,375
12,500 GTE Corporation 550,000
12,500 Nipsco Industries, Inc. 478,125
6,500 QUALCOMM, Inc. * 279,500
8,500 SBC Communications, Inc. 488,750
13,500 WorldCom, Inc. * 475,869
-----------
Total Utilities 2,822,619
-----------
Total Common Stocks (Cost $20,011,947) 23,138,268
-----------
</TABLE>
30
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<S> <C> <C>
SHORT-TERM INVESTMENTS-4.9%
Repurchase Agreement-4.8%
$1,171,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due $ 1,171,000
01/02/96 in the amount of $1,171,000 (collateralized by $1,014,867 -----------
U.S. Treasury Note, 7.25%, due 08/15/22, with a market value of
$1,201,900 at 12/31/95), repurchase proceeds $1,171,748.
Number
of Shares
- ---------
Short-Term Investment Funds-0.1%
1,000 Fidelity Institutional Cash Portfolio-U.S. Government Portfolio 1,000
14,430 Goldman Sachs-Institutional Liquid Assets-Government Portfolio 14,430
-----------
Total Short-Term Investment Funds 15,430
-----------
Total Short-Term Investment (Cost $1,186,430) 1,186,430
-----------
Total Investments (Cost $21,198,377)-99.9% 24,324,698
Other assets in excess of liabilities-0.1% 42,436
-----------
NET ASSETS - 100% $24,367,134
===========
</TABLE>
* Non-income producing.
The accompanying notes are an integral part of this statement.
31
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
CORE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $21,198,377) $24,324,698
Cash 285
Investment income receivable 44,283
Receivable for units issued 22,951
-----------
Total assets 24,392,217
-----------
LIABILITIES
Management fee payable 20,762
Payable for units redeemed 4,321
-----------
Total liabilities 25,083
-----------
NET ASSETS $24,367,134
===========
Net assets were comprised of:
Units of beneficial interest $19,585,429
Accumulated net investment income 666,699
Accumulated net realized gain 988,685
Net unrealized appreciation 3,126,321
-----------
Net assets at December 31, 1995 $24,367,134
===========
Unit value, offering price and redemp-
tion price per unit ($24,367,134 /
1,873,587 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $13.01
===========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
CORE EQUITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 466,860
Interest 78,364
-----------
Total income 545,224
-----------
Expenses
Management fee (Note 2) 223,368
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 4,019
Legal fees 4,734
Registration fees 2,385
Shareholder reports 1,833
Miscellaneous 1,921
-----------
Total expenses 260,987
Expense subsidy (Note 3) (37,619)
-----------
Net expenses 223,368
-----------
Net investment income 321,856
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 1,676,560
Unrealized appreciation in value
of investments during the year 3,034,911
-----------
Net gain on investments 4,711,471
-----------
Net Increase in Net Assets
Resulting from Operations $ 5,033,327
===========
</TABLE>
The accompanying notes are an integral part of this statement.
32
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
CORE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 321,856 $ 284,826
Net realized gain/(loss) on investments 1,676,560 (577,754)
Unrealized appreciation/(depreciation)
in value of investments during the year 3,034,911 (331,898)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 5,033,327 (624,826)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 4,888,390 16,424,835
Cost of units redeemed (6,590,153) (6,482,572)
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions (1,701,763) 9,942,263
----------- -----------
Total increase in net assets 3,331,564 9,317,437
Net assets, beginning of year 21,035,570 11,718,133
----------- -----------
Net assets, end of year $24,367,134 $21,035,570
=========== ===========
Net Change in Units Outstanding
Units issued 412,444 1,563,804
Units redeemed (569,249) (618,915)
----------- -----------
(156,805) 944,889
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
33
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
CORE EQUITY FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout each of the periods indicated)
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993*
----------- --------- -----------
<S> <C> <C> <C>
Investment income $ 0.29 $ 0.28 $ 0.21
Expenses (0.14)# (0.13) (0.20)#
Expense subsidy 0.02 0.03 0.13
------ ------ ------
Net investment income 0.17 0.18 0.14
Net realized and unrealized gain/(loss)
on investments 2.48 (0.62) 0.66
------ ------ ------
Net increase/(decrease) in net asset
value 2.65 (0.44) 0.80
Net asset value, beginning of period 10.36 10.80 10.00
------ ------ ------
Net asset value, end of period $13.01 $10.36 $10.80
====== ====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 1.00% 1.00% 1.00%##
Net investment income 1.44% 1.68% 1.84%**
OTHER:
Average net assets (000 omitted) $22,336 $16,948 $ 4,356
Portfolio turnover 133% 129% 83%
Number of units outstanding at
end of period (000 omitted) 1,874 2,030 1,086
Total return 25.53% (4.03%) 7.95%***
</TABLE>
- -------------------
# Reflects voluntary fee waiver of $6,949 or $0.01 per unit. Without
voluntary fee waiver, expense per unit is $0.21.
## Does not reflect voluntary waiver of management fees of $6,949. Net of
the voluntary management fee waiver, the net expense ratio is 0.79% of
average net assets. This figure is annualized.
* Commencement of Operations April 1, 1993.
** Annualized.
*** Not annualized.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
34
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- ---------- -----
COMMON STOCKS-86.7%
Consumer Discretionary-16.9%
<C> <S> <C>
6,600 Career Horizons, Inc. * $ 222,750
5,300 Central European Media Enterprises * 108,650
4,200 Clear Channel Communications * 185,325
12,200 Corrections Corporation of America* 452,925
9,390 Evergreen Media Corporation* 300,480
5,200 Gymboree Corporation * 107,250
3,885 Harman International Industries, Inc. 155,886
3,600 Proffitt's, Inc. * 94,500
6,850 St. John Knits, Inc. 363,906
8,450 Trump Hotels & Casino Resort, Inc. * 181,675
----------
Total Consumer Discretionary 2,173,347
----------
Financial Services-13.0%
5,250 Capstead Mortgage Corporation 120,094
16,700 City National Corporation 233,800
7,000 Collective Bancorp, Inc. 177,625
3,500 Evans Withycombe Residential, Inc. 75,250
10,400 Ideon Group, Inc. 105,300
6,500 Magna Group, Inc. 154,375
8,200 Mercer International, Inc. * 168,100
9,900 Roosevelt Financial Group, Inc. 191,812
3,200 Vesta Insurance Group, Inc. 174,400
3,200 Weeks Corporation 80,400
9,300 WFS Financial * 181,350
----------
Total Financial Services 1,662,506
----------
</TABLE>
35
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- ---------- -----
<S> <C> <C>
Healthcare-18.4%
16,950 Applied Bioscience International, Inc.* $ 114,412
19,650 Centocor, Inc.* 606,694
11,950 Circon Corporation * 241,988
12,400 Immunex Corporation* 204,600
5,000 Martek Biosciences Corporation * 126,250
4,050 Nellcor, Inc.* 234,900
3,450 Occusystems, Inc. * 69,000
13,350 Sofamor/Danek Group, Inc. * 378,806
8,850 Sybron International Corporation * 210,187
3,700 Watson Pharmaceuticals * 181,300
----------
Total Healthcare 2,368,137
----------
Integrated Oil-0.7%
6,500 Cabot Oil & Gas Corporation 95,063
----------
Materials & Processing-9.4%
4,100 Dekalb Genetics Corporation 185,012
4,900 NCI Building Systems, Inc. * 121,275
6,400 Potash Corporation of Saskatchewan, Inc. 453,600
7,300 Vigoro Corporation 450,775
----------
Total Materials & Processing 1,210,662
----------
Other Energy-5.4%
4,550 Barrett Resources Corporation * 133,656
5,250 Energy Ventures, Inc. * 132,563
16,200 Falcon Drilling, Inc. * 243,000
8,200 Parker and Parsley Petroleum Company 180,400
---------
Total Other Energy 689,619
---------
</TABLE>
36
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
Producer Durables-6.5%
<S> <C> <C>
8,700 Greenfield Industries, Inc. $ 271,875
7,800 Sanifill, Inc. * 260,325
10,700 Titan Wheel International, Inc. 173,875
6,800 USA Waste Services, Inc. * 128,350
-----------
Total Producer Durables 834,425
-----------
Technology-14.7%
9,500 Black Box Operating Corporation * 155,562
7,300 Burr Brown Corporation * 186,150
9,700 Computervision Corporation * 149,137
6,850 Global Direct Mail Corporation * 188,375
8,150 International Rectifier Corporation * 203,750
6,300 National Computer Systems, Inc. 118,912
8,650 Pacific Scientific Companies 214,088
4,900 Pair Gain Technologies, Inc. * 268,275
6,100 PSC, Inc. * 56,425
8,300 Rational Software Corporation * 185,713
12,000 Westcott Communications * 165,000
-----------
Total Technology 1,891,387
-----------
Utilities-1.7%
5,300 California Energy Company, Inc.* 103,350
2,200 Tejas Gas Corporation * 116,325
-----------
Total Utilities 219,675
-----------
Total Common Stocks (Cost $8,089,018) 11,144,821
-----------
</TABLE>
37
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<S> <C> <C>
SHORT-TERM INVESTMENTS-16.6%
Repurchase Agreements-13.1%
$414,000 Barclays BZW Securities, dated 12/29/95, 5.50%, due 01/02/96 $ 414,000
in the amount of $414,000 (collateralized by $400,249 U.S. Treasury
Note, 7.50%, due 01/31/97, with a market value of $422,073 at
12/31/95), repurchase proceeds $414,253.
636,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due 01/02/96 636,000
in the amount of $636,000 (collateralized by $551,200 U.S. Treasury
Note, 7.25%, due 08/15/22, with a market value of $652,783 at
12/31/95), repurchase proceeds $636,406.
636,000 Merrill Lynch Government Securities, dated 12/29/95, 5.60%, due 636,000
01/02/96 in the amount of $639,180 (collateralized by $649,901
U.S. Treasury Note, 5.63%, due 10/31/97, with a market value of
$650,001 at 12/31/95), repurchase proceeds $636,396.
-----------
Total Repurchase Agreements 1,686,000
-----------
Number
of Shares
- --------- Short-Term Investment Funds-0.4%
26,000 Fidelity Institutional Cash Portfolios-U.S. Government Portfolio 26,000
24,350 Goldman Sachs-Institutional Liquid Assets-Government Portfolio 24,350
---------
Total Short-Term Investment Funds 50,350
---------
</TABLE>
38
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<S> <C> <C>
U.S. Government Obligation-3.1%
$400,000 U.S. Treasury Bill, 5.12%, due 03/21/96 $ 395,449
-----------
Total Short-Term Investments (Cost $2,131,799) 2,131,799
-----------
Total Investments (Cost $10,220,817)-103.3% 13,276,620
-----------
Liabilities in excess of other assets-(3.3%) (428,580)
-----------
NET ASSETS - 100% $12,848,040
===========
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
39
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $10,220,817) $13,276,620
Cash 439
Investment income receivable 5,075
Receivable for units issued 4,633
-----------
Total assets 13,286,767
-----------
LIABILITIES
Investments securities purchased 427,213
Management fee payable 10,339
Payable for units redeemed 1,175
-----------
Total liabilities 438,727
-----------
NET ASSETS $12,848,040
===========
Net assets were comprised of:
Units of beneficial interest $10,058,092
Accumulated net investment income 112,845
Accumulated net realized loss (378,700)
Net unrealized appreciation 3,055,803
-----------
Net assets at December 31, 1995 $12,848,040
===========
Unit value, offering price and redemp-
tion price per unit ($12,848,040 /
957,968 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $13.41
===========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 80,961
Interest 70,156
-----------
Total income 151,117
-----------
Expenses
Management fee (Note 2) 119,346
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 3,659
Legal fees 4,734
Registration fees 1,744
Shareholder reports 1,833
Miscellaneous 1,231
-----------
Total expenses 155,274
Expense subsidy (Note 3) (35,928)
Voluntary fee reduction (Note 3) (15,584)
-----------
Net expenses 103,762
-----------
Net investment income 47,355
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 370,797
Unrealized appreciation in value
of investments during the year 2,480,282
-----------
Net gain on investments 2,851,079
-----------
Net Increase in Net Assets
Resulting from Operations $2,898,434
===========
</TABLE>
The accompanying notes are an integral part of this statement.
40
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 47,355 $ 53,358
Net realized gain/(loss) on investments 370,797 (641,446)
Unrealized appreciation in value of
investments during the year 2,480,282 (262,884)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 2,898,434 (850,972)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 2,518,482 5,609,939
Cost of units redeemed (1,835,378) (5,330,322)
----------- -----------
Net increase in net assets resulting
from unit transactions 683,104 279,617
----------- -----------
Total increase/(decrease) in net assets 3,581,538 (571,355)
Net assets, beginning of year 9,266,502 9,837,857
----------- -----------
Net assets, end of year $12,848,040 $9,266,502
=========== ===========
Net Change in Units Outstanding
Units issued 215,639 535,483
Units redeemed (163,732) (532,454)
----------- -----------
51,907 3,029
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
41
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SMALL CAPITALIZATION FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout each of the periods indicated)
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993***
----------- --------- -----------
<S> <C> <C> <C>
Investment income $ 0.17 $ 0.16 $ 0.09
Expenses (0.16)** (0.15)** (0.17)#
Expense subsidy 0.04 0.05 0.10
------ ------ ------
Net investment income 0.05 0.06 0.02
Net realized and unrealized gain/(loss)
on investments 3.13 (0.72) 0.87
------ ------ ------
Net increase/(decrease) in net asset
value 3.18 (0.66) 0.89
Net asset value, beginning of period 10.23 10.89 10.00
------ ------ ------
Net asset value, end of period $13.41 $10.23 $10.89
====== ====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 1.00%* 1.00%* 1.15%##
Net investment income 0.46% 0.55% 0.28%+
OTHER:
Average net assets (000 omitted) $10,378 $9,678 $5,768
Portfolio turnover 89% 120% 161%
Number of units outstanding at
end of period (000 omitted) 958 906 903
Total return 31.14% (6.12%) 8.94%****
</TABLE>
- -------------------
+ Annualized
# Reflects voluntary fee waiver of $14,349 or $0.02 per unit. Without
voluntary fee waiver, expense per unit is $0.19.
## Does not reflect voluntary waiver of management fees of $14,349. Net of
the voluntary management fee waiver, the net expense ratio is 0.82% of
average net assets. This figure is annualized.
* Reflects management fee reduction of .15% or $15,584 and $9,153 for the
years ended December 31, 1995 and 1994 respectively. For the year ended
December 31, 1994 the actual net expense ratio for the year was 1.06% of
average net assets as the fee reduction went into effect on 5/2/94.
** Reflects management fee reduction of $15,584 or $0.02 per unit and $9,153
or $0.01 per unit for the years ended December 31, 1995 and 1994
respectively. Without management fee reduction, expense per unit is $0.17
and $0.16 for the years ended December 31, 1995 and 1994 respectively.
*** Commencement of Operations April 1, 1993.
**** Not annualized.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
42
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C>
INTERMEDIATE-TERM U.S. GOVERNMENT OBLIGATIONS-88.9%
U.S. Government Obligations-88.9%
$1,500,000 U.S. Treasury Note, 5.13%, due 04/30/98 $ 1,496,719
4,000,000 U.S. Treasury Note, 5.63%, due 01/31/98 4,032,500
5,000,000 U.S. Treasury Note, 5.75%, due 10/31/00 5,076,559
1,500,000 U.S. Treasury Note, 5.88%, due 06/30/00 1,530,938
3,000,000 U.S. Treasury Note, 6.00%, due 11/30/97 3,043,125
1,000,000 U.S. Treasury Note, 6.25%, due 08/31/00 1,035,000
1,000,000 U.S. Treasury Note, 6.50%, due 05/15/97 1,016,875
1,000,000 U.S. Treasury Note, 6.75%, due 04/30/00 1,052,500
3,800,000 U.S. Treasury Note, 7.13%, due 02/29/00 4,047,000
3,000,000 U.S. Treasury Note, 7.75%, due 11/30/99 3,250,311
-----------
Total U.S. Government Obligations 25,581,527
-----------
Total Long-Term U.S. Government Obligations (Cost $24,951,637) 25,581,527
-----------
SHORT-TERM INVESTMENT-1.8%
Repurchase Agreement-1.8%
507,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due 507,000
01/02/96 in the amount of $507,000 (collateralized by $583,050 -----------
U.S. Treasury Note, 7.25%, due 08/15/22, with a market value of
$520,379 at 12/31/95), repurchase proceeds $507,324.
</TABLE>
43
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- ------------- ---------
<C> <S> <C>
Short-Term Investment Fund-0.0%
$13,391 Goldman Sachs-Institutional Liquid Assets-Government Portfolio $ 13,391
-----------
Total Short-Term Investment (Cost $ 520,391) 520,391
-----------
Total Investments (Cost $25,472,028)-90.7% 26,101,918
Other assets in excess of liabilities-9.3% 2,681,409
-----------
NET ASSETS - 100% $28,783,327
===========
</TABLE>
The accompanying notes are an integral part of this statement.
44
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT
SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $25,472,028) $26,101,918
Cash 900
Investment income receivable 369,067
Receivable for units issued 2,334,942
-----------
Total assets 28,806,827
-----------
LIABILITIES
Management fee payable 16,632
Payable for units redeemed 6,868
-----------
Total liabilities 23,500
-----------
NET ASSETS $28,783,327
===========
Net assets were comprised of:
Units of beneficial interest $26,134,173
Accumulated net investment income 2,501,239
Accumulated net realized loss (481,975)
Net unrealized appreciation 629,890
-----------
Net assets at December 31, 1995 $28,783,327
===========
Unit value, offering price and redemp-
tion price per unit ($28,783,327 /
2,535,625 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $11.35
===========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT
SECURITIES FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 13,569
Interest 1,479,497
-----------
Total income 1,493,066
-----------
Expenses
Management fee (Note 2) 182,714
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 4,019
Legal fees 4,734
Registration fees 2,552
Shareholder reports 1,833
Miscellaneous 2,565
-----------
Total income 221,144
Expense subsidy (Note 3) (38,430)
-----------
Net expenses 182,714
-----------
Net investment income 1,310,352
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on securities 175,119
Net realized gain on options (2,738)
-----------
Net realized gain on investments 172,381
-----------
Unrealized appreciation in value of
investments during the year 1,250,842
-----------
Net gain on investments 1,423,223
-----------
Net Increase in Net Assets
Resulting from Operations $ 2,733,575
===========
</TABLE>
The accompanying notes are an integral part of this statement.
45
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT
SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 1,310,352 $ 948,222
Net realized gain/(loss) on investments 172,381 (593,298)
Unrealized appreciation/(depreciation)
in value of investments during the year 1,250,842 (576,673)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 2,733,575 (221,749)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 10,490,632 13,604,980
Cost of units redeemed (7,433,318) (7,782,147)
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions 3,057,314 5,822,833
----------- -----------
Total increase in net assets 5,790,889 5,601,084
Net assets, beginning of year 22,992,438 17,391,354
----------- -----------
Net assets, end of year $28,783,327 $22,992,438
=========== ===========
Net Change in Units Outstanding
Units issued 960,197 1,337,764
Units redeemed (693,274) (767,011)
----------- -----------
266,923 570,753
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
46
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT
SECURITIES FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout each of the periods indicated)
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993*
----------- --------- -----------
<S> <C> <C> <C>
Investment income $ 0.66 $ 0.52 $ 0.33
Expenses (0.10) (0.09) (0.11)#
Expense subsidy 0.02 0.02 0.07
------ ------ ------
Net investment income 0.58 0.45 0.29
Net realized and unrealized gain/(loss)
on investments 0.63 (0.55) (0.05)
------ ------ ------
Net increase/(decrease) in net asset
value 1.21 (0.10) 0.24
Net asset value, beginning of period 10.14 10.24 10.00
------ ------ ------
Net asset value, end of period $11.35 $10.14 $10.24
====== ====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 0.75% 0.75% 0.75%##
Net investment income 5.38% 4.41% 3.76%**
OTHER:
Average net assets (000 omitted) $24,350 $21,504 $ 8,598
Portfolio turnover 187% 268% 247%
Number of units outstanding at
end of period (000 omitted) 2,536 2,269 1,698
Total return 12.01% (1.05%) 2.43%***
</TABLE>
- -------------------
# Reflects voluntary fee waiver of $9,789 or $0.02 per unit. Without
voluntary fee waiver, expense per unit is $0.13.
## Does not reflect voluntary waiver of management fees of $9,789. Net of
the voluntary management fee waiver, the net expense ratio is 0.60% of
average net assets. This figure is annualized.
* Commencement of Operations April 1, 1993.
** Annualized.
*** Not annualized.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
47
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ----------
<S> <C> <C>
LONG-TERM U.S. GOVERNMENT OBLIGATION-86.6%
$2,425,000 U.S. Treasury Bond, 6.25%, due 08/15/23 $2,492,446
----------
Total Long-Term U.S. Government Obligation (Cost $2,113,930) 2,492,446
----------
SHORT-TERM INVESTMENTS-11.4%
Repurchase Agreements-11.4%
72,000 Barclays BZW Securities, dated 12/29/95, 5.50%, due 01/02/96 72,000
in the amount of $72,000 (collateralized by $69,609 U.S. Treasury
Note, 7.50%, due 01/31/97 with a market value of $73,404 at
12/31/95), repurchase proceeds $72,044.
128,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due 128,000
01/02/96 in the amount of $128,000 (collateralized by $110,933
U.S. Treasury Note, 7.25%, due 08/15/22, with a market value of
$131,378 at 12/31/95), repurchase proceeds $128,082.
128,000 Merrill Lynch Government Securities, dated 12/29/95, 5.60%, due 128,000
01/02/96 in the amount of $128,000 (collateralized by $128,640
U.S. Treasury Note, 5.63%, due 10/31/97, with a market value of
$130,818 at 12/31/95), repurchase proceeds $128,080.
----------
Total Repurchase Agreements 328,000
----------
Total Short-Term Investments (Cost $328,000) 328,000
----------
Total Investments (Cost $2,441,930)-98.0% 2,820,446
Other assets in excess of liabilities-2.0% 56,843
----------
NET ASSETS - 100% $2,877,289
==========
</TABLE>
The accompanying notes are an integral part of this statement.
48
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $2,441,930) $2,820,446
Cash 879
Investment income receivable 57,402
Receivable for units issued 368
----------
Total assets 3,879,095
----------
LIABILITIES
Management fee payable 1,806
----------
Total liabilities 1,806
----------
NET ASSETS $2,877,289
==========
Net assets were comprised of:
Units of beneficial interest $2,337,502
Accumulated net investment income 407,069
Accumulated net realized loss (245,798)
Net unrealized appreciation 378,516
----------
Net assets at December 31, 1995 $2,877,289
==========
Unit value, offering price and redemp-
tion price per unit ($2,877,289 /
221,200 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $13.01
==========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 2,826
Interest 177,876
----------
Total income 180,702
----------
Expenses
Management fee (Note 2) 21,549
Accounting fees 9,720
Audit fees 10,719
Legal fees 4,734
Insurance 3,299
Registration fees 1,286
Shareholder reports 1,833
Directors' fees 2,288
Miscellaneous 770
----------
Total expenses 56,198
Expense subsidy (Note 3) (34,649)
Voluntary fee reduction (Note 3) (2,527)
----------
Net expenses 19,022
----------
Net investment income 161,680
----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 23,350
Unrealized appreciation in value
of investments during the year 494,639
----------
Net gain on investments 517,989
----------
Net Increase in Net Assets
Resulting from Operations $ 679,669
==========
</TABLE>
The accompanying notes are an integral part of this statement.
49
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 161,680 $ 175,147
Net realized gain/(loss) on investments 23,350 (294,113)
Unrealized appreciation/(depreciation)
in value of investments during the year 494,639 (139,310)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 679,669 (258,276)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 1,036,585 1,052,752
Cost of units redeemed (1,467,055) (1,082,703)
----------- -----------
Net decrease in net assets resulting
from unit transactions (430,470) (29,951)
----------- -----------
Total increase/(decrease) in net assets 249,199 (288,227)
Net assets, beginning of year 2,628,090 2,916,317
----------- -----------
Net assets, end of year $ 2,877,289 $ 2,628,090
=========== ===========
Net Change in Units Outstanding
Units issued 87,397 102,673
Units redeemed (129,083) (107,041)
----------- -----------
(41,686) (4,368)
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
50
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
U.S. GOVERNMENT SECURITIES FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout each of the periods indicated)
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993***
----------- --------- -----------
<S> <C> <C> <C>
Investment income $ 0.81 $ 0.70 $ 0.45
Expenses (0.24)** (0.23)** (0.36)#
Expense subsidy 0.16 0.15 0.31
------ ------ ------
Net investment income 0.73 0.62 0.40
Net realized and unrealized gain/(loss)
on investments 2.28 (1.53) 0.51
------ ------ ------
Net increase/(decrease) in net asset
value 3.01 (0.91) 0.91
Net asset value, beginning of period 10.00 10.91 10.00
------ ------ ------
Net asset value, end of period $13.01 $10.00 $10.91
====== ====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 0.75%* 0.75%* 0.85%##
Net investment income 6.38% 6.23% 4.91%+
OTHER:
Average net assets (000 omitted) $ 2,535 $ 2,810 $ 1,905
Portfolio turnover 17% 174% 232%
Number of units outstanding at
end of period (000 omitted) 221 263 267
Total return 30.11% (8.39%) 9.12%****
</TABLE>
- -------------------
+ Annualized.
# Reflects voluntary fee waiver of $3,040 or $0.02 per unit. Without
voluntary waiver, expense per unit is $0.38.
## Does not reflect voluntary waiver of management fees of $3,040. Net of
the voluntary management fee waiver, the net expense ratio is 0.64% of
average net assets. This figure is annualized.
* Reflects management fee reduction of .10% or $2,527 and $1,886 for the
years ended December 31, 1995 and 1994, respectively. For the year ended
December 31, 1994 the actual net expense ratio for the year was .80% of
average net assets as the fee reduction went into effect on 5/2/94.
** Reflects management fee reduction of $2,527 or $0.01 per unit and $1,886 or
$0.01 per unit for the years ended December 31, 1995 and 1994
respectively. Without management fee reduction, expense per unit is $0.25
and $0.24 for the years ended December 31, 1995 and 1994 respectively.
*** Commencement of Operations April 1, 1993.
**** Not annualized.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
51
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INTERMEDIATE TERM BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------- -------------
<S> <C> <C>
LONG-TERM INVESTMENTS-86.7%
Corporate Bonds-17.9%
Bank-3.1%
$150,000 BankAmerica Corporation, 6.85%, due 03/01/03 $155,598
-------------
Financial & Other-11.9%
150,000 Associates Corporation of North America, 7.70%, due 03/01/02 162,587
134,772 General Motors Acceptance Corporation, 7.15%, due 03/15/00 137,254
150,000 U.S. Leasing International, 5.95%, due 10/15/03 146,877
150,000 U.S. West Capital Funding, 6.43%, due 12/12/05 149,900
-------------
Total Financial & Other 596,618
-------------
Financial Services-2.9%
150,000 Commercial Credit Corporation, 6.13%, due 12/01/05 148,560
-------------
Total Corporate Bonds (Cost $872,290) 900,776
-------------
U.S. Government and Agency Obligations-68.8%
U.S. Government Agency Obligations-9.9%
100,000 Federal Home Loan Bank, 6.05%, due 06/28/00 101,907
400,000 Federal Home Loan Mortgage Corporation, 5.50%, due 12/15/00 397,125
-------------
Total U.S. Government Agency Obligations 499,032
-------------
</TABLE>
52
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INTERMEDIATE TERM BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------- -------------
<S> <C> <C>
U.S. Treasury Obligations-58.9%
$ 720,000 U.S. Treasury Note, 6.38%, due 08/15/02 $ 756,450
1,195,000 U.S. Treasury Note, 7.25%, due 08/15/04 1,329,063
645,000 U.S. Treasury Note, 7.75%, due 01/31/00 700,832
165,000 U.S. Treasury Note, 7.88%, due 04/15/98 174,281
-------------
Total U.S. Treasury Obligations 2,960,626
-------------
Total U.S. Government and Agency Obligations (Cost $3,366,682) 3,459,658
-------------
Total Long-Term Investments (Cost $4,238,972) 4,360,434
-------------
SHORT-TERM INVESTMENTS-19.5%
Repurchase Agreements-13.4%
225,000 Barclays BZW Securities, dated 12/29/95, 5.50%, due 01/02/96 in 225,000
the amount of $225,000 (collateralized by $217,527 U.S. Treasury
Note, 7.50%, due 01/31/97, with a market value of $229,387 at
12/31/95), repurchase proceeds $225,138.
225,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due 225,000
01/02/96 in the amount of $225,000 (collateralized by $195,000
U.S. Treasury Note, 7.25%, due 08/15/22, with a market value of
$230,937 at 12/31/95), repurchase proceeds $225,144.
225,000 Merrill Lynch Government Securities, dated 12/29/95, 5.60%, due 225,000
01/02/96 in the amount of $225,000 (collateralized by $226,125
U.S. Treasury Note, 5.63%, due 10/31/97, with a market value of
$229,953 at 12/31/95), repurchase proceeds $225,140.
-------------
Total Repurchase Agreements 675,000
-------------
Number of
Shares Short-Term Investment Funds-4.9%
- ----------
225,000 Fidelity Institutional Cash Portfolios-U.S. Government Portfolio 225,000
22,826 Goldman Sachs-Institutional Liquid Assets-Government Portfolio 22,826
-------------
Total Short-Term Investment Funds 247,826
-------------
</TABLE>
53
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INTERMEDIATE TERM BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------- -------------
<S> <C> <C>
U.S. Government Obligations-1.2%
$ 50,000 U.S. Treasury Bill, 4.43%, due 01/18/96 $49,895
10,000 U.S. Treasury Bill, 5.89%, due 05/02/96 # 9,823
-------------
Total U.S. Government Obligations 59,718
-------------
Total Short-Term Investments (Cost $982,544) 982,544
-------------
Total Investments (Cost $5,221,516)-106.2%" 5,342,978
Liabilities in excess of other assets-(6.2%) (312,297)
-------------
NET ASSETS-100% $5,030,681
=============
</TABLE>
# Security is held as collateral (pledged amount is $10,000) for futures
contracts and is restricted as to resale." The accompanying notes are an
integral part of this statement.
54
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INTERMEDIATE TERM BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments, at value (cost $5,221,516) $5,342,978
Cash 802
Investment income receivable 85,258
Receivable for units issued 2,089
----------
Total assets 5,431,127
----------
LIABILITIES
Investments purchased payable 397,206
Management fee payable 3,184
Payable for units redeemed 56
----------
Total liabilities 400,446
----------
NET ASSETS $5,030,681
==========
Net assets were comprised of:
Units of beneficial interest $4,134,744
Accumulated net investment income 427,832
Accumulated net realized gain 346,643
Net unrealized appreciation 121,462
----------
Net assets at December 31, 1995 $5,030,681
==========
Unit value, offering price and redemp-
tion price per unit ($5,030,681 /
431,038 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $11.67
==========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INTERMEDIATE TERM BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 14,909
Interest 381,561
-------
Total income 396,470
-------
Expenses
Management fee (Note 2) 44,818
Accounting fees 9.720
Audit fees 10,719
Legal fees 11,283
Insurance 3,539
Registration fees 978
Shareholder reports 1,833
Directors' fees 2,288
Miscellaneous 489
-------
Total expenses 85,667
Expense subsidy (Note 3) (40,849)
-------
Net expenses 44,818
Net investment income 351,652
-------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 350,978
Unrealized appreciation in value
of investments during the year 196,223
-------
Net gain on investments 547,201
-------
Net Increase in Net Assets
Resulting from Operations $898,853
========
</TABLE>
The accompanying notes are an integral part of this statement.
55
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INTERMEDIATE TERM BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------
Increase/(Decrease) in Net Assets 1995 1994*
-------- --------
<S> <C> <C>
FROM OPERATIONS
Net investment income $351,652 $76,180
Net realized gain/(loss) on investments 350,978 (4,335)
Unrealized appreciation/(depreciation) in value
of investments during the period 196,223 (74,761)
---------- ----------
Net increase/(decrease) in net assets
resulting from operations 898,853 (2,916)
---------- ----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 2,335,347 5,127,181
Cost of units redeemed (3,327,720) (74)
---------- ----------
Net increase/(decrease) in net assets resulting
from unit transactions (992,373) 5,127,107
---------- ----------
Total increase/(decrease) in net assets (93,520) 5,124,191
Net assets, beginning of period 5,124,201 10
---------- ----------
Net assets, end of period $5,030,681 $5,124,201
========== ==========
Net Change in Units Outstanding
Units issued 212,880 512,836
Units redeemed (294,670) (7)
---------- ----------
(81,790) 512,829
========== ==========
</TABLE>
*Commencement of Operations October 3,1994.
The accompanying notes are an integral part of this statement.
56
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
INTERMEDIATE TERM BOND FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout the period indicated)
<TABLE>
<CAPTION>
Years ended December 31,
-----------------------
SELECTED PER UNIT DATA: 1995 1994*
--------- ----------
<S> <C> <C>
Investment income $0.72 $0.17
Expenses (0.16) (0.08)
Expense subsidy 0.08 0.06
--------- ----------
Net investment income 0.64 0.15
Net realized and unrealized gain/(loss)
on investments 1.04 (0.16)
--------- ----------
Net increase/(decrease) in net asset value 1.68 (0.01)
Net asset value, beginning of period 9.99 10.00
--------- ----------
Net asset value, end of period $11.67 $9.99
========= ==========
RATIO TO AVERAGE NET ASSETS:
Expenses 0.75% 0.75%**
Net investment income 5.89% 6.12%**
OTHER:
Average net assets (000 omitted) $5,973 $5,046
Portfolio turnover 198% 7%
Number of units outstanding at
end of period (000 omitted) 431 513
Total return 16.79% (0.32%)**
</TABLE>
* Commencement of Operations October 3, 1994.
** Annualized
Per unit amounts are calculated using average units outstanding for the
period.
The accompanying notes are an integral part of this statement.
57
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<C> <S> <C>
LONG-TERM INVESTMENTS-73.1%
Common Stocks-20.5%
Auto & Transportation-0.7%
200 AMR Corporation* $ 14,850
200 Chrysler Corporation 11,075
250 General Motors Corporation 13,219
--------
Total Auto & Transportation 39,144
--------
Consumer Discretionary-2.5%
200 Disney (Walt) Company 11,800
300 Eastman Kodak Company 20,100
550 Federated Department Stores* 15,125
500 Mattel, Inc. 15,375
400 McDonalds Corporation 18,050
850 News Corporation, Ltd. 18,169
300 Tambrands, Inc. 14,325
850 Wal Mart Stores, Inc. 19,019
--------
Total Consumer Discretionary 131,963
--------
Consumer Staples-2.0%
300 Clorox Company 21,488
300 Coca Cola Company 22,275
250 Philip Morris Companies, Inc. 22,625
550 Sara Lee Corporation 17,531
650 Sysco Corporation 21,125
--------
Total Consumer Staples 105,044
--------
Financial Services-2.7%
550 American Express Company 22,756
200 American International Group, Inc. 18,500
200 Federal National Mortgage Association 24,825
300 MBIA, Inc. 22,500
400 Student Loan Marketing Association 26,350
450 Travelers Corporation 28,294
--------
Total Financial Services 143,225
--------
</TABLE>
58
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<C> <S> <C>
Healthcare-1.9%
250 American Home Products Corporation $ 24,250
200 Bristol-Myers Squibb Company 17,175
400 Columbia HCA/Healthcare 20,300
600 Humana, Inc.* 16,425
400 Merck & Company, Inc. 26,300
--------
Total Healthcare 104,450
--------
Integrated Oils-1.8%
400 Amoco Corporation 28,750
200 British Petroleum Company PLC 20,425
300 Exxon Corporation 24,038
200 Mobil Corporation 22,400
--------
Total Integrated Oils 95,613
--------
Materials & Processing-2.2%
400 Dover Corporation 14,750
200 Dow Chemical Company 14,075
300 Dupont (E.I.) de Nemours & Company 20,962
700 James River Corporation of Virginia 16,887
350 Kimberly Clark Corporation 28,963
300 Minnesota Mining & Manufacturing Company 19,875
--------
Total Materials & Processing 115,512
--------
Other Energy-0.7%
650 Panhandle Eastern Corporation 18,119
400 Tenneco, Inc. 19,850
--------
Total Other Energy 37,969
--------
Producer Durables-1.3%
400 Allied Signal, Inc. 19,000
300 Emerson Electric Company 24,525
400 General Electric Company 28,800
--------
Total Producer Durables 72,325
--------
</TABLE>
59
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<C> <S> <C>
Technology-2.1%
450 Ceridian Corporation* $ 18,563
150 Hewlett Packard Company 12,562
300 Intel Corporation 17,025
200 International Business Machines
Corporation 18,350
150 Microsoft Corporation* 13,162
300 Motorola, Inc. 17,100
125 Xerox Corporation 17,125
----------
Total Technology 113,887
----------
Utilities-2.6%
350 AT&T Company 22,662
550 GTE Corporation 24,200
650 Nipsco Industries, Inc. 24,863
400 QUALCOMM, Inc.* 17,200
400 SBC Communications, Inc. 23,000
750 WorldCom, Inc.* 26,437
----------
Total Utilities 138,362
----------
Total Common Stocks (Cost $982,937) 1,097,494
----------
Principal
Amount Corporate Bonds-10.3%
- ---------
Bank-5.0%
$260,000 BankAmerica Corporation, 6.85%,
due 03/01/03 269,703
---------
Financial & Other-5.3%
260,000 Associates Corporation of North America,
7.70%, due 03/01/02 281,817
---------
Total Corporate Bonds (Cost $522,102) 551,520
---------
</TABLE>
60
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<C> <S> <C>
U.S. Government and Agency Obligations-42.3%
U.S. Government Agency Obligation-2.8%
$150,000 Federal Home Loan Bank, 6.05%, due 06/28/00 $ 152,860
-----------
U.S. Government Obligations-39.5%
695,000 U.S. Treasury Note, 7.00%, due 04/15/99 730,401
630,000 U.S. Treasury Note, 7.25%, due 08/15/04 700,678
475,000 U.S. Treasury Note, 7.88%, due 04/15/98 501,719
170,000 U.S. Treasury Note, 9.25%, due 08/15/98 186,363
-----------
Total U.S. Government Obligations 2,119,161
-----------
Total U.S. Government and Agency Obligations
(Cost $2,192,793) 2,272,021
-----------
Total Long-Term Investments (Cost $3,697,832) 3,921,035
-----------
SHORT-TERM INVESTMENTS-26.0%
Repurchase Agreements-6.4%
8,000 Barclays BZW Securities, dated 12/29/95, 5.50%, 18,000
due 01/02/96 in the amount of $18,000
(collateralized by $17,402 U.S. Treasury Note,
7.50%, due 01/31/97, with a market value of
$18,351 at 12/31/95), repurchase proceeds $18,011.
241,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, 241,000
due 01/02/96 in the amount of $241,000
(collateralized by $208,867 U.S. Treasury Note,
7.25%, due 08/15/22, with a market value of
$247,359 at 12/31/95), repurchase proceeds $241,154.
85,000 Merrill Lynch Government Securities, dated 12/29/95, 85,000
5.60%, due 01/02/96 in the amount of $85,000
(collateralized by $85,425 U.S. Treasury Note,
5.63%, due 10/31/97, with a market value of
$86,871 at 12/31/95), repurchase proceeds $85,053.
---------
Total Repurchase Agreements 344,000
---------
</TABLE>
61
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<C> <S> <C>
Short-Term Investment Funds--5.5%
240,000 Fidelity Institutional Cash Portfolios--U.S. Government Portfolio $ 240,000
56,165 Goldman Sachs - Institutional Liquid Assets - Government Portfolio 56,165
----------
Total Short-Term Investment Funds 296,165
----------
Principal
Amount U.S. Government Obligation-14.1%
- ---------
$760,000 U.S. Treasury Bill, 4.43%, due 01/18/96 758,094
----------
Total Short-Term Investments (Cost $1,398,259) 1,398,259
----------
Total Investments (Cost $5,096,091)-99.1% 5,319,294
----------
Other assets in excess of liabilities-0.9% 49,689
----------
NET ASSETS - 100% $5,368,983
==========
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
62
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER--INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $5,096,091) $5,319,294
Cash 987
Investment income receivable 53,408
Receivable for units issued 306
----------
Total assets 5,373,995
----------
LIABILITIES
Management fee payable 5,012
----------
Total liabilities 5,012
----------
NET ASSETS $5,368,983
==========
Net assets were comprised of:
Units of beneficial interest $3,780,106
Accumulated net investment income 590,624
Accumulated net realized gain 775,050
Net unrealized appreciation 223,203
----------
Net assets at December 31, 1995 $5,368,983
==========
Unit value, offering price and redemp-
tion price per unit ($5,368,983 /
466,586 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $11.51
==========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER--INCOME FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 74,617
Interest 521,046
----------
Total income 595,663
----------
Expenses
Management fee (Note 2) 116,580
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 3,659
Legal fees 11,283
Registration fees 1,009
Shareholder reports 1,833
Miscellaneous 650
----------
Total expenses 157,741
Expense subsidy (Note 3) (41,161)
----------
Net expenses 116,580
----------
Net investment income 479,083
----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 808,803
Unrealized appreciation in value
of investments during the year 307,656
----------
Net gain on investments 1,116,459
----------
Net Increase in Net Assets
Resulting from Operations $1,595,542
==========
</TABLE>
The accompanying notes are an integral part of this statement.
63
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER--INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994*
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $479,083 $111,541
Net realized gain/(loss) on investments 808,803 (33,753)
Unrealized appreciation/(depreciation)
in value of investments during the period 307,656 (84,452)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 1,595,542 (6,664)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 13,404,622 11,073,483
Cost of units redeemed (19,276,354) (1,421,656)
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions (5,871,732) 9,651,827
----------- -----------
Total increase/(decrease) in net assets (4,276,190) 9,645,163
Net assets, beginning of period 9,645,173 10
----------- -----------
Net assets, end of period $ 5,368,983 $ 9,645,173
=========== ===========
Net Change in Units Outstanding
Units issued 1,270,206 1,113,034
Units redeemed (1,770,961) (145,695)
----------- -----------
(500,755) 967,339
=========== ===========
</TABLE>
* Commencement of Operations October 3, 1994.
The accompanying notes are an integral part of this statement.
64
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER--INCOME FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout each of the years indicated)
<TABLE>
<CAPTION>
Years ended December 31,
--------------------------
SELECTED PER UNIT DATA: 1995 1994*
----------- ---------
<S> <C> <C>
Investment income $ 0.60 $ 0.15
Expenses (0.16) (0.06)
Expense subsidy 0.04 0.03
------ ------
Net investment income 0.48 0.12
Net realized and unrealized gain/(loss)
on investments 1.06 (0.15)
------ ------
Net increase/(decrease) in net asset
value 1.54 (0.03)
Net asset value, beginning of period 9.97 10.00
------ ------
Net asset value, end of period $11.51 $ 9.97
====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 1.10% 1.10%**
Net investment income 4.52% 4.77%**
OTHER:
Average net assets (000 omitted) $10,590 $9,491
Portfolio turnover 278% 15%
Number of units outstanding at
end of period (000 omitted) 467 967
Total return 15.41% (1.22%)
</TABLE>
- -------------------
* Commencement of Operations October 3, 1994.
** Annualized
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
65
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<C> <S> <C>
LONG-TERM INVESTMENTS-77.2%
Common Stocks-42.1%
Auto & Transportation-1.6%
500 AMR Corporation* $ 37,125
500 Chrysler Corporation 27,688
550 General Motors Corporation 29,081
--------
Total Auto & Transportation 93,894
--------
Consumer Discretionary-4.7%
400 Disney (Walt) Company 23,600
400 Eastman Kodak Company 26,800
1,600 Federated Department Stores* 44,000
1,250 Mattel, Inc. 38,437
750 McDonalds Corporation 33,844
1,750 News Corporation, Ltd. 37,406
900 Tambrands, Inc. 42,975
1,500 Wal Mart Stores, Inc. 33,562
--------
Total Consumer Discretionary 280,624
--------
Consumer Staples-4.1%
750 Clorox Company 53,719
600 Coca Cola Company 44,550
550 Philip Morris Companies, Inc. 49,775
1,350 Sara Lee Corporation 43,031
1,650 Sysco Corporation 53,625
--------
Total Consumer Staples 244,700
--------
</TABLE>
66
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<C> <S> <C>
Financial Services-5.3%
1,000 American Express Company $ 41,375
500 American International Group, Inc. 46,250
450 Federal National Mortgage Association 55,856
700 MBIA, Inc. 52,500
850 Student Loan Marketing Association 55,994
1,000 Travelers Corporation 62,875
--------
Total Financial Services 314,850
--------
Healthcare-4.4%
650 American Home Products Corporation 63,050
650 Bristol-Myers Squibb Company 55,819
950 Columbia HCA/Healthcare 48,212
1,500 Humana, Inc. 41,062
750 Merck & Company, Inc. 49,312
--------
Total Healthcare 257,455
--------
Integrated Oils-4.1%
850 Amoco Corporation 61,094
600 British Petroleum Company PLC 61,275
700 Exxon Corporation 56,088
550 Mobil Corporation 61,600
--------
Total Integrated Oils 240,057
--------
Materials & Processing-4.2%
1,000 Dover Corporation 36,875
600 Dow Chemical Company 42,225
500 Dupont (E.I.) De Nemours & Company 34,938
1,400 James River Corporation of Virginia 33,775
750 Kimberly Clark Corporation 62,063
600 Minnesota Mining & Manufacturing Company 39,750
--------
Total Materials & Processing 249,626
--------
</TABLE>
67
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<C> <S> <C>
Other Energh--1.2%
1,000 Panhandle Eastern Corporation $ 27,875
850 Tenneco, Inc. 42,181
----------
Total Other Energy 70,056
----------
Producer Durables-2.5%
850 Allied Signal, Inc. 40,375
600 Emerson Electric Company 49,050
850 General Electric Company 61,200
----------
Total Producer Durables 150,625
----------
Technology-4.6%
1,000 Ceridian Corporation* 41,250
300 Hewlett Packard Company 25,125
600 Intel Corporation 34,050
400 International Business Machines Corporation 36,700
350 Microsoft Corporation* 30,713
600 Motorola, Inc. 34,200
1,000 Silicon Graphics, Inc. 27,500
300 Xerox Corporation 41,100
----------
Total Technology 270,638
----------
Utilities-5.4%
850 AT&T Company 55,038
1,500 GTE Corporation 66,000
1,350 Nipsco Industries, Inc. 51,638
850 QUALCOMM, Inc.* 36,550
1,000 SBC Communications, Inc. 57,500
1,500 WorldCom, Inc.* 52,875
----------
Total Utilities 319,601
----------
Total Common Stocks (Cost $2,235,113) 2,492,126
----------
</TABLE>
68
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<C> <S> <C>
Corporate Bonds-2.2%
Bank-1.1%
$ 60,000 BankAmerica Corporation, 6.85%, due 03/01/03 $ 62,239
----------
Financial & Other-1.1%
60,000 Associates Corporation of North America, 7.70%, due 03/01/02 65,035
----------
Total Corporate Bonds (Cost $120,485) 127,274
----------
U. S. Government and Agency Obligations-32.9%
U. S. Government Agency Obligation-2.6%
150,000 Federal Home Loan Bank Corporation, 6.05%, due 06/28/00 152,860
----------
U.S. Government Obligations-30.3%
500,000 U.S. Treasury Note, 6.38%, due 08/15/02 525,312
270,000 U.S. Treasury Note, 7.25%, due 08/15/04 300,290
225,000 U.S. Treasury Note, 7.75%, due 01/31/00 244,476
525,000 U.S. Treasury Note, 7.88%, due 04/15/98 554,531
150,000 U.S. Treasury Note, 8.50%, due 11/15/00 169,922
----------
Total U.S. Government Obligations 1,794,531
----------
Total U.S. Government and Agency Obligations (Cost $1,897,962) 1,947,391
----------
Total Long-Term Investments (Cost $4,253,560) 4,566,791
----------
</TABLE>
69
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<C> <S> <C>
SHORT-TERM INVESTMENTS-22.1%
Repurchase Agreements-4.2%
$ 7,000 Barclays BZW Securities, dated 12/29/95, 5.50%, due 01/02/96 in $ 7,000
the amount of $7,000 (collateralized by $6,767 U.S. Treasury
Note, 7.50%, due 01/31/97, with a market value of $7,136 at
12/31/95), repurchase proceeds $7,004.
245,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due 245,000
01/02/96 in the amount of $245,000 (collateralized by $212,333
U.S. Treasury Note, 7.25%, due 08/15/22, with a market value of
$251,465 at 12/31/95), repurchase proceeds $245,157.
----------
Total Repurchase Agreements 252,000
----------
Number
of Shares Short-Term Investment Funds-3.5%
- ---------
180,000 Fidelity-Institutional Cash Portfolio-Government Portfolio 180,000
28,497 Goldman Sachs-Institutional Liquid Assets-Government Portfolio 28,497
----------
Total Short-Term Investment Funds 208,497
----------
Principal
Amount U.S. Government Obligation-14.4%
- ---------
$850,000 U.S. Treasury Bill, 5.29%, due 01/04/96 849,626
----------
Total Short-Term Investments (Cost $1,310,123) 1,310,123
----------
Total Investments (Cost $5,563,683)-99.3% 5,876,914
----------
Other assets in excess of liabilities-0.7% 39,846
----------
NET ASSETS - 100% $5,916,760
==========
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
70
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $5,563,683) $5,876,914
Cash 105
Investment income receivable 44,907
Receivable for units issued 344
----------
Total assets 5,922,270
----------
LIABILITIES
Management fee payable 5,510
-----------
Total liabilities 5,510
-----------
NET ASSETS $5,916,760
==========
Net assets were comprised of:
Units of beneficial interest $4,621,012
Accumulated net investment income 348,800
Accumulated net realized gain 633,717
Net unrealized appreciation 313,231
----------
Net assets at December 31, 1995 $5,916,760
==========
Unit value, offering price and redemp-
tion price per unit ($5,916,760 /
506,458 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $11.68
==========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RKS MANAGER-BALANCED FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 79,188
Interest 312,919
----------
Total income 392,107
----------
Expenses
Management fee (Note 2) 92,979
Accounting fees 9,720
Audit fees 10,719
Directors' fees 2,288
Insurance 3,539
Legal fees 11,283
Registration fees 972
Shareholder reports 1,833
Miscellaneous 546
----------
Total expenses 133,879
Expense subsidy (Note 3) (40,900)
----------
Net expenses 92,979
----------
Net investment income 299,128
----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 665,885
Net realized gain on futures 2,053
Net realized gain on options 4,424
----------
Net realized gain on investments 672,362
Unrealized appreciation in value
of investments during the year 356,487
----------
Net gain on investments 1,028,849
----------
Net Increase in Net Assets
Resulting from Operations $1,327,977
==========
</TABLE>
The accompanying notes are an integral part of this statement.
71
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994*
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 299,128 $ 49,672
Net realized gain/(loss) on investments 672,362 (38,645)
Unrealized appreciation/(depreciation)
in value of investments during the period 356,487 (43,256)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 1,327,977 (32,229)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 14,814,714 5,130,255
Cost of units redeemed (15,323,567) (400)
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions (508,853) 5,129,855
----------- -----------
Total increase in net assets 819,124 5,097,626
Net assets, beginning of period 5,097,636 10
----------- -----------
Net assets, end of period $ 5,916,760 $ 5,097,636
=========== ===========
Net Change in Units Outstanding
Units issued 1,379,553 513,150
Units redeemed (1,386,206) (40)
----------- -----------
(6,653) 513,110
=========== ===========
</TABLE>
* Commencement of Operations October 3, 1994.
The accompanying notes are an integral part of this statement.
72
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-BALANCED FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout the period indicated)
<TABLE>
<CAPTION>
Years ended December 31,
--------------------------
SELECTED PER UNIT DATA: 1995 1994*
----------- ---------
<S> <C> <C>
Investment income $ 0.50 $ 0.13
Expenses (0.17) (0.09)
Expense subsidy 0.05 0.06
------ ------
Net investment income 0.38 0.10
Net realized and unrealized gain/(loss)
on investments 1.36 (0.16)
------ ------
Net increase/(decrease) in net asset
value 1.74 (0.06)
Net asset value, beginning of period 9.94 10.00
------ ------
Net asset value, end of period $11.68 $ 9.94
====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 1.10% 1.10%**
Net investment income 3.54% 3.99%**
OTHER:
Average net assets (000 omitted) $8,456 $5,051
Portfolio turnover 337% 17%
Number of units outstanding at
end of period (000 omitted) 506 513
Total return 17.59% (2.64%)
</TABLE>
- -------------------
* Commencement of Operations October 3, 1994.
** Annualized
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
73
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
LONG-TERM INVESTMENTS-80.9%
Common Stocks-55.6%
Auto & Transportation-2.1%
250 AMR Corporation* $ 18,563
300 Chrysler Corporation 16,613
300 General Motors Corporation 15,863
--------
Total Auto & Transportation 51,039
--------
Consumer Discretionary-6.4%
250 Disney (Walt) Company 14,750
350 Eastman Kodak Company 23,450
750 Federated Department Stores* 20,625
600 McDonalds Corporation 27,075
550 Sears Roebuck & Company 21,450
500 Tambrands, Inc. 23,875
1,000 Wal Mart Stores, Inc. 22,375
--------
Total Consumer Discretionary 153,600
--------
Consumer Staples-5.4%
350 Clorox Company 25,069
350 Coca Cola Company 25,987
250 Philip Morris Companies, Inc. 22,625
750 Sara Lee Corporation 23,906
1,000 Sysco Corporation 32,500
--------
Total Consumer Staples 130,087
--------
Financial Services-7.0%
500 American Express Company 20,687
300 American International Group, Inc. 27,750
250 Federal National Mortgage Association 31,031
300 MBIA, Inc. 22,500
500 Student Loan Marketing Association 32,938
500 Travelers Corporation 31,438
--------
Total Financial Services 166,344
--------
</TABLE>
74
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----
<S> <C> <C>
Healthcare-6.1%
300 American Home Products Corporation $ 29,100
350 Bristol-Myers Squibb Company 30,056
500 Columbia HCA/Healthcare 25,375
1,150 Humana, Inc.* 31,481
450 Merck & Company, Inc. 29,587
--------
Total Healthcare 145,599
--------
Integrated Oils-5.2%
450 Amoco Corporation 32,344
300 British Petroleum Company PLC 30,637
350 Exxon Corporation 28,044
300 Mobil Corporation 33,600
--------
Total Integrated Oils 124,625
--------
Materials & Processing-5.5%
600 Dover Corporation 22,125
300 Dow Chemical Company 21,112
250 Dupont (E.I.) De Nemours & Company 17,469
800 James River Corporation of Virginia 19,300
300 Kimberly Clark Corporation 24,825
400 Minnesota Mining & Manufacturing Company 26,500
--------
Total Materials & Processing 131,331
--------
Other Energy-1.6%
600 Panhandle Eastern Corporation 16,725
450 Tenneco, Inc. 22,331
--------
Other Energy 39,056
--------
</TABLE>
75
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number
of Shares Value
- --------- -----
<S> <C> <C>
Producer Durables-3.6%
600 Allied Signal, Inc. $ 28,500
400 Emerson Electric Company 32,700
350 General Electric Company 25,200
----------
Total Producer Durables 86,400
----------
Technology-6.1%
650 Ceridian Corporation* 26,812
200 Hewlett Packard Company 16,750
400 Intel Corporation 22,700
200 International Business Machines Corporation 18,350
200 Microsoft Corporation* 17,550
400 Motorola, Inc. 22,800
150 Xerox Corporation 20,550
----------
Total Technology 145,512
----------
Utilities-6.6%
450 AT&T Company 29,137
550 GTE Corporation 24,200
750 Nipsco Industries, Inc. 28,688
550 QUALCOMM, Inc.* 23,650
500 SBC Communications, Inc. 28,750
650 WorldCom, Inc. * 22,913
----------
Total Utilities 157,338
----------
Total Common Stocks (Cost $1,229,653) 1,330,931
----------
</TABLE>
76
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<S> <C> <C>
Bank-1.3%
$ 30,000 BankAmerica Corporation, 6.85%, due 03/01/03 $ 31,120
---------
Financial & Other-1.4%
30,000 Associates Corporation of North America, 7.70%, due 03/01/02 32,517
---------
Total Corporate Bonds (Cost $60,243) 63,637
---------
U.S. Government and Agency Obligations-22.6%
U.S. Government Agency Obligation-2.1%
50,000 Federal Home Loan Bank 6.05%, due 06/28/00 50,953
---------
U.S. Government Obligations-20.5%
30,000 U.S. Treasury Note, 7.25%, due 08/15/04 33,366
50,000 U.S. Treasury Note, 7.50%, due 05/15/02 55,469
130,000 U.S. Treasury Note, 7.75%, due 01/31/00 141,253
245,000 U.S. Treasury Note, 7.88%, due 04/15/98 258,781
---------
Total U.S. Government Obligations 488,869
---------
Total U.S. Government and Agency Obligations
(Cost $513,337) 539,822
---------
Total Long-Term Investments (Cost $1,803,233) 1,934,390
---------
</TABLE>
77
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<S> <C> <C>
SHORT-TERM INVESTMENTS-18.6%
Repurchase Agreement-4.5%
$107,000 Barclays BZW Securities, dated 12/29/95, 5.50%, due 01/02/96 $ 107,000
in the amount of $107,000 (collateralized by $112,700 U.S. ----------
Treasury Note, 7.50%, due 01/31/97, with a market value of
$109,086 at 12/31/95), repurchase proceeds $107,065.
Number
of Shares Short-Term Investment Funds-5.5%
- ---------
107,000 Fidelity Institutional Cash Portfolios-U.S. Government Portfolio 107,000
25,006 Goldman Sachs-Institutional Liquid Assets-Government Portfolio 25,006
----------
Total Short-Term Investment Funds 132,006
----------
Principal
Amount U.S. Government Obligation-8.6%
- ---------
$205,000 U.S. Treasury Bill, 4.43%, due 01/18/96 204,497
----------
Total Short-Term Investments (Cost $443,503) 443,503
----------
Total Investments (Cost $2,246,736)-99.5% 2,377,893
----------
Other assets in excess of liabilities-0.5% 12,784
----------
NET ASSETS - 100% $2,390,677
==========
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
78
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $2,246,736) $2,377,893
Cash 865
Investment income receivable 13,662
Receivable for units sold 467
----------
Total assets 2,392,887
----------
LIABILITIES
Management fee payable 2,210
----------
Total liabilities 2,210
----------
NET ASSETS $2,390,677
==========
Net assets were comprised of:
Units of beneficial interest $1,428,677
Accumulated net investment income 195,354
Accumulated net realized gain 635,489
Net unrealized appreciation 131,157
----------
Net assets at December 31, 1995 $2,390,677
==========
Unit value, offering price and redemp-
tion price per unit ($2,390,677 /
197,726 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $12.09
==========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 75,311
Interest 142,296
----------
Total income 217,607
----------
Expenses
Management fee (Note 2) 60,623
Accounting fees 9,720
Audit fees 10,719
Legal fees 11,283
Insurance 3,539
Registration fees 1,116
Shareholder reports 1,833
Directors' fees 2,288
Miscellaneous 447
----------
Total expenses 101,568
Expense subsidy (Note 3) (40,945)
----------
Net expenses 60,623
----------
Net investment income 156,984
----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 693,488
Unrealized appreciation in value
of investments during the year 162,228
----------
Net gain on investments 855,716
----------
Net Increase in Net Assets
Resulting from Operations $1,012,700
==========
</TABLE>
The accompanying notes are an integral part of this statement.
79
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase/(Decrease) in Net Assets Years ended December 31,
---------------------------
1995 1994*
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $156,984 $ 38,370
Net realized gain/(loss) on investments 693,488 (57,999)
Unrealized appreciation/(depreciation)
in value of investments during the period 162,228 (31,067)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations 1,012,700 (50,696)
----------- -----------
FROM UNIT TRANSACTIONS
Net proceeds from units issued 2,678,624 5,002,565
Cost of units redeemed (6,252,526) 0
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions (3,573,902) 5,002,565
----------- -----------
Total increase/(decrease) in net assets (2,561,202) 4,951,869
Net assets, beginning of period 4,951,879 10
----------- -----------
Net assets, end of period $ 2,390,677 $ 4,951,879
=========== ===========
Net Change in Units Outstanding
Units issued 246,984 500,263
Units redeemed (549,521) 0
----------- -----------
(302,537) 500,263
=========== ===========
</TABLE>
* Commencement of Operations October 3, 1994.
The accompanying notes are an integral part of this statement.
80
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
RISK MANAGER-GROWTH FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout the periods indicated)
<TABLE>
<CAPTION>
Years ended December 31,
--------------------------
SELECTED PER UNIT DATA: 1995 1994*
----------- ---------
<S> <C> <C>
Investment income $ 0.43 $ 0.11
Expenses (0.20) (0.09)
Expense subsidy 0.08 0.06
------ ------
Net investment income 0.31 0.08
Net realized and unrealized gain/(loss)
on investments 1.88 (0.18)
------ ------
Net increase/(decrease) in net asset
value 2.19 (0.10)
Net asset value, beginning of period 9.90 10.00
------ ------
Net asset value, end of period $12.09 $ 9.90
====== ======
RATIO TO AVERAGE NET ASSETS:
Expenses 1.10% 1.10%**
Net investment income 2.84% 3.14%**
OTHER:
Average net assets (000 omitted) $5,532 $4,949
Portfolio turnover 191% 31%
Number of units outstanding at
end of period (000 omitted) 198 500
Total return 22.15% (4.10%)**
</TABLE>
- -------------------
* Commencement of Operations October 3, 1994.
** Annualized
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
81
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Annualized Yield
Principal Maturity on Date of
Amount Date Purchase Value
- ---------- -------- ---------------- -----
<S> <C> <C> <C> <C>
COMMERCIAL PAPER-74.0%
$3,000,000 American Express Credit Corporation 03/11/96 5.53% $ 2,967,742
3,000,000 AT&T Company 02/23/96 5.57% 2,975,399
1,000,000 AT&T Company 01/18/96 5.67% 997,323
3,500,000 Associates Corporation of North America 02/02/96 5.68% 3,482,329
2,000,000 Cargill, Inc. 01/10/96 5.68% 1,997,160
3,000,000 Commerzbank AG 01/16/96 5.67% 2,992,913
3,000,000 CoreStates Capital Corporation 01/31/96 5.71% 2,985,725
2,500,000 Daimler-Benz North America Corporation 02/16/96 5.66% 2,481,919
2,000,000 Dupont (E.I.) De Nemours & Company 01/03/96 6.08% 1,999,324
2,000,000 General Electric Capital Corporation 04/04/96 5.47% 1,971,434
1,100,000 General Electric Capital Corporation 01/31/96 5.60% 1,094,867
3,000,000 Goldman Sachs Group, LP 04/02/96 5.50% 2,957,833
3,000,000 Hewlett-Packard Company 03/05/96 5.55% 2,970,304
1,000,000 International Lease Finance Corporation 02/05/96 5.65% 994,507
1,000,000 International Lease Finance Corporation 01/10/96 5.71% 998,573
1,000,000 International Lease Finance Corporation 01/26/96 6.02% 995,819
3,000,000 Merrill Lynch & Company, Inc. 01/03/96 5.72% 2,999,047
1,000,000 Merrill Lynch & Company, Inc. 01/12/96 5.72% 998,252
3,000,000 National Rural Utilities Cooperative Finance
Corporation 02/26/96 5.62% 2,973,773
1,000,000 Smithline Beecham Corporation 01/30/96 5.90% 995,247
2,500,000 Toronto Dominion Bank 04/25/96 5.60% 2,455,278
1,000,000 Toronto Dominion Bank 02/20/96 5.62% 992,195
2,000,000 Transamerica Finance Corporation 02/09/96 5.60% 1,987,867
1,000,000 Transamerica Finance Corporation 02/16/96 5.63% 992,806
3,500,000 U.S.A.A. Capital Corporation 01/31/96 5.64% 3,483,550
-----------
Total Commercial Paper 52,741,186
-----------
CORPORATE BONDS-12.1%
2,000,000 FCC National Bank, 6.14%, due 01/19/96* 2,000,000
1,000,000 FCC National Bank, 6.51%, due 05/06/96* 1,000,262
3,000,000 Morgan, (J.P.) and Company, Inc., 5.75%, due 08/07/96 2,999,138
1,100,000 Norwest Corporation, 7.75%, due 12/31/96 1,123,255
1,000,000 Toyota Motor Credit Corporation, 6.74%, due 03/18/96 1,000,189
500,000 Virginia Electric & Power Company, 8.20%, due 08/15/96 506,542
-----------
Total Corporate Bonds 8,629,386
-----------
</TABLE>
82
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----
<C> <S> <C>
REPURCHASE AGREEMENTS-8.6%
$2,884,000 Goldman Sachs and Company, dated 12/29/95, 5.75%, due $2,884,000
01/02/96 in the amount of $2,884,000 (collateralized by $2,499,467
U.S. Treasury Note, 7.25%, due 08/15/22, with a market value of
$2,960,102 at 12/31/95), repurchase proceeds $2,885,843.
3,281,000 Lehman Government Securities, dated 12/29/95, 6.10%, due 01/02/96 in 3,281,000
the amount of $3,281,000 (collateralized by $3,079,219 U.S. Treasury
Note, 7.13%, due 02/29/00, with a market value of $3,351,696 at 12/31/95),
repurchase proceeds $3,283,224.
----------
Total Repurchase Agreements 6,165,000
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS-7.0%
2,000,000 Federal Home Loan Bank, 6.01%, due 05/15/96 1,999,575
3,000,000 Federal Home Loan Mortgage Corporation, 6.84%, due 02/28/96 3,004,373
----------
Total U.S. Government Agency Obligations 5,003,948
----------
Total Investments (Cost $72,539,520)-101.7% 72,539,520
Liabilities in excess of other assets-(1.7%) (1,229,298)
----------
NET ASSETS-100% $71,310,222
==========
</TABLE>
* Interest rates are reset weekly based on the three month U.S. Treasury Bill.
Rates shown are the rates in effect on December 31, 1995 plus ten
basis points.
The accompanying notes are an integral part of this statement.
83
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at amortized cost, which
approximates value $72,539,520
Cash 211
Investment income receivable 294,282
Receivable for units issued 44,164
-----------
Total assets 72,878,177
-----------
LIABILITIES
Income due participants 21,084
Management fee payable 31,497
Payable for units redeemed 1,515,374
-----------
Total liabilities 1,567,955
-----------
NET ASSETS $71,310,222
===========
Unit value, offering price and redemp-
tion price per unit ($71,310,222/
71,310,222 units of beneficial
interest issued and outstanding;
unlimited number of units authorized) $1.00
===========
</TABLE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
MONEY MARKET FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 51,797
Interest 3,924,454
-----------
Total income 3,976,251
-----------
Expenses
Management fee (Note 2) 435,936
Accounting fees 8,925
Audit fees 10,719
Directors' fees 2,288
Insurance 4,738
Legal fees 4,734
Registration fees 7,969
Shareholder reports 1,833
Miscellaneous 4,148
-----------
Total expenses 481,290
Expense subsidy (Note 3) (45,354)
Voluntary fee reduction (Note 3) (100,525)
-----------
Net expenses 335,411
-----------
Net investment income $ 3,640,840
===========
</TABLE>
The accompanying notes are an integral part of this statement.
84
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase in Net Assets Years ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 3,640,840 $ 1,230,291
------------ -----------
Dividends to unitholders (3,640,840) (1,230,291)
------------ -----------
FROM UNIT TRANSACTIONS (at $1 per unit)
Net proceeds from units issued 143,467,408 61,259,645
Net asset value of units issued for
dividends reinvested 3,640,840 1,230,291
Cost of units redeemed (131,303,078) (35,008,679)
------------ -----------
Net increase in net assets
resulting from unit transactions 15,805,170 27,481,257
------------ -----------
Total increase in net assets 15,805,170 27,481,257
Net assets, beginning of year 55,505,052 28,023,795
------------ -----------
Net assets, end of year $71,310,222 $55,505,052
============ ===========
Net Change in Units Outstanding
Units issued 143,467,408 62,259,645
Units redeemed (131,303,078) (35,008,679)
Units issued for dividends reinvested 3,640,840 1,230,291
------------ -----------
15,805,170 27,481,257
============ ===========
</TABLE>
The accompanying notes are an integral part of this statement.
85
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
MONEY MARKET FUND
SELECTED PER UNIT DATA AND RATIOS
(Selected data for a unit outstanding throughout each of the years indicated)
<TABLE>
<CAPTION>
Years ended December 31,
----------------------------------------------------------------------------
SELECTED PER UNIT DATA: 1995 1994 1993 1992 1991
----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investment income $ 0.059 $ 0.045 $ 0.032 $ 0.041 $ 0.063
Expenses (0.006)** (0.007)** (0.008) (0.008) (0.007)
Expense subsidy 0.001 0.001 0.002 0.002 0.001
------- ------ ------- ------- -------
Net investment income 0.054 0.039 0.026 0.035 0.057
Dividends to unitholders (0.054) (0.039) (0.026) (0.035) (0.057)
------- ------- ------- ------- --------
Net asset value, beginning of year 1.000 1.000 1.000 1.000 1.000
------- ------ ------- ------- -------
Net asset value, end of year $ 1.000 $1.000 $ 1.000 $ 1.000 $ 1.000
======= ====== ======= ======= =======
RATIO TO AVERAGE NET ASSETS:
Expenses 0.50%* 0.50%* 0.65% 0.65% 0.65%
Net investment income 5.43% 3.90% 2.57% 3.37% 5.69%
OTHER:
Average net assets (000 omitted) $67,067 $31,587 $30,917 $34,125 $31,036
Number of units outstanding at
end of year (000 omitted) 71,310 55,505 28,024 32,861 32,230
Total return 5.57% 3.80% 2.60% 3.44% 6.01%
</TABLE>
- -------------------
* Reflects management fee reduction of .15% of $100,525 and $27,802 for the
years ended December 31, 1995 and 1994 respectively. For the year ended
December 31, 1994 the actual net expense ratio for the year was .56% of
average net assets as the fee reduction went into effect on 5/2/94.
** Reflects management fee reduction of $100,525 or $0.002 per unit and $27,802
or $0.001 per unit for the years ended December 31, 1995 and 1994
respectively. Without management fee reduction, expense per unit is $0.007
and $0.008 for the years ended December 31, 1995 and 1994 respectively.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
86
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
a: The AVESTA Trust (the "Trust"), formerly the Retirement Investment Trust, is
registered under the Investment Company Act of 1940 as an open-end, diversified,
management investment company that consists of fifteen Funds for the collective
investment of retirement accounts for which Texas Commerce Bank National
Association ("TCB") or one of its affiliated banks serves as trustee. Under an
amended and restated Declaration of Trust, TCB is the Trustee of the Trust and,
as such, provides, or arranges for the provision of, investment advisory,
administrative and custodial services and unitholder accounting. Chemical
Securities of Texas, Inc., an affiliate of TCB, is the distributor of the Trust.
Each Fund has an unlimited number of units authorized.
The Trust currently offers thirteen Funds, each of which is accounted for
separately and has a different investment objective.
The EQUITY GROWTH FUND seeks to increase retirement assets primarily by
investing in equity-based securities, which include common stocks and those debt
securities and preferred stocks convertible into common stock, that provide
capital appreciation. Current income is a secondary objective.
The EQUITY INCOME FUND seeks to increase retirement assets by investing
primarily in equity-based securities that provide capital appreciation as well
as current income.
The BALANCED FUND seeks to increase retirement assets by investing in a
combination of bonds and equity-based securities to provide a balance of current
income and capital appreciation.
The INCOME FUND seeks to increase retirement assets by investing primarily in
domestic debt securities that earn a high level of current income with
consideration also given to safety of principal.
The CORE EQUITY FUND seeks to increase retirement assets by investing primarily
in common stocks of U.S. companies to maximize total investment return through
emphasis on capital appreciation and current income consistent with reasonable
risk.
The SMALL CAPITALIZATION FUND seeks to increase retirement assets by investing
primarily in common stocks and other equity-based securities of small
capitalization U.S. companies that can provide capital appreciation.
The SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND seeks to increase
retirement assets by investing primarily in shorter-term securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, and
repurchase agreements with respect thereto, to provide as high a level of
current income as is consistent with the preservation of capital.
The U.S. GOVERNMENT SECURITIES FUND seeks to increase retirement assets by
investing primarily in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities, and repurchase agreements with respect
thereto, to provide current income with emphasis on preservation of capital.
There is no restriction on the maturity of the Fund's portfolio or any
particular portfolio security.
The INTERMEDIATE TERM BOND FUND seeks to increase retirement assets by investing
primarily in debt securities with intermediate term maturities to provide
current income, with consideration given to stability of principal.
The RISK MANAGER-INCOME FUND seeks to increase retirement assets by investing in
a combination of debt and, to a lesser extent, equity-based securities to
achieve high current income and, when appropriate, capital appreciation.
The RISK MANAGER-BALANCED FUND seeks to increase retirement assets by investing
in a combination of debt and equity-based securities for high total return.
The RISK MANAGER-GROWTH FUND seeks to increase retirement assets by investing in
a combination of equity-based and, to a lesser extent, debt securities to
achieve capital appreciation and, secondarily, current income.
The MONEY MARKET FUND seeks to increase retirement assets by investing only in
instruments with a remaining maturity of thirteen months or less to provide a
high level of current income with equal emphasis on liquidity and stability of
principal.
The INTERNATIONAL EQUITY FUND had not commenced operations at December 31, 1995.
The INTERNATIONAL BOND FUND had not commenced operations at December 31, 1995.
The ability of the issuers of the securities held by the Trust to meet their
obligations may be affected by economic developments in a specific industry or
region.
87
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. 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 those estimates.
Note 1 - Accounting Policies
A. Securities Valuation
Securities listed or traded on a national securities exchange are valued at the
last reported sales price on the primary exchange on which they are traded,
usually 3:00 p.m. Houston time. Unlisted securities and listed securities for
which the last sales price is not available are valued at the last reported bid
price. U.S. Government securities are valued at the last reported bid price.
For all funds except for the Money Market Fund, short-term securities which
mature in more than 60 days are valued at current market quotations. Short-term
securities are valued at amortized cost if, (1) their term to maturity from date
of purchase was 60 days or less, (2) their maturity is 60 days or less, or (3)
their original term to maturity from date of purchase exceeded 60 days, by
amortizing their value on the 61st day prior to maturity. The Money Market Fund
values all securities at amortized cost.
A repurchase agreement is a short-term investment in which a fund acquires
ownership of a debt security and the seller agrees to repurchase the security at
a future time at a specified price. Repurchase agreements are entered into only
with approved counterparties which are monitored on a daily basis. It is the
Trust's policy that its custodian take possession of the underlying collateral
securities, through physical delivery or book entry transfer, the value of which
exceeds the principal amount of the repurchase transaction, including accrued
interest. To the extent that any repurchase transaction exceeds one business
day, the value of the collateral is marked-to-market on a daily basis to ensure
the adequacy of the collateral.
B. Options and Futures Contracts
Put and Call Options
All funds, except the Money Market Fund, may invest in exchange-listed and over-
the-counter put and call options in order to take advantage of market
inefficiencies or to provide portfolio protection in expectation of a declining
market. During 1995, the Trust invested in options contracts soley for the
purpose of hedging its existing portfolio.
When the Trust writes (sells) a call option, an amount equal to the premium
received by the Trust is recorded as a liability and is subsequently adjusted to
the current market value of the option written. Premiums received from writing
call options which expire unexercised are treated by the Trust on the expiration
date as realized gains from the sale of options. The difference between the
premium received and the amount paid on effecting a closing purchase
transaction, including brokerage commissions, is also treated as a realized
gain, or if the premium is less than the amount paid for the closing purchase
transaction, as a realized loss. If a written call option is exercised, the
premium is added to the proceeds from the sale of the underlying security in
determining whether the Trust has realized a gain or loss. The Trust, as writer
of a call option, may have no control over whether the underlying securities may
be sold, and as a result, bears the market risk of an unfavorable change in the
price of the security underlying the written call option. If a written call
option on a futures contract is exercised, the premium is recognized as a gain.
Thereafter, such futures contracts are accounted for as described under
"Financial Futures Contracts". The Trust may not write put options.
The premium paid by the Trust for the purchase of a call or put option is
recorded as an investment and is subsequently valued to reflect the current
market value of the option purchased. If a purchased option expires, the Trust
realizes a loss in the amount of the premium paid for the option. If the Trust
enters into a closing transaction, it realizes a gain or loss, depending on
whether the proceeds from the sale are more or less than the cost of the option.
If the Trust exercises a purchased put option, it realizes a gain or loss from
the sale of the underlying security and the proceeds from such sale are
decreased by the premium originally paid. If the Trust exercises a purchased
call option, the amount of the premium originally paid increases the cost of the
security which the Trust purchases upon exercise of the option.
Financial Futures Contracts
A financial futures contract is an agreement between two parties to purchase
(long) or sell (short) a financial instrument at a set price for delivery on a
future date. Upon entering into a financial futures contract, the Trust is
required to pledge to the broker an amount of cash and/or U.S. Government
securities equal to a certain percentage of the contract amount. This amount is
known as the "initial margin." Subsequent payments, known as "variation
margin," are made or received by the Trust each day, depending on the daily
fluctuations in the value of the underlying security. Such variation margin is
recorded for financial statement purposes on a daily basis as a realized gain or
loss. The Trust invests in
88
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
financial futures contracts solely for the purpose of hedging its existing
portfolio securities or securities the Trust intends to purchase against
fluctuations in value caused by changes in prevailing market interest rates.
Should market values move unexpectedly, the Trust may not achieve the
anticipated benefits of the financial futures contracts and may realize a loss.
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.
C. Federal Income Taxes
No provision for federal income taxes is required because the IRS has ruled that
the Trust is a pooled-fund arrangement exempt from Federal Income Tax. To
maintain this tax-exempt status, only Individual Retirement Accounts, Keogh
plans, 401(k) plans and other plans exempt from federal taxation may invest in
the Funds.
D. Securities Transactions and Investment Income
Securities transactions are recorded on the trade date. Realized gains and
losses on sales of investments are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis. Discounts and premiums are amortized using the
scientific method except for the Money Market Fund which utilizes the straight-
line method.
E. Dividend Distributions
The Money Market Fund declares daily and pays monthly dividend distributions
from net investment income and short-term capital gains; such dividend
distributions are automatically reinvested. Dividend distributions are recorded
on ex-dividend date. The other twelve funds do not declare or pay dividends on
investment income.
Note 2 - Management Fees
- ------------------------
The Trust has management agreements with TCB. Pursuant to these agreements, TCB
has responsibility for all investment advisory services in connection with the
management of the Trust. TCB pays the compensation of officers and employees of
the Trust, occupancy and certain accounting and clerical costs of the Trust.
The Trust bears all other costs and expenses.
The investment management fee paid by each Fund is accrued daily and paid
monthly. With respect to the Equity Growth Fund, the Equity Income Fund, the
Balanced Fund, the Income Fund, and the Core Equity Fund, the management fee is
limited to an annual rate of 1.00% of the first $250 million of the average
daily net assets of each Fund, 0.90% of the next $250 million of such net
assets, and 0.80% of such net assets in excess of $500 million. The Short-
Intermediate Term U.S. Government Securities Fund and the Intermediate Term Bond
Fund pay a management fee limited to an annual rate of 0.75% of the first $250
million of the average daily net assets of the Fund, 0.65% of the next $250
million of such net assets, and 0.55% of such net assets in excess of $500
million. The U.S. Government Securities Fund pays a management fee limited to
an annual rate of 0.85% of the first $250 million of the average daily net
assets of the Fund, 0.75% of the next $250 million of such net assets, and 0.65%
of such net assets in excess of $500 million. The Small Capitalization Fund
pays a management fee limited to an annual rate of 1.15% of the first $250
million of the average daily net assets of the Fund, 1.05% of the next $250
million of such net assets, and 0.95% of such net assets in excess of $500
million. The Risk Manager-Income Fund, the Risk Manager-Balanced Fund, and the
Risk Manager-Growth Fund pay a management fee limited to an annual rate of 1.10%
of the first $250 million of the average daily net assets of the fund, 1.00% of
the next $250 million of such net assets, and .90% of such net assets in excess
of $500 million. The Money Market Fund pays a management fee limited to an
annual rate of 0.65% of the Fund's average daily net assets.
Note 3 - Expense Subsidy and Voluntary Fee Waiver
- -------------------------------------------------
In accordance with the management agreement, TCB has agreed to subsidize 100% of
the operating expenses in excess of the management fee of each Fund until net
assets of each Fund exceeds $250 million. Generally, expenses applicable to all
funds are allocated equally. Expenses incurred for specific funds are allocated
to the respective funds.
For the year ended December 31, 1995, TCB elected to reduce management fees on
an ongoing basis by a total of $255,253 resulting in the following amounts of
fees reduced per fund: $136,617 in the Income Fund, $15,584 in the Small
Capitalization Fund, $2,527 in the U.S. Government Securities Fund, and $100,525
in the Money Market Fund.
From time to time, TCB may voluntarily elect to waive a portion of the Trust's
management fee. The voluntary fee waiver may be discontinued at any time
without prior notice.
89
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AVESTA TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
Note 4 - Portfolio Securities
- -----------------------------
Purchases and sales of investment securities, excluding short-term securities,
futures and written options, for the year ended December 31, 1995 and gross
unrealized appreciation and depreciation at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Purchases Sales Appreciation Depreciation
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Equity Growth Fund $37,077,281 $35,288,357 $ 8,540,554 $890,002
Equity Income Fund 5,903,610 8,590,773 12,859,636 80,602
Balanced Fund 20,356,229 24,100,757 2,851,380 237,184
Income Fund 44,743,249 47,660,066 2,530,821 0
Core Equity Fund 27,764,372 25,782,111 3,578,743 452,562
Small Capitalization Fund 8,319,412 7,750,743 3,314,022 258,218
Short-Intermediate Term U.S.
Government Securities Fund 68,960,514 66,727,581 664,170 34,281
U.S. Government Securities Fund 376,188 867,933 378,516 0
Intermediate Term Bond Fund 11,118,571 11,531,867 121,463 0
Risk Manager-Income Fund 24,997,805 29,507,887 242,457 19,254
Risk Manager-Balanced Fund 21,267,744 21,328,020 363,774 50,543
Risk Manager-Growth Fund 8,338,309 10,741,022 158,185 27,024
</TABLE>
Purchases and sales of long-term U.S. Government Obligations included in the
purchase and sale amounts above for the year ended December 31, 1995 are as
follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Purchases Sales Appreciation Depreciation
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Balanced Fund $ 9,666,242 $10,464,947 $ 452,903 $ 0
Income Fund 43,661,047 45,564,437 2,072,339 0
Short-Intermediate Term U.S.
Government Securities Fund 61,775,801 66,727,581 664,171 34,281
U.S. Government Securities Fund 376,188 867,933 378,516 0
Intermediate Term Bond Fund 8,123,661 9,410,603 89,207 0
Risk Manager-Income Fund 18,101,230 22,396,531 76,310 0
Risk Manager-Balanced Fund 11,321,405 11,930,018 49,429 0
Risk Manager-Growth Fund 2,342,015 3,261,591 25,515 0
</TABLE>
The Money Market Fund held only short-term securities and, therefore, is not
included above.
Note 5 - 10:1 Reverse Split
- ---------------------------
On May 7, 1993, the Equity Growth Fund, the Equity Income Fund, the Balanced
Fund and the Income Fund effected a 10 for 1 reverse split. One unit of
beneficial interest was exchanged for each ten units of beneficial interest
outstanding.
90
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